Golden visas offer the keys to Europe

At a time when Britain is worrying about an influx of workers from poor European Union countries, Portugal is enthusiastically encouraging rich entrepreneurs from outside the EU.

Romanian and Bulgarians, especially those likely to seek welfare benefits, are causing panic in Britain because immigration restrictions are to be lifted on January 1.

Meanwhile, Chinese, Russian and other foreign nationals are being wholeheartedly welcomed here in return for investments under the so-called Golden Visa scheme. 

In return for buying property for upwards of half a million euros ($700,000), or capital transfers of more than a million, a golden visa allows non-EU citizens to reside in Portugal for five years without having to pay tax on foreign-earnings. It also gives the right to move around in the Schengen area, which includes nearly all the countries across Europe, but not the UK.

After the initial five years, visa holders may become Portuguese passport holders and thus full citizens of the European Union.

A recent YouGov poll for The Sun newspaper in the UK showed that 72% of Britons wanted their government to limit immigration from other EU countries, fearing that immigrants might take their jobs or strain public services.

The European Commission rebuked Prime Minister David Cameron for saying he  aims to restrict the relocation of migrants from poorer to richer EU states, saying EU membership confers only a qualified right to freedom of movement.

Portugal being one of the poorer states does not have an immigration problem. On the contrary, the mass exodus of Portuguese job seekers to richer countries, including Britain, continued this year at about the same rate as last. Official estimates put the figure at between 100,000 and 120,000 annually leaving their homeland.

High unemployment and severe austerity make Portugal an unattractive country to many outsiders too. Recent reports say even refugees arriving from Syria and other Muslim conflict zones don’t want to stay here. Portugal is merely a stepping-stone.

It seems to be merely a stepping-stone for many of those applying for golden vistas too. Unlike the Romanians and Bulgarians who are hoping to stay in Britain, many of the Chinese and other foreign investors are using their golden visas to set up yield-bearing arrangements in this country that will allow them to live or do business elsewhere in Europe.

For example, they are looking for easily rentable properties in prime Lisbon locations or condominium resorts in the Algarve. Estate agents are scrambling to make sales. Many highly attractive properties are on offer at prices that have dropped by nearly a third since the country was forced to apply for a bailout in 2011.

Agents say plush apartments are available in Lisbon at the same price buyers would have to pay for properties half the size in Beijing or Shanghai. With this in mind, delegations from Portugal attended China’s largest international real estate fair in Shanghai this month.

The golden visa scheme attracted little interest when it was introduced over a year ago. It now seems to be taking off, with applications rolling in mainly from China, but also Russia, Brazil, Angola and India.

According to an official tally released early this month, the scheme had brought in a total of €222 million from 256 visa holders. More than 300 applications were said to be in the pipeline. Nearly all were expected to be approved, which would bring the total investment since the scheme was set up to around €600,000 million.

Introduced by the centre-right coalition government, the golden visa programme has the tacit support of the Socialist opposition party. The only severe critics are the far-right National Renovator party whose leader, José Pinto-Coelho, claims the country is “prostituting itself.”

If so, it is not the only one. Other EU countries in serious financial straits - Spain, Greece and Cyprus - have their own golden visa programmes. So too do some of Europe’s wealthier nations, including Germany and the Netherlands.

As the year ends, the poor are as problematic as ever, while the competition to attract the rich is fierce and rewarding.

Top judges spark pre-Christmas crisis

The approach of Christmas brings fresh worries to Portugal and its hopes of returning to something like financial stability next year.

Once again, the biggest threat to the government's efforts to exit the country’s bailout – and to the continued existence of the present government itself - comes not from politicians but judges.

The latest decision by the nation’s Constitutional Court has blocked a highly unpopular bid to cut public sector pensions. It is the fourth time judges in the highest court in the land (pictured below) have blocked government measures this year. They may do the same to plans to cut the salaries of public sector workers.

As with earlier rulings on austerity measures, the Constitutional Court judges have stymied efforts to cut spending ahead of Portugal’s planned exit from its €78 billion ($107 billion) bailout next June.

The latest decision outlawed a key measure in the 2014 budget calling for cuts of up to 10 percent in civil service pensions over €600 a month. The 13-member court unanimously declared the proposal “unconstitutional” as it was a “violation of the principle of trust.”

This brought renewed calls from street protesters as well as opposition politicians for the government’s resignation. Arménio Carlos, leader of Portugal’s largest trade union, CGTP, condemned the government’s austerity policies as “attacks on human rights.”

An ever-growing number of citizens are claiming that the coalition government is more like a dictatorship than a democratic institution and that it has lost touch with public opinion and the people’s needs. Protesters want President Aníbal Cavaco Silva to veto the controversial State Budget and call early elections.

The pension cuts would have saved an estimated €388 million, funds the government must now find elsewhere to comply with the country’s bailout deal with the European Union and the International Monetary Fund. The most likely alternative savings will involve hikes in VAT, which are sure to spark more public outrage.

While there is serious disenchantment with the present centre-right coalition, the question arises: would any other set of politicians in the country be able to do any better? Incompetence and inefficiency are thought to be rife in just about all sectors and at all levels of the administration and the civil service.

Portugal has so far received €71.4 billion of the bailout money it was promised. The government hopes it can follow Ireland’s lead and exit by staying on target to meet the bailout requirements and return to normal financing in the bond markets.

Not everyone is pessimistic. In the days leading up to the latest court ruling, the European Commission expressed qualified optimism that Portugal would be able to find an alternative way to meet its 2014 budget deficit target. “Such measures, however, could heighten risks to growth and employment and reduce the prospects for a sustained return to financial markets,” said a commission spokesman.

The Financial Times today quoted Charles Schulz, a senior economist with Germany’s Berenberg Bank, as saying that Portugal still had a good chance of leaving its bailout programme in June. “The economy is growing, political risks are limited and the government is reforming the economy. But the errors of the past will continue to weigh on Portugal’s prospects.”

On hearing of the court’s rejection after the first session of an EU summit in Brussels last night, German Chancellor Angela Merkel told reporters: “It’s not an easy situation but I think Portugal will find a way to solve it.”

What do you think?

Is the government on the right track, or has it got it all wrong?Your comments below please. 

Drug law reform: a bold new initiative

Uruguay has joined Portugal in the forefront of drug law reform by becoming the first country in the world to make it legal to grow, sell and smoke marijuana.

When the law approved by the senate in Uruguay comes into force and marijuana is being grown legally within its own borders, Uruguyans over the age of 18 will be allowed to buy up to 40 grams of pot per month from licensed pharmacies.

Twelve years ago Portugal became the first country to fully decriminalise the personal use of all kinds of drugs. Decriminalising did not mean legalising. Personal use remained unlawful but was no longer regarded as a criminal offence. Trafficking or dealing remained a serious crime.

‘Quantities for personal use’ is defined as one gram of heroin, two grams of cocaine, five grams of hashish or 25 grams of marijuana leaves. That is the maximum allowed for a 10-day period.

Illicit drug use in Portugal is treated as a misdemeanour that demands counselling or vocational training rather than prosecution. On the premise that addicts are ‘sick’ rather than ‘criminals,’ the solution now lies in national health centres rather than the courts and prisons.

The policy is still controversial. It seems to be working well even if not deemed an unqualified success. The number of addicts seeking rehab has gone up. The number of HIV cases among intravenous drug users has significantly dropped. Usage has not dramatically increased and Portugal has not become a haven for drug tourists. Most of the doubters have come to accept that even if it has not radically improved the situation, at least it has not made it worse.

Opponents of the law change in Uruguay claim state control will be a “social engineering experiment” likely to expose more people to a drug that critics consider more harmful than its advocates make out.

Supporters of legalising marijuana characterise it is a sensible response to the global ‘war’ on drugs that by common agreement has hopelessly failed everywhere. They believe that state control and setting the price as low as about €0.72 ($1) a gram will help push traffickers out of the market.

Although the pioneer of drug decriminalisation, Portugal has always been a dedicated partner in international efforts to curb the drug trade.

Portugal is itself on well-established intercontinental drug routes. Seizures and multinational arrests in this country are commonplace. Open borders within the European Union make the traffickers’ job easier, but the police are vigilant.

This summer, for example, Interpol supported by Europol led an operation involving 34 countries that targeted cross-Atlantic smuggling of drugs and illicit firearms. It resulted in 142 arrests, the seizure of 15 vessels, 42 guns and nearly 30 tonnes of cocaine, heroin and marijuana with an estimated value of €600 million ($822 million).

Dealing in drugs is like any other trade. It is about supply and demand and moving goods from their place of origin to the market place. Eradicating drug trafficking may be impossible, however, as it is globally so massive and secretive. Powerful cartels run by terrorist groups as well as criminal organisations, supported by money laundering involving some of the biggest banks in the world, are using poverty and the marginalisation of segments of society in Latin America, Asia and Africa to expand drug production and black economies.

Drugs generate about €300 billion ($400 billion) a year and account for about 8% of all international trade. Only time will tell if legalisation and decriminalisation at the national level can make any real dent in organised crime on such a scale.

Meanwhile, just as those with drug policy reform in mind in the United States, Britain and elsewhere have been closely following Portugal’s bold initiative, Uruguay’s ‘experiment’ is sure to be watched with great interest.

Mandela and the Portugal connection

The death of Nelson Mandela and the global outpouring of condolences to his widow evoke reminiscences of Portugal’s influence on the couple’s lives and on the history of South Africa as a whole.

Portuguese explorers in the 15^th century were the first Europeans to set foot in southern Africa. The Portuguese established initial trade links but went on to colonise neighbouring Mozambique and Angola to the east and northwest, leaving the central and southernmost territory to the Dutch and the British.

Portugal’s close association with the region continued right up to the second half of the 20th century when it played a pivotal role in the downfall of apartheid.

After Mandela’s imprisonment in 1964 on charges of inciting armed revolution, fiercely racist white politicians and security forces remained dominant in South Africa despite international condemnation of apartheid.  With one of the fastest growing economies in the world, commercial relationships thrived with the United States, Britain, France and other leading western countries.

Portugal on the other hand simply could not afford to sustain its opposition to the Russian and Chinese-backed liberation movements in Mozambique and Angola. The ‘Carnation’Revolution’ at home in 1974 was largely in opposition to the Portuguese dictatorship’s long and financially draining colonial war.

The Portuguese troop withdrawals and subsequent granting of independence to Mozambique and Angola hugely encouraged the determination of South Africa’s blacks and increasing numbers of like-minded whites.

Portugal’s exit from Africa in the second half of the 1970s gave real hope to the anti-apartheid movement spearheaded by the African National Congress of which Mandela remained an iconic figure while languishing in jail on Robben Island off the coast of Cape Town.

Among the much more racially tolerant Portuguese there had never been segregation in Mozambique or Angola, but after independence many emigrants moved across the border to South Africa. They enriched the multi-cultural though increasingly tense situation there.

Overwhelming international pressure in the late 1980s led to the collapse of the laws separating whites and blacks in South Africa. In 1994, Mandela, who had served 27 years in jail, was elected the country’s first black president. There then developed a much more personal connection between Portugal’s sphere of influence and President Mandela. 

With Mozambique in the throes of a post-independence civil war between the army of the ruling Frelimo government and South African-backed Renamo rebels in 1980s, the president of Mozambique Samora Machel, a fierce opponent of the neignbouring apartheid regime,  had been killed in a still mysterious plane crash  near the border of the two countries. 

Machel’s widow, Graça, had been born into a peasant family in rural Mozambique. She won a scholarship to high school in Mozambique’s capital, Maputo, but she was the only black in a class of white students.

“Why is it that I’m made to feel strange in my own country? They’re the foreigners, not me. Something is wrong here,” she remarked much later.

Another scholarship brought her to the University of Lisbon as a language student who became deeply involved in political and humanitarian issues.

On returning to Mozambique she joined Frelimo,  trained as a guerrilla fighter and became a schoolteacher, a contrasting but, as it turned out, sound preparation for her deployment as Mozambique’s first post-independence minister of education, a job she relished until well after her husband’s death.

Graça Machel first met Mandela, 27 years her senior,  soon after his release from Robben Island in 1990. In 1998, two years after Mandela’s highly publicised divorce from his second wife Winnie, Nelson and Graça married on his 80th birthday.

How ironic that two passionate rebels of different nationalities and almost different generations, both branded ‘guerrillas’ - or in modern parlance ‘terrorists’ - ended up contributing  so much to peace and reconciliation, not only in southern Africa, but across the world.

On reflection perhaps it is not so strange. As Mandela told the court before being sentenced to life imprisonment with hard labour: “I have fought against white domination, and I have fought against black domination. I have cherished the ideal of a democratic and free society in which all persons live together in harmony with equal opportunities. It is an ideal which I hope to live for, and to see realised. But, my Lord, if needs be, it is an ideal for which I am prepared to die.”

Oh that today’s political leaders had half that sort of moral commitment.