An AARP for Portugal? Seniors rally as pensions under pressure.
Portuguese seniors may not be leading today's strike, but they're organizing against austerity.
As Portuguese take to the streets today in the fourth general strike in Portugal with multiparty support, the increasingly powerful retiree population will be on the front lines.
Seniors, who make up about a third of Portugal's population, have been specially targeted by relentless public cuts. They have not only seen their pensions reduced, but are suffering from severe increases in the cost of living from tax hikes and a shrinking welfare state. Combined, these developments have eroded their purchasing power and forced hundreds of thousands below the poverty line.
While they cannot be the most active in street protests, an area where the younger populations understandably dominate, they could certainly determine Portugal's future.
They will be a key voting bloc in the next general election in 2015 (if protests and upheaval like today's strike don't force a new vote before then). They have a history of being a combative political force and are showing early signs of renewed empowerment and mobilization, which some experts say could be a game changer in this crisis.
Retirees feel a sense a betrayal from a democracy they built and defended that is now turning against them, not only when they were meant to enjoy what they’ve worked and paid for, but when they are least able to fight back.
"This is social terrorism," says 64-year-old Maria do Rosario Gama, leader of a nascent yet rapidly growing national association of retirees based in Coimbra called APRe!, an acronym which also translates as "No more!" Their slogan is "We are not disposable."
"We've been fighting all our lives and now, because we are old and they think we can't defend ourselves, they are targeting us. It's just cut after cut after cut," says Mrs. Gama, a former school director.
“Workers’ struggle is our struggle,” APRe! said this week in a statement supporting today’s strike.
Back to the front
Gama has been on the front lines her entire life, like many of her generation who lived through decades of dictatorship that ended in 1974, followed by violent turmoil and saber-rattling and a grueling road to consolidate democracy.
In the past she led protests against economic and political stagnation aided by an infamous political class too divided between the right, the socialists, and the communists to be effective. Now, just when she thought she could relax and enjoy her life with her children, grandchildren, and husband, she's back in the street, this time leading a battle against the relentless spending cuts of the conservative government of Prime Minister Pedro Passos Coelho.
"This a tremendous injustice that the government is doing. It's barbaric," says Luís Valente de Oliveira, a 76-year-old former government minister and veteran Portuguese politician who now presides over the Oporto city council.
"But retirees will defend themselves, you can be sure, even if they can't do much to change their situation. It's a very incorrect policy implemented by very insensitive people and just a great disappointment vis-à-vis politics and democracy."
Seniors make up more than a third of the voting population and here, like in other countries, tend to vote more than younger cohorts. With the Portuguese population aging, their power will only grow for years to come – giving them the potential for influence in Portugal akin to that the AARP senior lobby holds in the US.
But so far they have had no need to act as a voting bloc. Even if they did, their options are limited because so many of the cuts have been imposed by the European Union, especially Germany, which has significant economic interests here. Although the decision on how to distribute the cuts is up to the government, the amount that needs to be cut is not negotiable.
"I don't know if we are going to win, but we are going to fight," says Gama, visibly indignant. They've knocked on all powerful doors, "but the political parties aren't listening to us."
For now, they are concentrating on organizing the huge and long-disfranchised population and on defending their rights in courts, challenging the constitutionality of austerity policies. APRe! is an apolitical organization, and they know their voting power won't necessarily force any government to backtrack.
"But we are only getting started," Gama says defiantly.
Portugal is in its third straight year of recession and its economy is expected to contract 2.4 percent in 2013. The pain intensified in 2011, when Portugal was forced to request a 78 billion euro ($101 billion) bailout from the European Union, European Central Bank, and International Monetary Fund to avoid going bankrupt.
Mr. Passos Coelho swept elections and Portugal had no choice but to implement unprecedented cuts to meet the terms of the bailout, which came with strict deficit targets. It's up to the government, though, to divvy up austerity.
Although there have been multiple tax hikes and government spending cuts that have visibly eroded the welfare state, especially in sectors such as education and health care, Passos Coelho's policies have directed much of the pain on civil servants and retirees.
In April, the country's highest court ruled some of the measures unconstitutional because they discriminantly targeted only public pensions and employees and because pension cuts are illegal. But a month later, the government announced measures that levied new taxes on pensions, generating a similar amount of revenue for the government without violating the law against pension cuts, and harmonizing the rules for public and private pensions.
The measures only increased the burden on retirees, with 1.5 billion euros of a total savings of 4.8 billion euros by 2015 coming on their backs.
On top of that, the retirement age was raised a year, to 66, and a new tax was levied on pensions. The government also further cut the budget for social security.
Around 87 percent of retirees earn less than 611 euros ($794) a month, and around 77 percent don’t earn enough to cover basic costs, according to a study released this week by the Economic and Social Council, of Coimbra University. The study didn’t take into account recent cuts, which will only swell the elderly population at risk, it warned. The elderly population of Portugal has the highest poverty risk in the EU as a result of shrinking benefits, studies show.
APRe! is once again challenging the measures in court, but it could take months, if not years, to eventually reach the high court or European courts.
"I don't travel, I can't go to the beach and I no longer can treat myself to something special as I used to. I only have money for rent and food, and that's if I can keep paying rent," says Estela Castilho, a 66-year-old retired teacher who has lost 25 percent of her income. "I was middle class and now I'm low-middle class. I worked to have a good pension. I paid for it and they are taking it away."
Few options but to fight
"Undoubtedly retirees will vote out the current government as soon as they have possibility to do so," says Antonio Costa Pinto, a political analyst at the University of Lisbon. "But austerity is not going to change. The solution is not in the national government but in Europe. The change won't be very significant even with a new government and the luck of retirees won't change very much."
And retirees, like the unemployed, have no way of threatening productivity by striking, thus denying them the power that their generation used so effectively in the past. But that is precisely where their salvation could lie, says Raquel Cardeira Varela, a researcher in the Universidade Nova de Lisboa and an expert in labor and conflict issues.
If retirees join forces with others in similar situation, like the unemployed and impoverished, and for example shut down ports or other vital infrastructure by occupying it, like they did in Argentina last decade, they could force the government to backtrack, Dr. Varela suggests.
"This is very new and we are only now researching this, but retirees have a history that plays to their advantage. They know how to organize, which younger generations have been unable to do. They are educated and militant. They traditionally are not active, but the cuts are mobilizing them quickly and we are seeing signs of a potentially strong organizational capacity," Dr. Varela says.
"They need to unite to other non-productive segments of the population, and even though it's to early, this could be a game changer."