Charlemagne: the perky Portuguese
Social democracy is floundering everywhere in Europe, except Portugal
A small miracle on the Atlantic
Print version | Europe
Apr 14th 2018
ANTONIO COSTA, Portugal’s affable prime minister, greets your columnist with a broad grin as he settles his hefty frame into a sofa in his official residence. He has a lot to smile about. Lisbon, among Europe’s hottest tourist destinations, is enjoying a mini startup boom. Portugal’s footballers are the European champions, and its politicians have nabbed a clutch of senior international jobs. And above all, he is the winner of a high-stakes political gamble.
When Mr Costa’s Socialist Party lost an election in 2015 to the centre-right (and confusingly named) Social Democrats, who had overseen a harsh EU-imposed austerity programme during a three-year €78bn ($107bn) bail-out, most observers expected the Socialists to prop them up in a left-right “grand coalition” of the sort now common across Europe. Instead Mr Costa, the son of a communist intellectual from Goa, Portugal’s old colony in India, convinced two hard-left parties—the old-school Communists and the modish Left Bloc—to support a minority Socialist government in exchange for modest policy concessions.
Nothing like this had been tried before in Portugal. Mr Costa’s new friends wanted, variously, to write off debt, leave the euro zone, renationalise vast swathes of industry and quit NATO. The fury was swift, deep and near-universal. Foes nicknamed Mr Costa’s experiment the geringonça (“contraption”), and gave it six months at most. Portugal’s president threatened to reject the proposed government outright. Creditors feared a free-spending leftist government would send investors packing.
Yet over two years later the contraption is grinding along and the sky has failed to fall in. Some wage and pension cuts have been reversed, firms are creating jobs at a neat clip, foreign investors are eagerly sniffing around and the public finances are in rude health; the government hopes to balance the books next year. Portugal has become a bond-market darling while claiming to stand in the vanguard of the battle against austerity. “We showed that there is an alternative to ‘There is no alternative,’” says Mr Costa. He enjoys approval ratings most leaders would kill for. Little wonder Europe’s beleaguered social democrats are beating down his door.
