Portal de Periódicos da CAPES

Letter from Lisbon

2017; SAGE Publishing; Volume: 34; Issue: 4 Linguagem: Inglês

10.1215/07402775-4373322

1936-0924

Catarina Fernandes Martins,

Regional Development and Policy

When the financial crisis hit Portugal in 2010, it marked the end of the idea that we were on the same economic footing as northern Europe. I was born during a time of “fat cows,” which began when Portugal joined the European Union in 1986. For the next 14 years, it was easy for the Portuguese to access credit for vacations or houses or cars, or, really, anything else. Then, in 2011, the country nearly defaulted on its debts, we received an $83-billion bailout from the European Union, and the age of austerity set in. The government slashed public-sector pay, pensions, and benefits. In 2013, unemployment peaked at nearly 18 percent. Members of my generation, the “most educated in Portugal’s history,” moved abroad or worked for minimum wage—less than $600 a month. My parents had always wanted me to live nearby, but one day they told me it was time for me to leave. Not long after, I went to the U.S. to study. When I returned home to visit in 2015, it seemed as if the country was on the brink of change. Serious political conversations were taking place in the streets, and, fed up with austerity, people spoke anxiously about the upcoming election.Fast forward to now: Portugal is enjoying a kind of renaissance. Unemployment is below 10 percent, and our year on year GDP growth has outpaced the eurozone average. Tech startups are mushrooming, more than 11 million tourists visited this year, and areas that were previously abandoned are being revived. Madonna, John Malkovich, Monica Belluci, Michael Fassbender, Eric Cantona, and Christian Louboutin all recently bought property in Portugal. (Madonna’s complaints about the difficulties of finding a house in Lisbon were even relayed to the public via breaking news alerts.) Portugal has “turned the page on austerity,” said Prime Minister António Costa, whose Socialist party now holds a 10-point lead over the center-right opposition.Pundits on the left have cited anti-austerity politics as the reason behind this change in fortune. As many social democratic parties across Europe struggle for votes, the Portuguese Socialist Party’s political success is the result of an uneasy partnership between normally warring left-wing parties, who in 2015 called a truce to prevent a minority right-wing coalition from taking office. The gambit worked: The economy steadied, and Costa is enjoying a 65.8 percent approval rating. Local and international politicians are even toying with the idea that the Portuguese model could be exported. Last summer, the country hosted delegations of European leftists, including former French presidential candidate Benoît Hamon, Italian EU parliamentarian Gianni Pittella, and members of the Dutch Labor Party. “I believe the Portuguese political solution is both specific and exportable,” João Galamba, a socialist parliamentarian, told World Policy Journal. “Even if the Portuguese circumstances are somewhat unique, the meaning of this experience is a lesson for others.”Yet not all economists are convinced that the coalition is responsible for Portugal’s economic boom. Nor do locals see it as a long-term fix. At dinner parties, people talk of a “honeymoon period,” suggesting the glory days won’t last. There are self-deprecating jokes about affected Portuguese attempts at cosmopolitanism and our infamous tendency to accrue debt. Portugal’s coalition remains fragile at best, raising the questions: Is the economic revival sustainable? And if it is, to what extent does it depend on politics?In 2000, social democratic or socialist parties helped make up the ruling coalitions in 10 of the then-15 European Union countries. Then, the financial crisis forced most social democratic parties in Europe to shift right and embrace austerity. In 2017, center-left parties lost power in all but six countries. The waning of the center-left across Europe has meant that many establishment parties have become less significant in countries like Greece, the Netherlands, Poland, and France. The threat of “Pasokification”—a term referring to Pasok, the socialist party that was virtually obliterated in the 2015 Greek election—now looms for parties across much of the left.Months after the Greek elections, Portuguese Socialist leader António Costa made an unprecedented move, one meant to rescue his party from a Pasok-like fate. After the center-right Social Democratic Party won the election but lost its absolute majority in parliament, Costa’s Socialist Party formed a minority government with the support of the Portuguese Communist Party and the far-left Bloco de Esquerda. While right-wing coalitions are relatively common, pundits dismissed this political solution as “clumsy” and “unstable” since the parties fundamentally disagreed over how to handle Portugal’s debt. Moreover, communists and socialists have historically been opposed: The former believe in the abolition of property, the latter advocate income redistribution. In Portugal, the Communist and Socialist parties had been political enemies for more than 40 years, since party leaders quarreled over the country’s direction following the 1974 revolution that toppled António de Oliveira Salazar’s fascist dictatorship. A working partnership seemed unlikely. A conservative politician coined the term geringonça—which roughly translates to “contraption”—to ridicule the solution.Upon signing the agreement, the Communist Party and Bloco de Esquerda dropped some of their more radical demands—such as leaving NATO, abandoning the eurozone, and demanding a renegotiation of Portugal’s debt—and stopped short of formally joining government ranks, agreeing not to seek to occupy cabinet positions. In return, Costa agreed to undo some of the previous government’s austerity measures. Over the last two years, the Socialist-led government has increased the minimum wage, reversed regressive tax increases, increased social security for poorer families, and imposed a luxury charge on homes worth more than $697,000.In the wake of these changes, many economists predicted Costa’s spending would increase the deficit, creating the need for another bailout and even steeper cuts. Instead, the geringonça—a term also adopted by the left— enjoys strong social support and the country is experiencing an economic revival. The economy has grown for 14 successive quarters, and since 2015 the deficit has declined by more than half. Consumer confidence is near all-time highs and, as of August, unemployment was 8.8 percent, below the EU average. The government has succeeded in paying off its debts while meeting the left-wing demand to resist austerity. But at the same time, European socialist leaders are starting to grasp that geringonça might be specific to Portugal, in part because its political parties are more willing to get along than to tempt fate.Last November, the country was enveloped in controversy after the Irish founders of an annual tech conference decided to host their final banquet in Lisbon’s National Pantheon, an historic site that holds the tombs of some of the country’s most revered figures. News that the Ministry of Culture had approved the dinner prompted a media storm and a public discussion over Portugal’s apparent lack of self-respect. Officials were accused of selling out, and of trading on national history for start-up money. The reaction, which oscillated between expressions of egoism and insecurity, was typically Portuguese. Though Portugal once ruled over the first global empire, stretching from modern Brazil to the East Indies, ever since that started to crumble in the 17th century we have grown more comfortable with fatalism and disappointment.In the 17th century, António Vieira, a Jesuit priest and writer, put forward the messianic theory of “The Fifth Empire,” in which a global empire would be united spiritually and culturally under Portugal’s leadership and guidance. Three centuries later, our most famous poet, Fernando Pessoa, revived that theme in his poem “Message,” which envisions Europe as a reclining woman: “Enigmatic and fateful she stares/Out West, to the future of the past/The staring face is Portugal.” Both authors are studied in Portuguese schools, their works memorized by young students. As our national literature suggests, being Portuguese is like living in a constant state of nostalgia: We remember having been a wealthy, influential nation, but have never been able to fully reclaim that role. The term saudade—an untranslatable word meaning something that no longer exists or is yet to come—captures this mood, and the melancholy idea that we have made peace with our fado, our fate.Philosopher José Gil describes the Portuguese as a people always striving for consensus. For decades, Salazar’s dictatorship emphasized order, discipline, authority, humility, the exaltation of poverty, and a fearfulness of God. “Any excess—whether in political ideas, in morals, or in the general spirit—is frowned upon,” Gil notes. “This commonsense mentality is deeply ingrained in us and is probably rooted in the fact that Portugal is a small country, but is also rooted in the religious discourse that permeated every sphere of Portuguese life during Salazar’s dictatorship.” According to the philosopher, this helps explain why Portugal has remained allergic to far-right politics, and it also frames the moderate character of the Portuguese far left. “Even if Bloco de Esquerda’s speeches are radical in practice,” Gil argues, they “raise no major conflicts, and essentially play by the rules.” Locals even refer to Portugal as um país de brandos costumes—“a country of mild manners.”Gil’s point is underlined by the fact that similar political efforts in other countries have failed. After the Spanish elections in 2015, the far-left Podemos party proposed a Spanish geringonça with the Socialist and the United Left party. Polls showed that the alliance was broadly popular with the Socialist base, but leaders scrapped the idea, fearing it would taint their image as a center-left party. In France, Benoît Hamon spread the word about what he saw in Portugal and called on his country’s divided left to join forces against upstart center-right presidential candidate Emmanuel Macron. This also fell short. Hamon was ignored by party leaders unwilling to compromise, and Macron won the presidency.To get another perspective on Portugal’s national psyche, I went to see Carlos Amaral Dias, one of the country’s best-known psychoanalysts. I met Dias at his home office in the center of Lisbon. Five years ago, he suffered a stroke, which slowed him down but hasn’t stopped him from seeing patients or talking to journalists. He struggles to begin conversations, starting deliberately and using a low voice, but he’s perfectly clear once his brain warms up. An anti-fascist activist during the 40-year Salazar dictatorship, Dias was imprisoned by the Portuguese secret police for his political activities, and now treats many high-powered people and politicians. He despises authority, and is frequently quoted in national newspapers about the behaviors of the Portuguese ruling elite. Some of his patients, he said, are overconfident about the strength of the geringonça and the role it can play in Europe’s future. “Trotsky and Stalin would have never imagined they would reunite in their afterlives in a country they probably never heard of,” Dias said, alluding to the unlikely alliance between the Bloco de Esquerda and the Communist Party.The geringonça, Dias continued, is a very Portuguese way of solving a problem. “My first patient said something that stuck with me,” he told me. “He was a Jesuit priest who suffered from schizophrenia. One day he asked: ‘Do you know why God decided to place Portugal in the end of Europe? To drown us all.’ I think he was right. We were left here by ourselves and that’s why we became so good at desenrascanço,” he added, referring to the ability to solve a problem with imagination rather than with knowledge or tools. He sat back and opened his eyes with excitement, seemingly pleased with his thesis. Ingenuity thrives in moments of crisis.So what is driving Portugal’s economic boom— politics or luck, ambition or reticence? The revival came without the austerity measures and deep cuts that Portugal’s creditors, the EU and International Monetary Fund, said were the only way to save the economy. The socialists are all too happy to take credit for the outcome, yet many economists believe the members of the geringonça have merely gotten lucky. They contend that much of the growth has been driven by a tourism boom that has little to do with government policies, and by an increase in exports, a strategy initiated by the previous administration. Francesco Franco, a professor at Nova School of Business and Economics in Lisbon, described Costa’s approach as “progressively undoing what has been done by the previous government and benefiting from growth recovery in the eurozone and booming tourism.” Ricardo Paes Mamede, a left-wing economist at the Higher Institute of Economics and Management at the University of Lisbon, attributed the boom to “Portugal’s deepened participation in the globalization process.” He argued that the country’s success is dependent on external circumstances—such as oil prices and exchange and interest rates—and is not resilient enough to withstand a major shock.When it comes to economic policy, Mamede described the government as fundamentally conservative and “in line with the EU budgetary rules and its obsession to rapidly decrease the debt.” This troubles left-wing politicians such as Catarina Martins, whose Bloco de Esquerda captured a landmark haul of half a million votes in the November 2015 elections. Martins, the party leader, worries that this approach is preventing the left from “focusing on changing labor laws and regaining public control of crucial parts of the economy.” But Portugal is still in a precarious situation: The country’s debt is the eurozone’s third highest, at 130 percent of gross domestic product. Meanwhile, the boom in tourism has led to rising rents and a debate over the quality of the jobs being recovered.The narrative around Portugal has shifted dramatically in the last two years. The negative media coverage of the austerity years has vanished, replaced by international headlines about economic miracles and the renewal of Lisbon and Porto. Yet for all the buzz, it’s easy to overlook more complex questions about the sustainability of growth, wage gaps, and the deeper problem that with fewer than 40 percent of the population holding a secondary degree, Portugal remains an uncompetitive country. There are good reasons to worry that although we may be enjoying a honeymoon period now, it won’t change Portugal’s economic outlook in the long run, or our pessimistic attitude about the future. Yet this year, an unexpected event led me to wonder whether Portugal may finally be taking control of its fate. At the Eurovision competition, of all things, a young Portuguese jazz singer, Salvador Sobral, took to the stage and performed a serious song, delivering it earnestly and bursting with emotion. He was a hit with international audiences, but in Portugal he was met with ridicule and suspicion. When he won the contest, it was Portugal’s first victory ever, and the mockery that had been so widespread suddenly seemed small-minded. It again felt like Portugal was on the brink of change. In the national euphoria that followed, I remembered something I had heard earlier that year from Maria de Sousa, a biologist who had trained generations of young Portuguese scientists. “We are experiencing an extraordinary time,” she said, “because the country is changing radically and we do not yet realize the importance . . . The younger generations are transforming Portugal by believing in it in a way we’re not used to.”