The unexpected ousting of the right-wing government in Portugal after just eleven days in office could have repurcussions across the Europe, writes Alastair Stephens

Another front has unexpectedly opened up in the struggle raging across Europe between the forces of austerity and the working people of the continent. In Portugal, the right-wing government of Pedro Passo Coelho has been brought down after just eleven days by an alliance of the left which bringing together the centre-left Socialist Party (PS), the Communist Party (PCP) and the radical Left Bloc (BE).

At the end of a day of high drama in Lisbon, with thousands of trade unionists demonstrating outside parliament, Coelho was ousted by 123 votes to 107. The country’s president, the right-wing Aníbal Cavaco Silva, may well now be forced into an embarrassing retreat and have to ask the left parties to form a government, something he previously said he wouldn’t do.

This would not just be a change of labels; the left parties have pledged to roll back many aspects of the programme of vicious austerity implemented by the right over the last four years. And the country has suffered grievously.

Even before the global economic crisis Portugal was the poorest country in Western Europe. The bailout forced on the country in 2011 then thrust it into a 3-year recession. State spending was slashed and most incomes nosedived. Unemployment rose to 12% (30% amongst the young) and would have risen even higher if half a million people, from a nation of just 10 million, hadn’t emigrated in search of work.

Election upset

The general election on 4 October totally upset the politcal applecart. The governing coalition of Social Democrats (actually the main conservative party) and the CDS-People’s Party, running together as the Portugal Ahead, suffered a shock defeat.

They had been expected to beat the Socialist Party, whose prospects had wilted through 2015. But when the votes came in, the coalition had taken 38.5% of the vote, just six points ahead of the Socialists and far down on the 50% of the vote the right wing parties had received together in 2011. They had won just 100 seats, far short of the 116 needed for a majority.

The result was widely expected to be a minority administration. Negotiations opened between the coalition and the Socialists, amongst whom there were factions in favour of a deal. But Party leader Antonio Costa was opposed and talks broke down after only a few days.

The President’s own goal

Then President Anibal Cavaco Silva announced that he was asking Coelho and his Portugal Ahead coalition to form a government on the grounds that it had, as the largest party, won the election. However, he went much further and addressed the idea of a possible alternative – a left coalition led by the Socialists and backed by the Communist Party and the Left Bloc. He said:

“In 40 years of democracy, no government in Portugal has ever depended on the support of anti-European forces, that is to say forces that campaigned to abrogate the Lisbon Treaty, the Fiscal Compact, the Growth and Stability Pact, as well as to dismantle monetary union and take Portugal out of the Euro, in addition to wanting the dissolution of Nato. This is the worst moment to radically change the foundations of our democratic regime… Outside the European Union and the Euro the future of Portugal would be catastrophic. After we carried out an onerous programme of financial assistance, entailing heavy sacrifices, it is my duty, within my constitutional powers, to do everything possible to prevent false signals being sent to financial institutions, investors and markets.”

This was reported as an EU ‘coup’ by sections of the British media. But in appointing Coelho, President Silva was acting within his rights (Portugal has a semi-presidential constitution which grants the presidency wide powers). Also what he said also wasn’t diktat from Brussels, it represented the firm position of the Portuguese ruling class for over 40 years.

However, it was an anti-democratic attempt to keep the left parties (which together have a majority in parliament) out of power, and provoked a furore. It also totally rebounded. It caused the left to unite and put the supporters of a left-right deal in the PS on the back foot, effectively killing off the possibility.

Antonio Costa pledged, however, that the PS would not bring down a minority administration of the right if there was no alternative government, as for constitutional reasons, it would not be possible to hold fresh elections until June 2016.

Shift to the left

All previous calculations had been changed by the election result. The country had clearly shifted to the left. The PS had to adapt to this mood and in its election campaign pledged to reverse many of the austerity policies of the previous administration. The Socialists were facing competition from their left.

The radical Left Bloc, established in 1999 by a fusion of Trotskyists, former Maoists and others, had doubled their vote, rising to 10%. Having won their best ever result, they became third largest party in parliament. Just behind them, on 8% was the CDU, an alliance between the Communist Party and the Greens. It was the highest vote ever for the parties to the left of the Socialist Party. Together they now hold 44 seats.

There has been a history of animosity between the left parties. The Socialists Party had been set up with German and US backing at the overthrow of fascism in 1974, in large part to keep the Communists out of power. The Communists had since then retreated into sectarian isolation, maintaining their base but being as politically immobile as their fellow Communists in Greece.

The Left Bloc on the other hand had been specifically set up to oppose the shift to the right that the Socialists had made, in common with Europe’s other social democratic parties, in the 1990s.

Left unity

But a desire for unity was in the air. During the campaign, in a TV debate with Costa, the Bloc’s spokesperson Catarina Martins laid down conditions for agreement, saying the Socialists would have to retreat on three points: the freezing of pensions, welfare reform and changes to workers’ rights. In an election night speech she was even more explicit, saying that “the Left Bloc will do everything to prevent the right-wing coalition forming a government. We now await for the response of the other parties.”

The prospect of a broad left government and the threat that the Left Bloc now poses to its base shocked the Communsit Party into action. It too declared itself willing to discuss a left government.

The prospect threw the establishment into a frenzy. But they could not stop the movement for unity on the left and agreement was reached. The Left Bloc and the PCP decided to prioritise the reversal of the austerity cuts and questions such as the membership of the Euro, which both the Left Bloc and the PCP are opposed to, were put on the back burner.

The Socialists accepted the three conditions set by the Bloc but the agreement went further than that. Amongst other things it stipulates the end of privatisation and the cancelling of pre-election moves to privatise public transport in Lisbon and Oporto. Water will be protected as an essential public asset. Four public holidays will also be restored, pensions increased and the minimum wage will increase to 557 Euros, rising to 600 by the end of the term. Collective bargaining will be reinstated.

Once an agreement was made on 8 November, the Socialists were ready to make good on their promise to bring down Coelho if there was an alternative government ready to take office. And so left parties moved to a put a vote of no confidence in Coelho’s government.

A new dawn?

The ball is now in the president’s court. Either he can ask Antonio Costa to form a broad left government or he can keep the Coelho government in power. But the latter will have to lurch forward zombie-like without a budget and unable to pass legislation until new elections in 2016. Or he can appoint a technical government until then and hope that it can get legislation through the Assembly, which seems unlikely

Continuing to keep the left out of power though would be likely to create the country’s greatest political crises since the revolutionary years of 1974-75.

How the new government will fare is impossible to predict. It will face enormous pressure both at home from the right and the ruling class, and from the EU, ECB and the markets. Only two days after the election the European Commission was already demanding more reform to the social security system. It will only get more difficult from here on in, especially because on some key questions there is no agreement between the PS and the left parties.

However, the advent of an anti-austerity left government in Portugal goes some way towards dispelling the atmosphere of fear created by the defeat of Syriza. And with elections next month in Portugal’s much larger Iberian neighbour Spain, the whole dynamic of resistance to austerity could change again. This strange turn of events in one corner of Europe may yet have repercussions far beyond it.