The woman at the centre of the storm

No sooner had she been appointed minister of finance than the most senior woman in the Portuguese cabinet found herself at the heart of a political eruption that threatened to bring down the government and derail the bailout recovery process.

Less than 24 hours after the surprise resignation of Minister of Finance Vitor Gaspar, the foreign minister and leader of the junior party in the governing coalition, Paulo Portas, announced he was resigning too.  Real fears of a dramatic government collapse threw European financial markets into turmoil.

Gaspar had had enough of the persistent opposition to his efforts to get the country out of its financial and economic mess.

The reported pretext for Portas quitting was the appointment of Treasury Secretary Maria Luis Albuquerque as Gaspar’s successor.

So who is this previously little-known woman, pictured right, who suddenly found herself in such a pivotal role in the country’s future?

First of all, she is one of a substantial gender minority in the Portuguese parliament. Two years ago, MPs elected Assunção Esteves as the first-ever female Speaker in a parliament in which men outnumbered woman 168 to 62.

Portugal currently ranks 32^nd in the world parliamentary gender equality rankings. That is only a little better than Afghanistan, but much better than the United Kingdom, and very much better than Ireland or the United States. 

Born in Braga in 1967, Albuquerque spent six of her school years in Mozambique. After graduating in economics in Lisbon, she went on to specialise and gain a master's degree in monetary and financial economics.

Having worked in both academia and in public service, in 2011 she became the first secretary of state at the Treasury. As such, she strongly supported the polices of Gaspar to meet the bailout targets. Prime Minister Pedro Passos Coelho deemed her to be the best person to continue at the helm of the government’s programme to avoid bankruptcy.

While little known to the general public, Albuquerque, 46, is a familiar face to members of the ECB, EU and IMF ‘Troika’. The Financial Times quoted a senior EU official as saying: “She’s got a strong grasp of economic policy and has been a key figure as state secretary through tough times.” The official added that Gaspar’s tenure came “during the most challenging circumstances, which always consumes political capital.”

Whatever Portas’ objection to Albuquerque and the likelihood that she was intent on continuing severe and highly unpopular austerity measures, “a viable solution” seems to have been sorted. “A formula was found to maintain government stability,” Passos Coelho said on Thursday after a series of crisis meetings.

It had been a close call. The opposition had already proposed a general election to coincide with local voting scheduled for September 29. The prophets of doom were warning that on top of the troubles in Greece, Spain, Cyprus, Italy, Slovenia and Ireland, Portugal could be forced to ask for another bailout loan or even forced out of the eurozone.

For Maria Luis Albuquerque, married to a journalist and with three children including twins, life at home may not be quite the same for the foreseeable future. With a summer of discontent looming across Europe, and temperatures in Portugal this weekend forecast to soar to more than 40ºC, relaxing by the pool or sunbathing on the beach will probably not be an option.

Bad to worse: yet another crisis looms

In the swings and roundabouts of public life in Portugal, the on-going economic crisis has produced another political one.

If the present government collapses, which suddenly looks likely, there is no guarantee that an alternative one will fare any better. The country is in turmoil.

As of today in a fast changing scenario, President Aníbal Cavaco Silva is challenged with brokering a deal that will hold the government together and avert the need for another snap election.

The last Socialist government of José Sócrates was forced to quit in 2011 when all opposition parties rejected proposed spending cuts and tax increases as too excessive.

Opposition parties are levelling the same criticism against the current, highly unpopular centre-right government of Pedro Passos Coelho. Unlike Soctares’ minority government, Passos Coelho's coalition looked secure because it had a comfortable majority in parliament.

Even during last week’s general strike and anti-austerity demonstrations, there seemed little likelihood of the government collapsing. But a week is a long time in politics....

Everything suddenly changed with the resignation of Paulo Portas, foreign minister and leader of the coalition’s junior partner, the right-wing CDS-PP party. It came less than 24 hours after Vitor Gaspar resigned as finance minister. Two other coalition ministers are reportedly set to follow. Without the coalition, the government loses its majority.

In a hastily called TV address to the nation, Passos Coelho (right) vowed to fight on. "With me, the country will not choose political, economic and social collapse. There is a lot of work to be done and we have to reap the fruit of what we sowed with so much effort,” he said.

A new election, two years earlier than scheduled, may be the only option open. It would almost certainly return the centre-left Socialists to power, but again probably without a majority.

The other two parties – the Communists and the Left Bloc – are unlikely to do any deals with the Socialists, say analysts, meaning that the next government will again need CDS-PP support.

Amid all the disarray, share prices tumbled and bond yields soared. Meanwhile, hanging in the balance is Portugal’s commitment to the terms of its €78 billion bailout. ‘Troika’ representatives are due to start their next review of the economy in Lisbon on July 15.

The latest developments fuelled concerns in the national and international press. The Spanish daily El País said Portugal was slipping “into the unknown.” The French Le Monde noted that Portugal could be "facing the failure” of its rigorous economic policies. The Guardian reported on Wednesday that “World markets have fallen sharply today and Portuguese government borrowing costs have soared as the political crisis in Lisbon threatens to bring down its government, inflaming the eurozone crisis again.”

The New York Times commented: “"Political unrest in the coalition government of Portugal rekindles tensions growing in many European countries on expenditure cuts and other austerity measures that are being blamed for a series of recessions and record unemployment rates in countries like Greece, Spain and Portugal.”

Among the few optimistic voices around is that of Jeroen Dijsselbloem, president of the eurozone’s finance ministers. “I do not expect any problems with Portugal, first because I believe that the political situation will stabilise, and secondly because the phasing and timing of Portugal’s programme [of EU financial assistance and reforms] is proceeding well,” he said in response to the latest events.

Portugal’s ‘pseudodemocracy’ plods on

Portugal’s centre-right government is determined to continue with its austerity programme despite Thursday’s general strike, record low approval ratings and opposition demands for it to resign.

The government is unlikely to deviate from its highly unpopular policies, let alone collapse, as it enjoys a comfortable majority in parliament and national elections are not due for another two years.

Prime Minister Pedro Passos Coelho said that while his government respected the “inalienable right to strike,” what the country needs are “fewer strikes and more work and rigor.”

Although largely confined to the public sector - transport and health services in particular - the strike was still a powerful reminder of the depth of resentment and unrest in the country. “Enough of impoverishment and exploitation” was a common theme during demonstrations.

Across all sections of the community there is anger over the spending cuts and tax hikes imposed because of the €78 billion bailout requested by the Portuguese administration in 2011.

As Portugal struggles to meet the fiscal targets of the bailout, it is experiencing the third year of its worst economic recession since the 1970s. Analysts expect the economy to contract 2.3 percent this year after a 3.2 percent slump last year.

While protesters accuse the government of intransigence over its austerity programme, there is no clear agreement on a cogent alternative strategy. The closest so far was a joint statement at the beginning of the week from the heads of four national business confederations, covering industry, trade and services, tourism, and agriculture. They called for lower taxes that might allow companies to resume investment and permit households to start spending again.

The two main unions behind the general strike were the General Confederation of Portuguese Workers (CGTP) and the General Union of Workers (UGT). Together they represent about a million workers.

Ahead of yesterday’s strike, CGTP secretary general Arménio Carlos said, “We refuse to work longer and receive less.”

The UGT leader, Carlos Silva, declared: “We say no to the dictatorship of the Troika – that is what we are rebelling against.”

On one of the hottest days of the year so far, many young people reportedly chose to go to the beach rather than attend street protests in support of the strike.

Last week an estimated 90% of the country’s 100,000 teachers took part in a controversial 24-hour strike that severely disrupted end-of-year examinations, especially among 12th grade students enrolled to take exams that day to enter university.

Unemployment and the dismal outlook for the country’s youth were among of the main worries underlying the latest protests. With unemployment almost at a record 18 percent among the working population in general, youth unemployment (under 25-year-olds who are not studying) has soared to about 43 percent. Meanwhile, young people, including graduates, are leaving in droves to seek jobs and a better life abroad.

Among the government’s fiercest critics is elder statesman Mário Soares. The former Socialist prime minister and president, who came to prominence after the 25th April revolution, recently told the Portuguese daily newspaper Público: “Right now, we are a pseudodemocracy because democracy needs to have people who solve problems.” He accused the present government of “ignoring the people” to such an extent that “democracy is in danger.”

There is no end to the bad news in sight. The government’s plans include increasing working hours and monthly pension deductions while laying off almost 12 percent of state emplyees.

More mass protests seem inevitable. 

Madeleine and the UK prosecutors

Reports that top officials from the Crown Prosecution Service in London have had discussions in Lisbon with their Portuguese counterparts about the Madeleine McCann case have sparked yet more intrigue in a six-year saga brimming over with controversy and mystery.

In breaking the latest story, the London Evening Standard noted it was the first time that CPS lawyers had visited Portugal in connection with the Metropolitan Police’s £5 million review of the case and that it brought “new hope.”

First reports gave the impression that the CPS visit to Lisbon was very recent. In fact, Alison Saunders, the senior crown prosecutor for London, and her colleague Jenny Hopkins, head of the complex casework unit, visited in April.

 “The visit of Saunders and Hopkins, accompanied by Met investigators, is a significant development – and adds to speculation that the Met are about to begin a new investigation into the disappearance of the three-year-old in May 2007,” said the Guardian.

Amid conjecture over who might be included in the “people of interest” likely to be questioned in any fresh inquiry, both sides in the heated public debate over what may have happened to Madeleine have taken heart from the CPS involvement.

 The Sun declared that “Brit prosecutors have been to Portugal in the hunt for Madeleine McCann’s kidnapper — signalling fresh momentum in the bid to solve the mystery.”

The Independent said the prosecutors discussed “new leads.” The Daily Telegraph reported that the meeting was held to discuss “possible next steps.”

In fact, we do not know what was discussed in Lisbon, only that the CPS visit was conducted in total secrecy. And it should be remembered that in English law public prosecutors - the CPS - do not investigate crimes. That is the role of the police. The CPS decides on sufficiency of evidence and then decides whether it is in the public interest to prosecute.

With this in mind, a key question: Were the visitors testing the sufficiency of the Portuguese evidence on various points so as to be able to prosecute in the UK?

Another question: By announcing the visit to the press in recent days was the idea to tempt revealing words or actions by the person or persons responsible for Madeleine’s disappearance?

Having held the talks in April, the London prosecutors have perhaps had sufficient time to make a report and forward it for consideration to the British Home Secretary, Theresa May. It is for her to decide what the next step should be.

Speculation among newspaper readers and in online forums has been ratcheted up, but, much more importantly, there is fresh reason to hope that real progress towards justice in this case may now be on the way. 

Madeleine, the media and the Met

Recent reports in the mainstream British press about London’s Metropolitan Police delving into Madeleine McCann’s disappearance raise more questions than they begin to answer.   

Under a review codenamed Operation Grange, the Met has been examining material collected by the Portuguese police, UK law enforcement agencies and various private investigators.

A rash of stories around the sixth anniversary of Madeleine’s disappearance and what might have been her 10th birthday last month were based on yet more speculation and largely devoid of hard news content. But the appetite among British readers is such that anything about the McCanns is good for circulation figures.

Several papers reported the Met’s discovery of a number of “potential new leads” and “people of interest.”  

The Sunday Express, for example, was able to reveal 'exclusively' that “Scotland Yard detectives are trying to find a middle-aged couple said to have entered Madeleine McCann’s holiday apartment to comfort her because she was crying.”

According to The Mail on Sunday, “Police are said to be keen to trace six British cleaners who were working in Praia da Luz when Madeleine vanished and who didn't appear in the Portuguese files. They are said to have used a white van and went from apartment to apartment offering their services, chiefly concentrating on expats.”

Detective Chief Superintendent Hamish Campbell, head of Scotland Yard's Homicide and Serious Crime Command, was quoted as saying, “There are a lot of people who could be explored further, if only to be eliminated.”

To some unbiased observers, vague talk of “potential new leads” and “people of interest” did not seem very impressive considering that a team of 30 Scotland Yard detectives have been on the job for two years at a reported cost of £5 million.

Even so, The Daily Telegraph noted: “Det Chief Supt Campbell praised their progress and said they had done a ‘fantastic’ job.”

Now we learn that the Operation Grange review is to be upgraded to a full-scale investigation backed by more resources from the British Home Office. The new investigation will replace the Polícia Judiciária inquiry, which was officially closed in 2008. Widely reported in the British press, the proposed UK inquiry has received little and only belated coverage in Portuguese newspapers.

Ever ready to get in a dig at how the Portuguese “bungled” it and are “STILL dragging heels,” the Daily Mail revealed  it had “learned that behind the scenes a major diplomatic row is brewing because the Portuguese authorities are adamant they will not reopen the inquiry. Officials in Lisbon have told their British counterparts that under Portuguese laws, they can reopen the case only if there is new evidence.”

Indeed. So why is the Met launching an investigation apparently without any new evidence? So far it has said nothing directly on the subject. “Detectives remain in regular contact with Kate and Gerry McCann and are working closely with the Portuguese police in an attempt to make further progress,” is as far as the Met will go for now. An official statement is expected only “in the next few weeks.”

Confirmation of regular contact with Kate and Gerry McCann begs the question as to whether the Met is focusing solely on the theory that Madeleine was abducted?

Has the Met completely ruled out the more widely held theory in Portugal that something else probably happened to the little girl?

It would seem so from a report in the Sunday Mirror that claimed, “British police probing Madeleine McCann's disappearance now believe her kidnapper was staying in a holiday flat near the family.”

This is an example of how the British media in general seem to accept that Madeleine was abducted as if it were an established fact.

From the Portugal perspective, plenty of other questions come to mind, if only to put to rest lingering doubts about Kate and Gerry McCann and the Tapas Seven.

Will the Met confront the McCanns and their holidaying friends about inconsistencies and contradictions in their accounts to the PJ of what took place in Praia da Luz that fateful night?

Will it insist on a reconstruction of events, and an explanation of why such a reconstruction was denied to the PJ?

Will the Met team be permitted to conduct joint investigations and interviews on Portuguese soil, or will it delegate to the PJ?

“Home Secretary Theresa May has agreed to fund an operation by the Metropolitan Police to continue the search for Madeleine McCann,” according to The Independent, but who will be funding any further work on the case by the PJ?

We may not get answers to such questions in the next few weeks, but let’s hope any new investigation finally solves the mystery and brings those responsible to justice before the seventh anniversary of Madeleine’s disappearance. 

Lawlessness at Lagoa dos Salgados

 The Lagoa dos Salgados coastal lagoon has suffered   shocking abuse this spring. Unrestrained dogs and roaming livestock continue to be a major hazard to breeding birds. They have been attacking chicks and damaging nesting habitats. These animals and their owners go unchecked because the environmental authorities, including the ‘Green’ police, do nothing about it.

In contrast to last spring, there has been almost too much water rather than too little in the lagoon. This has had the effect of pushing nesting waders into more remote spots, out of sight of visiting birdwatchers - but not out of the way of predators. Many eggs and chicks, particularly of Avocets and Black-winged Stilts, have fallen victim to marauding dogs owned by a shepherd. 

In a rather different example of wanton disturbance to sensitive nesting species such as Purple Heron and Little Bittern, a large wedding party last weekend watched from the lagoon’s boardwalk as a plane flew low over the water pulling a banner congratulating the bride and groom.

The disturbances are getting worse, says Rui Eufrasia who for the past eight years has been closely monitoring the situation at Salgados for SPEA, the Portuguese society for the study of birds. “The place has been abandoned. There is no law.” 

There are, however, some significant rays of hope. A source in Brussels has unofficially indicated that the European Commission may be poised to urge the Portuguese government to declare Lagoa dos Salgados a special protected area within the Natura 2000 network. This may come about as a result of an appeal last year from the Algarve conservation NGO, Almargem, and even earlier proposals by the Birdlife International partners SPEA and RSPB.

In another positive sign, the regional water supply and treatment agency, Águas do Algarve, has reiterated its intention to put in place a sustainable management system that will control the level and quality of water in the lagoon. It will be done in co-operation with the APA national environmental agency and the ARH regional hydrographic institute.

The high water level this year has been due to the heavy winter rains in contrast to the previous winter’s relative drought. This sort of thing is a natural consequence and not unusual in coastal lagoons. Caring human intervention is needed if optimum all-year-round levels are to be maintained for breeding, wintering and migrating birds.

Isabel Soares, the former mayor of Silves who is now the head of Águas do Algarve, confirmed this week that the money is in place for extensive works to install a series of ditches, islets and dykes. The works will also include a pipeline to bring waste water from western Albufeira to the Salgados treatment plant instead of depositing it, as at present, straight into the sea off the nearby beach. Water from the treatment plant will continue to supply the lagoon.

The overall €1.2 million scheme “will mean a very positive improvement for the whole area,” said Soares. Work is scheduled to start in mid-September and to be completed by March next year.

Declaring Lagoa dos Salgados a protected area under EU law and installing a sustainable management system are vital if the lagoon is not to be “destroyed” as feared by some protesting commentators.

Serious concerns remain, however, about the possible impact of the huge tourist complex planned for the Armação de Pêra side of the lagoon. A spokesman for the development company, Finalgarve, part of the Galilei group, said this week there had been no significant progress with the project since their announcement four months ago of an ‘environmental park’ within the complex.

The future of the tourist development project may hinge on a comprehensive environmental impact study, which is expected to be soon completed and released for public discussion.

How many more 'terrible years' ahead?

The “two terrible years” anticipated by Pedro Passos Coelho on taking office as Portugal’s Prime Minister on 5th June 2011 are almost up. That will not be the end of it, of course. There is no end in sight to the economic suffering Passos Coelho said the nation would have to endure before returning to growth and regaining the confidence of international investors.

“A very rigorous programme of austerity and structural reforms” was the only remedy, he said while setting about implementing the tough €78bn rescue programme agreed with the European Union and International Monetary Fund.

Passos Coelho won a decisive election victory two years ago. Neither the voters nor economists doubted his commitment to the formidable task ahead. But two years on, what has been achieved?

Unemployment has shot up and is now approaching 18%. Among under 25-year-olds it is 40%. Businesses all across the country have been forced to close. That includes almost half the nation’s restaurants and cafés, according to estimates.

 The Financial Times last weekend highlighted the fact that “austerity is hitting family-run businesses hard, stretching the country’s safety net and threatening social stability.”

 The FT’s correspondent in Lisbon, Peter Wise, wrote:  “Few, if any, crisis-hit European countries have followed the austerity programme more assiduously than Portugal, and the public has largely backed the government’s deep cuts. But recent polls show they have reached their limit and want the programme to be altered, if not scrapped.”

Portugal has not requested any new easing of budget goals set out under its bailout, but its European partners may consider more flexibility if the long recession worsens while reforms remain on track, Reuters reported this week.

On a visit to Lisbon, the chairman of the euro zone finance ministers, Jeroen Dijsselbloem, said it was important for Portugal to stick to its recently revised budget targets and to carry out structural reforms.

“There is a great appreciation in the Eurogroup on how Portugal is tackling challenges, with the economy doing worse than expected. If, on the basis of effort, compliance and reaching structural targets, more time is necessary due to economic setbacks, more time will be considered.”

Passos Coelho’s firm stance is  believed to be helping to rehabilitate Portugal in the eyes of international investors but at home he is facing plummeting popularity in opinion polls, opposition calls for an early election, and more strikes and street protests in the weeks ahead. More alarmingly, the genie is out of the bottle over the euro.

Two years ago, the notion of abandoning the euro single currency was seldom seriously discussed. It is now a hot topic. Lively public debate has been sparked by a new book Why We Should Leave the Euro – an immediate best-seller by a Lisbon economics professor, João Ferreira do Amaral.

The argument in favour boils down to this:  “We are now at a stage where it is becoming clear the austerity policy isn't working despite all our efforts. The next step is for us to realize the euro simply isn't sustainable for Portugal,” according to Ferreira do Amaral.

Whether Portugal leaves the euro may depend on what happens in the next year or two. Passos Coelho says the long-awaited recovery will arrive in 2014.

He underestimated with his prediction of “two terrible years”. If he gets it badly wrong on recovery, Portugal may be going back to the escudo.