The pluralist-left coalition—’contraption’ to its detractors—in Portugal has changed the political discourse. Change is less evident, however, on the ground.

I was in a rush, running late to where I needed to be, which on 4th October 2015 was the electoral-results party of the Portuguese Bloco de Esquerda (Left Bloc), at Lisbon’s São Jorge cinema. So I took a cab.

Cabs are the best way to know what is going through Portuguese consciousness—even what is going on in the Portuguese parliament. Cab drivers in Lisbon are not shy of sharing their opinion and that of those they have driven. Cab drivers, hairdressers and cafe waiters are the barometers of Portuguese society. And when in doubt, it is this holy trinity I consult.

What I did not know on 4th October 2015, even after seeing Bloco surge in the exit polls against all odds, even after watching friends become members of parliament and the conservative coalition lose its majority, was that the Portuguese paradigm was to become a riddle for political analysts for years to come.

And even if I had foreseen that the harshest round of austerity measures was to end with the rise of the geringonça (the contraption)—a derogatory moniker for the governmental agreement between the Socialist Party (PS) and the far left in the form of Bloco, the Portuguese Communist Party (PCP) and the Greens—I would never have guessed that this new government would pose so many questions on the nature of social democracy in the 21st century.

All I knew was that Portugal, like many of its southern European brethren, was afflicted by austerity, unemployment, crumbling social infrastructures, social unrest, mass emigration, widespread discontent and a slight taste of panic. The PS, part of the Socialist International, was floundering—in members on the ground and in political rhetoric. The infamous demise of its Greek counterpart, PASOK, was still fresh. Conservative Catholics seemed to be doing just fine, piggybacking on the centre-right (and inaptly named) Social Democratic Party.

Building an alternative

‘In the post-crisis context that affected Portugal, Europe and the world, where cuts were imposed on wages and public services, where household incomes and investment fell, where half a million people—in their majority qualified young people—emigrated, we had a huge and challenging path to take,’ the PS national director, Mariana Vieira da Silva, told me recently. ‘The path was to build an alternative to the austerity policy defended by the right.’

She said ‘it was therefore necessary to give people back their social rights, reverse the cuts imposed by the years of austerity, and also give them back their trust in a future of growth and sustainable development’. To reverse this ‘negative cycle’, she added, ‘it was possible to find common ground with the other parties of the parliamentary left and we established our joint positions in three historic agreements’.

That’s the inception of the geringonça. And the agreements Viera da Silva refers to could be seen as the three budgets agreed by the Portuguese parliament thus far or the PS’ three promises to its far-left partners: to unfreeze pensions, reform taxes which burdened families far more than corporations and stop the rampant privatisation of public services.

To the naked eye, these agreements were, overall, respected. The Portuguese economy seems, at first glance, to be doing better and the pace of recovery is, allegedly, faster than that of Greece or Spain. But walking through the streets of the Portuguese capital one would not think of this country as a shiny example of European affluence. Rather, it strikes one as the new ‘hot tourist destination’. And, indeed, that is one of the things that helped create the mirage that is the Portuguese economic recovery. Last year, a record 20 million foreigners visited the 10 million-strong country. According to recent figures from the Bank of Portugal, they left behind a whopping €41.5 million a day.

For the average Portuguese person, however, not much has changed. There are more jobs around but few with stable contracts. Under European diktats many public companies continue to reduce their senior and higher-paid staff (through early retirement or voluntary redundancy), precarious and seasonal employment is on a high, and vital sectors such a journalism are a dying breed.

Tactical turn

It was fellow journalist and Lisbon resident Ricardo Cabral Fernandes who explained to me how the PS government left turn was nothing but a coup of political genius: ‘The geringonça was basically an exclusively tactical turn of the Socialist Party.’ My colleague, who works six days a week for two of Portugal’s biggest publications and manages an entire foreign desk with one other person, looks exhausted.

‘What happened was that the, so-to-speak, socialist/left wing of PS very quickly learnt the lessons of PASOK in Greece. So it turned its compass. And [Prime Minister] António Costa was that compass. Yes, he broke the governance arc, made a parliamentary alliance with the Bloco and the PCP, but for all else, in policy terms, it keeps the same politics.’

What the PS was able to do, he argues, was to radically change the way in which voters understood the party. While it was once attacked both by the right and by the far left, with the geringonça the PS created some space to grow with at least a ceasefire from Bloco and the PCP.

Part of that strategy was a strong message from the PS arguing that, after all, austerity was not as inevitable as had once been accepted. ‘After almost three years, we are in a position to say that our policies worked and that the PS knew how to affirm a real alternative to those who said that it did not exist,’ said Vieira da Silva. Where that leaves the PS’ one-time support for the ‘troika’ (the European Central Bank, the European Commission and the International Monetary Fund) memorandum, no one is quite sure.

‘The Socialist Party is an example of the possibility of building an alternative without breaking with European commitments,’ she insists. ‘We have shown that, even under a different policy, it is possible to build a more equal country, with more and better jobs, and enjoy the highest economic growth since joining the euro. All under the same rules that apply to other countries in the European Union.’ She adds: ‘It was with this policy that we scrapped excessive deficit and reached its historic low levels. That is why Portugal today has a solid economy and public finances.’

And yet, public investment in Portugal is the lowest of all advanced economies, according to the IMF. Promises to improve this record have come to little on the ground. Public services such as the transport networks and the national health service are in acute crisis, and teachers have declared war on the government over missed salary increases.

The country’s industries too have not changed much since 2015. Other than tourism, of course—and much of that is controlled by foreign investment, particularly from China. Other grand investments in Portuguese infrastructure have been by Spanish, Brazilian and US corporations. Little public revenue is to be expected from them in the coming years.

Realpolitik

There is, however, an argument to be made about the Realpolitik behind the geringonça. While it is not without its contradictions, the geringonça—as a government that has not implemented austerity but is not openly anti-austerity either—has allowed Portugal to do things the troika did not allow Greece to do.

Cabral Fernandes is in no doubt that the European Union would have fallen on Portugal—as it did on Greece in the early days of the Syriza government—had the geringonça turned out to be a more radical government, ready to talk debt restructuring or renationalisation of public services: ‘The dogmas of the European Union continue, in Greece and everywhere else.’

‘It was this policy that allowed a better life for the Portuguese and gave them back the confidence they had lost in the institutions, the European Union and democracy in general,’ echoed the national director of the PS. ‘According to the latest Eurobarometer, 75 per cent of Portuguese people are satisfied with democracy in Portugal, which contrasts with 15 per cent in 2013. Confidence in the government, parliament, and European institutions has also been on the rise since we formed a government.’

This, she believes, has also thwarted the ‘populist, nationalist and destabilising projects’ that have grown across Europe. ‘These narratives did not grow in Portugal because we believe that the core of the government’s policies must be trust. The Portuguese feel that they have returned or are returning to normality. By giving them security and hope in the future, we are simultaneously fighting the threat of populism.’

My trusted barometer, the next cab driver, agreed with her. He was a middle-aged man named Tó Vieira, and he promptly told me that ‘there are only two real politicians in Portugal’. One was Costa. He felt things were slowly turning around, yet not for everyone. Of his two children one was abroad. The other was unsure about the probabilities of finding a job after graduating.

Most importantly, however, he told me he used to be a PS militant. ‘I was a member of the Socialist Party in the time of Lopes Cardoso and of Salgado Zenha, but when they left, I left,’ he said in a kind of jolly resignation. António Lopes Cardoso and Francisco Salgado Zenha were two heroes of the Portuguese revolution, founders of the PS and members of its more left-wing ranks. Both abandoned the party when its socialist essence turned into the social-democratic nature it has adopted to this day.

For many Portuguese like Vieira, certainly for those who supported it in the early years of the new, democratic Portugal, the PS went from being a party of transformation and hope to a party of the status quo and ‘jobs for the boys’. But since the geringonça there’s a new-born hope. Not necessarily hope for a better life, as Vieira da Silva suggested, but hope that things in São Bento (read the Portuguese political establishment) are moving in a different direction.

Strongest lesson

And that is perhaps the strongest lesson of the geringonça—both for the PS and political analysts fascinated by its anachronistic revival. In a time when its sister parties in Germany and France are polling at 17 per cent and 4.5 per cent respectively, the PS has consistently polled around 40 per cent since its left turn. The only other case of a social-democratic party succeeding in these terms is that of the British Labour Party. There too, albeit under different circumstances, a sharp turn from social democracy to democratic socialism has taken place.

In the past decade social-democratic parties, defending minor reforms, often promoting policies such as ‘austerity light’, or shrouding privatisations in PR language and calling them public-private partnerships, became meaningless to an electorate eager for a new system. New parties with smaller support bases started mushrooming across Europe, calling not for ethical capitalism but for the end of capitalism. And as the socio-economic situation worsened, so did these movements become bigger, as we saw with the birth of Syriza in Greece and Podemos in Spain. Minor reforms were shunned in favour of bolder political promises, including reversing many of the policies implemented by the last generation of social democrats. Indeed, these pledges, many critics pointed out, were not revolutionary but regressive in essence—a  de facto return to the well-nurtured postwar welfare state.

As with Syriza and Podemos, so too did the PS and the Labour Party succeed once more in appealing to the electorate by turning left and offering a socialism that, more than utopian, is ultimately nostalgic. In fact, the PS and Labour benefited from the fact that they had a longer history, a firm structure and the resources to do more and reach further than the new movements. And by resources I don’t mean just in terms of donations, or volunteer door-knockers and leafleteers, but also in connections and relationships with the rest of their national and the international establishments.

There are however great differences between the PS and Labour. For starters, the Portuguese party’s numbers on the ground are nowhere close to swelling like Labour’s. In other words, the support for PS is premised on its performance as a government. While it navigates the pressures from its far-left partners, it must deliver for the electorate and yield palpable results so to guarantee its grip on power. Its left turn is not ideological but tactical. For that reason too, the reaction of mainstream media and financial institutions to its government have ranged from miffed to lenient, rather than violent hostility.

Labour did nearly the exact opposite. It started a struggle at its very core for the heart and soul of the party. It is led by people who believe in the political turn as the ideological path to follow, rather than the useful step ahead. And while both are allowed in the political game, it would seem the former is of a long-lasting nature considering the political positions taken by the younger generations—Millennials and Generation Z.

Whims of capital

Indeed, the lesson of the new smaller parties, of Bloco and of Podemos, and even of Syriza, is that political organisations without serious work of ideological base-building, without institutionalisation—not in terms of parliamentary politics but in terms of crystallising internal structures—don’t survive the whims of capitalism. Because capital is willing to accommodate for its survival, as long as it needs to, until it rears its ugly head again at the nearest opportunity. But this, rather than delivering a new system, perpetuates an existing cycle that won’t end unless we will it so. Yet the future requires we must, if there is to be one at all.

To beat climate change and violent xenophobia, to extend international solidarity and resolve conflict, to eradicate poverty and bring abundance, the Socialist Party, as Vieira da Silva pointed out, must co-operate internationally. But in a polarised world the choices of whom to work with to achieve these goals are dwindling. So it is undoubtedly essential that the PS holds hands with and learns from Labour, while encouraging other social-democratic parties to open their arms to democratic socialism and its supporters.

Only thus can the Socialist Party, and Portuguese paradigm by extension, go from being a political conundrum—a geringonça—to being the future of Europe.

This is an edited version of the author’s contribution on Portugal to What’s Left? The State of Global Social Democracy and Lessons for UK Labour, published by Compass.