The role of municipalities in the 21st Century

The environment where Portuguese municipalities act upon has gone through a deep transformation ever since the council’s arrival which was subsequent to the 25th April, 1974. Two aspects of this transformation are, in my perspective, particularly relevant:

(I) The change of focus in the autarchic performance. After, in most of cases, a great investment has been made in the basic infrastructure of territory and at the level of equipment, the central paper of the autarchic advisor is, more and more, to lead a territory project, organizing competitive networks and poles and contributing towards the attraction and maintenance of companies, projects and people.

(II) The growing competition, whether at a national level (between cities, city networkss and regions) or at an international level, not only of cities and regions which are close to us (for example Spanish ones) but also of places in the world which are physically distant and that globalization brings closer to us (examples: the rise of the “factory and office of the world” – respectively China and India; the opening and modernization of eastern European economies).

É neste contexto que cidades e regiões europeias embarcam com cada vez mais frequência em projectos de Prospectiva Territorial capazes de criar uma Visão comum e mobilizadora para o futuro, de fortalecer sinergias, redes e interfaces (capital social), de mobilizar os actores do território e melhorar as relações entre os cidadãos e as autoridades regionais/locais, de facilitar a implementação de processos inovadores e eficientes, de definir prioridades estratégicas, de melhorar a imagem do território e de melhorar a capacidade de inteligência económica dos territórios (identificando riscos a minorar e oportunidades a aproveitar com o máximo de antecipação face à concorrência).
It is in this context that European cities and regions embark more and more frequently in projects of Territorial Prospective capable of creating a common and mobilizing vision for the future, of strengthening synergies, networks and interfaces (social capital), pf mobilizing the territory’s actors, improving the relations between citizens and regional/local authorities, of facilitating the implementation of innovative and efficient processes, of defining strategic priorities, improving the territory’s image and the capacity of the territory’s economic intelligence (identifying risks to minimize and opportunities to make the most of with maximum of anticipation in relation to other competitors).

Examples to explore: Project Vision 2025 for the region of Helsinki (http://www.ytv.fi/ENG/future/vision/frontpage.htm), Strategic Partnership of Birmingham (http://www.bhamsp.org.uk/), Gipuzkoa 2020 (http://www.gipuzkoa.net/g2020/es/index.html), Vision Dublin 2020 (http://www.dubchamber.ie/economy_item.asp?article=496), Scenarios for the urban region of Edinburgh (http://www.edinburgh.gov.uk/internet/environment/planning_buildings_i_i_/planning/planning_policies/CEC_a_vision_for_capital_growth_-_2020_-2040), Millénnaire3 (Grand Lyon) (http://www.millenaire3.com/), Metropolitan Strategic Plan of Barcelona (http://www.bcn2000.es/ca-es/default_ca_es.aspx), Gothenburg 2050 (http://www.goteborg2050.nu).

Apricot in Norway

Norway is, basically, the richest country in the world, occupying the first place (or close) in most of development indexes. It is situated in the Scandinavian chain close to Sweden and Denmark, the historical powers of these regions. It is not part of the European Union (EU) by referendum option (but, for example, it takes part in the space of free circulation of people – Schengen).

People are few and space is abundant. The older people talk little but those who are younger talk more and more. Oslo is a peaceful city, where wealth strikes you discretely as in a premonition. “Premonition” is, actually, an adequate word for Norway, rich with oil and natural gas of the North and Artic Seas that started to flow towards the “fat” budget of the Norwegian State since the 60´s. It envisioned an organization of social democratic matrix, a rigorous and discreet public control of vast riches that in so many other places of the world turned into ostentation, misery, war and death (some examples just in Africa: Niger, Angola, the Democratic Republic of the Congo, Liberia, Sierra Leone, Coute d’Ivoire, Equatorial Guinea, Sudan and Chad). You can envision an almost philosophical anguish in people’s look (perhaps influenced by the grey climate varying from midnight’s sun to the minimum clarity of its winters), between the confident austerity and conscientious suicide. Death, Black, Trash & Other Metal, statues in Oslo, pines and endless routes sprinkled by reindeers and Sami people complete a quick image of the country. Trying to be even more imprecise, I proceed with 18 hobbies of the Norwegian:

1- To solve other peoples’ problems after having solved their own. Norway is one of the countries that most contributes towards international cooperation, frequently assuming itself as a conflict mediator (example: Sri Lanka and Cyprus) and developing a lot of investigation in this area. PRIO, for example, is an institute of international reference in the area of Peace and Conflict Studies.

2 - Death, Black, Trash & other Metal. Não só são norueguesas algumas das bandas de referência como também os noruegueses constituem, com grande probabilidade, o povo mais fanático por este género musical (“Podia-me traduzir esta letra dos Sepultura?” – perguntou-me candidamente um respeitável professor sexagenário).
2- Death, Black, Trash & other Metal. Not only are most of the bands of reference Norwegian but also the Norwegian constitute, with great probability, the most fanatic people for this particular musical genre. (Could you translate these Sepultura’s lyrics for me? – candidly asked me a respectable sexagenarian teacher).
3- To award the Nobel Peace prize, the most prestigious of prices (Norwegian Nobel Institute of Oslo)
4- To commit suicide.
5- To fish (second largest fishing fleet in Europe and great exporter) and to produce fish (including cod fish) in fish farms.
6- To die in car crashes caused by mousses.
7- To talk little (diminishing and in inversely proportional to age).
8- To have comfortable bathrooms with heated floor.
9- To eat pig’s heads (including the eyes, the best part, of course).
10- To drink wine every time the bottle costs less than 3500 kroner (nearly 40€). Directly related to this hobby is the sub-hobby of the alcohol exaggerations in ferries.

11- To build and show statues (with particular regard for the Master Viggeland).
12- To steal and recover famous paintings.
13- Trekking and cross-country skiing through the middle of the pine trees. Worth noting that those who practice cross-country skiing are usually persevering and methodical athletes who enjoy jazz and classical music while ski jumpers are usually adventurous, eccentric and, eventually, members of black metal bands.
14- To redistribute the oil’s money (they have, for example, the highest minimum wage of the world – something close to 12€/hour).
15- To read newspapers. They are the people that read more newspapers, counting with more than 80 daily newspapers (more than 230 altogether).
16- To speak English. Almost everyone speaks this language and a great part of higher education is in English. The adaptation by the teachers was difficult, but it has been successful.
17- To get a suntan. Holidays in the South and solariums.
18- To breath oxygen with flavours (I suggest apricot).

Why do it differently in Portugal?

Last week, I had the opportunity to go back to Romania, more concretely to Bucharest, through my involvement in an European network of researchers in the area of Prospective/Foresight. The meeting was quite interesting, allowing the exchange of different national experiences, the exploration of common work possibilities and contributing for the conceptual, methodological, and empirical “densification” of the discipline. The usual thing in these European networks (when they go well, of course).
I had been in Romania 12 years ago, involved in an European project of implementation of a Business Innovation Centre in Timisoara, in the west of the country.
At the time, the image I retained both of Timisoara and of the rest of the country was quite greyish (in spite of recognizing the richness of its landscape), of a castrating poverty, of detachment, contrasting with the cultural and historical dimensions of these places. They were accounts of an Orwellian dictatorship, communist and populist, which managed and conditioned everything, spearheaded by Nicolae Ceausescu and his wife Elena.
The cars and buses fell apart, except for the limousines of dealers (of people, drugs, arms, etc.) that beneficiated a lot with the conflicts associated to the desegregation of Yugoslavia.
Today, if in Bucharest, we can still find signals of the anachronic dictatorship of Ceausescu and comrades (though similar signal also still exist, for example, in Berlin), not much is left of that Romania of 1994.
There are still a few Dacia but the company has been, meanwhile, bought by Renault. There are loads of BMW and similar cars. The multinationals are present all over the country and have become landmarks of the capital’s image. The center of Bucharest can be perfectly mistaken by any other European capital. Deloitte Offices, young executives of dark suits, design coffees and bars, restaurants of every colours and forms, Irish pubs… The Ibis Hotel has rooms, on special offer, at 99€/night (in 1994 to cross Timisoara in a falling apart taxi , in roads full of potholes cost something like 4 escudos in the exchange rate of the time).

The traffic is chaotic. At night, I watch BBC and Chelsea TV in my hotel room. Everything is transformed, everything is built. Roads, motorways, apartments, skyscrapers. Distribution is also on a high with the presence of great European networks like Lidl and Carrefour.

There are also Portuguese. Lena Construções is, for example, in charge of the motorway connection works between the airport and the city. Coindu (upholsteries) is also present in Romania, like Mota-Engil, Infosistema (information systems consultancy) and, of course, BCP (just to give some examples). The bathroom of my hotel was equipped with ‘Valadares’ Ceramic.
There are clear signs that some Portuguese groups (essentially linked to construction) understood that they can replicate in the East the experience accumulated in Portugal. Romania is only an example that is still just starting.
Therefore the doubts I have in relation to those who defend that it is this time that Portuguese capital, given the possible profitability reduction of the sectors linked to the “soil” (construction and similar) and to distribution, would finally start to look with more attention towards industries and services linked to knowledge.
At the end of the day, let’s be frank, why do it differently in Portugal if we can earn so much more money doing the same in any other place?

A per capita country and the Lebanon war (with Europe in between)

Time for holidays, of unpretentious readings (how I miss the Summer of the “Da Vinci Code”…) and of futilities to relax. Parties with sardines or vodka, with foam or salami. Going south, to the coast, towards a heat that is attenuated by the sea.

Escaping the everyday buzz to try and understand it better. Everything is in pre-epoch in Portugal. Everything is ok. Those who can, go to the hotel. Those who sort of can, rent a place and share the costs with family and friends. Those who almost can’t, try to enjoy a couple of escapes to the beach. Those who cannot, either pretend they can or stay at home.

We are important people and that allows us to go on holidays in a relaxed manner. We are important, not only because we are one of the four better football squads of the world, but also because our C-130 travels, “at UN’s request”, between Italy and Beirut. And it is the only one. The national logic and the journalistic presentation of these two “important things” is more or less the same. One like the other let us at ease with ourselves.

On the one hand, we are good at doing what we like, that is, to play football (and everything associated to it: from Super Bock to cafe chit chat). All this despite us being a small country, make notice therefore that, in per capita terms, we clearly were the world champions.

On the other hand, we do per capita our very meaningful part, in helping the international effort to respond to the conflict in Lebanon. I repeat, our C-130 travels, “at UN’s request”, between Italy and Beirut to transport humanitarian aid. And it is the only one. Drawn in jealousy super-powers. It is on these little details that great nations define themselves!

Strangely, nobody seems ask why the hell is our C-130 the only one doing this work. But this does not matter. What matters is that it is the only one and it is Portuguese and that Portugal, in spite of being a small country, leads the aerial humanitarian effort to help the victims of the bombardments. That really puts me at ease. What else could we have done? It already had been our Minister of Foreign Affairs (MFA) who had asked for a special meeting of the MFA of the EU about this subject and now we had our plane that just keeps landing in Beirut filled with humanitarian aid.

It is true that, once again, the EU was completely incapable of taking a common stance that someone understands. It is also true that the international intervention plan in this conflict seems to be peacefully (to give Israel more time to do its “work”) prepared by the USA, by talking to those that matter. And, in Europe, it is France and the United Kingdom that matters (and, in a second level, Germany and Italy). The EU does not have armed forces prepared to die by the orders of the President of the Commission of of the European Parliament or of the Council. In Foreign Policy and Defence, the EU could be a vision or a Project, but it is not (I do not know if it must be) a reality.

As I have said before, us Portuguese, are at ease because we have already done what we could. Nowadays we are in the need of holidays, of pink magazines, of “Da Vinci Code” sequels, of open-air discos and pretty people. Pretty people like those who appeared on Beirut’s photography, the Paris of the Middle East, once again bombarded on a daily basis. Many of those pretty people should already have gone out of the city and the country (at least pretty people with appropriated nationality, that is, not Lebanese, and/or with enough money).
In Lebanon and Israel, the war became once again an everyday affair, occulting, among other tragedies, the Iraqi (only a man with the charisma of Fidel Castro managed to rival media-wise with an Israeli-Arab war; and, even so, only if the intensity of bombardments and the clarity of the mutilated bodies’ images is not enough).
I try to read something about what happens.
I knew there was an UN resolution to disarm Hezbollah and that, if something is certain, is that Hezbollah was not disarmed (thousands of missiles moved in lorries usually do not result from a well succeeded disarmament). It is true that the fact that Hezbollah, supported by Syria and a pro-nuclear Iran (remember?), violating the international line that separates (separated?) Israel from Lebanon, attacking Israeli soldiers and kidnapping two of them is not exactly an act of peace.

It is true that the non-recognition of the state of Israel state by Hezbollah, by Hamas and the successive declarations of Iranian representatives are not exactly an act of approximation to Israel, a small country in permanent state of war and fighting for survival.

It is true that Israel’s response is brutal, perhaps disproportional (but disproportional to what?, the two soldiers’ life or to the existence of a nation?). It is true that the news and the images that arrive to us are extreme.
I do not really know where to find guidance from. I will just stay here. Reading, Talking and trying to understand a bit better. Good holidays.

Portugal: Grow with the World and make the most out of change.

Friday, June 02, 2006


The drop in trade barriers and the circulation of capital and the sudden entrance of huge economies like China and India in the global competition for the markets of goods and services makes the capacity of economies like the Portuguese one to “grow with the world” even more decisive, meaning, to ‘tune in’ with the most dynamic sectors of international economy.

The problem is that not only is our business structure characterised by sectors losing out in global competition, but also central elements for the transformation of this reality (such as the education and scientific-technologic systems) have demonstrated great rigidity and resistance to change. Therefore, in spite of the indexes showing a growing qualification of human resources, the existence of an enlarged network of infra-structures (such as roads) and poles of R&D and centres of excellence for artistic creation, the Portuguese mission in a world in accelerated transformation appears quite a lot complex.

And here are the “heavy weights” (with a crescent opening of EU to Asia). And the EU is different, with new Member-States that directly compete with Portugal in many ranks, many of them with better conditions in terms of fiscal policy, qualification and location, making the position of economies like the Portuguese a difficult one on what concerns their relative atractiveness. Therefore the urge for attention to what is coming, for a selective definition of a strategy and of a perception of possible places for Portugal and its economy in growing activities related to, for example, sustainable mobility, health, the IT and entertainment.
It is change that affects and hits us. But it is also from this change and its exploration that opportunities emerge.

To explore change, it is essential, first of all, to be conscious of its nature and the relation of the actor, for example Portugal, with it. Here comes the distinction between changes in the context that the actor does not influence (“things that happen to us”) and changes “created” by the actor. And if the first type of change appeals to our attention and defines limits, supplying logics of behaviour and “rules of the game”, the second kind appeals to Portuguese capacity “to create its own future”, optimizing its capabilities and international positioning. It is about adding up the action (second type of change) to attention/monitoring/contingency (first type) and, above all, be conscious of the existing capacity to influence (second type) but that is contained within limits that one should known/make the most out of (first type).

On other hand, it is equally fundamental to understand the distinction between continuous, graduals changes, during long periods, which to do not threaten the reigning socio-economics structures; and disruptive, sudden changes, that put in cause the contemporary structures. This last type of change, normally less accompanied, is particularly important. Professor Peter Bishop, in a recent conference about Futures/Foresight in Munich advanced with the example of the speed of human movement: the appearance of the bike is clearly a disruptive change in relation to moving on foot; and a car is a lot faster than a bike; and no car, however fast it is, has the speed potential of a plane.

The problem is that all change brings problems and challenges structures that work. Moving by foot was great before bike appearance. Bike was excellent before cars emerged. And cars allowed for long trips until airplane came along.

E são precisamente estas estruturas que estão a funcionar bem aquando do surgimento da mudança disruptiva que é preciso abandonar para inovar e para aproveitar essa mudança. Como se intui, este processo é bastante difícil. Se, por vezes, é difícil descartar algo que comprovadamente não funciona, imagine-se o que é ter que abandonar algo que reconhecidamente funciona. Mas é precisamente neste repensar permanente dos seus métodos e práticas e na capacidade de abandonar modelos organizativos, opções e processos que funcionam que reside a vantagem competitiva de muitas organizações de sucesso, sejam elas empresas, regiões ou países.
It is precisely these structures that seem to be working well when disruptive change comes about that need to be abandoned in order to innovate make the most out of this change. As you can imagine, this process is quite difficult. If, sometimes, it is difficult to rule out something that has been proved not to work, imagine what it is have to abandon something that is recognized to work. But it is precisely in this permanent rethinking of its methods and practices and in the capacity to abandon organizing models, options and processes that work that resides the competitive advantage of many successful organizations, be it companies, regions or countries.

A diplomatic victory

The year of 2005 ended very well for Portugal in the European arena. There are not many doubts left that the agreement achieved in Brussels in the early hours of the 17th December, concerning the next Financial Perspectives (2007-13), was good to our country.
The Portuguese negotiators obtained a very substantial volume of funds (22,5 billions of euros – a reduction of only 10% relatively to the previous financial framework) in a context of reduction of the communitarian budget and of enlargement of the Union (to countries which are creditors of communitarian funds and, consequently, direct rivals of Portugal on this subject). They also obtained more flexible rules for the execution of the funds, namely a plafond of 85% for communitarian participation (it used to be 80%), 3 years for the devolution of non-spent funds (it used to be 2), the inclusion of non-deductive VAT in the expenses financed by the Union, financing of the private component in public-private projects, etc.
It was, all around, a true diplomatic victory. Portugal and its “specifity” (meaning “Portugal and its problems”) had access to special rules created for new State-Members. A small detail is that the new State-Members entered in 2004 and not in 1986. And that is why this clear diplomatic victory crudely exposes the Portuguese failure, our slow transformation and convergence (that has turned into stagnation since the beginning of the 21st century). This victory solemnly declares our separation from Spain (when it comes to economic growth and development levels) and makes us put our eyes on Ireland with a mix of admiration and incredulity (though some people take note that poor Ireland, does not have any decent roads to cros the island; it is probably the same people who say that poor China, can only do simple things like t-shirts and toys.
Will the next Communitarian Framework be any different? In spite of the Government’s will, our curriculum does not seem to point to that. Portugal demonstrated that it knows how to reach very high levels when it comes to the execution of communitarian funds. However, it was not able to put them at the service of the transformation of the economic model and the country’s activities portfolio (that is, it does not associated the availability of the funds to the implementation of the reform of the Portuguese capitalist model), this results in a stagnation that drags on in time and causes, among other harms, difficulties at the level of public finances and increases in unemployment. However this failure also has good things: for example, an excellent and smiling diplomatic victory. Congratulations!

What if it all goes well?

“To go well” is, of course, subjective. It is even more subjective when we are talking about European integration, with its entanglement of questions and trends and a group of actors whose interests are often distinct.
But, in this time of pessimism, it appears to me that it can be interesting to reflect about a positive scenario of equilibrium in the future course of the integration process. A scenario in which the train of integration does not suddenly brake.
Lets then imagine a group of possible evolutions for the positions of four of the key EU actors in the next decade:
Throughout the next decade, France would accept the gradual reduction of the Common Agricultural Policy’s (CAP) weight on the communitarian budget, at the same time it started a process of structural internal reforms which, while transforming the French capitalist system, would bring about good results in terms of economic growth. At the international level, French leaders would clearly understand the disadvantages of a permanent attempt of international affirmation in opposition to the USA, which would allow for the construction of a strong bond between the two powers (for example at the level of defence), empowering the dynamism of the European defence industry and of the progressive affirmation of an effective European identity of defence within NATO. This would be a France with a new generation of politicians in power (perhaps Sarkozy, perhaps Villepin), without Chirac or Jospin and very hardly with Fabius.
Germany, in spite of the economic difficulties and of initial internal costs of the structural reforms (successful in the medium term), would accept to continue to play its part as the biggest contributor (in liquid terms) towards the communitarian budget. On the other hand, already far away from the scars of the Second World War, it would assume greater international prominence, which would be reflected upon, among other things, membership into the United Nations Security Council. These evolutions could happen with a central block government in Germany led by Merkel or by CDU / Free Democrats coalitions (with or without the Greens) or SPD with the Greens.
An EU that would be closer to the USA (more of a partner, less of a rival) would lead to a greater popularity of the EU in the United Kingdom. This improvement of EU’s image would have as is most remarkable facts the gradual reduction of the “British rebate” and, especially, the United Kingdom’s support for the “Economic and Monetary Union”. The natural successor of Blair (Gordon Brown) seems to be the suitable person make these evolutions possible, which would presuppose the continuation of the prolonged absence from power of the Conservative Party.
Lastly, the Netherlands, fearful of migration pressures but confident of an EU which managed to persuade the UK to adhere to the euro and which accepted the reduction of the Dutch liquid contribution towards the communitarian budget, would participate in the consolidation process of a collection of Europeans policies in regards to Internal and Justice Affairs (IJA). These policies would prove quite a lot more efficient than in the past, when it comes to, for example, immigration control (leaving, however, some room for maneuver by the member states). This Dutch evolution would implicate that populists would be keeping away from power and, probably, that the Liberals would have a key-role in the government’s coalitions.

Give it a decent funeral

On the aftermath of the French and Dutch “no” to the Constitutional Treaty of European Union, the 25 heads of State met in Brussels, on that occasion the European Council declared:
“The citizens express worries and reservations that should be taking into consideration. It is, therefore, necessary to proceed with a due reflection about this happening. This reflection period would be used to carry out in each of our countries a wide debate, with which citizens, civil society, social partners and national parliaments will be associated, as well as political parties. (…) We made an appointment for the first semester of 2006 in order to proceed with a global appreciation of the national debates…”

A wide debate? To which citizens, civil society, social partners and political parties will be associated? Political parties? One almost feels like say nothing deserves to be said such is the shallowness of the words. The debate does not exist, it is not promoted, it does not have interest neither from potential promoters nor from potential participants. The Portuguese Prime Minister signed an empty, subjective and discouraging declaration of intentions, in which the small print seems to affirm in a loud voice: “the Constitutional Treaty died, it is buried and is irrecoverable. We are only going to try and recover some parts to see if we get along together at 25. Also because the current treaty, the treaty of Nice only triggered debate for a single reason: the need for its revision.”

The fact is that the Constitutional Treaty really did die, and the later the burial, the more commotion it will cause. The Constitutional Treaty only could come alive if all the Members States of the European Union had ratified it. France said “no”. The Netherlands said “no”. Czech Republic postponed the referendum that was supposed to be in June 2006. Denmark postponed the referendum supposed to be on the 27th September. Ireland also delayed the referendum, just as Portugal did. The United Kingdom delayed the referendum and the parliamentary ratification. And Sweden delayed the latter.
The Constitutional Treaty will not come into practice. Perhaps it will be possible to make the most out of some less polemic novelties, namely on what concerns the simplification of treaties and the transparency of the European Union. Just give it a decent funeral. As quickly as possible.

“The idea of there not being anyone in this country is unbearable: I have to run for elections”

In 1985, the Socialist Party candidate to the next presidential elections unabatedly signed the Treaty for Portugal’s entry into the European Union. This was the first political act in Portugal that I accompanied with enthusiasm. It was a victory for Portugal and it definitely put us in the route to Europe and to development. In 1986, the candidate from the left on the next presidential elections was elected, for the first time, PR. These were the first elections in my memory, where I supported, in an active and emotional way, Mário Soares. In 1991, Mário Soares was overwhelming re-elected PR (even then, the phenomenon of the “void” already showed some signs). Possible future PR, probable future PR, Socialist Party candidate to the next presidential elections, candidate of the left to the next presidential elections, Mário Soares. I apologize for repeating myself, but I do not get tired of repeating it, since they tell me that it is true, I read it on the newspapers, but I still cannot believe it. As I write this article, Wednesday, the 31st August, early morning, I still have a small hope that he will back down at the last moment (but, deep down I know it is not going to happen). The candidacy of Mário Soares, a unique man in the Portuguese history of the second half of the 21st century, represents the complete failure in the renovation of the political system, a kind of generational politic scleroses (with its origins in Mário Soares’ generation but also, although to a smaller extent, in Cavaco’s one) that halted the renovation, settling in its own failure (of being able to put together parties and bring about capable politic leaders) the reason of its maintenance in power. “There is no one else, I have to advance”, must have thought Mário Soares when he decided to decide to be a candidate for candidate. It is this “no one” that worries me. Is it, as it seems, that there really is not anyone else in the Portuguese left (the right is not much better) capable of presenting himself as a strong candidate to PR in the beginning of the XXI century? And is it the case that, because there is no one else, exactly one of those responsible for this void is going to be elected, taking into account the long-term exercise of party power by Mário Soares. Honestly, the next presidential elections deserved the occurrence of surprises. To the left and to the right. Somebody that would challenge this “back-and-forth” of “addicts” to power and history. That would halt the paradox in the genesis of this process that may not be more than an intimate dialog of the kind: “the idea of the Socialist Party, my Socialist Party, giving its support to a comrade more dedicated to Arts than to electoral victories is unbearable; the idea of the Socialist Party, my Socialist Party, supporting Freitas do Amaral is even more unbearable; the idea of not being anyone in this country is unbearable: I have to run for elections ”

Money: Wanted

In the European Union (EU), with the terrorist tension in turmoil, the difficulties in economic growth and the sensitivity of the questions related to immigration and border control increasing, the concept of Independent State has gained terrain to the idea of Member State ( “Member-State”, and therefore, co-responsible for group decisions and for the success of their implementation). Only this explains all the tension about the EU’s budget, that is, about 1% of EU’s product (a national budget is usually situated between 45 and 50%of the national product). With the reinforcement of the importance of nationality and the difficulties in growth and in job creation, the “old buddies” have started counting each euro. Looking at the “old” 15 (not counting with Luxembourg), I will briefly refer to a basic difference that, among others, structures the relationship between States in the EU: there are those that pay and those that receive, that is, some Members States are net contributors for the EU’s budget, while others benefit from the referred budget.

When they seat at the negotiation table, the difference between those who contribute for the thin budget of the EU and those who benefit from it over and over again is clear. If I give the money to someone, I can demand some conditions. If I receive the money, I can, in as much, be a “good student” (I can also be a “bad student” here and there as long as such behaviour does not turn into a rule on the eyes of those who pay me, running the risk of having my nice sponsor simply stopping the payments). It is because of this (but not only) that only the more uninformed thought that Germany could be fined for having a deficit of about 4% of the product. It will be enough, through the German perspective, having offered its national currency to be ran together with those gentlemen and ladies of the south Europe that deserve little trust and to having been, since always, (and by far) the biggest net contributor (in absolute values) to the communitarian budget. “Enough! The Second World War ended 50 years ago and we (Germans) have enough problems with our economy and our development model.” On the other side of the barricade we have “nuestros hermanos” who want to be big, to be in all the photos and to always have a word while, simultaneously, also wanting to continue to receive funds, because they are still poor, and cannot just suddenly enrich, in a purely statistical way. It is a schizophrenia that limits, for now, Spanish ambitions (in the EU; not in Portugal).

So, who is giving out the money, wanting to control its destiny? From Germany, the United Kingdom, France (not much, in relative terms), Netherlands (a lot, too much, taking into account its dimension), Sweden, Denmark and Italy (little). And for whom does the money go to, not wanting to irritate their financiers? It used to go to Ireland (that went from a “country of cohesion” to the second richest country of the EU in terms of per capita product – just after Luxembourg), it goes to Spain (the main beneficiary in absolute terms), to Greece (theold poorest member of the old poor members of the Union) and, of course, to Portugal (you guessed it: the current poorest member of the old poor countries of the Union; poorer than the two richest of the ten relatively poor countries in terms of the EU average that entered the club on the 1st May of 2004: Cyprus and Slovenia; and very soon poorer than two others: Malta and the Czech Republic).

Good Luck

Blair has an extraordinary task in hands: to quickly convince continentals to radically alter the allocation of money in the process of European integration, dedicating it to vanguard areas; and to convince, in the short-term, his fellow countrymen that this Europe of innovation, without CAP, with a large and deepened Single Market, that is more demanding in the application of structural funds, is worth it, it is fundamental for this process of European transformation that the United Kingdom (UK) adheres to the Single Currency. It is for this Herculean task of Blair that many in Europe look at expectation (starting with Durão Barroso, who has been going through complicated times since he assumed the Presidency of the European Commission – supported by, rember, the UK). If it comes through, Blair’s Europe will be a very different Europe. With a coordinated Defence sector but without aprioristic ambitions of counter-power against the USA. With the euro and a Single Market even more developed. With a big role for the Members-States (MS) and great caution towards advances considered as federalist (with that point, France will keep agreeing to). It will be a Europe that will reform its social-economic model that is so pressured by demography and global competition. And It will also be a more demanding Europe on what concerns security and, possibly, more attentive and selective in relation to immigration. It will be less cohesive and more competitive. With less funds of cohesion but with renewed opportunities for the most dynamic MS (and more risks for those who are incapable of reforming themselves and compete). If he achieves it, Blair will be making History. If he obtains an agreement in the Financial Perspectives, reforming the CAP and the English rebate and if, afterwards, he brings the UK closer to the European Union and to the Euro, Blair will be justly referenced in future historical pages relative to the beginnings of the XXI century of the “Old Continent”. Good Luck.

Who is going to pay the interest?

Everyone seems happy with the Stability and Growth Pact (SGP) agreed by the Finance Ministers of the European Union (EU). It is, in fact, a reason to smile. It is as if, at the end of the year, we would put together in an Assembly all the people who were fined this year and had as the only point in the agenda: “to forgive or not to forgive the traffic fines”. It is not difficult to guess the decision… “It would be handy” for almost every Government to change the SGP. And so it was changed. And everybody was a happy chap. Everybody? No, some irresolute and strange economists still say that the stability of European public finances is not only a question that is very sensitive to political interests (not all of them are so “noble” as our technologic shock; believe it or not, there are those who expect to win elections more easily with this renewed ability to easily spend/invest…) but also, above all, it is a fundamental basis for economic growth. The message that came across about the SGP (“we created it but, after all, it is too rigid for the expenses/investments we want/have the need to do, so we have to make it more flexible”) increases the pressure on the interest rates in the euro zone (towards its increase, of course), making the commitment of sanitizing the public accounts of the Member-States less incisive and giving a bigger room for the public induction of the rise in prices. This inflationist pressure will be fought by the European Central Bank (ECB) with the rise of the interest rates. And when, in one of the next meetings, the ECB raises reference interests rates, the many Portuguese who bought, with great effort, their own houses, has to send the “bill” to the men and ladies of the Left Block and the Communist Party (for example) that so much attacked the ignoble monster called SGP. Fact remains that the fashion was, almost from the start, to attack the SGP, to blame it for the weak economic performance and the increase in unemployment, among other bad things. No one (or very few) said what it was actually for. Now, unfortunately, it is going to be understood. And the Portuguese with house loans will be some of the first.