FIREWORKS: BETTER OR WORSE THAN IN 2017?
- This week’s tragedy was hard to avoid: high temperatures, low humidity and strong winds always lead to the perfect storm. This is true in Portugal and throughout the developed world. Just think of the recent California fires as a disaster.
- In combat, there were some improvements compared to 2017, although they are palliative:
- Civil Protection acted in advance of the risk factors. It provided timely information. EU assistance was provided on time. SIRESP did not fail. It was not the chaos that occurred in 2017.
- But there were also serious failures. For example, some roads were not closed in time. This could have led to a tragedy similar to Pedrógão. In short, there is still a lot to be done.
- The underlying problem, however, is the forest. There are no improvements there.
- First, the attitude. People talk about forests when there are fires. Once they are over, they never talk about forests again. In winter, when everything is getting ready, politicians and TV stations avoid the subject like the devil from the cross. TV stations because the subject doesn’t get ratings. Politicians because it doesn’t get votes.
- Second, cleaning. Almost no one clears forests in Portugal. The owners even prefer to pay the fines. And why? Because the forest has no economic value. It is not profitable. The owners feel that the forest brings them expenses and not income. This is the core problem. The priority issue should therefore be to discuss incentives to give value to the forest. The government should create a working group with this sole objective: how to give economic value to the forest. How to make it profitable.
- Thirdly, the State’s negligence: biomass plants. This would be a way of giving economic value to the forest. Of making it profitable. Forest residues would be biomass to produce energy and would be paid to the owners. There was, therefore, an incentive to clean up. The problem is the State: it hinders instead of encouraging.
- The previous government promised in 2017 to open a tender for around six biomass power plants. Seven years later, the decree-law was amended three times; there were municipalities and private companies that showed a willingness to build plants; but the promised tender was never opened. Seven years of neglect. Let’s see how the new government reacts now.
FIRES: THE ARSONISTS
- The Prime Minister was not happy with the way he addressed the issue of alleged murky interests behind several fires. A Prime Minister cannot limit himself to making guesses. He has to act. But be careful: on the fundamental issue, Luís Montenegro is right: there is too much arson; the number of arsonists is increasing; more effective justice is needed.
- Official figures show that the issue deserves attention:
- In the summer months of June, July and August, arson, of a criminal nature, is the main cause of fires (50%).
- Arson crimes are, as a rule, around 6,000 per year. There was a peak in 2017. There may be a new peak this year. But peak or no peak, the numbers are very high.
- The number of prisoners convicted of arson has almost doubled in the last decade, rising from 21 in 2013 to 58 in 2024. However, this number appears to be low compared to the very high number of arson crimes (6,000 per year).
- But then there is a fact that is even more difficult to understand: only 5% of those convicted are sentenced to effective imprisonment. 48% of those convicted are sentenced to suspended sentences.
- This issue deserves special consideration: the law is correct. But its application needs to improve a lot. Firstly, there are too many suspended sentences. I would like to remind you that even a 6-month sentence for a negligent crime may not be suspended. Secondly, there is little use of security measures, which can be used in relation to pyromaniacs with mental illnesses. Be careful: if there is no change in the application of the law, people will become indignant and this will generate social unrest. This issue deserves reflection.
FIRES: POLITICAL MANAGEMENT
- The political management was, in essence, correct, both on the part of the Government and the opposition. The opposition resisted the temptation to take political advantage, as had happened in the Madeira fire. Pedro Nuno Santos even went so far as to say, and rightly so, that it is only after the process is over that questions can be asked and conclusions drawn. This is not giving in to the Government. It is a sign of maturity. The opposition did well.
- The Government did well: at the level of the Prime Minister and at the level of the Deputy Minister:
- Luís Montenegro showed leadership. By cancelling his agenda and the PSD Congress itself. By addressing the country with the President of the Republic on Monday. By holding an extraordinary council of ministers the following day, in the presence of the President of the Republic. By forming a multidisciplinary team to go immediately to the field. Montenegro did not just react. He had the ability to act and to lead.
- Castro Almeida was the minister of the week. He is one of the most competent ministers in the government. He is sober, solid and consistent. He did something that is unusual but very important: he went out into the field, built bridges with local authorities, and accelerated the assessment of needs and support for people, companies and municipalities. Two things are now expected: first, speed in decisions on support; second, combating bureaucracy. It is not enough to announce support; it needs to actually reach people and companies in a timely manner.
- The exception was the Minister of Internal Affairs. It is clear that she does not deal well with political and communication issues. Either she is helped by the political core of the Government or the Government will have, sooner or later, a serious problem in this ministry.
THE BUDGET
- There were no negotiations on the State Budget this week, but there was a more important fact: the feeling that, after this calamity, it is even more difficult to trigger a political crisis. The Portuguese did not want a crisis before. After this tragedy, they are more sensitive. They will not tolerate a crisis being triggered over the State Budget. And whoever does trigger one will pay a high price. This is the big news this week. The country, now more than ever, needs stability and normality.
- I still think that the State Budget will pass, even if it is at the 25th hour, as long as there is a minimum of rationality. In truth, everyone loses with early elections.
- The PCP, BE and Livre are pretending to be strong, but they avoid elections like the devil avoids the cross. Especially the PCP and BE: they may become more residual. Especially because there will be useful votes on the left in favor of Pedro Nuno Santos.
- IL was strong in the European elections, but if it goes alone to the elections, it could “shrink” because of the useful vote in favor of the PSD.
- Chega, which is not in good shape, could lose 20 to 25 deputies. Half or almost half of the parliamentary group.
- The PS does not gain anything. If it loses, it loses. If it wins, it also loses because it cannot find a majority solution to govern. And then Pedro Nuno Santos could even lose the leadership.
- AD will not win either. Even if it wins again, it will be more of the same. It will not win an absolute majority. Therefore, everything will remain the same.
- The best thing is for there to be humility on both sides: the Government and the PS. To negotiate the State Budget, to avoid the crisis and guarantee stability.
THE BANKING CARTEL
- A landmark court ruling was made this week: the Competition Court sentenced the main Portuguese banks to crimes totalling 225 million euros, for having violated competition rules between 2002 and 2023 and disclosing to each other the spreads they were going to apply to housing, consumer and business loans. This was the so-called “banking cartel”.
- This conviction is very bad for the banks, but it is very positive for the Portuguese.
- It is very bad for the banks. It is a huge damage to their reputation. In addition to the loss of fines to be paid, these 10 banks have their credibility affected. It is true that the events occurred years ago and the managers are no longer the same. But the damage to their reputation remains and tarnishes the banks.
- This is very positive for the Portuguese in general, especially for bank customers. It is the certainty that even the most powerful entities in society are investigated and convicted in court. They do not go unpunished. All practices that violate competition rules are harmful to consumers.
- Of course, the banks can still appeal. However, after the ruling issued by the European Court of Justice, it is unlikely that they will succeed in their appeal. What may happen is the opposite: consumers will now be seeking compensation in court from the banks that have now been convicted.
THE NEW EUROPEAN COMMISSION
- The cycle of choices by European decision-makers is over. And two conclusions can easily be drawn:
- The first is that the President of the European Commission has strengthened her power. She no longer has a designated number two. She replaces the Commissioners who were opposing her (Breton). On essential issues, it is she, and she alone, who makes the decisions.
- The second is that Eastern Europe has gained a greater influence than it ever had before. Through Kaja Kallas, the EU’s “MFA”, who comes from Estonia; the Defence Commissioner, who comes from Lithuania; and the Polish Commissioner, who now holds the important budget portfolio. This is a sign that, on the EU side, Putin will not have an easy time.
- As for Portugal, it was lucky: having a Portuguese as President of the European Commission and a Commissioner with the important portfolio of Financial Services is not very common. Which proves two things:
- On the one hand, Luís Montenegro’s negotiating weight. This weight is great because months ago Luís Montenegro was one of Ursula Von Der Leyen’s greatest defenders in the EPP when she was being challenged.
- On the other hand, the indisputable merit for these places, both of António Costa and of Maria Luís Albuquerque.
- Now we need to give Portugal more influence in the leadership positions. I would like to remind you that we do not even have a director-general. We used to have one, we no longer have one and we need to have one again.
Source: www.jornaldenegocios.pt
