Chaos and confusion reign in the UK

Seismic feelings of insecurity have swept across Britain and Europe as the complexities of the UK leaving the European Union start to sink in.

Since referendum day, shell-shock and disbelief have given way to impressions ranging from tragedy to farce. Chaos and confusion reign.

The President of the European Central Bank Mario Draghi was at the opening of a major ECB conference in Portugal when he said on Monday: “I have difficulty finding the words to describe what has happened. Probably the best is sadness.”

Portugal’s President Marcelo Rebelo de Sousa expressed a similar sentiment, but vocabularies in all 28 European countries have struggled to adequately convey reactions. It has already been proposed that English be banned as an official EC language as soon as Britain leaves.

Amid the collapse of the political landscape in the UK, chasms of disagreement among the country’s population and turmoil in the international financial markets, there has been some bitter acrimony in Brussels.

From the initial bewilderment over Brexit, it has emerged that nothing is going to change for Britons living, visiting or investing in the EU, or for EU nationals in the UK – at least not for the next two years.

The two-year period refers to the time it is expected to take for all countries concerned to negotiate and agree on the unprecedented terms of Britain’s exit, starting from when Britain formally says goodbye, probably in September.

Outgoing Prime Minister David Cameron wants Britain to be able to take its time in reaching a deal that hopefully gives the UK the best of both worlds: freedom of trade without free movement of people.

Some leaders in Brussels seem to want the UK out as soon as possible and without concessions. Even so, as explained by British Ambassador Kirsty Hayes in a Lisbon Embassy Facebook page video, so far nothing has changed for Brits in Portugal.

Both President Marcelo Rebelo de Sousa and Prime Minister António Costa have made it clear that Portugal is for staying in Europe despite a call from the Left Bloc for a referendum if Brussels decides to impose new sanctions.

“Portugal is in the European Union, feels good in the European Union and wants to continue in the European Union,” said the president. “The Constitution says that any decision on a referendum is for the president to make and therefore this is an issue that does not arise at this point.”

Portugal’s governing Socialist party is firmly pro-EU, though it wants reform in the way the Union is run and especially on attitudes to austerity.

The 40,000 to 50,000 British community in Portugal is small compared with the estimated 800,000 living in Spain. (although only just over 283,000 are officially registered there).

Mariano Rajoy, whose right-of-centre party emerged with the most votes from last week’s second Spanish general election in six months, has said that for the time being expats will keep the same rights to live and work as before.

Even Boris Johnson has said as much. Britain’s leading Brexit campaigner declared this week that the UK would always be “part of Europe” and that the status of EU nationals living in the UK and Britons abroad would be protected under what he called a “fair, impartial and humane “immigration system.”

It ‘s anyone’s guess what will happen to the value of the pound in the coming weeks and months. Naturally this is of concern to expats with British pensions, and those planning to holiday on the continent or buy a home in the southern European sun.

Other than exchange rates, the Association of British Travel Agents (ABTA) says tourists will see little change to their travel plans this summer.

A summer of discontent is now assured, but when things calm down it may be more or less business as usual in the tourist industry that is so vital to Portugal's prosperity. 

Brexit, but oldest alliance will remain

Portugal intends to do everything possible to ensure that the rights of the Portuguese citizens in the UK and of British nationals who live, visit or invest in Portugal are all guaranteed in the wake of Britain’s sensational decision to leave the European Union.

This reassurance came from Prime Minister António Costa following the shock result of Thursday’s referendum in the UK. While helping to steady individual fears, Prime Minister Costa also declared that “we have the oldest alliance in the world with the United Kingdom and it will carry on long after what will be the departure of the UK from the European Union.”

The Socialist prime minister spoke of the “inevitable turbulence” following the Brexit vote, but he sought to reassure financial markets by saying that Portugal’s fragile economic recovery will remain on track.

    Britain’s decision to leave had sent a strong signal that the EU needs to reflect on becoming more relevant and useful to the lives of ordinary people, said Costa.

What is needed is not more Europe or less Europe, but a “better Europe” that, for example, produced prosperity and a single currency facilitating trade rather than lifting up some economies and penalising others.

Initially at least, the referendum result is expected to impact negatively on Portugal’s tourist industry and property markets, which rely heavily on British holidaymakers and home buyers. Of special concern was the sudden devaluation of the pound.

Football manager José Mourinho’s income provided a particularly graphic indication of the fall in the pound’s value on Friday. It was pointed out that Mourinho could lose €700,000 in the 10 million pounds a year contract he signed last month with Manchester United.

The unprecedented decision of 52% of British voters to leave the European Union shattered political convention and confounded not only eve-of-referendum opinion pollsters, but even the betting markets. It has raised all sorts of uncertainties about what now happens in the UK and in the UK’s relations with the other 27 EU member states in the coming days, weeks and months.

Donald Tusk, president of the European Council, has said the other 27 members are keen to preserve their unity. Prime Minister David Cameron will have to explain Britain’s position to fellow heads of government attending next Tuesday’s European Council meeting. It is thought unlikely the UK can expect any concessions from the European Council, the body responsible for setting the EU's policy agenda.

Within hours of the outcome of the referendum, David Cameron announced his derision to resign as prime minister by October despite a letter from around 80 pro-Brexit Conservative MPs insisting it was his ‘duty’ to stay on whatever the result.

The Brexit result has left the United Kingdom divided and in disarray. Most of England and Wales voted for Brexit, but majorities in London, Scotland and Northern Ireland voted to remain. A constitutional crisis is looming. A second referendum on independence for Scotland now seems inevitable. Cross-border cooperation between Northern Ireland and the Republic of Ireland may be jeopardised.

The presumptive US Republican presidential candidate Donald Trump gave the thumbs up to the Brexit vote on a visit to his golf courses in Scotland on Friday. He echoed much of the rhetoric of the Brexit leaders.

“Come November, the American people will have the chance to re-declare their independence. Americans will have a chance to vote for trade, immigration and foreign policies that put our citizens first,” he said.

“They will have the chance to reject today's rule by the global elite, and to embrace real change that delivers a government of, by and for the people.”

The Week – Too much and too little

You may have missed World Digestive Health Day organised on 29 May each year by the World Gastroenterology Organisation, but more than 43,000 food bank volunteers turned up at supermarkets across Portugal on that day to collect food for distribution among 426,000 of the nation’s hungry.

Since then, other statistics have emerged from various sources showing that obesity is increasing at an alarming rate while sardines are becoming bewilderingly scarce.

One in three children between the ages of six and nine in Europe are either overweight or obese, according to a new report by United European Gastroenterology (UEG).The prevalence of overweight children in Europe is higher than in any other continent. The UEG’s Professor Herbert Tilg said: “The economic burden of treating adult obesity is just too great for the European region and priorities need to change quickly.”

The same report warns that an estimated 41 million children under the age of five worldwide are now obese. If current trends continue, this figure is likely to almost double by 2025.

Surprisingly, an internal report last year reckoned that within the European Union the rate of obesity in Portugal was exceeded only by that of Malta.

It may not be of huge significance, but sales of foodstuffs in Portugal’s retail sector in April increased by 1.3% on the month of March and that saw year-on-year growth surge from 3.9% in March to 5.2% in April, according to the Portuguese National Institute of Statistics (INE).

Meanwhile, average life expectancy from birth in Portugal is now just over 81 years, with men living to more than 76 and women making it to 83. A new report from the INE reveals that the average life expectancy has risen by more than two and a half years in the past decade. Portuguese women live six years longer on average, but the gap is narrowing.

People are growing older, but fewer are being born. Portugal has one of Europe’s lowest fertility rates. The average number of children for every woman of child-bearing age fell from three in 1970 to one in 2013, according to the OECD.

Questions arise as to whether the widely lauded Mediterranean diet has anything to do with any of this. Statistics on the subject are scant but it is said that a Mediterranean diet helps arouse sexual desires, if any help is needed that is. The two top stimulants are believed to be those Portuguese staple drinks, red wine and coffee. In moderate amounts of course.

Red wine and coffee are definitely here to stay but concerns are deepening about the future of sardines. Mackerel are by far the most caught and sold fish in Portugal nowadays. Due to fishing quotas, the 13,729 tons of sardines traded at fish auction last year was the lowest amount since such statistical records were first collected.

The national fishing fleet captured a total of 140,800 tonnes of fish (including 46.400 tonnes of mackerel). That was up by 21,000 tonnes on 2014. The 2015 haul fetched €261 million at auction, 5,4% higher than in 2014, but the average price of landed fish, €1.81€ per kg, was the lowest since 2012.

The average price of sardines at auction (€2.19 per kg) was the highest in the last twenty years. Further quota cuts this year are expected to send sardine prices soaring further.

Bom apetite!

McCanns appealing to Supreme Court

          
      - Privacy versus freedom of expression -

The lawyer for Kate and Gerry McCann has filed an appeal in Portugal’s Supreme Court following last month’s Appellate Court decision in favour of Gonçalo Amaral.

This is the latest move in the long-running civil action over the former lead detective’s controversial book about Madeleine McCann’s disappearance in 2007.

The court last month overturned an earlier decision to award half a million euros in damages to the McCanns. The Supreme Court review is expected to focus mainly on legal aspects of the case rather than material issues.

The lifting of both the damages ruling and the ban on further publication of the book was seen as a highly significant decision within traditional areas of conflict: the right to honour and privacy on the one hand, and to freedom of expression and opinion on the other.

Freedom of expression is a fundamental right enshrined in the Portuguese constitution that applies to every citizen, but it comes with certain constraints.

While everyone has a right to express and to publicise their thoughts in words, images or by any other means, the constitution also states that everyone has a right to a good name and reputation, and to the protection of the intimacy of private and family life.

The media have the right - indeed it is their social function - to spread news and give critical or non-critical opinions. It is important that they do so with respect for the truth and for the intangible rights of others, said the three appeal judges in this case last month.

Amaral in his book, The Truth of the Lie, not only included facts that were evidence in the inquiry into the disappearance of Madeleine McCann, but aired his opinion that Madeleine was not abducted. He suggested that she died accidentally and that her parents covered this up by concealing her body and making up a false story.

The facts of the case in the form of evidence in police files had already been widely published in newspapers and on the Internet as a result of an initiative by the office of Portugal’s prosecutor general. Amaral had the legitimate right to describe and interpret these facts.

The allegation expressed in his book that the McCanns were involved in a cover-up was not new either. It was already in the public domain as it was contained in the police files and was the basis upon which the couple had been declared official suspects, arguidos, in the original investigation.

The judges indicated that the McCanns had voluntarily limited their rights to privacy by making themselves available to the national and international media to which they had easy access. In effect they opened the way for anyone to debate and express opinions about the case, including opinions that contradicted their own.

In essence, the appeal judges ruled that the McCanns' rights had not been infringed and that Amaral’s book was a lawful example of freedom of expression.

Many observers would argue that the lawsuit instigated by the McCanns seven years ago is turning out to be more harmful and costly to them than the defendants. It has inadvertently generated publicity of a kind they least wanted and boosted book sales, but they have instructed their Lisbon lawyer, Isabel Duarte, to continue to the highest level.

Even that may not be the end of this dispute. Amaral is considering turning tables and suing the McCanns for damages. 

The Week: Clean energy surging ahead

Portugal has demonstrated its leading role in clean energy by supplying the country’s entire electricity needs solely from renewal sources for a record four days in a row. It is being acclaimed internationally as a landmark in the shift from fossil fuels.

The country’s consumption was fully covered for 107 continuous hours with hydro-power plants, wind turbines, solar panels, biofuels and geothermal heat. No fossil fuels were involved.

“This is a significant achievement for a European country, but what seems extraordinary today will be commonplace in Europe in just a few years,” said James Watson, the CEO of SolarPower Europe.

Last year, more than half of the Portugal’s electricity came from renewals, though this was down from 63% in 2014 due to drought and a drop in hydro output that normally accounts for about a third of naturally replenished sources.

The International Energy Agency says in its 2016 review that “Portugal should be commended for its achievements and its ambitions in large-scale deployment of renewable energy.”

The average levels of electricity generated from renewables in the 28 countries of the EU is much less than in Portugal, which is far ahead of many other countries including the United States.

Less than 13.5% of the domestically produced electricity in the US last year came from renewables, the rest mainly from coal and natural gas.

Hottest news ever

Amid widespread grumbles about how cold and wet it has been in Portugal this spring came news this week that April was the seventh month in a row to break global temperature records.

The latest figure smashed the previous record for April by the largest margin ever recorded, as did the figures for February and March. It now seems certain that 2016 will be the hottest year on record - and probably by the largest margin ever.

Some of this can be blamed on the warm El Niño in the Pacific Ocean. But it’s not the biggest El Niño blast on record. A combination of factors are heating things up, say scientists, who this week have been talking more than ever about a “climate emergency.”

All the more reason for speeding up the move from fossil fuels to renewals.

Drugs decriminalised

New research prudently supports Portugal’s controversial drugs decriminalisation policy, previously lauded by some as a “resounding success” and dismissed by others as a “disastrous failure.”

It is fifteen years since Portugal pioneered the decriminalisation strategy. While cannabis, heroin, cocaine and other drugs remain illegal, the personal use of all illicit drugs is deemed a matter for health officials rather than the judiciary – treatment instead of imprisonment.

A study by specialists in the UK and Australia found that reported drug use among the overall population in Portugal since decriminalisation in 2001 has decreased. So has the number of problematic drug users. There has also been a reduction in drug-related deaths and infectious diseases. On the other hand, cannabis use among adolescents has increased in line with several other European counties.

Prof Alex Stevens and Dr Caitlin Elizabeth Hughes have concluded that combining decriminalisation with expansion in prevention, treatment, harm reduction and reinsertion, “may indeed offer a model for other nations that wish to provide less punitive, more integrated and effective responses to drug use.”

At the end of the United Nations General Assembly special session on drugs last month - the first in almost two decades - the rift was still wide between governments insisting on prohibitionist drug control and those seeking more humane reforms.

Roundup winding down?

In March this year the President of the Portuguese Medical Association, José Manuel Silva, called for a worldwide ban on glyphosate, the active ingredient in the herbicide ‘Roundup’.

Produced by the American Monsanto company, ‘Roundup’ has been used in vast quantities by farmers and gardeners for decades. The EU’s standing committee on plants, animals, food and feed had been due to rubber stamp its approval of glyphosate for a further 15 years, but several countries objected when the World Health Organization announced that glyphosate probably causes cancer.

After deliberating for two months, instead of giving a definitive yes or no the EC on Thursday further delayed its decision to re-license glyphosate. Meanwhile, Natural News reports that tests conducted in Portugal have detected disturbingly high levels of glyphosate in people with no professional exposure to glyphosate.

This Week: Troubling times for traders

The ‘debate’ over next month’s referendum on whether Britain should stay in or leave the European Union heated up so much this week that it is starting to look like civil war. It seems to be tearing apart the British Tory government and indeed the whole country. A wider worry in the event of a Brexit is the collateral damage in Portugal and other EU countries.

Brexit cheerleader Michael Gove says leaving would be “an empowering moment of patriotic renewal.”  The Governor of the Bank of England, Mark Carney, evoked fury in the Brexit camp on Thursday by saying that leaving might spark a recession. Then the IMF’s Christine Lagarde weighed in on Friday by saying she had “not seen anything that's positive”  about Brexit. Her remarks were dismissed by Brexit supporters as “nonsense.”

Lots of strong opinions continue to be aired, but in truth no one knows for sure what a Brexit would bring. No country has ever left the EU before.

Amidst all the internal rhetoric, scaremongering and false forecasts, a calm but concerned outlook emerged this week from the British Portuguese Chamber of Commerce in London.

Founded in 1911, the BPCC is an independent, non-profit organisation devoted to promoting commercial links between businesses in the United Kingdom and Portugal.

The UK is one of Portugal’s major export destinations, with almost €3 billion worth of goods going there every year. Few countries do more business with Portugal.

The BPCC reports that research conducted by international shippingexperts ParcelHero concludes that the impact of a Brexit on this market could be huge. It could have serious implications not only for Portuguese traders, but also consumers.

“It’s impossible to overstate the importance of the EU to Portugal’s trade with the UK,”  writes Keegan Spindler, a member of the consumer research team.

“The free movement of goods has allowed British companies to be competitive in the European market, and the cost of shipping in the EU is significantly lower than shipping to European countries that aren’t part of the Union, such as Switzerland or Iceland.

“Our research suggests that by leaving the EU, the cost of goods imported to the UK from Portugal could change by as much as 30%. That price change comes from a variety of factors that include raised shipping costs, duties and taxes and handling costs.”

Such a price change would make Portuguese goods less attractive to British consumers and reduce Portuguese manufacturers’ abilities to compete on price in the UK market.

Most Portuguese small to medium enterprises are likely to look elsewhere for their customers if Britain leaves the EU, but those who don’t will have all new challenges to deal with, among them paperwork, customs clearance and duties and taxes. Furthermore, the United Kingdom will no longer be a competitive target for the logistics industry, which is likely to mean that shipping costs will rise significantly, according to the study.

The UK is expected to be separated from countries like Portugal by a lot more red tape, making it a much less attractive proposition for international businesses.

“Our data suggests that the UK’s departure from the EU would likely force many SME’s who trade in the country to find new markets for their goods or be forced to quite literally pay the price. Similarly, a Brexit would see the cost of importing in to Portugal from the UK increase, and as Britain is one of Portugal’s biggest importers, it could be the consumers who end up paying the price.”

None of the above will apply, of course, if the Great British public decide on 23 June that voting for Michael Gove’s “empowering moment of patriotic renewal” would in fact be akin to a catastrophic moment of total madness.

Which way will it go? No one probably knows better than the betting bookmakers. Paddy Power’s latest odds:

*  2/5 in favour of remaining in.

*  15/8 in favour of exiting.

This Week: Money, money, money

This week’s revelations about the money laundering activities of Russian gangsters in Portuguese and other European football circles come just days before an avalanche of new information is published from the leaked Panama Papers.

The Russian racket in Portugal was uncovered by the Polícia Judiária (PJ) with the support of Europol in an operation codenamed ‘Matrioskas,’ the name for traditional Russian wooden dolls of different sizes that fit inside one another.

Raids on various clubs and homes in Portugal this week involving more than 70 officers culminated in the arrest of Alexander Tolstikov, the supposed owner of the third division club Uniao de Leiria. He is suspected of tax fraud, criminal association, money laundering, corruption and forgery of documents. An administrator and the financial director of the club were also arrested.

Uniao de Leiria, formerly a respectable Premier Liga club managed by José Marinnho, dropped to the third division in 2012 and went bankrupt before being bought by Mr Tolstikov and associates last year. Virtually unknown in Portugal until he first made contacts in Leiria in the summer of 2014, Tolstikov is alleged among other things to have been behind the importation of large amounts of cash from Russia in violation of EU cash regulations.

Three top Portuguese clubs - Sporting Lisbon, Sporting Braga and Benfica – were reportedly searched because of football transfer negotiations conducted with Leiria, but are not themselves under suspicion.

Europol said in a statement that the investigation had dismantled an organised criminal network, composed mostly of Russians, operating in football circles in the UK, Germany, Moldova, Austria, Latvia and Estonia. The network, active at least since 2008, is thought to have been a cell within the Russian mafia, directly responsible for laundering money derived mostly from criminal activities committed outside the EU area.

Here’s a handy guide to the network’s modus operandi. Step one is to identify a club in financial trouble and infiltrate it with individuals posing as benefactors who provide much needed short-term donations or investments.

Once trust has been been established, step two is for the same benefactors to buy the club and use it as a front for opaque holding companies, invariably owned by shell companies registered offshore and in tax havens. Thus the real owner and those who ultimately control the club remain unidentified, as does the true origin of the funds used to purchase it.

If you want to manipulate a club in this way, it’s best to remain as unostentatious as your greed and ill-gained power will permit. This last bit seems to have been the Leiria gang’s downfall.

All being well, though, once clubs like Uniao de Leiria are under the control of the Russian mafia, the large scope of financial transactions, cross-border money flows and shortcomings in governance allow clubs to be used to launder dirty money. This is usually done by over or under valuing players on the transfer market and arranging television rights deals. Clubs can also be used for betting activities, both for the generation of illegal proceeds due to match fixing or for pure money laundering purposes.

Those somewhat baffled by such skulduggery should relax over the weekend if they want to try to get their heads around next week’s revelations. A vast trove of leaked information about those using tax havens is due to be published on the World Wide Web on Monday.

Just to recap, the Panama Papers scandal all started with the emails of a Panamanian law firm called Mossack Fonseca being penetrated by a hacker. A database comprising 11.5 million documents was subsequently distributed to the International Consortium of Investigative Journalists (ICIJ) for examination.

The first batch of Panama Papers released last month included references to at least 244 companies, 255 shareholders, 23 guests and 34 beneficiaries with Portuguese postal addresses. Monday’s batch is expected to be on a far bigger scale and will be of great interest to law and tax enforcement authorities around the world.

In a related piece of news, the European Central Bank has just announced it is going to stop producing €500 banknotes because of fears they are being used by criminals as a convenient way to launder money and finance terrorism. The bank will stop issuing the €500 notes around the end of 2018, but those currently in circulation will remain legal tender.

Here’s the good news for anyone planning to move a stash from under the mattress. A usually reliable media source mentioned this week that a million euros in €500 notes weighs 2.2 kilograms, or just under 5 pounds, and fits in a laptop bag.