This note digests the events of these past two weeks and the political choices the country faces. It then reflects on the particularly delicate situation in which the social-democrats now find themselves, to which there are many parallels at the European scale. I then try to anticipate forthcoming developments.
Update 23-10-2015: President Cavaco Silva addressed the country yesterday evening to communicate his decision to appoint Pedro Passos Coelho as prime minister, leaving the right in power. With an uncharacteristic surly tone, the president made clear he will not accept a left front government, calling such solution "inconsistent". The president now hopes for a rebellion within PS to support his government. If that does not happen, Portugal will remain effectively without a government until next March, when Cavaco Silva leaves office.
This is a follow up to a longer preview on these elections posted a few weeks ago. Please consult that previous article for a quick overview of the parties and personalities referred here.
This note was cross-posted at the European Tribune, where the ensuing discussion may help clarifying some points.
It is probably best to start by recapitulating the results of this election. In the last few days of campaign polls where forecasting a result nigh on absolute majority for PàF, the governing coalition; however, the end result was of 38%, representing a loss of almost 800 000 votes relative to 2011. Still, PàF harnessed 107 MPs, with PSD alone remaining the largest party in Parliament with 89 mandates. Just one year ago this result would have not been in the coalition's wildest dreams. PS comes out clearly defeated with 32%, gaining just 200 000 votes relative to 2011; it remains the second largest party in Parliament with 86 MPs.
The big surprise of the election night was BE, that more than doubled its 2011 result, surpassing for the first time the half million votes (10%). With 19 MPs BE becomes unexpectedly the third largest party in Parliament. At 8% of votes, the communist party (PCP) ends up under expectations, but with 17 MPs elected still achieves one of its best results ever.
Contrary to my expectations, out of the non-represented parties, only PAN was able to reach Parliament, with one MP elected in Lisbon. PDR and LIVRE withstood heavy defeats, loosing much of the votes they harnessed in the 2014 European elections. However, together these smaller parties now account for 7% of the votes.
Before moving on there is an important figure to note, that starts explaining the course of events. Together, the parties to the left of (or overlapping) PS account now for 23% of votes. In the 1995 election this figure was just above 10%.
It is in face of these results that events start unfolding in an unexpected fashion immediately at election night, the 4th of October. António Costa climbs on the pulpit for the defeat speech already after 23h00 to deliver a remarkably ambiguous address. More importantly, he does not announce his resignation. Traditionally, the leaders of PSD and PS resign after a defeat, making way for renovation in his party, but also providing a start period without proper opposition to the new government. Costa is able to linger in power because there is no real challenge to his leadership. However, pressure builds up on strategy and the party management ends up deciding the following day to meet all other parties represented in Parliament.
Tuesday, the 6th of October, it is time for the President to break up with tradition. Contrary to what the Constitution commands, Aníbal Cavaco Silva dispenses formal talks with all the parties represented in Parliament and informally invites the incumbent prime minister - Pedro Passos Coelho - to find a lasting government solution. In a speech announcing his decision to the country, the President implicitly leaves aside PCP and BE from any government formulation, invoking their opposition to Portugal's NATO membership.
Wednesday, the 7th of October, PS starts the round of negotiations with the remaining parties. PCP is the first in the list and straight away Jerónimo de Sousa drops a bomb on António Costa's lap: the communists are willing to do whatever is necessary to prevent the right from remaining in government. The secular argument PS had to support the right - not having alternatives to its left - suddenly stops applying. Costa does not falter and negotiates, progress is swift and soon programmatic details are discussed; according to some press even ministerial places are on the table. At the end of the day many still regard this move as a bluff, but clearly caught by surprise, BE request the adjournment of its meeting with PS.
It is perhaps time to unveil a bit of the historical rift separating PS and PCP. After the 1974 revolution Portugal elected a Constituent Assembly (basically a Parliament invested with powers to draft a new Constitution) with a provisional government managing daily policies. PS and PSD dominate the Parliament, while PCP largely controls the government. PCP is on a drive to move Portugal away from NATO and closer to the USSR's sphere of influence; PS, PSD and CDS are for a European-style democracy within NATO and with eyes set on the EEC. Things unravel into a series of violent events throughout the summer of 1975, eventually ending with a failed coup by PCP and the revolutionary parties (some of which where the seed of BE) on the 25th of November. Hop on to the articles at Wikipaedia for more details, the important to note here is that a chasm was open between PCP and the other traditional parties. For 40 years PCP was never willing to reach out from its stronghold position, never willing to compromise on its programme, never willing to support any sort of government. Until now...
PS meets PàF on Friday, the 9th of October. The meeting is largely inconclusive, never reaching the detail discussed between PS and PCP. António Costa would describe it as "useless". The prospects of a left front government slowly settle; at the end of the day Sérgio Sousa Pinto, a middle figure in the PS management, resigns his post in protest against the negotiations with PCP. The country goes on the weekend in suspense, waiting to see how BE may react to this unfolding redrawing of Portuguese politics.
PS has a busy calendar on Monday, the 12th of October, in the morning it is to meet BE, then PAN in the afternoon and Costa is to meet the President in the evening. The suspense is undone at lunch time with BE playing along the left front government hypothesis. Costa calls the meeting "interesting", while Catarina Martins rotundly claims an end to the right wing government.
PS meets PàF again on Tuesday, the 13th of October, once more without reaching a compromise. Mutual suspicion builds up between both political forces, PàF accuses PS of make pretend while PS vents concerns the government is hiding negative budget figures. Meanwhile technical discussions multiply behind closed doors between the three left parties towards a common governance basis. Along the process PS also entails fruitful meetings with the smaller parties: Greens and PAN.
PàF puts an end to negotiations with PS on Wednesday, the 14th of October. Pedro Passos Coelho "calls the bluff", so to say, and declares he will request to form a minority support government to the President. While PS pretends to still have a door open to negotiations with PàF, it now becomes evident that any remotely lasting government solution can only come from the left front: PS, PCP and BE.
The following days the country dives into a sort of psychosis. A visceral reaction emerges to the prospect of having Marxists and Trotskists in (or supporting) government; few are those willing to manifest for the left front. The media employs diffuse or subjective arguments against a left government: it was PàF that won the elections, Costa lacks political legitimacy, anti-NATO parties should not be allowed in government. The industry arguments with economics: interests on sovereign debt will rise, confidence will sink, as so will investment. The establishment is frightened.
Out of a defeat, António Costa unexpectedly emerges as the key player, retaining the initiative from day one. But this new found protagonism does not mean an happy ending for PS. The internal division of the party is becoming ever more evident, even if no one is yet willing to challenge Costa's leadership. On the one side are fears that enabling a government on the right with an austerity programme may definitely alienate the political space at the left of PS. On the other side there is great mistrust on a coalition with PCP and BE, a risky strategy that can end up pushing the electorate at the centre towards PSD. The problem for PS is that both points of view are correct. There is no easy way out, damned if you do, damned if you don't.
The crossroads faced by PS is not merely circumstantial, it is the fruit of the deep crisis the European social-democracy fell into. Tony Blair's third way, i.e., insisting on liberal economic programmes while in parallel fighting for collateral flagship themes such as same sex marriage or abortion de-penalisation, is no longer viable. The flagship fights are won and in the present economic context liberal policies are producing results in the social plane that are at odds with traditional values of the left. It is the moment of truth, PS (and many other European social-democrat parties) can no longer rest in no man's land.
Beyond the governance of the country, Costa has in hands the ultimate survival of his party. A bridge too long between left and right might end up breaking.
What happens next? The President Cavaco Silva is finally sinking in the new political realities of the country and has decided to formally listen to all parties before appointing a prime minister (as required by the Constitution). In all likelihood, he will chose Passos Coelho for the job by late Tuesday. After forming a government, the latter should present a budget to Parliament by the end of this month or the beginning of the next. If the left front holds until then, this budget should be refused, with the PàF government entering into care taking mode. This situation could drag on until a new President takes office in the beginning of 2016.
Throughout these two breathtaking weeks many other interesting things took place. The Presidential election acquires now a whole new meaning and four relevant personalities presented themselves during these weeks: Marcelo Rebelo de Sousa (PSD leader in the 1990s), Maria de Belém (minister in various PS governments), Marisa Matias (BE MEP) and Edgar Silva (from PCP in Madeira). The former social-democrat prime minister José Sócrates was freed after a court ruled his arrest unlawful; no charges have yet been filled against him.
This is the most interesting period I ever witnessed in Portuguese politics, and possibly, it is only starting.