Without any need to worry about getting support from its left, the Socialists and Costa are very likely to shift further towards the center. This calls into question, yet again, the efficacy and wisdom of leftist and anti-capitalist parties collaborating with capitalist progressive or social democratic parties and governments in parliaments.
Communist leader Jerónimo de Sousa at an election rally in Porto, January 2022
The anti-capitalist left has suffered a setback In Portugal after Socialist prime minister António Costa won an absolute majority in the Portuguese parliamentary elections on Sunday (January 30). While the majority victory was unexpected -- most commentators thought the Socialists would win the most seats but fall short of a majority -- the drubbing that the Communist Party electoral alliance and the Left Block took had been predicted by the polls.
The Communist-Green Unitary Democratic Coalition (CDU) alliance saw its vote fall from 6.3% in 2019's elections to 4.4% and lost half of its seats to end with 6. The Left Bloc had an even greater decline seeing its vote drop from 9.5% to 4.5% and its seat total declined from 19 to 5.
Both the CDU and Left Bloc had backed the Socialists in the minority parliament and had helped to push the government somewhat to the left.
They voted against Costa's proposed budget at the end of October, 2021 saying it did not go far enough on issues like wage increases for workers, tax increases on the wealthy, and increases to pensions, social spending and health spending. There were also differences related to changing labour laws in favour of workers.
The CDU and Left Bloc suffered from two major factors. First, many left wing voters were scared by the rise of the far right Chega party which saw its vote increase from 1.2% to over 7% and went from 1 seat to 12. There were fears, that the Socialists readily exploited during the campaign, that the opposition right wing Social Democratic Party would turn to Chega to get into government in a minority parliament if the Socialists fell short.
The second and related factor was that with the rise of the far right, the CDU and Left Bloc's own cooperation with the Socialists in parliament for many years both tainted them with the inevitable limitations of a social democratic government and allowed the Socialists and Costa to take credit for the concessions that were achieved.
Without any need to worry about getting support from its left, the Socialists and Costa are very likely to shift further towards the center.
As Reuters reported, business and the markets seemed pleased by the win:
Investors welcomed Costa's victory, although Portugal's PSI20 stock index only edged 0.5% higher.
"The election result in Lisbon can...clearly be seen as a confirmation of Costa's consistent economic and fiscal policy," Germany's DZ Bank said in note.
Credit rating agency S&P said Costa's majority mandate will be key to speeding up the application of a 16.6-billion-euro ($18.6 billion) package of EU pandemic recovery funds and should allow for further budget deficit and public debt reductions.
To unlock new tranches of the funds, the government must meet a range of goals implying a lower budget gap.
This calls into question, yet again, the efficacy and wisdom of leftist and anti-capitalist parties collaborating with capitalist progressive or social democratic parties and governments in parliaments.
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