Vintage Financial Crisis

This vintage is taking place against a background of an international financial crisis. With Greece on the brink of bankruptcy, Portugal is next in line. New holes keep appearing in Portugal’s accounts, including a 1.1 billion euro debt in Madeira which had previously been deliberately hidden. So far Portugal’s centre-right Government has been behaving very sensibly, raising taxes, cutting spending and of course blaming its Socialist predecessors. But on the streets, both here and in Lisbon, few seem to realise the gravity of the situation which could eventually lead to a break up of the euro-zone. Greece and Portugal should never have joined the euro-zone in the first place and both countries would have been much better off controlling their own interest and exchange rates. Certainly, from our point of view, Portugal would be selling much more wine abroad if we had a weaker currency. As it is the euro is killing off what is left of Portugal’s largely uncompetitive industry. I can’t help feeling that Greece, then Portugal will exit the euro will sooner or later. In my opinion the later it happens the more damage it will inflict.