Portugal: Fifty years since the revolution, ten days since the election

As they prepare to celebrate on 25 April the fiftieth anniversary of the revolution that ended the dictatorship bequeathed by Salazar, the Portuguese have elected a parliament in which an insurgent populist party of the right has more than a fifth of the seats and holds the balance of power. What happened? What happens next?

Antonio de Oliveira Salazar came to power in the 1920s after a period of political and economic turmoil, and his ‘Estado Novo’ lasted more than forty years. He had little in common ideologically with the other mid-century dictators of western Europe, other than a fierce anti-communism.  A shy, ascetic bachelor by temperament, a pious Catholic by conviction and an economist by academic and professional background, Salazar disdained the strutting militaristic posturing of his authoritarian contemporaries.

Salazar’s key objective was stability, even stasis; his vision an organic, corporatist society of minimal social mobility, religious conservatism and economic predictability. Salazar’s deft diplomacy kept Portugal out of the Second World War, and he had no taste for overseas adventures. But he was determined to hold onto the colonies, notably Angola and Mozambique, which he regarded as integral to Portugal and its identity.

By 1974, Portugal was ripe for change. Salazar’s successor, Marcelo Caetano, was floundering. Portugal remained the poorest country in western Europe, its major export cheap labour (the Portuguese population of Paris was second only to that of Lisbon; a tenth of Luxembourg’s population was Portuguese). The grinding colonial conflicts had scarred a conscripted generation and fostered both opposition and repression. Communist influence was growing. But when revolution came, it was from an unlikely source - middle-ranking military officers, many infused with inchoate leftist ideas, fed up with fighting an unwinnable and unjust war.

For a while after the 1974 revolution, it looked as though Portugal might succumb to the Communists or civil war. But the US poured resources into the country to counter Soviet influence. Socialist Party leader Mario Soares, Portugal’s outstanding post-revolutionary politician, returned from exile to lead the Socialist Party and opposition to the Communists. A centrist general, Ramalho Eanes (later President), mounted a defence against a Communist coup. By the end of 1975 democracy was secure, the African colonies were independent, and Portugal was in the process of successfully absorbing more than a million ’retornados’, representing an increase of more than a tenth in Portugal’s population.

Portugal’s post-revolutionary path has, mostly, been a remarkable success, underpinned by membership since 1986 of the European Community/Union and the Portuguese talent for reconciliation and compromise. Government alternated between the centre-left Socialist Party (PS) and the centre-right Social Democrats (PSD), often with little policy distinction between them. The economy steadily grew, and GDP per capita rose from 39% of the north/central European average in 1960 to 70% by the year 2000. Infrastructure was transformed: a country that had only fifty kilometres of motorway in the 1980s now has one of the most modern (and expensive) motorway networks in Europe. Lisbon has become a city destination to rival any in Europe and has attracted a young population of ‘digital nomads.

But the 21st century has not been easy for many Portuguese. After 2001 the economy had difficulty adapting to Eurozone membership; traditional industries such as textiles suffered from Chinese, Turkish and North African competition; eastern European countries, entering the EU, began attracting investment that might previously have gone to Portugal; and structural rigidities were stifling innovation.  

When the international economic crisis hit in 2008-9 Portugal’s debt ballooned, and the country seemed to be heading the same way as Greece. The government rescued failing banks (at considerable cost to the taxpayer) and was itself bailed out to the tune of 78 billion euros, the price of which was a fierce programme of austerity overseen by the IMF, European Commission and European Central Bank, who had provided the funds. Public sector salaries were cut by up to 25% and the unemployment rate rose to over 17%.

From 2015 successive Socialist Party governments were able to roll back austerity. Tourism boomed. The economy gradually recovered and then rebounded from the Covid crisis, growing by over 2% last year. Unemployment is down to around 6%. But problems remain, particularly for the young. The youth unemployment rate is 23%. Salaries remain low by West European standards. Young families are locked out of the property market, as an influx of relatively affluent foreigners has fuelled property prices in Lisbon, Porto and the Algarve. Yet successive governments have sought to attract those foreigners with policies such as the ‘golden visa’ scheme (being phased out), which has encouraged property purchase, and tax exemptions on overseas retirement income.

So when PS Prime Minister Antonio Costa resigned towards the end of last year following a controversy over lithium mining licences, there was much resentment for Chega to exploit. Led by former football pundit Andre Ventura, Chega (‘Enough’) had emerged shortly before the 2019 elections with an anti-immigration, nationalist, conservative platform, winning less than 2% of the vote. In the elections of 2022 Chega’s vote share rose to 7%. In the run-up to last week’s elections, Chega, running a very effective social media campaign that combined anti-immigration messages, light-hearted stunts, and a programme of tax cuts (particularly for the young), as well as huge increase in the minimum salary, help for first-time buyers and cheaper energy - without being clear how any of this was to be paid for - increased their vote share to 18%.

Portugal now faces a period of fragmented and fragile politics. At the time of wrting, both the PS and PSD, who won similar vote shares of just under 30%, have ruled out any agreement with Chega. Neither can put together a majority with smaller parties of the left or liberal right. A grand coalition of the centre is unlikely. One or other major party - probably the PSD, who won a couple of more seats - may form a minority government with the tacit, temporary support of other parties, but it would be unlikely to last beyond the vote on the annual budget towards the end of the year. Major decisions, such as the site for a new Lisbon airport and the (re-)privatisation of the national airline, may be put on hold.

For most of the past half century, the relatively recent experience of dictatorship and revolution seemed to have inoculated the Portuguese against extreme or populist political movements. But older memories have died or are fading, and many young voters, for whom what happened half a century ago is irrelevant, were clearly won over. Indeed, it looks as though Chega was the most popular party amongst voters between the ages of 18 and 34. This may prove to be an unwelcome turning point in Portuguese politics. But with luck it will serve as a salutary shock to the major political parties, who will need to focus on the many problems of young voters in particular if they are not to find themselves outflanked and superseded by the simplistic ‘solutions’ of the populists.