BLOG: How Portugal manages to square the circle

Jeronimo de Sousa (Communist Party), Antonio Costa (Socialist, Primeminister) and Catarina Martins (Bloquo Esquerda) // Source: Geringonça

Portugal used to be the former poster child of the EU crisis countries. Now it has a new left government which opposes austerity – and became a role model for European socialists. How did this happen?

There’s an old cartoon, by João Abel Manta: the Portuguese borders chalk-drawn on a black board in front of a crowd of curious students. Among many scholars that shaped the ideological debate back in those days in 1975, there’s Gandhi, Marx, Mao. The illustration is called “A ponderous problem”.

There hasn’t been much intellectual brainstorming over Portugal since the Carnation Revolution.

João Abel Manta, Source: Wikimedia

Those students turned their eyes elsewhere. Some of them retired. But António Costa’s socialist party government, in power since November 2015, seems to be catching the eye of other social-democratic, labour or centre-left European leaders who feel that the times they are a changin’.

Benoit Hamon, the French socialist’s candidate to this year’s presidential election came to Lisbon this February to take a look at one of his “inspiring models”: “I wanted my first trip abroad to be in Portugal. It’s a political choice. This is a country run by a left government, supported by a left coalition, that turned its back on austerity”, said Mr. Hamon, who claims that if he joined forces with other two French left candidates (Jean-Luc Melanchon and the Greens) he could lead the race against the extreme-right frontrunner Marine Le Pen. These aspirations are backing an otherwise chimerical second presidential round for the socialists in France.

Now, as we publish this blog post, another visitor arrived in Lisbon: Gianni Pittella, the European socialist’s leader. This Italian MEP, that recently lost the race for the European Parliament’s presedency to the conservative Antonio Tajani, is even more assertive. “The lesson to be learnt from Portugal is that good governance by the left and progressive coalition could solve the public finance situation and also improve the citizens’ life standards.” That’s why, according to Pittella, the European socialists want to drop their “big-coalition” strategy with the liberals and the conservatives and “start working on a progressive alliance with the left and the greens”.

There were also the Dutch Workers Party (PVdA) members that came last January to Lisbon to ask questions. The party couldn’t withhold its “purple coalition” with the liberals and is now facing a major fall in this year’s general election. They came second in 2012, but now they rank just eighth in the polls.  And this is the reason why a group of young party leaders wanted to see how the “contraption” (the nickname used by a right-wing opponent to describe the Portuguese government, an unnecessarily complex and impractical mechanism, according to the definition) works for their fellow socialists in Portugal.

Even on the dawn of America’s new reality, there’s someone who looks at this with some hope. American writer Richard Zimler published an essay on the American online magazine Tikkun about Portugal’s secret revolution :

“After the election of Donald Trump in America, the Brexit referendum in the United Kingdom, and the resurgence of far-right parties in Holland, France, Poland, and much of the rest of Europe, it would be easy for anyone with progressive opinions and hopes for a world of greater justice and compassion to become dispirited. Undoubtedly, tens of millions of Americans, Brits, and others have been wondering if there is any country in which left-of-center parties committed to creating a more egalitarian society have been elected and brought about meaningful political change – a place where they may have even reversed reactionary social and economic policies. As a matter of fact, there is one small country at the western edge of Europe where exactly that has taken place (…)”.

Portugal used to be the former poster child of the EU crisis countries. How did this happen?

On the 25th of November 2015, Portugal was still Eurogroup’s favourite pupil, seemingly embracing German finance minister Wolfgang Schäuble’s words about the virtues of austerity as an economical and political law. The day after, the same country turned into a great expectation for the left. Even for Eurogroup’s President, less than recognizable as a left-winger, Jeroen Dijsselbloem’s own party in the Netherlands…

One of the reasons for this curiosity is Portugal’s left-wing long history of misunderstandings, dating back to João Abel Manta’s cartoon. Since 1974, when the “carnation revolution” overthrew the 48 year long right-wing dictatorship of Salazar and Caetano, both former allies in the resistance against the regime, socialists and communists, behaved as adversaries. And the small and radical left parties that regrouped under the Left Bloc – Bloco de Esquerda – in the late 90’s were equally averse to their left-wing companions. No agreement or compromise whatsoever was possible between these three forces, or even two of them, on a national level. Until last November…

The centre-right coalition (PSD/CDS) won the 2015 elections but lost the majority in Parliament. And that’s when the opportunity came for a complex agreement involving the left-winged parties. First, they didn’t agree with each other, but stroke bilateral deals. The socialists signed individual agreements with the other parties (Bloco de Esquerda and the Communist Party). The majority in Parliament has a wide range of agreed dissent.

In its first appearance in Parliament, during the approval of the Government’s program, the left-wing parties didn’t even stand up to applaud their own government. That’s because they don’t consider it to be “their” government, but a socialist minority cabinet that acts as the executive branch of a Parliament with a left majority, but only with a limited agreed mandate.

It’s a win-win situation. The smaller left parties feel comfortable enough to make some of the agreed measures theirs, like the minimum wage raise, for instance. But they can step aside and criticize the government every time they feel their electoral base needs to understand the difference between centre and left. Of course, this involves a certain degree of math and some negotiation skills. Right in the beginning, it also required the participation of the centre-right PSD to pass the last bank rescue (BANIF). But from then on, it was possible to pass all the major laws without any public damage to the cohesion of this “mechanism”. Even the recently failed attempt by the government to pass a reduction of the social tax for the employers was apparently no big deal for the prime-minister.

The socialist party, while “unifying” a lifelong divided left, also can brag about their squaring of the circle. Acting left and keeping Europe’s magic numbers on the right side, seems to be the motto: the deficit is the lowest in 42 years (2,1% according to the government’s estimates), unemployment is at an 8-year record low, and growth, while small, is enough to underline the rhetoric of “turning the page of austerity”.

And while there’s a new left-right gap in the political landscape that divides parliamentary seats and heats the public debate, polls show that that the pro-government parties are keeping, and growing, their electoral base. Even in Brussels, where the new government was first perceived as a second take of Greece’s Syriza, there seems to be a calm, relaxed, attitude towards the country’s economic performance. It is expected that in the short run Portugal can exit the excessive budget deficit procedure.

Meanwhile in Europe and in the US, all political attention is turned to the rise of a right-wing, populist, anti-immigration and xenophobic speech. There’s not much of that in Lisbon. The only party that stands for Le Pen’s, De Wilder’s or Trump’s views on the scapegoats for unemployment or poverty has only managed to scrape less than 1,5% of the popular support and has no elected members in local or national institutions. Political scientists say this is also a consequence of the communist party’s influence among low-wage workers.

Being nothing more than a parliamentary agreement between well-established parties, this solution also appealed somehow to the zeitgeist of unconventionality. It’s true that the “popular front” governments had a history in Europe. But they didn’t in Portugal, where this can be perceived as something new, modern, against the system. And that also must play a part in the explanation of how, suddenly, the country wakes up from the troika years and the financial crisis feeling like an “oasis of sanity”, as philosopher José Gil would put it, in an unpredictable European and American political landscape.

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