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State of the Left - Portugal

A new chapter for the Portuguese left

Hugo Coelho - 13 November 2015

Poised to become prime minister, António Costa faces a delicate balancing act to ensure party unity while retaining far-left support for his government

Unless something unexpected happens over the next few days, António Costa, the leader of Portugal’s centre-left Socialist party (PS), will become prime minister of an anti-austerity government before the end of November.

This is the bizarre outcome of the parliamentary elections of 4 October. Despite having suffered a humiliating defeat at the hands of the incumbent rightwing coalition of liberals (PSD) and Christian-democrats (CDS), Costa refused to step down as party leader. Instead, he made overtures to the diehard Communists (PCP) and the Left Bloc (BE), Syriza’s sister party, about securing their support to topple and replace prime minister Pedro Passos Coelho – who got most votes, but lost the parliamentary majority that allowed him to push through bailout reforms over the past four years.

The agreement between the parties of the left was sealed on 8 November, after the central committee of the Communist party gave its nod. Neither PCP nor BE are willing to take part in a PS-led government, but they agreed to support it in parliament in return for 51 changes to the socialist manifesto, including the reversal of privatisation decisions, a swift elimination of salary and pension cuts and a substantial increase in the national minimum wage.

It is unclear how much these measures will cost, but the socialists vowed to keep the deficit under control and Portugal in the euro. This is intended to secure the non-opposition of the president, Anibal Cavaco Silva, who is the last man standing between Costa and the premiership. In theory, he could appoint another prime minister of his choice; but the left would vote it down in parliament.

Costa has described the agreement as the equivalent to bringing down the “Berlin wall of Portuguese politics”. Never before did the socialists and the far left share power. The rift goes back to the aftermath of the 1974 democratic revolution, when PS led the moderate forces that thwarted plans to impose a communist regime. The process of the European integration, in particular the decision to join the euro, widened divisions. In 2011, after a socialist government turned on the EU for a bailout, the far left joined forces with the right to pass a no-confidence motion. They would rather see the country default than sit at the negotiating table with the officials of the troika.

This time was different. The political context and, arguably, the individual circumstances of the party leaders, made the political marriage convenient. No party was prepared to take blame for letting the right remain in power. There is no reason to believe the ideological differences in the left have eroded, though.

This begs the question of whether Costa would have any reasonable chance to see through the end of his term in office. The constraints that come with euro membership cannot be easily reconciled with the demand-led growth promoting policies his partners expect him to implement. BE and PCP have not imposed any demands on debt restructuring, but introduced a clause in the agreement that bars the socialist government from adopting measures that reduce workers’ income, if it ever needs to plug a gap in the budget. With the deficit at 3 per cent and public debt at more than 125 per cent, it would not take much for this ‘limit’ to be put to test. The government would find itself stuck between a rock (the far left) and a hard place (Brussels and international lenders).

As if this was not enough, Costa is under fire from the moderate wing of his party. Francisco Assis, the leading socialist candidate in the 2014 European elections, argued PS would be better remaining in opposition and using its votes in parliament to shape the agenda and the policies of the rightwing government, rather than be held hostage by the far left.

The dependence on the votes of the PCP and BE not only raises questions about the government’s relationship with the EU, but it also restricts its ability to pursue much needed reforms, in particular in the public sector and social security. The socialists included a series of measures in their manifesto designed to overhaul the system, in particular a reduction of the social contributions paid by employers. These were intended to boost employment levels, and, by doing so, increase contributions. But the far-left parties, which have voted against parametric reforms in the past, have scrapped that proposal. Costa plans to launch a debate on the matter, which will include the social partners, but it is hard to see what a consensual reform plan would look like.

At present there is no real risk of a split in PS, but that would become more likely if Costa is seen to be losing the centre ground or if the position of the country in the EU is perceived to be under threat. On the other hand, the experience of a coalition might redefine the relationship between the centre and the far left for good, and in a way that benefits the Socialists. The result is tied to the fate of Costa and his government. In any circumstance, they have already secured a place in history.


Hugo Coelho is a political and financial journalist and former political correspondent for Portuguese broadsheet Diário de Notícias

This article is a contribution to State of the Left – Policy Network's regular insight bulletin reporting from across the world of social democratic politics

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The Policy Network Observatory promotes critical debate and reflection on progressive politics. It is centre-left orientated but determinedly challenges social democracy. It is pro-European but restlessly questions EU institutions and practices.

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