When Portugal will, next year, celebrate its fifty years of democracy, the main event will likely take place in the capital’s main plaza, commonly referred to as Terreiro do Paço (Palace Yard), one of the biggest in Europe, and the former seat of royal power. On one end, the plaza oversees the Tagus river. On the other, former King Carlos I and his heir prince Luís Filipe were assassinated in 1908.
Two assassins—one from a distance, with a rifle, and a second one who jumped onto the royal carriage—effectively ended the 770-year-old Portuguese monarchy, while the Queen, with about the same efficacy that the the monarchy defended itself from Republicanism, struck back at the assassin with the only weapon available to her: a bouquet of flowers. A commemorative plaque to the side of the plaza celebrates the event or, rather, celebrates the King and his son having “given their life for their Fatherland.” If they were now looking down at their fatherland, roughly a century after, what would they see?
They would certainly joyously reminisce on its rugged cliffs, sprawling vineyards, and azure coastlines. And, with bittersweetness, they’d admire the 100-foot Triumphal Arch that oversees the plaza where they were killed—an arch that celebrates the former Portuguese Empire and the discovery of new peoples and cultures, surmounted by three colossal statues representing Glory crowning Genius on one side and Valor on the other.
Despondent, they’d also see a society where neither Genius nor Valor are as prized as they once were and where, as of 2020, at least half of a population of ten million depend on the state in some way—35% are retirees, 10% government workers, and another 5% receive either unemployment benefits or integration benefits. They would see a country with less youth than they once saw; they would see what is in fact, after Italy, the second-oldest country in Europe, with 23% of the population being older than 65. And they would further see that like so many other democratic and less democratic countries, Portugal is having elections and that this election will, once again, pit the country’s aging population against its young people.
So-called “seniors” are reliable voters, while young people aren’t, and so this perverse incentive ensures that seniors vote, effectively, to extract rent for themselves from young people through the state. This is reflected in voting intentions: people over 54 are disproportionately likely to vote for the Socialist Party, while those who are under 25 are disproportionately unlikely to vote for it.
This measured effect, if anything, understates the underlying reality, as young people vote more with their feet than with their ballots. They are a large part of those abstaining to vote and a large part of those leaving the country for other EU member states and beyond. One in three Portuguese people between the ages of 15 and 39 have left the country. The most educated and accomplished are, of course, the first to leave in pursuit of opportunities elsewhere. This dismal story, in its broad strokes, is not unique to Portugal, or even southern Europe, but increasingly sounds familiar in aging societies from Germany to Japan, if not even the United States.
A Retirement Home Divided
Few people outside Portugal would be familiar with the last decade of Portuguese electoral politics. But they might be surprised to hear how familiar the characters, plot twists, and season finales sound. In 2022, the Socialist Party won an absolute majority with 41% of the votes and was supposed to govern until 2026. But prime minister António Costa’s government fell late last year as prosecutors carried out searches in his office, indicted both his chief of staff, Vítor Escária, and his minister of infrastructure, João Galamba, and finally posted a note on their website informing social media that the prime minister himself—the PM, for Americans—was under investigation.
This abrupt end to the administration is reminiscent of when the Socialist Party was last in power: in 2009 the same party won elections and none were due until 2013. However, in 2011, a hung parliament, caused by the entirety of the opposition uniting to vote against the government’s proposed austerity measures intended to curb the financial crisis the country was going into—the same that earned the country its own letter in the infamous PIIGS acronym—ensured early elections. The Socialist Party lost, then PM José Sócrates—mentor of later PM António Costa—resigned. José Sócrates himself was arrested on suspicions of corruption and money laundering in 2014.
The way Costa’s government ended was uncommon, but so was the way it began. Portugal had a long-standing unspoken agreement that the party with the most votes would head the government, even if they didn’t have an absolute majority. António Costa broke this agreement in 2015 by signing a “confidence and supply” agreement with the Left Bloc, the left-wing populist party, and the Portuguese Communist Party (PCP), which ensured they would vote to support his minority government. But times changed as the agreements degraded the image of both the Left Bloc and of the PCP with their voters. To win the elections in 2022, the Socialist Party needed another tactic: the specter of the extreme right.
CHEGA! (literally “Enough!”) is a right-wing populist party that entered parliament in 2019 by the hand of its leader and former television soccer commentator André Ventura. In 2022, Chega polled high enough to be the third-largest party out of the nine in parliament. The Socialist Party pivoted their branding to being the only party able to stop their rise. Their rationale was that the second-largest party in the country—the Social Democratic Party—reliably made pre-electoral deals with the then-only party to the right of it—CDS, the Christian Democrat party—and thus couldn’t be trusted to stop the new onslaught coming from the right.
Ironically, it was precisely the Social Democratic Party reliably making deals with the Christian Democrat party that allowed André Ventura’s Chega Party to rise. Treating the right-wing vote as secured, the Social Democratic Party started calling itself a “center” party. This repositioning disenfranchised former voters and allowed Chega to emerge to compete for the right-wing vote.
The Social Democratic Party faced a dilemma: they could stay positioned at the center and risk attracting no one, or move right to try to reclaim their votes. They did the latter in the Azores where they met with Ventura’s party, and made an agreement to share power there. The Azores are one of the two autonomous archipelagos of Portugal in the North Atlantic Ocean with their own government. As a consequence the parties of the archipelagos are somewhat independent. Despite this independence the agreement played right into the Socialist Party’s hand.
Much of the media political commentary since has revolved around whether or not the Social Democratic Party would draw a “red line” and commit to refusing to share power with Chega in mainland Portugal, in case those seats were needed to achieve a majority in parliament. A prospect that seems increasingly likely as Chega rose to the third place with 7% of the votes in 2022 and it has already polled as high as 20% for the upcoming elections in March.
The Socialist Party’s pivot was more successful because they already had a firm position as the party of benefits to the ever-growing national plurality of pensioners and state dependents. When Portugal went bankrupt in 2011 under José Socrátes, it was the Socialist Party that, in response to that, originally requested an economic reform program and bailout from the International Monetary Fund and European Central Bank, but enacting those agreed-upon reforms was left to the Social Democratic Party. As a result, many people felt significant economic pain under the Social Democratic Party government, which left a hard-to-combat national understanding wherein the Social Democratic Party is the one that is responsible for cutting pensions, and the Socialist Party for reinstituting them.
So, as the country struggles with an aging population, brain drain, and youth drain, it also suffers from the impossibility of voting structural reforms into existence. In addition to this, it suffers from a Byzantine legal system where there is no precedent and the interpretation of law depends on scholars scattered across the country. Recall that former Socialist PM Sócrates was first arrested ten years ago. His trial hasn’t started yet. Such a system is only navigable by those who already have wealth to afford it or by those for whom special, simplified systems are created.
Give Me Your Retired, Your Landlords, Your Slouching Techies Yearning To Feel Free
As the westernmost country in Europe, with a long coast line and more than three hundred sunny days a year, Portugal has a natural appeal. These advantages contribute to quality of life and help draw in tourists—in fact, in 2023, a record 30 million of them, three times the population of Portugal. With rapid aging and concerning emigration compounded by a broken political economy which blocks both reform and economic growth, the country has been leaning into these remaining natural advantages by creating a variety of special exemptions to facilitate not just tourism but long-term residency. However, it is not clear that these have always met their stated aim.
An example of one of these exemptions is the so-called “golden visa.” Officially known as the “residence permit for investment activity,” it allows you to reside not just in Portugal but to have access to any of the 29 EU countries that have abolished border controls between them through the Schengen Agreement, in exchange for buying property or creating jobs. Out of the 10,000 visas issued—not counting visas for the investors’ family members—9998 went to buying property. Half of those were issued to Chinese nationals who, after buying property and having access to Europe, leave and rent their property on vacation rental platforms like Airbnb. This led to an inflow of €9 billion, accounting for around 4% of the country’s GDP, which distorted the property market so severely that Lisbon, the country’s capital, is now the 8th-most expensive EU city, ahead of Berlin.
A different regulatory exemption was the “Non-Habitual Resident Tax Scheme,” or NHR. This ensured anyone who had not previously resided in the country over the past five years to get tax exemptions and flat rate taxation for a period of ten years after moving to Portugal. The stated goal was to get expat professionals qualified in activities with high added value, intellectual talent, or industrial know-how, as well as pensioners and other passive income earners. As of 2019, of the 27,367 beneficiaries, less than 10% have professions with high-added value, while the remaining 24,630 were expat pensioners, most of them French, Italian, and Swedish.
It’s easy to be attracted to Portugal if you weren’t born there. International media has been promoting Portugal and its various exemptions for some years, and with so much success that the main airport has reached capacity: in 2019 Lisbon’s airport was the busiest single-runway airport in mainland Europe. This year—ahead of the 50th anniversary of democracy—is also the 55th anniversary of never-ending political discussion about where to build the new airport. Perhaps a new airport will be achieved by the centennial.
While the political system may be dysfunctional for citizens, and government services perplex citizens and digital nomads alike, Portugal has managed to have a dependable, rather than chaotic, dysfunctionality. It is, according to the Global Peace Index, the seventh-safest country in the world. Low labor costs—a $800 minimum wage and a $36,000 GDP per capita adjusted for purchasing power parity, about half that of the U.S.—are likely to remain low as record numbers of immigrants are imported.
The World Population As Temporarily Undocumented Portuguese
Over 10% of the population is now composed of immigrants, not counting those who have gained citizenship. Legal immigrants come mostly from Brazil and other former Portuguese colonies. Ukrainian license plates can now frequently be seen on the roads of Lisbon: being the westernmost country in Europe, it is as far away as you can drive from Russia, after all. Finally, there are many Pakistani immigrants, many of them from human trafficking networks. These tend to work in the Alentejo region in agriculture—an old and depopulated area, as young people moved to the big cities.
These new migrants, with their unique customs and great numbers, cause the topsy-turvy experience of there now being viral videos where the old immigrants—Brazilians—complain about the new immigrants. Two factors have contributed to this increased immigration. First, in 2017, Left Bloc proposed a change to legislation where you no longer needed to show you could sustain yourself to get a permit to live in Portugal. A job contract would be enough.
The Immigration Control Agency (SEF) was against it, but it was passed in Parliament. As predicted by SEF, this started a blooming business of fake contracts and overwhelmed the immigration services. Ostensibly in response to this volume of fraud, as of 2019, the policy was changed so that anyone who had been paying for social security for twelve months would automatically receive a visa, whether or not they had entered the country legally. In 2022 the agency, mandated by the government, began issuing visas for “job search,” and did away with quotas.
Then, in 2023, the Immigration Control Agency was dissolved, ostensibly in response to an extremely uncharacteristic display of violence where, in March 2020, two officers beat a Ukrainian man to death in the airport of Lisbon.
No protests followed the unjust death of this man on Portuguese soil. This makes for an illustrative contrast to when, three months later, the June 2020 Black Lives Matter protests were, just in Lisbon, attended by over 5000 people, decrying the death of an African-American man 6000 kilometers away on New World soil. These protests were organized by an organization called SOS Racismo. And, while no energy was expended on protests—there was no global interest for Ukraine at the time—the agency was dissolved by António Costa’s government.
After dissolution, it had its competencies divided by seven different agencies. Today, one agency is responsible for air border control, another for the sea and land borders. One is responsible for the entry into Portugal of a migrant, and a different one is responsible for issuing the residence permit. While the Immigration Control Agency was being dissolved, the government decided it was opportune to sign a deal with countries in the Community of Portuguese Language Countries (CPLP), a political association of former Portuguese colonies—and, for some reason, Equatorial Guinea—wherein any national from them that was illegally in Portugal could just go to a website and automatically get a residence permit.
Although the ostensible goal was to regularize the many illegals in Portugal, the fact of the matter is that anyone could access the website from anywhere, gaining a residence permit. And, even if having been obtained fraudulently, different agencies now process entry and expulsion. Effectively, the government gave residency permits to anyone who wanted them in a Lusophone universe of 287 million people, about thirty times the population of Portugal. This move was so brazen that the EU opened an infringement procedure against Portugal, threatening its Schengen status.
The Political Economy of Vote Dilution
It is tempting to think of Portugal as a small, poor country, beset by unique problems. But Portugal is rather typical of the periphery of the New Europe coming into being. As economic growth approaches zero, and fertility sinks to new lows, remaining young workers are taxed to supply the pensions for an ever-growing population of pensioners. This drives young workers to move out of peripheral EU countries like Portugal, Greece, or Croatia—or Ukraine—and into the economic core of Europe. This compounding labor shortage demands immigration.
Economically productive immigrants provide more income taxes that the political economy efficiently redistributes from the few working to the many retired and government-employed. Chinese absentee landlords or American crypto-millionaires bring with them similar benefits while being, however, politically inert and, while wealthy, disenfranchised. Through seeking exit from China and the United States, they have bought into a system where they have even less voice.
Immigrants who aren’t economically productive provide additional voters. When up-and-coming populist parties try to split the difference and argue for keeping social services for retirees but reducing them for those on welfare or government employees, they play the same game as is being currently played but with one hand tied behind their back.
Moreover, since populists have no principled way to argue against the ideological premises of this extractive political economy pretending to be technocratic governance—or, in the Anglophone context, pretending to be economic rationality—they make for boogeymen and scapegoats. If they govern, the immediate short-term effect is hardship, ensuring any electoral win does not translate into bureaucratic power.
The political economy of votes for legitimacy, salaried bureaucracy, and activism for power, backed ultimately by the economic and military power of the United States and to an ever-lessening degree the economic power of Germany, means that few would-be republics that provided power to their citizens, such as Hungary, Poland, or Italy, will escape this New Europe. When the monarchy was first abolished, Republicanism was supposed to provide Portugal with that same progress and order that was inscribed in Brazil’s flag when it, twenty years earlier, became a republic.
Having achieved neither, and having exhausted conventional political solutions, perhaps it is time we admit to ourselves that there is nothing orderly or progressive about the current political economy, no matter how lovely the constitution and its voluminous list of rights read on paper. The search should begin for more radical thinking that isn’t just about reconfiguring who is extracted and who extracts to try to find a majority of votes. Perhaps a people beset by these problems ought to consider alternative political economies that have already shown promise, be they one-party states like Singapore and Japan, or even the de facto monarchy of Botswana.
Democracy’s functionality might have been a strange artefact of the immense demographic expansion of the 19th and 20th centuries, where ever more young people combined with rapid technological leaps in many different fields between 1870 and 1970. Sure, in a new system, we could keep the trappings of democracy, but the first step to recovery is recognizing that in Europe, at least, the political economy where citizens achieve representation of their interests through voting is long dead. Long live the King.