June 2011 Portuguese Parliamentary Elections: Pre-Election Report

As part of our continuing series of election reports, we are pleased to welcome the following guest post from Pedro Magalhães of the Social Sciences Institute of the University of Lisbon, Portugal, with a pre-election report on the June 2011 Portuguese Parliamentary Elections.

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In the February 2005 legislative elections in Portugal, José Sócrates, the leader of the Portuguese Socialist Party (PS), achieved something that his predecessors had pursued in vain throughout more than three decades of democratic rule: an absolute single-party majority for the Socialists. Six years have now elapsed since that historic achievement. Unemployment has risen from 7.6% to 11.1%. The economy has grown at a meager average rate of 0.6% per year. Consumer confidence has reached the lowest level ever recorded. Central government debt represents now 93% of GDP, up from 71% in 2005. And the budget deficits in 2009 and 2010 were close to -10% of GDP, the largest in the last 160 years. Last March 23rd, all opposition parties rejected a new package of austerity measures proposed by the PS government. Subsequently, Sócrates resigned. Parliament was dissolved and elections called for June 5th. In the meantime, however, the Portuguese government was forced to recognize that, by the end of May, it would stop being able to meet its debt obligations. On April 6th, the PS caretaker government formally requested financial rescue from the European Commission (EC) and the International Monetary Fund (IMF). On May 3rd, just last Tuesday, the terms of a $115 billion package were finally agreed upon.

On the basis of the previous paragraph, a reasonably informed reader will not have much difficulty in making an educated guess about the likely outcome of the coming June election: a massive electoral punishment of the incumbent Socialists. Reading this, this or this, for example, one would find out that, in Portugal, the electoral performance of incumbents tend to be strongly affected by economic outcomes. Hibbs’s partisan theory seems to work reasonably well in this case, as left-wing governments seem to be particularly punished by increases in unemployment, an ominous finding for the current PS government. A look at several short-term correlates of electoral behavior in the recent polls would certainly increase one’s near certainty about an incoming electoral landslide: PM Sócrates’s approval ratings are extremely low; close to 80% of the electorate evaluates the government’s performance as “bad” or “very bad”; and more than 90% describe the situation of the economy in the same way.

Therefore, what follows will probably come as a surprise: in fact, nothing like an electoral landslide is anticipated for the coming June election. The figure below plots voting intentions, as captured by the five main polling companies in the country since January 2010, for the five main Portuguese parties: PS, PSD, CDS-PP (the party furthest to the right in parliament), CDU (the Communist and their Green Allies) and BE (the Leftist Bloc, a left-libertarian party). In late March 2010, the election of a new leader – Pedro Passos Coelho – of the center-right PSD seems to have taken his party, for the first time in eight years, to a leading position in voting intentions. The approval of the 2011 budget, which included reductions in civil servants’ wages, a freezing of their pensions, and an increase of VAT rates, was accompanied by a further decline in voting intentions for the PS. However, the advantage of the PSD in the polls has never been larger, on average, than 10 percentage points. And in recent weeks, particularly after the request for financial rescue made to the EC and the IMF, the PSD’s advantage seems to have dwindled. At the very least, a debacle such as the one experienced by Fianna Fáil in Ireland seems to be completely out of the question for the Socialist incumbents. And it even seems wise not to discard completely the possibility that PSD might end up losing the election to PS after all.

Voting intentions in Portugal since January 2010 (lines represent local regression smoothing, 10% bandwidth).

How is this even possible? Several commentators, especially those most adversarial to the Socialists, have resorted to explanations linked to voters’ irrationality or PS’s alleged control and manipulation of the media. “Our polls show there is still a part of the electorate that wants to be deceived”, a PSD politician argued. “Politics is not an eminently rational, informed and enlightened equation”, argued another. Maybe all that is true. But perhaps we do not need to go there in order to account for the relative resistance of the PS to electoral erosion or for PSD’s inability to capitalize on the current state of the economy.

A first explanation must acknowledge that voters’ ability and willingness to punish incumbents for economic outcomes hinges on the clarity of responsibility for those outcomes. And several things have happened in the last year and a half to make the question of “who is responsible for what” less clear than what the center-right opposition might desire. As spreads in Irish and Portuguese sovereign bonds began their rise in May 2010 and austerity policies were made unavoidable, the Socialists placed responsibility for Portugal’s increasingly unsustainable financial situation on Greek contagion, the role of the unregulated financial markets and on the alleged unfairness of the downgrades made by the rating agencies, especially as indicators related to growth and exports showed that, by early 2010, some semblance of economic recovery might already be taking place. Most importantly, the Socialists had lost their absolute majority in the September 2009 elections. The fact that the PS minority government needed now support in parliament to pass urgent austerity measures placed the new leader of the PSD in a dilemma. Should Passos Coelho, however reluctantly, lend a hand to the government, in order to present himself as a credible leader who was serious enough to place the interests of the nation first and foremost? Or should he blankly avoid to be held even partially accountable for the necessary measures? The answer throughout 2010 was the former, as two economic austerity packages were negotiated between the PS and PSD last year. Unsurprisingly, however, when asked about whom they should blame for the economic state of affairs, voters could not help displaying a complex mix of perceptions. A poll conducted by the Catholic University after the first PS/PSD agreement showed, on the basis of a multiple-choice question, that only 21% of respondents placed full and exclusive responsibility on the current government, and that more than one in four voters also blamed the international crisis or “banks and financial institutions”.

The question of who should be held responsible or get credit for what became even more complex since last March, when the government proposed a third major austerity package, which was negotiated in Brussels and announced prior to any significant exchanges with the PSD. Its rejection, Sócrates warned, would be inevitably followed by his resignation. Buoyed by polls that gave the PSD their best results for a very long time and allegedly under considerable pressure from within his party to force elections, Passos Coelho ultimately rejected the package. Since then, however, the PS’s discourse has been fully oriented to denounce the “immaturity” of Passos Coelho, whose willingness to cause elections is argued to have “thrown the country into the hands of the IMF,” placing Portugal in a weaker negotiating position and risking tougher austerity measures than those strictly necessary. To be sure, it is relatively clear that financial rescue was going to be needed at some point, regardless of whether the March package had been passed or not. But again, the sequence of events contributed to further blur responsibilities. In a new poll conducted just before the request for financial rescue was finally made, less than half of the electorate blamed the PS government for the likely need for foreign support, while the remaining voters spread it across the PSD, the President of the Republic, international crisis, or even the EU. That pollsters feel the question needs to be asked at all and that its answers are less than unequivocal is in itself an important political triumph for the incumbent Socialists. Finally, last Tuesday, the negotiations between the government, the EC and the IMF for a rescue package were completed. Following weeks of speculation about its contents – including further cuts in civil servants wages and in public-sector jobs, cuts in all pensions above 600€ per month and in the minimum wage, and the privatization of social security and of the country’s state-owned bank – Sócrates announced in a televised address that the package negotiated by the government contained, after all, no such measures. Tough as the package would be, it would be not much tougher than the one previously rejected by the PSD. In fact, it even included a smoother path towards fiscal consolidation, allowing Portugal to reach the negative 3% of GDP deficit goal by 2013, a year later than the government’s previous plan. A few minutes after the PM’s televised announcement, the PSD claimed that “the opposition helped create a bailout package ‘that was better for the Portuguese’. But the least that can be said at the moment is that the final outcome of these complex blame-shifting and credit-taking moves is much less clear than what the PSD would like it to be.

A second explanation for the likely absence of an electoral landslide in the coming elections goes somewhat deeper than just looking at short-term political tactics. Post-electoral surveys in Portugal, which have been systematically conducted only since 2002 (and can be downloaded in the Comparative Study of Electoral Systems website) have begun to reveal a few important structural patterns in the Portuguese electorate. First, although nearly half of voters do not profess any party identification whatsoever, those who tend to do so award a structural advantage to the Socialists. Second, when comparing voters’ self-placement in a left-right scale with where they place the parties themselves, only the PS appears as a centrist party, closer to median voter preferences than any other, while the PSD is perceived (and increasingly so since 2005) as a rightist party, indistinguishable from the smaller CDS-PP. Given these circumstances, one would imagine that a party in PSD’s already precarious competitive situation would make all possible efforts to reposition itself in the center in the eyes of the electorate, emphasizing “valence issues” and allowing voters to perceive it as a viable alternative to PS’s gross mismanagement of the economy. In fact, some cross-national political learning might be helpful in this respect. In Spain, the Socialists preserved their electoral hegemony for nearly a decade and a half even under massive unemployment rates, and were only dislodged in 1996 when the Partido Popular managed to present itself as a centrist party.

However, it seems now clear that the PSD has made little headway in assuring its centrist repositioning. In fact, it may have done just the opposite. In April 2010, Passos Coelho announced that the party would propose a series of constitutional amendments, generically aimed, among other things, to “reduce the role of the state in society” and “increase people’s ability to make choices in health and education”. The several drafts discussed within the PSD and invariably made public in the following months included, among other things, eliminating the expression “tend to be free of charge” as it referred to the National Health Service, changing the “fair cause” limitation in what concerned the ability to dismiss workers, eliminating the state obligation to “progressively make all levels of education free of charge” or even eliminating an article defining Portugal as a republic (instead of, possibly, a democratic constitutional monarchy). A discussion of the soundness of those amendments or of whether the existing provisions should belong in a constitution at all is beside the point here. What is not beside the point is how such proposals have allowed the PS to depict the PSD as a party composed by “conservatives” and “neo-liberals” set on “destroying the welfare state”. Additional proposals emanating from PSD circles, such as delivering social benefits and subsidies in the form of vouchers or reducing the amount of pensions to be received in the future on the basis of past unemployment benefits, have not done much to disavow this sort of claims. Whether such proposals result from an inability of the PSD’s leadership to address factional squabbling between different brands of pragmatists and ideologues or from an honest (albeit completely futile) attempt to redefine, from the opposition, the country’s ideological center in a matter of a couple of months, is yet unclear. But in a country where median issue preferences concerning social benefits and the role of the state in the economy are decidedly leftist, and where high social costs are anticipated as a consequence of austerity measures for the forthcoming years, such ideas seem nothing but pure and undiluted electoral poison.

In sum, it could be said that the Portuguese 2011 elections seem to stage a fight between two different views about economic voting. The first is a naïve retrospective economic voting theory, which would suggest an electoral landslide in favor of the center-right opposition. The second view would take a couple of other things into account. On the one hand, the simple fact that political agency and leadership can help redefining the way issues are framed and the basis on which voters hold governments and oppositions accountable. On the other hand, the fact that, in some circumstances and contexts, economic voting may be policy- rather than incumbency-oriented, particularly when oppositions have done little to change perceptions about their priorities and policy placements. At the moment, the second view seems to have the upper hand.

One Response to June 2011 Portuguese Parliamentary Elections: Pre-Election Report

  1. Carl Silva May 25, 2011 at 8:13 pm #

    Excellent article with very good insight.