(In comments to one of the posts here on Greece, Tiago Lemos Peixoto posted some observations on the situation in Portugal. In response to some questions from me, he sent the message below. We don’t hear much in the US about the the political-economic situation in Portugal, and I thought Tiago’s discussion was interesting enough to post on the front page. I’ve posted his original comment first, and then then the followup. My questions to him are in italics. JWM.)
I am a 37 year old Portuguese, born merely 4 years after a semi fascist dictatorship that furthered our already geographical peripheral position to one of political isolation. We joined the EEC 10 years after that, while still trying to recover from the aftermath of the democratic transition on the promise of cooperation, solidarity, prosperity, and a helping hand in developing our economy to the european standards of living.
Now, let’s forget for a while the fact that such a thing never happend. Instead of modernizing and improving our competitiveness, the EEC brought in fact production quotas to our industries and agriculture, and effected a great many deals that turned out to be unilateral. One example out of many would be our milk and dairy production, which is capable of producing in vast quantities, but due to said quotas are, to this day, often destroyed and wasted so that we don’t outperform.
We didn’t readily see that, however. Along with our joining in 1986 came communitary funds which were generously abundant, almost trickle down. Why would we think about our lack of competitiveness when Europe paid our producers subsidies to cut down excess? Who could really complain when great and bloated artistic endeavours, ambitious new infrastructures were being developed via communitary funds? Or with the tearing down of the old borders, the freedom to move within anywhere in the Schengen space? After the years of dictatorship and extreme poverty, after all that crippling isolation, it seemed like the dawn of a new age. And there are striking paralels to Greece here as well, what with their being a peripheral country who survived a period of dictatorship.
Add to that the promise of the €. Now, that one was harder to sell, since it actually doubled a lot of the prices, but hey, all seemed to be going so well, surely it would all adjust soon, and this is just another step to an unified Europe of progress.
That’s what we’ve been pretty much conditioned to believe, and that is the mindset that made people equate the European project with prosperity. For the Greeks, it’s very likely that any Greek between 50 and 60 grew up in a dictatorship, and same goes to every Portuguese between 40 and 90. Adults like myself grew up with the European Union and its promise of a better world and barely know any world outside of it. And communitary funds, even if they’re all almost universally badly applied, worked like a Skinner’s box of sorts.
And now, they threaten us, the adults who barely know a world outside EEC/EU, the young adults who grew up on the possibilities given by Erasmus projects, the older people who grew up or lived through overt dictatorships, that all this can go away. And that with it comes fire and brimstone, that we HAD to join the € because our currency was too weak (and what better argument to NOT join the Euro?) and would be even more worthless if we were to readopt it. They throw the ghosts of market anathema at us, “leaving the Euro would be catastrophic, the markets react just from your mere mention of it, you really want to go back to those bad old days? Do you really want to be out of the cool kids’ club, and have no EU funding for your arts association anymore?”
That is why we fear the alternative, even as we begin to see the bars that hold our gilded cage.
Is there any kind of organized challenge to austerity there? Is there any kind of left opposition party?
Well, there is, and there isn’t. The most consistent and organized opposition is the local Communist Party (PCP), which commands a respectable position in parliament (about 11%). What’s more significant, the vote on PCP has been relatively unchanged since the 1974 revolution, so they’re a familiar presence in our democracy, and relatively well respected outside of its circles for the fact that they were the “vanguard” against Salazar’s regime. They’re incredibly well organized and have the support of the majority of the unions. They’re also relatively less “orthodox” than something like the KKE, for the most part. However, despite all this, their voting base is incredibly stable for better and for worse.
Then there’s Bloco de Esquerda (Left Bloc or BE) which could be seen as our own Syriza: a broad front of minor leftist parties of different traditions, disgruntled communists and modern socialists which formed 15 years ago and was on the rise in parliament. They took a huge hit in the last elections, though, through a combination of leadership bickerings, lack of cohesive message, and the center left Socialist Party (PS) being able to sideline them via pushing BE’s social issues agenda on issues like women and LGBT rights. Many saw BE a bit redundant after PS pushed those issues through parliament. They managed to have around 12% at their best, got 5-6% on the last election.
And that’s the extent of organized opposition. BE and PCP do work together a lot better both in parliament and on the streets than in other countries and are a lot closer than say, KKE and Syriza. But whereas PCP’s strength and weakness lies in the rigidity of its speech, BE has failed to have an open discussion on issues like debt restructuring and the like.
Social movements were strong for a while in 2010-2012, and were a ineffectual, uncohesive mess after that, I’m sad to say. There was a strong grass roots response to the austerity packages with absolutely gigantic demonstrations occuring in 2011-2012. But there was also failure to plainly articulate a political alternative, as well as the prevalent “sibling rivalries” that so often fracture these kinds of movements. The government and mainstream media narrative effectively pushed back via Thatcher’s “TINA”, and it’s not so much that people bought the narrative, but they’re failing to see anyone present anything else.
Dairy has been an issue in Greece too, it’s specifically mentioned in the new agreement. It seems as tho the crude mercantilist arguments, which I think mostly miss the larger picture, really may be the story in agriculture.
There is an apparent mercantilist side to the way that the EU is constructed. In many ways, it’s a paradox: its current ruling minds come from that neoliberal school of Thatcher and Reagan policies, but the actual construct is almost neo-colonial, with very apparenty peripheries and semi peripheries forming around the German epicenter. Any analysis of trade relations will show Germany as either the no. 1 or no. 2 exporter to other European countries: Spain, Italy, Greece, Portugal, all of those have Germany in their top 2 of imports. Which is, I believe, all the more significant when you cross that data with the prevalence of production quotas.
Though I’d argue that in Portugal’s specific case, these quotas end up helping Spain, especially in terms of food products. Germany’s our second larger import origin, but we import a staggering 27% from Spain alone. Now, though I’m no economist and my field lies in History, I do believe this is a rabbit hole worth chasing.
Has there been significant liberalization in Portugal over the past five years? Rolling back of labor laws, weakening of unions, cutting back pensions, etc.? In other words, has the crisis worked?
It has. Completely. Nearly anything that could be privatized, including energy, our airfields, our air company, our telecommunications grids our energetic infrastructure, our mail service, all have been sold off at the time we’re speaking. It’s worth mentioning that, while it could be argued that there were severe deficiencies in the management of these companies, nearly all of them actually turned a profit. So, selling off, say, our energy for €3 billion 5 years ago stops being an impressive feat when we see that the company’s profits were at about €1 billion/year, and we’d have €2 billion more at our disposal by not selling.
Collective bargaining took a major hit. Most new jobs are being created on a temporary basis. People have in fact been “temps” without social welfare benefits for more than ten years now in many cases (this did not start with the crisis, but did speed up considerably). Others work under weekly renewable temp contracts, which can prolong themselves for months. Our minimum wage is net €505/month, but many make less than that by working 6.5 hour long “part time” jobs for €300-400. Any company can hire you and sign temp contracts with you for a period of 3 years during which the rules are more or less “at will”; firing you sometime during those 3 years, waiting a couple of months and then calling you back to rehire you (obviously resetting that 3 year grace period) is a very common occurence. Unpaid internships are the norm, with some of them taking on surreal form. Unpaid internships for bartender or hairdresser are things we can see on job websites and ads papers.
Unemployment is predictably high, currently at 14% after a 18% peak. We should account for the fact that Portugal measures unemployment by the number of people who have enrolled in our unemployment centers. Which are ineffective to Kafkaesque levels, often summoning you by letter to interviews which have already happened by the time you received that letter, at which point you’re out of the center (and the stats) and have to justify your absence or wait for four months before you can enroll again. Add to those numbers the fact that half a million left the country in the last 5 years. In a country of 10 million, that means 5% of our population, most of them college educated youths between 20 and 35 is absent from the active population.
But despite all that, despite the 6% GDP contraction, or the fact that the austerity measures actually skyrocketed the debt from 95% to 130%, we’re told (in an election year, no less) that we can rest assured in the fact that we’re not Greece (which if one wants to argue that we’ve been put under a slow burn as opposed to Greece’s scorched earth can be a point I do concede), and that “though the Portuguese are worse off, the country is better” (actual quote from Luis Montenegro, Parliamentary leader to the majority party), and that the worst has passed, and austerity is a thing of the past… though they need to make an extra 500 millions in pension cuts this year alone.