Portugal & Madeira News from Paul Abbiati
Portuguese Prime Minister resigns
“Portuguese Prime Minister Jose Socrates resigned Wednesday in a televised speech to his debt-ridden nation after parliament rejected his government’s austerity plan intended to ease the financial crisis.
Opposition parties combined to vote down the plan, which they viewed as hurting Portugal’s poor, that had been formulated without broad consensus. Socrates, a Socialist, had threatened to resign if the plan failed.
He gave his resignation to the Portuguese president, Anibal Cavaco Silva. The presidential website indicated it was not clear there would be snap elections. Another option, the website indicated, would be for a replacement to be appointed without elections.
Socrates said the country is the real loser in the decision.”
“The obstruction from the opposition today was taken to intolerable levels.” Socrates said in his address. “It wasn’t just about obstructing the government, it was about obstructing the country.”
José Sócrates, prime minister of Portugal in Brasília, 2006
The defeated plan was the latest in a series of austerity measures aimed at resolving Portugal’s financial crisis. Where previous plans had increased the country’s value added tax to 23 percent and cut salaries of government workers by an average of 5 percent, the latest proposal included budget cuts and a freeze on pensions.
Critics said the plan would unfairly hurt low-income residents already struggling under higher taxes.
Miguel Macedo, a member of parliament who voted against the proposal, said all of Socrates’ plans have failed and the country needs change. He said the government’s policies have increased poverty.
But Silvia Pereira, a lawmaker who supported the plan, said in debate over the proposal that rejecting the plan could throw the country into turmoil.”
“The responsibility belongs to whom wanted to add a political crisis to our existent economic crisis,” Pereira said.
The political turmoil comes on the eve of European Union summit in Brussels that had been expected to focus on the debt crisis in the eurozone but which will now likely include additional attention on Portugal.
Portugal’s high debt and borrowing costs have prompted repeated speculation in the European Union and in international financial markets that the nation might need a bailout, like Ireland and Greece before it.
Socrates’ Socialists hold 97 seats in the 230-seat parliament.
A spokesman for the main opposition center-right Social Democrats, with 81 seats, said his party was rejecting the government’s plan because “we are trying to save the country, not the prime minister.”
Smaller opposition parties on the left and right also voted against it.
The question for many is how Portugal’s delicate financial situation, with 10 percent unemployment and tepid economic growth, will fare under a caretaker government.
A top Socialist Party official, Jose Lello, told CNN that Socrates will go to Brussels on Thursday for the European Union summit.
Socrates’ resignation will not have much “impact on the Portuguese economy,” financial analyst Filipe Garcia told CNN before the vote.
“It’s more important what’s discussed in Brussels than in Portugal,” Garcia said from his office in the northern city of Porto
Portugal aims to cut its public sector deficit from 6.8% of gross domestic product last year to 4.6% this year and to just 3% next year, in line with European Union guidelines.
But Lello said the opposition had distorted the plan’s contents. He said the pension cuts it envisioned would have hit some of the wealthiest Portuguese, not the poorest.
“We offered to negotiate to all parties,” Lello said. “If we go to elections, let’s see.”
Link to full CNN report: http://edition.cnn.com/2011/WORLD/europe/03/23/portugal.austerity/?hpt=Sbin
By Reuters reported on Times live.co.za:
The EU’s delay in reaching a deal to bolster the EFSF is partly due to politics and partly the result of a need to coordinate the legal and structural changes that being introduced and avoid national parliaments rejecting them.
Finland has dissolved its parliament ahead of an election on April 17 and cannot take any formal decisions until it has a new government in place, something that is only likely by May at the earliest.
There are also doubts in Germany about what capital commitments it needs to make to finance the ESM, which will have an effective capacity of 500 billion euros.
EU finance ministers agreed on Monday that the ESM would have paid-in capital of 80 billion euros and 620 billion euros of either callable capital or guarantees, a total that would ensure a triple-A credit rating.
But a German official said on Wednesday that Germany now wanted this week’s summit to alter the timetable agreed by the ministers for injecting cash into the ESM.
While this is essentially a technical issue, it contributes to a sense in financial markets that EU member states are endlessly at odds over how best to handle the debt crisis, and that everything could unravel if deals are not respected.
NO MOVE ON IRELAND
Further undermining confidence is the expectation that no progress will be made at the summit on reducing the interest rate on bailout loans already made to Ireland. Dublin says the rates are cripplingly high and wants them lowered.
But agreement has been held up by Dublin’s refusal to give in to German and French pressure for Ireland to raise its corporate tax rate.
“There is almost certainly not going to be a resolution of the Irish issues tomorrow or Friday,” said an EU diplomat.
“The feeling is that the outstanding issues for Ireland, which are not just the interest rate but the banking question, that they are better dealt with as a package,” he added, referring to upcoming tests of the health of Irish banks.
Regardless of whether euro zone governments can agree on their crisis package in coming weeks, further pain for some investors in the weak economies may be inevitable.
It is only a matter of time before Greece, which is receiving a 110 billion euro bailout from the EU and the International Monetary Fund, has to restructure some of its sovereign debt, a former chief economist of the European Central Bank said.
“As soon as the other countries are out of danger, the Greek government debt will have to be restructured,” Otmar Issing told Germany’s Der Spiegel magazine. “This can be done by cutting that debt or by extending the terms of the loans, but there is no getting around a debt restructuring.”
Link to full article: http://www.timeslive.co.za/world/article984742.ece/Portuguese-PM-submits-resignation
Flying dolphins off Paul do Mar
The Calheta Marina based dolphin watch boat Lobosonda/Ribeira Brava has spotted many Common dolphins along the south-west Calheta coast the last few days and other species including A Bryde’s whale and its calf obviously close to Madeira for feeding and the great weather!
Thanks to the skipper of Lobosonda/Ribeira Brava Claudia for the amazing photographs and we look forward to you sending us more! The photographs are copyright 2011 Lobosonda/Ribeira Brava and cannot be published without their permission.
Lobosonda/Ribeira Brava blog:
Madeira mega-promotion in Brazil
TAP the Portuguese Airline and the Madeiran Secretaria Regional do Turismo e Transportes will be launching a significant marketing campaign to promote Madeira in Brazil. Bernardo Trindade the Portuguese Tourism Secretary and Raquel França of the Madeiran Secretaria will be present at the launch of the campaign in São Paulo.
1st TAP Golf Open Madeira – PALHEIRO GOLFE and SANTO DA SERRA GOLFE
30 March to 3 April 2011 on the TAP website and in the Diario 31 de Março e 2 de Abril!!
Spectacular views from Santo da Serra Golf Course course – one of the venues for the 1st TAP Golf Open Madeira.