Prime Minister Antonio Costa of Portugal has stepped down from his position, following the detention of his chief of staff by prosecutors investigating allegations of corruption within his government’s management of lithium mining and hydrogen projects. Costa, himself under investigation in a separate case, made the announcement in a televised statement after a meeting with President Marcelo Rebelo de Sousa. While affirming his innocence, Costa declared that he would not seek reelection for a fourth term as premier.
In his statement, Costa emphasized that the integrity and ethical standards expected of the prime minister were incompatible with any suspicion of wrongdoing. The fate of the ruling Socialists, who hold a parliamentary majority, now lies in the hands of the president, who must decide whether to allow them to form a new government or to dissolve parliament, triggering an election. Parliament was scheduled to vote on the 2024 budget bill later this month.
The developments mark the latest in a series of scandals that have plagued Costa’s administration, beginning with the TAP state-owned airline controversy in January, prompting opposition parties to call for the government’s resignation. Following Costa’s announcement, Portuguese stocks experienced a 3% decline.
According to the prosecutor’s office, five individuals, including Costa’s chief of staff Vitor Escaria and a business consultant, were detained as part of the investigation. Infrastructure Minister Joao Galamba and Nuno Lacasta, the president of the environment agency APA, have been designated as formal suspects and are expected to appear before a judge.
The prosecutors revealed that the suspects purportedly invoked Costa’s name and authority to expedite procedures related to the deals. The Supreme Court will examine Costa’s potential involvement in the affairs. Dozens of searches were conducted at various government premises on Tuesday, including Escaria’s office, as well as the infrastructure and environment ministries.
The investigation focuses on alleged corruption and influence peddling concerning lithium exploration concessions in northern Portugal, a project for a hydrogen plant in the port of Sines, and a significant investment in a data center in the same area. The prosecutor’s office has indicated the possibility of crimes involving malfeasance, active and passive political corruption, and influence peddling. Costa has expressed his willingness to fully cooperate with the justice system in the investigation.
