An anti-austerity demonstration in Lisbon in 2014. Photo: Patricia de Melo Moreira/AFP/Getty Images
Show Hide image

Why the left is losing the austerity argument

Unlike voters in Greece, Spain or Ireland, the Portuguese are not turning to left-wing parties – even the moderate mainstream left is failing to turn Portugal’s hardships to its advantage.

In a Lisbon hotel, Portuguese nurses sit, waiting to be interviewed for jobs at an NHS trust in the north of England. “The national health service in Portugal is being destroyed,” says Artur Colares, a 45-year-old trauma nurse. “Many medical professionals are choosing to emigrate.”

Portugal’s health service has been battered by deep spending cuts. Nurses have had their salaries frozen, their overtime pay reduced, their promotions halted and their working week increased by five hours with no change in what they earn.

“Nurses are overstretched, exhausted and demoralised,” says José Carlos Martins, the head of the nurses’ union that staged a two-day national strike for better conditions this month. More than 10,000 nurses have emigrated in the past six years, leaving a shortage of 25,000, according to union figures. The flight of medical and other professionals is just one scar left by the recession that Portugal suffered following an economic adjustment programme overseen by the EU and the IMF in return for a €78bn bailout in 2011.

Since then, emigration has risen to levels unknown since the 1960s, with more than 100,000 people leaving each year. Britain is a leading destination for Portuguese emigrants but unlike the previous generations of rural workers who fled, today the migrants include many skilled young graduates who, after years of state-funded education, cannot find a job at home.

A third of those under 25 are unemployed. Half the university graduates under 35 who have a job are estimated to earn less than €900 a month, with one in three earning no more than €600. Aggrieved, they call themselves “the 500 generation”, referring to the monthly minimum wage, which many bring home by working on short contracts in cafés or call centres.

Greece and Spain, where youth unemployment is even higher, bear similar wounds. But unlike voters in these countries – or in Ireland, another bailed-out country – the Portuguese are not turning to left-wing parties such as the Greeks’ Syriza, Podemos in Spain or the anti-austerity Sinn Fein. Even the moderate mainstream left is failing to turn Portugal’s hardships to its advantage.

Less than four months away from a general election, the centre-left Partido Socialista (PS), the main opposition party, had been expected to be leading comfortably in the polls, with its promise to “turn the page on austerity” and put more money in voters’ pockets by reversing public-sector cuts and lowering taxes.

Yet a recent poll showed the PS fewer than 4 points ahead of the two right-of-centre parties in the coalition government that has presided over four years of austerity. Anti-establishment parties of the Podemos or Syriza variety are, in effect, off the radar here. None polls more than 4.5 per cent. On current voting intentions, neither the ruling coalition nor the PS would have enough support to form a majority government.

Pedro Passos Coelho, Portugal’s centre-right prime minister, has been heartened by David Cameron’s election victory in Britain, noting that it was achieved in spite of “difficult and unpopular measures”. The parallels are clear. Passos Coelho’s message, not unlike George Osborne’s, is that austerity works. Over the past four years, Portugal has turned its big current account deficit into a surplus. The economy has been growing for more than a year and is forecast to expand by 1.7 per cent in 2015 while the budget deficit falls below 3 per cent of GDP for the first time in 15 years.

António Costa, who took up the leadership of the PS last year after resigning as mayor of Lisbon, argues that this is only one side of the bailout coin, achieved at the cost of record unemployment, the worst recession in almost half a century and social hardship. Meanwhile, public debt has risen to 130 per cent of GDP, a level considered unsustainable by many economists.

The PS, however, has toned down its message as the stand-off between the Greek government and its creditors brings out the risk-averse side of Portuguese voters. “Passos Coelho’s message to voters is very simple and effective,” writes the political commentator Teresa de Sousa. “Do you want to put all the sacrifices you have made at risk and lose everything?”

Analysts seeking to explain why Portugal is bucking the trend set by other austerity-hit countries in the eurozone also point to the role of the Communist Party, which often polls as high as 10 per cent of the vote, providing a lightning rod for anti-establishment and anti-austerity dissent while remaining too far outside the mainstream to enter government in alliance with the moderate left.

This article first appeared in the 19 June 2015 issue of the New Statesman, Mini Mao

Getty
Show Hide image

Italian PM Matteo Renzi resigns after referendum No vote

Europe's right-wing populists cheered the result. 

Italy's centrist Prime Minister Matteo Renzi was forced to resign late on Sunday after he lost a referendum on constitutional change.

With most ballots counted, 60 per cent of Italians voted No to change, according to the BBC. The turn out was nearly 70 per cent. 

Voters were asked whether they backed a reform to Italy's complex political system, but right-wing populists have interpreted the referendum as a wider poll on the direction of the country.

Before the result, former Ukip leader Nigel Farage tweeted: "Hope the exit polls in Italy are right. This vote looks to me to be more about the Euro than constitutional change."

The leader of France's far-right Front National, Marine Le Pen, tweeted "bravo" to her Eurosceptic "friend" Matteo Salvini, a politician who campaigned for the No vote. She described the referendum result as a "thirst for liberty". 

In his resignation speech, Renzi told reporters he took responsibility for the outcome and added "good luck to us all". 

Since gaining office in 2014, Renzi has been a reformist politician. He introduced same-sex civil unions, made employment laws more flexible and abolished small taxes, and was known by some as "Europe's last Blairite".

However, his proposed constitutional reforms divided opinion even among liberals, because of the way they removed certain checks and balances and handed increased power to the government.

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.