‘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).  

Pope makes way for a younger pontiff

The initial shockwaves that followed Pope Benedict’s resignation announcement this week were followed surprisingly quickly by expressions of approval and optimism.

Benedict XVI, 85, is the first Pope to resign in six centuries, but the feeling is that he has done the right thing, bearing in mind not only his age, but the parlous state of the Catholic Church. The feeling in Portugal and elsewhere is that a younger and more energetic pontiff is now needed.

Among the first senior members of the Church in Portugal to comment publicly was the Bishop of Fátima, Monsignor António Marto. He said the resignation would present an opportunity to pick a new pope from a country in the developing world.

“Europe today is going through a period of cultural tiredness, exhaustion, which is reflected in the way Christianity is lived,” Bishop Marto told reporters. “You don't see that in Africa or Latin America where there is freshness, an enthusiasm about living the faith.

“Perhaps we need a pope who can look beyond Europe and bring to the entire church a certain vitality that is seen on other continents.”

The “cultural tiredness” of which Bishop Marto spoke is reflected in the fact that although nearly 90% of people in Portugal profess to be Catholic, fewer than 20% regularly attend Mass. The figure could be much lower than that, especially among the young.

In 2000, Cardinal Joseph Ratzinger, as Benedict was known under his predecessor Pope John Paul II, gave the official interpretation of the long suppressed “Third Secret” of Fátima that stemmed from the reported appearances of the Virgin Mary at Fátima on six consecutive months in 1917. They have been described by the Vatican as “undoubtedly the most prophetic of modern apparitions.”

Ratzinger dismissed notions that the third secret was the Virgin Mary’s warning of doom, either for the Church or the whole world. In a lengthy theological commentary, he spoke of such things as “private revelation” as opposed to “public revelation.” His explanation of the contents and meaning of the third secret was widely criticised as a 'cover-up.'

Since then, growing secularism, opposition from dissident Catholic traditionalists and child sex abuse scandals have drawn a great many people away from the Church in Europe and North America. Meanwhile, Church attendance is growing in Africa and almost half the world’s Catholics live in Latin America.

While on his way to visit Portugal in May 2010, Benedict XVI declared that the widespread abuse of children by members of the clergy showed that the greatest threat to the Catholic Church came from “sin within.”

“Today we see in a truly terrifying way that the greatest persecution of the Church does not come from outside enemies, but is born of sin within the Church,” the pontiff told reporters on a plane bound for Portugal to mark the 93rd anniversary of the reported apparitions.

A turnout of some half a million people for an open-air Mass celebrated by Benedict at the Fátima shrine was seen as clear support for him personally.

“As far as the crisis and scandals are concerned, I think that the people wanted to show that they can distinguish between exceptions and the vast majority of their priests,” Portuguese episcopal spokesman Manuel Morujão told reporters.

But the pontiff continued to court controversy after Portugal had already decriminalised abortion and at a time when the country was about to legalise gay marriage. He told Catholic social workers at Fátima that abortion and gay marriage were “insidious and dangerous threats to the common good.”

All that is in the past now, of course. Catholics are looking to the future. Benedict has emphasised that he is retiring “for the good of the Church.” The conclave of cardinals will begin the process of finding a new pope on March 15.

The Cardinal Patriarch of Lisbon,  D. José Policarpo, took part in the election process in 2005 and was himself described as “a dark horse” candidate to replace John Paul II. He said this week that Benedict’s eight year pontificate had been a very difficult one and hoped his resignation would result in a younger pontiff with the ability to lead the church into a new era.

Asteroid on track for close encounter

Having survived the widely predicted end of the world a couple of months ago, another fantastically fearsome event is right on schedule - for next Friday, February 15^th.

Experts say the fast approaching 2012 DA14 asteroid is the biggest object to pass so close to the Earth since regular asteroid surveys began. It was first spotted in February last year by La Sagra astronomical observatory in the mountains of neighbouring Andalusia.

An intriguing fact that seems to have gone unreported by the mainstream media is that this observatory is very modestly equipped and unoccupied except for a single caretaker or maintenance man. It is controlled remotely by people located elsewhere in Spain – and in Hong Kong!

What has certainly not gone unreported is that an asteroid wiped out the dinosaurs. More than 60 million years on, however, we hominids can relax and continue our strange ways as if nothing unusual is happening.

This latest asteroid will bypass us with no ill effects whatsoever. Indeed, most of us would have been totally unaware of anything special in prospect had it not been for the media who do love to ratchet up the fear factor at every opportunity.

The normally conservative Daily Telegraph has informed us that “the 130,000 tonne space rock will miss Earth so narrowly that it will come within the orbit of some communication satellites, travelling at a speed of five miles per second – eight times the speed of a bullet from a rifle.”

Trust the Daily Mail to point out that if 2012 DA14 did hit the Earth – which it won’t – it could wipe out a city the size of Greater London.

Just in case bankers and businessmen were getting a little too complacent, the Wall Street Journal has noted that “if there were an impact, energy generated from 2012 DA14 would be an estimated 120 times greater than that of the atomic bomb dropped on Hiroshima.”

Many newspapers and TV networks have relayed the words of Donald Yeomans, manager of the near-Earth object office at the Jet Propulsion Laboratory in California. He told a press conference: “This asteroid seems to be passing the sweet spot between the GPS satellites and weather and communications satellites.”

It only seems to be passing the sweet spot?

Apart from the very remote possibility that viewers may find their favourite Sky TV programmes rudely interrupted, none us will notice anything different at all. No sudden gust of wind, no bang in the night, not even a pinprick of sinister light visible to the naked eye. Just business as usual as the rock sweeps by on its way to heaven knows where.

Actually, at 45 metres across, this is quite a small rock by celestial standards, and there have been plenty of them during the Earth’s four-and-a-half billion-year history.

According to Time magazine: “The fact is, there are a whole lot more of them than you likely know: from Feb. 5 to May 5 of this year, no fewer than 77 space rocks that could, in theory have Earth’s name on them, will be whizzing by. On March 20 alone, when you may have been planning to celebrate the first day of spring, there will be seven.”

Meanwhile, to ensure harmony, for goodness sake don’t forget that the big day to celebrate close encounters is not Friday 15th, but Thursday 14th - Valentine’s Day!

Extra vigilance against terrorist threat

The current French intervention in northern Mali and the recent hostage crisis at a gas plant in Algeria are reminders that jihadists remain an ever present threat not only across North Africa, but also in Spain and Portugal.  

The followers of radical leaders including Osama Bin Laden, his mentor Abdullah Azzam, and the spiritual head of the Muslim Brotherhood, Sheikh Yusuf Qaradawi, believe it to be an Islamic “obligation” to return and recover their “lost” territories of al-Andalus.

Occupied by Muslim Moors from North Africa from the early 8th century, al-Andalus included the Algarve and most of the rest of Portugal, along with much of Spain. Muslims dominated the Algarve for well over 500 years. They were not finally banished by indigenous Christian forces in southern Spain until near the end of the 15th century.

In March last year, Spanish police arrested a suspected al-Qaeda member on terrorism charges. They said he ran one of the world's most important jihadist forums dedicated to online recruitment and propaganda operations. 

Four months later, in July, Spanish police arrested three more al-Qaeda suspects who were thought to be planning an attack. These arrests were reported to be the result of collaboration between the Spanish intelligence services and some of the country’s unnamed “close allies.”

Such collaboration is now being stepped up. The interior ministers of Morocco, Spain, France and Portugal signed an agreement in Rabat last week to expand police cooperation and improve information exchanges on terrorism, illegal immigration and drug trafficking.

A closer commitment to combating renewed threats from jihadists in the light of the Mali intervention was the subject of this week’s visit to Algiers by Britain’s Prime Minister David Cameron. He said the UK and Algeria wanted to form a strategic partnership on policing, defence, counter-terrorism and intelligence. The international community should use “everything at its disposal” to fight terrorism, Cameron declared.

The predominately Muslim nations of Morocco and Algeria are southern Portugal’s closest neighbours after Spain. Algeria shares a long border with northern Mali, which is closer to the Algarve than Faro is to Paris.

The main point of entry to the Iberian Peninsula from Morocco is the busy Spanish port of Aljeciras, just across the Straits of Gibraltar. It was the first city created on Iberian soil by the invading Moors in 711. As a result of last week’s agreement in Rabat, Portugal and France will send liaison officers to the police centre in Algeciras to become part of the existing Moroccan-Spanish intelligence effort.

In the past there have been reports of al-Qaeda movements across the open border between the south of Spain and the Algarve. Southern Spain has a large Muslim community. Incitements to attack certain types of targets in Portugal, as well as Spain, have been reported from forums on radical Islamist websites.

The head of Russia's Federal Security Service, Alexander Bortnikov, blamed al-Qaeda for starting forest wildfires last year in Portugal, Spain and elsewhere in Europe. He said it was part of what al-Qaeda calls its “strategy of a thousand cuts.” Bortnikov was quoted by the Russian International News Agency (RIA) as saying: “This method allows (al-Qaeda) to inflict significant economic and moral damage without serious preliminary preparations, technical equipment or significant expenses.” 

Crimes of forgery and fraud  in Portugal and the theft of a large number of passports and identity documents of various nationalities in Spain have been attributed to supporters of al-Qaeda. This is seen as part of an on-going “bleed the enemy to death” campaign against the western world.

Meanwhile, a growing number of commentators in the media are questioning the whole concept of the so-called “war on terror.” They point out that the Islamist threat comes not from a unified al-Qaeda organisation with a clear agenda, but from complex and disparate groups embodying a range of grievances. 

In the UK’s Independent newspaper last week, the British shadow foreign secretary Douglas Alexander wrote: “Today the challenges and circumstances we confront demand a different response. Al-Qaeda – using modern technology to advance medieval ideas – is like a mutating virus, seeking out weak host bodies in which to take root and spread.”

As to how the international community should respond t0 the emerging threat in the Sahel region of Africa, Alexander said: “First - in a way that was not the case in Iraq - by prioritising an understanding of the peoples, history and culture of the region.

“To try and draw simplistic lines between good and bad will only help those seeking to unify those with ethnic, regional and international grievances. The prize is to keep those movements separate, not unite them.”

Another key ingredient, Alexander added, was the need for “more intelligence sharing on the characteristics and capability of the emerging threats.”

The British Foreign Office continues to advise those travelling to Portugal that “there is an underlying threat from terrorism. Attacks could be indiscriminate, including places frequented by expatriates and foreign travellers.”

While the threat rarely gives rise to concern in the everyday experiences of those living or holidaying here, it is reassuring to know that it is very high on the agenda of those responsible for the security of this and the wider region around us.  

Crisis sparks new ideas - and fantasies

Three stories emerged this week that gave some respite from the unremitting gloom on offer from the national and international media about Portugal’s economic crisis.

In very different ways, each of these stories shows that while the current crisis has created crippling problems, it has also presented opportunities.

A report from Lisbon on the France 24 television channel extolled the virtues of young people who have chosen to stay at home in austerity-riven Portugal and meet the challenges head-on rather than emigrate to seek employment elsewhere. It gave examples of young entrepreneurs setting up their own businesses – creating their own work instead of remaining jobless or exacerbating the brain drain.

One of those interviewed on the programme was a maths graduate who is heading a company using modern methods to produce vegetables. With agriculture now a growth sector (in more ways than one) and likely to help Portugal emerge from recession, other graduates who in better times might have considered becoming doctors or lawyers are now passionately returning to the land with entrepreneurial success rather than the more widspread pessimism firmly in mind.

Some of those who have gone abroad have done rather well too, of course. Luis Amaral is a remarkable case in point. In 2003 he bought Eurocash, a struggling Warsaw-based grocery business, for $30 million. Now Poland’s biggest distributor of non-durable goods, Eurocash last year sold, among other things, about three million bottles of champagne and 7.8 million lollipops.

The company’s value has surged more than fifteen-fold since selling shares in an initial public offering in 2005, helping Amaral, the 51-year-old CEO, amass a $1.1 billion fortune, according to the Bloomberg Billionaires Index.

Bloomberg quoted a Vienna-based analyst as saying of Amaral: “He’s a visionary who created a custom-built business for the Polish market. Eurocash has helped traditional retailers to survive against the onslaught of giant supermarkets.”

No wonder Amaral is happy to be in Poland.  He lambasted the Portuguese education system because it “promotes mediocrity,” the judicial system under which “crime pays,” and the financial system that “gives money to people and not to ideas.”

In a rather more quirky story that first broke around Christmas time, there were further revelations this week about  Artur Baptista da Silva, the widely-quoted pundit who told the Portuguese weekly Expresso last month that Portugal needed to renegotiate its bailout package or risk social problems spinning out of control. 

“If it's not negotiated now, then in six months' time, we'd have to do it on our knees. All the projections that we've done for the economy, debt, unemployment, lead us to believe that Portugal will be in serious difficulties in terms of social control in half a year,” warned Baptista da Silva in a report relayed by the Reuters news agency. It sounded sensible enough.

His comments during a debate at the prestigious International Club in Lisbon were greeted with thunderous applause and a part-standing ovation, according to the Spanish newspaper El País. He was taken seriously as an expert by the news media because he was an ex-presidential consultant, a former adviser to the World Bank, a financial researcher for the United Nations and a professor of social economics at a US university.

Well, actually he didn't hold any of these positions.

The 61-year-old looks the part. In fact he is a convicted forger and a conman. None of those who lapped up his financial wisdom saw through his fake CV until after he had established himself as an economics guru. By then some of his former cellmates had been duly impressed by his TV performances.

Although comvicted of 10 crimes between 1982 nd 1998 and having been released from jail a year ago, Baptista da Silva now claims he is the victim of a witch-hunt and has reportedly disappeared from public view. A fresh investigation into alleged falsification of documents is now underway and it is thought likely he will face more charges and be returning behind bars.

In a way that’s a pity. The man clearly has talent. It’s sad that he may not have an opportunity to put it to better use.

Salgados: Conflict or compromise?

 Finalgarve, the company behind the highly controversial tourist development planned for the Lagoa dos Salgados and Praia Grande area, is soon to release details of  an ‘environmental park’ it intends to create as part of the overall project.

A spokesman for the company told me that a formal public presentation of the proposed park will be made in Silves library at 11am on 4th February.

This follows the announcement last week by the Secretary of State for the Environment that an official environmental impact study is to be carried out before the huge Finalgarve development east of Armação de Pêra is allowed to proceed. The study, directed by the Agência Portuguesa do Ambiente, is already underway, but it may take several months to complete.

The impact study satisfies one of the demands of groups of environmentalists who have united under the banner ‘Friends of Lagoa dos Salgados.’ On the same day the Secretary of State announced that the study would go ahead, leading figures among the Friends of Salgados delivered to the Environment Minister’s office in Lisbon a petition signed by 20,000 supporters.

Either the impact study or the environmental park plan – or both - could prove to be the catalyst for renewed dialogue and possible compromise between NGO environmental groups and the developers.  

For the time being, Finalgarve and the Friends of Salgados appear to be totally at loggerheads. The Friends want the development stopped, but Finalgarve says it fully intends to pursue the project in partnership with other investors or developers. Crucially maybe, the company affirmed today: "Our project will not interfere with Lagoa dos Salgados nor use any of its water."

The current deadlock is in contrast to the large measure of goodwill that existed several years ago between Finalgarve and the Portuguese and British bird conservation organisations SPEA and the RSPB. They had reached an agreement by early 2008 with various municipal, regional and national bodies to reduce the number of beds in the development, to create a buffer zone between the development and Lagoa dos Salgados, and to conserve the lagoon as a wildlife sanctuary with a sustainable eco-management policy.

Instead of looking after the lagoon, the responsible government bodies have grossly neglected it. Water levels have been allowed to fluctuate wildly from overfull to completely dry, often due to artificial causes; flocks of goats and sheep trample over the habitat of ground-nesting species during the breeding season; marauding shepherd dogs and strays chase hares and birds at will; information signs have been deliberately smashed.

Ironically, the ‘no access’ signs still in place at the edge of the lagoon bear four logo images:  those of SPEA, the RSPB, Birdlife International and Finalgarve.

Renewed concern about the future of the area erupted last June with an announcement from Silves Câmara that Finalgarve’s long-approved plans would involve an investment of more than €232 million to build three hotels, several tourist villages and 18 holes of golf. The 349-hectare development would boost Silves’ coffers by €35 million over ten years and create many jobs.

An online petition was launched, regional and national environmental groups came together on the issue and campaigning newspapers joined in a chorus of opposition.

The newly-formed Friends of Salgados went into battle mode insisting that the Algarve did not need any further tourist developments and that if the Finalgarve project were to go ahead it would “destroy” Salgados. The petition declared that “any development taking place in the area will have a devastating impact on the wildlife.” 

When asked about the environmentalists’ claim that the development will “destroy” the lagoon and that “living space for wildlife will be lost forever,” the Finalgarve spokesman said: “We absolutely disagree with this claim. We are going to develop our project which respects the environment. Furthermore, we believe the project will profit from its environmental potential.”

The spokesman added: “The environmental park will go ahead as planned and it will allow us to preserve the best characteristics of Lagoa dos Salgados as a tourist destination. Being a tourist destination, we want to take advantage of the environmental park - and of the whole treatment of the environment - as a value added proposition of the project.”

There has been no recent dialogue between Finalgarve and environmental groups. Asked if Finalgarve would agree to negotiations, the spokesman said the company would welcome “with an open mind” any talks with any of the interested parties.

Domingos Leitão, a leading figure in both SPEA and the Friends of Lagoa dos Salgados protest movement, said this week: “In the past five years, local and national administration bodies have failed to take any credible action to protect the lagoon. Finalgarve has done little more than nothing. But if we see a window of opportunity, with no preconditions, we would be open for discussions again.”

Rising Chinese influence in Portugal

This year marks the 500th anniversary of the first direct contact between Portugal and China. With Chinese New Year 2013, the year of the snake, just a month away, relations between the two countries have probably never been closer.

In 1513, the Portuguese explorer Jorge Álvares sailed into the southern Chinese port of Guangzhou on the Pearl River about 120 km north of Hong Kong and Macau. He was the first European to reach China. Trading activities were established a few years later, but things soon soured because of outrageous Portuguese behaviour. This included the building of a fort on Chinese soil without permission and the kidnapping of Chinese children for enslavement.

Since then there have been serious ups and downs, but the two nations put differences behind them with the agreement to return the Portuguese colony of Macau to Chinese control in 1999. 

The fact that there are now Chinese shops and restaurants in almost every town throughout Portugal is the most obvious sign of cordiality. Less apparent is that China is now the main foreign investor in Portuguese companies.

China owns a significant stake in the production and distribution of Portugal’s energy. The Bank of China is due to start operating soon in Lisbon. China is also reportedly seeking business interests in a major port.

Last year, China’s State Grid International Development company bought a 25% stake in Portugal’s national electricity grid operator REN for more than €387 million. The year before, China Three Gorges (CTG) bid nearly €2.7 billion to acquire the Portuguese government's 21.35% stake in Energias de Portugal (EDP). The state-owned China Petroleum and Chemical Corp paid €3.6 billion for a 30% stake in a subsidiary of Portugal’s biggest oil company, Lisbon-based Galp Energia, which prospects for oil in Brazil.

Trade between the two countries in the first half of last year totalled €1.8 billion, with Portugal’s exports up almost 60% on the same period in 2011 at €737 million. Container loads of inexpensive Chinese products continue to flood in.

Portuguese decolonisation brought about a certain amount of Chinese immigration in the 70s and 80s, but a far greater number of immigrants have arrived from mainland China, particularly the Shanghai area, in the last few years. Of course, the recent exodus is infinitesimal compared to the number who stay at home. The population of Shanghai alone is well over twice that of the whole of Portugal.

The native tongue of most Chinese in Portugal is not the Cantonese dialect spoken in Macau, Hong Kong and elsewhere in southern China, but the country’s predominent language, Mandarin.  Immigrants undertake intensive courses to become fluent in Portuguese.

Up from official figures of about 4,000 in 2001, the big majority of the 20,000 or so Chinese people presently living in Portugal are younger than 40. These young entrepreneurs and employees are attracted by tax exemptions, job opportunities and the ability to make more money than they could back home. Making money by efficiently providing goods and services is the overwhelming motivation for Chinese expats. Even back in their communist homeland, it is officially no longer bad to be rich.

Perhaps inevitably, the expansion of Chinese businesses in Portugal and elsewhere in southern Europe, at a time when many indigenous businesses are closing down, has caused a certain amount of resentment amid accusations that the Chinese are exploiting not only cheap materials but also cheap labour. 

Most Chinese-owned firms here are family enterprises. Their suppliers are mostly Chinese and Chinese products are readily available to them. Their traditional foodstuffs, for example, can be obtained from a big central outlet in Lisbon, or a subsidiary in Albufeira.

Although they like to live in family units, when looking to expand business interests the Chinese tend to avoid competition by moving in on untapped markets elsewhere in the country. Despite being clannish, the Chinese send their children to Portuguese schools. Chinese community leaders have been reported as saying they would like to see greater integration and more marriages between Chinese and Portuguese.

Meanwhile, it is said that the strategy of the Bank of China in Portugal will initially focus on the Chinese expatriate market and on small and medium-sized companies exporting to China. This will give extra support to the culture of dedicated hard work that is so characteristic of the Chinese here.

We may well see a greater demand for the expensive cars so beloved by the Chinese. If Portugal continues on its economic downward spiral while China closes in on overtaking the US as the richest country in the world, the Chinese may soon be very much in the driving seat in this country in more ways than one.

2013 - A worrying and wobbly start

On New Year’s Day Portugal’s head of state, President Aníbal Cavaco Silva, had second thoughts about the legitimacy of the 2013 budget he had signed into law the day before. Critics claimed that some elements of the budget were unconstitutional. The president decided he had better refer the matter to the country’s highest court.

Cavaco Silva, a former professor of economics and former leader of the centre-right PSD party, expressed concern that while everyone would be affected by the proposed hikes in taxes and cuts in welfare payments, some would be “more penalised than others.”

He also noted that “Portugal’s foreign debt, now twice as high as the country’s annual output, is unsustainable.”

In a television address he added: “Fiscal austerity is leading to declining output and lower tax revenue. We must stop this vicious circle.”

The centre-right government of Prime Minister Pedro Passos Coelho has argued that the highest tax increases in living memory contained in the new budget are necessary to meet the terms of the country’s eurozone bailout. That he was “profoundly isolated” in his pro-austerity stance was one of the least impolite remarks any of Passos Coelho’s domestic political opponents could come up with.

“Portugal is a crisis country that is not as much in the public eye as Greece for instance, but austerity has the same effect on the Iberian Peninsula, especially with big neighbour Spain in crisis too,” commented the Social Europe Journal (SEJ).

“Will the relevant decision-makers ever notice that their strategy is not working economically and is more and more undermining democracy on all levels?,” asked  the SEJ, a forum for debate and innovative political thinking, which addresses issues of critical interest to progressives across Europe.

In the SEJ’s opinion, “the year we have just left behind has clearly demonstrated that in the current European crisis, politics is stretching national democratic orders to breaking point, especially in crisis countries. Unfortunately, this trend looks set to continue in 2013.”

According to the Financial Times: “By approving the budget, but also asking the constitutional court to vet the measures, Mr Cavaco Silva has avoided a direct political confrontation with the government while at the same time taking action that will at least partially appease critics of the austerity measures. However, the decision is expected to increase political tensions between the president and the prime minister.”

The Wall Street Journal said: “If the 2013 budget is deemed unconstitutional, it may complicate the government's efforts to reduce the budget deficit to 4.5% of gross domestic product this year, from an expected 2012 deficit of 5% of GDP, part of the commitments included in a €78 billion bailout agreement with the European Commission, the European Central Bank and the International Monetary Fund.”

The BBC among others pointed out that the proposed tax hikes in the latest budget are equivalent to more than a month’s wages whilst Portugal is entering its third year of recession with an unemployment rate of nearly 16%. Among the country’s youth it is topping 35%.

According to Eurostat, the EU's statistical agency, some of the unemployment levels are the highest ever seen in Europe, with Portugal along with Spain, Greece and Latvia the worse affected.

The latest Gallup poll on the subject found that 89% of adults questioned in Portugal thought this was a “bad time” to find a job.

Wishful thinking maybe, but nonetheless intriguing as we lurch forward into the new year gloom, 7% of Portuguese adults told Gallup they were optimistic about this being a “good time” to find work.