Left blocked

What will the ‘bailout’ mean for ordinary people in Portugal?

The ‘bailout’ is not financial help, it is extortion – it is going to give them a €520 million profit after they intervene in the Portuguese economy. The Portuguese people know this, but the hegemonic discourse dictates that it is ‘inevitable’ and without this package, the economy will go under. However, people know that the ‘bailout’ also means more austerity, compression of the workers’ wages, less public services, more VAT and the progressive destruction of the welfare state.

How has the Left Bloc responded to the financial crisis, and to the austerity that has already been imposed?

We have responded through social mobilisation and by presenting concrete legislative proposals that would be able to cut superfluous spending, while at the same time raise enough revenue for the state to pay off the deficit, without sacrificing the economy and the workers. This could be done by taxing fortunes and financial transactions to off-shore banks, the implementation of a new tax bracket where the rich are taxed more, and renegotiating the public debt in order for the economy to breathe. However, the real response must come from the streets.

Is there any kind of debt default movement in Portugal yet, inspired by what’s going on in Greece? Does the left have a common position on how to deal with the debt crisis?

There are a couple of small debt default groups, but nothing compared to the movement in Greece. Both the Left Bloc and the Communist Party have a common position on how to deal with the debt crisis and the first step is to renegotiate and restructure the public debt.

Why? Defaulting the payment of the debt will automatically exclude Portugal from the euro, meaning that we would have to go back to our old currency, the escudo, which in turn would be devalued as inflation would destroy the purchasing power of the Portuguese. With the renegotiation of the debt, we can withdraw pressure from the economy, alleviate the austerity and create a decent economy. Only with the creation of employment can we then start thinking about paying the public debt, though not the private debt or the extortionate interest rates.

This spring saw Portugal Uncut groups springing up around the country, inspired by UK Uncut protests. What kind of actions has Portugal Uncut been organising?

Portugal Uncut has been organising a series of debates, talks and actions. Its main intervention has been in the area of information, diffusing what UK Uncut and US Uncut have done, and through their example carrying out similar actions in Portugal. Their actions have been more directed at banks – how they only pay 5 per cent tax instead of 25 per cent like any other Portuguese company or shop – as well as millionaire bonuses and tax evasion schemes.

In the elections on 5 June, the Social Democratic Party [Portugal’s centre-right party] won the greatest number of seats. What will this mean for Portugal?

More austerity. The victory of the Portuguese right will bring more austerity for workers, instilling further precariousness and ‘flexibility’ of the work contract, as well as the dismantling of the welfare state. The Social Democratic Party, in coalition with the Popular Party [a smaller party to the right of the Social Democrats], has already stated that it will have to make profound changes in order to kick-start the economy and pay our creditors, and that can only be done with changes in the Portuguese constitution.

In order for this to happen, the Socialist Party will need to vote alongside the Portuguese right, which is quite possible since it was these three parties that struck a deal with the Troika [the European Commission, European Central Bank and IMF].

The austerity measures mean that workers pay 80 per cent of the bill, whereas the banks pay the remaining 20 per cent. In economic terms this is disastrous because it will reduce consumption, which will then drive down the production levels, leading to unemployment. In the end, this means less taxation and revenue for the state to channel into social spending.

The Socialist Party lost seats at the election, but so did the Left Bloc. Was this a general shift to the right in Portugal? Why did the Left Bloc lose out, while the CDU [the Communist/Green electoral coalition] vote remained stable?