A glimpse of the political centre

By Hugo Coelho
14 January 2016
Portugal Portugal
The state rescue of failing bank has exposed the limits of the tie-in between the Socialists and far-left parties, pointing to a reorganisation of the party system
Created with Sketch.
Share

It took less than one month for the first crack to show in the united front of socialists, democratic anti-capitalists and diehard communists that supports Portugal’s anti-austerity government. The cause of division was the state rescue and sale of a failing bank, Banif. The government was desperate to complete the operation before 1 January to avoid large account holders being made to share the losses – a pre-condition for state intervention under the new EU rules on banking resolution. However, the authorisation request for extra spending would have been rejected in parliament, if the centre right had not abstained at the last minute.

The fracture of the alliance of the left was hardly surprising. The parties in the far left – the Left Bloc and the Communist party – never concealed the differences that set them apart from the pro-EU Socialist government; on the contrary they have been emphasising these differences at every turn. The ‘confidence and supply’ agreement, signed behind closed doors in November, bans the two parties from voting in favour of a no-confidence motion tabled by the parties on the right, but it does not bind them to vote in favour of the legislative proposals put forward by the government of António Costa. In the words of one of Costa’s internal critics, the prime minister can count on his allies to echo the verb ‘to reverse’ (austerity), but will be find himself alone when he says the word ‘reform’. In this sense, the agreement is a recipe for political standoff.

The stance of the parties on the right was more conspicuous. Passos Coelho, leader of the Social Democratic party (PSD), who came first in the September general election, but lost his majority in parliament, backtracked on his threat to undermine Costa at the first opportunity and told his MPs to abstain. This was made in order to preserve financial stability, he said, but the fear of being blamed for not solving the problems of the bank during his time in office – he was the former prime minister – surely provided incentive. Perhaps, more importantly the Christian Democrats (CDS), the junior partner in the former rightwing coalition, broke ranks with PSD for the first time since the election and voted against the bill. Their leader, Paulo Portas, announced a few days later that he would step down, so to allow the party to start again with a clean slate.

Some commentators predict CDS will return to its old anti-EU rhetoric, in the hope of marking the differences to PSD and recapture the support of the conservative voters that blame Brussels for austerity. This might be one step too far, but there is no doubt that the vote on Banif’s rescue pointed to realignment of the party system. The gap between centre left and centre right, which seemed impossible to bridge in the aftermath of the election, narrowed, as old divisions between parties in the centre and the parties at the two ends of the spectrum have become salient again.

This realignment may not make much difference in the present circumstances. Costa will press on with his anti-austerity programme, conscious that, if things go off track, he might lose the support of his allies on the far left. Passos Coelho will eat his hat before lending the votes of the centre right to the socialists again. However, sooner or later, this ‘unhappy’ state of affairs will lead to a political deadlock. The way to break it will depend, to a large extent, on the relative position of political parties. In the medium term, in a fragmented party system, the key for the success of the centre left lies in Costa’s ability to construct ad-hoc coalitions of interest with different political groups in support of his policies.

The presidential election

Portuguese voters will go to the polls on 24 January to elect the president of the republic. There are 10 names on the ballot, and that is largely on the left’s account.

Two candidates are openly fighting for the support of socialist sympathisers, Maria de Belém and António Sampaio da Nóvoa. To an extent, they mirror the division between moderates and the leftists in the party, which became apparent Costa’s alliance with the far left. The socialist leader has not taken sides. The communists and the Left Bloc, desperate to underline their differences, also put forward their own candidates. In contrast, the right rallied behind a single candidate, Marcelo Rebelo de Sousa, former leader of the social democrats and popular TV political commentator.

According to the latest polls, the rightwing candidate is poised to receive more than 50 per cent of the votes in the first round. This would be bad news for Costa. The president of the republic has the power to call a snap election and veto legislative proposals. While Rebelo de Sousa has promised not to hamper the socialist government, Costa would be naïve to count him as an ally for the times of crisis.