Portugal News

portuguese press review plus the odd insight

Archive for the ‘business and finance’ Category

No time to waste

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The IMF is proposing that Portuguese state workers have their 13th and 14th months of salary, usually paid at the end of June and November, paid in form of treasury bonds rather than cash to ease pressure on the country’s public accounts. A similar measure was imposed by the IMF in 1983 during its previous bail-out of Portugal.

Meanwhile, Diario Economico says the talks between the EU, IMF and Lisbon authorities on the EUR 80bn, or more, rescue package have moved from the Finance Ministry, looking out to the Tagus River in Praca do Comercio, to the European Commission building in the capital, behind the Sao Jorge cinema if you know Lisbon.

In an FT opinion piece, leading Portuguese financial analyst Jose Maria Brandao de Brito likens his country to Shakespeare’s Richard II, incarcerated in a tower, stripped of its sovereignty (financial) and wondering aloud how things got so bad. The small Iberian nation initially weathered the impact of the global financial crisis. But soon managed to get itself sidelined from capital markets because of its government’s inability to rein in a ballooning budget gap.

Portugal’s needs from the IMF and EU are different to those of Ireland and Greece, already in the eurozone bail-out clinic, because Portugal’s debt problems don’t come from a specific sources like Ireland’s banks and Greece’s calamatious public finances, notes de Brito. Lisbon needs a rescue package geared to ensure that the coming fiscal austerity and private sector deleveraging (reducing debt by selling assets) do not generate widespread insolvency.

The IMF and EU must devise a bail-out that rests on sustainable public finances, liquidity for the financial system and capital, if needed, and economic reform focused on boosting the country’s growth potential, argues de Brito, head of financial markets at BCP Millennium.

Tough times lie ahead for Portugal, concludes de Brito, but recovery with the assistance of fellow EU states is possible. Failure to restore financial stability to the country will only bring more misery and the sort of self-commiseration that haunted Richard II, who lamented: “I wasted time, and now doth time waste me.”

Written by porkncheezer

April 26, 2011 at 1:29 pm

TAM confirms interest in TAP

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Portuguese flag-flier TAP could be bought by TAM, the Brazilian airline, when the Lisbon government proceeds with the carrier’s planned privatization later this year, according to Diario Economico. TAM, in the process of merging with LAN of Chile, joins British Airways, Iberia, Qatar Airways and Lufthansa as a potential buyer  for TAP.

TAP faces financial collapse if not bought soon. The Portuguese airline, operating lucrative routes to Brazil and southern Africa, is also looking to sell its loss-making Groundforce handling unit and profitable Brazilian engineering and maintenance arm. TAP should have been privatized years ago under EU-wide liberalization of the sector.

The TAP aircraft in the video is an A-310 performing ‘acrobatics’ at an air show at Evora, Portugal, in 2007. The display, which inclued a high-speed, gear and flaps up low-level pass, was meticulously planned and executed by two of the airline’s most experienced pilots. I don’t think they had any pax in the back! Portuguese aviation magazine Take-Off later ran a four-page feature on the dramatic Airbus display.

Written by porkncheezer

April 25, 2011 at 11:33 am