Portugal: the downfall of Costa – a symptom of the capitalist crisis

Since the current Socialist Party (PS) government came to power with a majority in January 2022, it has been a government of crisis, plagued with scandals, intrigues, and resignations. Now António Costa, the PM himself, has resigned following an investigation by the Supreme Court, which led to his own official residence being raided by the police, as well as government buildings and private residences. Several businessmen, CEOs, the mayor of Sines, and António Costa's chief of staff have been arrested. It appears that João Galamba, the Infrastructure Minister, will be indicted, as well as Duarte Cordeiro, the Environment Minister. António Costa himself might be indicted as well.

[Originally published in Portuguese at colectivomarxista.org]

What is at stake? On the one hand, a 20-year deal for the mining of lithium, worth up to 380 million euros, signed in 2019 with a company that had been created three days before, with an equity of only 50,000 euros! On the other hand, plans for the construction of a hydrogen energy plant in Sines involving the country’s three major energy monopolies – EDP, GALP, and REN – and the mishandling of EU funds. And also the creation of a datacenter involving a total investment to the tune of 3.5 billion euros.

There are two things worth noting here. Firstly, “green capitalism” is as corrupt and dirty as carbon-powered capitalism: both the lithium mining and the hydrogen plant are part of a so-called “energy transition”, which of course is largely paid for by the working class in the form of EU funds, subsidies, and tax exemptions for the rich. Secondly, the fact that large energy enterprises such as GALP, EDP, and REN are involved in the “green hydrogen” projects in Sines shows that the corruption of the bourgeois state is not simply a question of small favours and deeds – it is fueled by and for the big monopolies.

As far as the political crisis is concerned, President Marcelo now has a difficult decision on his hands. João Galamba, one of the accused, is a thorn in his side: Marcelo tried to have him removed from the government a few months ago, but this attempted manoeuvre ended in humiliation for him. This humiliation was revived only a few days ago when Galamba, following a reckless decision by Costa, found himself on the frontline defending the government’s budget, which he did by provocatively using the President's own words!

Personal considerations aside, the current political crisis is very much not in the interests of the ruling class – of whom President Marcelo is the faithful guarantor and spokesperson. The last three PS governments – the latter of which has not even reached half of its current term – have so far translated into some relative social peace – although this is becoming increasingly “relative” – and enabled the bourgeoisie to rake in astronomical profits.

The contradiction between these obscene profits and the increasing hardships endured by workers have been the driving force of a new upsurge in the class struggle that began about a year ago. Above all, there is a deep class resentment that has yet to be expressed. The country is now a powder keg. And the collapse of the government could very well be the trigger for more and bigger explosions!

No doubt that yet another corruption scandal has played the ultimate role in the downfall of António Costa. But the crucial element in the situation is the backdrop of social unrest caused by the inflationary crisis, the hike in interest rates, and the degradation of public services – in other words, by the crisis of capitalism, which is the deepest ever. When push came to shove, despite a 120-strong majority in parliament, without the left cover previously provided by the “geringonça” [contraption: popular term for the Socialist/Communist/Left Bloc (BE) and Green coalition], Costa fell hard!

What now?

The PS government has been until now the safest option for the Portuguese bourgeoisie / Image: PES Communications, Flickr

Despite all the scandals, the PS government has been until now the safest option for the Portuguese bourgeoisie, which did not shy away from publicly rejoicing in its January 2022 electoral win. It cannot be ruled out that Marcelo, in the name of “stability” while citing the dangers posed by the international crisis, might appoint a new PS government with a new PM. But it is not at all clear who would be the next PM in this scenario. No one in the current government has the popularity, status, and political weight necessary to replace António Costa. Above all, whatever the choice, a post-Costa PS government would be entirely discredited and face consistent opposition both within the institutions of the bourgeois state and from workers and youth on the streets.

But calling a new election entails other dangers. It is not impossible that the PS might win them again (even if they don’t get a majority), given the low credibility of the ‘mainstream right’ PSD and its leader and the healthy fear amongst broad layers that a right-wing coalition government would include the far-right Chega. However, the most likely scenario would be a victory of the right, forcing the PSD to seek support from the liberals of the IL and the swivel-eyed loons of Chega. We’ve seen similar manoeuvres recently in Sweden and Finland between conservative parties seeking to form a government with far-right forces. The same could happen in Portugal.

One thing would be certain in this case: this right-wing government would be reactionary to its core and seek to administer a “shock therapy”: with higher taxes and wage cuts for the workers and poor, the repeal of labour rights and protections, and the dismantling of the welfare state with cuts to education, healthcare, and social security. At a time when the crisis shows no signs of abating, such a government would have an explosive effect on the class struggle in Portugal.

Marcelo finds himself, therefore, between a rock and a hard place. Whatever he does, whatever his decision ends up being, and whatever the results of a hypothetical election, the crisis of Portuguese capitalism has deepened dramatically with Costa’s shock resignation. The key lesson is that the system is completely discredited in the eyes of hundreds of thousands of workers and youth. It has nothing to offer except more sacrifices, more austerity, more precariousness, and more instability. All of this alongside the obscene profits of the big capitalists.

The left parties have also been discredited due to the betrayals of the BE and PCP when they were part of the “geringonça”. It is thus possible that the petty bourgeoisie and the most backward sections of the working class, given the desperation ensuing from the current social crisis, will turn to the reactionary right. This will have only a temporary effect: in the face of the crisis, the true nature of these reactionaries will quickly be exposed, and the working class and youth will draw the necessary conclusions from such an experience.

History does not progress in a straight line! In the absence of a mass revolutionary alternative to overthrow capitalism in its death throes, we will keep seeing sudden shifts – now to the left, now to the right. However, more and more opportunities to build this revolutionary alternative will present themselves in the coming period. The mass movements spurred by the sovereign debt crisis, and the austerity that followed, will return – now on a higher level and with a more developed anti-capitalist consciousness. Thousands of young people and workers will seek in the coming years a revolutionary alternative to this system in crisis!

On the eve of the 50th anniversary of the Portuguese Revolution, a revolution that was derailed to give way to this corrupt and mediocre bourgeois-democratic regime, we make our slogan our battle cry: overthrow capitalism, finish the Portuguese Revolution!

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