Portugal’s Rejected Socialists Highlight the Rot on the European Left

By Tom Gallagher,

Latest book: Europe’s Leadership Famine: Portraits of Defiance and Decay, Scotview Press, 2023.

Photo, Pedro Nuno Santos, present leader of the Left in Portugal and his predecessor António Costa

António Costa’s eight years as Prime Minister of Portugal reached an ignominious end on 7 November 2023 when the justice authorities carried out a total of 43 raids on government buildings and homes including the prime ministerial residence. They were investigating misuse of funds in ambitious green energy initiatives into which European Union founding was being ploughed. The smooth, paternalistic lawyer concluded within hours that his position had become untenable and he announced that he was quitting (to be followed by an insistence that he had no plans to resume office). Over €75,000 was discovered in wine boxes and bookshelves, money belonging to his chief aide, Vítor Escária. He was placed under arrest and Costa himself figured in a long list of suspects. He insists that he is blameless which may well be the case. But he would be the 13^th member of his government to have to swiftly vacate office because of criminal investigations or conflicts of interest. Soon yet more government ministers would be facing the attentions of state investigators.

On Sunday 10 March,in what was the third general election in five years, the Portuguese removed the Socialist Party (PS) from power. It lost heavily, but the centre-right, the nominal winner, hardly budged. It was the surge in support for the populist challenger Chega ( the word is the Portuguese for Enough) which made this a watershed election. Its support soared from 7 to 18 percent on a turnout of 64 per cent, up nearly 12 per cent on last time. The young, massively disengaged from a mediocre political game, turned out in big numbers. It was a guarded vote for Chega in the hope that it could sweep away the torpor and cronyism and promote structural change which could stem the haemorrhage of population visible since the Eurozone crisis from 2009 onwards.

Only the over-55s have remained broadly loyal to the Socialist Party. It had created a strong power-base within an aging electorate by depicting itself as the guarantor of social protection, much of which was paid for from EU transfer funds. A steady cash flow from Brussels passed through the hands of Socialist power-brokers in local councils and state agencies. Patronage structures became embedded which made it hard for the left to be dislodged from office. Only its chronic economic mismanagement of the country, which intensified the effects of the Eurozone crisis for Portugal, condemned it to opposition.

The early decades of the century have been highly frustrating for young Portuguese. A declining level of productivity means that when they can acquire a job it will often be in a low-wage sector such as tourism. The money earned is rarely enough to be able to start a family. One in three Portuguese, aged from 15 to 39 have quit Portugal, either to avoid unemployment, or else high taxation of their paltry salaries if they break into a tightly-regulated labour market.

Chega’s fluent, and self-confident leader, André Ventura, won over enough young people to place his party firmly on the electoral map. He has a varied career profile unlike the mainstream parties which are staffed by lawyers or local government barons often with a background in teaching or public administration. His party’s vote appears to have more than doubled which means that a party which didn’t exist 5 years ago, will now have fifty deputies elected. (late results allocated Chega 2 of the 4 seats allocated to the numerous Portuese living overseas, a group who have no cause to love the blocked politics at home which they left behind).

He is a professor of law who also became a popular radio sports commentator. His verbal prowess enables him to be a dominating presence in the National Assembly and his social media followers outnumber those of the other main political contenders added together. The new leader of the PS, 46-year-old Pedro Nuno Santos, proved no match for Ventura on the campaign trail. He rather exemplifies the tendency across Europe for left-wing parties to choose leaders who promote a political order based on virtue rather than the ability to get things done.

He was infrastructure minister until his removal by Costa in 2022 after he had announced the location for a much-disputed new airport serving the capital, when his boss was out of the country, and without having cleared it with him. More seriously, billions of Euro were wasted in a saga over the state airline, TAP which is seen as one of the favourite sinecures of the PS. Originally privatised when the centre-right was in office, it was re-nationalised only for its privatisation to be arranged at huge cost to the exchequer but no visible benefit.

Like any number of prominent Socialists across Europe, Santos owes practically his whole career to the party from student days onwards. From his teenage years, he has been a full-time politician, drawn from a middle-class family in business, the bulk of whose wealth derives from trading with the state. His attention is focused on redistributing wealth not producing it. Just like the more moderate Costa, he lacks an economic vision for Portugal. He got the leadership by emphasising far-left themes requiring people to make major adjustments to their lives in order to fit in with the lofty climate and racial equality agendas imported from elsewhere.

Except for Chega, the aspirants for office are a pretty dull and uninspiring lot perhaps because Portugal has been content to follow directives on most aspects of domestic policy laid down by the EU. In office for most of the last third of a century, this is a period when what was once a trading organization has massively expanded its reach over perhaps most aspects of governance. The opening up of the national economy to competition from the rest of the EU has resulted in the shrivelling of the country’s once respectable industrial base and the rapid decline of agriculture.

Most political players have come to accept Portugal’s dependency status because supervision is accompanied by what seems like a generous injection of funds on a regular basis. Portugal received €133 billion worth of EU funding from joining the entity in 1986 to the start of 2023 (not including the large amount released in order to promote post-Covid economic recovery). The property sector and infrastructure have benefited from this injection of funding. These are sectors which do not strengthen the labour market or long-term growth. Perhaps the lion’s share of EU funding which can be officially traced goes into maintaining a large social state. The PS is careful to channel the money towards its own support groups via state agencies where the party often has a strong grip.

A recent best-selling work, the Causes of Portugal’s Backwardness by Nuno Palma, an economics professor at the University of Manchester, contends that Portugal would be better off in the long-run if (without leaving the EU) it was weaned off external support from the EU and required to stand on its own two feet, meaning carrying out long-overdue structural reforms.

https://books.apple.com/au/book/as-causas-do-atraso-portugu%C3%AAs/id6474694287

Arguably EU largesse has been a recipe for social stability. It has kept elite quarrels to a minimum and muffled social and economic tensions. Without the avuncular supervision of the EU, it is an open question whether the liberal republic could have endured for so long.

But the price has been high in terms of stagnation. As well as declining productivity, the Socialists have been content to preside over a rate of emigration unsurpassed since the 1960s, and one of Europe’s lowest birth-rates. Moreover, the political class does not have to carefully account for how the money from Brussels is spent. Checks are lax and the heavily-subsidised local media rarely makes difficulty for the authorities by investigating potential scandals.

EU structural funds exist to narrow the gulf between rich and poor EU states and promote eventual economic convergence. Portugal is not the only country where this lofty goal has been lost sight of, but it is perhaps currently one of the most glaring examples.

Social mobility has declined, as favoured groups often linked to whoever wields influence, succeed in determining recruitment on informal rather than meritocratic criteria. More importantly, structural reform is ruled out as long as the priority is to gain short-term advantage by sometimes Machiavellian distribution of EU funds. Perhaps the main beneficiary of the externally-shaped status quo in Portugal are not vulnerable social groups relying on state help but instead cartels in the media and commerce. There is evidence that they are able to receive state financing, or else are shown leniency over price-fixing, in return for backing during elections and times of crises.

It is perhaps no coincidence that the major media companies with plunging circulations, and disappearing profit margins have appeared keen to prevent Chega enjoying a major breakthrough in this election.

Nevertheless, early results show that Portugal has become the latest European country where populists have broken through.

Even though his party now seems destined for opposition, António Costa could still be the one who has the last laugh. If the authorities decide he has no case to answer, he could end up holding the top job in the EU’s European Council. He was seen as a favourite because of his negotiating skills and the friendships he had built across the political spectrum. Indeed, some allege that he neglected his duties at home to quietly lobby for this position. It is non-elected and it seems such positions are the ones left-wingers on the continent of Europe have the best chance of acquiring these days.

Meanwhile, his successor Pedro N. Santos surveys the ruins of the Socialist house. The PS has lost 43 seats and has seen its vote share reduced by 13 per cent. It was pinning its hopes on next month’s celebrations to mark the 50^th anniversary of the army coup in Lisbon, which placed Portugal on a long leftist path to be a validation of rhetorical socialism. However, the occasion is more likely to seem like a funeral than a festa.

The despised Chega has eaten into the left’s support base in what used to be its southern strongholds. Dismissing the vigorous political upstart as ‘far-Right’ means that the PS and parties further to the left (which mostly fared disastrously on 10 March )are besmirching many of  their former supporters, and perhaps alienating them permanently. And the final bitter pill to swallow is that Chega will get nearly 4 million Euro of state aid while the PS’s funding bonanza has been slashed.

At least there is little sign that the likely new prime minister, centrist Luís Montenegro, will defy the left-wing narrative about Chega being beyond the pale and reach out to Ventura. The last Prime Minister from the centrist Social Democratuc Party (PSD), Pedro Passos Coelho, is a backer of a unified centre-right government, one that doesn’t exclude Chega, but his successor isn’t. It is a relief on the left to see that most in the PSD fear they will end up being swallowed by this energetic challenger which seems to believe in its conservative message. So crude party advantage takes precedence over the need to overcome sectarian politics in order to fix a broken down country.

A majority right-wing government able to determine its spending priorities and its reform aims would have four years to dismantle the empire which the PS has constructed within the state apparatus, one that has enabled party bigwigs and their lieutenants to do business in politics with other people’s money.

The PS notables played the system and refused to govern. Santos and his shrinking army of Socialist sloganisers must hope that there will be no conditions enabling its successor to govern effectively. They will be pinning their hopes on Chega playing a strong hand badly, resulting in it crashing to earth once early elections take place. This could be a forlorn wish. Most of its 48 deputies are unlikely to have a special calibre, though some many prove pleasant surprises. But in Ventura, the party has a skilful and tenacious commander. He currently has no equal elsewhere in Portuguese politics.

A low-grade political class, devoid of leadership, intellect and, above all, a sense of public service has got what it deserves. Enough voters deserted the left, or else gave up on their non-voting habits, to place a new contestant in the game. Whatever comes next, the sterile two-party system, dominated by a swarm of usually unprepossessing careerists, looks like it has had its day. A critical mass of Portuguese have shaken off their deference and chronically low expectations.

Enough Portuguese seem to still believe in the nation and the need for it to experience long-overdue -structural reforms in order for it to remain viable and keep its citizens productive and at home, rather than successful but living faraway from Portugal.

To the dismay of a shabby political class recruited to pursue business in politics, and ill-equipped to perform national tasks, the Portuguese have suddenly become alert, vocal, and even demanding. A people too readily dismissed by the political bosses as ignorant, stupid and incapable, seem to have woken up. It will be quite a job getting them to go back to sleep, especially because of the uproar that is occurring right across Europe. Socialists who lost touch with electoral bases and instead ended up pushing niche causes incubated in universities or Woke boardrooms, are struggling to stay relevant. In Portugal, the chances of them putting in place a status quo based on post-national objectives dreamt up by European bureaucrats, corporate managers and Woke activists, suffered a considerable setback on 10 March. There is now a small window of opportunity for Portugal to renew itself, so that anniversary celebrations next month in favour of liberty might eventually have a less hollow ring to them.