Can Europe Make It?

Why these European elections matter for Portugal

As Portugal celebrates the 40th anniversary of the Carnation Revolution, the Portuguese must decide what role they want to play in Europe. Euro elections landscape, 2014.

Sara Loubser
13 May 2014
Austerity graffiti in Portugal. Flickr/anastaz1a. Some rights reserved.

Austerity graffiti in Portugal. Flickr/anastaz1a. Some rights reserved.

Although the Portuguese public has been urged to participate en masse in the 25 May European elections, such a scenario seems unlikely to take place. In previous elections Portuguese voters have shown little enthusiasm regarding the composition of the European Parliament. The democratic deficit at the EU level has allowed politicians in Portugal to eschew European debates, choosing instead to focus their campaigns on national issues. The Portuguese have largely responded by abstaining from voting.

With general elections around the corner it is not very realistic to expect this year’s run-up to play out any differently. Moreover, polls indicate that the traditional parties are expected to once again receive the most votes, with smaller ones securing a limited number of seats. Despite the appearance of ‘business as usual’, these European elections are taking place in a crucial, multifaceted context. There is more at stake than the predicted outcome may suggest.

The campaign is set to be dominated by the debate over whether or not austerity was the right approach to the sovereign debt crisis. The centre-right government insists that it was but many Portuguese feel let down by Europe’s response to the crisis and defrauded by their government’s inability to tackle the real structural issues of the country. This tension came to the forefront last week – when the government backtracked on recent assurances that no further tax rises were needed, only to then increase VAT, Social Security contributions and taxation of consumer products like alcohol and tobacco – and again on Sunday - as Prime Minister Passos Coelho announced that Portugal would be concluding its three-year financial assistance programme without resorting to a credit line. The so-called “clean exit” was portrayed by the ruling coalition as a governmental victory and a symbolic recovery of the country’s lost sovereignty. Yet, most analysts dismissed Coelho’s announcement as electoral propaganda.

In a sense, it is the perfect ending to the tale of Portugal as the "good student" of Europe, an image that Mr. Coelho’s government has so painstakingly sought to diffuse at home and abroad. The announcement was welcomed by key European politicians, for whom this is the most electorally convenient option. It does not involve asking European taxpayers to fund further assistance in the short term and it does not expose the inefficiency of the programme in place for the past three years.

This is far from being a consensus viewpoint in Portugal. The ideat that Portuguese public finances have been consolidated - thus permitting the country to opt out of a precautionary programme - is both misleading and risky. Portugal’s “clean exit” rests mainly on the current favourable conjecture in the financial markets. Thinking otherwise is giving the country a false sense of security. Besides, if there is one lesson the Portuguese government should have drawn from the 2008 financial crisis, it is that markets are volatile and unpredictable. Irrespective of what the government wishes to believe, markets are oblivious to measures imposed in Portugal, as clearly demonstrated by the fact that the country’s public debt, 130% of GDP, is now one third larger than in 2011. It was then already deemed unsustainable.

The reality is that with or without a “clean exit” the violent impact of austerity will continue to be felt in the years to come. Over the past three years, salaries were reduced and taxes increased multiple times. Unemployment has risen sharply and there was a massive exit of skilled labour from the country. In addition, there has been a general corrosion of social and labour rights while the number of people on the verge of poverty has expanded dramatically. In exchange for the misery brought about by austerity, the government has little to offer. Coelho’s team has failed to tackle corruption, push through structural reforms or challenge private interests. Rather, the impression given by the centre-right coalition has been that of an unsure government plagued by internal disputes, driven by private interests and powerless against the decisions made by the Troika.

The desultory performance of the Portuguese government, often punctuated by undue arrogance and inflexibility, is bound to be countered by a harsh defeat on 25 May. The centre-left PS seems likely to capitalise on public discontentment. However, this will be a test for the PS leader, António José Seguro. His party is not yet convinced Seguro is capable of leading the PS into a sound majority in the upcoming legislative elections. His time in opposition has been viewed as lacklustre. At times, particularly when the ruling coalition blames the former PS-led government for requesting foreign help and making Portugal lose its sovereignty, Seguro has come across as defensive.

The PS leader has promised ad infinitum that if elected he would be committed to control public finances while rejecting austerity. The centre-right parties in government characterise the socialist’s call to end of austerity as demagogic. The case may be that Mr. Seguro’s party is attempting to gain more votes by making idle promises. Nevertheless, PS does not stand alone in advocating the end of austerity. Earlier this year, a group of 74 personalities from across the political spectrum and representing public and private sectors signed a joint manifesto demanding the renegotiation of the Portuguese debt and the replacement of austerity with a policy centred on economic growth.

A more radical approach has been proposed by the Portuguese Communist Party (PCP) which has argued for Portugal’s exit from the Euro to remove the European Union budgetary constraints, which prevent the country from restructuring its debt. Judging from the PCP's results in the 2013 local elections, this isolationist stance, while still marginal, is attracting a growing number of supporters. Adherence to the PCP’s views is in many ways an expression of Portuguese distrust towards EU policies. This distrust has also been embraced by the Left Block (BE). But while the party agrees that restricting the public debt is an urgent precondition to get the Portuguese economy back on track without having the public endure further austerity, it also adopts a clear pro-European stance. The BE never shies away from condemning EU policies, but maintains that Europe needs an internal “revolution” and a return to the founding principles of the Union.

The lack of solidarity displayed by the EU in the context of the debt crisis has nevertheless taken a toll on how Portuguese people view the EU and Portugal’s role in it. The deterioration of Europe’s image among the Portuguese bears relation to the paternalist discourse that accompanied many of the punitive measures administered. This discourse (centred on the narrative of the lazy Southern ‘pigs’ free riding on the achievements of the hardworking North) has not only contributed to stigmatise Southern member states but also to validate stereotypes that feed into nationalist populist discourses on both ends of the equation. In the future, these may pose a serious challenge to the already fragile European project.

In Portugal, the disappointment with Europe has been accompanied by a sense of frustration regarding the inability of the main political parties to translate social protest and demands into meaningful political action. For this reason, this year’s run-up to the European elections is made unique by an unprecedented number of new parties. But a specificity of the Portuguese case is that the extreme right has been unable to exploit this political vacuum.

That in Portugal the extreme right splinter groups have no real expression seems to be one of the many achievements of the Carnation revolution, yet this situation should not be taken for granted. Last month Portugal celebrated the 40th anniversary of the revolution, leading to a society-wide reflection on the current path democracy has taken. Many senior figures of the Revolution and founders of Portuguese democracy seized the opportunity to deliver scathing criticism of the government’s inability to restrain the unfettered influence of the Troika. Warning against the risks involved in discrediting democratic processes and institutions, they cited recent IMF and EU Commission attempts to pressure the Portuguese Constitutional Court as instances of unacceptable, undemocratic practices.

The Troika’s presence in Portugal did pierce through the national consciousness, raising difficult questions about the country’s European identity. At the moment it seems that for the most part, both the public and politicians are unequivocal about seeking solutions within Europe. MEP Rui Tavares, whose newly created Free Party is running in these elections, has urged citizens to become more involved and increasingly demanding with Brussels.

Portugal’s recent experience has highlighted the impotence of the country in face of pressure from the international markets and rating agencies. Avoiding a future debt crisis and violent bailouts necessarily involves implementing changes at a supranational level. For that reason, some politicians have argued for a “nationalisation” of European politics instead of rejecting Europe as something foreign. Regardless of the turnout on 25 May, the fact remains that never before has the impact of European policies been so clearly felt in the daily lives of the Portuguese.

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