Portugal: the days of social peace are over

The apparent social peace in Portugal in recent years – without major uprisings or noteworthy social turmoil – hides a much more complex and bitter reality beneath its fragile surface. Whilst the mainstream media, nationally and internationally, hailed the economic recovery after Portugal’s debt crisis as a new dawn, the scars left in society by a decade of austerity, exacerbated by the COVID-19 pandemic, have created the potential for future revolutionary developments.

The growing instability within the political system, particularly with the growth of the far-right, is a harbinger of social instability. The illusions that Portugal was somehow immune to a far-right movement have been shattered with a bang. The last year has thoroughly dispelled that exceptionalism. But, more significantly, there is also a growing mood of anger on the left, which has not yet found an adequate political expression.

Carrot and stick without the carrot

For decades, the Portuguese capitalist class has ruled with the carrot and stick through its political representatives – the PS (Socialist Party) and the PSD (the conservative Social Democratic Party) respectively, the latter often in coalitions with the CDS (People’s Party). However, capitalism today is no longer able to offer any kind of concessions or reforms to Portuguese workers. This has been the case for the last two decades, and particularly since the sovereign debt crisis of 2009.

Following the bailout of 2011, four years of intervention by the so-called “Troika” – the European Commission, the European Central Bank, and the IMF – resulted in a cruel combination of austerity, high taxes, and deregulation of the labour market, with attacks on workers’ rights, carried out by the right-wing PSD/CDS coalition. These damaging policies saw unemployment skyrocket to the record level of 16.2% in 2013, with young people bearing the brunt of this brutal, hopeless reality.

Unemployment among people below the age of 25 reached 38.1% in 2013. Despite the ‘recovery’, this figure was still 22.6% in 2020. Similarly, in the 2010s emigration hit levels not seen since the great exodus of the 1960s, both permanent and temporary emigration being consistently highest amongst people below the age of 30. While the vast majority were facing harsh conditions, the rich were getting considerably richer.

Costa Image European Council PresidentThe Socialist Party has been in power since 2015, with the help of the left parties, but their programme has remained one of balancing the books / Image: European Council President

When the PS, with parliamentary support from the left parties, the BE and the PCP, replaced the PSD/CDS coalition in 2015, they promised to “turn the page” on austerity. They have done no such thing, with the government priding itself on historically low deficits before the pandemic. They framed the lack of public spending in a positive light, while essential public services continued to suffer from chronic underfunding. Indeed, since 2015 the government has tried to pull the wool over the eyes of the Portuguese working class, claiming that the stick they are routinely being flogged with is actually a carrot. But the working class is not as obtuse as the ruling class seems to think.

High public debt, the third highest in the EU, has meant that the tax burden on wages remains higher than the OECD average, with no visible benefit for the working class. The average salary, adjusted for living costs, is the lowest in Western Europe. Although unemployment decreased steadily until 2019, this has mostly been due to an increase in insecure work, with seasonal jobs, short-term, and zero-hour contracts becoming increasingly prevalent, especially among young people.

Property speculation after the 2008 crash caused housing to become increasingly unaffordable to the working class, resulting in a rise in homelessness even before the pandemic. In 2019, 21.6% of the population was at risk of poverty or social exclusion; this is only just above the EU average, but it is significantly above the average when considering households with three or more children. With only meagre economic growth, on average around only 2% since 2015 and mostly due to tourism, all of this has created grim prospects for workers, especially young people.

The virus has exposed the disease

The pandemic has only exacerbated the contradictions that already existed in Portuguese society. The economic ‘miracle’ of the past few years – based largely on tourism and low wages that attracted speculative investment in tech bubbles – has popped like a soap bubble as COVID-19 grounded flights and brought the economy grinding to a halt. Unemployment has grown again and 1 in 4 families have lost at least 25% of their income in 2020, mostly due to job losses and the initial furlough scheme only covering two-thirds of workers’ salaries.

The economic crisis has stretched household budgets to the very limit, pushing tens of thousands of people into poverty, many of whom have had to seek help from food banks. The largest hunger-relief charity in the country, Banco Alimentar, claims that most people receiving assistance today are first-timers. Additionally, the national debt has spiked to a record level, with families and businesses accumulating overdue payments.

This debt bubble has been kicked down the road with debt moratoria. But with 22.2% of debt payments suspended, much higher than the EU average of 7.5%, this has been described as a “ticking bomb”, which will push thousands of families and businesses off the cliff edge in the coming period. Some 86,000 families have already had mortgage payments reimposed on them since 1 April, with other moratoria due to expire in September.

With such pressing issues facing the working class, the government recently proudly announced that the deficit in 2020 was 5.7%, less than the predicted 7.3%. Rather than a cause for celebration, this simply reflects the fact that the government didn’t spend as much as it had planned and, crucially, not as much as would have been necessary to alleviate the predicament of workers across the country.

This has embittered relations between the minority PS government and the left parties, the BE and the PCP. The former even voted against the government’s budget for 2021 in November, in a quarrel which might be thought of as quite significant following on from five years of close cooperation between these three parties. In reality, it proved to be little more than a political stunt.

More recently, parliament has bypassed the government to approve a new social stimulus package, with the left parties seeking to distance themselves from the PS, and the right opportunistically siding with them. The government threw a tantrum after this move, claiming it was unconstitutional. At the time of writing, this dispute has yet to be settled by the courts.

Such ‘frugality’ during what is the biggest crisis of capitalism ever is a testament to the government’s priority: to balance the books for the bourgeoisie, first and foremost. They didn’t show any such frugality when handing out a €1.2 billion bailout to faltering airline TAP. Nor when loaning €850 million to Novo Banco (an offshoot of doomed BES, once one of the largest private banks in the country before its downfall in 2014). Novo Banco has, in the meantime, reported losses over €1 billion for its fourth consecutive year and is asking for a new loan, with the government poised to oblige.

The pandemic has also exposed the glaring fragility of the SNS (Serviço Nacional de Saúde, the country’s national health service), subject to decades of chronic underfunding which have rendered it unprepared to handle a health crisis of this magnitude. A study has directly ascribed “avoidable loss of life” to this persistent chipping away at the public health service, which had been left understaffed and in need of important material resources.

The virus has exposed capitalism as the real disease. The coming years will be very grim for the Portuguese workers and poor. The cost of living is set to rise. The workers will be made to foot the bill again as the bourgeoisie attempts to rebalance the books following the €1.8 trillion EU stimulus package. Austerity, which never ended in Portugal, will extend well into this decade and beyond, degrading public services further and the social safety net.

The economy is increasingly based on low wages and insecure work, with fewer opportunities for young people. The standard of living will once again come under attack. In fact, we are already witnessing attacks on working conditions, with pilots, crew, and other workers at TAP facing wage cuts and redundancies as part of the company’s bailout deal with the government. Groundforce, a subsidiary of TAP, has fallen behind on wage payments and is on course for a bailout as well. In the construction sector, workers have been coerced into not reporting symptoms of COVID-19 or contacts with infected people.

A crisis of leadership on the left

The PS has cumulatively been in government for a longer time than the establishment right-wing parties. As the BE and the PCP have enabled a minority PS government since 2015, there is a widespread perception that it is mainly the ‘left’ that has been in power since 1975. There is also a belief among some sections of the population that the country’s weak economy, as well as its chronic structural issues, are the fault of the left. “Socialism”, once a popular word, has effectively lost any real meaning in Portugal thanks to the behaviour of the left parties, and it is often enough used as a slur by the right.

The major issue for the left parties is that they have followed a meek reformist line. The priority for the BE and the PCP since 2015 has been to ward off the threat of a new right-wing government. This has meant propping up the PS, despite its anti-working class policies. They have agreed to significant concessions imposed by the PS, voting for austerity budgets year after year.

Prioritising avoiding a new right-wing coalition between the PSD and the CDS may have made sense in 2015. But successive scandals and broken promises by the PS – particularly the withholding of budgeted funding of social programmes – have meant that the largely unwavering support offered by the BE and the PCP only causes these parties to share in the discredit that the PS has rightly earned. In a textbook example of the dangers of reformism, many among their electoral base now regard them as establishment parties. Indeed both the BE and the PCP were penalised in the 2019 general election.

Propping up the PS no matter what has failed to stop the rise of the right. In fact, the lack of a clear left-wing alternative has allowed the far-right to present themselves as the only anti-establishment voice. The BE and the PCP now risk losing even more parliamentary seats in the next general election, following on from the losses in 2019. Recent elections in the Azores have seen the right return to power after negotiations between the establishment right and smaller parties (including Chega and IL) enabled the PSD to form a minority regional government in the archipelago. Should the left parties continue to toe the reformist line, we could very well see similar developments unfold at a national level in the future.

Growing alienation

The presidential elections at the start of this year illustrated this process of alienation and how this might be expressed with the lack of a clear alternative. Although they saw incumbent president Marcelo win a landslide with 60.7% of the vote, the real winner was the option “none of the above”, with a historically low turnout of 39.24%. The ruling class excused this low turnout on account of the pandemic. But for this, we have to ignore the data on all the other elections of the past few decades, which shows low turnouts are now a chronic problem in Portugal.

Turnout has consistently decreased in general, presidential, European, and local elections alike over the past period. Participation was 48.6% in the last general election and 30.7% in the last EU parliamentary election. Those on lower incomes and particularly young people are less likely to vote. They increasingly reject politics as the realm of a privileged corrupt clique.

Abstention isn’t the only expression of this discontent. Many are looking for answers outside the political establishment. Indeed, parallel to the decline in turnout, Portugal has also seen a growth of the far-right party Chega, whose name literally translates as “Enough!”. Their leader, the demagogue André Ventura, finished the January presidential race in third place with 11.9% of the vote. A recent poll places Chega in third place in a future general election with 7.3% of the vote. This is an increase from 1.29% in the 2019 general election.

Basta Image RodrigospascoalThe far-right party, Chega, made gains in the recent presidential election. Their modest gains were based on harnessing anti-establishment anger in a populist manner / Image: Rodrigospascoal

The growth of Chega has understandably caused alarm for left-wing workers and youth. This party is known for their inflammatory rhetoric targeting Romani gypsy and black communities, and for effectively promising to overthrow democracy and install a “Fourth Republic”.

However, we must maintain a sense of proportion. The (modest) growth of Chega has largely been at the expense of the right-wing establishment parties, the PSD and the CDS. These parties formed the unpopular coalition government of 2011-15, which inflicted callous austerity upon the Portuguese working class. They have been in crisis ever since. The growth of the populist Chega on the one hand shows the most conservative layers are shifting away from the traditional right. On the other hand, for some working-class people support for Chega has been a very confused attempt to hit back at the establishment.

Their growth does not signify a general turn to the right. It is a sign of polarisation and the crisis of the left.

Thousands of people across the country joined the 2020 Black Lives Matter protests, emphasising the existence of structural racism in Portugal and demanding an end to police brutality against poor black communities, such as those in Amadora and Bairro da Jamaica. Exactly two months after the death of George Floyd in the US, Bruno Candé, a black Portuguese actor, was shot dead in broad daylight by a former combatant in the Portuguese colonial war. This racially aggravated murder proved the point made by BLM demonstrators and sparked fresh protests in the country.

But none of this has found adequate expression. Although there is a shift to the left within the labour and youth movements, it isn’t being represented by any political party. The two left parties, the BE (Left Bloc) and the PCP (Portuguese Communist Party) have been merely a vocal opposition to the far-right. But they have failed to put forward a genuine alternative for the working class.

No country for right-wingers

Even a modest vote for the far-right shocked many on the left. Portugal was always considered a country where the right were discredited and could gain little traction.

In the aftermath of the Carnation Revolution in 1974, after four decades of right-wing dictatorship, the Portuguese masses conquered a position of strength for the left parties. Any party seen to be against the revolution, or to have explicit ties to the old regime, was profoundly unpopular.

The original constitution of 1976 even contained an explicit commitment to socialism and to the nationalisation and socialisation of the means of production. This was removed after several revisions carried out by the establishment parties. The social-democratic PS took the name ‘Socialist Party’ in 1973 and won the 1975 general election by outflanking the Communist Party to the left.

Carnation Revolution Image Henrique José Teixeira MatosSince the Carnation Revolution in the 1970s, the right wing found themselves marginalised. But consecutive, supposedly ‘left’ governments have dragged the word ‘socialism’ through the mud, giving a new space for the right to come out openly under their own banner / Image: Henrique José Teixeira Matos

Even the biggest right-wing party, the PSD, calls itself the ‘Social Democratic Party’ and originally presented itself as a moderate left party. The right-wing Christian conservative party, the CDS, ludicrously calls itself the ‘Social Democratic Centre’. Until recently, they were the rightmost party around which the ultra-conservative and fascist-adjacent types could be found.

These confusing naming conventions attest to the fact that the establishment had to smuggle themselves into Portuguese politics. The right has never called itself by its proper name. However, over the decades, the behaviour of the PS in power has dragged the banner of ‘socialism’ and the ‘left’ through the mud. It has made it increasingly possible for right-wing parties to explicitly come out under their own banner. The surge of right-wing populist movements across the world in recent years has also been taken by the right as a sign of their legitimacy.

The need for a real alternative

The growth of the far-right is a manifestation, albeit a distorted and very reactionary one, of widespread anger against the establishment, which in turn stems from legitimate grievances. The growing alienation from politics and electoral abstention is another expression of this discontent. Many of these people would welcome an alternative that addresses the deep social crisis in a clear and decisive manner.

Furthermore, there is a very broad layer of the working class and the youth that is actively seeking answers on the left, but which has hitherto been inadequately represented by the leadership of the left parties. It is therefore up to Marxists in Portugal to provide a genuine alternative, building the subjective factor out of a sound systematic analysis of the objective conditions experienced by workers.

Only a bold socialist programme can ultimately solve the problems facing Portuguese workers and youth:

  • For a democratically planned socialist economy under workers’ control!
  • For the nationalisation, without compensation, of the private healthcare sector so as to increase the capacity of the SNS and mitigate its chronic underfunding, allowing it to respond to the healthcare emergency!
  • End private education, for a fully funded state education system to stamp out the inequality of educational opportunities!
  • For the nationalisation of big businesses under workers’ ownership rather than bailout deals that are paid for by the workers, as we have seen at TAP and Groundforce!
  • End unsafe work! For workers’ committees across the economy, giving our class decision-making power in workplaces. The workers themselves must decide if, when, and how to return to work under safe conditions during the pandemic!
  • Expropriate the properties of big landlords so that the current housing crisis can be resolved under a democratic plan that satisfies everyone’s needs, including a cap on rents, linking them to household incomes!
  • For the funding of urgent social and environmental programmes and other necessary structural investments by expropriating the wealth of the rich and the entire finance and banking sectors!

These demands will certainly resonate with the working people of Portugal, battered by years of austerity and an onslaught by the ruling class. With an organisation capable of providing genuine leadership to the labour and student movements nationally, the potential for the socialist transformation of society could be realised in our lifetime.