Eyes to the left to see what comes next

Lest there was any doubt, it has just been confirmed that we live in a politically weird world. Never mind the shenanigans going on elsewhere in Europe and farther afield, Portugal now has a new government - another new government.

Having muddled through almost two rudderless months since the general election, Portugal finds itself still faced with huge economic problems and now heading towards a highly uncertain 2016 with one of the most unlikely of government setups imaginable.

Even by the standard of Portugal's turbulent young democracy, recent weeks have been dizzying. Just to recap for those still a bit dazed.

October 4: general election turns out to be inconclusive. October 22: President Aníbal Cavaco Silva asks the centre-right’s Pedro Passos Coelho to return as prime minister because his party won the most votes, though not a majority. November 10: new government ousted after 11 days by combined leftist parties’ vote of no-confidence.

November 24: After much discussion, the president reluctantly asks the centre-left Socialist leader António Costa to form a government. November 26: the new minority government that will rely on support from the far left is sworn in.

The almost stranger than fiction notion that moderate socialists, radical leftists and diehard communists could become partners in parliament has actually come to pass, but how long it will last is anyone’s guess. There has been no formal marriage. For now at least they’re just good friends, united in their dislike of austerity.

The president has requested Costa to provide “a stable, lasting and credible government solution,” but Passos Coelho has condemned Costa’s proposed policies as “reckless” and the Socialists post-election pact with the far left as “illegitimate.”

Costa’s forthcoming balancing act means continuing to placate erstwhile hard-left rivals while substantially reducing the burden of austerity to the benefit of the people, and at the same time ensuring stability by sticking to Portugal’s international fiscal commitments and keeping investors happy.

Costa, 54, a combative extrovert, is no stranger to trying to pull off the seemingly impossible. The thrice-elected mayor of Lisbon is said to enjoy relaxing with 1,000-piece jigsaw puzzles, but he regards himself as a man of action.

“I always deliver more than I promise,” is one of his best-known boasts, though it is not strictly true.

More than 20 years ago while running for mayor in the municipality of Loures north of Lisbon he famously drew attention to commuter problems by staging a race between a red Ferrari and a donkey in busy streets. The donkey won, but Costa lost the election.

He repeated a similar stunt 10 years later in central Lisbon, pitting a Porche against a taxi, the Metro and a bicycle. Costa rode the Metro and it was a toss up whether he or the cyclist won – but Costa certainly made his point about public transport.

We can but remain hopeful that he manages to pull off his next, much more complicated performance. If anything goes badly wrong, the country could face another general election in as little as six months from now.  

A tough call: who gets to govern?

The next few days are shaping up to be among the most remarkable in the annals of Portuguese democracy.

On Monday, parliament will debate the centre-right coalition’s proposed programme for governing the country.

On Tuesday or Wednesday, members of all parties will vote to accept or reject the programme.

The centre-right Portugal Forward (PAF) coalition has 107 seats in parliament, having lost its majority in the October 4 general election. It is possible, however, that some rebels within the opposition centre-left Socialist Party (PS) may vote in favour of the coalition’s programme.

It is thought more likely that the Socialists will be backed by the radical Left Bloc (BE) and the Portuguese Communist Party (PCP) in rejecting the PAF programme.

The Socialists have 87 seats, the Left Bloc 19 , the Communists 17 and an environmentalist-animal rights party a single seat. Such a collective could raise a majority in the 230-seat parliament.

If the centre-right programme is voted down, it will be the state president’s constitutional job to decide what comes next.

Will President Aníbal Cavaco Silva ask the centre-right coalition under Pedro Passos Coelho to serve in a caretaker capacity, knowing that the earliest possible date for a new legislative election will be in six months time?

Will he instead permit the moderate Socialist Party under António Costa to form a government that has some sort of agreement, if not a formal alliance, with the far-left parties?

Passos Coelho has said he would like to reach a compromise arrangement with the Socialists. This would avoid political instability that could be economically crippling as the country seeks to make a recovery in the wake of the debt crisis that brought an international bailout and severe austerity measures.

The centre-right leader admits he could soon be ousted, but vows to be “where I am needed,” either as prime minister or leader of the opposition.

Costa, who has said he will abide by Portugal’s EU budget obligations, has been trying hard to firm up accords with the far-left parties despite ideological differences on major issues involving the EU.

Unthinkable just a few weeks ago, reports suggest some sort of working deal between moderate and extreme leftists has already been reached.

President Cavaco Silva has pointed out that “in 40 years of democracy, no Portuguese government has ever depended on the support of anti-European forces, in other words, forces which have campaigned to repeal the Treaty of Lisbon, the Budgetary Pact, and the Stability and Growth Pact, as well as calling for the dismantling of the Monetary Union and an exit from the Eurozone - not to mention leaving NATO.”

The president has also noted: “This is the worst possible time for radical change in the foundations of our democracy.”

He has promised to do everything possible within his constitutional power “to avoid sending false signals to the financial institutions, the investors and the markets.”

Obviously the situation is highly sensitive, but some ill-informed critics and biased commentators in the foreign media have not been able to resist exaggerating.

The president has been accused of staging “a coup d'etat,” and exposing “the undemocratic nature of the EU.” It has been claimed that “Portugal’s constitutional crisis threatens all of Europe’s democracies.”

Aside from such alarming notions about a country that others have described as “an oasis of stability in southern Europe,” speculation about the coming showdown is rife. We shall just have to wait and see which way things go, but we won’t have to wait long.

President Aníbal Cavaco Silva

Cooperation is better than commotion

Amid the mass of coverage in the media here and abroad, about the only thing clear at the moment is that the interests of the majority of voters in this month’s general election are not being best served with the prospect of either a minority centre-right government or a left-wing alliance of unlikely bedfellows.

Things may become clearer – or even more confused – when the incumbent minority seeks a vote of confidence in parliament in the next few days.

Unfortunately, the inconclusive election results did not spur the leaders of the two main parties to try and reach a reasonable compromise arrangement aimed at giving the majority of voters what they are fervently hoping for: stability and less austerity.

Having endured years of severe austerity, voters object to the on-going heavy burden, but they don’t want to throw away what their resilience has achieved since the bailout of 2011.

Not an easy task for the leaders of the centre-right PaF coalition, with their 38.6% of the vote, or the centre-left Socialists, with their 32.3%, but surely they should be doing their very best to find enough common ground to ensure stability by easing austerity while upholding fiscal obligations and remaining on the cautiously optimistic road to recovery.

Democracy thrives on clashes of ideas, raging disputes and robust disagreements, mindful of what is best for national and international communities, but sometimes equanimity and determined cooperation is the best approach, especially in times of crisis.

After the October 4 election, Pedro Passos Coelho and António Costa, the leaders of Portugal’s two main parties, only managed two face-to-face meetings before giving up on the fundamental wishes of their combined total of 70.9% of voters.

The electorate be damned, the country now has a minority interim government that will struggle to survive months, never mind years, and risks being toppled by an unprecedented left-wing alliance that no one voted for.

The moderate Socialist Party has long denounced the severity of the austerity measures imposed by the ruling coalition, but it is in favour of eurozone membership and abiding by the EU rules.

Only after the unsuccessful election did the Socialist leader shunt towards Portugal’s far left, homeland of Syriza sympathisers and hard-line opponents of Portugal’s membership of the eurozone, the EU and NATO.

Portugal is not Greece. The attraction for Costa was the number of seats secured by the Left Bloc and the Communist Party, which respectively received 10.2% and 8.3% of the electoral vote.

If they and a smaller ‘nature’ party all back the Socialists, the broad left would have a combined total of 122 seats, 15 more than the centre-right coalition in the 230-seat national assembly.

It remains to be seen if such an alliance can set aside traditional ideological differences and appease any rebels within the ranks in order to make it a pragmatic political grouping, if not a formally united power.

It also remains to be seen if a majority of the electorate want such an entity and any shared political programme it can come up with.

Despite all the flapping over the past couple of weeks, Portugal is no stranger to minority or coalition governments. Since the return of democracy in 1974, both of the current main parties have run minority administrations. More to the point, the two main parties governed as a left and right centrist coalition in the 1980s.

Never before, however, have leftist parties ruled in coalition. They may soon unite to cripple the minority centre-right, although that does not mean the far left will agree to join a Socialist-led government.

Meanwhile, a record number of registered voters (40.8%) did not participate in the October 4 election, largely because they are fed up with politics and distrustful of politicians of all parties. Sadly, you can see why.

And so the show goes on. If the convoluted events of the past couple of weeks were not so serious and potentially damaging, you’d think it had something to do with Halloween.    

Pedro Passos Coelho and António Costa

Confusion confronts new government

 Portugal’s head of state has given the green light to Pedro Passos Coelho and his centre-right Forward Portugal (PaF) coalition to follow up on their first term in office and form a new government. But that doesn't mean the inconclusive outcome of the general election is all sorted. Far from it.

President Aníbal Cavaco Silva’s decision to deny an unprecedented left-wing alliance the opportunity to govern has gone down well in Brussels and across conservative Europe, but it has caused a commotion at home.

The October 4 election produced no clear winner and this  presented the largely ceremonial head of state with stark options. Although a former Social Democrat leader himself, Cavaco Silva was required by the constitution to fairly judge which group was best positioned to lead the country.

After consulting with all the political parties and in line with tradition, on Thursday evening the president nominated the group with the most electoral votes. He gave them ten days to present a four-year programme for approval by parliament.

Passos Coelho hopes to be able to count on support from any centre-left Socialists (PS) unhappy about the notion of an alliance with the radical Far Left (BE) and the hard-line Communist parties (PCP).

Should Passos Coelho fail to obtain a parliamentary vote of confidence for his programme for the next four years, the president will then be expected to ask the broad left to try to form a government.

Passos Coelho has told the president of the steps he would take to continue sound pro-European governance by the PaF coalition despite failing to get an absolute majority on October 4.

Catarina Martins, spokesperson for the anti-establishment Left Block, which has much in common with Greece’s Syriza and Spain’s Podemos, has said the BE will have the PCP’s support in tabling a motion rejecting the centre-right confidence vote in parliament in the days ahead.

It is thought the Socialists may close ranks and do the same, although more moderate members of the PS are said to be increasingly uneasy about “the self-defeating and reckless” direction in which their leader may be taking them.

Socialist leader António Costa, whose party came second in the election, decided against striking any deal with the incumbent centre-right, but managed to garnered support from the Left Bloc and the Communists who finished third and fourth in the election.

Because of historic feuding, it seemed improbably before and even immediately after the vote counting that the country could end up with a triple left-wing alliance. But it has become a possibility.

The prospect of a sudden shift from a government that co-operated closely with international lenders, to one with anti-austerity and anti-EU leanings, sparked concern among conservative governments and fiscal markets in the eurozone.

During the immediate post-election period this month, Costa, whose personal position seemed in doubt after the disappointing PS election result, reasoned that the centre-right option would not be viable and would simply “prolong the uncertainty” in the country. He has now criticised the president for creating a “useless political crisis.”

The Left Bloc's Catarina Martins said another centre-right government would be “a waste of time” as it could not expect to serve for long. She has chastised the president for “creating instability” and acting like “a cult leader.”

Jerónimo de Sousa, leader of the Communists, maintained that a majority left-wing government was feasible though it had long been spurned by many Socialists. He criticised Cavaco Silva for his “confrontational stance and disregard for the constitution.”

Paulo Portas, the incumbent deputy prime minister and leader of the rightist CDS-People's Party, said it was “absolutely extraordinary that a political leader fighting for his survival” (Costa) could even consider overriding “the vote of the people,” albeit it a minority vote.

Amid the domestic slanging, EU officials have threatened to take action against Portugal for not presenting its draft 2016 budget by the 15 October deadline. Portugal is still running one of the highest budget deficits in the eurozone.

Thursday’s announcement by President Cavaco Silva did not banish international fears that further weeks of uncertainty could harm Portugal's economic recovery more than a year after it exited the strict terms of its €78bn international bailout.

On the same day as President Cavaco Silva’s new government announcement, Angela Merkel, the German chancellor, expressed hope that Passos Coelho would be successful, but also spoke of her concern that upcoming elections in Spain and Ireland could see a swing to anti-austerity forces.

“We face difficult situations in Ireland, Spain and Portugal,” she told a meeting of the centre-right European People’s Party (PPP) in Madrid.

Even if Portugal’s centre-right get a vote of confidence in parliament in the days ahead, the new government will struggle to get through major legislative issues and is likely to have a limited life span.

No further general election can be held before May or June of next year. There will, however, be a presidential election when Cavaco Silva steps down in January. The future president’s first task may be to help clear up a political mess.

President Cavaco Silva with Prime Minister Passos Coelho (above) 
and opposition leader António Costa (below)

Oh for some help from outer space!

More than two weeks after the general election, Portugal will still be in the awkward position of not knowing who is to form the next government.

How much easier it would have been if a group of extraterrestrials had landed last week. They would have provided a handy solution to the conundrum created by voters on 4th October.

Portugal’s democratic history shows that minority governments can’t operate efficiently and don’t last long. So, having received the most votes but failing to win a majority, the centre-right (PaF) coalition under caretaker prime minister Pedro Passos Coelho could do with some backing from the opposition centre-left Socialists led by António Costa.

Shortly after the election, Costa said it would take “a Martian invasion” to convince him to join an alliance with the centre-right. He stopped short, however, of ruling out supporting a minority government on major legislative issues on which they could find common ground.

Negotiations between Passos Coelho and Costa on how they might compromise have so far got nowhere.

The Socialists may still hold the key to some sort of workable power-sharing arrangement, but they have a dilemma. They are pro-EU and have promised to honour this country’s budget commitments, but they oppose and want to lessen the harshness of the austerity measures imposed by the last government.

Before the election, a coalition between the Socialists and the far left - comprising the Left Bloc and the Communist Party - seemed almost unthinkable because of fundamental policy differences.

Surprise, surprise, it emerged that the centre and far left were seriously considering getting together, if only to keep the centre-right out.

The Socialists, unlike the far left, are opposed to dropping austerity or exiting the eurozone. But if the centre and far left were to marshal their differences, they could muster a majority in parliament.

Opinion polls indicate that most Portuguese do not believe the three left-wing parties could form the country's next government, but it remains a possibility.

Bloomberg Business reported that the election had been a victory for Passos Coelho and had been hailed by pundits as “a triumph for austerity and perseverance over Greek-style upheaval.”

The Financial Times said “Mr Passos Coelho’s re-election cannot be described as a ‘victory for austerity. At most, it reflects a grudging acceptance”.

The American online weekly Policy Digest claimed that, “along with last month’s Greek election, it was two in a row for the European Left.” Portugal’s ruling coalition lost its majority“in spite of a well-financed scare campaign, and a not very subtle effort by the European Union to load the dice” in the election.

Whichever way you look at it, political instability or any lack of fiscal discipline can only make Portugal’s fragile economy all the more vulnerable. Investors are already jittery.

 President Aníbal Cavaco Silva will hold separate meetings with the leaders of the main parties on Tuesday and Wednesday, October 20 and 21. Only then will the president be able to decide who to ask to form the next government.

It’s probably all a bit farcical to the record number of voters who abstained on 4^th October because they don’t hold politicians of any party in high regard. Some of the abstainers might welcome a sudden influx of sensible Martians.

Passos Coelho and Costa, unlikely partners

Weary electorate get weak government

As anticipated, there was no outright winner in this election. The centre-right coalition led by Prime Minister Pedro Passos Coelho won the most votes, about 38%, but it lost its majority in parliament and has little prospect of serving a full term.

The centre-left polled just over 32% of the votes, less than expected, which left António Costa with another fight on his hands: to carry on as leader of the opposition Socialist Party amid calls for his resignation.

The anti-austerity Left Bloc (BE) achieved their best result ever with more than 10% of the votes. The Communist Party dipped into fourth position with just over 8%.

The turnout was a record low: 43% of eligible voters stayed away, probably because they don’t like any of the political parties or felt their vote would not make much difference to the way the country is being run.

An outright majority in the 230-seat parliament would have required 44% of the vote. As it was, the coalition have so far come away with just 104 seats - 12 short.

Four seats are still undecided as final results of voters living abroad are awaited. While emigrants have the right to vote, most don’t bother. In 2011, non-voters abroad totalled 83%.

The half a million Portuguese who have left the country since 2011 are expected to add to the overall abstention rate.

"If we stay on the path we’ve been following, we won’t need any more bailouts,"  was one of Passos Coelho’s campaign messages.

Although his victory was a hollow one, at least he has the distinction of being the first prime minister to be re-elected among the five eurozone states that received a bank bailout.

The 2011-2015 coalition government’s austerity programme was hugely unpopular, but it appears to have worked, at least to the liking of Brussels. The coalition’s electioneering strong point was that having exited its bailout program successfully in 2014, Portugal’s economy looks like it is back on its feet, showing some of the best growth rates in the eurozone.

Tough times lie ahead but the economy is expected to grow 1.6 percent in 2015 and 1.8 percent next year, according to the latest forecasts from the European Commission.

The Socialists failed to capitalise on their promise to moderate the government’s austerity measures. António Costa said they would boost households’ disposable income while going along with fiscal discipline and supporting the EU policies so adamantly opposed by the far-left.

So, in essence, the 57% of voters who bothered to turn out have just generated a weaker version of the unpopular government they had before. By a slim margin, voters have decided it's better to stick with the devil they know.

Portugal election: complications ahead

It’s shaping up to be the closest contest in Portugal’s post-revolution democracy, but such is the level of apathy, angst and anger over politics that a record number of eligible voters may not bother to cast their ballot on Sunday. Those who do vote may end up concocting a parliamentary configuration that will make governing this country much more complicated than it has been for years.

Enthusiasm for voting has been in decline since 1974. People exercise political power through periodic legislative elections in which all citizens over the age of eighteen have the right to vote under conditions of equality and freedom. Sounds good, but the abstention levels have increased dramatically.

Democracy of a limited kind first arrived in Portugal on 5 October 1910 with the overthrow of the constitutional monarchy and the establishment of the First Republic. Dubbed by some as the ‘Nightmare Republic,’ it lasted for just 16 years during which time the voting system prior to universal suffrage put into power no fewer than 45 governments.

Rampant economic ineptness and political corruption between 1910 and 1926 created turmoil and ushered in almost half a century of dictatorship. Since the revolution of 1974 there have been a relatively modest 14 freely elected governments.

The turnout of voters in 1974 was a whopping 91.7%. It has dropped almost ever general election since then. In 1983 it had plummeted to well below 80% and in 1991 to well below 70% . In the last two general elections – 2009 and 2011 – the abstention rate was in excess of 40%.

Public disenchantment and distrust of politicians in the era of harsh austerity is widespread and deep in Portugal and so another low turnout seems inevitable.

To add to the turnout concerns, top football teams will set a precedent by playing premier league matches on Sunday.

Portugal’s election commission (CNE) could do no more than express “concern” over the likely number of lost votes because of matches involving Benfica, FC Porto and Sporting. Although the CNE always asks that big games not be held on election days, no legal ban can be imposed.

The results of the football games are easier to predict than the outcome of the 2015 election. If the pollsters are to be believed, the centre-right PSD-CDS coalition and the centre-left Socialist party could each win about 100 seats in the 230-seat parliament, leaving both sides well short of a majority.

The conservative coalition have been running the show for the past four years, the first freely elected coalition government in Portugal to survive a full term in office. The centre-left are hoping to re-establish the ruling status they enjoyed between 2009 and 2011, but they have been slipping somewhat in the most recent opinion polls.

Daily tracking by pollsters show the Communists to be steady on 10% and the Left Wing Bloc on 5%, meaning that despite the deeply unpopular austerity measures imposed by the coalition alliance there is no great appetite in Portugal for radical protest parties like Syriza in Greece or Podemos in Spain.

With no outright winner in prospect, one possible outcome is a weak minority government that will struggle to survive. Instability that could force another election within a year or two. Such a scenario, say analysts, could undermine Portugal's reform efforts and delay its recovery from the debt crisis.

Although none of the parties are advocating it, an alternative to a minority government would be a grand coalition. It has happened before. The Socialists ruled in coalition with the PSD and the Christian Democrats in the 1980s.

Never have the Socialists shared power with the Communists and doing so now is hard to imagine. For one thing, although the Socialists have promised to ease some austerity measures, unlike the far left they share the incumbent coalition’s intention to abide by the fiscal discipline required by being a member of the 19-nation eurozone.

So it’s all up in the air; speaking of which, if you are looking for an omen, good or bad, the forecast for most of Portugal for the rest of the week is sunshine. On Sunday and Monday rain is expected. Of course, weather forecasts can turn out to be wrong. And so can polls.

Conservative leader Pedro Passos Coelho

Socialist leader António Costa