Europe / World | Coronavirus

Europe Versus Coronavirus - Portugal: Health Crisis in Check. Next Up, Political Crisis?

ARTICLES - 18 May 2020

By Yves Léonard

Doctor of History and graduate of Sciences Po Paris

Key Points

Recently, Portugal has been touted – perhaps excessively – as a "role model" or even a "miracle," as a country that has been relatively spared by the virus in comparison to most of its European neighbors. Following the economic changes of the 1990s and given the economic recovery it has seen since 2015, Portugal is once again regarded as the "star pupil" of Europe.

The Portuguese authorities have followed a proactive and rigorous approach to avoiding the worst of the COVID-19 crisis (learning, perhaps, from the 1918-19 Spanish flu, which caused the deaths of more than 135,000 people in a country which, at the time, had a population of just six million). With around 1,000 deaths reported by the beginning of May, a relatively high screening rate and sufficient quantities of PPE available, the authorities were able to carefully and gradually begin lifting lockdown measures on May 4. However, in addition to fears of a second wave of infection, another cloud lurking on the horizon is the prospect of a serious economic and social crisis that would likely weaken the relatively consensual political response that has been seen since the outbreak.

Timeline

March 2: The first two cases of COVID-19 are reported.
March 8: The President of Portugal, Marcelo Rebelo de Sousa, announces that he is quarantining himself as a precaution, canceling all his public activities in Portugal and abroad for two weeks. He made the unprecedented decision after having been in contact with students at a school in the north of the country, which was later closed due to a confirmed case of coronavirus.
March 12: A State of Alert is declared.
March 15: The border with Spain is largely closed, with nine points of entry allowing only the transport of goods and cross-border workers.
March 16: Primary schools, middle schools, high schools and universities are closed.
March 16: The first death from COVID-19 is announced.
March 17: The city of Ovar, population 55,000, is quarantined.
March 19: A month-long State of Emergency is declared, following Parliament's approval of the presidential decree (216 votes in favor, 14 abstentions), a first since democracy was restored after the Carnation Revolution of April 25, 1974.
March 28: The government announces it will temporarily regularize all asylum seekers and refugees who applied before March 16.
April 16: Parliament approves the presidential decree extending the state of emergency for another 15 days (until May 2).
April 25: The anniversary of the Carnation Revolution of April 25, 1974, a public holiday also known as "Freedom Day," is celebrated in lockdown, without traditional parades or gatherings and with a reduced session in Parliament.
April 30: With 989 reported deaths from COVID-1 and 25,045 confirmed cases of contamination, but a large screening capacity (37,000 tests per million people), Prime Minister António Costa announces a phased, sector-by-sector plan to gradually lift restrictions starting on May 4 and to be reviewed every 15 days.
May 2: Prime Minister António Costa confirms that the State of Emergency declared on March 19 is now over with the transition to a "calamity situation", maintaining mandatory lockdown for all infected or at-risk individuals and reminding everyone of their "civic duty" to stay home.
May 4: The gradual lifting of restrictions begins with different sectors of the economy opening up every 15 days until the start of June, starting with small neighborhood stores (up to 200 m2), hair salons, car dealerships and bookstores. People must now wear a face mask in stores and on public transport or risk incurring a fine.

Analysis

On April 30, Prime Minister António Costa said, "We are all aware that until there is a vaccine available on the market and accessible to all of us, or until there is a treatment, we will have to continue to live without our normal life" and announced a plan to gradually lift lockdown measures. In the weeks leading up to this announcement, Costa praised "the effort we've made, which reflects the exemplary behavior of the majority of the population and that has paid off". In fact, Portugal has been less affected by the COVID-19 than many European countries, starting with its Spanish neighbor. At the beginning of May, Portugal had reached 1,000 deaths, whereas Spain, whose population is only four times bigger, had reported 26,000 deaths from COVID-19. However, as Portugal’s President Marcelo Rebelo de Sousa warned, "in order to take steps towards a gradual return to normality in May, we must give ourselves the means in April". He himself had voluntarily gone into a two-week quarantine on March 8, after having come into contact with students from a school in the north that was closed due to a confirmed case.

Foresight and "Freedom Day" spent in lockdown

There are a number of factors that explain this situation. Without making too much of cultural stereotypes such as the Portuguese "innate sense of discipline", the sound foresight of authorities and the solid efforts of the population were essential. Portugal's unique geographical position has also been proved advantageous.

We are all aware that until there is a vaccine available on the market and accessible to all of us, or until there is a treatment, we will have to continue to live without our normal life.

In the extreme west of the European continent, and thus far from the main source of the outbreak in northern Italy, the authorities quickly used Portugal's location to their advantage. As early as mid-March, they restricted movement across the border with Spain, their only land neighbor, even though Portugal only had a hundred cases at the time. Furthermore, the relative isolation of inland regions such as the Alentejo also played a role in curbing the spread of the epidemic. With a population density below the national average (111 inhabitants per km2) and less populated than the coastal strip between Lisbon and Porto, of which these two large metropolitan areas account for 58% of the population, the Alentejo went several weeks without any deaths from COVID-19.

An early campaign aimed at raising awareness about the gravity of COVID-19 and the importance of screening had an even greater impact on Portugal's aging population (20.5% of the population above 65 years of age, compared to 13.1% in 1994). This age range is all too familiar with the regional weaknesses and disparities of the National Health System (SNS), which was seriously compromised by years of austerity. As of March 12, no deaths or serious cases had been recorded and the state of alert was in place. The state of emergency was declared on March 19, schools closed on March 16 and a sanitary cordon was set up around the town of Ovar (55,000 inhabitants) on March 17.

Between March 1 and the beginning of April, more than 110,000 screening tests had been carried out, reaching a daily capacity of 11,000 tests. This is a level comparable to countries such as Denmark. At the end of April, nearly 23 tests per 1,000 inhabitants were being carried out, ranking Portugal in the middle with respect to OECD countries. The urban population has found it easy to acquire protective face masks, gloves and antibacterial hand gel because many cities have been distributing free kits of 5 masks through the mail, with a leaflet reminding citizens of the preventative measures to take. Moreover, the textile industry as a whole acted quickly, making face masks in large quantities. Several aircraft also arrived from China carrying much-needed equipment such as ventilators. The Portuguese Embassy in Beijing has become a sort of giant medical equipment warehouse where the ambassador – and former diplomatic adviser to President Rebelo de Sousa – struggles to keep count. Following the handover of Macau in 1999 and the signing of their strategic partnership in 2004, China identified Portugal as another bridgehead to expand its influence. China's large-scale investments in Portugal due to the financial crisis and austerity raised fears that the latter was on the verge of becoming "a Chinese aircraft-carrier in Europe."

Portugal's first two confirmed cases were reported on March 2, with a 60-year-old man returning from Italy and a 33-year-old man returning from Valencia, and the first death was announced on March 16. Thanks to the country's ready ability to respond to this crisis and ensure hospital capacity, the worst was prevented. Further assisting in the fight against the epidemic, a large part of the population voluntarily went into lockdown, even before the government imposed its containment measures. What's more, many parents took their children out of school well before March 16. Other factors may have helped to avoid a major outbreak, such as the early elimination of SL Benfica and FC Porto from the group stage of the European Champions League. This meant avoiding situations such as the February 19 match in Milan between Atalanta Bergamo of Italy and FC Valencia of Spain, which served as an epidemic cluster event in bringing together more than 50,000 supporters of the two clubs in the capital of Lombardy – the epicenter of the European pandemic.

While Portugal remains one of the least affected European countries, it fears, like so many others, a second wave, especially since only a small percentage of the population would have been exposed to the virus. This fear explains the renewed vigilance in force during the Easter weekend – traditionally a time of family travel and gatherings – and the extension of the state of emergency until early May. Hence, the emotionally charged decision was made to cancel the traditional Carnation Revolution parades, including Lisbon's Avenida da Liberdade parade. At the same time, an unprecedented appeal was made to the population, asking them to sing "Grândola, Vila Morena/Terra da Fraternidade" (emblematic of the Armed Forces Movement (MFA) and April 25, 1974) from their window on April 25 at 3 pm. For its part, Parliament took the somewhat controversial decision to reduce the number of participants in the traditional April 25, or "Freedom Day," commemorative session at the Assembly of the Republic to three quarters, with social distancing in place.

Resilience and solidarity

In terms of hospital capacities, clear thinking and humility both seem to have prevailed since the crisis began. According to the Health Consumer Powerhouse rankings, Portugal's free and universal National Health Service (SNS), which was founded in 1979, is considered the 13th best in Europe. On the occasion of its 40th anniversary in September 2019, a report emphasized the benefits demonstrated by the SNS since its inception in 1979, including a three-fold increase in the number of doctors, a significant increase in terms of lifespan and a decrease in infant mortality. However, it also revealed the steadily declining number of beds (339,000 in 2017 compared to 527,000 in 1980) and a system where hospitals are run like large corporations and the number of private hospitals is ever-growing.

The Portuguese had to approach the massive health crisis of COVID-19 with extreme caution, with the primary and absolute objective being preventing the disease’s spread

Even though the SNS has received an investment of €2 billion since 2016 and will receive a further injection of €800 million from the 2020 budget, these amounts will not make up for the extreme cuts made under the guise of austerity. Per capita health expenditures fell from €1,021 in 2010 to €894 in 2012 and 2013, before reaching €989 in 2017 and only returning to 2010 levels again in 2019. In other words, the Portuguese had to approach the massive health crisis of COVID-19 with extreme caution, with the primary and absolute objective being preventing the disease’s spread. As a matter of urgency, 500 ventilators were ordered at the end of March, adding to the approximately 1,200 already available. A 200-bed field hospital was set up in Lisbon, near Campo Pequeno. Ultimately, however, the available hospital resources were found to be lacking, especially since the private hospital sector is rarely called upon.

In these circumstances, polling showed over 70% of the Portuguese population is afraid to visit health service facilities. Many of the respondents also reported postponing or canceling examinations, operations and vaccinations for fear of revealing new health problems, while 15% stated that they were suffering from "sadness and anxiety". Economic hardship through unemployment or being laid-off strongly determines how people cope with COVID-19 restrictions. Despite government measures extending unemployment benefits, economic hardship caused by unemployment and lay-offs are significantly affecting life under COVID-19 restrictions. Additionally, younger people are feeling the effects of lockdown, with acute senses of isolation and loss of freedom being common. Among those in their thirties to forties, often with families and small children, some report difficulties in balancing working at home, daily family life and homeschooling, generating stress, anxiety and depression. Uncertainties about how long restrictions will last (15% of Portuguese said they had not left home at all in the previous two weeks) and fears of a potential scenario where lockdown lasts until the end of the year (or longer) are greatest among the elderly and the most economically vulnerable in a country where the minimum monthly wage is €635. For example, 12% of those polled in mid-April – around one and a quarter million Portuguese – feared that they would not be able to meet their living costs by the end of the month.

Against the backdrop of a nation-state that remains overwhelmingly centralized and lacking strong regional government structures, the spread of the COVID-19 epidemic has been uneven among the population of 10.2 million. Large urban centers in the north around Porto – the country's economic powerhouse – are the most affected (as of May 5, suffering 613 of the 1,074 deaths nationally and 15,200 confirmed cases out of the national total of 25,702). This is far higher than the metropolitan area of Lisbon and the Tagus Valley (223 deaths and 6,241 cases) and is in stark contrast to the southern provinces of Alentejo (1 death from 220 confirmed cases) and Algarve, with 13 deaths and 335 cases. The autonomous island regions of the Azores and Madeira reported 13 and zero deaths, respectively. The lockdown restrictions have been followed reasonably well, with the GNR (the National Republican Guard) and police operating roadblocks and checks on major roads, particularly entering and leaving Lisbon. These checks were stepped up during the Easter weekend, but the requirement of a completed form in order to authorize leaving home, such as in France, has not been implemented.

Parliament also approved the suspension of rent for vulnerable households and those small businesses experiencing financial difficulties during the epidemic.

In response to the day-to-day challenges that citizens are encountering, measures have been introduced in a bid to build up civic-mindedness and solidarity. The population has demonstrated a spirit of mutual aid since the health crisis began, especially towards the elderly, who are sometimes isolated even though most live with family instead of in nursing homes. At the end of March, Parliament also approved the suspension of rent for vulnerable households and those small businesses experiencing financial difficulties during the epidemic.

Several non-profit organizations have warned that these measures will only serve to delay the underlying crisis from "Airbnbization" and real estate speculation that has long threatened the housing market. In response, Lisbon City Council announced a rent freeze for 70,000 social housing units.

The government also decided, on March 30, to immediately grant all immigrants awaiting residence permits and all asylum-seekers temporary residency rights. "It is a duty of any society to show solidarity in times of crisis in order to ensure that migrants have access to healthcare and social security", said Interior Minister Eduardo Cabrita. Although generally exceptional compared to other EU nations, this move makes sense from a health care point of view as it enables migrants and asylum-seekers to access the national health system, taking care of their own health in order to protect both themselves and others. But there are other reasons beyond humanitarian considerations: it is also in the interest of a state with an aging population, plummeting birth rates, and a shortage of low-cost labor in sectors such as agriculture and construction.

A fragile consensus

Thus far, the government has received broad public support and political consensus for its key measures, such as the state of emergency. Such a declaration had not occurred since the return of democracy in 1974, but it was approved by more than 90% of the population. The draft presidential decree declaring a state of emergency was passed by the Assembly of the Republic (a unicameral chamber of 230 members) on March 18. The only abstainers were the Communist/Green Party coalition, the single Liberal Initiative deputy, and one non-attached member. All other groups, including the Left Bloc, PAN (People-Animals-Nature), the opposition center-right PSD, and the one far-right Chega deputy voted in favor of the text, despite its intention to temporarily curtail freedoms. António Costa, leader of the majority party PS, called it a "necessary evil" after having promised his government would ensure "that the necessary balance between safety and freedom is respected". But on April 16, during the vote to extend the state of emergency by 15 days, a few dissenting voices were heard, including that of the Communist Party, who deemed such an extension "unjustified and disproportionate in the public health fight against the epidemic". The ten Communist members voted against it, as did both the Liberal Initiative deputy and the non-attached member, while the two Greens and one Chega member abstained.

This broad consensus, uniting government, political parties, intermediaries and civil society, has given the government indisputable freedom to act. Praised by many outside the country, including Spain's Second Deputy Prime Minister Pablo Iglesias, the approach proved it could stand the test of time, even as questions multiplied in the weeks running up to the gradual lifting of restrictions at the beginning of May. For example, on Easter Monday, 159 business leaders sent a letter to the President of the Republic and the Prime Minister stating that "economic activity cannot be suspended completely until all risk of contagion is eliminated", and requesting that new measures be implemented. Inspired by the South Korean approach, these measures included a general requirement to wear face masks, close tracking of cases and mass screening and were aimed at reopening the economy in a controlled manner.

On April 14, Prime Minister António Costa wrote on his Twitter account that he had "discussed the outlook for the Portuguese economy and the reactivation of economic activity with a group of economists and academics", adding that "this frank and open debate has made an important contribution to the establishment of a solid path to a recovery, built on trust". Trust is central to the government's thinking on how to approach the gradual resumption of economic activity, stressing the idea that it's only "when people are sufficiently confident that they will be able to return to work and shops". The growing levels of trust appeared to stem mainly from the general requirement to wear face masks, which until that point had only been mandatory for health, safety and distribution professionals.

This broad consensus, uniting government, political parties, intermediaries and civil society, has given the government indisputable freedom to act.

On April 30, Prime Minister Antonio Costa announced the plan for gradually lifting restrictions. The first stage (May 4 to 18) included the reopening of local stores measuring under 200m2, public transport (at two-thirds capacity), hairdressers, car repair shops, bookstores and libraries. At the same time, remote working was strongly advised, and events or gatherings of more than ten people were banned. The second stage (May 18 to 31) includes the reopening of stores measuring under 400m2, restaurants and cafes (with no higher occupancy than 50%), museums, monuments and palaces, the final two grades of high school and some daycare centers. Finally, measures set for the beginning of June included resuming religious services, reducing the number of people working from home, reopening stores bigger than 400m2, as well as cinemas and theaters, and the recommencing (behind closed doors) of professional football.

Despite having a relatively low number of deaths and confirmed cases, the health crisis has hit Portugal hard, due to an aging population, a national health system (SNS) blunted by austerity and an economy where growth is highly dependent on exports and tourism (17% of GDP). This helps explain the authorities' caution towards the economic and social consequences of this pandemic. The COVID-19 crisis has revealed itself to be a test in resilience that is particularly challenging to a Portuguese economy still recovering from the austerity era of 2011 to 2015. In fact, the aftermath of those policies remains highly visible to this day and, with this specter of austerity still fresh in many minds, upon exiting from confinement the most optimistic outlook is now for a U-shaped (not V-shaped) recovery. The IMF has forecast a GDP decline of over 8% for 2020 (compared to 4.1% in 2012) and an additional 380,000 unemployed. In mid-April, Prime Minister António Costa, after talking about "a health crisis that is turning into an economic crisis that we cannot allow to worsen", confirmed that he was thinking about nationalizing companies. This included the national airline TAP, which was privatized in early 2015 but remains 50% owned by the Portuguese state: "We cannot exclude the need to nationalize TAP or other companies that are absolutely essential for the country. We cannot risk losing them."

On a political level, the Prime Minister has already appealed for a "collective effort" and "sense of responsibility", including from his former partners in the so-called "geringonça" (odd contraption) government of the PS, PCP and the Left Bloc, which ruled from November 2015 to October 2019. He also warned that he would be "very disappointed if we were to come to the conclusion that we can only count on the PCP and the Left Bloc in those times where the economy is growing". As for whether his government would be tempted to apply in the future the same measures that were applied ten years ago to face the crisis of 2011, António Costa reiterated that he would not apply austerity again, "not only because I didn't believe in it at the time, but, above all, because the disease now is so clearly different from the previous one. There is currently no disease of state finances, which, fortunately, has managed to clean up its previous issues."

However, is this type of alliance – centered around European integration, neoliberal reforms and overcoming the right/left divide – really obsolete?

As for going back to a "Central Bloc" government – like the one in 1983-85 with Prime Minister Mário Soares between the PS (center-left) and the PSD (center-right) – António Costa dismissed the idea, saying that "there is a notable agreement between the leaders of the PSD and the PS that this is not a good solution for the political system, because it weakens the natural poles of alternatives – and democracy demands alternatives and needs alternatives". However, is this type of alliance – centered around European integration, neoliberal reforms and overcoming the right/left divide – really obsolete?

The leader of the Left Bloc (Bloco de Esquerda, or BE, radical left, 19 deputies), Catarina Martins, had already warned the Prime Minister that if her party had control over confronting the crisis, it would be done the BE's way with no austerity or extreme cuts to public investment, recalling, "We did not accept austerity in 2011 and we will not accept it in 2021".

The current health crisis only heightens the issues of maintaining this unstable equilibrium and culture of compromise that enabled the "geringonça" to function for four years, a balance between respecting Portugal's European commitments and a willingness to turn the page on austerity. But the "geringonça" broke apart after the October 2019 legislative election and the PS (36.4% of the vote) was able to form a minority government with 108 of the 230 deputies in the Assembly. While Prime Minister António Costa's great political skill and tactical acumen had previously enabled him to govern without any major difficulties, the crisis has weakened the minority government, forcing an overhaul of its political agenda and reducing its capacity to navigate the looming economic and social crisis.

Spurred on by the BE and PCP to his left while being discreetly petitioned by PSD (center-right, 79 deputies) leader Rui Rio to consider a kind of "Central Bloc" in the form of a national unity government, the Prime Minister will have to skillfully manage the situation in the coming months in order to pass an amending budget in the summer and, after that, a 2021 budget against the backdrop of mid-term municipal elections in the fall of 2021. He must neither give in to the siren call of austerity, a true casus belli for a portion of his electorate and the other left-wing parties (BE and PCP), nor alienate himself from the centrist electorate that has gravitated somewhat to the PS, and a PSD pulled to its right by the populist drift of the CDS – People's Party (Centro Democrático e Social, formerly the Christian Democrats). This reshuffling of forces on the right began with the CDS. It had been weakened by poor results in the October 2019 Parliamentary elections (4.2% and 5 deputies), a historic low for the party. They were also under pressure from the far-right Chega ("Enough") party, which took home 1.3% of the vote in the last legislative elections. In the fall of 2019, Chega's populist leader André Ventura made his entrance into Parliament a rowdy one, making one racist remark after another. At the start of May, Ventura put forward the idea of building a specific lockdown and monitoring plan for the Romani people, who he seemed to deem responsible for all the country's ills, if not the epidemic itself.

Finally, at the EU level, António Costa, along with his Finance Minister Mário Centeno, who is also President of the Eurogroup, had hoped that issuing "coronabonds" or "eurobonds" would help the besieged economies of Southern Europe. But his attempts to assuage Dutch and German reservations met with little success and, calling the current crisis "a decisive moment" for Europe, Costa criticized the "repugnant" attitude of the unconvinced Dutch authorities. It is a decidedly complex situation, and one which this popular and apparently skillful Prime Minister must solve in the coming months.