Portugal seeks to fill fiscal black hole

Incredibly, Portugal has plunged from being a role model in its handling of the debit crisis to a potential basket case that may have to go begging for a second bailout. Some analysts say events here could instigate even worse and wider mayhem elsewhere in the eurozone.

The current international spotlight on the life of Margaret Thatcher provides a poignant reminder that the recent turn of events in Portugal is totally in line with the Iron Lady’s scepticism about European economic and monetary union.

Writing in the Guardian, business reporter Graeme Wearden managed to put a lighter spin on things: “No sooner had Cyprus been whisked out of the operation room and into intensive care than Portugal returned to casualty.”

Reeling from the setback delivered by the nation’s constitutional court on top of blistering criticism from opposition politicians and a wide cross-section of citizens, the Portuguese government is now studying plan B.

Widely praised in Brussels for sticking to the stringent terms of the €78 billion bailout negotiated with international creditors two years ago, confidence suddenly nose-dived when Portugal’s highest court ruled that some of the key austerity measures included in the 2013 budget were not acceptable.

The court rejected pay cuts for government workers and pensioners, thus confronting the government with finding an alternative way of making savings of €1.3 billion this year. It also cast doubts on how much further austerity will be tolerated, not only by angry citizens but by the nation’s top judges.

The European Commission welcomed Prime Minister Pedro Passos Coelho’s promise that his government remained committed to the adjustment programme, including its fiscal targets and timeline.

The proposed alternative deficit reduction measures are deeper cuts in public service, especially social security, education, health services and state-run companies. They are expected to be presented at the end of this month, or early next, and will almost certainly bring yet more job losses, hardship and anger.

The Fitch credit rating agency wondered if the ruling of the constitutional court “could be interpreted as saying that all public spending cuts that affect civil servants are unconstitutional.” It added: “If that interpretation is correct, the ruling represents a setback to future fiscal adjustment efforts in Portugal.”

The wider fear is that politicians in the other struggling euro economies may face complications if their own judges examine the constitutional correctness of austerity measures.

Troika representatives will soon be back in Lisbon to assess how Portugal is now going to cope. Meanwhile, eurozone finance ministers meeting in Dublin this weekend agreed "in principle" to give Portugal and Ireland seven more years to repay their loans. Portugal hopes this will facilitate a return to full market financing. But the Commission says the extension is dependent on the government providing compelling evidence that it has found an alternative solution to the €1.3 billion shortfall.

Regaining full market access may not happen this year.  “In our opinion, at best, this may occur in 2014,” declared a Barclays report. “Negative growth, rising unemployment, and delayed fiscal targets could even push Portugal to require additional official funding in 2014.”

As a backdrop to all this, the United States Treasury secretary Joseph “Jack” Lew,  on his first official visit to Europe, suggested to EU Commission president José Manuel Barroso among others that austerity should be relaxed in favour of more focus on policies that drive economic growth.

Many in Portugal and elsewhere in Europe have been saying this for years, arguing that austerity measures depress growth and are counterproductive.

While the debate rages on, Portugal may soon emerge from the casualty ward, but it will still need intensive care.

Conman Ken proves crime does pay!

The Welsh fugitive conman Kenner Elias Jones, a Walter Mitty character who disappeared two years ago after being tracked down in Portugal, has showed up in Spain, still leading an extraordinary life of fantasy and fraud.

Best known as Ken Jones, he has defrauded charities, religious institutions and hospitals, as well as many companies and individuals, in a criminal career spanning 40 years and involving more than 60 convictions.

In recent months he has been up to his old tricks in the Murcia region of

southeastern Spain. The Guardia Civil in Cartagena say they are aware of Jones staying in local hotels and leaving without paying the bills, but like their counterparts previously in Portugal, they seem unable or unwilling to arrest him.

Jones, 62, ‘collapsed’ in a restaurant and was taken to a district hospital near San Javier where he stayed having tests for six weeks. On being discharged, apparently in good health, he promised to settle the bill of more €26,000 with medical insurance. He had pulled the same stunt in a Portuguese hospital.

Over the past couple of weeks and using the Christian name Elias rather than Kenner or Ken, Jones has been spotted relaxing in the Murcia seaside resort of Santiago de la Ribeira. It is thought he may now be in Valencia, either gadding about or relaxing in hospital.

Charged with stealing thousands of pounds from an employer in the UK, he absconded from Lewes Crown Court in Sussex before his trial 10 years ago. He has been on the run ever since.

Long before that, he had been sentenced in the Old Bailey in London to three years’ imprisonment for committing theft and forgery. Coventry Crown Court sentenced him to 15-months’ jail for obtaining money by deception. He received a further 18-month sentence for deception and fraud from the Merthyr Tydfil Crown Court in South Wales.

Originally from Caernarfon, Gwynedd in North Wales, his colourful career has also included imprisonment and deportation from both Canada and the United States where he was deemed by officials to be “a danger to society.” A senior immigration officer in the US described him as “the best conman I have ever encountered in my entire career.”

Between fleeing the UK in 2003 and turning up in Portugal in 2011, Jones, a.k.a. Kenneth Ngeiwo Hawkins, spent years in Kenya posing as a doctor and administered medicines to children athough he had no medical qualifications. He is still wanted in Kenya for alleged debts of more than US$100,000.

An estate agent in the town of Palmela, south of Lisbon, told me how in 2011 Jones approached him saying he wanted to buy a house in the €400,000 to €600,000 price range. The wily Welshman went on to diddle the agent out of hundreds of euros by saying his foreign credit card was incompatible with the Portuguese system and he needed money urgently for medicine and other vital expenses.

On the understanding that Jones was transferring money from an overseas bank account, a Palmela travel agent handed over tickets worth €2,500 for Jones’ wife and two adopted children to fly into Lisbon from Kenya. The travel agent reported the scam to the Polícia Judiciária but she never got her money.

The return trip to Kenya was paid for by the Cáritas charitable organisation in Sétubal, according to a reliable Palmela source.

After being exposed in Portugal by dogged investigators from the BBC Wales Week In Week Out TV programme, Jones disappeared again and has gone about his wicked ways unreported until now. He is still pretending to be a qualified doctor and an ordained Anglican priest. He tells people he is planning to rejoin his family in Kenya where in 2003 he set up a charity called Luke’s Foundation. Even for the highly imaginative Ken Jones, getting out of Europe may now prove to be difficult: his passport expired at the end of January this year.

Those who have met him say he is a very intelligent, easy-to-talk-to, plausible and likeable person who confesses to multiple lamentable health problems – but then those are normal characteristics in a successful conman.

A full, unexpunged account of his activities over the past 40 years in his own words would make a riveting book – but who would believe it?

* algarvenewswatch will welcome any further accurate, honest information from readers. Please post comments below or send information to lenport@gmail.com. Be assured that sources will remain strictly confidential if that is their wish. 

Ana Moura - in tune with the times

Amid all the depressing economic news emanating day after day in Portugal, even melancholic fado music can provide welcome light relief, especially when sung by Ana Moura. It is also giving solace of sorts to Portuguese emigrants who have sought a better life abroad.

There can be no greater compliment to a female fado singer than to be likened to the iconic Amália Rodrigues. Although bordering on the heretical to some older fado aficionados, this is the kind of reputation Ana Moura is garnering on her current tour of Europe and North America.

So far this month she has performed to full houses in San Francisco, Boston, New York, Washington and Cleveland. This weekend it’s Chicago and Minneapolis, then on to North Carolina and Ontario.

A correspondent for the Boston Globe described Moura as “one of the latest singers to come out of the Lisbon taverns, where fado’s essence resides, and become one of its global ambassadors. She embodies, at a high level, modern fado’s duality: her potent contralto and her traditional fado treatments have earned her Amália comparisons at home – the ultimate connoisseur’s praise.”

As a fado “ambassador,” Moura is rivalling Mozambique-born Mariza who in the past decade has reportedly sold a million records and played more than a thousand concerts worldwide.

Moura has been singing fado since the age of six. Her interpretations of the form of music unique to the Portuguese have moved on from the purely traditional songs she learned from her fado-singing parents in Santarém.

“I started to grow up and listen to all kinds of styles, and I always sang many styles, but I always felt as a fado singer. It’s a way to express your feelings, your soul,” says Moura, now 33.

Rather shy off-stage, she has resisted being ‘programmed’ as a performer and cherished individual freedom of expression. “We are authentic if we sing with our souls. It should come from inside. I want the spontaneity that my parents taught me when I was young,” she says.

It helps, but you don’t have to understand Portuguese to appreciate fado. “If you have the emotion, the message can be felt by the audience even if they don’t understand the lyrics,” she told the Plain Dealer in Cleveland, Ohio. In her recently released album, Desfado, three of the 14 songs are in English. One is called “Thank You, and the lyrics include the lines “Thank you for making me cry” and “Thank you for breaking my heart.”

Said a music critic in the New York Daily News, “The point, it seems, is to savour emotion itself, to celebrate the frisson of feeling beyond consequence. It takes a singer of rare passion to articulate the nuances of such risks and, right now, the Lisbon-based Moura stands at the forefront of them.”

Her innovative fado renditions sometimes incorporate elements of modern popular music. Some of her melodies are even downright jaunty, but much of what she sings is still plaintive. Keith Richards of the Rolling Stones put his finger on it by describing fado as “Portuguese blues.”

On meeting her for the first time, Richards also succinctly summed up another of Moura’s attributes: “She’s very, very pretty.”

The mutual admiration between the Rolling Stones and the beguilingly demure Miss Moura was (and still is) obvious from YouTube videos of them rehearsing and performing together in Lisbon back in 2007 (click on link below).

Today in Portugal, Moura's 'blues' could not be more in tune with this time of deep pessimism over debt, austerity, unemployment and the future for the nation’s youth.

While her current concert tour is attracting admirers of various nationalities, many in her audiences are Portuguese emigrants. Over the past two years, since the country entered its worst recession in decades, some 240,000 people have left to join the millions of other Portuguese already living abroad. Moura’s music nicely satisfies feelings of homesickness, nostalgia, fate - saudades.

* Ana Moura is performing in the Barbican Centre in London on 20th April. 

www.youtube.com/watch?v=-kjoV2GUFvg

Criminals, wanted and unwanted

The law often works excruciatingly slowly and in dark, convoluted ways. Overshadowed internationally by the latest episode in the 12-year-old legal saga being enacted in Britain over the radical Muslim cleric Abu Qatada, there is lingering concern in Portugal about gangster Abu Salem who is facing trial for alleged heinous crimes committed in India two decades ago.

Born into a modest family in the north of India in 1968, Abu Salem rose rapidly from taxi driver and petty crook to billionaire underworld don. He is accused of involvement in extortion, murder and playing an active role in the 1993 Mumbai bomb atrocities that killed more than 250 people and injured 700.

Portuguese police arrested Salem in Lisbon in 2002 along with his Bollywood actress girlfriend Monica Bedi. She went on to serve two years in a Portuguese jail for her association with Salem and possessing forged travel documents.

In February 2004 a Portuguese court approved Salem’s extradition to face charges in India. He was eventually deported in November 2005. The deportation was dependent on Indian government assurances that Salem would not face the death penalty or be kept behind bars for more than 25 years.

Portugal was one of the first countries in the world to abolish capital punishment. It imposed an absolute ban long before joining the prohibition under the European Convention on Human Rights in 1976.

While Salem awaited trial, police in New Delhi and Mumbai came up with further charges carrying the death penalty. A court in Portugal responded in September 2011 by cancelling the earlier deportation ruling. Then last July, with Salem still incarcerated in a high-security Indian prison, the Portuguese Supreme Court upheld the lower court’s cancellation.

Last week while on a visit to India with a business delegation to discuss bilateral economic, trade and social security arrangements, the Portuguese foreign minister raised the matter of Salem’s extradition with his Indian counterpart.

“I think the judiciary in Portugal has raised some issues. The judiciary here in our country will take care of them,” External Affairs Minister Salman Khurshid said in a joint press conference with Paulo de Sacadura Cabral Portas. 

Mr Khurshid conveyed India's “deep appreciation for the positive support” extended by Portugal on the extradition. He said India would “remain compliant with the expectations,” of the Portuguese legal system and judiciary, an assurance of sorts that Cabral Portas found “reasonable.”

Efforts in Britain to deport Abu Qatada to Jordan to face terrorism charges have been going on now for seven years at a cost to the British taxpayer of half a million pounds in legal aid alone. Despite assurances from Jordan, it is argued that confessions obtained by torture would be used against Qatada. While his continued presence infuriates the British government, Justice Minister Lord McNally said this week that the legal protection holding up the deportation request was “part of what makes us a civilised society.”

In marked contrast to all this ponderous deliberation, the attempt by law enforcers in the United States to extradite the former Black Panther, convicted murderer, prison escapee and hijacker George Wright was dealt with in Portugal remarkably swiftly.

Arrested near Lisbon in September 2011 after 41 years on the run, the FBI wanted Wright back in America to serve the rest of his 1972 New Jersey jail sentence. By the time they tracked him down, however, he had morphed into José Luís Jorge dos Santos, 67, a Portuguese citizen married to a Portuguese woman by whom he had fathered two sons in a country with a statute of limitations, even for murderers.

In less than two months, a panel of three judges ruled that the statute of limitations had expired and so Mr Wright a.k.a. Sr Santos could not be extradited. A month later the decision was upheld by Portugal’s Supreme Court and the case formally closed. Wright was suddenly a free man for the first time in 50 years.

Meanwhile, there has been much criticism of endemic inefficiency in the execution of justice in Portugal, so much so that judicial reform was one of the key demands in the €74 million bailout deal.  Also, a recent study indicated that the Portuguese are among the citizens of Europe with the least confidence in their country’s legal system.

Flawed as it is, though, some might argue that in some ways, highlighted by the cases of Abu Salem and George Wright, the legal system here is part of what makes this a civilised society.

‘People power’ and Portugal’s economy

The March 2 anti-austerity demonstrations thrust Portugal into the limelight far beyond Europe in newspapers as diverse as USA Today and the Times of India, the Jamaica Observer and the Bangkok Post.

Editors and readers would have been struck by the scale of the event (hundreds of thousands of protesters in more than 40 cities). The name of the main organisers had gutsy appeal: Que se Lixe a Troika (variously translated as ‘Damn’, ‘Screw’ or ‘F***’ the Troika).

The story was enlivened because it was a display of ‘people power’ coinciding with a visit to Lisbon by representatives of the European Commission, the European Central Bank and the International Monetary Fund. Demands that the government must resign and renditions of the song that echoed the Portuguese revolution of 1974 added an extra edge.

One of the more searing quotes came from Fabio Carvalho, a filmmaker taking part in the protest in Lisbon. He told Reuters:  “This government has left the people on bread and water, selling off state assets for peanuts to pay back debts that were contracted by corrupt politicians to benefit bankers.”

The opposition Socialist leader, António José Seguro was succinct in his appraisal: “It is time to stop austerity, to stop the impoverishment of the Portuguese and Portugal.”

All in all, a mixture of zestful organisation and heart-felt spontaneity resulted in street drama full of sound bites and powerful images reflecting social angst - yet free from the violence that has marred similar protests in other countries in the Mediterranean region.

But what did it achieve?

The main messages certainly did not go unnoticed by Prime Minister Pedro Passos Coelho, his centre-right government or the Troika lenders who insisted on austerity measures as a condition for the €78 billion bailout in 2011.

In denouncing the present government in general and its imposition of severe austerity in particular, the protesters have added impetus to the Movemento 12 de Março formed by activists in 2011 to “make every citizen a politician” in the promotion of democracy in this country.

The 2011 demonstrations helped bring about the collapse of the last Socialist government and there is now renewed determination to oust the present conservative administration.

Declared Armenio Carlos, Secretary-General of the CGTP, Portugal’s largest trade union: “Today it is clear that this government has no political legitimacy, has no moral legitimacy, has no ethical legitimacy to continue to govern, because any visit by any minister is followed with protests and demands for the resignation of the government. The government has become the problem that prevents the solution.”

Widely condemned as they are, Passos Coelho and his government have a comfortable majority in Parliament. National elections are still two years away.

After chairing a meeting in Brussels of EU finance ministers, Jeroen Dijsselbloem of the Netherlands told reporters that Portugal is “on track and performing well despite challenging macroeconomic circumstances.”

Portugal’s Minister of Finance Vitor Gaspar said at the end of the Brussels meeting that the crucial message for the protesters and others was that “all the efforts and the sacrifices made by the Portuguese….will be successful.”

Furthermore, the Wall Street Journal pointed out: “The government's commitment to the bailout conditions has encouraged international investors, enabling Portugal to sell its bonds in the market and increasing its chances of covering its financing needs when the bailout program expires in mid-2014.” But, the paper added, “growing political and social opposition to the austerity measures could threaten the government’s control of its finances.”

The EU finance ministers have since agreed in principle to requests by both Portugal and Ireland for extensions to the deadlines for repayments of their loans. Analysts believe the Troika may go along with the requests in order to avert the growing danger of further political turmoil. We will have to wait a little longer to find out.

Bloomberg this week quoted the EU’s Economic and Monetary Affairs Commissioner Olli Rehn as saying: “I hope we can conclude this work and give a strong message of confidence” when the ministers meet in Dublin in April.”

The April message is unlikely to satisfy the anti-austerity, anti-Passos Coelho lobby.  Meanwhile, it is far from clear what alternative economic recovery plan would be better and who would be better equipped to implement it.

Discontent on both sides of the Med

Stability in Europe depends on stability along the southern rim of the Mediterranean Sea.

This was one of the key points in a message from the Portuguese president of the EU Commission, José Manuel Barroso, at the start of a conference last week entitled “Thinking out of the box: Devising new European policies to face the Arab Spring.”

Two days of speeches from the conference podium and discussions at roundtable sessions and in workshops at the University of Minho in the north of Portugal, involved academics from a variety of disciplines and countries. They explored how best to address the on-going consequences of the social and political upheavals in North Africa.

Participants focused on the complexities of such matters as security risks, border controls and fears of mass migratory movements across the Mediterranean into southern Europe.

In setting the tone, Barroso said: “The process of change is just beginning and the transitions are far from complete. It will take time until we can say whether all those young men and women who came to the streets to demonstrate against authoritarian regimes will see their expectations fulfilled.”

He emphasised “that events in our neighbourhood have a special importance for the future prosperity and stability of the European Union.”

When negotiating with the EU, the governments of North Africa must take into account the views of their people. And the EU needs to develop a stronger engagement directly with civil society organisations in the Arab countries, he said.

Barroso added that the EU is offering “support to economic reforms” in the Arab Spring countries as “part of a wider strategy to promote inclusive growth, create more jobs and tackle social challenges.”

A few days later, the president’s words sounded strangely apt in a different context when representatives of the European Commission, the IMF and the European Central Bank – the so-called ‘Troika’ of lenders – arrived in Lisbon to assess the latest economic situation here.

They were greeted by an announcement from the Que se Lixe a Troika (Damn the Troika) movement of renewed mass demonstrations across the country. A cacophony of opposition politicians, trade unionists, street protesters and the Portuguese public at large is declaring that the severe austerity programme insisted upon by the ‘Troika’ is stifling and simply not working.

“The fiscal targets are unachievable. Social conditions are worsening and democracy is suffering. Worst of all, people have no reason to believe the future will be any better. The programme has failed and it has to be changed,” declared an editorial in Público, one of Portugal’s most respected daily newspapers.

More than two years after the ‘Jasmine Revolution’  at the dawn of the Arab Spring, which brought down oppressive governments, demonstrators in this country are reviving Grândola, Vila Morena, the song that became synonymous with the 1974 ‘Carnation Revolution’, which  toppled Portugal’s last dictatorship.

Not on the scale of the turmoil in Egypt, Libya or Tunisia of course, but discontent in normally placid Portugal is simmering and seems to be heading towards boiling point.

The clear message from those taking part in the latest anti-austerity protests is that the time has come for not only new economic policies, but also a new government, one that respects the views of the people. 

The never-ending flow of fake money

Huge quantities of counterfeit cash hit the headlines this week. It made a change from the relentless, dismal news about the shortage of the real stuff.

A Portuguese police raid on Tuesday resulted in what has been described as “the world’s largest seizure of counterfeit euros.” It was an interesting comeuppance in what is regarded as “the world’s second oldest profession.”

The seizure in the northern city of Oporto comprised 1,901 fake €200 banknotes with a face value of €380,200. The notes were of “exceptional quality,” according to the police. Only one person was arrested - a 46-year-old foreigner.

Earlier this month police broke up a ring of five Portuguese nationals allegedly counterfeiting or passing on €30,000 worth of fake €20 and €50  notes.

In another counterfeiting story this week, the British intelligence service MI5 revealed that Nazi Germany succeeded in “destroying” the credibility of British bank notes during the Second World War by flooding Europe with forgeries.

Secret documents just released show that the Nazis began forging British currency in 1940 as part of Germany’s invasion plan. The idea was  both to raise money for the Nazi cause and to create a lack of confidence in the British currency.

The Germans initially released the forgeries in neutral Portugal and Spain. It apparently worked well. According to an MI5 report written in 1945: “What they subsequently produced was a type of forgery so skillful that it is impossible for anyone other than a specially trained expert to detect the difference between them and genuine notes.” By the end of the war, the fake cash was so plentiful that Bank of England notes would not be accepted on the Continent.

Counterfeiting has been going on since money was first issued in ancient societies, starting from about 600BC. It used to be an offence punishable by death. England’s most infamous female counterfeiter, Catherine Murphy, was burnt at the stake in 1788, the last person to be so executed in Britain.

Portugal has the dubious distinction of having produced one of the most notorious counterfeiters of all time. His name was Artur Virgilio Alves dos Reis. Born in Lisbon in 1898 the son of an undertaker who went bankrupt, Reis’ subsequent obsession with his profession brought out the best and the worst in him.

A consummate conman as well as a highly successful criminal entrepreneur, Reis glossed over his modest education by falsifying impressive credentials in engineering and various sciences, supposedly awarded by Oxford University. Crooked activities in Portuguese Angola turned him into the major shareholder of Transafrican Railways and a very rich young man. 

Back in Lisbon and still in his mid twenties, Reis immersed himself in outrageously innovative shenanigans that put into circulation escudo banknotes amounting to the equivalent of almost 1.0% of Portugal’s GDP. He did this by inveigling a legitimate British banknote printer into producing totally unauthorised Bank of Portugal currency. The Bank of Portugal had to order the withdrawal from circulation of all 500 escudo banknotes in the country. The so-called Portuguese Banknote Crisis of 1925 had enormous political as well as economic consequences.

Reis was sentenced to 20 years imprisonment. Upon his release from jail he was offered a job as a bank employee.   He turned it down.

By comparison to the 1925 case, this week’s seizure in Portugal seems modest. Although it may arguably have been the biggest single haul in the history of the euro, the French police in 2004 reportedly rounded up about €1.8 million from two laboratories after an estimated 145,000 counterfeit €10 and €20 notes had already gone into circulation.

In modern times, computer and advanced photocopying technology has greatly enhanced traditional counterfeiting skills, forcing official printers to devise much more sophisticated techniques. Still, countless phony banknotes in all kinds of currencies are said to be in circulation and going undetected.

Here are a few tips for checking euro notes. Real notes are made of a special cotton material that makes them feel firm, not flimsy, when you run  a finger along the edge.

All euro notes feature a hologram. On €20, €10 and €5 notes the hologram is a band running all the way down the front right-hand side. On €50 notes and higher, the  hologram is a squat design located on the front lower right. In normal light, the holograms show the denomination value, but when you hold the note up to a bright light you should see not the value but euro symbols and tiny numbers and letters.

Also when holding notes up to a light, check for a watermark image on the front left-hand side, and a dark magnetic security thread crossing near the middle.

Held under a strong light and tilted at a 45º angle, a vertical band with euro signs and the denomination should be visible near the middle on the back of €5, €10 and €20 notes.

When €50, €100, €200 or €500 notes are held under a strong light and tilted back and forth, the  hologram should alternatively display the denomination and either the image of a window or a doorway (as pictured here).