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Giving Substance to Austerity Alternatives

TRAVEL DIARY: Day 9 of our caravan tour through the Iberian peninsula, part of the Transeuropa caravans

Leaving Faro was hard, for one because we would have liked to spend more time with the lovely people and at our lovely hostel, and for another because we left so terribly early (Paula forgot at least three things in her morning dizziness)! But we needed to make our way from Faro to Lisbon in time to meet with Ricardo and Marco from the Congresso Democrático das Alternativas (CDA) in Lisbon.

The CDA is a civic movement, made up by activists, by members of different political parties and by people with no party affiliation at all. Some members are active in the main trade unions, the UGT and CGTP and in other social movements. What they share is the will to find common denominators to constitute a common platform for alternatives to austerity. Marco, active also for the association of precarious workers and the unemployed, told us CDA was formed in 2012, one year after the introduction of the austerity programme, when the opposition was not yet very strong. Despite the austerity programme, the ruling government was winning, because it argued the crisis in Portugal was fault of the previous government. CDA activists wanted to create more transparency on the origins of the crisis, and develop alternative policy responses. They got together with people from various political party sections, during a time when they where still formulating their positioning. CDA activists decided not to form a political party themselves, but to give substance to the opposition. CDA opposes budgetary austerity, the cuts in education and public health, changes in the labour law, cuts in unemployment subsidies, the decreasing social rights and increasing poverty and inequality – and it wants to create a more sustainable opposition to these policies.

There are three main drivers that led to CDA’s foundation: Firstly, there are programmatic reasons. CDA activists disagree with the dominant explanation that austerity politics are the former Portuguese governments fault. Although it is difficult to reconstruct the narrative of the origin of the crisis, it is important to achieve a change of awareness to understand options. Ricardo explains the origins of the crisis lie at the global level and with the financial misconduct of the Eurozone at macro level (read more here). The Portuguese problems do not have to do just with its own government, but with how the EU and the Euro function. Secondly, there is a political dimension behind the creation of CDA. To change the politics of austerity, a responsible and effective opposition is necessary, however this has been absent in Portugal. CDA wants to fill the vacuum and act as a common platform of alternatives to austerity. The third reason why CDA was formed is to encourage civic participation. The strategy followed by the Troika (European Commission, International Monetary Fund and the European Central Bank) is neither fair nor does it reflect the will of the citizens. Ricardo asserts that it is difficult to fight against Portuguese austerity, because people stopped to believe there is a way out. It is not easy to get people involved in political work; over one million people in Portugal are unemployed or gave up looking for a job. “The level of emigration is similar to the 1960s during the colonial war.” By changing the narrative and providing a platform, CDA aims to mobilise civil society and engage as many people as possible.

CDA organised a series of workshops where people discussed different issues and made proposals. Then, on the 15th of September 2012, about a million of people demonstrated in 40 cities across Portugal, over half a million in Lisbon. Shortly after, the CDA organised its first conference on the 5th of October. This symbolic date honours the proclamation of the first Portuguese republic and the 5th October 1910 revolution, which used to be a public holiday, but was revoked by the government as part of the condition of the 2011 Troika memorandum of understanding. About 1.700 people joined the conference on 5th of October, which led to a process of three month of discussions.

Since, various events have been organised and two books published. One is about the origins of the crisis, the consequences of the memorandum and political alternatives ‘A Crise, a Troika e as Alternativas Urgentes’. The basic problem in Europe, so Ricardo, is that we have different countries with different structures under common rule. The book provides a significant contribution to the discussion in Portugal, and beyond (for a publication in English on this topic see here). The second book is a contribution to the discussion on the welfare state, called “Welfare state – from everyone to everyone”. One condition of the Troika memorandum was to cut 4 billion € of the welfare state. As a result, wages have been cut by 20% and the regular working week has been increased by 5 hours. The cuts have a profound effect on society.

“What is at risk,” explains Ricardo, “are the pillars of civil society, the public education, the pension and healthcare systems. The reason they have not collapsed yet is because there is no alternative to the social welfare system.”

One of the selling phrases for the austerity measures is to “cut the fat to keep the muscle”. But the welfare state is important for the economy itself, thus CDA asserts “welfare is muscle, not fat”. The precarious situation people find themselves in has led to cross-party cooperation. For example, João Ferreira do Amaral, close to the Portuguese socialist workers party, published a book called “In defence of the national independence”, for which José Pacheco Pereira, social democrats, wrote the introduction. The subject of the book reflects a resurgence of the wish for national political, economic and financial independence in the face of the global crisis, which importantly is different to the exclusive nationalism of the past. See for example Real England by Paul Kingsnorth.

There are five main themes CDA focuses on: Debt restructuring, the welfare state – education, health and pension systems -, the development strategy for the country, the improvement of the Portuguese democracy and Europe. The restructuring of the debt is the main issue for CDA and there are several policies the activists suggest. Ricardo asserts that even if Portugal had a positive economic development, it would still have to make a choice of following two of the three strategies: fiscal treaty, debt payment and social welfare state. All three is not possible. A Portuguese government that wants to preserve minimum social standards will have to let go creditors or the fiscal treaty.

“We believe debt relief is necessary to release some pressure over the economic employment growth.

The Troika, Ricardo explains, is following a policy of low wages, a huge flexibility in the labour market and is thus generalising precarious work conditions. The result is something similar to Italy’s rich north and poor south. The developing economy went to the north and the south is living of tourism and state subsidy. This model is only viable if people feel that they belong to one nation. This is the same thing Europe is trying to do. But Europe is neither politically nor socially viable if we believe in the economic model of low wage. In Portugal many families have to live with less than €500 per month.

“There is a need to increase the minimum wage at least to €500 to give some marginal sense of decency.”

“We need to stop austerity and preserve the welfare state.” We need an agreement where austerity is compatible with a reasonable level of public finance and expenditure. The civil servant wages in Portugal for example are 8% of the GDP, which is neither acceptable nor sustainable. Meanwhile, 60% of the Portuguese population has never had access to a bank credit. “There are alternatives to austerity.”

One cannot talk about these subjects without mentioning Europe. Ricardo expresses the mixed emotions he observes amongst Portuguese and CDA activists. There is the wish to participate in European integration, and many feel there is the possibility to achieve more ‘Europe’, but at the same time, people feel that Europe is more the source of, rather than the solution to, the problems. Market forces are invited to take the stage in the single market and rule the financial system and the labour market. “We have lost any capacity to decide our own future,” says Ricardo. The Portuguese party is no longer authorised to decide on minimum wages, because the Troika can veto the minimum wage in Portugal. The Troika also vetoed public subsidiaries of a flight connection essential for people living in an isolated and otherwise inaccessible part of Portugal.

“Decisions are always based on financial considerations and Portugal has to comply with the fiscal pact and debt payments agreed to in the memorandum of understanding. All the basic principles of a working democracy are being thrown out of the window.” The Portuguese constitution is now interpreted very broadly to fit European regulatory demands. “The EU is not only destroying the EU project, but also the basic democracy in its member states.”

CDA activists want to defend their democracy, and they would like to have a Europe, but they feel it is not possible. CDA could help to create a sense of alternative, but Ricardo reflects that they are confronted with a very strong opposition in the EU.

Given the results of the European elections on a whole, I think that the people of Europe deserve some respect. Europe has been through some extremely rough years: the financial and economic crisis, severe cuts to the welfare system, high unemployment, evictions, and unworthy banks have been bailed-out… yet two-thirds of the citizens who took part in the elections voted for Europe-friendly, democratic parties. When will you, the governments of the European countries, the European institutions, listen to us – if not now? It is time to show gratitude to the citizens of Europe.




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