Portugal's hopes for a prosperous new year

The most promising news of the year has been China's pledge to help Portugal find its way out of the crisis that is threatening to wreck the country's economy.

China's President Hu Jintao announced the idea while on a state visit to Lisbon last month. Portugal's Finance Minister had it set in stone during his visit to Beijing last week.

"We made a great leap forward in strengthening our ties at all levels - in trade and investment as well as in the area of financing," said Teixeiro dos Santos, borrowing Chairman Mao Tse-tung's famous slogan during the late 1950s campaign to transform China's agrarian economy.

Teixeiro dos Santos' latest visit to Beijing was his second in three months and came a week after a trip to Brazil. Crucially - and in contrast to Portugal - both China and Brazil are recording strong growth.

So despite the prophets of doom who insist a bailout is inevitable, Portugal may have a card or two up its sleeve.

Bearing in mind that a Financial Times survey earlier this month rated Teixeiro dos Santos as Europe's second worst Finance Minister, how does his recent performance compare with other recent decisions concerning Europe and the wider world?

As we enter the season of merriment with its tidings of comfort and joy, a new bambino of sorts has been born, not in Bethlehem, but in Brussels. Begotten by the Lisbon Treaty, it has been christened the European External Action Service, EEAS for short.

Basically, EEAS is an EU foreign office representing all 27 member states. It was formally launched at the Europe Commission's headquarters in Brussels on 1st December, the first anniversary of the Lisbon Treaty. Alas, the champagne celebrations were somewhat muted because of cash problems. In its early infancy, EEAS has been stunted by an unholy parental row over the EU's budget for next year. Hopefully the budget will be approved before Christmas Day.

When the European Council appointed Catherine Ashton to the lofty position of High Representative of the Union for Foreign Affairs and Security Policy it declared that she would be “assisted” by EEAS. She will have a staff of no less than 5,500, mostly absorbed from existing EU institutions. It will be “a diplomatic corps to rival any in the world,” as one observer put it.

Already, EEAS is reckoned to be €45 million over budget for next year. Its budget is expected to be three times that of the British Foreign & Commonwealth Office and may reach €9.5 billion by 2013.

Catherine Ashton, otherwise known as Baroness Ashton of Upholland, a labour peer, will receive a salary of €265,470 plus various EU allowances, making her the highest paid female politician in the world. Not bad for a Lancashire lass hardly anyone had ever heard of and who has never been elected to anything.

Fifty of the Baroness' assistants will earn more than Britain's Prime Minister. Other expenses include tight security arrangements for hundreds of new offices in Brussels and the purchase of 150 new bullet-proof limousines. Opponents say EEAS will be yet another layer of EU bureaucracy, that it will compete with existing national diplomatic services and be a waste of money.

But let's look on the sunny side. Never mind the pay cuts and tax hikes ordinary folk in this country will have to suffer as from 1st January 2011. With the help of China, and maybe even EEAS as well, Portugal can look forward to a prosperous new year – though it may be some time yet before we know which year that might be.