section_path: Background/2025 budget crisis
section_name: 2025 budget crisis
paragraph_text: 2025 budget crisis
  
  With the lack of a workable majority, the AD minority government was forced to negotiate with opposition parties to pass major legislation and this created problems regarding the prospects of a budget for 2025. The Government decided to negotiate with the Socialist Party (PS), however, the odds of a positive outcome from these negotiations were slim as the PS rejected the corporate tax cuts and the proposed "Youth IRS" scheme, which would provide an income tax rate cut for young people under the age of 35, and accused the government of not giving in. President Marcelo Rebelo de Sousa warned that a lack of a deal could lead to snap legislative elections, and admitted he was putting pressure on both the major parties to reach a deal.
  
  On 3 October 2024, Luís Montenegro "dropped" several parts of his government's Youth IRS scheme and corporate tax cuts by bringing his new proposals closer to policies defended by the PS, calling it an "irrefutable proposal" for the Socialists. Pedro Nuno Santos recognized the concessions made by the government, but pressed for more conditions on corporate tax cuts, mainly on their timing. The Prime Minister rejected these last conditions made by the PS, but said he was "confident" in the budget being approved by Parliament.
  
  On 17 October 2024, the general-secretary of PS, Pedro Nuno Santos, announced that the Socialist Party would abstain in the budget vote, thus ensuring the approval of the document with the sole votes of the AD coalition. On 31 October, Parliament passed the budget in its first general reading by an 80–72 vote, with the 78 PS members abstaining. On the final vote, on 29 November 2024, the budget was confirmed by a 79–72 vote, with 77 PS members abstaining.