Social democracy is floundering everywhere in Europe, except Portugal

ANTONIO COSTA, Portugal’s affable prime minister, greets your columnist with a broad grin as he settles his hefty frame into a sofa in his official residence. He has a lot to smile about. Lisbon, among Europe’s hottest tourist destinations, is enjoying a mini startup boom. Portugal’s footballers are the European champions, and its politicians have nabbed a clutch of senior international jobs. And above all, he is the winner of a high-stakes political gamble.

When Mr Costa’s Socialist Party lost an election in 2015 to the centre-right (and confusingly named) Social Democrats, who had overseen a harsh EU-imposed austerity programme during a three-year €78bn ($107bn) bail-out, most observers expected the Socialists to prop them up in a left-right “grand coalition” of the sort now common across Europe. Instead Mr Costa, the son of a communist intellectual from Goa, Portugal’s old colony in India, convinced two hard-left parties—the old-school Communists and the modish Left Bloc—to support a minority Socialist government in exchange for modest policy concessions.