Portugal: Europe's Outlier

5 MINS READOct 3, 2015 | 15:32 GMT
Portugal: Europe's Outlier
Portuguese Prime Minister Pedro Passos Coelho with Portuguese Socialist Party Secretary General Antonio Costa at a debate in Lisbon, Sept. 17.

Portugal's upcoming general elections are unlikely to be a dramatic affair. International markets are staying calm, and even political commentators appear bored. Whichever of the two leading parties comes out ahead on Oct. 4, when voters head to the polls, the general direction of Portuguese economic policy will probably stay much the same. The battle for seats in the legislature will be held between the center-right incumbent Social Democratic Party/People's Party (PSD/CDS) coalition, which most polls put in the lead with about 38 percent of the vote, and the center-left opposition Socialist Party (PS), which is polling at about 32 percent.

But there is not a great deal of difference between the two contenders. While the opposition has used anti-austerity rhetoric over the last few years, both parties are committed to continuing the austerity program that Portugal implemented during the 2011-2012 sovereign debt crisis. So far, the country has proved to be one of the most compliant of the bailed-out countries, paying back its International Monetary Fund loans ahead of schedule. The election itself is set to be rather uneventful. Though, if the center-right coalition retains its mandate, it will be the first austerity government in Europe not to be voted out of office. The interesting aspect of these elections, however, is not the type of party that is running, but the kinds of parties that are conspicuously absent: Insurgent parties that challenge the establishment.

Since the financial crisis of 2008, anti-establishment parties have proliferated in Europe. This is in part because the general public's first response to economic misfortune is to look for scapegoats. The parties in charge when crisis struck were largely voted out of office at the first opportunity. Continuing economic hardship across the Continent then created opportunities for populist insurgent parties to build a support base by campaigning on popular issues. In the south of Europe, this trend solidified in a backlash against austerity economics, while in the north the focus has been more on anti-immigration, a traditional refrain when economic hardship increases job scarcity. Both movements have also gravitated toward a nationalistic message that has proved divisive in the European Union.

Portugal, however, is an outlier. The country lacks a rising anti-immigrant party along the lines of Italy's Lega Nord — Portugal's far western geography may insulate it somewhat — or an influential anti-austerity party like Syriza in Greece, or Podemos in neighboring Spain. As one of the "Club Med" countries involved in the 2012 sovereign debt crisis, Portugal emerged with high debt (129 percent of GDP) and high unemployment (12 percent). And while suffered the same austerity as its peers, it has not experienced the same political backlash. This is an anomaly.

There are several possible reasons why this might be the case. The primary feature of Portugal's post-crisis experience has been emigration. Some reports suggest that around 500,000 Portuguese have left the country — which has a population of only 10.5 million — since 2011. Many of those in search of distant shores follow Portugal's old imperial ties, destined for commodity-exporting former colonies such as Angola, Mozambique and Brazil. This exodus, expected to contribute to a low voter turnout in the coming election, may have removed much of the country's frustrated youth. In Spain, an agitated youth movement was instrumental to the rise of Podemos.

The pre-existing political structure in Portugal may have also absorbed any discontent harbored by the populace. Having a Communist party already established on the political scene provided an outlet for emerging frustrations. Indeed, the Communists are expected to register a sizable improvement on previous performances in Sunday's elections. Additionally, the Socialist Party, unlike its counterparts in Spain, was able to keep itself clear of the austerity adoption process, providing another outlet for a protest vote. Still, none of these reasons are wholly satisfying, since the incumbents' likely victory is more suggestive of an absence of an underlying rebellious sentiment, rather than of a political misalignment.

Portugal, for now, appears to have chosen a path without an insurgent party. But what effect does that have? The European Union, at least, certainly stands to benefit. Where recent elections in Greece, Denmark and Finland have created new problems for Europe, Brussels can watch events play out in Lisbon with a steady heart rate. The main danger is not rebellion, but dysfunction — a possible minority government bringing about impasse and fragility.

From a purely Portuguese perspective, however, it is unclear whether the absence of an insurgent party has had any effect on the country's economy. Portugal's circumstances still mirror those of other Mediterranean countries such as Spain and Italy. Its unemployment and debt figures, along with gross domestic product, remain in the double and triple digits respectively. Portugal has also enjoyed growth similar to nearby Spain, though this should come as no surprise as Spain is the primary market for many of Portugal's exports.

The question of an insurgent party aside, whoever wins the elections will still have to deal with the country's rising debt, high unemployment and rapid emigration rate — though this may start slowing down as destination countries' economies slide and some emigrants begin to return. The modest growth Portugal has experienced lately is unlikely to last. For now, the lack of an insurgent party still makes Portugal an anomaly. But given the challenges ahead, there should be plenty of opportunity for one to emerge.

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