Portugal and Ireland: the betrayal of democracy


by David Malone

The language we use to talk about things doesn’t restrict our thoughts but it does influence them.  Which means whoever manages to set the terms and language in which an argument or issue is discussed has already managed to greatly influence the range of possible understandings and outcomes, even before the debate begins.

For instance, the language of bank and sovereign ‘bail-outs’ has, it seems to me, a powerful and pervasive influence on how we understand what is being done to banks and nations, and the range of outcomes we consider possible.

The coverage of what is currently happening in Portugal and Ireland are good cases in point.  The Financial Times headline today is “Portuguese banks rise on bail-out request”.  The article reports in terms of, “… the country’s request for financial aid from the European Union …”

The out-going President, Mr Sócrates himself described what was going on as, “The government decided today to ask the European Commission for financial help.”

This is all about ‘requests for help’.  But let’s take a small step back to remember what actual events led to the present.  The facts are that the reason Mr Sócrates resigned is because there was no majority support among the democratically elected representatives of the Portuguese people for the draconian austerity measures he was trying to impose.  Hence his government collapsed and he resigned.  That the elected representatives were reflecting the popular will on this matter was already clear from the large numbers of Portuguese people who had protested and been on strikes.

If either of these had not been the case Mr Sócrates would still be in power successfully pushing through his austerity agenda.

So the train of events are, that a coalition government tried to impose austerity measures upon the people. The people, right or wrong, didn’t like it and said ‘No’.  A contest of wills was played out between government and governed.  In the meantime global events rolled on and it become evident that bank and government estimates of economic growth for Portugal and many other struggling nations, such as GB, were wrong.  Growth, it has become clear, will be much lower.  In Portugal the economy will contract.

These facts mean that even more austerity cuts would be required to achieve the debt reduction Portugal had already been told it had to achieve.  Add together the worsening economic situation and the evident popular and political unrest, and the Bond Market (AKA the big banks and funds) quite rightly estimated that the risk of Portugal not being politically able to do what it had been told it had to was increasing.  So they increased what they charged Portugal to lend it money and buy its bonds.  This week the rate became so absurd that Portugal was irreversibly on the debt death-spiral, getting poorer and further in debt with every euro it borrowed.

We can argue about whether the Portuguese people were to blame for their misfortune, whether their governments were to blame, their banks or the tooth fairy, but it matters less than the fact that the people simply said no to the coalition’s plans.  Just as the Irish had done a few weeks earlier.

Two nations in deep financial trouble.  Two governments brought down by popular opposition to their plans.  In Ireland there was an election in which the winner promised to review the austerity and bail-out agreements made by the defeated party with the EU and the IMF.

In Portugal there is no fast election.  There is a ‘caretaker’ government.  Unelected and therefore without a democratic mandate or basis for any decision.  An interesting and dangerous position for the people – an opening for the banks and financial class.

Both situations have been enveloped in the language of ‘asking for help’ and ‘receiving help’.  But are these phrases the best way of understanding what is actually going on?

The people of Ireland did not vote for a party or a slogan of “We will ask Europe and the IMF for ‘help’ in ignoring your opposition and pushing on with austerity measures similar to the ones you, the people, already rejected.”  Any party that had said that would have been laughed at.  Yet this is what the ‘help’ on offer seems to be.  The previous Irish government couldn’t quite force the EU and IMF dictated measures upon the Irish people.  The Irish people spoke rather clearly, despite the paucity of real choice they were offered at the ballot box, but the EU, IMF and banks seem not to have heard.

The promise was to renegotiate the conditions of the ‘bail-out’ and make senior bond holders share the pain.  The ‘help’ the EU has provided to the in-coming Irish Government, is to say “No, that is not up for discussion. End of story.”  Which allows the new government to go back to those who elected it and say, “Sorry.  We tried, but the big bad EU shouted at us and told us we just had to get on with it.”

The ‘help’ that is being offered is not ‘help’ to put into practice what the people democratically decided.  It is ‘help’ to ignore the people and push on with the bankers, EU and IMF plan anyway.  ‘Help’ to make it appear that the unpopular decision is no longer a matter of democracy nor even within the power or right of the people to decide.  The ‘help’ is to remove these most important and future-defining decisions from the people they will affect and from the democratic process entirely.  The ‘help’ is to run an end-game around democracy and allow finance and its unelected, un-accountable dictators to impose by force whatever ‘democracy’ could not deliver for them.

It seems to me that the entire democratic process is being used, as little more than a side show – an entertaining distraction arranged for the unruly mob, by the suited little Caesars of the European financial elite.

Portugal’s austerity government was toppled.  It had no democratic mandate for its policies.  If we now find the EU and the IMF offering to ‘help’ by insisting that the rejected measures be agreed quickly and forced through anyway, using an interim, caretaker government without any mandate at all, to push on with the rejected policies then what does that ‘help’ amount to and who exactly is being ‘helped’?

The best that I can say for the situation in Ireland and what may happen soon in Portugal, is that it is a charter for cowards to get paid for betraying their people.  Cowards who will do the bidding of an occupying financial power but who don’t have the courage to say that is what they are doing.  They ‘will ask for help’ so that others can ‘force’ them in to ‘reluctantly agree to unpleasant but but necessary measures’.

What is being helped is global finance and foreign banks.  What is being helped is a financial system that wrecked itself but wants ordinary people to pay its debts.  Democracy is being helped into its sick bed.  Even if the Portuguese people are wrong it is their right to be.  Even if their decision is stupid or unjust it is their sovereign right to do it anyway.  If we do not believe that then we do not believe in democracy or sovereignty.

The EU and the IMF are quite free to simply say we will not lend you the money.  That is fine.  What they must not be allowed to do is go behind the democratic will of a sovereign people and do what they, the IMF and the EU, think is necessary anyway.  Necessary for whose benefit?  If the EU and the IMF decide that they just cannot let the Portuguese default or restructure then they must go back to the the Portuguese and petition them to see reason by offering a better deal.

But what I fear is going to happen in Portugal is that the EU and the IMF will collude with Portugal’s banks to say, ‘there is not time to wait for democracy, and anyway this is a matter for experts not the untutored’, and they we will sign among themselves contracts which will claim to bind the Portuguese people and any future government they elect, in perpetuity.  So when it comes to it, the Portuguese people will be able to elect anyone they want as long as they realize that that government will be able to do nothing that the bankers haven’t already agreed and OK’ed.

That is the future of democracy as the financial class would like it.


David Malone is the author of the book Debt Generation. You can read and listen to excerpts from his book here: http://www.debtgeneration.org/index.php