Portugal: The EU’s managed democracy

The bail-out has been the perfect excuse for Europe to bypass Portuguese citizens entirely, says Leigh Phillips

April 18, 2011
6 min read


Leigh PhillipsLeigh Phillips is a regular Red Pepper writer and was previously a Brussels-based journalist and Red Pepper's Europe correspondent.


  share     tweet  

The European Union has crossed a line. It has intervened in the party-political process of one of its member states for the first time, and, exacerbating the transgression, in the midst of a bitter general election.

Portuguese citizens will still formally be allowed to vote how they like on 5 June, but while doing so, they will have very little if any choice over public spending, taxes, labour laws or the regulation of business.

Essentially all the policy decisions that governments can make, apart from those regarding defence and home affairs, have been amputated from the political process.

Ahead of the vote in Portugal, precipitated by loss of the parliament’s confidence in the governing minority centre-left Socialists and their resignation on 23 March, the wealthy countries in Europe, with the connivance of the European Commission and the European Central Bank playing the role of enforcer, have ordered the main political parties mid-campaign to put aside partisan politics for the sake of European financial stability and sign on to a crushing multi-year programme of austerity and structural adjustment.

Heading into a meeting of EU finance ministers in Godollo, Hungary on Friday, Lisbon begged its ‘European partners’ for a ‘bridging loan’, an infusion of cash that would have allowed the indebted country to keep the lights on until after the election.

Prime minister Jose Socrates insisted that as the head of a caretaker administration, he had no mandate to sign on to anything other than a short-term emergency cash infusion.

A three-year package of wage restraint, public sector cuts, privatisation and tax hikes designed – all supervised by the EU-ECB-IMF troika – in return for a roughly €80 billion loan with punishing interest rates slapped on top would have to wait until after the election and a government with a democratic mandate to negotiate.

But Lisbon was told that they did not have time for such democratic niceties.

‘Democratic legitimacy? It’s not necessary. Apparently they had some mandate when they made the request [for a bail-out]. So if they were empowered … to make the request, they are empowered to progress with negotiations,’ commission economy spokesman Amadeu Altafaj said of concerns that a caretaker government could not sign on to a bail-out package on the scale of those imposed on Greece and Ireland. ‘They simply cannot wait.’

Nevertheless, EU ministers remained nervous. The wheeze that they came up with to solve the problem was that if they forced all the political parties to sign on to the same agreement before the election, then it wouldn’t matter in the end how people voted.

The ‘main political parties’ must now negotiate amongst themselves and come to an accord on the austerity package. ‘In the context of a difficult political situation and forthcoming elections, it is essential in Portugal to reach a cross-party agreement among the main parties ensuring that such a programme can be adopted in May,’ EU economy commissioner Olli Rehn told reporters on Friday.

EU officials would not be drawn on exactly how opposition political parties would be picked to participate in the talks and who would do the picking. Two parties to the left of the Socialists enjoy the combined support of between 14 and 20 percent of voters, depending on the poll, but despite their level of support, they are certain to be excluded from talks.

But within minutes, the plan had already started to fray at the seems. A fed-up Portuguese finance minister declared that his party, whose leader, Socrates, is barely on speaking with his centre-right counterpart, would not negotiate with the opposition and that it was the responsibility of the EU and the IMF to do so.

A surprised Rehn then warned the country: ‘I trust all political parties of government and opposition realise their major responsibility in overcoming their current difficulties both for the sake of their own citizens and financial stability in Europe.’

‘Let’s not have a public dialogue every day,’ he said.

The head of the ECB, Jean-Claude Trichet, added that the bail-out negotiations were ‘certainly not for public’ discussion.

Remarkably this topic that is not for public discussion was the very policy that brought down the government. Socrates fell on his sword after he had failed to win support from the right-wing opposition for his latest austerity measures, the fourth such package in 12 months. Nevertheless, the new austerity programme, whose details must wait until after an assessment by troika experts who visit Lisbon this week to ‘open the books’, will be even tougher.

Further compounding the violation of Portuguese sovereignty and democracy, it is now emerging that it was the European Central Bank that pulled the plug on the Portuguese economy and forced the government to apply for a bail-out.

Last Monday, Portuguese banks announced they would stop buying government bonds if Lisbon did not seek a bail-out. Without the support of domestic banks, Socrates had no choice but to request an external lifeline.

On Thursday, although the ECB chief later denied it, the head of the country’s banking association, Antonio de Sousa, said that he had had ‘clear instructions” from the ECB and the Bank of Portugal to cut off the tap.

‘When it became clear that state financing needs implied more funding by banks, banks said this could not be done because they had clear instructions from the Bank of Portugal and ECB to do the opposite, to diminish their exposure and not increase it,’ he said.

There is no more important issue in this election than whether Portugal shall continue to cut ever more deeply and sharply to ensure the stability of core European banks who engaged in their own form of predatory lending to the EU’s periphery. But Brussels, Frankfurt and Berlin have declared such topics off limits.

This is just the most extreme, emergency version of what European elites would wish on all states. The new ‘economic governance’ rules approved last month affect all EU states, not just those in the eurozone, despite 10 Downing Street’s reassurances to the contrary, and are also in essence a prescription for taking key areas of policy, notably pensions, wages and wider questions of public spending, out of the realm of partisan politics, just as monetary policy has been politically neutered by its transfer to independent central banks.

Brussels officials regularly say that these issues are ‘too important’ to be ‘politicised’.

What they mean is that they are too important to be decided democratically, that they must be insulated from ‘irrational’ voters.

We are steadily moving towards a form of governance that is post-political, co-ordinated by  ‘experts’. The EU system has exploited the eurozone crisis to accelerate this tendency.

One irony in this process is that one of the main characters involved in this gelding of democracy, the European Commission’s Portuguese chief, Jose Manuel Barroso, in the 1970s was himself a fighter against the Salazar dictatorship. The irony that three and a half decades later, he would be one of the architects of the delimiting of Portugal’s relatively young democracy must not be lost on many of his countrymen.

But of course, he has long since ceased to be a politician. He is now an ‘expert’ too.

Red Pepper is an independent, non-profit magazine that puts left politics and culture at the heart of its stories. We think publications should embrace the values of a movement that is unafraid to take a stand, radical yet not dogmatic, and focus on amplifying the voices of the people and activists that make up our movement. If you think so too, please support Red Pepper in continuing our work by becoming a subscriber today.
Why not try our new pay as you feel subscription? You decide how much to pay.
Share this article  
  share on facebook     share on twitter  

Leigh PhillipsLeigh Phillips is a regular Red Pepper writer and was previously a Brussels-based journalist and Red Pepper's Europe correspondent.


Brexit, Corbyn and beyond
Clarity of analysis can help the left avoid practical traps, argues Paul O'Connell

Paul Mason vs Progress: ‘Decide whether you want to be part of this party’ – full report
Broadcaster and Corbyn supporter Paul Mason tells the Blairites' annual conference some home truths

Contagion: how the crisis spread
Following on from his essay, How Empire Struck Back, Walden Bello speaks to TNI's Nick Buxton about how the financial crisis spread from the USA to Europe

How empire struck back
Walden Bello dissects the failure of Barack Obama's 'technocratic Keynesianism' and explains why this led to Donald Trump winning the US presidency

Empire en vogue
Nadine El-Enany examines the imperial pretensions of Britain's post-Brexit foreign affairs and trade strategy

Grenfell Tower residents evicted from hotel with just hours’ notice
An urgent call for support from the Radical Housing Network

Jeremy Corbyn is no longer the leader of the opposition – he has become the People’s Prime Minister
While Theresa May hides away, Corbyn stands with the people in our hours of need, writes Tom Walker

In the aftermath of this disaster, we must fight to restore respect and democracy for council tenants
Glyn Robbins says it's time to put residents, not private firms, back at the centre of decision-making over their housing

After Grenfell: ending the murderous war on our protections
Under cover of 'cutting red tape', the government has been slashing safety standards. It's time for it to stop, writes Christine Berry

Why the Grenfell Tower fire means everything must change
The fire was a man-made atrocity, says Faiza Shaheen – we must redesign our economic system so it can never happen again

Forcing MPs to take an oath of allegiance to the monarchy undermines democracy
As long as being an MP means pledging loyalty to an unelected head of state, our parliamentary system will remain undemocratic, writes Kate Flood

7 reasons why Labour can win the next election
From the rise of Grime for Corbyn to the reduced power of the tabloids, Will Murray looks at the reasons to be optimistic for Labour's chances next time

Red Pepper’s race section: open editorial meeting 25 June
On June 25th, the fourth of Red Pepper Race Section's Open Editorial Meetings will celebrate the launch of our new black writers' issue - Empire Will Eat Itself.

After two years of attacks on Corbyn supporters, where are the apologies?
In the aftermath of this spectacular election result, some issues in the Labour Party need addressing, argues Seema Chandwani

If Corbyn’s Labour wins, it will be Attlee v Churchill all over again
Jack Witek argues that a Labour victory is no longer unthinkable – and it would mean the biggest shake-up since 1945

On the life of Robin Murray, visionary economist
Hilary Wainwright pays tribute to the life and legacy of Robin Murray, one of the key figures of the New Left whose vision of a modern socialism lies at the heart of the Labour manifesto.

Letter from the US: Dear rest of the world, I’m just as confused as you are
Kate Harveston apologises for the rise of Trump, but promises to make it up to us somehow

The myth of ‘stability’ with Theresa May
Settit Beyene looks at the truth behind the prime minister's favourite soundbite

Civic strike paralyses Colombia’s principle pacific port
An alliance of community organisations are fighting ’to live with dignity’ in the face of military repression. Patrick Kane and Seb Ordoñez report.

Greece’s heavy load
While the UK left is divided over how to respond to Brexit, the people of Greece continue to groan under the burden of EU-backed austerity. Jane Shallice reports

On the narcissism of small differences
In an interview with the TNI's Nick Buxton, social scientist and activist Susan George reflects on the French Presidential Elections.

Why Corbyn’s ‘unpopularity’ is exaggerated: Polls show he’s more popular than most other parties’ leaders – and on the up
Headlines about Jeremy Corbyn’s poor approval ratings in polls don’t tell the whole story, writes Alex Nunns

Job vacancy: Red Pepper is looking for a political organiser
Closing date for applications: postponed, see below

The media wants to demoralise Corbyn’s supporters – don’t let them succeed
Michael Calderbank looks at the results of yesterday's local elections

In light of Dunkirk: What have we learned from the (lack of) response in Calais?
Amy Corcoran and Sam Walton ask who helps refugees when it matters – and who stands on the sidelines

Osborne’s first day at work – activists to pulp Evening Standards for renewable energy
This isn’t just a stunt. A new worker’s cooperative is set to employ people on a real living wage in a recycling scheme that is heavily trolling George Osborne. Jenny Nelson writes

Red Pepper’s race section: open editorial meeting 24 May
On May 24th, we’ll be holding the third of Red Pepper’s Race Section Open Editorial Meetings.

Our activism will be intersectional, or it will be bullshit…
Reflecting on a year in the environmental and anti-racist movements, Plane Stupid activist, Ali Tamlit, calls for a renewed focus on the dangers of power and privilege and the means to overcome them.

West Yorkshire calls for devolution of politics
When communities feel that power is exercised by a remote elite, anger and alienation will grow. But genuine regional democracy offers a positive alternative, argue the Same Skies Collective

How to resist the exploitation of digital gig workers
For the first time in history, we have a mass migration of labour without an actual migration of workers. Mark Graham and Alex Wood explore the consequences


22