Saturday, January 31, 2015

Weak economic growth power emigration – publico

Weak economic growth power emigration – publico

                 


                         
                     


                         

                 

 
                         

The slow recovery that Portugal is currently experiencing is not enough to create the jobs that the country needs. And without changes, the result will be the departure abroad of the most qualified and stay in Portugal of hand labor increasingly inadequate to the needs.


                     


                         After almost four years since arriving in Portugal to negotiate the bailout program of the economy, the IMF continues, in its first report after the troika have left the country, to draw a gloomy outlook for growth and to recommend further structural reforms and fiscal consolidation. W ithout them back guarantee, the crisis will continue long into the labor market.

The Fund says that the expected growth in the Portuguese economy for years to come, and that will be around 1.5%, not will be enough to stop the stagnation of the labor market. As a result, the adjustment stands to be done via the output of workers, particularly skilled, abroad, leaving the country a workforce long brushed off the market and that is with inadequate qualifications needs.

In the analysis that makes the employment situation in Portugal, the IMF begins to reassess which indicators you use. Up Lall, the Fund’s mission chief in Portugal had already said not understand how the unemployment rate had fallen so much in recent quarters. Now, in the report published on Friday, goes further and recognizes that looking only at the unemployment rate does not fully capture the reality.

It uses so a broader indicator, joining the official numbers discouraged workers – “that have increased dramatically during the crisis” – and that, as employees work fewer hours than they would like, putting the real unemployment at 20.5% in the third quarter of 2014, higher than the unemployment rate number commonly used (currently 13.1%, why not account for the discouraged and underemployment). Before the 2008 crisis, the same measure of real unemployment was 9.8%.

Against this background, the IMF concludes that any serious attempt to solve the problem of stagnation of the labor market “implies growth of aggregate demand greater than the estimated “. The institution led by Christine Lagarde predicts that average growth of 1.5% economy in the period between 2015 and 2019, will reduce unemployment “only” 2.5 percentage points in 2019 to 18%.

The Fund notes that, in this context of low growth, there is a “serious risk” that the labor market stagnation is eliminated by additional output of workers abroad and “atrophy of skills of workers who are out of the market work for an extended period. ” That is, the adjustment may be made via the output of workers, particularly skilled, abroad, leaving the country a workforce long brushed off the market and that is with inadequate qualifications needs.

Risks to growth
solution, add the technicians who were in Lisbon between 28 October and 4 November, involves putting the economy to grow. But optimism is not much.

At present, you see the IMF is an economy that has begun to slow down and that is again to be dependent on private consumption to grow, rather than exports. This is why the IMF predicts that, after a growth of 0.8% in 2014, Portugal grow this year by 1.2%, a value which is below the 1.5% that are still planned by the Government.

In the medium term, the Fund sees as a base scenario the economy to grow by 1.5% per year. Rather, the forecasts are of a growth of 1.3% in 2016 and 1.4% in 2017, pointing to leave for variations of the annual GDP of 1.6%. But, warn IMF staff, even this scenario, will only happen if the governments in Portugal do the structural reforms recommended by the troika and a number of external and internal risks do not materialize.

“The medium-term growth depends on projected substantial increases in total factor productivity, which in turn depend on the successful implementation of structural reforms,” ​​said the Fund, warning that “if reform efforts begin to show signs of a prolonged pause, new downward revisions to the medium-term growth may be inevitable. “

                     
 
                     
                 


                     

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Restoration in the Azores says he is well prepared to receive … – Digital Journal

Restoration in the Azores says he is well prepared to receive … – Digital Journal

“We are prepared, in my perspective, very well prepared, although some people contradict this, what I call the prophets of doom,” said Luis Duarte agency Lusa.

From 29 March, the Azores air market will be open to other operators, in particular the ‘low cost’ companies that will compete directly with airlines SATA and TAP in Ponta Delgada routes.

Digital Money / Lusa

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Beja. Protest to “show that this part of the country there” – Renaissance

Beja. Protest to "show that this part of the country there" – Renaissance

Concentration calls for the completion of road accessibility of the region, in particular the works of IP8 and IP2. Protest is scheduled for this Friday in the parking area of ​​the city park, the entrance of Beja.

“There are two fundamental lines of communication for development”, underlines the Renaissance John Rocha, the mayor of Beja and the Intermunicipal Community of the Lower Alentejo (cymbal).

With the municipalities are, among others, the businessmen in the region, the regional entity Alentejo Tourism and the different political forces. With one voice ask the government, similar to what was done with the Marão tunnel, that “find a solution” to the road access in support of development.

And when it comes to regional development, the forces of the lower Alentejo refer to the importance of connection to Spain and Europe, the profitability of the Beja airport, the tourism potential that the region has or opportunities irrigated.

“We are in an area of ​​over one hundred thousand hectares of irrigated land, an area that can produce a lot and of great importance for the country, so it is critical to have good roads. If they do not exist, our products are not sold. Also for those who want to invest here will not do so in view of the disastrous state of IP8 and IP2, “adds John Rocha.

The mayor recalls that “has been spending a lot of money in these works” which is “a waste” so it is “necessary that the works will be completed.”

Furthermore, stresses the president of cymbal there is also concern about road safety ie “we are talking about serious accidents could be avoided.”

“We want to show that this part of the country there is” reinforces the mayor of Beja that appeals to the entire district population to join the protest in a day of fighting that prosecutors called “We exist, we require. ”

The protest is scheduled for this Friday, from 9:30 in the different counties, with a planned merger to 11.00 in Beja Industrial Park followed by a parade of cars to the city park where they will be parked.

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IMF insists on pension cuts – Morning Post

IMF insists on pension cuts – Morning Post

Institution says that we need to reduce more civil servants.

 By Miguel Alexandre Ganhão, Peter H. Gonçalves

You need to cut more in pensions?

The International Monetary Fund (IMF) says that austerity in Portugal is not over. It is urgent to cut more in pensions, especially among retirees of the General Retirement Fund (CGA) that, according to that institution, “receive disproportionately high pensions for pensioners of Social Security.”

In the report of the first post-troika evaluation, the fund argues that the government should postpone the most of the replacement of wages in the public sector. Criticizing the end Solidarity Extraordinary Contribution (CES), applied to pensioners, the institution calls for “ambition” to make a structural reform of social security systems.

In a press conference from Washington, the head of the IMF mission to Portugal, Up Lall also asked easier to fire in Portugal. In the Fund’s report, technicians still criticize the increase in the minimum wage of 485 to 505 euros, arguing that this would have perverse effects, creating more unemployment.

About the fact that the Constitutional Court has leaded several measures related to pensions, the IMF says that “there is a 2016 window of opportunity for structural reform.”

In the Civil Service, the IMF also calls “more ambitious reduction savings or elimination of salary supplements” and more outlets, either friendly or terminations for redevelopment. Up Lall said that the current “political cycle is not indifferent to the IMF assessment,” adding “it is difficult to make structural reforms in a year that take place legislative elections.”

You need to cut more in pensions?

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Azores Hospitality bet in the online market to captivate customers … – Digital Journal

Azores Hospitality bet in the online market to captivate customers … – Digital Journal

“We are aware that most people traveling through the ‘low cost’ much use the Internet individually. The hotel industry in the region has been preparing over the last five years with its strategy ‘online’, “said the agency Lusa the delegate in the Azores of Portugal Association of Hospitality (AHP), Humberto Peacock.

From March 29, the low-cost carriers can pass to ensure air links to Ponta Delgada, following the new public service obligations in the air transport negotiated between the governments of the Republic and the Azores.

Digital Money / Lusa

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Consumption maintains growth of 2.6% of US GDP – publico

Consumption maintains growth of 2.6% of US GDP – publico

                 


                         
                     

                 

 
                         

The world’s largest economy grew 2.6% in the last quarter of 2014, down from 5% amazing calculated for the previous three months, but in line with its potential level. For the full year, the Commerce Department points to an increase of gross domestic product (GDP) of 2.4% (0.2 percentage points above the 2013 record).


                     


                         Consumption growth (4.3% against 3.2% in the previous quarter) was the main driver of the final result, since it accounts for about two-thirds of the U S economy. The increase, which establishes the maximum value in seven years, results primarily from the reduction in petrol prices, a result of oil prices fall.

The average price of fuel, remember this Friday the agency Reuters, fell about 43% since the middle of last year, freeing money for families aplicassem the purchase of other products.

At least golden side of the numbers, there is a decrease in the levels of business investment in equipment (-1.9%), which is the sharpest contraction since 2009. Analysts explain that this record reflects a reduced investment in the oil extraction sector, which is a result of the free fall of the prices of black gold.

Last year, many US companies made heavy investments in the shale-gas extraction systems called, shale gas, but in the last quarter of the year substantially reduced this effort, when the oil prices, which came to be close to $ 110 in 2014, declined and fell below 50 dollars a barrel.

Another factor that turned out to adversely affect the result was an increase in the trade deficit with the outside, which eventually withdrew 1.02 percentage points to output growth. In this case, the explanation lies in the stagnation or slowdown of other major economies of the world with which the United States has strong relationships, as is the case of the euro area as a whole, China and Japan.

Looking to the near future, Gennadiy Goldberg, TD Securities analyst in New York, told Reuters he expects “a strong domestic consumption continues to sustain economic momentum in the coming quarters, even if the investment continues to be affected by the low level of oil prices. “

 
                     
                 

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Ulrich ensures that BPI has the means to buy the New Bank – Economic

Ulrich ensures that BPI has the means to buy the New Bank – Economic

 
         
 
         
 


         
         

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Friday, January 30, 2015

IMF recommends postponing replacement of wages and pensions Function … – Economic

IMF recommends postponing replacement of wages and pensions Function … – Economic

 
         
 
         
 


         
         

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Prices fall 0.6% in the euro area in January – Economic

Prices fall 0.6% in the euro area in January – Economic

 
         
 
         
 


         
         

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Hundreds of people in protest at the 35-hour … – The Ball

Hundreds of people in protest at the 35-hour … – The Ball

                     


                         
                         Hundreds of people in protest at the 35-hour work week – central government workers held a protest this afternoon at the Ministry of Finance in Lisbon, demanding the replacement of the 35-hour working week.
 
 The concentration, which was attended by hundreds of people, left around 15:15 hours the Royal Prince, passed by the Constitutional Court, and later headed to the Palace Square, where is the ministry tutored by Minister Maria Luís Albuquerque.
 
 The secretary general of the union federation CGTP, Armenian Carlos, attended the initiative.
 
 Protesters demand the government ‘the relaying of 35 hours a week, won in 2000 after 25 years of struggle. ”
 
 The protest was organized by the National Federation of Trade Unions of Workers in Publ ic Functions and Social (FNSTFPS).
 
                     

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Government extends deadline for companies to communicate inventories – publico

Government extends deadline for companies to communicate inventories – publico

                 


                         
                     

                 

 
                         

The Ministry of Finance decided to postpone for one week (until the next day 6), the deadline for companies that have a turnover of more than 100,000 euros to report to Finance their inventories for the end of year 2014.

                     


                         “However, as of today (Friday), most companies have already performed the communication of the inventories, the Secretary of State for Fiscal Affairs, Paul Nuncio, issued the order in which states that, exceptionally, the term to comply with the inventory reporting obligation is extended to February 6, 2015, without any additions or penalties “, said a statement issued by the ministry.

The requirement that companies include in their inventory accounts on the end of the year to which they relate was among the accounting standards in force in Portugal, but in the State Budget for 2015 the Government determined that the recording of stocks are communicated electronically to the Tax and Customs Authority.

The Secretary of State further determined that, during the month of February, the bid Authority action a nationwide action of physical verification, by count, of goods held in inventories reported by enterprises. “

 
                     
                 

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IMF advises Government to keep cuts – publico

IMF advises Government to keep cuts – publico

                 


                         
                     

                 

 
                         

While reforms to reduce spending on civil service pensions and salaries have not been completed, the International Monetary Fund (IMF) insists that the government should postpone “as much as possible” the reversal of pay cuts and the end of the Contribution Extraordinary Solidarity (CES). The board is left in the report on the development of the country after the departure of troika , released on Friday, in which the institution is concerned shows the risk of breaches of the deficit targets already in 2015.

                     


                         The Fund points out that in 2016, and according to a ruling of the Constitutional Court (TC), cuts in salaries of civil servants will disappear and the ESC (this year only affect pensions above 4611 euros) will be reduced to so significant. Against this background, the institution considers that the Portuguese authorities must be able to contain expenditure on both fronts.

“Despite legal challenges and growing political pressure because of the elections next year [2015], additional measures are needed to contain expenditure on salaries and pensions (…) to achieving the deficit targets, “recommend the technicians who were in Portugal at the end of October.

A few lines later, the IMF takes these recommendations. For pensions means that it takes “additional efforts” to improve the fairness and system maintainability. And warns:. A “comprehensive reform of the civil servants’ pension scheme” is necessary, paid by the General Pension Fund whose beneficiaries “receive disproportionately higher pensions than in the general Social Security”

This reform of the system should provide, among other measures, the indexation rule of pensions to economic and demographic indicators, as was once proposed by the working group for the reform of pension systems that the government, however, postponed.

Similarly, the IMF calls for reform “more ambitious” in remuneration and public sector careers to ensure “the sustainability of the payroll” and a system of recognition of merit “able to retain and attract” workers most qualified for state agencies.

The measures that may be taken in these areas depend greatly on the results of parliamentary elections. The PS has said he intends to comply with the judgment of the TC, who accepted pay cuts in 2015, but warned that in the following years if it is not before the same emergency situation. The prime minister, for his part, admitted resume its proposal for a reversal of the 20% cut per year by 2019.

With regard to the reform of pension systems, everything is open, then Pedro Passos Coelho has delayed structural reform until after the election.

IMF says there is scope for savings
While structural reforms are not enough, the IMF believes that in the short term, there is scope to go further rationalization of public expenditure. And gives as examples further reductions in public employment through friendly termination and renewal (the former special mobility) in areas where there is excess employment and “more ambitious savings” by reducing or eliminating the supplements paid to civil servants. Adds that there may be an additional effort in the area of ​​resource condition for access to non-contributory benefits.

In the case of friendly terminations, the Government has an ongoing program for employees of local authorities. After a halt of almost three months, streamlining the supplements is currently in the hands of the President having a guiding diploma on the table for promulgation. However, the Government has already said he did not expect significant savings the creation of the single table and rationalization of these supplements that cost 700 million annually.

The insistence of the IMF in seeking new fiscal consolidation measures is also explained by numbers. The Fund provides that the public deficit in Portugal is forecast to remain this year at 3.4% instead of 2.7% registered by the government in the budget. And projects that, only in 2018, the country will achieve a deficit below 3%, from the excessive deficit procedure brought against him by the European authorities.

The report explains that the difference between its budget estimates and the Government are mainly related to the fact that the Fund will not be so optimistic about the impact of the economic recovery in the public accounts and the results of the fight against tax fraud.

                     
 
                     
                 


                     

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IMF believes that raising the minimum wage can penalize … – Journal News

IMF believes that raising the minimum wage can penalize … – Journal News

The Fund points out that the productivity gains (measured by real economic growth adjusted to the working age population) remained “virtually constant” over the last decade, while the minimum wage “increased by 16% during the same period” , which means an annual increase of the minimum wage higher than the increase of the Gross Domestic Product (GDP) by 1.5% over the past ten years.

For the representatives of the IMF, “given the still high unemployment “, raising the minimum wage” may in fact penalize precisely the group that you want to support. “

The institution led by Christine Lagarde said that the impact of the crisis was” particularly felt by workers unskilled and young people “who have lower incomes.

The Fund believes that” measures that increase the cost of employment for these workers, while increase the income of those who have work, will keep high unemployment in these segments longer and delay the normalization of the labor market. “

The government raised the minimum wage to 505 euros a month now after the conclusion of the Economic and Financial Assistance Program (EFAP ), an increase which came into force in October 2014 and was accompanied by a reduction of 0.75 percentage points of the Single Social Tax (TSU) for companies with employees who earn this income.

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Minimum wage, elections and labor slack. The criticisms and doubts … – Express

Minimum wage, elections and labor slack. The criticisms and doubts … – Express

At a time when the Government follows excited by historically low interest on the debt and performance of tax revenue in 2014, which was higher than expected, some are not so optimistic. Although the balance sheet that can be carried over from last year and even events such as the oil price decline, the International Monetary Fund (IMF) does not believe that Portugal will be able to have a deficit below 3% of GDP by 2016 without additional measures. The report of the first post-program assessment, released on Friday, the Fund points to a deficit of 3.4% this year, a value that exceeds the government’s target of 2.7% in anything like € 1,250 million and which, if confirmed, will not allow Portugal exit the excessive deficit procedure.

Remember that since the European Commission, which also held the post program with the IMF assessment, had warned in its report for the same problem. At issue are “macroeconomic projections and optimistic revenue,” something that Brussels had also been stressed, and that happen in a year when several items of expenditure will have loosened belt – pensions and salaries, for example – and where there is tax reduction ( IRS and IRC). The IMF says that in this way, the consolidation effort is reduced.

2014: You can meet
Since the 2014 deficit is reached, which is no longer a surprise given that reported numbers by the Budget Directorate-General last week. The IMF points to 4.9% of GDP and the government’s target is 4.8% (including extraordinary effects, otherwise is 4% and can even be below, with the IMF to point to 3.9%) .

“While the 2014 budgetary target seems perfectly achievable to meet the budget estimates of medium-term government itself significantly more ambitious expenditure reforms will be needed”, says the report. Come here, for example, recommendations to bet on savings with retraining, salary supplements the state and pensions of the General Pension Fund.

The Head of Mission in telephone press conference from Washington, warns that “a great effort is needed to ensure that the debt continues to fall” and notes that achieve a deficit less than 3% is essential in preventing Portugal’s excessive deficit procedure (EDP) and to regain credibility.

Elections do not help anything
For men IMF, the parliamentary elections scheduled for this year will not help anything to speed up reforms. “As we have seen in the last six months [the report was closed in December], the pre-election period will not be relevant reform initiatives, will contribute to a greater temptation for populist policies,” reads the document.

For the more distracted should be emphasized that these post-program reports come up with a tougher language and criticism of governments, which did not happen in the quarterly reviews. Although there could be differences not transpareciam so clearly in the documents that were produced jointly. Now, no tranches to release, the government has more room to decide and only left the power of the word that the IMF and the Commission use more decisively.

In the macroeconomic front, the IMF expects growth of 0.8% in 2014 and an acceleration to 1.2% and 1.3% in 2015 and 2016. Amounts in line with the most forecasts available. The government, for example, expects a rate of 1.5% this year.

One of the problems right now is that the scope for acceleration is very low. The report says that even in the medium term, “it is expected that growth reaches a plateau of 1.5%”, since the dynamics of the economy is affected by the investment (net) negative and by demographics, is very much based on earnings that productivity, in turn, “depends on the successful implementation of structural reforms.”





Epa

Rise in salary minimum will “hurt”
The IMF report returns to one of the hot topics of the first post-program: the rise in the minimum wage of € 485 to € 505 and dedicates a text box to the analysis of situation where concludes that “this measure can precisely harm the group [workers] you want to support.”

The Fund highlights the fact that the minimum wage increases “have persistently exceeded productivity gains” and the value in Portugal not be “so low that required of this rise even “. And warns that the price to pay for those workers who are in the labor market segment covered by the minimum wage is measured in jobs.

“Measures that increase the cost of employment of these workers, if they go up the income of those who have work, will maintain the high unemployment in these segments longer and delay the normalization of the market work, “the report said.

One of the points of concern is the so-called labor slack, ie, a measure of ‘waste’ of workers that are broader than the unemployment rate and measuring all workers the economy could use and not use. Says Subir Lall that “remains very high” and that should be a priority, because the recovery of the Portuguese economy is being U and V not as expected.

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IMF says “populist temptations” are already coming up with the elections – publico

IMF says "populist temptations" are already coming up with the elections – publico

                 


                         
                     


                         

                 

 
                         

The International Monetary Fund (IMF) is concerned with the effect that the next parliamentary elections will have on the pace of implementation of structural reforms in Portugal, giving the example of what already has been happening since the end of the Troika program.

                     


                         In the report which reflects the results of the first troika of post-program monitoring carried out late last year, the IMF believes that the country is essential to accelerate the pace at which performs structural reforms, notably in the labor market and product markets as the energy. However, says that this may prove a difficult challenge with the approach of the elections.

“As we have seen over the last six months, the pre-election period does not facilitate the release of ambitious initiatives reforms, it is expected that the temptation for populist policies go, “said the IMF in the report

In the document, the IMF. – repeating what had already been done by the European Commission – shows his disappointment about what happened to this level after the country’s troika of departure, saying that “in recent months reform efforts in the labor market and in the energy sector appear to have been caught.” The rise in the minimum wage, rising energy prices, the postponement of changes in highly regulated professions and changes in the law of the lease are given as examples.

Top Lall, the head of the IMF mission Portugal, did not, at the reporting press conference to clarify what he meant by populism. He only said that for the future, “the reform process in Portugal has to be done for many years, regardless of who is in government.”

The Government’s response to these accusations IMF begin soon in documents released Friday by the IMF. In a letter signed by the Director of the Fund representing the group of countries is included Portugal (and Italy and Greece), it is said that “the repeated suggestion that the election cycle is affecting the reform process is inappropriate.” “The elections are a feature of democratic regimes and should not be presented as disruptive events for reform processes,” says the letter sent to the IMF by Carlo Cottarelli, the Executive Director for Portugal and his advisor, Inês Lopes.

In addition, as they did for the European Commission, government officials also argue that there was a slowdown in the pace of reforms, which continue to be carried out and to have a positive effect on the economy.

 
                     
                 

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Eurozone: Unemployment reaches lowest level since August … – TSF Online

Eurozone: Unemployment reaches lowest level since August … – TSF Online

According to the official statistics office of the European Union (EU), the unemployment rate – adjusted for seasonal variations – fell 0.1 percentage points in December, both compared to 11.5% in November total 18 countries then made up the euro zone, or relatively to 11.8% in December 2013.

In the 28 Member States of the EU, on the other hand, the unemployment rate stood at 9.9% December 2014, down from 10% in November and 10.6% in December 2013.

On the set of all Member States, is the first time since October 2011 that the rate is fixed below 10%.

The lowest unemployment rates were recorded in December 2014, Germany (4.8%) and Austria (4.9%), while the highest belonged Greece (25.8% in October 2014) and Spain (23.7%).

In the annual comparison, the biggest drop in unemployment was recorded in Estonia (9.0% to 6 , 6% between November 2013 and November 2014), Bulgaria (12, 8% to 10.8%), Greece (27.8% to 25.8% between October 2013 and October 2014 ), Hungary (9.3% to 7.3% between November 2013 and November 2014) and Poland (10.0% to 8.0%).

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MSC Cruises Portugal with over 24% of passengers in 2014 – Economic

MSC Cruises Portugal with over 24% of passengers in 2014 – Economic

 
         
 
         
 


         
         

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Fall in unemployment gives hope to Portuguese, says Mota … – The Ball

Fall in unemployment gives hope to Portuguese, says Mota … – The Ball

                     


                         
                         Unemployment in Portugal low to 13.4% in December – The unemployment rate (15 to 74 years) estimated for December in Portugal is 13.4%, down 0.1 percentage points than estimated in November, according to data advanced on Thursday by the National Statistics Institute (INE).
 
 The seasonally adjusted number of unemployed was estimated at 689 600 people in December, representing a decrease of 0.7% compared to November 2014 (under 4800), according to the same source.
 
 As for the employed population (15-74 years) also seasonally adjusted, was estimated at 4,441,500 people, increasing 0.1% (over 6400) from the previous month.
 
                     

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Thursday, January 29, 2015

José de Mello sells 2% of EDP to 3.4 euros per share – Economic

José de Mello sells 2% of EDP to 3.4 euros per share – Economic

 
         
 
         
 


         
         

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Government will tax Galp to lower gas prices – publico

Government will tax Galp to lower gas prices – publico

                 


                         
                     


                         
                     

                 

 
                         

It was already known that the measure was coming, but did not know the shape and content. In April, the Minister of Energy announced that the Government wanted to lower gas rates, forcing Galp to share with consumers the gains between 2006 and 2012, with the resale of natural gas from Algeria and Nigeria thanks to contracts signed long-term while still the utility of this business in Portugal.


                     


                         The way to get there was never disclosed, but yesterday was broken part of the mystery: the measure will cost 150 million e uros to Galp and go through the inclusion of these four contracts for the purchase, import and supply of natural gas in the active list on are covered by the extraordinary contribution of the energy sector (EESC), which is in effect for 2014 and 2015 (and with which the Government wants to raise 150 million each year). The same Galp has said it intends not pay to be convinced of the “illegality of the tribute.”

In November, both the oil as REN failed the period of settlement of the fee for 2014, with payments prowled 35 and 25 million, respectively. But now the government claims more than 150 million, extending the EESC (which already focuses on the distribution networks, power plants and refinery assets) to so-called take or pay contracts (which require Galp to buy pre-established quantities of gas, even if has not consumption).

The value will be used exclusively in the reduction of tariffs “too high” that Portuguese consumers pay, assured yesterday the Energy Minister Jorge Moreira da Silva, at a press conference. Claiming to be sure of “legislative choice made,” the minister explained that the objective is that market prices fall between 3% and 5% for domestic consumers and industrial, the next three years, starting in April when the regulator energy sector (ERSE) to approve the new tariffs, he said. Pay the fee “is a legal obligation,” he said.

Galp had “significant advantages” with these contracts that were not shared with consumers, defended the minister, adding that “robust estimates” indicate ” higher total earnings “to 600 million euros. “Assuming an equitable sharing between the company and its suppliers, we are talking about 300 million, at least,” capital gains for Galp he added.

But the allocation should be made with consumers “does not focus on past gains” but “on the economic value of the contracts,” said the minister. “What does the past allows us to check in terms of the benefits that have been conferred on Galp and were not shared with consumers, is that these contracts are an asset,” he added. These contracts were with Galp even when in 2006 the gas market has been restructured and the company was left with only the distribution and marketing of gas and transport has to REN. At that time “the system safeguarded the risks of the contracts, but not cautioned the benefits that have been generated” from the resale, said the minister. Contacted, Galp chose not to comment. “Galp Energia has no knowledge, in addition to press reports, the measure announced today [yesterday] by the Government and can not assess their impact or to rule on the matter,” said an official source of the company.

When the crisis brought down the consumption of natural gas in Portugal, Galp diverted part of supplies from Algeria and Nigeria to Asian markets (where demand grew), benefiting from rising prices in international markets. It is the difference between the purchase price and the price at which sold the gas that the government is the benefits that Galp not shared with consumers. This international retail activity is already one of the company’s largest revenue sources led by Ferreira de Oliveira.

When it ruled on the issue, the manager said he was unaware the metrics used by the Government to calculate the gains Galp and argued that were sales to Asian markets that prevented this cost is reflected in the making of the Portuguese.

Arguments abound to be wielded by the parties. In the middle of this equation there is another element to consider: based on the relationships between Galp and the government is also reviewing the law of oil bases, to be released soon and that may have implications for the company

The revision of the law, and in particular the need to ensure third party access to transport infrastructure and storage of fuels (where Galp has a dominant position), is one of the recurring themes in the analysis of competition to the market fuel and has also been proposed by the Government TNGC.

News updated at 21.10

                     
 
                     
                 

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