The Troika and Portugal’s Democracy Can’t Coexist
That time of year has returned to Portugal, when inspectors from the IMF & European Union arrive in the capital, negotiate behind closed doors with the country’s leaders, then disappear so the finance minister and deputy prime minister can brief the Portuguese public a few days later about the new sacrifices that are meant to prevent the next round of sacrifices, the same dishonest narrative presented the last several years. For the 2014 budget the government seeks further privatizations, salary cuts between 3.5% & 12% for hundreds of thousands civil servants, 10% cut to public sector pensions, and an increase in the retirement age. These deep public sector cuts for 2014 combine with this year’s “enormous” tax increase that will continue in effect for the foreseeable future.
The outrage to the measures was swift. On Saturday, tens of thousands marched in Lisbon and Porto in demonstrations organized by the main trade union federation, CGTP. Next Saturday, Que Se Lixe a Troika (screw the Troika in English) will hold demos across the country in an effort to repeat the success of mass demonstrations it organized in the spring and last fall. CGTP has called for a demonstration at parliament on the 1st of November to demand the rejection of the austerity budget, and sectors across the economy are organizing rolling strike action, from the dockworkers to the postal service and later the entire public sector with a general strike on the 8th of November. It’s easy to fear that the opposition on the streets will once again fall short, contained by low ambitions of political parties and union leadership, as has happened in previous protests, allowing the government to ignore them and press on with its budget cuts and tax increases.
While the protests and the outrage on the streets can be ignored or dismissed, there has been one voice against the austerity that the government and the Troika live in complete fear of: the constitutional court. A number of Troika imposed austerity measures have met a swift death in the constitutional court. The court has twice ruled against measures taking away the Christmas & vacation benefits of civil servants and pensioners, it has struct down cuts to unemployment benefits & sick pay, and this past September it ruled against the government’s “mobility scheme”, a cynically named measure to ease layoffs in the public sector. Having successfully blackmailed several European democracies into complying with austerity programs over the past several years, the frustration of the Troika continues to mount as expectations are high that some of the more controversial austerity measures in the 2014 budget will face their demise before the court.
The Troika is already making its next move in Portugal. For the past few weeks, there’s been a steady application of political pressure on the judges of the constitutional court. European officials warned against “political activism” by the court. The president of the European Commission José Manuel Barroso warned of the need of all Portuguese institutions to have “responsibility” to ensure Portugal’s return the markets. In private, European officials are more frank, with one Portuguese newspaper quoting an official describing the political pressure as “live ammunition” that will continue until the judges get the message: approve the measures even if they’re unconstitutional. It’s not hard to see where this is all leading Portugal. Having “rescued” Portugal from defaulting on its national debt, the Troika is preparing to rescue the country from the constitution crafted in the aftermath of the Carnation Revolution that brought to an end decades of fascist rule.
The constitutional court isn’t the only threat to the Troika’s program. This latest austerity package follows the near collapse of the coalition government over the summer. Paulo Portas, the leader of CDS, the junior party in the coalition, had delivered an “irreversible” resignation over the government unshaken commitment to austerity despite its well documented failures. After two weeks of political turmoil and failed talks for a government of national salvation with the opposition socialist party, the “irreversible” resignation became reversible, Paulo Portas winning a promotion to deputy prime minister. The commitment to the austerity program, however, remained unaltered.
With that commitment, the country remains condemned to a vicious cycle of political crisis and the Troika reimposing austerity through blackmail and threats. The country slides into a neoliberal dystopia where the young either emigrate or are unemployed, and where the shrinking pensions of their grandparents must somehow provide for three generations. If asked to choose which is the impossible path to pursue, to defy the Troika and cease the self-inflicted wounds of successive austerity measures or to continue on indefinitely slashing the welfare state to divert more of Portugal’s wealth to paying a national debt that can’t be paid, I would argue the second option is the impossible path and there’s no alternative but to expel the Troika before every last conquest of the Carnation Revolution is lost.