On Saturday 25 February, thousands took to the streets of Lisbon to protest against rising living costs. New demonstrations have been announced for the coming weeks. At the same time, the country is being shaken by a wave of industrial action, spearheaded by school teachers. Indeed, living standards are deteriorating dramatically amidst an unprecedented housing crisis. António Costa’s Social Democratic government, with an absolute majority in parliament since January 2021, is applying pro-capitalist policies, and bears full political responsibility for the crisis.
For a decent life
Portugal is the poorest country in Western Europe. The minimum monthly wage, now standing at €760, is roughly the same as in Greece. Yet living costs in Lisbon and Porto are not lagging far behind from wealthier capitals where salaries are much higher. The country experienced double-digit inflation in autumn 2022. It remains at a historically high level, over 8 percent. The price of basic foodstuffs, however, is growing faster, at 23.4 percent as of February 2023.
Needless to say, prices are not being matched by wages. In the private sector, wages increased by 2.3 percent last year and are forecast to rise a meagre 2.8 percent this year, well below inflation. According to a recent poll, 70 percent of citizens declare their purchasing power fell over 2022. A third of the population is left with only 10 percent of their income after paying its bills. This is compounded with the hike in interest rates, which affects mortgage holders and other small debtors. But not everyone’s lot is worsening: capitalists have been making handsome profits from inflation, with an increase in profits of €889 billion only in the first half of 2022!
An additional problem that is gnawing at living standards in Portugal is the dramatic increase in housing costs, which is especially serious in Lisbon and Porto. The virtual absence of development in public housing, the proliferation of tourist accommodation, speculation, and lack of private investment in affordable housing, have put the housing market under tremendous strain. Rents have increased 35 percent since 2018 across Portugal. The average rental price per square metre now stands at almost €16 a month in Lisbon.
The two-tailed whip of inflation and the housing crisis is rousing the working class into action / Image: fair use
Landlords, speculators, and multinationals such as Airbnb are cashing in on this crisis. They profit from the suffering of the working class, which is forced to move further and further away from their workplaces or to rent crammed and unsanitary accommodation. The iron fist of the bourgeois state enforces the will of the market through evictions, as the government lifts the protective legislation that was in place during the pandemic.
A dramatic expression of this social drama (which is paradise for the speculators!) was the fire in an overcrowded flat in the central Lisbon neighbourhood of Mouraria, where two died. It was revealed that 22 people, all of them foreign migrants, lived on the ground floor where they rented bunk beds for €150 a month. This was no unfortunate accident: it is a consequence of capitalist profiteering and speculation.
The two-tailed whip of inflation and the housing crisis is rousing the working class into action. On 25 February, thousands took to the streets of Lisbon to protest against the cost of living crisis and capitalist profiteering. The march was called by a broad platform, ‘Por uma vida justa’ (‘For a decent life’), set up by activists from different movements and organisations, including the Communist Party and the left-wing Bloco. Grassroots work in the outlying districts of Lisbon such as Amadora and Loures preceded the march, where people of African descent played a prominent role.
Workers from the Portuguese former colonies in Africa represent one of the most oppressed and exploited layers of the Lisbon proletariat. It is important to develop these efforts by turning demonstration support groups into permanent committees, which should work towards bringing the struggle up another notch. The demonstration for decent housing called for 1 April should become an important milestone for the class struggle.
The unions enter the fray
As the demonstration for a decent life neared parliament on Saturday, it joined forces with thousands of striking teachers, who had gone on a separate march to press their demands on the government. In December 2022, the schoolteachers’ two major trade unions launched a wave of rolling strikes, which also involved other sectors of school staff. They were calling for reforms in the unfair career progression system in education, which is multi-tiered and tends to bottleneck teachers in the lower, precarious rungs of the scale. They have also called for wage increases that compensate inflation.
This struggle has spiralled into a protracted conflict with the government, which is refusing to yield and is trying to wear out the teachers. Strike action has been buttressed by a series of mass demonstrations over the winter, some of which have mobilised as many as 100,000 teachers and supporters on the streets of Lisbon. The main weakness of the teachers is that they are divided into two trade union blocs, one, FENPROF, connected to the established labour movement, and another, STOP, newer and broader in its membership base. At times, the two organisations have failed to join forces, thus undermining the movement.
There are rumblings in other sectors of the Portuguese working class. The staff of the national railway company launched a strike that has paralysed trains across the country. The airline TAP, threatened with closure due to mismanagement by the capitalists and the government (which bailed it out), has also been on strike numerous times in recent months. Many other sectors, from food distribution to court of justice staff, have threatened industrial action. The Portuguese working class is starting to flex its muscles.
Workers now need unity and bold leadership. All unions, in alliance with the movement for housing and for a decent life and the left-wing parties, Bloco and the Communist Party, should start working towards a general strike prepared through patient grassroots organisation and agitation. General elections are not scheduled until 2025 and the left parties are relatively weak at the moment. Workers are looking for a way out through the economic struggle: for this reason, the movement should set its sights on a general strike, which, if well prepared, would deliver a heavy blow to the capitalists and their allies in government.
Costa’s absolute majority
A year after the elections, the Costa government has lost support in opinion polls and displays signs of burnout / Image: PES Communications, Flickr
In 2015, António Costa’s Social Democrats formed a minority government supported by the left-wing Bloco de Esquerda and the Communist Party. This arrangement crystallised into the so-called geringonça (‘contraption’), an informal pact for government stability, which remained in place, with some ups and downs, until 2021. The Bloco and the Communist Party hoped to push the Social Democrats leftwards and raise their own profile. However, Costa skilfully capitalised on the (rather paltry) progressive reforms that he implemented under pressure from the left, while sharing out responsibility for his numerous capitulations.
The geringonça gradually undermined the left-wing parties while Costa strengthened his hand. When he felt strong enough, he orchestrated a government crisis over the approval of the 2021 budget, calling early elections for January 2022 that he won with an absolute majority. The Social Democrats could now pursue the pro-capitalist policies that the bourgeoisie, the EU and the US imperialists demanded, unencumbered by his former left-wing allies.
However, as the IMT comrades of the Colectivo Marxista explained at the time, the new government was a giant with feet of clay. Costa now bore full responsibility for his reactionary measures in the midst of a major capitalist crisis. A year after the elections, the Costa government has lost support in opinion polls and displays signs of burnout. A series of corruption scandals and internal squabbles have aggravated this attrition. Yet the left is so far failing to capitalise fully on these favourable conditions.
The Communists and the Bloco need unity in action, overcoming their traditional sectarianism. More importantly, they need to enthuse the working class and the youth by going beyond narrow economic demands. The workers and youth that are springing into action want more than a new version of the geringonça pact. As the Colectivo Marxista points out, agitation for partial demands must also put forward the vision of a different, better society: of the expropriation of the capitalists and socialist revolution!