A Circus, in Town & in Portuguese Politics

How will this impact NHR decisions?

Nov 13, 2023

It took nearly 70 years for me to experience a circus under a big top. And I intended to write about it this week. However, the circus has also come to Portuguese politics. So I’ll update you on this as well, and speculate on how this may impact NHR decisions.

Circo Dallas

The circus came to town in a semi-truck. They parked in a large vacant lot beside the bus station and erected a traditional (though modest) big top. The current tour started in March, just south of Lisbon in Pinhal Nova. VRSA was their 16th stop. In most cities, performances were offered on Friday night, Saturday afternoon and evening, and Sunday afternoon. We commandeered two other American couples to join us for a Saturday afternoon adventure.

Frankly, we didn’t understand most of what was said by the clowns.

I suspect attending a circus in Portugal today is much like attending a traveling show in “Middle America” 70 years ago … albeit, thankfully, without the animals. The entire crew was only 10 people. When not juggling, clowning around, or playing with fire they sold tickets, rearranged the set, and manned the concessions stand.

Cotton candy or snow-covered holiday trees? You decide.

While we didn’t understand a lot of what was said by the clowns, we enjoyed their slapstick antics nonetheless. And although the juggler dropped her balls several times and the fire twirler dropped his baton twice, everyone agreed that the €10 senior, grandstand seats provided 2.5 hours of carefree and heartwarming entertainment. Once again, Portugal reminded me of what life was like living next to the Cleavers.

Prime Minister Resigns

So I was hanging out Tuesday afternoon when a news alert flashed across my phone…the Prime Minister had tendered his resignation. You can read about it in various English language papers (Portugal Resident, The Portugal News), in Jorge Branco’s excellent Substack account, and even in the New York Times so I won’t go into the accusations here.1 This is the third time in the last 22 years, that a major scandal has hit the Socialist Party (PS).2

And the timing of his stepping down created some interesting scenarios. First, the President had options. He could ask another member of the majority party (PS) to assume the role of Prime Minister3 and continue with the budget negotiations and other government business.4

Marcelo can appoint a new prime minister, but this goes against "tradition"
Although the Constitution allows the President of the Republic to appoint a new prime minister, doing so would go against the "tradition" in Portugal. - Publico.pt

Or the President could dissolve the government5 and call for another “early” or “snap” election.6 Based upon prior experience, it typically takes about 80 days between when the President calls for an “early” election and when it occurs. This puts us into 2024, which would make it very difficult to impose an early or mid-2024 NHR deadline.

However, as of Thursday morning, it appeared that Marcelo was going to try to split the baby.

And Thursday night, that is exactly what was announced. The President announced yet another “early” election on 10 March 2024. Until then, António Costa remains in charge and hopes to usher in a new budget at the end of the month.

However, many are suggesting that changes to NHR may be the proverbial can that is kicked down the road.

In the wake of Portuguese Prime Minister António Costa’s resignation amid a corruption scandal, political analysts are forecasting that the country’s Non-Habitual Resident (NHR) tax regime is likely to remain unchanged for the foreseeable future….
While a new government could submit a fresh proposal to end the NHR tax regime, it would need a clear majority and, more importantly, a similar desire to end the NHR regime. It is also likely that discussions on the new State Budget would not commence until at least March, possibly stretching as far as May.
Considering the fragmented nature of Portuguese politics following the scandal and the resignation of key government officials, the likelihood of any single party securing a decisive majority is slim. This political reality strengthens the case for the NHR’s continuation. …this latest news story will ironically provide some reassurance to future expatriates and potential investors concerned about the regime’s future amidst the current political turbulence. (emphasis added) —Portugalistl.com

So, we sit, wait, and wonder … stay tuned!

Calma, Beijinhos…

Nanc

An addition via Footnote and a story: Siemens the German conglomerate that purchased the health IT company I worked for was involved in a financial scandal. A few years after the sale was completed government agents entered our corporate offices, confiscated laptops, and instructed many employees in our accounting areas to leave the building for the day. Large sums of money seemed to be found in the desk drawers of certain European Siemens executives. These executives were involved in the sale of light rail systems. So I found this article particularly entertaining.

I am not suggesting that any other party would act differently. I don’t know enough about Portuguese politics to take sides.

This approach was supported by the PS, asking that Mário Centeno be installed as substitute prime minister.

And there is a lot of government business…doctors are demanding higher salaries, hospitals are closing ERs and maternity units due to lack of staffing, none of the teacher issues I wrote about earlier this year have been resolved, etc., etc.

The President met with the various party leaders on Wednesday and Thursday.

I wrote about the previous “snap” election here. It occurred in January 2022 and resulted in the PS gaining an absolute majority.