November 25th saw
Portugal’s new Socialist Prime Minister António Costa take office promising to “turn
the page on austerity” after one and a half months of constitutional crisis which
saw the collapse of the shortest administration in Portuguese history.
Now Costa, the son
of a Communist poet from Goa, and his Socialist Party must hold together his
fragile minority government with support from his radical Left Bloc, Green Party and Communist partners if he is to make good on his vow to end the savage cuts and sweeping privatisations of the outgoing centre-right government.
António Costa of the Socialist Party |
In the inconclusive general election on
October 4th had seen the ruling coalition Portugal à Frente (PaF), consisting of the centre-right Social Democratic Party (Partido Social Democrata or PSD) and their junior coalition partners the conservative CDS – People's Party (Centro Democrático e Social – Partido Popular, CDS–PP) lose the
overall majority they had enjoyed since 2011, despite winning the most seats.
With no outright winner, President Aníbal
António Cavaco Silva precipitated what some termed a constitutional crisis by inviting
PSD leader Pedro Passos Coelho
to form a minority government despite failing to find support from other
parties stating,
“In 40 years of democracy, no
government in Portugal has ever depended on the support of anti-European forces.”
With these words,
Cavaco Silva, who lead Portugal into the European Union as Prime Minister in
1986, refused to allow a broad coalition of left-wing parties lead by the Costa’s
centre-left Socialist Party (Partido
Socialista, PS) the opportunity
to form a majority government on the grounds that the Communists (Partido
Comunista Português, PCP) and Left Bloc (Bloco de Esquerda, BE) had
campaigned to take the country out of the Euro.
Passos Coelho (left) meets Cavaco Silva in the Presidential Palace |
However, the
controversial move backfired when the parliamentary deputies from the leftist parties
passed a vote of no confidence in Passos Coelho’s government shortly after they
took office, giving them the unwelcome record of the shortest administration in
Portuguese history at eleven days.
Now the real work
begins for Costa, a former lawyer and popular mayor of Lisbon who has impressed
many political commentators with his skillful handling of negotiations to reach
an agreement with the far left parties. Costa’s Socialist Party has formed a minority
government relying on the support of the more radical parties. Despite his anti-austerity
agenda, Costa has allayed the fears of more conservative voters by ruling out
leaving the Euro or restructuring Portugal’s debt, however he must cut the
deficit to keep to European Union budget rules. At the same time, the Socialist
Party has promised a Keynesian programme to increase families' disposable
incomes and help the poor, while maintaining a commitment to his Left Bloc and Communist
allies to raise the minimum wage, lift a freeze on pensions and cancel pay cuts
for civil servants.
Since 2011,
Portugal has suffered under the austerity measures required by the terms of its
bailout by the Troika of the European Central Bank, International Monetary Fund
and European Commission. The bailout programme, or Economic Adjustment
Programme for Portugal as it is officially called, expired in November last
year. Since the implementation of austerity measures starting in in 2011, unemployment has climbed to 14% (30% for young people) while wages and pensions have been
slashed (sometimes illegally) in a country with one of the EU’s highest levels of income inequality
and where 18% of the population live below the poverty line. With many
predicting the rapid collapse of his leftist coalition, it remains to be seen
if Costa can inspire the return of some of the estimated 60,000 people
(including 1 in 10 graduates) who have been leaving each year in search of better opportunities.