Political Institutions and Democracy in Portugal

Assessing the Impact of the Eurocrisis

António Costa Pinto, Conceição Pequito Teixeira, António Costa Pinto, Conceição Pequito Teixeira

• Publisher: Palgrave Macmillan
• Year: 2018
• Print ISBN:
  9783319981512
• eBook ISBN:
  9783319981529
• Topic: Politics & International Relations
• Subtopic: Comparative Politics
• Index: Politics & International Relations

This book examines how patterns of political representation, party system, and political culture have changed in Southern Europe following the "Great Recession" of 2008. It draws on the experience of Portugal to argue that austerity measures have significantly deepened the legitimacy crisis of democratic institutions, but the resilience of party system is remarkable in comparison. The case of Portugal present some interesting differences from other southern European democracies, since on one hand it suffered a deep economic crisis and the consequent bailout from the International Monetary Fund, the European Central Bank and the European Union, but on the other hand the party system remained stable. Nevertheless the impact of the crisis did reinforce a centre-periphery cleavage within the European Union, and especially in the Eurozone, Portugal is a central element of this new cleavage notoriously aggravated by Brexit.

© The Author(s) 2019

António Costa Pinto and Conceição Pequito Teixeira (eds.)Political Institutions and Democracy in Portugalhttps://doi.org/10.1007/978-3-319-98152-9_1

Begin Abstract

1. Portugal Before and After the “Great Recession”: A Resilient Democracy?

António Costa Pinto¹ and Conceição Pequito Teixeira²

(1)

Institute of Social Sciences, University of Lisbon, Lisbon, Portugal

(2)

Institute of Social and Political Sciences (ISCSP), University of Lisbon, Lisbon, Portugal

António Costa Pinto (Corresponding author)

Email: [email protected]

Conceição Pequito Teixeira

Email: [email protected]

End Abstract

“The (new) Portuguese government … faces a herculean task in the application of an economic programme to bring the country out of its alarming decline”. ¹ The sentence above could have been written in 2011, but it was published in 1978, and shows that what Southern European countries experienced in 2011–2012 is not new to Portuguese citizens. Since its inception, Portuguese democracy has had to deal with economic and financial crises and austerity measures, with the exception of the decade following European accession (Teixeira and Pinto 2012). Although the first decade after accession was one of slight growth and investment, Portugal’s economy has been performing poorly since the beginning of this century, when the euro entered circulation. This is so much so that the years between 2000 and 2010 have been named ‘the lost decade’ (Reis 2013). Then, in May 2011, Portugal signed its third bailout agreement with the International Monetary Fund (IMF) and the European Union (EU) and was forced to implement severe austerity measures again. For a democracy that was celebrating its 40th anniversary, the word ‘crisis’ was all too familiar.

Portugal was forced to solve the crisis through “internal devaluation”. Before and after the bailout, both the centre left (2009–2011) and the centre right (2011–2015) governments introduced unpopular measures, including severe wage and pension cuts, higher taxes, and, a sizeable decrease in social rights. Social and economic situations such as these are likely to have serious consequences for incumbent parties and therefore considerable party system changes were to be expected (Kriesi 2012). Yet, such has not been the case in Portugal, where, apart from some levels of fragmentation, little has changed (Lobo et al. 2011).

This book explores the factors that might explain why some of the changes occurring in other Southern European democracies as an impact of the crisis have not been felt in Portugal. The chapter is organised as follows: in the next section, we introduce the impact of the 2008 financial crises in Portugal. We then move to the framework of the book and the main research questions. Finally, the main consequences of the crisis for Portuguese democracy will be explored, based on the chapters of the book.

The “Great Recession” and Its Impact in Portugal

The 2008 crisis came on top of an economy that had been stagnating since the turn of the century. In fact, between 2000 and 2012, the Portuguese economy grew less than the United States during the Great Depression or than Japan during its ‘lost decade’ (Reis 2013). Figure 1.1 shows values of GDP growth in Portugal since 2000. It clearly shows that the Portuguese economy had practically stagnated between 2000 and the beginning of the crisis.

Fig. 1.1

Portugal GDP growth rate

(Source http://​www.​tradingeconomics​.​com/​portugal/​gdp-growth)

The impact of globalisation and the enlargement of the EU to include the countries of Central and Eastern Europe had a negative impact on the competitiveness of Portuguese economy, with anaemic productivity growth, almost no growth, increasing unemployment and public and private debt.

To tackle this problem, different governments have come to power since the beginning of the century with a commitment to fiscal consolidation and structural reforms. Barroso’s centre-right wing (PSD/CDS) cabinet in 2002; Sócrate’s majority and minority centre-left government (PS) in 2005 and in 2009, respectively; and especially Passos Coelho’s centre-right (PSD/CDS) government all were forced to implement unpopular austerity measures.

As many observers have noticed, until 2008, Portugal seemed to be on a path to fiscal consolidation. That year, however, the Portuguese socialist government engaged in anti-cyclical policies, following other European countries’ answers to the crisis. This might be the explanation to why the PS won the elections again in 2009. This time without majority in parliament, the PS decided to form a minority government. ‘Here again, the Portuguese party system was to display one of its more resilient features: the imbalance between the left and the right in terms of the potential for coalition-building’ (Magalhães 2012: 311).

When the international rating agencies downgraded the debt of Greece, the Portuguese Prime Minister tried to avoid the bailout request as much as he could. Under pressure from the EU, the Socialist government approved a series of austerity packages with the support of the PSD—in the form of abstention. These packages included a succession of cuts in salaries, pensions and welfare benefits, increase in taxation and a number of privatisations. When, in early 2011, interest rates for financing the state surpassed seven per cent, increasing the likelihood of a future bailout, the government proposed a fourth package to parliament that had been previously negotiated with the EU. The PS warned the PSD that the refusal of this package would make the bailout inevitable. But this time, after seven years in opposition, in face of favourable opinion polls, and with a young leader looking for electoral legitimacy, the PSD refused to give its support. This led the PM to present his resignation leading to early elections in June 2011 (Fernandes 2012). The bailout agreement with the EU and the IMF was negotiated in May 2011—during the interim period between the resignation of the PM and the elections. The EU demanded the signature of the three larger parties (PS, PSD and CDS).

The bailout was a central issue during the 2011 electoral campaign. The PS argued that the fourth package refusal by the PSD could have avoided a much more painful bailout. The PSD, on the other hand, ascribed all the blame to the PS and the previous six years of Socialist governments. In a nutshell, the PSD won 38.7% of the vote—not enough to form a single-party majority government. CDS, with 11.7%, became the coalition partner, just like in 2002. The PS won 28.1% of the vote and became the major opposition party. The remaining parties in parliament were the same—the PCP, with 7.4% of the votes (exactly the same as in 2009), and the BE, the second biggest loser after the incumbents, with 5.2% of the votes. As for the other 12 parties running for the election, they were unable to win a single seat. Abstention can be said to have been the biggest winner—with an absolute record of 42%. It was under a fairly stable centre-right coalition government (2011–2015) that Portugal was governed during the bailout period, when there was a clear political convergence between the Cabinet and the international lenders, even in the public speech of the Prime Minister Passos Coelho (Moury and Standring 2017).

Crises and the Quality of Portuguese Democracy

In a pioneering study of the impact of the crisis on South European Democracies, Morlino and Raniolo (2017) offer a framework of analysis that will be partially used in this book. Recalling what quality of democracy is, what its salient dimensions are and which ones can be most touched by an economic crisis, namely on the two procedural dimensions that are very relevant for every democracy, that is, participation and competition, this book expands that framework. The central question of this book is therefore whether the crises contributed to worsening or ironically deepening and improving the quality of Portuguese democracy, taking into consideration the quality dimensions of a democracy that can be endangered and worsened by crisis but the resilience of institutions as well (Pinto et al. 2013).

In Southern Europe, among the major changes as impact of the crises, we find: the emergence of important new actors—the protest parties; a change in political participation accelerated by the economic crisis becoming more radicalised; a partial reshaping of previous cleavages (left–right) and a fading away or reshaping of others (centre–periphery) with the emergence and consolidation of a quasi-new cleavage (pro–anti Europe) and a change in the structure of the party system towards tripolarisation despite bipolarising electoral systems (Morlino and Raniolo 2017). In many of these aspects, the phrase “with the exception of Portugal” is very present. In fact, if the impact of the crisis and subsequent austerity policies on citizen dissatisfaction and the drop in the responsiveness of the political system created a delegitimisation of traditional leaders, in Portugal, the crisis of loyalty led to exit (i.e. a growth in electoral abstention and a decline in party membership), but ironically, it led to the strengthening of traditional parties with the above-mentioned cleavages playing a very minor role in the Portuguese political arena. From this point of view, Portugal presents a different picture (Pinto and Raimundo 2014). There, the incidence of exit (abstention plus alienation) favoured the traditional parties with low levels of political activation of Euroscepticism and related cleavages, with a lack of political space to develop, and communicating populist alternatives (Quintas da Silva 2018).

Evaluating the Impact of the Crises: Main Actors and Institutions

It is with this perspective that in Chapter 2, Carla Costa analyses how the Portuguese economy and society have adjusted to the crisis years, within the context of the political economy approach of the European integration process. The author argues that the causes of the crisis that stroke EU, and its more fragile countries in particular, had two sets of origins: the relapsed behaviour of some of those countries, Portugal included; the original sins in European and Monetary Union (EMU) design, and the somewhat biased ways chosen to tackle the crisis, namely the political bargaining among its members, especially the most powerful ones.

She concludes that mistakes were serious, the adjustment programmes were blunt and the lessons are supposed to have been learnt. A fundamental lesson from the Portuguese crisis is that sudden disruptive stops can affect countries that are members of currency unions, even when those unions involve advanced economies, in the context of a non-fiscal union, such as is the case of EMU. Tellingly, the ways to deal with the crisis should consider not only economic and financial issues, but also encompass some sort of a political and social compromise. Otherwise, it is the global integration process that might be in jeopardy.

In Chapter 3 of this book, Rui Graça Feijó, immediately moving on to the effects that the crisis has had on political institutions in Portugal, focuses on the role of presidents under semi-presidentialism and how it was affected by the onset of the Eurocrisis. It starts by offering a historical background to the institutional design that has been in force since 1976, with an important constitutional revision that touched upon presidential powers in 1982. Then, it analyses the relationship between presidents and political parties. Next, it discusses two main junctures in this long process: the election of the first civilian president (Mário Soares) after sixty years of praetorian supervision, which contributed to fine-tune conventions on the status of presidents, followed by the experience of Cavaco Silva who had to face the Eurocrisis and moved, with little success, to a different view of the president’s position in the political arena which hollowed the function. The last section deals with the current president Marcelo Rebelo de Sousa and his attempt to shift back to conventions on presidential status and role, and seeking, through what he called the “presidency of affects”, to turn around the downward and negative trends of popularity of the presidency role and restore a very positive score in all polls. As the author well explains, the very fact that the public perception that “a page had been turned” in the Eurocrisis (mostly by virtue of the new government’s approach) was strong created a completely new scenario for the president to play a role that evokes—even if Marcelo tries to push his powers to the limit—the conventions established in the wake of Soares’ presidency.

In his chapter, André Freire, departing from the Portuguese case and using a comparative perspective, reflects on some of the fundamental problems associated with electoral reform or, more generally, with the choice of electoral systems. The author tries to show how the different fundamental objectives the various electoral systems target, as well as the differentiated solutions they adopt to achieve them, are not easily reconcilable, at least fully, and therefore there must always be some form of trade-off.

Considering the performance of the Portuguese electoral system in the European context in terms of proportionality, cabinet stability and quality of representation (i.e. the pattern of relationships between the voters, parties and candidates/members of parliament), as well as the necessary trade-off in each and every choice, the chapter reflects on the aspects of the electoral system that need more or less of reforms and how to reconcile the maintenance of proportionality, the strengthening of executive stability and increasing the intensity of links between voters and deputies. In the latter part of the chapter, the author makes it clear that the governability problems related to the current electoral system have an origin that is more politi...

Table of contents

• Cover
• Front Matter
• 1. Portugal Before and After the “Great Recession”: A Resilient Democracy?
• 2. The Political Economy of Portuguese Crisis Years: The Road Not Taken
• 3. The President of the Republic and the Management of the Eurocrisis
• 4. Electoral Systems and Political Reforms: Portugal in Comparative Perspective
• 5. The Portuguese Party System: Evolution in Continuity?
• 6. The Centrality of the Portuguese Parliament: Reform, Troika and “Contraption”
• 7. The Portuguese Constitutional Court and Its Austerity Case Law
• 8. New Challenges, Old Parties: Party Change in Portugal After the European Crisis
• 9. Trade Union Representation and Industrial Relations in Portugal Before, During and Following the Economic and Financial Crises
• 10. Portugal and Spain in the International Protest Cycles: From Global Justice Movement to Anti-austerity Protests
• 11. Political Discontentment in Portugal Post-Troika: Risks and Opportunities
• Back Matter