Portugal: A hot autumn looming

Mass and unified resistance needs to be organised

Portugal is the third country to be taken hostage by the diktats of the troika (International Monetary Fond, European Central Bank and European Union). Its government has recently been praised by establishment commentators and creditors for doing “very well” in implementing the austerity measures, while, at the same time, being urged to inflict further cuts and take a more ‘aggressive’ approach in relation to implementing this policy.

In April, Portugal received a “rescue“ package of 78 billion euro. As part of the deal, the government promised to lower the public deficit from 9.1% to 5.9% of GDP.

The new right-wing government, made up of the PSD (Social Democrats) and the PP (Peoples Party) deepened the cuts after deciding to make even harsher attacks than the original “rescue” plan the troika called for!

The new centre right government in Portugal is already carrying out the biggest attacks on working class people since the 1974 Revolution. It has also just emerged that there is further deficit of about 1.8 billion euro in the finances of the regional PSD government in the autonomous region, Madeira. This is another 0.53% on top of the Portuguese national deficit. This is probably only the tip of the iceberg, as more debts and even electoral fraud scandals in Madeira are coming to light in the media.

Prime minister Passos Coelho and foreign affairs minister Paulo Portas

At the same time, the Portuguese economy still remains in recession, with a 2.3% contraction in the economy this year and predictions of a further 1.7% contraction in 2012. As the real impact of the austerity measures begin to be felt by working class people, there is little chance of averting further falls in the economy. As the example of Greece shows, austerity can only deepen the economic crisis. The current figures already point to a fall in private consumption of 3.4%, the highest in three decades.

Portuguese working class squeezed

At the end of August, during his visit to Germany, the Portuguese Prime Minister, Passos Coelho, not only met Chancellor Angela Merkel but also representatives of the German energy company E.ON. He discussed with them the sale of the government-owned stakes of the energy company, EDP, and the energy network, REN. Coelho has also started discussions with the German airline Lufthansa, and the ex-President of Brazil, Lula, about selling the Portuguese TAP and the airport service ANA.

Also on Coelho’s list of public infrastructure and services to sell to private multinational corporations are the water supply, the postal service, the public broadcaster RTP and public transport. The government hopes to make 5.5 billion euro before 2013 through these sales, in order to pay for the “rescue” package.

In preparation for its privatisation, the price of public transport has already been increased by about 15% and will go up again at the beginning of next year. On top of this, the government has increased the VAT tax on gas and energy from 6 to 23%.

The wine industry, which employs an estimated 200,000 people, is worried that the coming rise of VAT on the sale of wine could see many small wine companies go broke and throw more people into unemployment.

Schools and universities have been devastated, as 37,000 teachers are now unemployed due to the cuts in education. The school year started in complete chaos. On top of the 600 schools that were already closed last year by the misnamed ‘Socialist Party’ government, another 300 public schools were closed this year. The government has also cut support for private schools, and as a result many parents cannot pay the rising fees. This means they have had to send their children to public schools which are already overcrowded due to the mass closures. School timetables cannot be properly organised at schools or at universities as there is a huge shortage of teachers. The government’s new initiative is to give teachers monthly contracts, which is only to keep indirect labour costs down. This kind of contracting will cause even more chaos in the education system.

Health system ill

The situation in the health system has also worsened greatly, this year. One out of three public hospitals is technically insolvent. The WTO recently found that there is only one nurse per 1836 Portuguese citizens. In many hospitals, there are as many doctors as nurses. Staff are often outsourced to small companies in terrible working conditions and with poor wages. There are long waiting lists for operations and the price of medicines and health treatment increased. Many subsidies, such as for the costs of opticians’ services, were completely ended.

Despite this, the government still wants to cut another 11% of the health budget between now and 2012.

In the public sector, about 10,000 jobs are under threat. Many citizens’ centres were closed. At the same time the government wants to implement a debt limit, which will mainly hit the local councils who are already in danger of running out of money to pay the wages of the council workers. In some areas, workers had to accept wage cuts of up to 60% to keep their jobs. On top of this, Christmas bonus was cut by 50%.

Unemployment has risen to 12.4% and the official figure for youth joblessness is 27%. This is a huge increase of about 5% compared to last year. Nearly all the jobs that have been created in the last six months are precarious jobs. It is young people especially who are forced into this kind of employment, of which it is estimated that 80% are illegal contracts.

As always, women are among the first victims of the crisis. The economic stresses and tensions resulting from the severe austerity measures, combined with the decreasing number of support groups and health centres, have also had an impact inside homes and families. There has been a shocking increase domestic violence. In the last few weeks, there has been a huge surge in media reports of women being killed by their partners or ex-partners.

Resistance looming

Prime Minister Passos Coelho believes that there will not be protests in Portugal similar as those seen recently in Greece and elsewhere. When Coelho visited Germany, at the end of August, he claimed that despite the fact that ordinary Portuguese people would know how deep the austerity measures are, they would also understand that these strict measures are the only way to get out of the crisis. Already however he has revealed a lack of confidence in his own perspective. Just a few days after this statement, he warned the Portuguese people not to organize “chaos” in the streets and not to confuse the right to protest and demonstrate with rocking the country. He also warned them not to “start a war with the government”.

As the massive attacks on the rights and living standards of the working class begin to be felt by the population in Portugal, he is correct to be worried!

New strikes have taken place in Alverca where the nearly insolvent TNC logistic company wanted to force its 126 workers to pay for the bankruptcy of the company by lowering their wages by about 50%. Protests and blockades continue, as management has still not paid the workers their wages from August onwards.

Another conflict is taking place in Viana do Castelo at a Portuguese ship building company which has been in debt for a decade. For the 720 workers in this company, there remains the danger that they could lose their jobs. In this region, the factory is one of the last big employers and as an 18,000 strong demonstration against the closure showed, people in that area are very worried about the possibility of the loss of these jobs.

Besides these industrial conflicts, the trade union federation, the CGTP, has also called for a national demonstration in Porto and Lisbon under the slogan, “Against growing poverty and injustice” on 1October. Unfortunately, fighting injustice does not resonate with the broad working class and the poor because it is articulated by the trade union leadership. For the heads of the CGTP, the unfair aspect of the capitalist attacks resides only in the fact they are “not shared equally” between the rich and the working class. The leaders of the Communist Party (PCP), who are the majority of the leadership of the union federation, do not reject the austerity measures as consequence of the crisis, as a whole, and do not fundamentally oppose the idea that the working class should to pay for it. The Left Bloc (BE), for its part, does not go beyond calls to “renegotiate” the debt, or its scale, interest rates and the period of repayment.

The leaders of the left and of the trade unions all demand an “equal share” of the sacrifices, which is completely incorrect idea regarding how the Portuguese people should target their resistance. The debts are by no means the fault of the working class, but were created by the Portuguese capitalists who were losing in the competition against the German and French capitalists. Now they are now trying to squeeze the Portuguese people for it. On top of this, the Troika is forcing Portugal into the position of a neo-colonial state, as they dictate the austerity measures and use the weakness of Portuguese economy to break the market up for international capitalist interests.

Building a mass movement

Given the scale of attacks from the new right wing government, a demonstration in itself is far from sufficient. The real power of the working class needs to be mobilised. It is necessary to set a date for a new properly organised general strike, and use the 1 October as a marker for such a mass mobilisation. Learning the lessons from last year’s general strike, such a mobilisation should only be the first, ambitious step towards the building of a sustainable mass movement. It should not just be a way for the trade union leaders to let off some anger and then let the avalanche of attacks continue unchallenged for the rest of the year.

A general strike needs to be built democratically from below, with open assemblies in the workplaces, linking up with the growing youth movement, the unemployed, the immigrants, the community groups, etc. All these layers have an urgent need to unify their struggles to build powerful resistance against the burden of the crisis that the government, the Troika and the bosses are trying to force working people to pay for.

However, despite the vague announcement that “strikes will also be among the measures to fight injustice” nothing concrete has been proposed yet by the leadership of the trade unions which would head in this direction.

Aware of this glaring weakness, the ruling class is making calls in the media for attacks on union rights. One right-wing journalist even spoke about the need, “to break the backbone of the trade unions”. The CGTP union federation made no attempt to reject this provocation, but instead has allowed these types of comments to continue unanswered.

If the trade union leadership remains caught in the trap of arguing for ‘social partnership’ in implementing austerity measures, they will continue to have a paralysing effect on their members. As a result of this, there is the strong possibility of a number of wild cat strikes but also the danger, out of desperation, of riots, as we have seen in Britain.

The youth and the ‘Geracao a rasca’ movement

Young people who organised the ‘Geracao a rascal’ demonstration on 12 March (see previous article http://www.socialistworld.net/doc/4936) and the camps in solidarity with the Spanish protests, in May, called for a protest on 15 October. On the same day, ‘Democracia Real Ya’ in Spain is also preparing actions and nationwide demonstrations, as well as calling for an international day of protest for real democracy. It is unfortunate, though, that the CGTP leaders, who have waited so long to call for any action at all, have organised a different date to mobilise their support.

Both the 1 October and 15 October movements have big potential to create a mass movement against worsening living standards and austerity measures. Some of those involved in the mobilisation for 15 October are also calling for the support for the protests on 1 October. This is a step to be welcomed. In the same way, the CGTP should encourage workers to come onto the streets in support of the youth and the ‘precarious employment’ movement, rather than ignoring them, as they tend to do at the moment. Arising from the attitude of the CGTP national leadership, there exists amongst a section of youth an understandable hostility toward political parties and trade unions.

Protest camps?

On 15 October, besides the demonstration, there will be also a public discussion organised, and a vigil next to the national parliament. It is likely that the vigil could be transformed into an ongoing protest camp, similar to what we saw in Spain and Greece in recent months. This type of public protest and mass discussion should be spread throughout Portugal, with democratic assemblies taking place in public squares, but also in the workplaces, in the schools and the factories, and in the neighbourhoods. In this way, the majority in society could participate in the organisation of the resistance struggle, as well as in the debate over a political alternative to the crisis-ridden system of capitalism.

All the indicators point towards a ‘hot’ Portuguese autumn, from October onwards. Socialismo Revolucionario, the Portuguese section of the CWI, is prepared to contribute to the coming debates and actions. We call for the present system to be replaced – a system that functions to provide profits for the rich and their political servants. We propose a democratic socialist society, in which the main levers of the economy, the banks and the big companies, are controlled and planned collectively according to people’s needs.

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September 2011