Portugal: powerful November 24 general strike first step in struggle against austerity package

A powerful general strike and massive demonstrations on November 24 was the answer of Portuguese workers to the austerity budget proposed by the right-wing governmnent of Pedro Passos Coelho. The troika approved the measures taken as part of the bail out package but demanded more cuts as the economy is forecasted to fall by 3% next year.

The general strike was the largest in 30 years, and the second to have been called jointly by the CGTP and UGT trade unions after the massive general strike exactly one year ago. Despìte  candalous claims by the government that the strike call had only been answered by 10% of civil servants, the truth is that the strike paralysed public transport almost completely (trains, railways, buses, metro, ferries and airports), as well as education and health, postal services, ministries and local councils and large parts of industry (including most of the car plants), while participation was weaker in the service sector, small businesses and commerce.

From midnight on November 23 thousands of trade unionists organised pickets at the main factories, transport companies and industrial areas which in some cases faced police repression. From early in the morning pickets were organised outside large supermarkets, public institutions, schools and universities.

The strike saw over 30 demonstrations in towns and cities across the country, with the largest in the capital Lisbon and in Porto. Tens of thousands marched in two separate demonstrations in Lisbon, one called by the trade unions, the other by the indignados movement, which then joined together in Sao Bento, outside the Portuguese parliament. The mood was angry and militant, with a sea of red CGTP flags and shouts of “a luta continua nas empresas e na rua” (“the struggle continues, in the factories and in the streets) and “a greve é geral, o ataque é brutal” (“the strike is general, the attack is brutal”). The participation of the youth was also noticeable.

Portugal Foto Encontro Nacional Militares 2 22OUT2011Meeting of more than 2000 military personnelThe attacks have generated a response even on the part of police and army officers. As we reported before, the National Associations of Sergeants, Non-Commissioned Officers and Officers have publicly expressed their opposition to the budget and warned the government that their mission is to defend the people, not a particular government. The three organizations convened a massive national gathering of military personnel on October 22 with the participation of more than 2,000 people. On October 30th, more than 10,000 army personnel and their families demonstrated in Lisbon against the cuts. On the day of the general strike the National Association of Sergeants (ANS) had issued a call to boycott lunch and instead organise mass meetings to discuss their opposition to the budget. According to the ANS, over 85% of sergeants in 90% of all army units participated in the protest. The movement of army officers continues on November 30th, the day of the vote of the budget, when they have called for a demonstration outside parliament.

The brutal austerity budget introduced by the right-wing government of Passos Coelho comes on top of the earlier austerity measures already introduced by the social-democratic government of Socrates and which led to its defeat in the general elections in June. These cuts are linked to the 78bn euro rescue package agreed with the EU, the IMF and the European Central Bank (the troika) in May.

Amongst the measures passed last week are cuts in public sector wages, the elimination of Christmas and Summer bonuses for civil servants, massive increases in indirect taxation, increases in the prices of public services in general (including transport, healthcare, etc.), cuts in pensions, a lengthening of the working day by 30 minutes without an increase in pay, etc. The government also wants to attack employment rights and collective bargaining rights. The income of public sector workers has already been cut by 25% since 2010 and these new budget will represent an average cut of 5% in living standards for all working families.

As in Greece, these measures are having the impact of further plunging the economy into recession as they reduce the internal market. The Finance Ministry itself foresees a steep contraction of private consumption by 3.5% this year and 4.8% next year. Thus, while the government is working on the basis of the economy falling by 2.8% next year, the troika is already talking of a 3% contraction.

The visiting delegation from the troika already warned that these cuts are not enough and more will be needed. They specifically mentioned that “in order to increase competitivity, private sector wages will have to follow the example of those of the public sector, which has implemented sustained cuts”.

With the typical arrogance of imperial governors, the troika officials – which no-one in Portugal has elected and which in effect dictate the terms of the government’s policies – are demanding more.  A “fresh and determined effort is required to reinvigorate the structural reform agenda,” they said, and added that the success of the programme “crucially depends on… structural reforms that will remove the rigidities and bottlenecks behind Portugal’s decade-long growth stagnation.” Translated into plain language this means that all employment rights, workers’ protection and collective bargaining rights have to be abolished or at least severely cut back. This is the same programme which is being implemented or will be implemented in Greece, Italy, Spain, etc.

What this means is that the only way out of the crisis, from the point of view of the capitalist class is to make the workers pay for the debt through massive cuts and push their wages and conditions down to  a level where profitability can be restored. This programme clashes head on with the interests of the working class in Portugal and throughout Europe and it is what is leading to a sharpening of the class struggle.

Given the deep crisis of Portuguese capitalism and the general bad state of the European and world economy, the capitalists and bankers do not have any room for concessions. As proven in Greece in the last year, they are determined to get these massive attacks implemented at whatever cost. In Greece there have already been 15 or more 24-hour and 48 hour general strikes, massive demonstrations, workplace occupations and mass non-payment campaigns. And still, the austerity cuts are being pushed through.

The Portuguese workers are shocked by the brutal character of these cuts and they are starting to flex their muscles. One 24-hour general strike, however, will not stop the right-wing government of Passos Coelho, which feels confident of having a comfortable parliamentary majority and can count on support from the “opposition” Socialist Party which carried out similar measures before.

The only way to fight back against these attacks is if the general strike is seen as the beginning of a sustained and growing campaign of struggle. The unions have already called a mass demonstration on November 30 and have hinted at the possibility of calling another general strike. This should be a 48 hour general strike in order to increase the pressure.

What programme for the Portuguese working class?

Above all, the Portuguese working class movement needs to be armed with a clear programme which can offer an alternative to the current austerity measures. This has been missing so far.

The first point that needs to be recognized is that these attacks on workers' wages and conditions are the result of the crisis of capitalism, not of some ideologically driven offensive. The second point which flows from this is that a clear alternative that challenges the capitalist system itself is needed.

On both counts the trade union leaders and the leadership of the two main parties to the left of the Social Democracy (the Communist Party and the Bloco de Esquerda, BE) fall short of what is really required. While they of course played an important role in denouncing the measures of the government and actively organized for the general strike, their political stance weakens the movement as a whole.

The BE for instance, in their main free brochure in preparation for the general strike says: “The government and the troika say that there is no alternative to the recession which is destroying the country. That is a lie. They are just taking advantage of the crisis to attempt to impose a new social regime in Portugal”. This is completely wrong. It is not correct to say that they are using the crisis as an excuse to attack the workers. The truth is that within the limits of capitalism there is no alternative. The capitalists want to destroy workers' rights and conditions (if that is what is meant by a “new social regime”) precisely in order to restore profitability and make the workers pay the crisis of capitalism.

So what is the alternative advocated by the leadership of the Bloco? Under the heading of “Yes, there is an alternative” they propose three measures: 1) an audit of the debt, so that the “abusive” parts of it can be rejected. “Not only should we delay the payment deadlines and lower the interest rates, but also part of the debt should be cancelled, as has already been announced for Greece”. 2) “The state has the means to reactivate the economy,” they argue, which should be done by “creating investment lines for employment, creation of new industries, exports and above all import substitution”. They argue that this could be done by using the money allocated for the bank bail outs (which some banks have rejected because they do not want state participation) in order to “support production”. 3) “It is time to claim the debt Capital owes to the tax payers,” which seems to mean increased taxation on private businesses which benefited from privatization and private-public partnership deals and those who benefited from tax breaks.

We have to say clearly that this so-called alternative is completely utopian and does not serve to arm the movement against austerity cuts. First of all regarding the debt, the proposal amounts to nothing else than a “hair cut” like the one which has already been implemented in Greece. What the leaders of the BE seem to be saying, in their search of a “reasonable” and “realistic” alternative, is: we will pay part of the debt, but only the “nice” bits. The problem with this is that any renegotiation of the debt involves precisely that: reaching an agreement with the creditors (private banks and public institutions). The Greek renegotiation of the debt has been achieved on the basis of the real prospect that the private creditors may not get any money at all (in the case of an open default). Faced with that, they have agreed to part with some of their investments (an “orderly” default). The result in Greece? Massive cuts to guarantee the payment of the renegotiated debt! The debt cannot be paid and should not be paid. As a matter of fact, in Portugal itself, tens of thousands already mobilized on October 15 on the basis of the idea of rejecting the payment of the debt.

Secondly, the idea that the state can somehow reactivate the economy by providing credit lines to create employment and stimulate production, is basically a Keynesian idea, which ignores the depth of the economic crisis in Portugal and globally. Where is the Portuguese state going to get the money to lend to private investors to create jobs? The problem is that Portugal’s sovereign debt is already unsustainable! Furthermore, even if the state was somehow able to find the money (and the BE leaders seem to suggest that it should be taken from the bailout fund – ignoring the fact that precisely the bailout comes with conditionalities), what private capitalists would be prepared to invest in new productive capacity at a time when the economy is in a deep recession and they would not be able to sell their products? Finally, the part about increasing taxes on private companies and banks, we can all agree on. The problem is that increased taxation would not stimulate investment and job creation but precisely the opposite, it would lead to the capitalists seeking means and ways of hiding their money away!

In reality, all these “clever” arguments and worked out “concrete” proposals on the part of the leadership of the BE stem from the fact that they do not think that in Portugal in 2011 the balance of forces is favourable to propose a socialist programme. From an “ideological point of view”, they are of course in favour, but it is just not possible right now, they argue. The Bloco’s main leader Francisco Louça has argued exactly in this way in a long document on the website of his faction within the Bloco, the Association for a Revolutionary Socialist Policy. In this document he says that “what matters now is the concrete balance of forces, that which exists now and that which we can generate in the context of a much stronger social answer against the dictatorship of the debt. It is what we can do and what we will do, not a political fiction novel.” This “realistic” approach is the thinking that permeates all the policies of the leadership of the BE and which led them to support the Greek bailout when it was voted at the European Parliament and more recently to vote in favour of the imperialist UN no-fly zone in Libya when it was voted at the European Parliament.

The policy of a leadership, that considers itself to stand on the basis of revolutionary socialism, should not be determined by what is possible here and now in a narrow way, but by what is required by the objective situation and then, of course, it should find skilful ways of explaining such a policy and linking it up with transitional demands, starting from the concrete experience of the movement of the workers and youth.

The same arguments that are used to say that the debt is odious or abusive, can be used to justify its repudiation. The arguments that are used to explain how the capitalists have benefited from state money and tax exemptions can be used to argue for the nationalization of the banking system under democratic workers’ control. The same arguments that are used to criticize the capitalists for not investing can be used to argue in favour of the expropriation of the means of production so that they can be used to the benefit of the majority.

Such ideas would find a massive echo amongst the millions of workers and youth in Portugal whose consciousness is being shaped by the heavy blows of the economic crisis and the austerity cuts and by what they can see happening in Greece, in Italy and also in the US. Through their own experience and their participation in the movements that have taken place in Portugal in the last few years (the November 2010 general strike and the movement of the indignados), many have already drawn the conclusion, in a more or less clear way, that it is the capitalist system which is the problem. The task of revolutionary socialists is surely to help give this instinctive opposition a clear programme and a more refined understanding, not that of coming up with demands that are supposedly “realistic” and “can be achieved” within the system. This “realism” in actual fact ignores the real crisis of capitalism, a crisis that leaves no room for reforms within the system.

You will never create a balance of forces which is favourable to the implementation of a socialist programme if you do not argue for it and link it to the everyday struggles of the working class. As a matter of fact, the BE already centred its election campaign in June on the question of “renegotiating” the debt and lost half of the 550,000 votes it had won in 2009. Surely, the members and activists of the Bloco should reflect on this.

The leadership of the Communist Party on the other hand, which has a strong presence in the leadership of the CGTP trade union, advocates what is basically a nationalist policy against the euro (http://www.pcp.pt/sites/default/files/propaganda/201111_folheto_pcp_novemb_2011.pdf). While making excellent points denouncing the austerity package and how the workers are being asked to pay, the alternative that is proposed is not what the seriousness of the crisis requires.

It proposes a plan to “increase wages and pensions, fight casualisation and defend workers’ rights”, to “put an end to privatizations, defend public services and recover state control over strategic sectors of the economy” and to “give new value to public services.” But when it comes to explaining how this will be possible the proposals do not address at all the fundamental question of the crisis of capitalism. The Communist Party leadership advocates a “renegotiation of the public debt, the defence of national production and support for small and medium sized businesses,” as well as “taxing the banks, financial speculation and luxury wealth”, all this together with a “rejection of the capitalist road to European integration and a defence of national sovereignty.”

Again, this programme is very similar to the one proposed by the Bloco leaders, with the difference that the BE leaders are pro-European, while the PCP leaders are for “national sovereignty” and a “patriotic and left-wing policy for a Portugal with a future”. None of these points really address the main question: the capitalist system is in crisis, capitalists are not investing and the state, families and businesses are saddled with a massive debt which is the result of the attempt to artificially prolong the previous period of economic growth.

Portuguese capitalism is in a crisis which is a more acute manifestation of the general crisis of capitalism in Europe and worldwide. There are hundreds of thousands of workers who could be put to work to produce goods and services to fulfil the needs of the majority of the people. The obstacle is that under capitalism, production only takes place for profit and if capitalists do not think they can sell their products they will not invest, on the contrary, they will destroy existing productive forces. In order to recover profitability they will attempt to push wages and conditions down in order to out-compete other capitalists, both national and foreign, in the struggle for markets.

The only way out of this vicious circle would be to take over the means of production (banks, factories) into public ownership so that the economy can be democratically planned to the benefit of the majority. Socialism is the answer to the crisis of capitalism, not the promotion of small and medium enterprises or the defence of “national” capitalists as against “foreign” capitalists.

The question of Europe also needs to be addressed from this class point of view. We are neither for the European Union (which is a fragile union of capitalist economies dominated by the stronger German and French capitalists and bankers) nor do we defend the idea that behind the borders of “independent” capitalist countries the interests of the workers can be defended. The workers’ interests lie in the Socialist United States of Europe as part of the struggle for international socialism.

There is no doubt that in the months ahead the Portuguese workers and youth will attempt to resist the brutal austerity package imposed by the troika and the Passos Coelho government. In the process they will have to discuss which is the programme that offers a way out of the acute crisis of capitalism they are facing. We hope that our observations can contribute to such a debate.

See Picture Gallery of the strike from the Bloco de Esquerda website:

See Picture Gallery of the strike from the PCP website: http://www.pcp.pt/greve-geral-2011-galeria-2

See  a video of the strike here