Portugal: unity of the left to defeat austerity!


Versão inglesa de um texto originalmente publicado em finlandês na página do Sosialistinen Vaihtoehto (apoiantes do Comité por uma Internacional dos Trabalhadores – CIT, na Finlândia).  

For Portugal, European integration brought deindustrialization and the dismantling of the agricultural and fishing sectors, for the benefit of the German, French and Spanish bourgeoisies, respectively. The strategists of the European Union (EU), with the complicity and support of a hegemonic sector of the Portuguese ruling class, aimed to consolidate Portugal’s position as a peripheral economy completely based on services like tourism, and as a market to absorb German and French exports. Simultaneously, we had the implementation of neoliberal policies: the fiscal weight was laid upon the workers’ shoulders, wages were kept below the European average, stable labour relations were undermined, public sectors of the economy were privatized, the financial markets were deregulated, etc. This process was led by the three main bourgeois parties, “Social-Democrats” (PSD), “Socialists” (PS) and Christian Democrats (CDS-PP), which have succeeded each other in government since 1975.

Naturally, this economic model fomented extreme social inequality and wide-spread poverty, besides aggravating the indebtedness of Portuguese families, who were forced to ask for loans to access to basic rights such as housing, education or health services. The state, on the other hand, accumulated enormous deficits, thanks to the governments’ leniency when it came to tax big business, not to speak of the billions spent on shady schemes favourable to the oligarchic clienteles near the ruling parties. For instance, the construction of motorways and megalomaniac football stadiums, which benefited major construction corporations; the nationalization of the BPN, a bank driven to bankruptcy due to a colossal corruption case; the recapitalization of private banks such as the BCP, the BPI or the BANIF; or the “private-public partnerships” (PPP’s) established between the state and private companies – particularly in the health sector but not exclusively – which basically mean that the public institutions make the investments while the private companies collect the profits. No wonder that, with such policies, along with a negative trade balance, the state would end up buried in debt, despite the fact that the fiscal deductions would suffice for the social security system’s sustainability and the social expenditures of the state.


The 2008 crash fell like a bomb upon the already feeble Portuguese economy and, as it usually happens under capitalist rule, the workers were called to pay the bill. Within the context of a structural crisis of capitalism, the bourgeoisie cannot invest profitably in the productive economy, therefore resorting to destruction of value and reduction of labour costs (unemployment, closure of factories, etc.) as means to keep up the capital accumulation levels. But, on the other hand, it also resorts to state deficits as a source of revenues. In other words, capitalists lend money to the state at a high interest level, transform the sovereign debt into a parasitic rent, and use it to grapple even more firmly the reins of political power.

That is precisely the case with Portugal. On the onset of the present crisis, the already indebted state allocated billions of euros to save the banks, which in their turn bought government bonds and speculated with the interest rates. When it was clear that the situation was increasingly unsustainable, and that the Portuguese state could not pay its debt, the troika (IMF, EU, ECB) entered the scene to save financial capital’s interests. This is how we arrived at the contemporary situation, when the public resources and the workers’ income are drained directly to the bankers’ pockets. To save financial capital, the productive economy is left in ruins and the working class falls into the claws of a bloodsucking ruling class and its agents in government.

The troika’s rule

The results of this onslaught are known: one quarter of the workforce is unemployed; amongst the youth, the unemployment rate is 42%; the majority of the working class has precarious labour contracts (or no contracts at all); a third of the population lives with less than 500€/month; 25% live on the poverty line; more than 30% is officially poor. Hunger abounds in the country, with appalling reports of children fainting in school due to malnutrition. In addition, a new rental law is going to be implemented, which liberalizes the rental market, rocketing sky-high the house rents and facilitating evictions. In other words, we will soon have a phenomenon similar to what is happening right now in Spain: thousands of evictions, most of them of poor elderly people.

The ruling class wants to overcome the crisis over the corpses of the workers. In fact, the Portuguese Prime-Minister, Passos Coelho, has overtly stated that the strategy to gain economic competitiveness is through the impoverishment of the country. He forgot to add that the impoverishment of the majority of the population buys the prosperity of a few. The troika has always sustained that the “restructuration” of the Portuguese economy and the “reform” of the welfare state are necessary to reduce the public deficit, decrease the sovereign debt, and set the Portuguese economy on its way to prosperity. The truth is that the state’s deficit now stands on 10, 6%; the debt amounts to 131% of the GDP, and the economy is in ruins. Everything is worse than before the troika intervention.

The troika’s “restructuration” is not anything other than institutional theft. It is the channelling of the available public resources to a handful of greedy capitalists, through the payment of the debt, the successive recapitalizations of decaying banks and the maintenance of contracts with corporations that survive by suckling on the state’s udder.

To be true, the ruling class has no other choice. In the midst of a crisis of overproduction/underconsumption, the bourgeoisie does not have markets to profitably unload the accumulated surplus. It has, therefore, to exploit the remaining public sectors of economy and divert public wealth from the state into its own hands, besides burning value and destroying an economy that ceased to be lucrative. The character of the bourgeoisie as a parasitic class becomes increasingly clearer.

Members of the Portuguese government and even Angela Merkel have stated that they intend to reindustrialize the country, in order to put the economy back on its feet. It is clear however that a reindustrialization along capitalist lines would bring no benefits for the working class. Basically, in the best case scenario, the German bourgeoisie wants to create a “Chinese Europe”, that is, to bring European working class’s living standards and labour conditions closer to those of Chinese workers; to transform southern Europe into a big sweatshop directed exclusively to the exportation of commodities. In the long run, this project may lead capitalism to a new equilibrium, but at the cost of the destruction of the already weakened living standards of the working class.

Mass movements: how to defeat austerity?

During the last couple of years, we have witnessed the biggest protests since the revolutionary period of 1974-75. We have had demonstrations of more than a million people on the streets, called by informal movements like the “Screw the Troika” or by the major trade union centre, CGTP. There are daily strikes in different sectors of the economy, the most combative of which, for example, are carried out by the dockers or the teachers. CGTP has called for 5 General Strikes since 2010, all of them participated by the overwhelming majority of the working class. The last one, in 27 June, with 80% of adherence by the workers, left the government on the brink of disintegration, after the resignation of Vítor Gaspar, former Minister of Finances and main strategist of the government, and Paulo Portas, former Minister of Foreign Affairs, who now returned to the executive as Vice-Prime-Minister in charge of the economic policy and relations with the troika.

Although the government was on the verge of collapse, the ruling class was able to patch up a remodelled government, under the protection of Cavaco Silva, who is the President of the Republic. The left (Communist Party and Left Bloc) and the CGTP, instead of calling for daily demonstrations and a new General Strike, did absolutely nothing to give the final push to the government. How is it possible that Passos Coelho and Paulo Portas still stand at the helm of the country, despite the unpopularity of the government and the disposition to fight on the part of the working class?

First of all, we should bear in mind that, even though this is one of the weakest executives since the revolutionary process of 1974-75, and despite the signs of dissension among the repressive apparatus of the state (army and police), Passos Coelho has the support of not only the Portuguese financial capital and the upper layers of the national bourgeoisie, but also of European and international capitalism. However, the irresolution of the leadership of the workers’ movement plays no small part in the survival of the government. The leaders of the CGTP call sporadically for mass movements of protest, but each one of them is separated from the other by months of apparent inaction. The workers’ struggles are scattered geographically, with small protests and strikes in dozens of different workplaces. Most of the times, these isolated struggles come to nothing and the lack of a clear victory demoralizes the workers.

The situation demands radicalization. Instead of occasional and dispersed protests, CGTP should delineate a plan of action, to unify the struggles and guarantee their continuity. The workers need to occupy their workplaces whenever they are threatened with redundancies, delocalization or closure; they should demand their bosses to open the account books every time a lay-off or redundancies are announced. Instead of ritualized 24-hours General Strikes, a 48-hours country-wide paralysation should already be on the agenda. This must be accompanied by the creation of strike committees in every workplace, school, university and community, as places of political discussion and direction of the struggle. These committees should unite on a national basis, as the social ground for a future workers’ government.

For this to happen, a strong leadership is necessary. It appears as if the main workers’ parties, the Communist Party (PCP) and the Left Bloc (BE), have no intention of leaving their place as mere parliamentary opposition. Both of them talk about the necessity of a left government but they do not materialize the logic conclusion of that premise: that they need to unite in a common front, together with the trade unions and the social movements. In the present state of affairs, the demand for snap elections – put forth by the entire opposition –, without a viable left alternative, equates to deliver the power onto the hands of the PS. The workers are aware of this reality, which also serves as a demoralizing factor. Why overthrow the PSD/CDS-PP coalition so that a new pro-troika, pro-austerity executive led by the “socialists” rises to power?

The PCP and BE combined already have more than 20% in the polls, but in case they joined in a common front with trade unions and social movements the results would be far more auspicious. It would gain the support of many workers who only vote PS as the “lesser evil” (in fact, the large majority of PS voters in the polls would do so as way of defeating the despised Passos Coelho, as in the past Coelho himself was elected because a large sector of the population wanted to get rid of the equally despised “socialist” Prime-Minister José Sócrates), and of those who now abstain from voting (last legislative elections, the abstention rate was 42%, reflecting the discredit of bourgeois democracy among growing sectors of society). These proposals have been advanced by Socialismo Revolucionário (CWI supporters in Portugal) and have been widely accepted by the working class, including the rank-and-file militants of the PCP and BE.

A united front comprised of PCP-BE-trade unions-social movements would be much more than the sum of its parts. It would lay the possibility of a workers’ government on the horizon. If even without a reliable political alternative, the Portuguese workers have answered to each and every summon to battle, imagine if they saw that there was a dim possibility of a government of their own, which would lead the way out of the crisis through socialist policies. A government that would break with the troika’s memorandum and expel the EU-IMF technocrats from the country; refuse the debt or any other sacrifices to stay in the Euro; nationalize the banks and the main sectors of the economy; launch a program of public investment and reindustrialize the country, thus creating jobs for all. Lastly, such a government should call upon the European workers to do the same in their own countries, in order to break the chains of capitalist EU and begin the construction of a socialist federation of European states. If the established left is not up to these historical tasks, then it is time to build new political organizations, genuinely anti-capitalist and socialist.


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