The Left Bloc -- which is close to Greece's Syriza and Spain's anti-austerity Podemos Party -- not only opposed the austerity, it demanded debt reduction. Indeed, without debt reduction -- a so-called "haircut" -- it is unlikely that small countries, like Greece, Portugal or Ireland, can ever emerge from their current economic crises. After years of austerity, Portugal's debt is still among the highest in Europe.
The Communist/Green alliance did marginally better than 2011, although the Left Bloc passed it for the first time. The Communist Party has a strong reservoir of respect in Portugal because of its long resistance to the 48-year military dictatorship. It has been a consistent opponent of the austerity policies, but so far it has shown little interest in working with the Socialists, which its leaders say is Forward Portugal light. The Party calls for an exit from the Eurozone, the 19 countries in the 28-member European Union that use the Euro. While some on the Left also want to leave the Eurozone, the Socialist Party is committed to the common currency.
However, there is agreement scross the Left around privatizations and cuts, and that the crisis in housing, education, and daily life -- including food and medical care -- has to be addressed. Without a majority, the Right will have to back away from more austerity and plans to privatize some schools and public pensions.
Does this election have reverberations outside of Portugal? The Wall Street Journal's headline on the outcome was that it was "a cause for concern" for Spain's rightwing government, which goes before the voters in about 10 weeks.
But if there is one thing that the recent election in Greece made obvious, it is that small countries cannot take on the power of the EU by themselves. The European Union is now the single most powerful alliance of capital on the planet, and it is not a bit shy about crushing anything it sees as a potential threat. However, the Troika's efforts to scare -- and bribe -- Portugal failed.
So, what is to be done?
In the long run, a common currency was a bad idea for everyone but Germany, Austria, the Netherlands and the banks, but a quick exit would be like pulling a spear out of your leg -- without careful preparations you are likely to hemorrhage to death. While the ultimate goal should be to move away from the euro, the process may take awhile.
One thing the European Union is vulnerable on is democracy. Being in the EU essentially means abandoning sovereignty. The recently signed agreement between the Troika and Greece says that the former can veto any policy it does not agree with, including anti-corruption legislation aimed at tax scofflaws. Essentially, democracy has become dispensible.
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