Advances and contradictions for Portugal’s left

AFTER LAST October's general elections in Portugal, it seemed improbable that the outcome would have had the impact it has.

The Socialist Party, led by António Costa, was forced to choose between total surrender to the right wing and making a turn to the left--under pressure from, on the one hand, the narrow center-right majority that has governed Portugal during the years of the Troika and, on the other, an emerging left.

The Left Bloc, a radical party bringing together leftists from different socialist traditions and social movements, pushed to bring down the center-right government and threw its weight behind a government led by the Portuguese Socialist Party. This effort, also supported by the Communist Party and the Greens, bore fruit when the Socialists (who won 32 percent of the vote in October) and the Bloco/CP/Green left (which took nearly 20 percent) united in parliament and voted against the governmental program of the right-wing coalition.

According to the Portuguese Constitution, in order to assume power and form a cabinet, the government must win majority support for its basic program and budget, or face new elections. The left's rejection of the parliamentary right's program forced the conservative president of the republic, very much against his will, to grant the Socialist leader Costa the opportunity to form a parliamentary majority government.

THE MULTILATERAL agreements established between the Socialist Party and each of the other left parties set the terms for important parts of the new governmental program. including a commitment from the Socialists to: stop cuts to welfare, compensate for previous cuts in salaries and pensions, increase the minimum wage, freeze privatizations and re-establish collective bargaining for workers.

The parties also agreed to combat conditions affecting precarious workers, prohibit evictions, end standardized testing for school children, grant full adoption rights for gay and lesbian couples, overturn abortion restrictions enacted by the previous government and generally reverse many of the policies put in place by conservative Prime Minister Passos Coelho's outgoing conservative government.

Since taking power on November 26, the Socialist government, backed by the left in parliament, has fulfilled its agreements with the Left Bloc, Communist Party and the Greens. Reversing the privatization of TAP Portugal airlines, which the previous government had agreed to during its brief tenure after the election, is now on the table, while concessions in public transportation given to private companies in Oporto and Lisbon have been completely annulled.

Same-sex couples can now adopt; restrictions on abortion have been lifted; nine laws have been promulgated to protect families facing legal orders and evictions because of debt; children aged 8, 10, and 12 will not have to take mandatory math and Portuguese exams; and the supplementary tax introduced by the previous government will be reduced by two-thirds for the majority of medium-income workers, and eliminated for those who earn less than 801 euros each month.

Further, an increase in the minimum wage has been negotiated, over the opposition of the employers' associations. It will increase to 600 euros a month by 2019--it was 485 euros until late 2014, when it was raised to 505 in 2015--and it will increase by at least 5 percent per year after that. This, in fact, gave rise to one of the first conflicts in the left alliance, because the Communists and the Left Bloc wanted an immediate increase in 2016.

Finally, a committee to fight labor precarity has begun its work, principally focusing on freelance and temporary workers.

The Left Bloc named its former party spokesperson, Francisco Louçã, to represent it in the State Council, an organ that advises the president of the Republic, who is himself facing reelection on January 24. This is a first for the Left Bloc to be represented on this council. The Communist Party, the Socialist Party and the parties that made up the now-dissolved conservative coalition--the Social Democratic Party and the Popular Party--have also named councilors.

AN INITIAL round of virulent right-wing attacks on the new government have practically ceased, especially since the exposure of a new banking scandal. The previous government had injected 1.1 billion euros into BANIF, a private bank based in Maderia and directed by Luís Amado, an ex-minister of the Socialist Party. In 2012, BANIF received the 1.1 billion "loan" from the Troika, of which it has only repaid some 275 million euros, with another 125 million still owed from December 2014.

In December 2015, the bank's shares plunged to almost zero, and it finally became clear that BANIF was bankrupt and insolvent--and that it has been so at least since the Troika declared the bank's "clean exit" from its financial rescue package, to great pomp and circumstance by former Prime Minister Coelho in May 2014.

In collusion with the director of the Bank of Portugal (the national central bank), the situation was covered up for electoral reasons and only came to the public's attention three weeks after the new government was constituted in December 2015. The Central European Bank then openly pressured the Socialist-led government to rescue the bank--less than a year earlier, the EU had put in place the new practice of internal recapitalization of bankrupt financial entities--to the tune of 2.2 billion euros.

Subsequently, the European Commission forced the sale of BANIF to the Spanish mega-bank Banco de Santander in exchange for only 150 million euros, as well as a debt write-down of another 289 million euros. The European Commission ordered the Portuguese government to hand the money over to Santander, rejecting the government's own proposal to merge BANIF with Caixa Geral de Depósitos, Portugal's public (and much larger) bank.

In parliament, the Left Bloc, the Greens and the Communist Party voted against the new rescue plan. However, the combined combination of "yes" votes from the Socialist Party and abstentions by the center-right Social Democratic Party once again allowed the euro policy of saving private banks with public money to win out, instead of placing the bank in public hands, even after having paid for it with public money.

THIS FIRST important crack in support for the new government reveals a great deal. At the same time, the resignation of ex-Deputy Prime Minister Paulo Portas--the former leader of the People's Party, the junior partner in the conservative-centrist coalition with the Social Democratic Party--marks the end of the of the right-wing coalition and the close of a cycle for the right.

Unfortunately, when it comes to banks and finance, the Socialist Party has demonstrated a continued commitment to support the European norms of crushing the people while bailing out the banks. And now, when faced with the question of another previously rescued bank--the old Banco Espírito Santo bank, now called Novo Banco, which was already in state hands--the Socialists decided to liquidate its newly constituted toxic assets (this time with private money) before returning it to private managers.

The EU is maintaining a constant pressure to hand over Portugal's financial system to the big European financial groups. The Left Bloc made its opposition to this decision clear, also winning the support of some rebel Socialist Party deputies.

The new Portuguese government's first weeks have made possible some important advances with respect to social questions, temporarily freezing policies that impoverished many, and some new policies have even improved conditions to a certain extent. However, the pressure applied by the EU--this time not by the Eurogroup, but by the European Central Bank and the EU Directorate General for Competition --clearly shows that we are a long ways from witnessing the Troika's demise.

Meanwhile, the Socialist Party's acceptance of many noxious European policies will continue to expose the contradictions between EU norms, on the one hand, and the social well-being and constitutional rights of the Portuguese people, on the other.

There is no doubt that these contradictions will sooner or later provoke a crack-up of the agreement that the new government has signed with the left, and when that time comes the Socialists will find themselves confronted with the same situation they faced the day after the October elections.

Hopefully, before that day arrives, we will see important changes in Spain and Ireland, where elections in those countries could finish off the hegemony of the European Popular Party--the coalition of conservative parties which dominates many of the EU's institutions--and the interests of the 1 Percent which it represents.