A Rising Cry Against the Radicals

Rival sound trucks blared abusive slogans at one another and hostile crowds poured into the streets of Portuguese cities as the confrontation between moderates and Communists intensified late last week. In Oporto, the country's second largest city, 75,000 Socialists rallied to proclaim their support of democracy. Communist roadblocks of barbed wire and nail-studded planks failed to prevent the mass gathering. Meanwhile, about 35 miles north of Lisbon, angry mobs sacked the offices and burned the files of the Communist Party in both Lourinh`a and Cadaval. At week's end, amid rumors of an impending coup, the country's military leaders sought to defuse the volatile situation; its Revolutionary Council placed troops on alert and lectured representatives of the warring Socialist and Communist parties that their continued split furthered the "reactionary" cause.

Flag-Waving Mobs. These developments, culminating a week of mounting political tension, confronted those backing the creation of a parliamentary democracy in Portugal with their most serious challenge since the Revolution 15 months ago. Earlier in the week, Socialist demonstrators had denounced the military leadership; the Communist Party had responded by summoning its members to a "state of vigilance." On the extreme left, flag-waving mobs marched to demand dissolution of the democratically elected Constituent Assembly. They were supported by hundreds of soldiers from Artillery Regiment No. 1, widely known as the most radical in the country, who had brought along eight of their menacing, self-propelled cannons.

Last week's tension was heightened by uncertainty over the complexion and direction of the regime. The military dissolved the shaky coalition Cabinet when the last of the moderates walked out. At week's end General Vasco dos Santos Gonc,alves, Portugal's Premier, was still trying to form a new Cabinet of military men and civilian technocrats. Meanwhile observers in Lisbon believed that a movement was mounting within the 30-man Revolutionary Council of the divided M.F.A. (Armed Forces Movement) to oust the strongly pro-Communist Gonc,alves as Premier.

The first moderates to quit the Cabinet were the Mario Soares Socialists, who protested against the M.F.A.'s political blueprint for the creation of local revolutionary councils, which would virtually eliminate political parties (TIME, July 21). The Socialists were followed last week by the centrist Popular Democrats (P.P.D.) and by two independent ministers, who pulled out of the coalition when they failed to receive assurances from the military that press freedom would be restored and parliamentary democracy would be established.

That left only the Communists and the fellow-traveling M.D.P. (Portuguese Democratic Movement) with party representation in the Cabinet; the two groups had polled a mere 18% of the vote in last April's Constituent Assembly election, compared with 38% for the Socialists and 26% for the P.P.D. So tiny a fraction made a mockery of any M.F.A. attempt to maintain the fiction of democratic participation in the government. The M.F.A. thus swept out all representatives of political parties.

Red Control. Although the Socialists and Popular Democrats never really wielded much power in the government, their presence in the coalition kept alive hopes that neither the Communists nor the ultraradicals, like supporters of General Otelo Saraiva de Carvalho, would have the final word on how Portugal's new government would be structured. Barring an unexpected change of heart by the military, the Communists stand to gain from the developments. While Party Boss Alvaro Cunhal lost his post as Minister Without Portfolio, the Reds retain control of the unions, most of the press and broadcasting network, and much of the national and local bureaucracy. Moreover, it is expected that many if not most of the "nonpartisan" civilians whom Gonc,alves would like to appoint to a new Cabinet will be mouthpieces for the Communists.

The moderates must pin their remaining hopes on increasing their influence within the M.F.A. Although all meetings of the Revolutionary Council and the 240-member M.F.A. General Assembly are cloaked in secrecy, it is felt that the movement is torn by a struggle involving at least three factions: Saraiva de Carvalho's ultraradicals, the Communists and their allies backing Gongalves, and moderates rallying about Foreign Minister Ernesto Melo Antunes. Much of the Socialists' and Popular Democrats' success may well depend on how effectively they can mobilize their supporters around the country and so impress the M.F.A. with the strength of their followings.

Yet Socialist Soares at first seemed apprehensive, even timid about challenging the radical officers. After quitting the Cabinet, he spent four days in long meetings with party colleagues instead of sending his followers out into the streets. "The Communists would have called a crippling strike by tea-time," noted one observer in Lisbon. "By dinnertime they would have had 30,000 people in the streets."

When Soares finally did schedule a rally early last week, the 20,000 Socialists who jammed the area in front of party headquarters in Lisbon were clearly ahead of their leader. Scares was visibly uneasy when the rally chanted: "The people are not with the M.F.A." --reversing what by now has become an almost automatic, liturgical profession of loyalty to the military leadership. Perhaps emboldened by the rally, Soares called for the series of demonstrations that were spreading through the country at week's end.

The Roman Catholic Church has also become bolder in its opposition to the radicals. More than 7,000 Catholics last week gathered at Aveiro, on the coast 170 miles north of Lisbon, to welcome Bishop Manuel d'Almeida Trindade. He had just returned from consultations at the Vatican on a recent takeover by radical workers of Radio Renascenc,a, the church's radio station. Addressing one of the largest conservative gatherings since the revolution, the bishop called for demonstrations throughout the nation.

In their struggle for survival, the moderate parties have one issue that is bound to gain them perhaps not only middle-class but also even some worker support: the collapse of Portugal's economy, which the M.F.A. has thoroughly mismanaged. Unemployment is now estimated at 10% and is certain to rise. The rate of inflation could top 30% by year's end, and the trade deficit threatens to reach $2 billion--a staggering sum for a nation with a gross national product of only $13 billion.

Gold Bug. Lisbon's foreign earnings have been badly hurt by the drastic drop in tourism. Germans, Britons and Americans who once flocked to the sandy beaches of Cascais and the Algarve have been frightened off by the political turmoil. Now falling at the rate of $100 million per month, Portugal's foreign-currency reserves will be exhausted by the end of the year. Although Lisbon could then draw upon its huge gold stocks--worth $5 billion at current market prices, making it the eighth largest hoard in the world--any significant sale of bullion would likely be politically explosive. The ordinary Portuguese, a notorious gold bug, would rightly regard the sale as an act of desperation.

The workers' councils, which now share in the running of big and small business, have badly crippled output. They have arbitrarily called strikes and in the fanatic saneamento (literally, "cleaning up") campaign, have purged from their plants all those accused of the undefined crime of "economic sabotage." Managers have been so harassed that many have abandoned their companies. Laborers at Lisnave, Europe's largest dry dock, have reduced work hours so much that 50% has been added to the lay-up time for ships. The nationalization of all the country's banks, insurance companies and half of its industries has brought foreign investment to a halt, even though foreign assets have been exempted. Half a dozen U.S. firms have closed up shop since the revolution began; Otis Elevator Co., for example, simply abandoned its premises to the workers. The G.N.P., which grew at an average rate of 6.2% in the 1960s and increased 8.1% in 1973, will fall a devastating 6% this year. The middle class, whose salaries have been frozen, have been crushed by the inflation; there has been an exodus of technicians to Brazil, Spain and other countries. Most workers, however, have escaped the worst effects of the soaring prices. Not only have wages more than doubled for those at the lower end of the pay scale, but paychecks keep coming even if factories are not producing. Reason: the government requires that employees be paid. The funds, of course, are ultimately provided by the treasury's printing presses, adding more fuel to inflation.

Instead of trying to restore the confidence of consumers and investors by developing an economic policy that might lead to stability, the government has been attacking unnamed foreigners for organizing a phantom "economic boycott." Although the Common Market has delayed granting Portugal aid and trade concessions, Washington --despite its worries about the present regime--has supplied Lisbon with $15 million in aid.

If the economic decline is not checked, the M.F.A. may find itself discredited and losing popular support. Power could then fall into the waiting hands of Alvaro Cunhal and his Communist Party. Although Cunhal has undeviatingly backed the M.F.A. so far, he will probably stop at nothing to grab power when he feels the time is ripe. He made that chillingly clear in a recent interview with Italian Journalist Oriana Fallaci, which was published last week by the New York Times. Abandoning the temperate tone he has used in previous talks with foreign newsmen, Cunhal boasted in almost brutal candor: "We Communists don't accept the rules of the election game. No, no, no; I care nothing for elections. We don't await the results of elections to change things. Our way is revolution. Portugal will never be a country of democratic freedoms."

Despite their discipline and their well-entrenched position in key bureaucracies, the Communists command the loyalty of only a small minority of Portugal's voters. Moreover they face threats on two fronts. Ultraradical leftists, some of them Maoist in outlook, are creating local revolutionary councils of their own that could eventually rival the Communist power network. On the right are the Socialists and P.P.D., whose appeal to reason and whose commitment to democracy and moderation may yet find majority support among the military leaders. But time is getting short. Last week's events seem to signal that Portugal is approaching what may be an unavoidable watershed--where it will have to opt for either a leftist but democratic society or an uncompromising authoritarian regime.

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