On Tuesday the Portuguese left struck a landmark compromise with the center-left Socialist Party that prompted the fall of the conservative PSD-CDS coalition government. The compromise is landmark not for its ambitions, but for representing an unexpected truce with a Socialist Party to achieve the immediate objective of toppling a government that implemented the Troika’s austerity program since 2011.
It’s a difficult compromise for the Portuguese left. Both the Communist Party and Left Bloc campaigned fiercely against the austerity-lite program the Socialist Party ran on in general elections just over a month ago. It’s also a compromise over substantial historical and ideological divisions. These divisions go back to the 1974-1975 revolutionary period during which Portugal’s international alignment, economic model, and state form were fiercely contested in the streets, army barracks, the constituent assembly and in six provisional governments. Through long stretches of the revolution, the Socialists and the center-right were allied on these matters and opposed to the Communist Party and other left-wing forces.
While historical and ideological differences between the Socialist Party and forces to its left still maintain relevance today, the political imperative of toppling the most right-wing government since the revolution motivated the entire parliamentary left to reach an accord to find an alternative government solution. Outgoing prime minister Passos Coelho and his deputy Paulo Portas provoke a revulsion on the Portuguese left comparable to that caused by Thatcher in British left politics. To contrast his government with PASOK in Greece, Passos Coelho sought to win over creditors and investors with the idea of being a willful reformer. The “good student” of austerity was in large part branding for foreign consumption, but at home it nonetheless earned him the designation of being “more troika than the troika.”
It would take a month of negotiations between the Socialist Party and forces to its left to ensure the defeat of Passos Coelho. Going in, the Socialist Party leader Antonio Costa made it clear he would not contribute to a so-called “negative majority”. This meant his party would abstain in parliament and permit the conservatives to form a minority government, absent an alternative government solution. This was a difficult moment for the party, potentially facing its second leadership contest in two years, a sharp contrast to the expectations months earlier of an election victory.
The Left After Elections
The Communist Party and Left Bloc had to navigate a difficult political scenario. They could have understandably identified the Socialist Party as too centrist to work with, or they could have intervened to extract the maximum economic concessions. There were persuasive arguments to be made for either option, which adds to the significance to their ultimate decisions to intervene.
After winning a surprising 10% of the vote in October 4th elections, Left Bloc may have been forgiven for sitting back and watching the Socialist Party bleed support from internal divisions and the stigma of propping up a conservative government, but the benefits to such a strategy aren’t as obvious on closer examination. Left Bloc’s support has been volatile over the past six years. In 2009 it won a breakthrough 10%, making it one of the standout, emerging left parties in Europe. But despite being in opposition to a minority Socialist government carrying out unpopular austerity measures, Left Bloc saw its support nearly halve in 2011 general elections. Its support in opinion polls would again rebound during the height of anti-austerity protests in late 2012, only to then suffer genuinely poor results in 2013 local elections and 2014 European elections.
Left Bloc’s unquestionable asset is their spokeswoman Catarina Martins. During the elections she carried the party from an expected mediocre performance to its best result ever in seats and percentage of votes. By inserting itself into the government formation process and negotiating economic policy, Left Bloc is putting Catarina Martins and its other promising, charismatic MPs in the position where they can be most effective to maintaining and growing the party’s support. The question is whether this personal protagonism produces the same political moderation that has characterized Syriza and Podemos.
The Communist Party’s place in Portuguese politics is different from that of Left Bloc. It’s a broader party organization with a long history and deep ties to the trade union movement; CGTP, its allied trade union confederation, is the largest in the country. Its working class ties can also be seen in its central committee and the working class professions of its members, including its secretary-general Jerónimo de Sousa. This gives the party a stable base of support that has modestly grown in each of the last four general elections, though distant from its best days in the late ‘70s and early ‘80s when the Communist led coalition United People Alliance won between 15% and 19% of the vote.
The Communist Party’s objectives in its dealings with the Socialist Party aren’t that different from Left Bloc’s. The goal for both is to put a line under the austerity of the last government and neutralize the austerity proposals of the Socialist Party. Left Bloc was more public in negotiations and worked off the preliminary demands for the Socialists to drop their proposed four year pension freeze, labor reform, and debasement of the social security system’s revenue stream. The Socialist Party’s revised program reflects these concessions, but more negotiations undoubtedly lay ahead as the compromise must be turned into budgets and government policy.
The Post-Compromise Horizon
The Communist Party and Left Bloc now find themselves as decisive players in Portuguese politics. The Portuguese right, who consider themselves the winners of October’s elections, are furious at being driven from power by a left alliance virtually no one expected. They have made clear that a Socialist minority government can’t count on their votes in parliament to survive. They are promising a bitter, reactionary opposition that adds to the importance of this moment in Portuguese politics. The so-called “arch of governance” between the center-left and center-right is broken, at least for now.
This notionally will give Left Bloc and the Communist Party great leverage over the Socialists, but this leverage runs into the political limits of the Socialist Party and the country’s European economic integration. While a higher deficit itself is not the objective of the left, they’d prefer a higher rate of spending to a budgetary consolidation done at the expense of pensions, wages and services. Depending on the economic situation in the months and years ahead, this preference may clash with the Socialist Party’s commitment to international agreements, including Europe’s Fiscal Compact.
These differences on structural questions as well as others like NATO and debt restructuring made it difficult for these parties to form a government together. While the Communist Party and Left Bloc will still find themselves voting for policies and measures they find insufficient or disagree with, they can better maintain themselves as independent forces with their own political projects outside the discipline of government. Left Bloc MPs like Jorge Costa and Catarina Martins continue speaking of the importance of debt restructuring for “more profound changes” and you can still find the Communist Party promoting and attending recent mobilizations against NATO military exercises in Portugal. These are causes they haven’t abandoned, but which the Socialists do not share and can’t be forced to share.
Portugal, like the rest of the Euro Zone, will ultimately need a far more ambitious political program than the one found in this compromise. The spectrum of this deal is modest, but it does permit the Communist Party and Left Bloc to frame themselves as defenders of the class interests of pensioners and workers, negotiating a greater share of income for these groups. Apart from meaningful concessions that can be won, the success of this deal for the Portuguese left will depend on whether it proves to be a quicker path to a more ambitious socialist project than by having chosen opposition to another conservative coalition government.
Short of sending the gunboats, it’s difficult to imagine anything more Greece’s creditors could’ve done to intimidate voters into accepting the austerity ultimatum presented to their government. The weekend the referendum was announced, The European Central Bank froze support to the Greek banking system, forcing the government to impose capital controls. It’s a distressing experience losing a wallet, imagine being locked out of your bank account? That’s been Greek life for a week with a limit of sixty euros in daily withdrawals. On top of this, in a coordinated move European leaders made appearances or released statements saying a no vote in the referendum would mean a Greek exit from the common currency. To complete the blitz of intimidation, the Greek media and much of the international media took photos of every bank queue and empty shelf, all while circulating any rumor.
Despite all this, 61% of Greek voters delivered a resounding no on Sunday, painting the entire Greek political map one single color rejecting imposed structural adjustment. Hopes were suddenly dashed across European capitals and EU institutions for a yes vote that could pave the way for a technocratic government that would obediently implement whatever creditors proposed. European authorities are incredulous that after five years of telling Greeks that austerity was the sacrifice necessary to stay in the euro, Greek voters don’t believe another year and a half of cuts and tax increases will guarantee their membership.
This puts the whole European project in a moment of existential crisis. If it doesn’t accommodate Greece and continues using notionally independent institutions like the European Central Bank as a siege weapon on the Greek economy, it provides all the ammunition necessary for euroskeptic political forces to tear the project to sheds over the next decade. Alternatively, if Europe makes meaningful concessions to Syriza, it risks an electoral storm sweeping the south of Europe with elections this fall in both Portugal and Spain.
The designation of Alexis Tsipras as a radical and a threat to the European order speaks to the terror felt by Europe’s geographic and political center over any attempt to alter economic policy. Syriza has sought to renegotiate the 2010-2012 crisis response of deficit limits, austerity as precondition for “solidarity” loans, and full repayment of the debt. Creditors were able to extract these concessions from Europe’s periphery as the alternative, they argued, to expulsion from the euro and financial collapse. The streets of Europe resisted this settlement through social movements in 2011 and a pan-European general strike in 2012. Out of these social movements, parties like Syriza and Podemos would find a significant political base to build upon.
European leaders applaud themselves and the austerity regime for ending the financial crisis yet this is an outrageous act of historical revision. Forcing out Berlusconi and replacing him with Mario Monti, an unelected technocrat, didn’t end the sell-offs in Italian bond markets in 2011 and 2012. Only the intervention by European Central Bank president Mario Draghi to do “whatever it takes” ended the sell-off. Italy and Spain, with the backing of the ECB, avoided the full bailout programs seen in Portugal, Greece, and Ireland, but by then the social damage across Europe’s periphery was already done.
Seven years after the world financial crisis of 2008 double digit unemployment persists across Europe’s periphery (over 20% in both Greece and Spain), unemployed youth continue to emigrate en masse, a suicide epidemic has taken hold, and education and healthcare funding have been slashed. Opponents of austerity have rightly called this a humanitarian disaster that requires policy action to restore electricity and undo pension cuts for the most vulnerable. This is what Syriza was elected to do, and this is what European authorities consider incompatible with the European project.
Fear of an axis of leftist governments on Europe’s periphery left creditors with a perverse incentive in negotiating with the newly elected Greek government: they had to make offers Syriza couldn’t hold up as a victory. The talks went on for five months and concessions by Syriza weren’t matched by anything more than lower primary budget surplus targets, something regularly conceded to other crisis affected countries. Renegotiating the Greek debt burden stayed completely off the table while creditors insisted upon the Syriza government introducing pension cuts and tax increases, forcing the party’s fingerprints onto the austerity dagger.
Syriza thought it would have a better bargaining position in negotiations given the potential financial contagion from what would be the biggest sovereign debt default in history. It hoped to win support of center-left governments in Rome and Paris in negotiations, allowing it the policy space to implement a sort of humanitarian Keynesianism in Greece to address the worst human suffering from five years of austerity. But France and Italy were more interested in squeezing out what’s left of the post 2008-2009 global economic recovery than risking an open clash with Europe’s austerity regime.
This all now leaves Europe in a very dangerous position in the next few days, months, and years. In seeking Syriza’s total capitulation it may force the Greek government to reintroduce the Drachma. Punitively forcing Greece out of the Euro would make the European project permanently toxic for the left across the continent, leaving just the eroding political center to defend it. The sympathy toward Syriza by some in the Portuguese and French socialist parties speaks to how extensive the damage could be. Should Alexis Tsipras take Greece out of the euro he’ll be denounced as the radical who broke Europe, but the truth is this is a catastrophe by Europe’s extreme center; let them own it.
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.
It’s as if Europe has passed the summer with its eyes shut and ears plugged, trying to wish away its profound social and economic crisis. It may seem like ages ago but it was just within the past year we’ve witnessed the bank runs in Cyprus, the pan-European strike that brought pitched street battles to Lisbon, Madrid, Barcelona & several Italian cities, and the determined effort by Catalans to achieve independence from Spain, threatening the dismantlement of one of Europe’s largest nation states. This was all meant to be forgotten; Europe’s crisis has come to end, we were told by policymakers. Greek & Portuguese prime ministers have spoken of recovery & German finance minister Wolfgang Schaeuble has assured us that Europe is being fixed. However, on Tuesday night, the fascist paramilitaries of Greek Golden Dawn reminded us that Europe is not just far from fixed, it is deeply broken.
On Tuesday night, those fascist paramilitaries attacked and pursued anti-fascist Pavlos Fyssas into an ambush where he would be fatally stabbed, living just long enough to identify his killer. Something is very broken here; broken so badly that Golden Dawn has been able to fatally assault migrants, carry out a homophobic siege on a performance of Corpus Christi, & just last week hospitalizing 9 communist party supporters with an assortment of crude weapons. Despite all of this, securing the dismissal of thousands of civil servants is still Europe’s most pressing concern when it comes to Greece, not dismantling this murderous neo-Nazi militia and its support network within the Greek police force.
Amid this fascist violence, record unemployment, decimated public services, and mass emigration from crisis hit countries, they still argue to us that Europe is being fixed. While they haven’t fixed Europe, they have manage to normalize a level of misery that would’ve been politically untenable just years ago. The mass mobilizations by indignant Europeans of the past three summer have largely melted away in 2013. Maybe Europe’s indignados have been broken by the many defeats of their movements to a European austerity policy that has gone unchanged despite the policy’s failure to reduce public debt & its rejection by the streets & ballot boxes. But this complacency isn’t sustainable. While the panic of Euro Zone collapse may have passed, the fascism and deprivation remain, and it won’t be leaving like the last dark clouds of an exhausted storm.
The political parties of the center-left and center-right will have nothing to offer voters for the foreseeable future. These parties only compete to prove that they will apply austerity at a slower rate than their rivals. The relevance of democratic elections is increasingly lost for more and more voters. It is in this political waste land where abominations like Golden Dawn and the National Front lurk. Europe can’t hunker down and attempt to wait out either the violent fascism on the streets or the endless austerity imposed by the Troika. Europe can’t avoid the inevitable task and responsibility of expelling these political actors from its political life. Waiting only leaves more victims behind, whether those victims are Spaniards who commit suicide at news of their home’s foreclosure, or migrants & leftists on the streets of Athens hunted down by fascist assassins. This is the broken Europe given to Europeans. Are they willing to keep it?
Political stability has become the national project of Portugal. While once Portugal had explorers seeking out regions of the world unknown to European civilization, today, Portugal has new explorers to romanticize, its president Cavaco Silva and prime minister Passos Coelho. Indeed, the promise of power, riches and a revitalized Portuguese nation isn’t across the vast Atlantic but within the depths of country’s political class. The current situation of hunger, misery, unconstitutional budgets, and unemployment will all vanish if only the country devoted itself to find this much sought political stability.
If you had witnessed the dedication placed by Portugal’s political class to finding political stability this past week, you too would resort to sarcasm to lash out at them. In a country with unemployment of 17.6%, mass emigration of jobless youths, & unending economic crisis, political stability somehow became the national priority. Prime minister Coelho, president Cavaco Silva apparently think the political crisis caused all these problems to exist, rather than believe that the existence of these problems are the source of the political crisis.
But let’s not deny Portugal’s political class the chance to be new national heroes. They devoted too much effort praising their own sense of political responsibility in repeatedly cutting pensions of retired nurses and teachers to be denied this moment when they rescue Portugal from their own incompetence, abuse, and negligence. Indeed, in Portugal’s darkest hour last week, when Paulo Portas, leader of the crucial coalition party CDS-PP, offered his irrevocable resignation from the government, he did the impossible, undoing the irreversible resignation! What courage! What self sacrifice! Portugal was staring down the barrel of the national calamity that is earlier elections *gasp* and prime minister Passos Coelho and CDS-PP leader Paulo Portas averted the tragedy of voters penalizing their mismanagement at the ballot box.
However, the coalition government apparently didn’t sufficiently save the country. Another hero emerged in president Cavaco Silva, who on Wednesday, with a tremendous sense of personal responsibility, informed the country it simply couldn’t be trusted with incredibly dangerous sharp objects like early elections. Instead of elections, he purposed something incredibly brave, something that hadn’t already failed with horrible results in Italy and Greece, a government of national salvation! He called on the three parties that have governed Portugal since the transition to democracy to come together, inevitably behind closed doors, and reach an agreement to complete all the wildly unpopular austerity measures before the Portuguese people have a say on it all through parliamentary elections.
Generations will come to envy that today we live in this golden age of Portuguese politicians who advance their profession to unimaginable heights of manipulation, insincerity, and theft. Although once again, Portuguese may find themselves enviously looking across the border to Spain where the ruling political party is accused of operating a slush fund, a fund from which prime minister Rajoy is alleged to have pocketed tens of thousands of dollars annually. Like on the football pitch, Portugal will have to dig even deeper to triumph over its Iberian rival.
In Portugal on Friday, a powerful anthem against the old fascist regime of Antonio Salazar was used against the figurehead of the new dictatorship, the Troika. The symbolism is immediate to anyone familiar with the song “Grandola, Vila Morena” and it didn’t resonate only in Portugal. It trended in Spain and in comments below the video you’ll quickly find solidarity from places like Greece that have also been visited by this dictatorship of the Troika.
The misery, the political alienation, the unemployment, Grandola, Vila Morena confronts everything wrong with how the world is today by describing how it should be:
“O povo é quem mais ordena” – It is the people who lead. Those forty protesters reminded the prime minister of this on Friday. On March 2nd, the upcoming day of mass mobilization, the whole of Portugal will get the opportunity to do the same.
Protesters in Spain demonstrating on Saturday against bank ordered home evictions sang Grandola Vila Morena:
You can find a full translation of the song here.
On Monday, the 12th of November, German Chancellor Angela Merkel will arrive in Portugal, one of the countries most ravaged by economic crisis in the Euro Zone. She arrives in a country debating a budget for 2013 that will impose enormous tax increases while cutting further into basic public services. It’s a country enduring a deep recession set to enter a Greek style depression where despite persistent austerity, budget deficits continue, provoking new cuts & yet higher unemployment and a continued fall in living standards.
Numerous people share the blame for this current crisis in Portugal, I include Merkel among them. Unions and social movements are on solid ground in calling protests on the day of her visit. These forces have stressed their opposition to austerity imposed by the IMF and EU without any democratic mandate. As written in a powerful open letter to the Germany Chancellor signed by leading activists, public figures and intellectuals:
“This letter cannot and should not be seen as any sort of nationalist of chauvinist vindication – it’s a direct address to you as the chief promoter of the Neoliberal doctrine which is ruining Europe. We do not address the German people who have all the democratic legitimacy to elect whomever they want for their representative offices. However, in this country where we live, your name was never on any ballot. We did not elect you. As such, we do not recognize you the right to represent us and even less the right to make political decisions on our behalf.”
Not all protest gestures have been as measured and thought through in the lead up to Merkel’s high profile visit. A video addressed to the German public attracted great -I’d say undeserved- attention on the Sunday before her arrival:
I found that the video shamefully promoted a sense of national victimhood, that the Portuguese people have been mistreated, in contrast to a German people who’ve benefited from debt forgiveness and lax EU rules on deficits, the video purports. The video strays into blatant incoherence at times, I suspect this is due to the contradictions of a clip that appeals to both a nationalism of grievance and European solidarity.
Let’s be clear, the Portuguese people aren’t a single item that have been mistreated. Within Portugal, there are banks that have been bailed out, there are companies and wealthy individuals who have benefited from privatization and an abundance of precarious labor, and then there’s the working class which has seen its taxes gone up, its services reduced, and wages fall.
It’s critical to point out this video is a product of Portugal’s governing center-right PSD (Social Democratic Party). It doesn’t strike me as a matter of coincidence that at a time when the center-right coalition government is plummeting in opinion polls, a former PSD minister would promote a video directing frustration over austerity away from the Portuguese government.
At the start of this blog entry, I included Angela Merkel among those I held responsible for the crisis. She is but one figure in a political class across Europe that has engaged in a dangerous act of postponement. Austerity has become a political act of stalling, of avoiding the critical decisions about the Euro Zone project. The continent is in the worst kind of stalemate where countries don’t want to commit to the deep integration a common currency like the Euro entails, yet they are also afraid of the Euro Zone breaking up and the day of reckoning it would be for the centrist political parties that rushed into this economic powder-keg. Instead, they go on passing austerity, insisting it will solve the debt issue even as the debt still rises and the budget deficits remain.
Austerity does buy European governments a few months, but it doesn’t deliver any meaningful long term solution and end to the crisis. In Spain, Portugal, and Greece, unemployment is between 15% and 25%, social unrest is on the rise; in the case of Greece, neo-Nazis are attacking political opponents and migrants on the street, all of this before the much feared turmoil of a Euro Zone exit. It’s intolerable that all this suffering will persist just so Europe’s political class can live in denial through another year. That is all the reason needed to protest in Lisbon on Monday, not misguided and incoherent nationalism.