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Anyone who followed the Greek criss with even half an eye open knows there is a lot not to like about the way the Eurozone is currently configured. And the resolution of the Greek criss does not bode well for its long-term future. The fouders of the EU and Eurozone recognized that their design was incomplete, and they anticipated that future predictable crises would provide the impetus to move their program forward.
However, as we’ve seen, economic performance among Eurozone members have diverged rather than converged. Germany has consistently put national interests ahead of implementing needed EU/Eurozone integration measures, such as Eurobonds or a major Eurozone infrastructure bank to allow for more fiscal spending in underperforming economies, or a Eurozone-wide deposit guarantee (as in with money behind it, as opposed to inadequately-funded national promises). But this isn’t so much pro-German behavior as sheer political expediency. Germany’s policies are hurting growth all over Europe, including in Germany itself, and bringing destructive deflation to Germany and the creditor nations.
And the handling of EU member states of the refugee crisis isn’t pretty either.
So that’s a long-winded way of saying that there’s a sound, indeed a strong, Euroskeptic case to be made. But late last week, a story by Ambrose Evans-Pritchard, a reporter I normally like and respect, went off the rails in depicting perfectly legal government-formation procedures in Portugal in the wake of an inconclusive election as an ant-democratic, unconstitutional course of action, in a piece titled, Eurozone crosses Rubicon as Portugal’s anti-euro Left banned from power. Even worse, other writers, such as Frances Coppola, uncritically amplified the Evans-Pritchard story. She originally titled her post, The Portuguese President’s decision shows the Eu is becoming like the Soviet Union (which is still visible in the HTML). She’s revised the headline (to The Fallout From The Greek Crisis Threatens European Democracy) and a fair bit of the post when she ran into a buzz-saw of well deserved criticism.
Some denizens of the Twitterverse were quick to react to the misreporting:
— Jorge_Costa (@Jorge_Costa) October 22, 2015
And Portuguese Twitters quickly set up a spoof hashtag, #PortugalCoup.
— Yannis Koutsomitis (@YanniKouts) October 25, 2015
But what were the substantive errors in the Evans-Pritchard account? The short form is that it stems from over-reacting to some admittedly distrubing remarks made by the Portuguese president, and not only taking their eye off the ball in terms of the election results and the procedural steps underway.
Evans-Pritchard suggested, and kept reiterating on Twitter that the leftist parties (or the “lefts” as they are called in Portugal), who in total had won a thin majority in the popular vote and in Parliamentary seats, were being kept from forming a government.
That is false. Two right wing-parties, CDS and PSD, the incumbents, ran together in a coalition called PaF received 38% of the vote. That made them the largest bloc but clearly not a majority. The three left parties that together got a majority did not campaign as a coalition, have never been in a coalition, have long-standing enmities, and some key policy differences (for instance, the Socialist Party, or PS, is anti-austerity but wants to stay in the Eurozone, while the Communists are opposed to austerity and want to leave the Eurozone). The PS leader, António Costa, is trying to form a coalition of these three parties that traditional have scrapped over left-leaning voters. But “trying to form a coalition” is not at all the same as having one.
As IsabelPS points out*:
The Constitution says:
1. The President of the Republic appoints the Prime Minister after consulting the parties with seats in Assembly of the Republic and in the light of the electoral results.
It also says
1. Within a time limit of at most ten days after its appointment, the Government shall submit its Programme to the Assembly of the Republic for consideration, by means of a Prime Ministerial statement.
1. The following shall imply the resignation of the Government:
d) Rejection of the Government’s Programme;
e) The failure of any confidence motion;
f) Passage of a motion of no confidence by an absolute majority of all the Members of the Assembly of the Republic in full exercise of their office.
Now what got Evans-Prichard disturbed is that the President, from the incumbent parties that lost seats and votes in the last election, has named a Prime Minister from his coalition. But that is perfectly kosher, indeed, while it is not mandated, it has been customary to select the head of the party with the most votes as Prime Minister. What has gotten many people understandably bent out of shape were the remarks the President, Anibal Cavaco Silva, also made. From the Telegraph (boldface ours):
In 40 years of democracy, no government in Portugal has ever depended on the support of anti-European forces, that is to say forces that campaigned to abrogate the Lisbon Treaty, the Fiscal Compact, the Growth and Stability Pact, as well as to dismantle monetary union and take Portugal out of the euro, in addition to wanting the dissolution of NATO.
This is the worst moment for a radical change to the foundations of our democracy.
After we carried out an onerous programme of financial assistance, entailing heavy sacrifices, it is my duty, within my constitutional powers, to do everything possible to prevent false signals being sent to financial institutions, investors and markets.
So despite the ugly dose of post-election eletioneering, all Cavaco Silva has said is that he is sticking with the current pro-Eurozone, austerian game plan of his coalition as long as he can do so in the current Constitutional framework. And that may not be very long. As Chris Hanretty sums up on Medium:
In this case, the facts are these:
- In the elections of the 4th, no single party secured a majority. The incumbent right-wing Social Democrats (PSD) and their allies the CDS won the most votes and the most seats, but failed to win an overall majority. Their main challengers, the Socialists (PS) improved their vote and seat share, but the big winners were the Left Bloc (BE).
- Prior to the elections, the PS had not discussed a pre-electoral alliance with the Left Bloc or the Portuguese Communist Party (PCP). However, once it became clear that these parties had won a majority of the vote (50.75%) and a majority of seats (122 of 230), negotiations began.
- The Portuguese constitution gives the President of the Republic the task of “appoint the Prime Minister after consulting the parties with seats in Assembly of the Republic and in the light of the electoral results” (Art. 187).
- The current President is Anibal Cavaco Silva, the most successful leader the right-wing PSD has ever had.
- On the 22nd, the President gave the leader of the PSD, Pedro Passos Coelho, the task of forming the next government, as some had expected he might.
- In the speech explaining this decision, the President explained that in all previous elections, the task of forming the government went to the party with the most seats, even where that party did not have a legislative majority. He gave the example of the 2009 election, where the PS formed a government.
- The President went on to say:
“However, the appointment of the Prime Minister by the President of the Republic does no finalize the process of forming a Government. The final decision belongs to Parliament or, more precisely, to the Members of Parliament. The rejection of the Government Programme, by an absolute majority of Members of Parliament, implies its resignation”.
8. The President also said:
“Outside the European Union Portugal’s future would be catastrophic.
In 40 years of democracy, the Portuguese governments never depended from anti-European political factions, that is, of the political factions which, in the electoral manifestos with which they presented themselves to the Portuguese, defended the repeal of the Lisbon Treaty, of the Budgetary Treaty, of the Banking Union and of the Pact of Stability and Growth, as well as the dismantlement of the Economic and Monetary Union and Portugal’s exit from the Euro, and, still further, the dismemberment of NATO, of which Portugal is a founder member”.
These remarks were directed against the the PCP, [the Communist party which has proposed exit from the Eurozone and NATO.
This all means that the EU has not prevented Leftist parties from forming a government. The EU did nothing. The Portuguese President made a decision. He decided to ask an (1) incumbent PM who is (2) leader of the party with the most seats and who is (3) of the same party as the President, to form a government. If the right is unsuccessful, then the government will be voted down, and the left will have the chance to put together an alternative.
National Interest explains why the situation in Portugal now is what Lambert likes to call “overly dynamic.” The Socialist Party had gotten a new leader in 2014, Antonio Costa, after the party had see its popularity fall. The PS, as it is called, suffered a further decline. Contrary to expectations, Costa did not resign nor did the winning block, the PaF, seek to form a coalition with PS:
A recovering economy and PS’s injured reputation delivered victory to the right-wing coalition instead, albeit only with a relative majority. Normally, the opposition leader would have resigned, but not this time. António Costa has since been seeking something unheard of since the revolution: a coalition between PS and the far-left communists and Trotskyists.
IsabelPS gave a translation of another angle on the President’s position on a Portuguese TV brodcast from the ex-head of the PSD (a member of the minority coalition that is provisionally in charge):
He [Cavaco Silva] at the bottom meant: “If this agreement come to fruition [a left government of the PS, PCP and BE] I do not think it is consistent. If I had the power to dissolve parliament, I would not accept that government and would call elections. Since I have no such power, because the constitution does not allow it, the Honourable Members of Parliament should think carefully before voting.”
It is this that leads me to conclude that Cavaco, if the question is put, will clearly appoint António Costa [the head of PS].
Ironically, Cavaco Silva’s pro-Eurozone rant could be the best thing that could have happened to Costa’s efforts to form a coalition among traditional enemies. The Wall Street Journal games the situation out:
Still, his decision presents President Cavaco Silva with a dilemma if, as seems likely, Mr. Costa mobilizes a parliamentary majority against Mr. Passos Coelho next week, when his government is likely to face a confidence vote.
He can either ask Mr. Passos Coelho to stay on as a caretaker prime minister until June, which is the earliest that new elections could be held under the constitution. Or he can ask Mr. Costa to try to form a government—either a formal coalition or minority government—with his newfound allies on the far-left.
Few believe such an arrangement could last long given the different party agendas and their historical rivalry. Early tests would include the need to agree on a budget for 2016, particularly if Mr. Costa sticks by his electoral pledge to abide by EU rules on reducing the country’s fiscal deficit.
The constitution only requires that Mr. Cavaco Silva act in the national interest, but both paths condemn Portugal to months of political uncertainty.
In other words, this would be a European version of what we call “gridlock”. But as Ed Harrison stressed via e-mail, “If the parties present a FORMAL coalition to the President that has a majority he MUST allow it.” So we’ll see soon enough if the three “lefts” decide that the enemies on their right are a compelling enough cause for them to put aside their long-standing rivalries and work together.
*IsabelPS also helpfully sent a primer:
Parties and their heads, from right to left (I have put PAN, the animal party in the middle because it is where they sit):
CDS (Paulo Portas)
PSD (Passos Coelho)
PAN (André Silva)
PS (Antonio Costa)
PCP (Jerónimo de Sousa)
BE (Catarina Martins)
Presidente Cavaco Silva (PSD)
Electoral results (CDS+PSD, the incumbents, ran together in a coalition called PaF):
PaF: 38.35% – 107 MP
PS: 32.31% – 86 MP
BE: 10.19% – 19 MP
PCP: 8.25% – 17 MP
PAN: 1.39% 1 MP