Portugal: a case study in the politics of austerity

Portuguese workers face a bleak future but the country's weak, fragmented left has empowered the neo

A worker holds the Portuguese flag during a protest against government austerity measures last week
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Portugal had certainly geared itself up for last Thursday's general strike against the IMF/EU-imposed austerity package. Not long after landing in Lisbon a few days before, I noticed that the city was plastered with colourful banners and posters. "Reject the Pact of Aggression!" bellowed hundreds of Portuguese Communist Party posters; others called for people to "Fight the Austerity Regime." In their preparations for the greve geral, Portugal's trade unions could certainly teach their British counterparts a thing or two.

But - then again - workers in Portugal face an even bleaker future than they do here. Pedro Passos Coelho's right-wing government has extended the working day by half an hour, driven through deep cuts in health and welfare, and is cutting Christmas bonuses for civil servants. That's essentially the thirteenth payment of their annual salaries and, in a country where the minimum wage is just €450 (£386) a month, it makes a big difference. Social gains won over decades are being stripped in weeks and months.

Portugal was the third EU country to be bailed out after Greece and Ireland, and the austerity measures are justified by the terms of the €78bn package. But, as elsewhere, the policies have sucked growth out of the economy. When credit-rating agency Fitch downgraded Portugal's debt to junk status on the same day of the strike, they estimated the economy would contract by 3 per cent next year.

The thousands of strikers who gathered outside the National Assembly on Thursday certainly feel that austerity has gone too far. 'Basta' - 'Enough' - was the most common slogan inscribed on banners. Enraged workers expressed that familiar frustration of the post-Lehman era - why are we being made to pay the bill for someone else's mess? "The poor class and the middle class are being made to pay for this crisis," Maria, a media assistant, told me. "We are spending our money to give to the banks. It's not fair - they're putting it in their pockets." Protesters had a strong sense that they were facing a similar onslaught - differing only in scale - as other Europeans. But there was also deep anger expressed at the Troika enforcing austerity - the European Union, the European Central Bank and the International Monetary Fund. Across the political spectrum, there's a realisation that Portugal has lost much of its sovereignty.

Portugal will be an interesting case study as to just how possible radical neo-liberal policies are in modern democracies. Economists close to the government privately express impatience that "reforms" are not fast or far enough. But their real fear is that the democratic system is on a collision course with what they regard as necessary policies, which - they believe - will prove to be short-term pain for long-term gain.

Maria certainly doesn't expect resistance on the scale of Greece. "We're not such a radical country," she argues. "We're very, very peaceful." While Communists dominate the main trade union federation (the CGTP), union membership is even lower than Britain - running at less than a fifth of workers and, as here, overwhelmingly concentrated in the public sector. There have only been two other national strikes in the 37-year history of Portuguese democracy.

But Portugal also has a recent revolutionary tradition. When left-wing army officers toppled António Salazar's authoritarian right-wing 'New State' regime in the 1974 Carnation Revolution, radical politics flourished. "Socialism" was inserted into the constitution, and the first post-Salazar Prime Minister Vasco Gonçalves pledged a "fight to the death against capitalism." Time magazine even fretted that the revolutionary government would "transform Portugal into Western Europe's first Communist nation." It didn't pan out that way, but constitutional clauses forbidding privatisation remained in place as late as 1989.

Many of Thursday's strikers drew on this tradition. "The 25th April forever, liberation from fascism!" was one of the chants, referring to the day that left-wing officers toppled the Salazar regime.

But, as in most other European countries, the left has failed to benefit from the biggest crisis of capitalism since the 1930s. In fact, quite the reverse. The June general election was certainly marred by low turnout, suggesting widespread disengagement from the political process. But the right-of-centre social democrats won over half the vote, while the even more right-wing People's Party achieved their best result since 1983. The Socialists were kicked out of office with their worst showing since 1987; though, in any case, they were also committed to radical austerity measures. Meanwhile, the Communist vote stagnated, and the radical Left Bloc lost half their MPs.

It is this weak, fragmented left that offers the best chance of success for radical neo-liberalism in Portugal. Frustration and anger will inevitably escalate further but - unless a coherent alternative emerges to give it political focus - it is unlikely to present a real challenge to austerity. And if that's the case in Portugal, it's just as true everywhere else.

Owen Jones is a left-wing columnist, author and commentator. He is a contributing writer to the New Statesman and writes a weekly column for the Guardian. He has published two books, Chavs: the Demonisation of the Working Class and The Establishment and How They Get Away With It.

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Why the Liberal Democrats by-election surge is not all it seems

The Lib Dems chalked up impressive results in Stoke and Copeland. But just how much of a fight back is it?

By the now conventional post-Brexit logic, Stoke and Copeland ought to have been uniquely inhospitable for the Lib Dems. 

The party lost its deposit in both seats in 2015, and has no representation on either council. So too were the referendum odds stacked against it: in Stoke, the so-called Brexit capital of Britain, 70 per cent of voters backed Leave last June, as did 62 per cent in Copeland. And, as Stephen has written before, the Lib Dems’ mini-revival has so far been most pronounced in affluent, Conservative-leaning areas which swung for remain. 

So what explains the modest – but impressive – surges in their vote share in yesterday’s contests? In Stoke, where they finished fifth in 2015, the party won 9.8 per cent of the vote, up 5.7 percentage points. They also more than doubled their vote share in Copeland, where they beat Ukip for third with 7.3 per cent share of the vote.

The Brexit explanation is a tempting and not entirely invalid one. Each seat’s not insignificant pro-EU minority was more or less ignored by most of the national media, for whom the existence of remainers in what we’re now obliged to call “left-behind Britain” is often a nuance too far. With the Prime Minister Theresa May pushing for a hard Brexit and Labour leader Jeremy Corbyn waving it through, Lib Dem leader Tim Farron has made the pro-EU narrative his own. As was the case for Charles Kennedy in the Iraq War years, this confers upon the Lib Dems a status and platform they were denied as the junior partners in coalition. 

While their stance on Europe is slowly but surely helping the Lib Dems rebuild their pre-2015 demographic core - students, graduates and middle-class professionals employed in the public sector – last night’s results, particularly in Stoke, also give them reason for mild disappointment. 

In Stoke, campaign staffers privately predicted they might manage to beat Ukip for second or third place. The party ran a full campaign for the first time in several years, and canvassing returns suggested significant numbers of Labour voters, mainly public sector workers disenchanted with Corbyn’s stance on Europe, were set to vote Lib Dem. Nor were they intimidated by the Brexit factor: recent council by-elections in Sunderland and Rotheram, which both voted decisively to leave, saw the Lib Dems win seats for the first time on massive swings. 

So it could well be argued that their candidate, local cardiologist Zulfiqar Ali, ought to have done better. Staffordshire University’s campus, which Tim Farron visited as part of a voter registration drive, falls within the seat’s boundaries. Ali, unlike his Labour competitor Gareth Snell and Ukip leader Paul Nuttall, didn’t have his campaign derailed or disrupted by negative media attention. Unlike the Tory candidate Jack Brereton, he had the benefit of being older than 25. And, like 15 per cent of the electorate, he is of Kashmiri origin.  

In public and in private, Lib Dems say the fact that Stoke was a two-horse race between Labour and Ukip ultimately worked to their disadvantage. The prospect of Nuttall as their MP may well have been enough to convince a good number of the Labour waverers mentioned earlier to back Snell. 

With his party hovering at around 10 per cent in national polls, last night’s results give Farron cause for optimism – especially after their near-wipeout in 2015. But it’s easy to forget the bigger picture in all of this. The party have chalked up a string of impressive parliamentary by-election results – second in Witney, a spectacular win in Richmond Park, third in Sleaford and Copeland, and a strong fourth in Stoke. 

However, most of these results represent a reversion to, or indeed an underperformance compared to, the party’s pre-2015 norm. With the notable exception of Richmond’s Sarah Olney, who only joined the Lib Dems after the last general election, these candidates haven’t - or the Lib Dem vote - come from nowhere. Zulfiqar Ali previously sat on the council in Stoke and had fought the seat before, and Witney’s Liz Leffman and Sleaford’s Ross Pepper are both popular local councillors. And for all the excited commentary about Richmond, it was, of course, held by the Lib Dems for 13 years before Zac Goldsmith won it for the Tories in 2010. 

The EU referendum may have given the Lib Dems a new lease of life, but, as their #LibDemFightback trope suggests, they’re best understood as a revanchist, and not insurgent, force. Much has been said about Brexit realigning our politics, but, for now at least, the party’s new normal is looking quite a lot like the old one.