Lisbon silent coup

Note kindly translated by Anne-Marie de Grazia

During these past days, Portugal has been the victim of a silent coup organized by the country’s pro-European leaders [1]. This event is particularly grave. It is occurring at a time when the memory of the successful coup de force against the Greek government by the combined political pressures from the Eurogroup and the economic (and financial) pressures from the European Central Bank is still fresh in our memories. It confirms the deeply anti-democratic nature not only of the Eurozone but also, one regrets to say, of the European Union.

Results of Portuguese elections

It has been much reported in the press, particularly in France, that the right coalition has emerged a winner of the latest Portuguese legislative elections. This actually is false. The rightist parties, lead by the Prime Minister M. Pedro Passos Coelho, have garnered only 38.5% of the votes and have lost 28 seats in Parliament. A majority of the Portuguese voters has voted against austerity measures, 50.7% in fact. These voters gave their suffrage to the moderate left but also to the Portuguese Communist Party and other formations of the radical left. In fact, the Portuguese Socialist Party has 85 seats, the Leftist Block (radical left) has 19 and the Portuguese Communist Party has 17. We have 230 seats at the Portuguese Parliament. Results of the latest election give 121 to the anti-austerity forces, when the absolute majority is 116[2].

An agreement could have been found between the rightist parties and the Socialist Party. But this agreement was clearly not possible without calling into question part of the austerity program deriving from the agreement passed between Portugal and the European institutions. This is not without reminding one of the situation in Greece …

The socialists and the “block of the Left” have clearly stated that this agreement needed to be revised. This motivated President Cavaco Silva’s decision to reject the project of government presented by the Left. But the wording of his declaration goes even further. He said: « After all the important sacrifices consented within the framework of an important financial agreement, it is my duty, and pertains to my constitutional prerogatives, to do all that is in my might to prevent false signals to be sent to financial institutions and international investors [3] ». This declaration actually creates a true problem. That M. Cavaco Silva may think that a government of the united Left may lead to a confrontation with the Eurogroup and the EU is his right, and it is probably true. But in a parliamentiary republic such as Portugal, it is not in his power to interpret future intentions in order to oppose himself to the will of the voters. If a coalition of the Left and the extreme Left has a majority in Parliament and if it is presenting – as was the case – a program of government, he must give it its chance. Any other decision is akin to an anticonstitutional act, to a « coup d’Etat ».


The economic situation of Portugal

This « coup » is happening at a time when the economic situation of Portugal, which is often – wrongly – presented in the press as a « success » of austerity politics, remains quite precarious. The budget deficit reached over 7% in 2014 and should be way over 3% this year. The public debt amounts to more than 127% of GDP. And, even if the economy is again enjoying a certain amount of growth, it still remains, in 2015, at the level of 2004. The country has been brought back more than ten years into the past through austerity politics, at extremely high social costs (unemployment).

In fact, the « reforms » which were imposed to counterbalance a plan of aid for the financing of the debt and of the banks did not solve the main problem of the country. This problem is the productiveness of labour. The latter is too weak in Portugal, and this is due to many reasons, a workforce that is badly or little trained, and productive investments which are largely insufficient. In the years 1980 and 1990, Portugal was able to adjust to this weak productiveness because it could let its currency depreciate. Since 1999 and its entry into the Euro, this has become impossible. It is not surprising therefore that production has been stagnant.

Successive austerity plans have been implemented with the aim to bring down salaries (in value), whether the direct or indirect salaries. But this decrease cannot benefit exports because, in the same time, it is depressing domestic consumption [4]. Whereas a depreciation of the currency would leave domestic consumption unchanged, the gains in exports achieved thanks to the austerity plans must compensate for the loss in domestic consumption. This is why austerity plans are always less efficient than a currency depreciation, and Patrick Artus may well add, in a note going back to 2012 : « Adjustment by way of currency exchange rates yields rapid results; we have seen this above in the case of Spain and of Italy in 1992-1993 with a rapid disappearance of the exterior deficit and a limited increase of unemployment over time. We can see this too in the various adjustments of emerging countries: Korea and Thailand in 1997, Brazil in 1998 »[5].

The responsibility of the Euro in the economic situation of Portugal is undeniable. But the responsibility of the European authorities in the economic and political chaos which is at risk of occurring is just as certain.


Lessons to be drawn

One is often talking about an habituation to disaster, about a weariness with pain which drives peoples to get accustomed to the worst. In fact, there is no such thing to be found here. The Portuguese have attempted to apply the measures inspired by the Eurogroup and the European Commision and, today, they are forced to realize that these methods do not give the expected results. The vote at the legislative elections is the result of this assessment. But the leaders, who are in foreign bondage, meaning, to the European institutions, have decided not to take account of this. What is happening today in Lisbon is as grave, even if it is less spectacular, than what we have known in Greece.

The profoundly anti-democratic nature of the Eurogroup and of the European Union is asserting itself again for the second time and is now confirmed. One would have to be blind not to see it. Yet, this one time could be one time too many. But for this to happen, it is imperative that all the forces decided to struggle against the Euro should find forms of coordinating their actions. We must here remind ourselves of what La Boétie wrote in the Discourse on Voluntary Servitude published in 1574[6] : « the tyrants are standing tall only because we are on our knees »[7]. One could then take up the formula, which appears so relevant today, formulating it thus: « European institutions are powerful only because we (the sovereignists) are divided ».

More than ever, the question of the coordination of the various sovereignist forces is on the table. This coordination by no means implies that what is opposing these forces to one another is negligible, nor that it should be put between parentheses. This is the whole logic of « Fronts », such as the « United Anti-Japanese Front » achieved in China by the CCP and the Guomindang, which are not strictly speaking alliances but which allow to walk separately and strike together. But the reality, however unpleasant it may be to some, is that as long as we cannot coordinate ourselves, a power which is in fact in the minority will be able to exert its tyranny. And, from one coup to the other, establish a regime of the permanent coup d’état.

[1] Evans-Pritchard A. « Eurozone crosses Rubicon as Portugal’s anti-euro Left banned from power », The Telegraph, 23 octobre 2005,

[2] Reuters, « LEAD 2-La gauche portugaise travaille à la formation d’un gouvernement » 12 octobre 2015,

[3] Evans-Pritchard A. « Eurozone crosses Rubicon as Portugal’s anti-euro Left banned from power », op.cit..

[4] Blanchard O. et D. Leigh, Growth Forecast Errors and Fiscal Multipliers, FMI Working Paper WP/13/1, Washington DC, janvier 2013.

[5] Artus P., « Dévaluer en cas de besoin avait beaucoup d’avantages », Flash-Economie, Natixis, n°365, 29 mai 2012, p. 6.

[6] La Boétie E., Discours de la servitude volontaire, Paris, Mille et une nuits, 1997.

[7] This quote knew a great success on the eve 1789, but under another form : « The big guys are big only because they are mounted on our shoulders ; let’s shake them off and they will litter the ground ».


Jacques Sapir

Ses travaux de chercheur se sont orientés dans trois dimensions, l’étude de l’économie russe et de la transition, l’analyse des crises financières et des recherches théoriques sur les institutions économiques et les interactions entre les comportements individuels. Il a poursuivi ses recherches à partir de 2000 sur les interactions entre les régimes de change, la structuration des systèmes financiers et les instabilités macroéconomiques. Depuis 2007 il s'est impliqué dans l’analyse de la crise financière actuelle, et en particulier dans la crise de la zone Euro.

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