Coronavirus shatters illusory Portuguese “boom”

The coronavirus crisis has shattered the lauded Portuguese "boom", which is based primarily on the now-crippled tourism industry, and exposed the fragility of this backward European economy. Portuguese workers must follow the example of their class brothers and sisters in Italy and Spain, who have met the bosses' attempts to make them choose between health and pay, with strikes and class struggle!

Note: The situation in Portugal has moved on quickly since this article was written. Confirmed COVID-19 cases have almost tripled since the weekend and the country has experienced its first deaths. The President is set to declare a state of emergency which will involve repressive measures such as the banning strikes. We will publish an update tomorrow.


Last weekend, the historic centre of Lisbon, usually teeming with tuk-tuks, walking tours and selfie-seeking backpackers, was cloaked in an eerie silence. The seemingly never-ending queue for the number 28 tram that usually snakes its way from one of the city’s main squares was nowhere to be seen. What tourists there were made their way cautiously through the streets – often wearing masks – towards the few government-run attractions that have not been closed until at least 3 April.

In previous articles over the past two years, we predicted that the Portuguese economic recovery – optimistically described as a “boom” by certain bourgeois publications – could turn into its opposite given the slightest shock from elsewhere in Europe. We also explained that, by founding the economic recovery in large part on an expansion of the tourist industry, the Portuguese ruling class was setting itself up for an even faster and more spectacular fall. Now this prediction is coming to pass emphatically, as the coronavirus pandemic has tipped Europe into the recession it was already heading for.

Tourism slump

Tourism is the sector showing the first and most obvious signs of economic damage in Portugal, as the virus forces millions of people from Europe’s largest economies to cancel travel to the Iberian Peninsula. While the number of confirmed cases in Portugal was still well below 100, the Algarve’s AHETA hotel association said 60 percent of the 411 hotels in the region had already experienced cancellations. With the number of cases rapidly increasing across the continent, including inside Portugal, and with neighbouring Spain now in a state of emergency, the number of visitors for the spring season at least is set to collapse completely. TAP, the Portuguese national airline, had cancelled over 3,500 flights earlier this week and is about to cancel many thousands more.

Portugal Tourism Nature Image Max PixelPortugal's economy is dependant on the tourism industry, which has been gutted by the COVID-19 pandemic / Image: Max Pixel

In a list (compiled by the World Travel and Tourism Council) of countries most at risk due to a coronavirus-related drop in tourist numbers, Portugal placed fourth in the world and second in Europe (behind Greece). The tourist industry accounts for over 19 percent of national GDP and employs more than one-in-five Portuguese workers. That doesn’t include the service sector workers in industries such as transport, a large proportion of whose work is serving tourists.

The knock-on effect of a collapse in tourism will be enormous, without even taking into account the impact of emergency measures gradually being enforced by the Portuguese government to prevent the virus spreading further. Hundreds of thousands of people will be without the seasonal and temporary tourist-driven work that their livelihoods depend on. Meanwhile, the huge numbers of hospitality workers on precarious, short-term contracts or in bogus self-employment via the “recibos verdes” scheme will suddenly be facing unemployment as an immediate and very real prospect. Small business owners and city-centre homeowners who have jumped on the AirBnB bandwagon will find their accounts in the red just at the time of year when visitor numbers typically begin to spike.

When the coronavirus hits Portugal hardest, a massive slump in the tourist industry will soon pull the rest of the economy down with it. And even when the worst of the pandemic is over for Europe, due in large part to their over-reliance on tourism, the Portuguese ruling class will be in no position to rebuild quickly. During periods of economic crisis, when markets shrink and demand disappears due to the evaporation of cheap credit as the contradictions of capitalism coming to the fore, tourism – a fairly superficial and disposable element of the world economy – is one of the first industries to suffer. And as the economy comes out of the crisis, tourism is one of the last things to recover. This will be particularly true in the case of the current crisis, which will make millions of people reluctant to travel for a long time to come.

When the glossy veneer of the tourism “boom” is wiped away, the true frailty of the Portuguese economy – still one of the most backward in Europe – will be left horribly exposed. A completely new reality will fast set in for the Portuguese working class, who have experienced relative calm for the last five years despite generalised precariousness and ballooning rents. This new reality will present another level of hardship altogether, leading to open class warfare on a mass scale.

The Portuguese government tries – and fails – to learn from Italy and Spain

In the immediate term, the PS government is doing its utmost to avoid – or at least delay – the catastrophic situations developing in Italy and Spain from also coming to Portugal. Unlike the governments of the largest Western European nations, which apart from anything else have been guilty of the most criminal complacency, the Portuguese government did begin implementing various preventative measures on a national scale while the number of confirmed cases was still in single figures.

With just a handful of cases confirmed, the public was banned from attending major sporting events before they were cancelled altogether. During the course of the last 10 days, museums, art galleries and other public spaces were closed, mass gatherings were discouraged and prohibited, universities and colleges were closed and schools and libraries followed, with restrictions on other public services. From Monday 16 March people will be blocked from travelling to and from Spain for at least two weeks.

Antonio Costa Image Flickr PES CommunicationsAll governments are having to make a decision: protect human lives or the market economy. In Portugal, just as in other countries, the PS government is leaning towards the latter course, despite taking preventative measures / Image: Flickr, PES Communications

Of course, workplaces - in each of which hundreds if not thousands of people gather to spend half their waking week together in close quarters, sharing poorly-ventilated spaces and equipment - are a different story. Yes, people are being “encouraged” to work from home. In fact, a bill has been passed ensuring that, if you are able to work from home and decide to, your employer cannot stop you.

But what exactly does this mean for the Autoeuropa assembly plant workers in Almada? Or the dockworkers in Setubal and Sintra? Or the shoe factory workers in the north? Or the textile factory workers in the Alentejo? Or the tour guides, tuk-tuk and Uber drivers, and delivery workers giving phony “recibos verdes” to their agencies? Or the AirBnB cleaners and hotel bar staff? Or the hundreds of thousands of call centre workers who are not allowed to bring labelled bottles of water into their ID-secured workspaces, let alone work where they like unsupervised? Can they work from home if they decide to?

In a country where there is no sick pay and a one-day “unjustified” absence for illness can be grounds for firing someone, many workers are being bullied into using their holiday allowance days to self-isolate at home while business is down. The government has also come up with a regime of remuneration which gives workers a basic wage of up to 905€ per month who are self-isolating: two thirds of their average wage. There is an additional measly sum provided to parents who are also having to look after children while schools are closed. Only self-isolating workers who usually receive a wage of 952.24 euros – which is well above the average wage in Portugal – would end up receiving at least the net minimum wage while in isolation.

Moreover, much like the provision for long-term sick leave in Portugal, the bulk of this payment will come straight from Portuguese taxpayers in the form of social security. Employers will only cover 30 percent of the remuneration, and in return for this generous sacrifice they will also be gifted exemption from the TSU – a corporation tax that pays into the government’s social security fund.

So Portuguese workers will lose out in three ways: they will be docked one third of their wages for choosing the health and safety of their families over catching the virus at work, in the majority of cases choosing genuine poverty over life-threatening illness; those still forced into work will be paying the wages of their colleagues through the regressive flat-rate social security tax; and all workers will later have to shoulder the additional debt accrued by giving employers a corporate tax break for their already minimal troubles.

Meanwhile, the buffoonish Portuguese President Marcelo staged a demonstration of his voluntary self-confinement for reporters after testing negative for the coronavirus last week. He told the media he wanted to set “a good example” for the nation. It would have been worth clarifying that, when your job only involves posing for photo opportunities and occasionally intervening in the parliamentary process to stop it from threatening the interests of capital, it’s a bit easier to work from home than for those of us with proper jobs.

It is also worth noting that, while less-profitable public spaces owned or subsidised by the state have been or will soon be closed, some of Portugal’s main commercial centres – where many thousands of people at a time can breathe the same air – are still open, and will remain so for the foreseeable future. For example, the Lisbon area is home to some of the largest malls in Europe. It goes without saying that these cathedrals of capitalism have not been closed, and will be among the last public spaces to shut down in the event of a lockdown.

The measures taken by the government have clearly not been enough to prevent the virus from spreading, as the number of confirmed cases more than doubled over the weekend to 245. With suspected cases in the thousands, the SNS (Portuguese health service) – which has been cut to the bone over the past eight years – will become the focus of the situation over the coming weeks.

“Life before profit!”

The CGTP has spoken out against the pitiful remuneration package that the government has agreed with employers for workers having to stay at home during the coronavirus pandemic. However, while they are correct in their criticism, they propose no alternative except that the 70 percent of the payment covered by the state should come from the income tax budget rather than social security – as though this were the only problem with the package! The main Portuguese trade union federation should be leading the calls for a mass strike if the health and safety of workers and their families is not put before the profits of big business.

Instead, the fighting talk is left to small independent unions like the Union of Call Centre Workers (STCC) and individual activists, who are raising the slogan “Life before profit!” They are rightly calling for call centres to be shut down until proper safety measures are put in place or provisions are made for work in isolation. As of Sunday evening, the STCC has called a 12-day strike of all call centre workers from 24 March, in order to force the quarantine of all non-essential workers without loss of pay. Regardless of the inaction of the CGTP, which has been a common theme of the previous five years of PS government, the situation in Portugal will reach a critical point at which workers start taking matters into their own hands on a mass scale.

The struggle between a safe, civilised existence for the majority in society and the profits of the minority is being magnified under the present extreme conditions of the coronavirus pandemic. Right now, governments in every country affected by this crisis are having to make a decision: whether to minimise the loss of human life at great cost to the market economy, or to minimise the costs to the market economy while sacrificing human lives. In Portugal, just as in other countries, despite the preventative measures that have been taken, the government is leaning towards the latter course, in defence of the interests of the ruling class.

As billions around the world will experience hardship to one degree or another over the coming weeks and months, the capitalist class couldn’t care less about a human life standing in the way of its profits. Every politician and business owner responsible for this, who fails to make the necessary provisions for the safety and financial security of all workers and their families, will have the blood of thousands on their hands. The working class will not forget this.

On the other hand, at 10.00pm on Saturday, traditional working-class neighbourhoods around Lisbon broke into spontaneous applause for the healthcare workers fighting the coronavirus on the front lines. This act mirrored the displays of communal spirit shared between windows and apartment blocks across Italian cities over the past few days, which themselves chimed with the solidarity video messages recorded for Italians by thousands of ordinary Chinese people and shared on social media. In stark contrast to the grasping cynicism of big business and its parliamentary stooges, it is this instinctive sense of comradeship that epitomises the class which will inherit the earth.

What we demand:

  • Social guarantee of full wages to all those required to self-isolate and/or supervise children covered wholly by companies; no job cuts.
  • Proper preventative safety measures put in place regarding all social environments, public spaces, schools, childcare centres, etc, regardless of the effect on company profits.
  • Full social security payment equivalent to a living wage for those losing out provisionally-agreed work contracts, to be funded wholly by 100 percent tax on the profits of big tourist companies and property speculators, to be expropriated if they refuse to pay. The maintenance of all tourist workers’ contracts already provisionally in place for the year, including fake “green receipts”.
  • Requisitioning of certain hotels, private tourist centres and private hospitals for public use to boost SNS, in particular for the creation of test and treatment centres in every neighbourhood, with those who have lost employment opportunities hired to boost the workforce required at these centres. To be funded by expropriation of the profits of these hospitals and big hotel companies without compensation.
  • Reversal of all user charges for SNS imposed since EU memoranda, reopening of closed clinics and hospitals where possible. Additional funding for medical schools to be paid for expropriation of profits of private universities.
  • Provision of free masks, sanitary equipment and medicines covered by employers and expropriation of big pharmaceutical companies
  • CGTP and other TUs should not just be criticising the government’s lack of action or prioritisation of employers. They should be organising the means of making their demands count – mass strike action, following the Italian example.
  • This situation shows how valuable workers are. Without us, employees are nothing. The protection of workers and their families should be at the centre of any plan to tackle this crisis – but the PS government on the side of the bosses and the bosses themselves are not going to provide this out of the goodness of their hearts. We have to make it happen ourselves.