Portugal - The Government is out! The struggle continues!

Yesterday evening, 10th of November, the 11-day old government of the right-wing coalition in Portugal was ousted by the left-wing parties in parliament. On the day, the CGTP, the biggest trade union, called for a demonstration to take place outside parliament while discussion on the program presented by the minority government was taking place. I happened to be there on the day to experience the mood of the people: it was vibrant, joyful and promising. They had won a first battle.

A country in crisis

Portugal, presented as the role model of how to impose austerity in the South of Europe, has experienced a huge economic collapse that has had a massive effect on the living standards of workers and youth. As former Prime Minister Pedro Passos Coehlo suggested in 2011, “Portugal will only come out of the current crisis if it becomes poorer”. And the following is what he managed to achieve.

Unemployment jumped up from 9.5% before the crisis to a peak of 17.5% in 2013, only to decrease slightly to 13.2% now. Meanwhile, 1 out of every 3 young people is jobless. These figures can be an underestimation of the actual reality: while unemployment has ‘fallen’ by 6 percentage points, the amount of people with jobs has only increased by 0.2% during the same period. This mathematical contradiction accounts for many unpaid ‘jobs’ – especially targeted at young people – that include internships and volunteer work which helps them to pump up their employability status. At the same time, about 350,000 people, mainly young, have left the country, forced to emigrate in search of jobs they can’t find at home.

In 2014 alone, the government agreed with the Troika’s condition to introduce cuts of 4.7 billion euros in healthcare, education and security. That meant an increase in healthcare fees of up to 30 euros as well as 50 euros for each examination and diagnosis. Between 2010 and 2012 education spending decreased by 23% and has been decreasing since then. At the same time a wave of privatisations meant that energy companies, railways and transportation are now in the hands of a small minority – mostly foreign investors – that have no interest in creating jobs or providing secure living conditions for their workers.

The country has the highest level of income inequality in the EU and one in every five people live below the poverty line. This is the balance sheet of years of Troika imposed austerity policies.

The reaction of the masses

The Portuguese people have had enough of this social degradation. In the elections that took place only a month ago, a majority of voters laid their hopes on parties to the left of the PSD-CDS coalition (PaF). The smaller, more radical parties were the biggest winners in the polls. Bloco de Esquerda (BE), standing on a clear anti austerity platform, won big support amongst the youth, doubling its votes and securing an additional 11 seats in parliament, while the Communist Party of Portugal (PCP) had an overall percentage of 8.3% and 17 seats. Nearly 20% of the population voted for these two parties.

Since then discussions took place on the idea of creating a government of the Socialist Party (PS) with the external support of the BE and PCP in parliament. The right-wing President of the Republic, a slimy character who has been serving as President for the last 10 years, announced that he would not allow for a government of “anti-European” forces to be formed. In his speech after the negotiation talks between the parties he said:

“In 40 years of democracy, no government in Portugal has ever depended on the support of anti-European forces, that is to say forces that campaigned to abrogate the Lisbon Treaty, the Fiscal Compact, the Growth and Stability Pact, as well as to dismantle monetary union and take Portugal out of the euro, in addition to wanting the dissolution of NATO”.

It is evident that the President of the Republic is serving another type of democracy, one where the recklessness of the bankers and the capitalists makes working people pay for the crisis of their system.

But this speech was not the end of it. Yesterday, the left-wing parties in parliament voted for a motion of no confidence in the right-wing government and announced an agreement to form a stable government of the PS with outside support from the BE and PCP as a way forward. The motion was passed with 123 votes in favour and 107 against. On the days leading up to the discussion of the minority government’s proposal, the biggest trade union was already organising a demonstration.

The 10th of November Protest - Governo para a Rua!

Yesterday’s protest gathered all sorts of working people from different professions and regions. People were flooding down the road towards the parliament for many hours without a break. There were flags everywhere, most of them from the main trade union, the CGTP, while others included the dockworkers, teachers, cleaners and youth. People had travelled all the way from Porto and Braga in the North and Algarve from the South. Many people were wearing the carnation flower, the symbol of the 25th of April [1974] Revolution.

People were ecstatic. Long before the official results of the vote in parliament were announced, they were celebrating. The protest didn’t look so much like a protest that was going to bring the government down, but rather a celebration of the government having already fallen. The atmosphere was incredible, after four years of harsh austerity, here it is: an alternative!

People were singing and dancing to revolutionary songs by Zeca Afonso, the composer of ‘Grandola Vila Morena’ and by the end of the protest they all sang the Internationale. The faces of the people were glowing with confidence and hope for a better tomorrow.

At this point it’s appropriate to mention the right-wing protest. This consisted of maybe a few dozen people on the other side of the parliament, men wearing expensive suits and women in high heels. Within the first half an hour they had dispersed, although the media had a chance to take some short videos. With the aid of some image manipulation, the news channels presented it as an overwhelmingly big protest.

The new government - A luta continua!

The government composed of the PS with the support of the BE and PCP still needs to be approved by President Silva. After the last speech he gave where he clearly showed his indifference to people’s opinions, no one can say what his reaction will be now. The PaF right-wing government has fallen, but it is now up to the president what to do next. Amongst his options are the formation of a technocratic presidential government, to ask the PS to form a government or to continue with an interim situation until new elections can be called (not before mid-2016).

The ruling class wants “stability”, so it can continue to implement its capitalist austerity measures. A government of the PS backed by BE and PCP and committed to reversing some of the austerity measures is not their preferred option, but not having a government at all in a situation in which PS, BE and PCP can force measures through parliament would be even worse.

I noticed that, although most of the people present were either members of the PCP or actively supporting it, there was not one flag of the party in the air. There were no flags of any parties held by the protestors. This was done on purpose: the upcoming government will be a contradictory mix of forces; the centrist PS, the radical Bloco and the traditional workers’ party the PCP. Frictions will emerge once these three parties govern a country in crisis, but the mood at the demo was one of unity.

The program agreed [http://static.publico.pt/DOCS/MedidasPSPCPBE.pdf] differs in some important points with the original PS program and represents a partial reversal of some of the harshest austerity measures. Amongst those are: no further cuts in pensions, increase in the minimum wage, restoration of wages of public sector workers, reduction in VAT rates, protection of low income families from home repossessions, a reduction in healthcare fees and their abolition for emergency care, stopping the process of privatisation of public transport systems in Lisbon and Porto, no further privatisation, reversal of privatisation of waste management company EGF, no privatisation of water, restoration of four national holidays which had been abolished, etc.

As mentioned already, Portugal has been deteriorating throughout the years of austerity. If a new PS government swears in parliament it will be faced with massive problems and an expensive bill. The problem is that the PS has argued that it is possible to implement this program without repudiating or restructuring the debt and maintaining all of its commitments with the European institutions. This is clearly not possible.

Mario Centeno, who developed the PS economic program and is tipped to be Finance Minister in a PS government, said that they would not “throw money at the economy” to stimulate growth or consent to increasing the public deficit. “We will stay on the path of fiscal consolidation,” he told the Financial Times in an interview aimed at “reassuring the markets”. “It’s not the direction we challenge, but the speed of travel. We will continue to bring down the deficit and debt, but at a slower pace. This will create the economic space needed to alleviate the very serious financial restraints families and companies face.” In other words, Mr Centeno wants to square the circle!

As we have already seen in Greece, a PS government will come under the merciless pressure of the crisis of capitalism and the dictates of the Troika to implement cuts and austerity. The room for manoeuvre will be extremely limited if not inexistent. The EU has imposed on Portugal a target of cutting the budget deficit down to 0.2% of GDP by 2019 (from 3% this year). The PS hopes to renegotiate that target to a 1.5% deficit in 2019. That is a major change and one which the EU is unlikely to agree to. The numbers do not add up.

The left parties, BE and PCP, have correctly stayed out of such a government and only promised to give it external support. They have also said that they would only support the budget on a year by year basis on the basis of the government sticking to the measures agreed. While they have promised not to support a right-wing motion of no confidence, they have reserved their right to present their own.

If a PS government is formed it is likely to come under the pressure of the Troika very quickly to implement a policy of cuts and austerity and reverse any promises made to BE and PCP. The example of Greece is clear. Syriza, which was much more committed to an anti-austerity agenda than the PS and came to power on the back of a huge mass movement which was bigger than anything we’ve seen in Portugal, was broken by the Troika. The reason for that is simple: within the limits of the capitalist system and the EU straightjacket there is no room for any alternative policies “combining growth and austerity”. As long as the Syriza government was not prepared to break with capitalism it ended up implementing the same policies it had come to power to reverse. This will be even more the case with the PS.

At least Syriza had the illusion of renegotiating the terms of the debt, which, if possible, would have allowed it to implement the reforms it promised. But in Portugal the situation is worse, as the PS has ruled out any renegotiation of the debt.

The ruling class in Portugal and in Europe will exert pressure on the PS, starting by using the right wing of the party to undermine any attempt by the government to take serious measures against austerity.

The PCP and the BE should be extremely careful in remaining vigilant and not being drawn into a government which will very soon be put to the test. The PCP as a party providing external support to a PS government should do so in a manner which would be to its benefit. It is the only party that can take on the fight against austerity due to its traditions, its rank and file and its organisation. This is something that needs to be clear to people from within the party itself and outside of it.

The left parties should use the mood of confidence created by the collapse of the PaF government to launch a wave of mobilisations in the streets. The main struggle will not be in parliament but in the factories, workplaces, schools and neighbourhoods. They should explain clearly the need to remain vigilant and to struggle to ensure the implementation of all the measures in the agreement. In this way, once the PS in government starts to backtrack, the left parties would be in a position to benefit. The danger is that if they sow illusions in the PS, then if that government starts to betray, the left parties will also be tainted by it, being dragged into the logic of supporting whatever the PS does as a way of “stopping the right wing”.

The PCP and BE need to use the experience of this PS government (if it comes into being) to patiently explain that within the limits of capitalism there is no way out of austerity.

The political situation in Portugal is developing at an extraordinary speed and so far the working people of Portugal feel that they have won a victory by bringing down the hated right-wing government. The spirit and revolutionary mood of the 10th of November is just a glimpse of the upcoming struggles of the Portuguese workers and youth. We haven’t seen anything yet! We can only speculate as to how the frustration and radicalisation of the people will express itself but we are sure that it will!

The Government has fallen!
Down with austerity!
Down with capitalism!
For a socialist future for Portugal!