Analysis by Kirsten WILLIAMS
In one month, Portugal will head to the polls to vote for a new parliament, the first one since receiving emergency bailout loans in 2011. The Social Democrat (PSD) prime minister, Pedro Passos Coelho, has clung to power despite a raft of resignations from his coalition government in 2013, which were quickly followed by several cabinet reshuffles. Yet for all the political and economic uncertainty, Portuguese party politics have remained fairly stable since the outbreak of the financial crisis. This is somewhat surprising, given the very serious problems the country faces: rising inequality, massive unemployment, significant emigration, and deep cuts to education and healthcare budgets. Portugal is yet to witness the runaway successes of anti-austerity parties along the lines of Syriza or Podemos. So what can we expect from the Portuguese elections?
Like the UK elections earlier this year, polls are showing that there is no clear winner. The most recent survey showed the Socialist Party (PS) leading by just 1.5 points ahead of the current government coalition, which is formed of Coelho’s PSD and the centre-right People’s Party / Popular Party (CDS-PP). This is a disappointment for the PS, who had emerged as the clear victor in municipal elections two years ago. A coalition between the PS and the PSD is even less likely, with both parties ruling out the possibility of co-operation.
The slow-growing economy remains the key concern for the electorate. The Socialists argue that austerity is stifling the economy, and promise to implement pro-growth policies. They have unveiled a plan to bring public sector pay back up to pre-bailout salaries and programmes to reduce unemployment. Meanwhile, the PSD has promised corporate tax cuts and continued austerity. Falling unemployment and economic growth have bolstered the government’s election pledges, but support is still tepid. In an attempt at scare tactics, Coelho has repeatedly used Greece as an example of disastrous left-wing fiscal policy, drawing thinly-veiled comparisons between the two countries. Indeed, as support for left-wing ideals wanes in Portugal, even the leader of the Socialists, Antonio Costa, has toned down his once-ardent support for Syriza. Costa’s usually strong anti-austerity message has also been somewhat muted in recent months: he has pledged to repay debts to international lenders and continue the budget consolidation seen under the PSD/CDS-PP coalition.
High level corruption is another sticking point. In November 2014, the minister of the interior, Miguel Macedo, resigned following a scandal involving the fraudulent distribution of Portuguese residence permits. Macedo was one of Coelho’s closest allies and his resignation has further loosened Coelho’s hold on power. The PS has not fared any better: days after Macedo’s resignation, the former Socialist prime minister Jose Socrates was arrested on suspicion of corruption, fraud and money laundering. In order to gain the trust of the electorate, the parties must present themselves as transparent and ready to root out corruption, even at the top.
Finally, Portugal is facing a demographic crisis. Grinding austerity measures have driven vast numbers of young, educated citizens away and pushed down birth rates. Approximately one Portuguese person emigrates every five minutes. Many of these émigrés are healthcare and education workers, struggling to make ends meet despite their qualifications. The new government will need to create incentives for Portuguese workers to return and stay in their country.
If no party gains a majority, Coelho and Costa may be forced to reconsider their refusal to work with one another. A landslide victory looks increasingly unlikely, but perhaps Portugal’s distinctly middle-of-the-road politics will provide the country with the stability it needs to consolidate its growth.