Over the weekend, the ruling centre-right coalition in Portugal was reelected. You might be forgiven, dear reader, for having glossed over the news, but the news was significant. It was the first reelection of a government of a bailed-out country in the Eurozone. The Portuguese people have voted for the same team—albeit without giving them an absolute majority—that imposed draconian measures such as cuts in wages, pensions and a huge increase in taxes on the country.
There are two important lessons to be learned from this electoral result.
The first one is that a government can actually enact extremely unpopular decisions in Europe and still win elections. For months we have been listening to what seemed to be a very logical narrative: by cutting pensions, wages, and increasing taxes, the government of Passos Coelho’s Forward Portugal (PàF) is committing political suicide and is destined to be shellacked at the polls. But unlike Santiago Nasar, the tragic hero of Gabriel Garcia Marquez’ Chronicle of a Death Foretold, it did not perish. And if there is one feature that is certain to recur in Europe’s present and future political landscape, it is the need for enacting deeply unpopular measures against a background of rising populist movements.
The second one is that there is much more heterogeneity to Southern Europe than is usually portrayed. To put it in different words: Portugal is not Greece or Spain. Unlike these two countries, the anti-establishment parties have not been able to present themselves as real contenders for power.
This is not to say that they didn’t do reasonably well. In fact, the Left Bloc, a Trotskyite movement formed in 1999, and the traditional hard-line Portuguese Communist Party, which have both campaigned against the euro, together earned 18.5 percent of the vote—enough to have them have a strong voice in the opposition.
Their established role goes a long way to explaining why they managed to consolidate any kind of anti-austerity vote between them. But so does low voter turnout, especially among the younger generation. In fact the abstention rate was 1.1 percent higher than the last national elections, and reached 43.07 percent. But even so, their success was distinctly limited, and the Left Bloc achievement came at the expense of the more centrist Socialist Party, which campaigned against austerity but still favored policies for keeping the country in the Eurozone.
Because the ruling coalition fell short of an absolute majority, it will face severe challenges in the coming months. It will need to come to some kind of an agreement with the chastened Socialist Party (which gained seats, but not as many as it had hoped) in order to form a viable government. The likelihood of that play working out is not clear at the moment. The Socialists have been sending mixed signals. As things stand, they have much more in common with the center-right than with the old anti-establishment parties. But even so, they may not be able to form a coalition, due to a brewing fight over the leadership of António Costa, the former mayor of Lisbon.
Any battle between the center-left and left wings within the Socialist Party is likely to be bloody. This tension has always been present in the Party, but it is now at a rolling boil. The former leader, António José Seguro, who is close to the left wing, was very publicly accused of not having won a sufficiently big victory over the coalition in the European elections last year. Seguro lost the leadership contest to Costa, who argued that only he could steer the Socialist Party back into power. He clearly has not delivered on his promise. Some party members have already stated their intention to contest the leadership of Costa, but none of them really have the pedigree or the presence to lead the Party.
If the Socialist Party falls prey to fratricidal infighting and is unable to get back on its feet, democracy in Portugal will take a body blow. The worst thing would be to have a replay of what happened in Greece with the virtual disappearance of the socialist PASOK. Nature abhors a vacuum, and in politics, it looks like formerly fringe parties often fill the void.
But Socialist disintegration is not a foregone conclusion. And overall, the election results in Portugal may not be bad news for the eurozone as a whole.
The next critical chapter of the euro saga will take place at the end of the year in Spain. Spain has a population of 48 million, and the fifth largest GDP in Europe. Madrid, just like Lisbon, implemented a strict austerity program, although it did so voluntarily rather than having the program imposed from outside. Nevertheless, structural problems such as youth unemployment continue to plague the government. The disenchantment with the mainstream parties that have dominated the life of post-Franco Spain—the Socialists and the Conservatives—has been enormous and given birth to various political and protest movements.
To the left of the spectrum, an anti-austerity group calling itself Podemos (‘We can’) arose out of the indignados protest movement, and has a Syriza-like style and agenda. A more centrist, pro-European and market-friendly movement, called Ciudadanos (‘Citizens’), also sprung up, giving voice to those who feel disillusioned with the corruption charges facing members of the Conservatives. The latest poll shows that the two mainstream parties represent around 57 percent of the voters’ intentions, with the Conservatives ahead with 30.4 percent, whilst Podemos is third with 16.7 percent and Ciudadanos fourth with 12.3 percent.
Spanish democracy has traditionally not been keen on coalitions. But if these polls are indicative, then there may be no choice but for the leader of the Conservatives, Mariano Rajoy, to consider forming a government with Ciudadanos. There is a common point of convergence between the two: Ciudadanos is led by a Catalan politician, Albert Rivera, who like Rajoy holds an uncompromising stance against Catalonian independence—something that is likely to emerge as a key campaign issue in the December elections. But to even realize that governing coalition, the Conservatives will need to do better than they’re doing in polls right now—and will have to pledge greater transparency and a will to fight corruption in order to convince the Ciudadanos to come on board.
There are many differences between Portugal and Spain. The Spaniards have experienced austerity in order to avoid a bail-out while the Portuguese have endured austerity because of the bail-out. And their respective parties and electorates are different enough that drawing explicit parallels would be too facile. But there may be a spill-over effect. Like the situation in Greece has served to show the damage that can be made by the radical left, Mariano Rajoy can now look to his Portuguese neighbors for inspiration that austerity is not necessarily an electoral death sentence.