Social Democracy Key to Deepening Europe’s Democracy

Good afternoon, Eunice, and thank you very much for taking the time to talk to me today about the Portuguese Socialist Party. What would you say is the historic position of social democracy and the Socialist Party of Portugal in the Portuguese political system. Where does it currently stand?

Well, the Portuguese Socialist Party has had a key contribution to make to Portuguese democracy. So, without the efforts of Mário Soares, and of the Socialist Party, perhaps it would have taken much longer to have a democratic government in Portugal. Social democracy was at the birth of the Portuguese democracy and thanks to its efforts we have a consolidated democracy now in 2017. So, those first steps were absolutely crucial. The other very big contribution that the Socialist Party has made was in anchoring Portugal in the European democratic project.

Being seen as a European nation took precedence over democratic socialism or social democracy. In fact, socialist governments in Portugal in the late 1970s and early 1990s imposed really painful austerity on the population with the goal of joining the European Community later on.

So that has been its contribution, and this European-ness of the Portuguese Socialists is pretty fundamental and pretty important for us to understand where they are now, and in the past. And where they want to go.

Okay, and it’s a party in government at the moment. What is its role in Portugal’s recent votes in the wake of the Eurozone crisis, and what kind of alternative policy mix has it come up with now in government?

Well, the current prime minister, António Costa, as a very pragmatic but also quite principled prime minister, was quite key in ensuring good governance. He maintained stability by securing an agreement that allowed for a minority socialist government supported by two radical left wing parties. I’m not so sure that the socialists now offer, really, an alternative to austerity. There is a massive difference from what we had before, but Portugal is still committed to maintaining certain fiscal targets.

And even though the economy is growing quite fast – economic growth in Portugal is higher than the European average, – we’ve met our fiscal targets. And there has been an investment in social policy, in particular pensions, wages and so on. There has been a price to pay in terms of investment. António Costa has managed to create that little alternative that was possible within the very strict constraints of being part of an older liberal monetary union.

So basically, he’s pushed as far as it could go within the existing framework, basically?

Exactly. That’s exactly what he did, and if we look at the macroeconomic policies of this government only two years, soon to be two years, in power, essentially there was a trade-off. The trade-off was to stop privatisations and invest in the social fabric. Poverty in Portugal reached extremely high levels during the worst periods of austerity, but the price to pay was that there was no much-needed public investment. It’s at the lowest level since 1995, the year before Portugal joined the European Community.
So it’s not a recipe for the future. It’s not a recipe for a prosperous and sustainable future, because for the economy to grow, it needs to invest not only in infrastructure. It needs to invest in the scientific and technological fabric of the country. Within the budgetary constraints imposed by the monetary union now, that is not possible.

And if we take a step back from the current politics of the government, and have a sort of bird’s eye view of the party as such. Where do you say are the particular strengths and weaknesses of the Portuguese Social Democratic Party?

Well, I would start with the weaknesses, because they will enable us to understand the current strengths. The first weakness, and perhaps the main weakness, of the Portuguese Socialists. and this was the kind of original sin of most social democratic parties in the 1990s – was that it accepted without questioning the new liberal turn of the European Union. That led to the primacy of markets over the primacy of politics at European level, and we know where all that ended.
It ended with the small state mentality that governs the monetary union, and ultimately led to extremely painful austerity that brought rising unemployment and poverty. And eventually, the rise of xenophobic forces in several European countries. Thankfully, Portugal escaped that particular trend. That was the weakness of Portugal. Never a leader in terms of political thinking, essentially it followed the crowd. It followed what became the dogma for European social democrats.

But, in terms of strengths, the socialists have also understood the limits of that dogma and started to argue for a different course, an alternative. And this is what this socialist leader, and our current prime minister, Costa, has been doing. His strength was in arriving at the right moment and making the most of it. There was a window of opportunity for change and he has used it. The other strength is very effective leadership. We often forget these questions of leadership when discussing social democracy.

But very often the achievement of social democratic goals is dependent on having principled but also quite effective leaders. Costa has proved that in the domestic realm, where he managed to convince the communists and the radical left bloc to support his government, and he also has won plaudits in Brussels. The German chancellor, Angela Merkel, has a very good relationship with him, and he has convinced the Brussels authorities that Portugal will meet its fiscal targets.

As Portugal does that, he has argued very persuasively but very diplomatically for reforms of the monetary union, and he is trying to build alliances. All of this takes time, but these are the necessary steps for effective and sustainable change in Europe that will favour social democratic politics. 

If we look at what kind of opportunities and threats there are for the Portuguese Social Democratic Party. Maybe seen in a more widely European view against a backdrop of surging populism and the success of populist parties. So, where would you pinpoint the opportunities, and threats?

The opportunities are the change of mood in Europe. There is a realisation that austerity does not work, that the monetary union must be completed and reformed. So that is the opportunity, and I think Costa is making the most of it. The threat is that he alone won’t be able to change Europe. So other member states, other prime ministers and presidents of Europe, hopefully from more powerful states, will help him make the case for that change. In terms of threat, the threat is still, I’m afraid, Germany.

Germany is very resistant to the idea of changing the monetary union. In particular, the most harmful aspect of the monetary union, which are its governance rules. There are over-strict budgetary criteria and a stability pact that need to be reformed to allow for economic growth and the achievement of other social goals, as opposed to only low inflation and fiscally conservative balance budgets.

How do you think the party should react to these opportunities, and the threats, for that matter? By building more coalitions across Europe and making the case, or what would you advise?

I think the advice that perhaps can best be made, taking it from Portuguese experience, is dialogue. It’s dialogue, it’s accepting that change is slow and that it’ll take a lot of time for change to happen, but small incremental steps can lead to radical change. I think that has been Costa’s approach. He has shown that dialogue has contributed to that change. That has happened at the national level. We should not underestimate what was achieved in 2015 in Portugal.

He managed to have two parties who had vowed never to support the socialists ever in their lives, he managed to get them to support his own government. This agreement on the left about what can be done, and what are the limits to those ambitions, is extremely important. I think he learned from the mistakes of Syriza, the Greek government, during the height of the Eurozone crisis. He has learned that isolation leads nowhere. Essentially, Greece was extremely badly treated by the European institutions..

So, he has learned from that and he has used those lessons to promote dialogue, to show that they are meeting the targets set by the EU. That they want to comply, that they are committed to the European project, but there has to be some leeway, and we need to be able to discuss the fundamentals. These are the lessons I think we can take from the Costa experience.

What are the specific circumstances in Portugal regarding populism?

Well, populism in Portugal, we can call some of the radical left parties populist, but it’s a kind of very low-key type of populism. I’m more comfortable calling the left bloc a radical left-wing party as opposed to a populist party, and the communists, well, they don’t really classify as a populist party. So, the lesson that Costa can send is that dialogues with these parties actually benefits the socialist parties, because if we look at opinion polls, the socialists are now doing extremely well: 40 per cent, and they were really low previously.

Five points below since the beginning of the summer because of the fires and little scandals that have emerged. But they were 40%, two years ago they were on 25%. So, a massive rise in popularity. On the other hand, the popularity of the radical left bloc and the communists has stagnated or declined. So, the lesson here is that dialogues with the radical left, they actually benefit social democratic parties because it humanises those parties.

It reminds them of their ideological goals, it reminds them that they’re left-wing parties, and that galvanises voters that were perhaps somehow turned off by the electoral process.

If you look around social democratic parties and progressive parties, even more widely across the world, there seems to be a common problem: the core constituency, or what used to be the core constituency of social democratic parties, is changing. And the parties are struggling to connect or to reconnect with their core constituency. Is this also the case in Portugal?

Well, in Portugal, as in other southern European countries, the constituency of socialist parties has traditionally been middle class, lower middle class. The industrial working class has normally voted for the communist party. So, the problem is less acutely felt across southern Europe than it is, for instance, in Britain or other European countries where social democratic parties relied essentially on the votes of the industrial working class. But this has been going on for quite a long time, since the 1970s, that there have been massive changes in European economies.

So, there’s been the transformation of these economies from industrial economies into service economies, and the social democratic parties have paid a heavy price in terms of losing considerable votes. But I think that the lesson for or the focus of social democratic parties should be not so much on the industrial working class, but coming to the realisation that there is a class of educated left behind. Quite a big chunk of populations now with university degrees, but who are yet in insecure employment or who have great difficulties in buying a house, even finding affordable rental accommodation, who see themselves unable to start a family because life is too tough and too insecure. This precariat is, I think, the new constituency for social democratic parties, and it took them a very long time to realise that this is where their future lies.

Even though social democracy is doing comparatively well in Portugal, progressive parties everywhere are looking to the future and thinking about their next big political agenda. Do you see, looking internationally, any sort of role models that could provide guidance? Some parties that have already made more progress than others in identifying what a progressive idea of the future could be?

I’m afraid there are no real role models that offer a kind of blueprint for the future, but perhaps they don’t need to draw big, new blueprints because the lessons are there in the past. Social democracy did well when it remembered that it was a political project to regulate capitalism with the explicit aim of ensuring prosperity, democracy and certain cosmopolitan values. I think this is what social democratic parties across Europe need to remember. They need to remember what are their values, and what are their goals. They need to put politics above markets.

The project of the left and of social democracy was always one of transforming society, not one of accepting the world as it is. So, it is remembering these roots, it’s remembering what is the purpose of social democracy, that its renewal relies upon. Accepting the status quo will be very detrimental. Europe has been a very big obstacle for the fulfilment of a social democratic vision. In particular, the Europe of the 1990s until today. Europe needs to rediscover its social vocation.

We used to talk about the European social model. Not any more. This is what the European social democrats should start doing. We saw what were the dangers of ignoring the European social model, the European social vocation, and those are poverty, the brutality of austerity and a rise of xenophobia and fascist parties across Europe. So, the ingredients are there. What is needed now is real political will.

Beyond reviving the idea of a social Europe and the European social model, do you see any kind of other topics that social democracy should get its teeth into, in trying to shape the future? I mean, against the backdrop of the digital revolution that is now coming, against the backdrop of insecure regions around European borders, refugee problems, and so on and so forth. What do you think are the big topics that require strong social democratic and progressive answers?

The deepening of democracy, that’s absolutely fundamental. A deepening of democracy that will lead to a greater consciousness of what being European means. I think that will contribute vastly to the promotion of cosmopolitan values across Europe, and they are very much needed. And in terms of looking at a prosperous future, that future needs to be sustainable. We need to think about our impact on the environment, and prosperity should not be done at the expense of social inclusion.

So, we need to have some truly courageous discussions about work and the future of work. What it means to live in a good society. What is a good society? What should be the goals of the good society? Is it just work? Working, being in full employment? Or finding fulfilled work and other forms of happiness? Work that is not paid but needs to be recognised. It’s in these issues that Europe will find the root of its renewal.

Well, that’s quite an agenda, Eunice. So that’s basically work for the next decade, at least.

It’s the Social Democratic Party so you’re always thinking ahead and always thinking of ways of changing and improving.

This is the fourth in a series of interviews on SWOT analyses of European social democrat parties sponsored by SE and the Friedrich-Ebert-Stiftung