Portugal: A Preemptive Strike

Сontradictions in the new government

Originally appeared at Gianalytics

A Prime Minister in charge of a new government was just appointed in Portugal.  His name is Pedro Passos Coelho, and he is the leader of Portugal à Frente (Portugal Ahead), a center-right umbrella that had been governing the country in a pro-austerity direction between 2011 and 2015.  There is a slight problem, however, and a reason to hold back from clinking glasses. In the recent October 4 parliamentary elections, à Frente received a total of 107 seats out of 230 seats in the Assembleia da República, the Portuguese Parliament.  À Frente is now the largest bloc in parliament. But Portugal is a parliamentary democracy.  A coalition that wishes to govern must enjoy the vote of confidence of at least 116 members in parliament in which 230 members serve.  Passos Coehlo does not enjoy such a majority, and the parties on the Left are unwilling to join his coalition. This not only means that he will be unable to govern, since in 10 days most of the Portuguese parties will pass a no-confidence vote, but also that he does not represent the democratic will of the Portuguese majority. How did things come to this bizarre stage?

Before we begin to seek an answer to this question, we must first make sense of the Portuguese political map.  Portugal à Frente is the name of joint list composed of two parties, Partido Social Democrata (PSD), which is a social-democrat party only by name run by neoliberals (as one who is accustomed to European politics by now must know), and People’s Party (CDS), a Conservative party similar to the Christian Democrats. Passos Coelho’s bloc is pro-EU, pro-NATO and pro-austerity.  Under his government unemployment has grown and the government deficit reached 7.8%, the second highest in Europe. Unemployment among the young is rife, and many have expectedly left the country. Portugal à Frente planned to reduce the debt by raising taxes and cutting on public programs. It is a bloc that Chancellor Merkel would probably be happy to see in power.

The second largest party, the Socialist Party (Partido Socialista, PS) is led by a new leader, António Costa, who until recently was the mayor of Lisbon. PS was created in 1973 with the help of the German Social Democrat Party, one year before Portugal shed its fascist rule.  It is pro-Euro and in favor of ‘austerity light’.  It was the Socialist Party that took on the bailout in 2009 and later had to resign, just as in the case of Greece’s socialist Pasok.

Things get complicated, however. Contrary to what one may expect, the Socialist Party recently decided to stop playing business as usual. When asked prior to the elections whether he intended to form a government with à Frente, and therefore continuing with the predictable pro-austerity policy and following the line from Berlin and Brussels, Costa left no room for a second guess. “I would consider a grand coalition in the event of an alien invasion”, he said.  Indeed, after the elections, he did not seek a coalition with à Frente.

The Left Bloc (known as O Bloco or BE), modeled after the Greek Syriza is the third largest party. It was created in 1999, bringing together Trotskyites, Maoists and Communist Party defectors. It is in favor of leaving the Eurozone and supports freedom from austerity. O Bloco received 10.19% of the vote, earning 19 members in the Assembleia. The Portuguese Communist Party, created as early as 1921, ran together with the Green Party (PEV). The Red-Green bloc is staunchly anti-NATO and anti-EU. The Communists are particularly strong in the unions and in local municipalities. The Communists-Greens received 8.25% of the vote and took 17 seats.  The People-Animal-Nature Party (PAN) gained one seat.

Let’s do the math then.  The Left camp, from the Socialist Party leftward, has 122 seats (absent the undecided PAN). The Right camp has 107 seats. Since according to the 1976 Constitution Portugal is a parliamentary democracy, the President of the Republic, Aníbal Cavaco Silva, should now give Costa, the leader of the Socialist Party, the task of forming a steady coalition. After all, the Right bloc suffered a defeat, falling from the 132 seats it secured in 2011 to 102 seats and the Socialist leader Costa has a support of a majority of parliament members.  But that is not what happened.

On October 22, the Portuguese President Cavaco faced the cameras and his nation at the impressive presidential palace in Belém and announced that although the Portuguese people just participated in the elections and expressed their preferences, things are not as simple.  Forming a government that opposes the Eurozone and the EU is a government that does not provide for durability and stability, he said. Such forces, referring to the various Left parties that oppose austerity as usual, “do not match the strategic needs of Portugal”. For this reason, he decided to place the burden of forming the new coalition on Pedro Passos Coelho, the leader of the Right. Cavaco explained that nothing about this step was out of the ordinary.  In 40 years of Portuguese democracy, he said, the responsibility of forming a government has been given to the party that won the largest number of votes.  The president explained that in 2009 for example, the Socialist Party that gained only 97 seats was given the task of forming a short-lasting minority government.

But President Cavaco conveniently ignored the fact that never before in Portuguese history did the second largest party have the opportunity to form a stable coalition by relying on a majority of parliament members, which is the case now. In 2009, the Socialist Party was the largest winner and a different coalition was not possible at the time. The president took on a political line by arguing, much like a military commander, what the strategic choice of Portugal is but ignored what the nation actually voted for. By his logic, an unstable minority government is better than a majority government that does not automatically follow the EU line and therefore does not provide ‘stability’.

The president then made a startling statement. “In 40 years of democracy, never did the governors of Portugal depend on anti-European forces, that is, on political forces that in the electoral programs that they represented to the Portuguese people defend the revocation of the Lisbon Treaty…. the monetary union and the Stability Pact, and the dismantlement of the economic and monetary union, as well as the exit of Portugal from the Euro, in addition to the dissolving of NATO, an organization of which Portugal was a founding member”, he said.

There are several problems in this argument. Firstly, all the parties on the Left said that they will respect existing international commitments. Secondly, Portugal has been a democracy since 1974, but it joined the European Union only in 1986. Portugal’s democracy is therefore not tied to the EU but to its constitution. But the president tied the very existence of democracy in his country to the relatively new European Union. Thirdly, expressing an “anti-EU” opinion should be deemed legitimate and not blasphemous and is certainly a democratic right, but the president argued that “the European Union is one of the fundamentals of our democracy”.  Adhering blindly to the EU is what democracy must mean today, according to the president.

When Cavaco concluded by saying that “it is up to the deputies [of parliament] to have the capacity to decide in conscience and taking into account the superior interests of Portugal, if the government should or should not assume the functions that was given to it”, many took his words to mean that he was hinting to members of the Socialist Party to revolt against Costa and support the Conservative choice, giving the latter a majority in parliament. However, things did not work out as planned. Due to the backlash that resulted following his words, 15 members of the Socialist Party who may have otherwise revolted refrained from doing so.

Following the televised speech, various voices throughout Portugal and the social media reasonably claimed that this was an attempt at a constitutional coup by using his power as president to circumvent the will of the people and appoint a prime minister who does not reflect the choices of the majority.

But Filipe Henriques in Sorry, British Eurosceptics, but there was no coup in Portugal , argued that the President’s action was legitimate and ridiculed claims that this was a “coup”. Henriques explained that “according to the Portuguese constitution, the president has the right to choose the prime minister after consulting the parties with seats in the assembly of the republic and in light of the electoral results”. But if this case, it is unclear how appointing Passos Coehlo is in line with the election results as he doesn’t have a majority. Henriques claims there are various “historical precedents” of the president taking unilateral decisions. But none of the cases he cites include appointing a prime minister who does not have a majority in parliament following fresh elections.

Henriques argues that Eurosceptics fail to understand that “what’s happening in Portugal has nothing to do with the structure of the EU, only with the economic measures that the rightwing government imposed on the Portuguese people”. But according to the president himself, this has everything to do with the EU, as he said explicitly.  Furthermore, had Portugal not been a EU member it would have not been entangled in austerity measures following a bailout and its economy may have fared differently had it had the freedom to print its own currency.

The president’s disaregard of the people’s will is quite troubling. But where does Portugal stand now?

According to the constitution, the prime minister must submit his government’s program to the parliament within ten days. But all the Left parties already said that they will vote against it, causing the government to fall.

What kind of scenarios may then unfold?

One possibility is that the President may appoint Passos Coehlo as a prime minister with limited powers (“governo de gestão”) but that also means that he will not be able to pass the budget, leaving the country in a standstill and resulting in new elections, which due to a unique set of circumstances will probably in June 2016.  In the mean time, what is likely to happen is that in order to force the Portuguese people into submission, a fear campaign led by the EU and the European financial bodies will attempt to forecast a catastrophe if Portugal dares deviate from the path chosen for it by the EU.  After all, such fear mongering and blackmailing has already taken place in Greece when Syriza was told it must accept the Troika’s plans or face a cash shortage.

Another possibility is that President Cavaco will allow the leader of the Socialist Party Costa to form a government with the Left parties but such a scenario appears for now unlikely. It is also possible though not very likely that Costa will be pressured to form a government with Passos Coehlo.

One things has become clear, however. Developments in Portugal indicate that the pro-EU powers that be are taking no chances this time. While after the bitter experience of Greece, in which a left-wing party, Syriza, swore to say “Goodbye to the Troika” as Alexis Tsipras famously said in the night following his election and prolonged negotiations left the possibility of a Grexit open, this time no chances are taken with Portugal. The Left is not even being allowed to form a government, although it won a majority and even though parties said they see will respect Portugal’s international obligations.

All this indicates that we have entered a dangerous stage where the masks are coming off and even a pretense of democracy is being shed. After all, as the president said, democracy is the European Union itself, and not the will of the people if they oppose it.

In several days the government is likely fall. But there is a danger that Portugal will then fall into a prolonged stalemate and an inconclusive political outcome while its economy suffers due to subsequent fluctuation of the markets as the country enters months of uncertainty.  Such an outcome in itself would serve as a lesson to those who dare to vote for parties that challenge the status quo.  The president’s actions following the October 4 elections make it clear that no chances were taken. This may mean that the status quo is far more fragile that we realize and that the president is all too fearful about giving the helm to the Left parties, not knowing what line they will pursue in a country where debt is 130% of the GDP. In the case of Greece there were months of futile negotiations but with Portugal there is an attempt to avoid even that.

This time it’s a preemptive strike.