Which way now fo Portugal's bosses?

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At dawn last Thursday Portuguese entered a new critical phase.

The first parliamentary government for 50 years was decisively defeated after only 16 months in office.

After a continuous two-day debate on a motion of confidence, Mario Soares' minority socialist government received onlythe votes of the 100 socialist MPs.

Not only did the two bourgeois opposition parties vote against Soares, as they were expected to do, but so did the Stalinists of the Portuguese CP, which did not make its decision unti the very last moment.

In the debate Soares wooed the CP, saying that it was a "democratic party" and that he would be willing to continue to govern with CP That itself was a striking change from Soares attitude to the CP at the beginning of the present crisis. His main concern then seemed to be to get the parliamentary votes of the two bourgeois parties-the Social Democrats and the Democratic and Social Centre.

'Concessions'

The CP leaders dared not back up Soares anti-working class government without at least the appearance oi some 'concessions' Soares did not wish to make these concessions for fear of losing the confidence of the international capitalists.

That SILL last minute compromise saved Soares is proof of the extreme econdebts amount $3500 million -equal to half of what remains of the country's gold reserves.

The deficit in the balance of payments remains enormous and there is no sign of export growth to reduce it.

Hyperinflation

This means that without outside help Portugal would very soon face either international bankruptcy or massive devaluation and hyperinflation.

Since the Soares government took power, despite its tireless efforts to make Portugal safe for capitalism, the economic situation has continued to deteriorate. Unemployment is officialiy 16 per cent of the labour force and still rising as more firms go bankrupt.

National production has risen a little in the last year but there has been no renewal of capitalists' investment.

Soares' socialist government has for 18 months tried to keep a precarious political balance between the bourgeois opposition and the CP.

But political balance has not been enough to re-establish the confidence of capitalism in Portugal.

That requires the reversal of more of the gains which the working class has made since 1974.

Already Soares has tried to seize back from the peasantry land distributed to them in the 1975 Land Reform.

Confidence vote

He has cut back government spending, promoted unemployment and imposed wage control to slash real

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- INTERNAT spending and raise taxes enough to keep in line with the IMF limits would provoke an uncontrollable reaction from the working class.

So the Andreotti government is already proposing unilaterally to break the