Sunday’s state-wide elections in Portugal show that German Finance Minister Schäuble was correct when he labelled Portugal “the good pupil of the Eurozone” more than three years ago. The Portuguese economy has outperformed other debt-ridden countries of Southern Europe and its electorate favors continuity over radical alternatives to the left and right. Yet beneath the surface Portugal’s story is one of tragedy and farce.

It’s the economy, stupid!

The cost of economic recovery in Portugal has been high. As the government committed itself to selling off US$5.6 million (5 million euro) worth of state assets, German and French companies made sure to snap up shares of profitable state-owned companies at a fraction of their original value. It’s profitable airports have been sold off to the French company VINCI.

And, in an ironic twist of events, companies from Portugal’s ex-colonies have seized the opportunity for revenge. Angola’s Banco BIC has bought Portugal’s nationalized, scandal-ridden Banco Português de Negócios (BPN) for a fraction of its US$211 million (180 million euro) asking price. Furthermore, an Angolan company has already bought Portugal’s biggest furniture maker, and Portuguese construction companies such as Teixeira Duarte, Soares da Costa, and Mota-Engil have been switching from their domestic market to Angola.

The current government made up of the Social Democrats (PSD, a right-wing party despite its name,) and the Conservatives (CDS) which is set to come out on top at Sunday’s elections – cut civil servants’ salaries by over US$1,691 (1,500 euro), or 10 percent. Those earning over US$1,127 (1,000 euro) had their holiday pay scrapped and more than 600,000 public sector jobs – around four out every five public sector workers in the entire country. Today, more than 50 percent of Portuguese workers have no fixed contracts and labour rights have been further curtailed during the crisis. According to Eurostat figures about 24 percent of the Portuguese population live below the poverty threshold.

On Wednesday then, the government reported a budget deficit of 7.2 percent. Yet Prime Minister Coelho remains confident that it will not exceed the 3 percent budget deficit threshold enshrined in the EU’s growth and stability pact. This is largely due to a 6 percent jump in exports between May and June earlier this year. Thus, it appears that the Portuguese economy is on the road to recovery. There are two reasons for this so-called recovery: As disaster has unfolded in Greece, European creditors have adapted their strategy and been more lenient with Portugal. In return, the EU could count on the centre-right governing coalition to slavishly follow the dictates of the Troika of the EU, ECB and IMF.

Cracks in the state    

Yet there has been disquiet amongst sections of the state apparatus. On Nov. 6, 2012, more than 5,000 local police officers marched against the government’s plans to stop early retirement and to end free public transport and healthcare for police officers. Only a few days later on Nov. 10, 10,000 active and retired members of the military in civilian dress marched against austerity through Lisbon. Some officers complained that their salaries have been cut by as much as 25 percent. One banner read: “The military is unhappy, the people are unhappy.”

Given the role that radical officers played in the 1974-5 Revolution, many people supported the military’s protest. Later on television, one member of the military went on to say, “We will do everything so that the indignation of the people will not be suppressed.” Thus, it comes as no surprise that the riot police received an 11 percent pay rise while Portugal’s city police, the PSP, received 13.2 percent more. The militarized GNR (Guarda Nacional Republicana, National Republican Guard) police got an extra 9.9 percent. In total, the budget for the Ministry of the Interior increased by about 12.3 percent to US$2.4 billion (2.14 billion euro) in 2013.

At the beginning of April that year, Portugal’s Constitutional Court rejected four of nine contested austerity measures. A senior member of Portugal’s cabinet, Miguel Relvas resigned as a consequence. Yet the left was not able to use the cracks in state and government to advance its agenda. Instead it has been fraught by political infighting and high-profile splits.

Mainstream political battles    

It is most likely that the PSD-CDS coalition will win the Sunday’s elections. Coelho has made austerity work, yet at every campaign appearance Coelho has been heckled by protesters waving black flags in a campaign for the restitution of the millions of euros in savings they lost in the BES bailout. Nonetheless, the Socialist Party with its association to former PM Socratés – charged with corruption – who has been recently released from prison does not present a viable alternative for sections of the middle class.

The ‘Que Se Lixe a Troika’ (Screw the Troika) movement in 2012 and 2013 were the biggest demonstrations since the fall of the Salazar dictatorship in 1974. In more than 40 towns and cities across Portugal, 1.5 million people (800,000 in Lisbon) took to the streets against the government’s slavish submission to the dictates of the Troika. While the demonstrations showed how deep the anti-austerity sentiment runs inside the country, they did not create a new political formation such as Podemos in Spain. And the Bloco de Esquerda – Left Bloc – has been weakened by high profile splits rather than being able to galvanize the resistance of the last four years, as SYRIZA had been able to do in Greece. However it has been the Communist Party (PCP) which has been gaining in momentum in the last couple of months and is set for its best election result since 1987. Yet the two anti-austerity parties are not likely to win more than 15 per cent of the popular vote. By far not enough to effectively challenge the government’s pro-austerity consensus.

The key question in Portugal is whether the popular movements will be able to mobilise once again as they did in 2012 and 2013 and crystallize popular anger into a political programme of change. It appears though that resignation has taken over. The high emigration amongst under 30-year-olds testify to that. New data suggests that a total of 485,000 people left Portugal between 2011 and 2014, with almost 200,000 as permanent emigrants. Sunday’s elections will not give them any more reason to return to their home country.

Mark Bergfeld is an activist and writer. He has published the ebook ‘Portugal 40 years after the revolution’. He is a researcher at Queen Mary University of London. He tweets @mdbergfeld

---