LISBON/BRUSSELS | | portugal

LISBON/BRUSSELS (Own report) - The austerity dictate, imposed by Berlin on the Eurozone, is a stumbling block for the formation of a democratically legitimized government in Portugal. In the country's recent elections, the Partido Socialista (PS) and two alliances of left-wing parties had won the majority of parliamentary seats because they had promised to reject the former government's harsh austerity program. This was not tolerated in the German-dominated EU, therefore, President Aníbal Cavaco Silva, refuses to mandate the PS to form a new government. Instead, he has called on the former Prime Minister of the conservatives, Pedro Passos Coelho, who had lost the elections. Cavaco Silva declared, Portugal's governments have never relied on "the support of anti-European forces," with reference to the EU critical positions of the two alliances of left parties, which are also not tolerated by Portugal's establishment. It is unclear how this will develop. In spite of the new democratic majority, Passos Coelho may be kept in office for another six months. On various occasions over the past few years, electoral and referendum results have been negated, because they did not correspond to the EU's austerity dictate. Democracy is losing out to the German-inspired austerity.

Bankrupt Like Greece

The defeat of Prime Minster Pedro Passos Coelho's conservative right wing party alliance, Portugal à Frente (PàF) (Portugal Ahead) in the October 4 parliamentary elections has caused a dispute over the formation of Portugal's new government. Losing nearly 11 percent, the PàF dropped to 36.9 percent, winning only 107 of the 230 seats, together with a few parliamentarians from the Azores and Madeira. Passos Coelho's government was defeated because it had ruthlessly implemented the Troika's harsh austerity policy. Within only a few years, wages dropped in Portugal by nearly 20 percent; only one-fifth of the population earns the 505 Euros monthly minimum wage; and more than one-fourth lives at or below the poverty line.[1] At the same time, public debt has skyrocketed from 94 to 129 percent of the GDP. Talk of "Portugal's recovery" is a "fairy tale," wrote the German business press last February; that country "is no less bankrupt ... than Greece."[2]

Never Against the EU

According to practice in Lisbon, the leading candidate of the largest group in parliament is usually given the mandate to form a new government. Therefore, following the recent elections, President Aníbal Cavaco Silva initially mandated Passos Coelho. However, negotiations with the social democratic Partido Socialista (PS) were unsuccessful. The PS declared its intentions of forming a government with the left-wing alliances, Bloco de Esquerda (BE - the "Left Block") and Coligação Democrática Unitária (CDU - Democratic Unity Coalition). BE and CDU received 10.2 and 8.3 percent of the vote, respectively, thanks to their opposition to Passos Coelho's austerity policy. President Cavaco Silva provoked considerable indignation when, on October 22, he mandated Passos Coelho a second time with the formation of a government, thereby refusing to allow the PS, BE and CDU coalition democratic majority to form the government. Alluding to BE and CDU's fundamental criticism of the EU, Cavaco Silva justified his decision not to mandate the center-left majority to form a government saying, "in 40 years of democracy" Portugal's governments have "never relied on the support of anti-European forces." Making reference to the center-left parties' rejection of the austerity dictate, he considers it his "duty to do everything possible to prevent false signals being sent to financial institutions, investors and markets."[3]

Still Repudiating

It is still unclear how this will develop in Portugal. On November 10, a vote of no-confidence by the center-left parliamentary majority defeated Passos Coelho's second attempt to form a government. The plan to maintain Passos Coelho in power - with the help of renegade PS parliamentarians - has failed. In accordance with democratic traditions, Cavaco Silva would have at least handed government power over to the left majority by now, which he persistently refusing to do. If he continues to persist, Passos Coelho will remain in office until new elections can be held, which, according to Portuguese law, can take place in June 2016, at the earliest. Passos Coelho could therefore continue governing without democratic legitimacy, for more than six months, in spite of a functional democratic parliamentary majority.

No Room for Democracy

Within the EU, over the past few years, democratic majorities have repeatedly been nullified, if they would not guarantee the implementation of a German-dictated austerity policy imposed on the entire Eurozone. In Italy for example, Mario Monti's "cabinet of experts" ruled from November 16, 2011 until April 28, 2013. Prime Minister Monti did not rise to power through democratic elections. He was installed under pressure from Brussels. The "Troika" comprised of representatives of the EU, ECB and IMF - without democratic legitimacy - decides varying degrees of national policies in Ireland, Portugal, Spain, Greece and Cyprus. Last July - under German pressure - the EU even disregarded the Greek population's clear rejection of a continuation of the austerity policy, imposed by Berlin and Brussels. A three-fifths majority had voted "No" in a referendum on the question. Greece was then punished with the imposition of even harsher austerity measures.[4] A leading German daily considered the de facto suspension of democracy in indebted countries to be an appropriate measure, by seeking to apply private law conditions to interstate relations, which are entirely different. "There are a few things in the world, where there is no room for democracy," the daily wrote, "for example, debts."[5]

The Only Way

In Portugal, Cavaco Silva has repeatedly reiterated over the past few days that he will take his time in deciding on the next government. At the beginning of the week, he ostentatiously made a two day visit to Madeira for business talks, in spite of considerable indignation in Lisbon. Today, he will discuss the situation with board members of several Portuguese banks. Carlos Costa, head of the Central Bank, has already stated his opposition to a possible center-left government, warning that the country will have to "pay for all the mistakes made today," meaning the sovereign decisions taken by an elected government.[6] The results of Cavaco Silva's talks today with leading Portuguese bankers will also depend on the concessions the PS candidate for prime minister, António Costa, has made to leading bankers, with whom he negotiated on Monday.[7] Relinquishing all positions critical of the EU and its German-inspired austerity policy is usually the only way to win the acceptance by the EU-oriented establishment.

[1] Reiner Wandler: Absoluter Gehorsam. 12.11.2015.
[2] Daniel Stelter: Das Märchen von der Sanierung Portugals. 27.02.2015.
[3] "Nunca os governos dependeram de forças políticas antieuropeístas". 22.10.2015.
[4] See Austerity or Democracy and Die Politik des Staatsstreichs.
[5] Rainer Hank: Dieter Nuhr hat recht! 12.07.2015.
[6] Linke jagen Reformer aus dem Amt. 16.11.2015.
[7] Cavaco Silva recebe banqueiros na quarta-feira. 17.11.2015.