A sign of hope in Portugal

David Raby reports on the election of an anti-austerity government in Portugal

25th February 2016

Left bloc rally

For all of us who believe in a Europe of democracy and social justice, the emergence of new progressive parties, movements and even governments in various countries is enormously encouraging.

A year ago we were thrilled by the unexpected victory of Syriza in Greece, and inspired by its valiant struggle culminating in last July’s referendum victory that said “No!” to the humiliating terms of the bankers’ Troika. In the same way we were massively disappointed when the same Troika brutally imposed austerity terms on Greece anyway.

This is why it is so important to realise that another country, Portugal, recently elected an anti-austerity government, and so far it is achieving some success in standing up to the bankers and austerity-mongers in Brussels, Berlin and Washington.

In last October’s Portuguese general election there was no clear winner, but the outgoing right-wing coalition was unable to continue and after prolonged negotiations a left government was formed under Socialist Prime Minister António Costa. For the first time ever, the Socialist Party, the Communists, the Left Bloc and the Greens all agreed to work together and to govern “for the people, not the bankers” in the words of Left Bloc leader Catarina Martins.

Anti-austerity measures

The new government immediately declared an increase in the minimum wage; an end to the previous government’s public-sector wage freeze; an end to the pension freeze; an increase in income tax deductions for dependent family members; a reduction in VAT on restaurant meals from 23% to 13%; and an increased tax on banks.

This surprisingly clear anti-austerity programme was followed by further announcements aimed at strengthening the public sector: a halt to previously-planned privatisation of public transport in Lisbon and Oporto, and the partial re-nationalisation of the national airline TAP (a sell-off which had been rushed through at the last minute by the outgoing government).

How can Portugal get away with this when Greece couldn’t? Basically because its public debt is officially under control, so it doesn’t have to negotiate everything with the Troika. Nevertheless, the ever-vigilant German Finance Minister Wolfgang Schauble declared on February 10th that Portugal should not deviate from “the successful path it was following” previously, or else it might “disturb the financial markets”. He was promptly backed by the Dutch president of the unelected Eurogroup and by the International Monetary Fund.

On this basis the Portuguese government was blackmailed into making some concessions in order to conform to EU budgetary rules, and proceeded to increase taxes on tobacco, petrol and motor vehicles. But it is a positive sign that Portugal refused to back down on its main anti-austerity measures, maintaining the increases in public-sector wages, pensions and the minimum wage and the new tax on banks.

Similarly the decision to halt privatisation of public transport in the two main cities is now being implemented, despite the fact that it affects powerful interests such as the British company National Express which hoped to take over Oporto’s bus services. This is surely a welcome indication that a determined government with popular support can begin to implement an alternative to austerity policies.

Need for publicity

Not surprisingly, virtually none of this has been reported in the British media. But it is surely essential for us in Another Europe Is Possible to give it all the publicity we can. Indeed, we need to shout it from the rooftops: there is an alternative, and Portugal is showing how to do it!

The Portuguese example is also relevant to the current situation in Spain, where elections in December produced a stalemate which has yet to be resolved. The right-wing Popular Party lost its majority there, but attempts to form a Portuguese-style coalition of the anti-austerity party Podemos, the Socialists and others have so far failed because they lack a clear parliamentary majority; there may in the end have to be new elections. Spain is of course much bigger than Portugal, and an anti-austerity victory there would really set the cat among the pigeons and greatly strengthen the forces of change all over Europe.

David Raby is a retired academic in Latin American and Iberian History & Politics and author of “Fascism and Resistance in Portugal” (Manchester UP, 1988) and “Democracy & Revolution: Latin America and socialism today” (Pluto, 2006). He is also a Green Party City Councillor in Norwich and is on the International Committee of the Green Party of England and Wales.