Portugal, the EU and the Euro: Interview with João Ferreira

March 22nd, 2017

Awake Goy

Mural at the Communist Party headquarters in Lisbon

The European Union is in turmoil. Years of crisis and brutal austerity have had terrible social consequences, especially in peripheral countries. In Portugal a change of government after the 2015 legislative elections brought an end to the previous troika-imposed austerity and even a reversal of some policies. But structural problems persist due to the nature of the EU and its mechanisms, particularly the single currency. To discuss the political situation in Portugal, the consequences of entering the single market and the Euro, and solutions to these problems, as well as other issues such as the rise of the far-right in Europe, we have interviewed Jo o Ferreira from the Portuguese Communist Party (PCP). He is a member of the PCP Central Committee, a city councilman in Lisbon and a two-time member of the European Parliament.

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Ricardo Vaz: Turning now to the Euro, the PCP is not alone today. There is a widespread opinion that the single currency is not working. Why was the Euro destined to fail and what were its consequences?

Jo o Ferreira: In our view the Euro did not fail. There were goals that were proclaimed to the peoples, but the question is whether those were the true goals of the project. Our view is that they were not. The Euro was from the start a political project of European big capital. A project that had two main objectives: reducing the unit labour costs, which amounts to transferring wealth from labour to capital, and on the other hand, under the cover of fulfilling requirements of the single currency, attacking public services and privatising strategic economic sectors. It was with the pretext of the Euro and fulfilling its requirements that real wages were reduced (the so-called wage moderation ), countless public companies were privatised, in some cases even entire strategic sectors, the social functions of the state were targeted, resulting in reduced spending in healthcare, education, social security, and so on. So the Euro fulfilled its goals.

For example, a decade after the creation of the single currency, profits across the eurozone had increased by 30% whereas unit labour costs had decreased by 1%. This happened, to a higher or lower degree, in many countries. It happened in Portugal and it happened in Germany. In Germany, for example, profits grew 80 times faster than salaries. Therefore the Euro delivered its political goals, which is why we reaffirm that the Euro is a political project of European big capital. Of course, the people were promised that the Euro would reduce unemployment, deliver growth rates around 3% per year, elevate salaries, making them converge towards salaries on other eurozone countries. Looking back, what happened in Portugal was the following:

unemployment was not reduced, it has more than doubled and has consistently been above 10%,
the accumulated growth after one and a half decades in the eurozone is zero, meaning these were 15 wasted years,
salaries not only failed to converge with respect to those in other countries but actually diverged further,
the deficit in our trade balance worsened and debt exploded,
agricultural and industrial output went several years backwards, and this also holds for other countries in the periphery,

All of this was a result of the Euro. The opposite of what was promised is what actually came to pass. Now, what we cannot say is that the publicly stated goals were the actual purposes of the project. They were just promises made to get people to join the project. But the actual objectives of the Euro, those were certainly accomplished.

Unemployment numbers in Portugal since joining the Euro (data from the Portuguese National Institute of Statistics)

Beyond that, the Euro worked to deepen the European capitalist integration, through a policy of faits-accomplis. Today we are told that the Euro went wrong because it was incomplete. And that is the pretext to go even further in the integration process. At the time it was widely known that the Euro structure was not complete, that it was not a well designed monetary union, but nobody seemed to care all that much.

RV: In the latest statement of the PCP Central Committee, a campaign on freeing the country from the submission to the Euro was announced. What do you hope to accomplish?

JF: With this campaign we aim to broaden throughout Portuguese society the understanding of what is all too evident today: the Euro has brought impoverishment, backwardness, debt and foreign dependency. And there is no prospect of reversing course without breaking with the submission to the Euro for all the reasons we have already discussed. In fact, this is very clear when we look at all the policies that have been imposed on the country under the pretence of remaining in the single currency. Therefore the country must free itself, it must regain an important instrument which is its monetary sovereignty. And with that comes also a strengthened sovereignty on budgetary and foreign exchange matters, and in some ways also on fiscal matters.

This is an essential instrument, because in its absence the adjustment factors in times of economic crisis are just salaries and employment. This is what we have seen in recent times, salaries being lowered and unemployment increasing. We need an increased sovereignty so that in the monetary sphere, but also in the economic sphere in general, we have a currency that is suited to the productive structure of the country, which is significantly different from the productive structure of a country like Germany. The submission to the same currency will necessarily result in economic divergences as we have seen, which is why the country must be free of this. And this liberation is not only needed, but also possible and viable.

RV: If I may play devils advocate, exiting the Euro also carries its own risks, specially in the short term. Is the PCP taking those into account?

JF: Exiting the eurozone is not a politically neutral process. We advocate leaving the Euro in the context of a patriotic and left-wing policy (pol tica patri tica’e de esquerda). That is, process of exiting from the Euro that will defend incomes, living conditions and savings of the people. One that will ensure that those who have benefited the most from the presence in the Euro are the ones who shoulder the biggest burden of this exit. An exit from the Euro conducted by a right-wing government can have very negative consequences. This is why we say it is not a politically neutral project.

The Communist Party held its XX Congress in December 2016

And when we defend leaving the Euro from the left, this requires coordinating it with other measures, two of which are of major importance. The first one is renegotiating the debt in its amounts, terms and interest rates, so as to significantly reduce debt service, and even expunging it of a component which we deem illegitimate. The second one is asserting public control over the banking sector. So these are three measures that from the Communist Partys point of view are profoundly connected. We have tabled a proposal in Parliament, which took aim precisely at freeing the country from these three constraints, Euro, debt and private banking sector, and in turn offer integrated solutions for each of them.

RV: They are inseparable problems

JF: Yes, no doubt, and thus any response must also be built in an integrated fashion. Some of the main vectors of the alternative, patriotic and left-wing, policy which we defend and should be articulated with leaving the Euro include: the defence and promotion of national production, the recovery of strategic sectors of the economy, increasing workers incomes, strengthening public services, etc. We defend this necessity of releasing ourselves from the Euro not in isolation, but in the context of this patriotic and left-wing policy. What reality has demonstrated, and the Greek experiment provides us with a lesson that cannot be ignored, is that it is not possible to implement a left-wing policy within the framework of the Euro and the constraints associated to the economic and monetary union.

RV: Many people say, even in the center-left, that one country cannot make it on its own and that there needs to be a coordinated effort with other countries in similar circumstances

JF: We find it very important to coordinate efforts with other countries, and with other communist and progressive parties. But we do not believe a country should stand still until there is a change in the supranational structures. Even more so because these supranational structures have demonstrated time and again whom it is they serve. Therefore changing the situation in Europe requires reverting the correlation of forces in each country, it requires changes in each country. And changes in one country can in turn lend support for the similar changes to occur in other countries. Even on this question of abandoning the single currency we have defended the need to join forces on an European level, starting, of course, with countries in similar scenarios. Yet we do not hinge what we deem as necessary on a national level on any preceding shifts at an European level. Any changes that we may push on a national level may themselves lead to shifts on the European level. Once more, the Greek story is instructive in this regard. It takes a great deal of courage, a great deal of determination, and a readiness to break with the blackmail and pressures coming from the European Union. The solution is not to submit to those.

Jo o Ferreira speaking in the European Parliament

RV: And with all this in mind, does the PCP advocate a unilateral exit from the EU?

JF: We do not ignore the nature of the capitalist integration process, and thus we have no illusions on what it could bring. It has been demonstrated that the EU is not reformable. This does not mean that we do not advocate a different cooperation/integration process among free, sovereign and equal states in Europe, but it is a process that in its main characteristics will be diametrically opposed to what the EU stands for. And I am not talking about what the EU stands for today , I am talking about what it has always stood for. The primacy of free circulation of capital in the single market over social and labour rights, for example, is engraved in the treaties from the very beginning. That is why this process is not reformable from our point of view. What we ought to do is build, on top of the ruins of this process which is manifestly exhausted, a new cooperation project among European states. And we embrace this struggle, which necessarily involves confronting the impositions from the European Union, safeguarding the national interests in face of these impositions, and this, of course, will lead to ruptures. In the short term, a rupture with the single currency, but other ruptures in the longer term with other instruments and mechanisms of the European Union. As for the concrete characteristics of these ruptures, the struggle itself will determine it. It would be very easy for us to proclaim that we leave the EU today, and tomorrow all our problems will be solved , but thats not how things work.

RV: Should we also take from this a response to those who try to conflate Europe and the European Union?

JF: Exactly, this is a very important point. The EU is not Europe , and this confusion is deliberate, it is not innocent. It is not Europe and it would not be even if it included all the countries in Europe. Even more so because the EU today affronts fundamental aspects of a whole legacy of values of achievements of the European peoples. The EU is an integration process of European states, it is not the first and it certainly will not be the last.

RV: Moving on to a different subject, we have been witnessing a rise of the far right. What is causing this?

JF: This emergence of the far right in inseparable from the policies of the European Union through the years. We are talking about policies which exacerbate social inequalities inside each country, that exacerbate divergence between countries, policies that have been evolving towards what we today consider to be relations of a neo-colonial nature. We have witnessed outright oppression processes directed by the European Union against individual states. These anti-social policies which generate inequality, poverty, social exclusion, on top of this national oppression processes, which always have a very clear dimension of class oppression, create the conditions for the emergence of far right forces. This is specially true in countries where revolutionary, patriotic left-wing forces have been weakened.

The far right forces are very opportunistic and always try to take advantage in these contexts. At the end of the day they do not wish to call into question the capitalist system, but to present a new possibility for its survival. The system is faced with a fundamental crisis and there needs to be different options to safeguard its survival. The far right and fascism are a resource that may be used just like it was used in the past, to ensure the survival of a system that is profoundly unjust and unfair. Now, in the European context the EU has clearly paved the way for this kind of policies. An emblematic example has been the EU response vis-a-vis the so-called refugee crisis, and the policies with a clear xenophobic character that the EU itself has adopted, which only end up feeding these far right forces.

RV: And does the social democracy also deserve a share of the blame?

JF: Social-democracy is one of the two heads of the system. In essence there are these two heads, right-wing and social-democracy, that share the responsibilities for how things have developed over time, and for the point we have reached in Europe. The betrayal of social-democracy with respect to the interests of the working classes and the peoples, when it fully stood for and implemented neoliberal policies, specially since the 1980s, played a major role in getting us where we are today.

RV: The Communist Party still defines itself as a Marxist-Leninist party. Does Marxism-Leninism remain current these days?

JF: In our opinion it does. Marxism-Leninism is a tool, a very valuable instrument to analyse reality, an instrument that is itself averse to dogmatic positions and to schematic and static views of reality. It is an instrument that guides us in analysing and understanding the world but which also shows the way when it comes to transforming it. It has an unquestionable legacy, in which Marx, Engels and Lenin had decisive contributions, but is also enriched by all the experiments that took place all over the world. Therefore it is an instrument to analyse and transform reality which gets enriched and with all the struggles that take place in various countries.

Jer nimo de Sousa, secretary-general of the PCP, speaking in the opening event of the commemorations of the centenary of the October Revolution

RV: This year marks the centenary of the October Revolution. What is the significance of this event?

JF: The October Revolution was a major event in human history. For the first time in history, those at the bottom, who for centuries, millennia, were the target of exploitation and oppression, showed that they could take power and take their destiny in their own hands. And build a workers state. There had been previous attempts, but this was the first time in history in which, storming the heavens ¹, those who had eternally lived under exploitation and oppression decided to take power and build their own state.

There are major accomplishments that are part of our lives, even in western capitalist countries, that are inseparable from this experiment and the October Revolution. Issues ranging from gender equality, wide-reaching social and labour rights, maternity leave, rights for families, sick leave, the right to have holidays, everything that is broadly grouped in the so-called welfare state , which is generally associated to post-war Europe, is, in fact, a result of the October Revolution and the achievements that followed. In many countries capitalists needed to offer concessions in order to contain the advances of the labour movement, which had major achievements inspired in the achievements of the October Revolution.

It is not a coincidence that the end of the USSR coincided with an offensive against all these achievements throughout Europe.

RV: What should communists take from the October Revolution and the experience of the Soviet Union that followed?

JF: The October Revolution is an essential event and a major source of inspiration in our struggle for a better life and a better world. It is not a matter of copying a given recipe or model, which is something that the PCP was always very clear on. It is about drawing inspiration and lessons for a process that each people will undertake with its own means, according to its own will and to the specific material conditions in which the struggle takes place. We usually say that all peoples will reach socialism, but each will get there though its own path.

This experiment which marked the beginning of a new historical era needs to be analysed and taken on in its entirety by communists, with its enormous achievements, its wealth of successes, but also in its shortcomings, its failures and its mistakes, some of them profound, which also occurred. But the truth is that we cannot say that the world is better since the disappearance of the Soviet Union. Quite the contrary, it is much more dangerous, and in many countries there were significant setbacks in terms of rights and living conditions for the majority of the population.

In summary, I would say that in celebrating this 100 year anniversary, we should highlight the universal reach of the October Revolution, appreciate the conquests and achievements of the Soviet Union and its decisive role in the revolutionary advances of the 20th century, while stressing that the demise of a model that moved away from the communist ideal and project does not call into question the course of history and the need for socialism. Rather, it gives more strength to our struggle to build a society without exploiters or exploited, free of oppression, the struggle for socialism and communism.

Read Part One here

First published in Investig’Action