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Socialists Rain On Spain

Socialists Rain On Spain

Dispatches From the Edge

March 5, 2016

 

The effort by Pedro Sanchez, leader of the Spanish Socialist Workers Party, to form a government on March 2 brings to mind the story of the hunter who goes into the forest with one bullet in his rifle. Seeing a deer on his right and a boar on his left, he shoots in the middle.

 

Sanchez’s search for a viable coalition partner began when the ruling right-wing Popular Party (PP) took a pounding in Spain’s Dec. 20 election, dropping 63 seats and losing its majority. Voters, angered by years of savage austerity that drove poverty and unemployment rates to among the highest in Europe, voted PP Prime Minster Mariano Rajoy out and anti-austerity parties in, although leaving the PP as the largest single party in the parliament.

 

The only real winner in election was the left-wing Podemos Party, which took 20.6 percent of the vote. The Socialist Party actually lost 20 seats, its worst showing ever, and at 22 percent, barely edged out Podemos. And if the Spanish political system were not rigged to give rural voters more power than urban ones, Podemos would have done much better. The Socialists and the PP are particularly strong in rural areas, while Podemos is strong in the cities.

 

While a candidate in Madrid needs 128,000 votes to be elected, in rural areas as few as 38,000 votes will get you into the parliament. Podemos and the Socialists both won over five million votes, with the difference only 341,000. But the Socialists took 89 seats to Podemos’s 65.

 

Spaniards voted for change, but the Socialists, who ran an anti-austerity campaign, chose to form an alliance with the conservative Ciudadanos or Citizens Party, which refuses to have anything to do with Podemos—and the feeling is mutual. Ciudadanos also underperformed at the polls. Ciudadanos was predicted to get as much as 25 percent of the vote and surpass Podemos, but instead came in under 14 percent with only 40 seats.

 

On the surface the only thing the Socialists and Ciudadanos have in common is their adamant opposition to Catalonia’s push for a referendum on independence. Podemos is also opposed to a Catalan breakaway, but supports the right of the region to vote on the matter.

 

Catalonia’s drive for independence is certainly controversial and would have a major impact on Spain’s economy, but exactly how the Spanish government thinks it can block a referendum is not clear. And if Catalans did vote for independence, how would Madrid stop it? One doubts that the government would send in the army or that such an intervention would be successful.

 

Indeed, the fierceness with which the PP, Socialist Party and Ciudadanos oppose the right of Catalans to vote is more likely to drive the province toward independence, rather than discourage it. At this point Catalonia’s voters are split slightly in favor of remaining in Spain, although young voters favor independence, a demographic factor that will loom larger in the future. In provincial elections last September, candidates who supported independence took 47.7 percent of the vote.

 

The Socialists had a path to form a government, but one that would have required the party to modify its position on a Catalan referendum. If it had done so, it could have formed a government using Podemos, the Republican Left of Catalonia (ERC), the Basque Nationalist Party, (EJA-PNV), Canary Islanders, and a mix of independents. Had the Socialists compromised on Catalonia, they might even have picked up the votes from the center-right Democracy and Freedom Party (DIL).

Left parties in the Parliament can put together 162 votes on their own, which is short of the 176 needed to form a government. But it would not have been impossible to pick up 13 more votes from the mix of 14 independents and eight seats controlled by the Catalan DIL.

 

Choosing Ciudadanos as a partner makes little sense. Podemos immediately dropped cooperation talks with the Socialists and sharply criticized Sanchez for not building a genuine left government. Ciudadanos’ economic policies are not much different than the PP’s, plus it opposes abortion, and is hawkish on immigration. In any case the party did poorly in the national elections. The merger “prevents the possibility of forming a pluralistic government of change,” according to the parliamentary deputy and Podemos spokesperson, Inigo Errejon.

 

“Negotiate with us,” Podemos leader Pablo Iglesias told Sanchez, “stop obeying the oligarchs.” The Socialist Party leader pleaded with Podemos to vote for him so that the Socialist-Ciudadanos alliance could pass “progressive” legislation like raising the minimum wage and addressing the gender wage gap. The Socialists also presented a plan to tax the wealthy, improve health care, and try to stop the growth of “temporary” worker contracts that have reduced benefits and job security.

 

But those issues do not really address the underlying humanitarian crisis most Spaniards are experiencing, like poverty and growing homelessness, and the damage austerity has inflicted on education and social services. And Ciudadanos’ views on abortion, immigration and privatizing public services are repugnant to Podemos.

 

Spain’s unemployment rate is still over 20 percent—far more among the youth in the country’s south—and many of the jobless will soon run out of government aid. While the economy grew 3.1 percent in 2015 and is projected to grow 2.7 percent in 2016, it is not nearly where it was before the great 2008 financial crisis and the implosion of Spain’s enormous real estate bubble. On top of which, that growth rate had nothing to do with the austerity policies, but instead was the result declining value of the euro, low interest rates, and cheap oil.

 

If the Socialists have no success in forming a government, there will be new elections, probably in late June. Polls show the outcome of such a vote would be similar to the last election, but Spanish polls are notoriously inaccurate. In the last election they predicted Ciudadanos would eclipse Podemos. The opposite was the case.

 

The right-wing Popular Party is likely to do worse, because it is mired in a series of corruption scandals over bid-rigging and illegal commissions. In Valencia, nine out of the 10 PP councilors are considered formal suspects in the case. Indeed, the Party’s reputation for corruption makes it difficult for any other grouping in the parliament to make common cause with it. And even if Ciudadanos dumped its anti-corruption plank and broke its promise never to cooperate with the PP, such a government would still fall short of the 176 votes needed. The PP controls 119 seats.

 

In part, the Socialists are frightened by the growth of Podemos and the fact that it might replace them as the number two party in the parliament. In part, the Socialists also tend to run from the left and govern from the center, even the center-right. That is a formula that will simply not work anymore in Spain. The domination of the Spanish government by the two major parties since 1977 is a thing of the past, having been replaced by regional and anti-austerity parties like Podemos.

 

Before the recent election, the two major parties controlled between 75 percent and 85 percent of the voters. In the December election, they fell to just over 50 percent.

 

A more successful model is being built next door in Portugal, where the Socialists united with two left-wing parties to form a government. All the parties involved had to compromise to make it work, and the alliance might come apart in the long run. But for now it is working, and the government is dismantling the more egregious austerity measures and has put a halt to the privatization of public services like transportation.

 

Spain’s Socialist Party is riven with factions, some more conservative than others. Sanchez—whose nickname is “ El Guapo” (handsome)—has so far out-maneuvered his party opponents, but this latest debacle will do him little good. He did receive support from the party’s rank and file for the Ciudadanos move, but that led nowhere in the end. Sanchez got 130 votes in the first round and only picked up one more vote in the second round.

 

Another election will probably not produce a sea change in terms of party support, but voters may punish the Socialists for their unwillingness to compromise. Those votes are unlikely to go to Ciudadanos, and the PP is so mired in corruption that it will struggle to keep its current status as the largest party in the parliament. A recent poll taken after Prime Minster Rajoy passed on trying to form a government found that 71 percent of the voters felt that the PP did not have the best interests of Spain in mind. That refusal may come to haunt the PP in June.

 

Podemos will undoubtedly pick up some Socialist Party voters, but probably not enough to form a government. That will only happen if Socialists put aside their stubborn opposition to a Catalan referendum and help build what Podemos calls a “genuine” leftist government.

 

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Conn Hallinan can be read at dispatchesfromtheedgeblog.wordpress.com and middleempireseries.wordpress.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Irish Shillelagh Austerity

Irish Shillelagh Austerity *

Dispatches From The Edge

Conn Hallinan

Mar. 1, 2016

 

If there is one thing clear after Ireland’s recent election, it is that people no longer buy the myth that austerity is the path to economic salvation. It is the same message that Greeks, Portuguese and Spaniards delivered to their elites over the past year: the prophets of tough love, regressive taxes, and massive social services cutbacks should update their resumes and consider a different profession than politics.

 

Ireland is a small country but the Feb. 26 election drove a big spike into the policies of the “troika”—the European Central Bank, the European Commission and the International Monetary Fund—that have blitzed economies across the continent and made chronic unemployment and growing economic inequality a continuing source of malaise.

 

The governing center-right Fine Gael lost 16 seats, and its partner, the center-left Labour Party, was virtually wiped out, dropping from 37 seats it controlled after the 2011 election only to six. The two parties had overseen an economic program that almost doubled child poverty rates, drove some 500,000 young people to emigrate, reduced wages by 15 percent, and sharply raised the jobless rate.

 

Ireland’s economic difficulties had nothing to do with public spending, but were the fallout from private speculators and banks caught in the great 2008 financial meltdown. Rather than making the speculators pay, the then government of Fianna Fail shifted the bank debts to taxpayers. The troika agreed to a $67 billion bailout of the banks, but only if major bondholders were exempted and the government would institute a draconian austerity program. Most Irish voters were unaware of this “trade off” until just before the election.

 

The Fine Gael/Labour government has long claimed that it had no choice but to apply the austerity formulas and that, in any case, the policies worked, because the economy was recovering. Voters didn’t buy it. The “recovery” has largely been restricted to Dublin—where homelessness in January reached a record high—and the growth was largely a product of falling oil prices and a decline in the value of the euro, rather than the result of austerity.

 

As Fintan O’Toole of the Irish Times put it, “What voters said on Friday is in some ways highly complex, but in relation to the dominant narrative” that austerity is the path to recovery, the Irish said, ‘We don’t believe you.’” The Fine Gael-Labour campaign slogans of “stability” and “all is well” fell flat. The government, O’Toole said, “imagined that it would ride back to power on a feel-good factor, as if people who had been repeatedly beaten should feel good that the beating has stopped.”

 

At first glance, the Irish election looked like a shootout between the two center-right parties—Fine Gael and Fianna Fail—that have taken turns governing Ireland for more than eight decades. But this time around Fianna Fail ran from the left—mild left, as it were—promising greater fairness and more public services. Fianna Fail, which was crushed in the 2011 election, bounced back from 21 seats to 44 and is now the second largest party in the Dail after Fine Gael.

 

The Dail has 158 seats.

 

Another winner was the unabashedly leftist Sinn Fein Party, which picked up nine seats for a total of 23 and is now the third largest force in the Dail. The People Before Profits/Anti-Austerity Party gained two seats, and the independent bloc picked up a seat. In contrast, the rightwing Renua Party lost its three seats.

 

Irish elections are complex affairs, employing a proportional representation system that provides a path for small parties to gain a foothold in the Dail, but makes campaigning complicated.

 

What emerged from the Feb. 26 vote was a hung parliament: Fine Gael/Labour did not win enough seats for a majority, but neither did anyone else. There is talk of a “grand coalition” between Fine Gael and Fianna Fail, but both parties would have to renege on pre-election promises that they wouldn’t consider such a move, and it would automatically make Sinn Fein the leader of the opposition. The latter possibility scares both center-right parties.

 

Fine Gael, Fianna Fail, and Labour refuse to consider a coalition with Sinn Fein because of the Party’s links to the Irish Republican Army and violence. It is an odd rationale, considering that all three parties have roots in the sometimes quite violent struggle for Irish independence and the bloody 1922-23 civil war over the Anglo-Irish Treaty that freed the Republic from Great Britain.

 

In any case, Sinn Fein leader Gerry Adams made it clear that his party has no interest in being a minority member of any combination that Fine Gael or Fianna Fail put together. And there is no way that Sinn Fein can construct a majority coalition. At most, the left and center-left parties could muster 60 votes, and that would include the Labour Party, a dubious possibility. Indeed, one Labour Party leader, Alan Kelly, has already called for a Fine Gael-Fianna Fail unity government.

 

It is possible that Fine Gael will try to rule as a minority government, but that would require Fianna Fail to abstain when it comes time to elect a Prime Minister, or Taoiseach. And it would also mean that Fianna Fail might have to choose between swallowing some of Fine Gael’s austerity policies that it ran against in the election, or bringing down the government. Since any minority government will be extremely fragile, another round of elections is a real possibility. During the campaign, Fianna Fail leader Michael Martin said he would not go into a coalition with Fine Gael, and Irish voters in a re-match might punish any party that broke its promises.

 

Irish voters essentially gave two messages in the last election, one directed at Europe and the other at its own political structure.

 

About Europe, the voters firmly rejected the increasingly discredited policies of the troika, joining Greek, Spanish and Portuguese voters in saying “enough.” Austerity as a cure for economic crisis, as O’Toole points out, “was not just an Irish story—it was a European narrative.” That narrative is under siege.

 

About Ireland, voters turned their own political structure upside down. The two parties that have dominated Ireland since the end of the 1922-23 civil war can now claim the allegiance of slightly less than 50 percent of the electorate. This election, as Sinn Fein’s Adams argues, represents “a fundamental realignment of Irish politics.”

 

*A shillelagh is a blackthorn walking stick that the Irish use for whacking things they don’t like.

 

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Spain Says “No” to Austerity

Spain Says “No”

Dispatches From The Edge

Dec. 23, 2016

 

For the third time in a year, the tight-fisted, austerity policies of the European Union (EU) took a beating, as Spanish voters crushed their rightwing government and overturned four decades of two-party reign. Following in the footsteps of Greek and Portuguese voters earlier this year, Spaniards soundly rejected the economic formula of the Troika—the European Central Bank, the European Commission and the International Monetary Fund—that has impoverished millions of people and driven the jobless rate to almost a quarter of the country.

 

Greece’s leftist prime minister, Alex Tsipras said “Austerity has been politically defeated in Spain,” and that the election was a sign “that Europe was changing.” Italy’s prime minister, Matteo Renzi said, “As already happened in Greece and Portugal, governments which apply rigid austerity measures…are destined to lose their majorities.”

 

The big loser in the Spanish elections was the rightwing Popular Party (PP) that lost 63 seats and its majority in the 350-member parliament. The PP won more votes than any other single party, but its support fell from 44 percent in the 2011 elections to 28.7 percent. While PP Prime Minister Mariano Rajoy ran on a platform that the Spanish economy had recovered from its disastrous plummet following the 2007-08 worldwide financial crisis, voters were not buying.

 

The economy is indeed growing—3.1 percent this year and projections for 2.7 percent in 2016—but after four years it has yet to reach pre-crisis levels. Unemployment has remained at 21 percent nationwide and more than double that figure among youth and in Spain’s battered south.

 

Besides delivering a decisive “no” to austerity, Spaniards also turned out the two-party system that has dominated Spain since the death of dictator Francisco Franco in 1975. For 40 years the PP and Socialists Workers Party (PSOE) have taken turns running the country, racking up a track record of corruption and malfeasance. The Socialists also took a drubbing, albeit less so than the PP. PSOE lost 20 seats and fell from 28.8 percent support in 2011 to 22 percent in 2015.

 

The winners were two new parties, the left-wing Podemos (“We Can”) and the center-right Ciudadanos (Citizens), although it was former that really won the day.

 

In pre-election polls the Citizens party was projected to become the second largest party, but voters clearly decided that its free market economic strategies and backward positions on abortion and immigration made it look like PP-lite. Ciudadanos was supposed to win upwards of 25 percent. Instead it took less than 14 percent of the vote, although that translates into 40 seats.

 

For months the Spanish and European media have been filled with stories on Podemos’ falling support—one newspaper called it “No Podemos” (“No we can’t”)—and the New York Times essentially anointed Ciudadanos as the new up and comer. Voters had a different idea and gave the left party 20.6 percent of the vote and 69 seats in the parliament.

 

Spain’s political system is heavily weighted toward rural areas, where both the PP and the Socialists are strong. In Madrid, a candidate needs more than 128,000 votes to be elected. In a rural area that figure can be only a little over 38,000. The difference in votes between the Socialists and Podemos—both won more than five million—was only 341,000, but the Socialists have 90 seats and Podemos has 69.

 

Podemos came out of the 2011 plaza demonstrations by “Los Indignados” fighting against home foreclosures, social inequality, evictions, and massive cuts in support for education and health care. Its membership is mainly urban, although it has made gains in rural areas. Its grassroots organizing experience came in handy it when it needed to turn out votes.

 

Cuidadanos started as a regional party opposed to Catalan independence but, taking a page from Podemos’s book, went national last year.

 

Rajoy says he intends to form a government, but how that would work is not clear. Both Podemos and the Socialists—between them they control 159 seats—have made it clear they intend to fight any attempt by the PP to remain in power. Rajoy could try a coalition with the Citizens Party, but that would only amount to 163 seats, and one needs 176 seats to control the parliament. In any case, Citizens’ leader, Albert Rivera, says he won’t go into an alliance with Rajoy because of the PP’s history of corruption.

 

There are other members of the parliament representing the Basque regions and Catalonia, and Podemos emerged as the strongest party in both regions. However, it will not be easy for a Socialist Party/Podemos alliance to patch together a majority, and it will require navigating the tricky politics of Catalonia.

 

Catalonia, Spain’s richest province has 17 seats in the parliament, all of whom support either greater independence or outright secession. Catalonia became part of Spain after it was conquered by a joint French/Spanish army during the War of the Spanish Succession (1701-14). It has its own language and culture, which until recently was suppressed by Madrid. In September, 47.7 percent of Catalans voted for independence-leaning candidates, who now control the regional parliament.

 

The Socialists Party and Podemos are both opposed to Catalonian independence, although Podemos believes the issue should be up to the Catalans and supports a referendum on the issue. Ciudadanos is adamantly opposed to Catalan independence.

 

It might be possible to cobble together a government from the 159 seats that the Socialists and Podemos control with the 28 other seats representing Basques, Catalans, Canary Islanders, plus other leftish groups. While such a government looks fragile, it might be better than trying to forge a three-way alliance of Socialists, Podemos and Ciudadanos.

 

The latter party is opposed to government regulation, supports privatization of publically owned assets and, at its core, is socially conservative. The left, on the other hand, wants a strong role for government and is firmly opposed to privatization. And the election, says Socialist Party leader Pedro Sanchez, shows Spain wants “a move to the left.”

 

On January 13, King Felipe VI will most likely offer Rajoy the first shot at forming a government. If he does, it will be a short-lived minority one. Last month the right-wing Portuguese president appointed a minority rightist government, which only lasted a week. The Portuguese left is currently hammering together a three-way alliance that will run the country.

 

If Rajoy fails, and the Socialists can’t cobble something together, then there will have to be new elections. However, the left has the best chance of pulling a coalition together.

Whatever happens, the old two-party system is broken. Before this election, the two major parties controlled 75 percent to 85 percent of the votes. In this last election that fell to just over 50 percent. And that, as Podemos leader Pablo Iglesias says, means, “Spain is not going to be the same, and we are happy.”

 

The next hurtle is the EU. But while the Troika could beat up on Greece, Spain, with the fifth largest economy in the EU, is altogether another matter. The game is changing, and Spain is a new piece on the board, one that the Troika will not be able to bully quite as easily as Greece and Portugal.

 

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End To Right’s Reign In Spain?

An End To Right’s Reign In Spain?

Dispatches From The Edge

Dec. 12, 2015

 

 

“Volatile” seems to be the adjective of choice for pollsters going into the Dec. 20 Spanish elections, a balloting that will likely not only change the face of politics in the European Union’s (EU) fifth largest economy, but one that will have reverberations throughout the 28-nation organization. Long dominated by two parties—the rightwing People’s Party (PP) and the center-left Socialist Workers Party—the political landscape has atomized over the past two years. “For the first time in general elections in Spain,” says Manuel Mostaza Barros of Sigma Dos poll, “We have four parties polling above 15 percent when it comes to voter intentions.”

 

What levers those voters pull is very much up for grabs. Polls indicate that 41 percent of the electorate has yet to make up their minds. But whatever party ends up on top, it will have to go into a coalition, thus ending the reign of the two-party system that has dominated the country since the death of fascist dictator Francisco Franco in 1975.

 

The latest polls indicate that the rightwing PP will take a beating, dropping from the 44 percent that it won four years ago to around 28 percent, but it will still win the largest number of votes of any one party. Behind the PP are the Socialists, with close to 21 percent, followed by the center-right Ciudadanos Party at 19 percent, and the left-wing Podemos Party at 15.7 percent.

 

However, with a chunk of the voters yet to make up their minds, “These are the most volatile elections of recent years,” says pollster Mostanza. Pablo Iglesias of Podemos says, “We’re expecting a bumpy ride with political turbulence.”

 

Spain is just beginning to emerge from five years of draconian austerity that drove the national jobless rate to 27 percent, and above 50 percent in the country’s south and among its young people. While growth has finally returned, unemployment is still 22 percent, and far higher for those under 35. The gap between rich and poor has sharply widened, and many workers have lost their modest state support, because they have been jobless for more than two years.

 

The PP’s Prime Minister Mariano Rajoy has been campaigning on a program of ‘stay the course because things are improving.’ The Party’s slogan is “Espana, en serio” (“Spain, seriously”). Opponents have added a question mark to the end of that sentence.

 

It is true that Spain’s economy is growing—3.1 percent in 2015, and projections for 2.7 percent in 2016—but the austerity program had little to do with that turnaround. The fall in the euro’s value has lifted Spain’s export industries, and the precipitous drop of world oil prices—from $114 in 2014 to $35 today—are the major reasons Spain has clawed its way out of recession.

 

Spain’s woes began with the American banking crisis of 2007-08, which crashed Spain’s vast real estate bubble and threatened to bring down its financial system. At the time, Spain had a budget surplus and a modest debt, but speculators drove borrowing rates so high that the country found itself on the edge of default.

 

The Socialists were in power at the time and accepted a “bailout” from the “Troika”—the European Central Bank, the European Commission and the International Monetary Fund. The term “bailout” is a misnomer, since most of the money went to the speculators: German, Dutch, French and English banks. And the “price” the Troika demanded in return was a savage austerity regime that threw Spain into a five year recession, impoverishing millions of its citizen, and driving the jobless rate to over a quarter of the country.

 

However, the Spanish did not go quietly into that good night. Starting in 2011, hundreds of thousands of “indignatos” occupied the plazas of Spain’s great cities, a massive outpouring of rage that eventually led to the formation of Podemos—“We can.” The Occupy Wall Street movement in the U.S. was an offshoot of the plaza demonstrations.

 

Podemos shocked the country in 2012 by winning 8 percent of the vote in the European parliamentary elections and eventually polling as high as 24 percent, making it the second largest party in the country. Since then its poll numbers have fallen for a variety of reasons, but it is still likely to win close to 50 seats in the 350-member parliament.

 

There are a number of complicating factors in the upcoming elections, some national, some regional, particularly in the case of Spain’s wealthiest province, Catalonia.

 

The Spanish newspapers and the international media are harping on Podemos’ declining support—some have been hard pressed to dampen their obvious glee—but the 27 percent was always a soft number. Indeed, Podemos activists charge that the figures were deliberately inflated so that when later polls reflected a decline in support, the media could claim that the left party was “out of steam.”

 

The mass media—dominated by Spain’s elites—have been relentless in their attacks, and Podemos, the most resource-poor of the four major parties, has struggled it get its message out. But the party is a grassroots organization, and it knows how to get out the vote. Plus, in last May’s regional elections Podemos-allied candidates were elected mayor in Madrid, Barcelona, Cadiz, Zaragoza and several other cities.

 

Ciudadanos is the wildcard in this election. Originally a Catalan-based party formed to oppose the push for Catalonian independence, it now has a national profile. It is also anti-abortion and anti-immigrant, and its economic policies are closer to the PP than the Socialists, let alone Podemos. It is, however, deeply critical of the PP’s corruption, and generally supports the kind of constitutional changes favored by the more left forces.

 

The Party’s telegenic leader, Albert Rivera, is hard to pin down on anything but Catalonia and taxes: he opposes independence and he wants to cut business taxes. Whether voters will be attracted to the party’s vague centralism remains to be seen.

 

Catalonia is another wildcard. In the Sept. 27 regional election, the pro-independence parties took 47.7 percent of the vote and 72 of the 135 seats in the regional parliament. While pro-independence parties hailed it as a major victory, the PP government in Madrid called it a defeat for the breakaway movement because the independence parties drew less than 50 percent of the voters.

 

Catalonia was conquered by a joint French and Spanish army during the War of the Spanish Succession (1701-14) and has never quite reconciled itself to rule by Madrid.

 

Podemos took some losses in the Sept. 27 vote, largely because they are caught in the middle. The Party does not want Catalonia to breakaway from Spain, but it also supports the right of the Catalans to hold a referendum to decide the matter. Standing on the sidelines is not a successful formula in polarized Catalonia.

 

Just as it did in the Greek and Portuguese elections, the EU has waded into the Spanish elections. Brussels has showered the PP government with praise, and the Troika has eased up on its austerity demands, allowing the PP to put forth modest spending increases for education and social services. The EU has also warned Catalans that if they break free from Spain, they cannot assume they will be able to maintain their membership in the organization. Similar threats were aimed at Scotland when it was considering breaking free from Great Britain.

 

The EU and the PP have also warned Spaniards that if they don’t support the PP’s economic program, they could end up like Greece. That line of argument didn’t work in last month’s elections in Portugal, where a coalition of center-left forces has taken control despite a massive media campaign warning the Portuguese that failure to support the rightwing government’s austerity policies would lead to ruin and damnation. Images of Greek pensioners lined up at banks flooded television ads.

 

 

But Portugal has now become a model for a center-left takeover. Initially the rightwing coalition claimed that, because it received the largest number of votes, it should continue to rule. The rightwing Portuguese president agreed and re-appointed the old government, a maneuver that lasted a little more than a week, when they were voted out of office by the progressive coalition.

 

The PP’s Rajoy supported the position of the rightist Portuguese government even though it had received only 38 percent of the vote. The final outcome in Lisbon may be a re-run of Portugal: Rajoy gets the most votes of any single party, but not enough to rule.

 

The difference in Spain is Ciudadanos. The Spanish party is much more conservative than the center-left Socialist Party in Portugal, and there is a possibility that it could go into coalition with the PP. That would give a center right government a majority in the parliament.

 

Ciudadanos leaders are coy about their intentions and also a little wary of being swallowed up by the more conservative Popular Party. When the English Liberal Party made a decision to join with the Conservatives, voters punished them in the next election go-around. Ciudadanos leaders are concerned that the same thing could happen to them.

 

Whatever the outcome, nothing is going to be quite the same in Spain after Dec. 20. The rightwing will almost certainly lose its majority, and that, in turn, will crimp Rajoy’s efforts to intimidate the media and criminalize mass demonstrations through the Citizens Security Law that the PP rammed through Parliament. It will also mean a setback for the policies of the Troika. And one hopes, an antidote to the growing strength of racist and xenophobic forces in Europe.

 

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Portugal: The Left Takes Charge

Portugal: The Left Takes Charge

Dispatches From the Edge

Nov. 25, 2015

 

 

After several weeks of political brinkmanship, Portugal’s rightwing president, Anibal Cavaco Silva, finally backed off from his refusal to appoint the leader of a victorious left coalition as prime minister and accept the outcome of the Oct. 4 national elections. Silva’s stand down has ushered in an interesting coalition that may have continent-wide ramifications.

 

Portugal’s elections saw three left parties—the Socialist Party, the Left Bloc, and the Communist/Green Alliance take 62 percent of the vote and end the rightwing Forward Portugal Party’s majority in the 230-seat parliament. Forward Portugal is made up of the Social Democratic Party and the Popular Party.

 

Even though Forward Portugal lost the election—it emerged the largest party, but garnered only 38 percent of the votes—Silva allowed its leader, former Prime Minister Passos Coelho, to form a government. That maneuver lasted just 11 days. When Coelho introduced a budget loaded with austerity measures and privatization schemes, the left alliance voted it down, forcing the government to resign.

 

Rather than giving the left alliance a chance to form a government, however, Silva—a former leader of the Social Democrats—insisted that the alliance pledge in writing that it would maintain the country’s role in NATO and commit itself to euro zone financial rules. Portugal is a member of the 19-country euro zone, those countries in the 28-member European Union that use the euro as a common currency.

 

Silva’s threat was real. While the president’s term only runs until January, the constitution requires a six-month delay between the appointment of a new president and fresh elections. It would have been eight months before the left alliance could take power and roll back some of the more onerous austerity measures that Forward Portugal had installed.

 

In the face of growing outrage and a threatened general strike, however, Silva finally asked Socialist Party leader Antonio Costa to form a government.

 

Portugal is the victim of the great 2008 international banking crisis. At the time, Portugal’s debt was small and its public spending modest, but speculators drove up the price of borrowing beyond what the country’s small economy could manage. Through no fault of its own, Portugal suddenly found itself on the edge of bankruptcy.

 

In 2011, the “Troika”—the European Central Bank, the European Commission, and the International Monetary Fund—lent Portugal $83 billion, but in exchange instituted an austerity regime that raised taxes, slashed education and medical care, cut wages and pensions, and drove 20 percent of the population below the poverty line. The crisis forced almost half a million young people to emigrate, and Portugal ended up with one of the highest income disparities in Europe.

 

The left alliance government is unprecedented in Portugal, where the Communists and the Socialists have locked horns since the 1974 Carnation Revolution overthrew the 48-year old dictatorship. But four years of austerity have apparently convinced everyone on the left that there needs to be some immediate relief.

 

The Communists and the Left Bloc have agreed to temporarily shelve their demands to exit NATO and the euro zone, and the Socialists have agreed to roll back austerity measures, cut taxes, and raise pensions and wages. Privatization will be on hold.

 

There are still major differences within the alliance, however, and not just over dumping the euro and getting out of NATO. The Communists and Left Bloc want debt reduction because much of the country’s encumbrances are the result of private speculators, not profligate public spending. The Socialists did not mention debt reduction during the election and, at least for now, seem committed to repaying all debts.

 

However, the new government is pledged to loosen austerity’s grip and to challenge the Troika’s tight-fisted formula for economic recovery with one based on economic stimulus. If successful, that could model a new strategy for the rest of Europe, where, in spite of years of austerity, economies are still sluggish or in recession.

 

Even in countries that show growth, the rate is relative. Spain, for instance, is growing at a respectable 3 percent, but unemployment is over 20 percent—close to 50 percent for young people—and its gross domestic product has still not reached pre-2008 levels. Wages have declined in nine out of 14 quarters. According to Simon Tilford of the Center for European Reform, Spain’s recovery is not due to austerity, but rather, to low interest rates, the declining value of the euro, and a worldwide fall in oil prices.

 

Certainly the new Portuguese government will not be welcomed by Madrid, where the declining popularity of the rightwing Popular Party’s threatens its control of the Spanish Parliament. It is not unlikely that the Dec. 20 elections in Spain will produce a very similar outcome to Portugal’s: the Popular Party will lose its majority to the center-left Socialist Party and the left Podemos Party. Whether that will result in the kind of coalition that Portugal’s left has stitched together is not clear, in part because the centrist Citizen’s Party is a bit of a wild card and there are complex politics around Catalan independence.

 

However, even if the smaller Spanish parties cannot unite a’ la Portugal, they will put the brakes on the Popular Party’s austerity policies and its push to muzzle the media and curtail mass demonstrations.

 

The Portuguese model may end up having an influence on the rest of the European left, where conversations are going on about how to begin moving the continent away from the policies of the Troika. There are at least two major currents now engaging the left, the so-called “Plan A” and “Plan B.”

 

Plan A—supported by the United European Left/Nordic Green Alliance, the group representing the left parties in the European parliament—calls for democratizing the European Union and the European Central Bank, taxing the rich, raising wages, funding social services, and creating jobs through public investment. Plan A is backed by Spain’s Podemos, Greece’s Syriza, and Germany’s Die Linke (Left Party).

 

Plan B was launched Sept. 11 by five key figures in the European left—Oskar Lafontaine, a former leader of Die Linke, Italian parliamentary deputy Stefano Fassina, Jean-Luc Melenchon of France’s Left Party, and two former Syriza leaders, Zoe Kostntopoulou and Yanis Varoufakis. Plan B is somewhat more nebulous than Plan A, and not everyone who advocates it is on the same page. While it doesn’t contradict Plan A, most of its advocates are not sure the EU is really reformable.

 

According to Liam Flenady of Green Left Weekly, the September call “remains intentionally open to what this Plan B could look like.” For one thing, it comes off sounding a little wonky: “Parallel payment systems, parallel currencies, digitization of euro transactions, community based exchange systems…euro exit and transformation of the euro into a common currency.”

 

Not all of the five left figures are in agreement. Varoufakis, Greece’s former finance minister, is for staying with the euro, while the Italian Fassina is not. No one openly attacks Syriza, but most supported Popular Unity, the anti-euro split from Syriza that failed to win any seats in the last Greek election.

 

A Plan B summit is set for the end of the year.

 

The disagreements between—and within—the plans reflect the enormous complexity of the task facing Europe’s left, including how to present a united front while still searching for solutions that are not obvious. Is trying to democratize the euro zone like teaching a pig to whistle: can’t be done and annoys the pig? Can a country withdraw from a common currency zone without the Troika destroying its economy? Do countries within the euro zone have the right to experiment with different economic strategies?

 

Greece was forced to swallow the Troika’s medicine, in part because Syriza assumed that the Troika was essentially rational and actually interested in resolving the crisis. It was not, because the Troika saw Syriza’s resistance as the precursor to a continent-wide movement against its austerity policies.

 

Portugal is charting a somewhat different path than Syriza. Instead of head-on confrontation, the left is trying to maneuver while strengthening its base by improving people’s lives. Disagreements will eventually surface—hardly an unhealthy thing—but the Portuguese alliance has decided to kick that can down the road.

 

On Nov. 20, the Portuguese united left used its majority to approve a law allowing same sex couples to legally adopt children and permit lesbians to obtain medically assisted fertilization. That little act hardly shakes the foundation of the EU, and one doubts it caused the Troika to tremble. But suddenly Portugal is a little bit kinder place than it was a month ago.

 

Small things can lead to big things.

 

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Portugal and Europe’s Democracy Crisis

Portugal’s Democracy Crisis

Dispatches From The Edge

Nov. 5, 2015

 

Within a week, Europe will face one of the most serious challenges to democracy it has seen in many decades. On Nov. 10 Portugal’s minority rightwing government will likely lose a vote of confidence, initiating a series of events that will determine whether voters in the European Union (EU) still have the right to a government of their own choosing.

 

The crisis was set off by the Oct. 4 elections that saw the rightwing Forward Portugal coalition, which has overseen austerity policies that have driven 20 percent of the population below the poverty line, lose its majority in the parliament to three parties on the left, the Socialist Party, the Left Bloc, and a Communist/Green alliance.

 

Forward Portugal, an alliance of the Social Democratic Party and the Popular Party, lost 28 seats in the election, dropping from 135 seats to 107. The left parties, meanwhile,won over 50 percent of the vote and picked up 25 seats, for a total of 122. An animal rights party won 1 seat.

 

The Portuguese parliament has 230 seats. A majority is 116 seats.

 

Instead of asking the left if it could form a government, however, on Oct. 23, Portuguese president Cavaco Silva—a former prime minister for the Social Democratic Party—reappointed the rightwing alliance’s leader, Pedro Coelho as prime minister.

 

Silva went further, however, delivering an incendiary speech in which he declared that he would never appoint “anti-European forces” to run the government, and denouncing parties on the left for opposing the North Atlantic Treaty Organization (NATO) and the common currency, the euro.

 

“It is my duty, within the constitutional powers, to do everything possible to prevent false signals being sent to financial institutions, investors and markets,” he concluded.

 

The speech has set off a firestorm in Portugal, one that is reverberating throughout the EU. It is one thing for the EU and its financial enforcer, the Troika—the European Commission, the European Central Bank, and the International Monetary Fund—to exert pressure on a country from the outside. It has done exactly that in Greece. It is quite another to say that a particular political or economic program is beyond the pale.

 

Portugal’s austerity program, originally introduced by the Socialist Party, has impoverished the country and driven half a million young people emigrate. Unemployment, while down from its height of 17 percent, is still at 12 percent, and over 31 percent for youth. One out five in the population is below the poverty line of $5,589 a year, and Portugal has one of the highest in income inequality in the EU. The average household income has fallen 8.9 percent since 2009. Exhausted by austerity, Portugal’s voters turned against the rightwing government and turned it into a minority.

 

In what is an historic development—one commentator called it a “Berlin Wall moment”—the three left parties put aside their differences and agreed to form a united front government.

 

While all the left parties opposed austerity—the Socialist Party having finally seen the light— they differed on many other issues. The Left Bloc and the Communist Green alliance opposes Portugal’s membership in NATO and wanted the country to get out of the Eurozone, the group of 19 countries in the 28-member EU that use the euro.

 

The euro is a controversial issue. It has been a boon for Germany, Austria and the Netherlands, and to the large banks that dominate European finance. But it has had a generally negative impact on many other countries, particularly those in the distressed south—Italy, Spain, Greece, and Portugal. Since Ireland is also in this same the problems are economic, not geographical.

 

As far as NATO goes, there are a number of political organizations that argue the old Cold War alliance should be retired and that NATO does more to raise tensions on the continent that it does protect its members.

 

In any case, opposition to NATO and the euro are hardly opinions that should bar one from government, but that is exactly what the Portuguese president has done.

 

He has received support for his position as well. Joseph Daul, president of the center-right grouping in the European Parliament, said, “The sacrifices made by the people of Portugal must not be jeopardized by a government composed of anti-EU and anti-NATO parties.” German Chancellor Angela Merkel said an anti-austerity government in Portugal would be a “very negative” development.

 

Some of the comments have an Alice in Wonderland quality to them. Coelho said, “It’s time to say loud and clear that the Socialist Party lost the elections…we’re not going to stand the elections results on their head.” He was joined by the rightwing Prime Minister of Spain, Mariano Rajoy, who warned, “coalitions of losers want to join forces to do away with moderate majorities in our societies, to attain through deals what they didn’t achieve at the ballot box.”

 

But as the Socialist Party grouping in the European Parliament pointed out in a statement, “Portuguese voters were very clear in the last general election with a strong majority (62 percent) against the austerity policies of the last four years.”

 

Rajoy, of course, has his own problems. His rightwing People’s Party will probably lose its majority to the Socialist Party and the leftwing Podemos Party in Spain’s upcoming Dec. 20 elections, but it still may be the single largest vote getter. He wants to stay in power and the Portugal maneuver gives him a strategy for doing just that.

 

What clearly surprised the Portuguese right is that the left could agree to work together. The Socialist Party has long been at loggerheads with the Communists, who accuse it of being too much like the rightwing Social Democratic Party. Indeed, the fact that the Socialists did not win the election outright is in part due to the fact that voters are still angry with the party for introducing the austerity policies in the first place.

 

But the dramatic gains for the Left Bloc—it is now the third largest in the parliament, ahead of the Communist/Green alliance—clearly convinced the left that it should find issues to agree on. After several meetings, the Left Bloc and the Communist/Greens agreed to temporarily shelve the euro and NATO issues, and the Socialists pledged to end austerity.

 

There are still major questions to iron out. The Left Bloc and the Communist/Greens want to challenge Portugal’s staggering debt—they have a solid basis for claiming that much of it is illegitimate—while the Socialists have been silent on the subject. Eventually the euro, NATO, and the debt will be on the table, but such disagreements are hardly unique to Portugal. There is virtually no government in Europe without ideological divisions.

 

In any case, despite their differences, the left parties are on the same wavelength as the majority of Portuguese voters: no more austerity.

 

If the Portuguese president refuses to allow the left to form a government and Portugal Forward is defeated in the Nov. 10 vote, Silva can appoint Coelho to run a caretaker government and call for new elections. But those won’t be for eight months. Silva’s presidency runs out in January, and new elections can’t be held for six months following the appointment of a new president.

 

The left has the votes to insure a president compatible with the will of the voters—they have already overridden the right’s candidate for Speaker of the House and put their own candidate in—but there will still be six months before the next election. Eight months is enough time for a rightwing caretaker government and its backers in the EU and the Troika to do considerable mischief. Greece has felt the power of the Troika and seen what it can do to undermine opposition to its policies.

 

During the recent Greek crisis, German finance minister Wolfgang Schaueble made it clear that what Greek voters wanted was irrelevant. Greece would bow to the Troika or the Troika would strangle the Greek economy, period. In essence, national governments should restrict themselves to things like what color park benches should be painted—provided the paint is affordable.

 

If this “soft coup” stands, taxes, interest rates, public ownership, investments, and economic strategies to control inflation and unemployment—long the battleground for conflicting ideologies—will no longer be issues to be decided democratically. Unelected bodies, like the Troika, will make those decisions, in spite of the fact that many of the Troika’s policies—like austerity—are highly controversial and have an almost unbroken track record of failure.

 

Democracy is what is at stake in Portugal, and it is a crisis that cuts to the heart of the European Union experiment. Do people still have the right to make decisions about policies that have a profound impact on their lives? Or do they only get to quarrel about the color of park benches?

 

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Portugal: European Left Batting 1,000

Portugal: Europe’s Left Batting 1000

Dispatches From The Edge

Oct. 7, 2015

 

In spite of a well-financed scare campaign, and a not very subtle effort by the European Union (EU) to load the dice in the Oct. 4 Portuguese elections, the ruling rightwing Forward Portugal coalition lost its majority in the parliament, Left parties garnered more than 50 percent of the vote, and the austerity policies that have paralyzed the country for four years took a major hit.

 

Along with last month’s Greek election, it was two in a row for the European Left.

 

While most the mainstream media touted the election as a victory for Prime Minister Passos Coelho’s Social Democratic Party/Popular Party coalition, the rightist alliance dropped from 50.4 percent in the 2011 election to 38.4 percent, losing 28 seats. In contrast, the center-left Socialist Party picked up 11 seats, the Communist/Green alliance 1 seat, and the Left Bloc 13 seats. All in all, the Left went from 40 percent of the vote in 2011 to a little over 50 percent in 2015.

 

There are still four seats to be determined by the votes of expatriates, but even if all four went to Forward Portugal, it would still be short of a majority. And given that a flood of young, mostly professional, Portuguese fled the austerity regime inflicted on the country by the “Troika”—the European Central Bank, the International Monetary Fund, and the European Commission—those votes may well end up in the Left’s column.

 

The parliament has 230 seats. The Right now controls 104 and the left 121. A majority is 116 seats.

 

The surprise in the election was that the Left Bloc more than doubled its representation in spite of the fact that there were three Left parties vying for voters.

 

The Right ran endless images of poor Greek pensioners lining up at banks, and warned voters that voting for the Left could result in the kinds draconian measures the EU took out on Greece, but the scare tactics didn’t work.

 

The Troika also eased up on Portugal prior to the election, exactly the opposite approach it took in Greece, even though Portugal’s debt is still high and its growth is anemic—1.6 percent this year. Unemployment has come down from a high of 17 percent, but it is still 12 percent, and over 30 percent among youth—those that haven’t emigrated. Out of a population of 10.4 million, some 485,000 young people emigrated from 2011 to 2014.

 

In what one leftwing party member told the Financial Times was an “unseemly interference” in the election, Standard & Poor’s upgraded Portugal’s credit rating just two weeks before the election. S&P has long been accused of politicizing its credit ratings.

 

Forward Portugal is already backing away from some of its more bombastic attacks on the Left, and Coelho says his coalition would enter into “necessary agreements” with the Socialists in the future. Most commentators think the new parliamentary alignment is too unstable to last long.

 

The question now is, can the Left unite to roll back the four years of austerity that has impoverished the country? One in five Portuguese are below the poverty line of $5,589 income a year, and the minimum wage is $584 a month. Portugal has one of the greatest income disparities in Europe—the top 20 percent earn six times more than the bottom 20 percent—and education levels are among the lowest in the EU.

 

But much of the Left is not on the same page. Indeed, it did surprising well in the election considering its message was hardly consistent.

 

The Socialist Party is still saddled with the fact that it instituted the austerity policies in 2011 when financial speculators in the rest of Europe drove up interest rates on borrowing. Contrary to the Right’s charge, the debt was due to financial speculation, not spending. The Socialists also had a corruption problem, so voters turned to the Right in the 2011 election.

 

With an absolute majority in the parliament, the rightist alliance slashed wages, cut back pensions, privatized public property and raised taxes. One of the few checks on the slash-and-burn assault was the Portuguese Constitutional Court, which blocked some of the more onerous austerity measures.

 

In this election the Socialists ran against the austerity policies, but the message voters got was mixed: roll back austerity, but abide by EU rules. However, given that it was the EU rules that brought on the austerity, it was a message that voters found hard to decipher. The Socialists were also silent on the debt, a large part of which is of a questionable nature.

 

A study by the Committee for a Citizen’s Audit on the Public Debt found that most debt was not due to government spending, but massive tax cuts and rising interest rates. The Committee concluded that as much as 50 percent to 60 percent of most countries debts were “illegitimate.”

 

The Left Bloc—which is close to Greece’s Syriza and Spain’s anti-austerity Podemos Party—not only opposed the austerity, it demanded debt reduction. Indeed, without debt reduction—a so-called “haircut”—it is unlikely that small countries, like Greece, Portugal or Ireland, can ever emerge from their current economic crises. After years of austerity, Portugal’s debt is still among the highest in Europe.

 

The Communist/Green alliance did marginally better than 2011, although the Left Bloc passed if for the first time. The Communist Party has a strong reservoir of respect in Portugal because of its long resistance to the 48-year military dictatorship. It has been a consistent opponent of the austerity policies, but so far it has shown little interest in working with the Socialists, which its leaders say is Forward Portugal light. The Party calls for an exit from the Eurozone, the 19 countries in the 28-member European Union that use the Euro. While some on the Left also want to leave the Eurozone, the Socialist Party is committed to the common currency.

 

However, there is agreement scross the Left around privatizations and cuts, and that the crisis in housing, education, and daily life—including food and medical care—has to be addressed. Without a majority, the Right will have to back away from more austerity and plans to privatize some schools and public pensions.

 

Does this election have reverberations outside of Portugal? The Wall Street Journal’s headline on the outcome was that it was “a cause for concern” for Spain’s rightwing government, which goes before the voters in about 10 weeks.

 

But if there is one thing that the recent election in Greece made obvious, it is that small countries cannot take on the power of the EU by themselves. The European Union is now the single most powerful alliance of capital on the planet, and it is not a bit shy about crushing anything it sees as a potential threat. However, the Troika’s efforts to scare—and bribe—Portugal failed.

 

So, what is to be done?

 

In the long run, a common currency was a bad idea for everyone but Germany, Austria, the Netherlands and the banks, but a quick exit would be like pulling a spear out of your leg—without careful preparations you are likely to hemorrhage to death. While the ultimate goal should be to move away from the euro, the process may take awhile.

 

One thing the European Union is vulnerable on is democracy. Being in the EU essentially means abandoning sovereignty. The recently signed agreement between the Troika and Greece says that the former can veto any policy it does not agree with, including anti-corruption legislation aimed at tax scofflaws. Essentially, democracy has become dispensible.

 

Syriza and the Portuguese Left successfully made this an issue in their campaigns, and it has great potential to become a pan-European issue. At the same time, there is potential danger with the issue of sovereignty, and the Left must clearly distinguish itself from the xenophobic European Right’s opportunistic adoption of the issue.

 

Ronan Burtenshaw, vice-chair of the Irish Congress of Trade Union Youth Committee and Coordinator of the Greek Solidarity Committee in Ireland, has proposed that the European Left look to Latin America for a model.

 

Mercosur, the huge Latin American trading block, is the third largest on the planet, but it doesn’t dictate economic policy to its members. The Bolivarian Alliance, ALBA, draws progressive countries into a political and economic union, and the Community of Latin American and Caribbean States has replaced the U.S. dominated Organization of American States. The Bank of the South offers development loans without the rigid strictures of the IMF and the World Bank.

 

Latin America is a counter to the European mantra that “there is no alternative” to economic crisis and debt but austerity. Each country in the region developed its own way of turning away from the market-driven, austerity laden “Washington consensus” that blitzed economies from Brasilia to Santiago during the 1980s and ‘90s. And the Left played an important role in establishing continent-wide political and economic connections, specifically in Venezuela, Brazil, Argentina, Ecuador and Bolivia.

 

There are, of course, differences. Many in the European Left contrast Argentina’s successful replacement of the dollar with the peso and its refusal to service its debt with Syriza’s acceptance of the Troika’s demands.

 

But Argentina is a big, powerful country, self-sufficient in energy and food. Greece—or Portugal or Ireland—is neither. And while Argentina had support from other countries in the region, Greece stood alone, even from parties like the French Socialists and the German Social Democrats.

 

Somehow the Left will have to chart a perilous passage between resisting austerity on one hand, and not committing suicide on the other—or rather, allowing the Troika to impoverish its base even more than it currently has. How that will happen is hardly clear, but solidarity is its essential ingredient, along with a willingness to work with others.

 

The Left will have to persuade or pressure center-left forces to abandon their romance with the euro and confront the social crisis created by austerity. Social democratic parties should take note that moving to the right does not translate into political power. Syriza smoked the center forces in Greece, and the Left Bloc made the biggest gains in Portugal.

 

To a certain extent, this process is underway with the election of long-time leftist Jeremy Corbyn to head the British Labor Party.

 

In his speech at the Fete de la Rose this past summer, former Greek finance minister, Yanis Varoufakis, told the Socialist Party gathering that what the Left in Greece had done was to give Europeans “a sense that democracy can change things.” Portugal was another step on that path, with Spain due up in December and Ireland in April.

 

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