Madeira budgets

Below are the regional budgets from 2002 to 2009 according to the Court Auditor's reports. The yearly tax revenue generated in Madeira is now estimated at 650 million Euros, i.e. amounting to about one tenth of Madeira's 6 billion Euro debt!

(EU funding is not totally reflected, since not all goes through the regional budget)

year	regional	%	state	%	EU	%	Credits	Other	total income
	income		transfers		funding
2009	654.627.700	50	223.925.300	17	36.523.600	2,8	159.800.000	225.516.300	1.300.393.900
2008	791.676.600	50	224.524.100	14	44.902.800	2,8	256.666.700	274.600.000	1.592.370.200
2007	903.960.400	60	208.366.500	14	22.819.600	1,5	113.550.100	255.707.500	1.504.404.100
2006	794.795.700	56	199.945.500	14	41.757.800	2,9	129.604.300	261.466.800	1.427.570.000
2005	840.043.200	65	213.619.800	17	42.598.400	3,3	0	193.993.300	1.290.254.700
2004	848.700.000	65	210.621.100	16	50.584.400	3,8	35.072.000	167.542.200	1.312.511.400
2003	597.851.200	51	202.975.600	17	72.896.500	6,2	156.884.000	136.441.000	1.167.048.300
2002	630.746.000	56	186.748.000	17	81.936.200	7,3	34.074.900	195.578.000	1.129.109.900

Lisbon to Control Madeira Debt Repayment

The first austerity measures for Madeira, resulting from an agreement between the Madeira and the National Governments, were announced yesterday. They include

VAT increase: the minimum VAT is set at 8%, the medium at 12% and the maximum at 22%;
IRS and IRC taxes to be the same as the mainland;
The elimination of the Christmas and holiday subsidies for civil servants and public sector companies;
Reduction in number of civil servants by 2% per year and a 15% decrease in leadership posts;
The regional government to present a plan for remission of contracts for civil servants by the second quarter of 2012;
An increase of tax on fuel of up to 15%;
Tobacco tax increase,
Government investments over the next 4 years limited to 150 Million Euros;
Reduction in subsidies in soprt health and education;
Privatization of public sector businesses in order to reduce operational costs by 15%, with reference to the year 2009;
No new public-private partnerships to be allowed and the exsiting ones to be renegotiated;
The Regional Government is to supply Lisbon periodically with all the information requested;
Most importantly, the Madeira debt is to be administered by the national Institute (Insituto de Gestão das Contas Públicas)

In short, the national Government is taking control of debt repayment in exchange for bailing out the Madeira Government. The practical details of how Madeira is to repay its 6 Billion Euro debt, however, remains obscure.

Regional Government fails to comply with Payment Plan to the Pharmacies

Press Release of the National Association of Pharmacies

The Autonomous Region of Madeira’s debt to the pharmacies is at this moment 77 million Euros.

In May 2011, the pharmacies accepted the Regional Government’s payment plan to repay the debt over a period of eight years.

The rigorous execution of the agreed payment plan is essential to guarantee the bank financing which allows the pharmacies to support the back payments they are due.

In the current context of the national banking system’s lack of liquidity, the decision to keep dispensing medicine on credit to patients is not longer in the hands of the pharmacies.

Regional Government of Madeira is fully aware of the situation.

In November 2011, the Regional Government ceased to comply with the agreed payments, making it impossible for the pharmacies to keep dispensing of medicine on credit.

Therefore, we inform that as of the 15^th of December, the pharmacies will no longer continue to dispense medicine on credit to the population of Madeira.

The pharmacies are the first to lament this situation, which also affects them negatively.

We hope the Regional Government resumes payments, complying with the accorded Payment Plan, allowing us to fulfill our financial obligations, and so ending this situation which harms both Madeirans and the region’s pharmacies

New road and seawall in Paul do Mar will affect surf spot

From Olhodefogo.blogspot.com August 2011

The Madeiran Government announced the decision to move on with the project of a road and seawall protection on the shoreline in Paul do Mar, from the road leading to the wharf at East until the graveyard area at West. The topic is the security of ninety families living in the area because of the sea advancement, said local newspaper Diário (13.8.2011). It sounds like Jardim do Mar promenade and seawall in Jardim do Mar, part 2. Protecting the houses and keeping intact the surf break is possible. Both goals can be achieved. In front of the surf break there are no houses in danger because of the sea.

As you can check on the picture presented, the new road and seawall (green), go much further out than the existing seawall (red/pink colour) and further West too, passing the graveyard area. This expansion endangers the surf spot in front of the graveyard area as the seawall will be built in the surf break.

The wave in Paul do Mar is very much appreciated for its frequency, regularity, access and it offers intense and extreme surfing experiences. That is why competitions have taken place there. Damaging or destroying it would be a tremendous loss for surf and for the tourism and natural heritage of the island.

How can local authorities defend surf, using its images to promote Madeira as a tourism destination, support surf competitions in that surf spot in Paul do Mar, and at the same time keep destroying the natural conditions for surfing? It's more than enough what has already been damaged and destroyed in other places like Ponta Delgada or Jardim do Mar, just nearby.

However, we are living in a period before elections in October with lots of announcements, without forgetting that in the present economical and social crisis in Portugal, people will have more urgent concerns and needs than concrete seawalls, and we do not know (and if) this construction will be done in the near future. Madeira has no money, as recently announced by its Government. And the situation is not going to change anytime soon.

The construtction project is now on public tender for the estimated price of 7 Million Euros as Diário informs (20.8.2011), and it is funded by the European Union but Madeira has to put in some percentage of that sum. More information soon on this matter.

The public tender was authorized recently (resolution 1134/2011 of Conselho de Governo on the 11th of August, published on the 17th of August in the Oficial Madeira Journal Jornal - Joram). This way the Government "launches" the new road/seawall within the limit of 2011. As Diário says, the «resolution was based in Plano e Programa de Investimentos e Despesas de Desenvolvimento da RAM (PIDDAR) for 2011, in line with PDES - Plano de Desenvolvimento Económico e Social 2007/2013, and also in the Program of Government that started ruling in 2007 and ends now next October. Some years after de first part of Paul do Mar protection, this second part is oficially entitled "Ligação Marginal entre o Cemitério e o Cais do Paul do Mar" (Connection of the coastal road between the Graveyard and Wharf of Paul do Mar.»

In spite of the present economical problems, surfers and citizens in general must be aware and do everything they can to value that surf spot in Paul do Mar and prevent any damage or desctrution.

According to the Government announcement last Thursday (August 11), the goal is to have a 445 meters long road by (actually in) the sea connecting the square area of the graveyard at West with the road that leads to the wharf area at East.

And Government adds: "the new road will have two lines measuring 3.5 meters each one, adding a 1.5 meters sidewallk (South/sea) and 1.2 meters (North/shore). The road will be on a platform conquered to the sea along the shoreline already occupied by houses. Along the new road will be built a seawall and protection from the sea that will be about 500 meters long."

Vitor Freitas elected leader of Madeira Socialists

Vitor Freitas has been elected leader of the Socialist Party in Madeira. A good speaker and an able politician, he is close to the Party grass roots. He previously contested the elections against Jacinto Serrão, losing by a narrow margin; this time he has won with a comfortable majority. Vitor is widely popular and is seen as someone able to galvanize change in the Socialist Party and in the opposition as a whole.

City Councillor Victim of GBH

Gil Canha, City Councillor for the PND, was badly beaten up last Saturday night by thugs linked to the PSD. One of the agressors is an ex-convict who accompanied the PSD youth organization in the last inauguration prior to the elections, and was identified by police for hitting Gil with a stick. Alberto João Jardim, the President of Autonomous Region of Madeira frequently incites violence against his political adversaries and has in the past known to have ordered thugs to do this type of dirty work.

Madeira offshore loses 1/5th of its companies

According to yesterday’s Publico newspaper, more than 500 companies have left the Madeira Offshore, representing a loss of one million Euros per year for the Madeira International Business Centre, the private company which runs the concession since 1978, for a period of 30 years.

Madeira has perhaps one of the only offshores run by a private company. Why the Government should have handed over this lucrative business to a private company, and for a lengthy period of thirty years, is a question often asked. The company has very close ties to the Regional Government and to the former PSD vice-president Miguel de Sousa, who is a partner of the owners in other ventures.

Hitler court case decision

The Court of Funchal acquitted Eduardo Welsh of an accusation of defamation and abuse of press freedom, for having published a photomontage of the President of the Regional Government of Madeira, Alberto João Jardim, dressed as Hitler, on the cover of the ‘Garajau’ newspaper.

The decision considered the Public Prosecutor’s accusation to be unfounded and also acquitted the accused of paying the 5.000 Euro compensation demanded by Jardim.

The judge cited jurisprudence of the European Court of Human Rights in his extensive analysis of the constitutional right to freedom of expression when this collides with the constitutional right to good name, reputation and image.

He concluded that Jardim’s character had not been smudged by the caricature which aimed to criticize acts of ‘intolerance’, ‘incitement to violence’ and his recurrent use of ‘subliminally aggressive’ language to attack political opponents.

Jardim was condemned to pay the costs of the court fees.

Portugal's Unrepentant Debtor

by Raymond Zhong,  editorial page writer for The Wall Street Journal Europe.

On this tiny island in the northern Atlantic, best-known for its rich wines and as a stopover for transoceanic cruise ships, debt has been an inescapable topic of late.

Lisbon's debt, but Funchal's too. The capital of this autonomous region of Portugal has lately seemed like an ugly epitome of Club Med fiscal misbehavior. In September, the regional government announced that it had discovered €1.1 billion in unreported debt among its books, increasing the already-huge previous total by a fifth. Global markets shuddered; Moody's downgraded Madeira paper out of concern for "grave irregularities" in the region's budget reporting. A former Portuguese finance minister told The Wall Street Journal recently that "We are looking at Madeira like the Germans look at Portugal."

But here as elsewhere in Europe's periphery, the matter of today's debt is making the equally important question of tomorrow's growth harder to answer. Policy makers seem to hope that the debt crisis will simply rattle sleepy southern economies out of decades-long complacency. Examples like far-off Madeira's suggest, however, that belt-tightening on the EU and International Monetary Fund's model is more likely to grind them deeper into the ground than to spring them back to life. If promoting growth looks like a bleak prospect in Portugal and southern Europe, it can seem near-impossible in Madeira. The island's remoteness makes shipping prohibitively expensive—Madeira is closer to Casablanca than to Lisbon. Many of Madeira's 250,000 inhabitants still work the land, and more than half of the island's area is a nature reserve on which development is illegal. The place hardly has the obvious makings of an economic powerhouse.

What Madeira does have is the power of taxation—or lack of taxation, as it were. Since 1983, foreign companies have enjoyed preferential tax treatment by registering through the Madeira International Business Centre (IBC). Discounts on everything from VAT to capital-gains and withholding taxes have attracted thousands of firms and holding companies to set up shop on the island. Today the IBC is responsible for nearly a fifth of the regional government's tax take. That's pretty good by most standards, but Funchal wants to do even better. At the moment, though, the EU classifies the IBC as a form of state aid, which means that its ability to offer certain incentives is circumscribed. Since 2002, financial firms have been prohibited outright from setting up through the IBC. There are de minimis financial-privacy protections, and companies are not exempted from any of Portugal's famously sclerotic labor laws. That Madeira is not its own state also restrains its autonomy in making tax policy. Companies in the IBC are largely unshielded from Lisbon's fiscal decisions.

These are huge disadvantages considering Madeira's competition just among Europe's low-tax jurisdictions. But cutting a better deal for Madeira is looking harder now that the island's name, both on the Portuguese mainland and in EU policy circles, is inseparable from its debt. Lisbon and Brussels have been eyeing the IBC with suspicion for many years now. The EU has periodically halted new listings to investigate the IBC; it has already forced Funchal to withdraw a number of tax and regulatory goodies that were on offer. The parliament in Lisbon is contemplating amendments to its 2012 budget that would subject non-residents to withholding tax on dividends disbursed by IBC companies. Austerity may have provided the means, and the justification, to finally kill the tax haven off.

The man seen these days as responsible for bringing dark clouds of debt woe to sunny Madeira is Alberto João Jardim, the 68-year-old president of the regional government. After taking office in 1978, Mr. Jardim filled his coffers with EU regional aid and transfers from Lisbon, and set off modernizing Madeira. He built roads and bridges to connect the island's towns and villages. He bored tunnels through the mountains and erected hospitals and schools. It worked. In less than 30 years, Madeira went from one of Portugal's poorest regions to its second-richest, after Lisbon. But then, around the time the euro went into circulation, Madeira's GDP surpassed the national average, and funding from Lisbon was reduced accordingly. Mr. Jardim kept right on building, though, and Madeira borrowed its way into a deep hole.

Today, telltale signs of overinvestment dot the island. Industrial parks and marinas sit abandoned and half-ruined. Amid a cluster of luxury hotels, a beautiful green park is empty nearly every day, built too far out on the rocky shore to be accessible. After a while, even the roads and tunnels and bridges here can start to seem a little too nice for such a small place, as if they were never, ever going to be used quite enough to justify their expense.

The debt scare hasn't halted Mr. Jardim's designs for Madeira, or his strong-armed style. In July he declared that Moody's inspectors were banned from the island after the agency downgraded Madeiran debt. His hand was only strengthened last month when he won his 10th straight regional election, making him one of the longest-serving democratically elected executives in the world. To his detractors, Mr. Jardim is a populist despot whose contempt for democratic niceties is only exceeded by his regard for his own majesty as eternal leader of the Madeiran people. But behind the bluster, Mr. Jardim has shown himself to be a friend to Madeira's pro-enterprise ways—even if cutting ribbons at road projects is still the more reliable vote-getter. He is a vocal defender of the IBC. In 2007, he declared that he wanted to turn Madeira into the "Singapore of the Atlantic." By making the island attractive to foreign business through low taxes and first-class infrastructure, his government would create a "knowledge economy" dominated by professionals and skilled high earners.

The words aren't Mr. Jardim's own, exactly. In 2000, the European Council met in Lisbon to formulate a plan to make the EU "the most competitive and dynamic knowledge-based economy in the world." Why the Lisbon Agenda's promised revolution never came is no great mystery. See "Southern Europe, Economies of." Yet changing the development paradigm in these economies will take scrappy ingenuity at home and international support, both of which are now under threat in Madeira. It will be a long time before Madeira is Singapore. But in economic history, much more has been made of much less. The question is whether Brussels and Lisbon will let anything be made of it at all.

This month the IMF delivered its latest report on Portugal's fiscal consolidation, saying "The envisaged adjustment program for the troubled autonomous region of Madeira will provide an opportunity to signal that errant fiscal behavior at the regional and local levels will no longer be tolerated." Whether "fiscal errancy" includes tax incentives like the IBC is yet to be made clear, but even the policy world's language of crisis resolution tips discussion toward the punitive and away from the genuinely recuperative. Recall Ireland's struggle to hold on to its 12.5% corporate tax rate against French and German pressure.

The wide attention that September's debt revelations received outside of Madeira rankled those on the island who have for years raised concern about Mr. Jardim's spending. But as tiny Madeira steps into the ring with Lisbon and its international creditors, Mr. Jardim may be the island's only hope of defending its prospects as a place for business. The president is something of a hustler for Madeira on the mainland: He has gotten Lisbon to forgive Madeira's debt twice in the past. Mr. Jardim is said to be preparing to take his fight for the IBC all the way to the European Commission and its Portuguese president, José Manuel Barroso.

Madeira—and Portugal, and Europe—probably could have used fewer politicians like Mr. Jardim back when he was building and borrowing like an addict. But mere repentance will not reduce debt or promote competitiveness. Mr. Jardim does not need to be contrite to be useful for Madeira and for Portugal in its moment of opportunity.

Jardim threatens to sever links with PSD and start own party

According to Filipe Malheiro, one of the senior militants of the PSD Madeira, should the Portuguese Government not be forthcoming with a quick financial solution to Madeira's debt problem, one of the options open to Jardim is to promote 'the mass resignation of militants from the national PSD and initiate immediate procedures to form a new regionalist party structure'.

This radical stance aims to obtain more bargaining power for 'Madeira', namely to extend the debt repayment period to twenty-five years, rather than the three years the 'troika' is conceding to Portugal. To further pressure the Portuguese Government, Jardim is also drafting a memorandum to send to all EU embassies to counteract the 'distorted and even manipulated' information disseminated by the Portuguese Government.

Madeira's Problem: no democracy, no free-market

The problem behind the Madeira debt is lack of democracy. The Regional Parliament is powerless to check and control the executive since it has as much power as the German Reichstag after Hitler's 1933 Enabling Act. Jardim's unending program of building infrastructures, the main source of the Madeira debt, is used to finance his election campaigns, providing his main means of propaganda, the daily inauguration ceremonies held in the run up to elections.

The problem behind the Madeira economy is lack of free-market. Tourism is the only sector which does not depend on the Government and where the Government finds it hard to interfere. All the other sectors are heavily dependent of the Government, if not for custom and financing, then for getting past red tape and for 'favours'. The ports monopoly, for instance, was handed to the Sousa Group in a very strange arrangement. It costs many times over to unload a container in Madeira than in the Azores and this is one of the reasons why cost of living is high in Madeira, despite the EU susbsidies to keep it low.

Building construction was one of the dodgiest sectors. Many promotors had difficulty in getting building approval; they would sell their land only to find that someone 'connected', after a simple phone call, could build twice as much on it than they would be allowed. This has since subsided, partly because of the real estate market crash and partly because hundreds of people, fed up with this situation, resorted to the courts, moving proceedings against illegaly approved buildings.

The Government has hundreds of ways of favouring some and harassing others, be it through inspections, red tape or economic persecution.

Guilherme Silva threatens a revolt in Madeira

Guilherme Silva, Vice-President of the National Parliament, threatened that if the budget alterations tabled by the Madeira PSD are not approved in the national parliament ‘we will revolt once more. Madeira has revolted against continental oppression in the past and can do so again’.

Such rhetoric is typical of the PSD Madeira, which never assumes any responsibilities for its mistakes and blames everything on Madeira’s external and internal ‘enemies’. Jardim often incites the population to violence and insinuates that the Madeira separatist movement may resurge.

Silva was one of the four national MPs elected for the PSD in Madeira and is widely seen as Jardim’s ‘fixer’ in the mainland. He forgets, however, that the oppression in Madeira comes from the Jardim Government and not from the mainland and that any revolt is likely to be against the party he represents.

Christmas lighting controversy

Jardim has anulled a public tender for Christmas lighting, adjudicating the decorative lighting project to Luzosfera, a company owned by the SIRAM group, led by a PSD ex parliamentarian, Silvio Santos. The public tender was anulled when a number of companies impugned the Government decision. According to the Secretary of Tourism, none of the applicants had fulfilled the terms of the tender.

SIRAM's tender had been the lowest, 1,4 million per year, but the Government is now upping it by 500 million, bringing the yearly spending up to about two million Euros.

The prices for the Xmas illuminations were reduced as of 2006, when the Court Auditors made the public tender obligatory. In its report of that year the Court Auditors detected irregularities in the adjudicating process, acusing the Regional Government of having favoured the same company since 1996 - SIRAM - the company which also ran the logistics for the PSD election campaigns.

SIRAM is best known for the controversial mega project, 'Columbus Resort', in Porto Santo, which has since gone bust.

President Jardim asks for 1.2 billion

In a meeting with Prime Minister, Passos Coelho, held last week, Jardim asked for immediate financial help of 1.2 billion Euro. The Prime Minister was apparently quite put out by the fact that Jardim proposed no measures for debt repayment. Prior to the elections Jaridm stated that he would accept no measures imposed by the mainland Government and the Prime Minister retorted that Jardim would have to come up with his own proposals for debt reduction.

Following an article on Jardim's meeting with the PM, published in the DIário, the Madeira Presidency issued a communiqué stating that the positions this newspaper coninues to take 'personally against the President of the Government and the PSD in general, reveal to the population the perfectly idiotic guerrila the Blandy group and its lacqueys will maintain for the next four years of the new mandate.' It is signed by Paulo Pereira, not the world's brightes spark.

Faced with Jardim's silence, the Lisbon Government has mooted the idea of creating introducing motorway tolls, raising taxes and the reduction of civil servants (by about 600).

Whale Museum Cost 730% more than initial budget

The museum construction was adjudicated in 2004 to the builders AFA and Arlindo Correia e Filhos, for the sum of 1.6 million Euros. The follow year, the budget had risen to 2.083 million. After several delays, the costs, according to the PIDDAR 2010, were set at 10,083 million. The costs climbed even higher with the inclusion of equipment which should have been covered by the original tender.

The Museum was finally inaugurated just prior to the October 2011 regional elections. Immediately after the elections, the Government passed a resolution to pay compensation to the builder, to the tune of 621.350 Euros. The total cost of the project is now 11.723 million Euro: seven times the initial cost. The EU contributed circa 1 million towards the project. AFA is the company that tops the public works contracts in the region and is also the builder that has been directly contracted to do most of the 20th of February reconstruction works, without public tenders.

Source: Publico

Financial Times following the Madeira debt crisis

The Financial Times Lisbon correspondent has also been following the Madeira debt crisis.

'Overall, public debt-per-capita for Madeira’s 267,000 inhabitants is estimated at three times that of mainland Portugal', he wrote on an article published on the 10th of October.

Read more on the FT site:
http://www.ft.com/intl/cms/s/0/7daa67a8-f329-11e0-8383-00144feab49a.html#axzz1e3tnG1Y9

Wall Street Journal on the Madeira Debt

By PATRICIA KOWSMANN, 07/10/2011

Portugal is trying to prove to creditors that it can cut its budget to the bone, but the governor of this tiny island has plans to keep spending.

Despite Lisbon's calls for austerity, Alberto João Jardim, Madeira's governor since it gained autonomy in 1976, vowed more building when he spoke late last month at the opening of a €1.1 million ($1.5 million) road linking a small neighborhood to a new church in the rural district of Calheta.

Madeira Gov. Alberto João Jardim has defended the autonomous region's public spending. "We can't stop economic activity, and we need to continue to address the needs of the population. Construction continues," the 68-year-old Mr. Jardim said, drawing applause from an audience of locals.

Such public-works projects—a hallmark of the populist Mr. Jardim—have come under scrutiny since Madeira acknowledged on Sept. 22, just two days before his speech, that it had failed to report debts of €1.1 billion.

The revelation, bringing the island's total debt to an estimated €5.8 billion, comes as Portugal's new prime minister, Pedro Passos Coelho, has been trying to show his euro-zone peers that he is firmly in control of the country's efforts to cut spending after getting a €78 billion bailout package this year.

The news prompted Moody's to downgrade the island's bond ratings and is forcing Portugal to revise its overall budget-deficit figures for 2008 to 2010, underlining the difficulties countries in the euro zone's struggling periphery face as they try to meet budget requirements set by the European Union and the International Monetary Fund.

"It is a problem," Mr. Passos Coelho said of Madeira's debt, noting that it raises a "credibility" issue. He added that Portugal doesn't have any other debt surprises like that of Madeira.

Late last month, Portuguese Finance Minister Vitor Gaspar said the government is drawing up an austerity plan for the island; Mr. Jardim has said he will consider it if, as expected, he wins a new term in Madeira's elections Sunday.

Mr. Jardim is a controversial figure, known for his tight control over the island as owner of Madeira's main newspaper and for his defiant attitude toward Portugal's leaders. His regional government employs more than 10% of the island's 250,000 residents. He has publicly disagreed with the austerity measures set out by the IMF and EU, saying they will choke off economic growth.

Through a spokesman, Mr. Jardim declined requests for an interview. His spokesman didn't respond to questions for this article.

Asked in an interview on local television in Madeira last month about the added €1.1 billion in debt, Mr. Jardim blamed the previous government—of a rival party to his own— for cutting Madeira's funding. To make up for those cuts, he said, he created third-party companies to borrow money directly from banks and enter into deals with construction companies to continue financing the projects.

"What I did was decide to increase our debt so I could continue with construction. That is why I made arrangements with construction companies and banks," Mr. Jardim said. He said he didn't "hide anything—once projects were done, the accounts were sent to the national statistical institute."

Critics point to wasted projects like a shut marina in Ponta do Sol.
.The National Statistics Institute referred questions about Mr. Jardim's statement to a Sept. 16 announcement, in which the institute said Madeira had failed to register the debt in the list of expenditures it provided to the agency. The statistics institute and Portugal's central bank uncovered the additional debt after a report published in April by the country's Court of Auditors said the island's government had incurred charges in 2009 that it hadn't paid to creditors including banks and construction companies.

Madeira and Portugal's other autonomous region, the Azores, run independent budgets and have lower tax rates than continental Portugal. They get funding transfers from the Portuguese government and EU subsidies for economic development. The Azores hasn't had any problems related to unreported spending, the central government said.

The EU subsidy funds, which often require national governments to put up part of the costs, have played a part in driving overspending on Madeira's public-works projects and in expanding the region's debt, Prime Minister Passos Coelho said. "The whole country has too much of this construction, it's not just Madeira," he added. In Portugal, major public-works projects have been put on hold for re-evaluation, and the next Madeira government will be required to do the same, he said.

On Madeira, known for its namesake wine and its tourist resorts, an extensive highway system with more than 120 tunnels crisscrosses the island. Mr. Jardim has defended such development as necessary to draw tourism, which brings in about half of the island's €5.3 billion annual gross domestic product; the island's GDP as a whole accounts for about 3% of Portugal's economy.

Critics, however, say much of Madeira's publicly funded building is a waste. Among the projects that have drawn fire are a marina in Ponta do Sol in the southwest that opened in 2005 and was later rebuilt after wave damage—at a total cost to the government that opposition parties have put at around €100 million. Now the marina is shut, its 290 boat slots empty.

In an industrial park in the northern region of São Vicente, built by the government-owned Madeira Industrial Parks SA and opened in 2004, only 1,700 square meters (18,299 square feet) of its 47,505 square meters are occupied—by the offices of electric company Empresa de Electricidade da Madeira and storage space for Leonardo Gomes & Brazao Ltd., a seller of construction materials.

"There are examples of insane spending all over the island that have done little to improve people's lives," said Socialist Party candidate Maximiano Martins, Mr. Jardim's main rival in next month's elections.

A spokesman for Mr. Jardim didn't respond to questions about the projects.

As Madeira's debt woes have fanned tensions between the mainland and the island, Medina Carreira, a former finance minister and respected economist, in a television interview last month warned the Portuguese people to keep the situation in perspective.

"We are looking at Madeira like the Germans look at Portugal," he said

The Rubber-Stamp Parliament

Jardim’s party is proposing to alter the rules of Parliament once again, reducing the quorum from one half to one third of MPs; i.e. to 16 MPs. The reduction in numbers of MPs elected by the PSD made absenteeism more of an issue. The PSD also proposes to move all voting to the last session of each week, basically so that its MPs would not have to sit through the debates. But the debates themselves have long ceased to be debates: parties with a single MP have only 2 minutes to intervene on each issue.
The PSD privileges ‘efficiency’ over debate in the functioning of the Parliament. An example of this efficiency is the occasion when all opposition members abandoned parliament in protest at a PSD proposal to submit the then opposition leader, João Carlos Gouveia, to a sanity exam. The PSD took advantage of the absence of the opposition parties to debate and vote through 17 motions in 15 minutes.
The CDS has proposed an alternative, more democratic version, which also obliges the President of the Government to go to Parliament for a monthly debate – Jardim has always refused to answer to Parliament and only sets foot in the building once a year to get the budget approved.

Development Society executives resign

The executive heads of the Northern Development Society, Rui Adriano, and the Metropolitan Development Society, Pedro Ferreira, have handed in their resignations. Eduardo Jesus, an economist, member of the board of the Metropolitan Society, has also resigned. The heads of the Western and Porto Santo Development Societies have also manifested their willingness to step down. The idea of making a holding that congregates all the Development Societies is being mooted. A proposal for consolidating all these companies into one had been made by the Socialist Party some time ago, but was rejected by Jardim’s government.

Jardim’s new mandate: official ceremony speech

The newly elected President began his TENTH mandate with a soporific, vacuous, diatribe that lasted over an hour. He warned he would resist any measures that the prime minister might want to ‘colonially’ impose on Madeira to deal with the Madeira debt. ‘Madeira has not surrendered, nor will it surrender to Lisbon, despite the intentional and illegal attempts of those in Lisbon who tried, brazenly and with infantile strategies, to interfere in the last election results.’(i.e.mentioning the debt)

Jardim refuses to admit that the Madeira debt is of his own making and that the Madeiran people will have to bear the consequences of his misgovernment. Everything continues to be blamed on internal and external 'enemies of the people'. Miguel Mendonça, the chair of the Regional Parliament, also resorted to the same idiotic posturing, condemning ‘the violent and virulent internal and external attacks against [Madeira’s] autonomy’.

The new Democracy Party did not attend the ceremony since it does not recognize the legitimacy of a government elected due to blatant violations of the election laws.

Vandalism or Persecution?

A number of cars belonging to the family of Gil Canha, alderman in the Municipality of Funchal, representing the New Democracy Party, were vandalized last night. The vandals entered the communal garage of the block of flats, severed the wires from the security cameras and poured corrosive liquid over the cars. This is not the first such incident. On the 26th of August, the Amazonia bar, which belongs to the Canha family, was twice set on fire in the middle of the night, using incendiary devices. Gil has been the target of anonymous threats. Following the elections,defamatory posters, which were paraded by supporters of Jardim’s party on the election night, were subsequently placed in the street outside his own home, and that of Baltasar Aguiar, the PND leader.

The Berardo Collection controversy

The Portuguese Government is seeking to reevaluate the Berardo Collection. The collection is on public display through a protocol signed with the Government, where after a certain number of years, the state has an option to acquire the collection. The snag is that 75% of the collection has also been given as guarantee for several bank loans. Berardo reportedly borrowed around a billion Euros to buy bank shares which are now estimated to be worth only 70,000 Euros. The collection had initially been estimated by Sotheby’s to be worth over 300 million Euro. Some time ago, it emerged that Berardo, instead of contributing to the collection financially, as set out in the protocol signed with the state, had instead been providing new acquisitions. He recently acquired the complete ouevre of an unknown Madeiran artist, which was billed, in Madeira, as a great discovery, to be coveted by many museums the world over.

Gaddafi and the Madeira Offshore

Written by João Pedro Martins, 'Suite 605, The secret story of hundreds of companies that fit into a 100m2 room' is a fascinating book, packed with information on the Madeira Offshore.

On pages 51 to 54, it reveals connections between the Lybian regime and the Madeira Offshore. The Libya Investment Authority and the Lybia Africa Investment Portfolio (LAP) are on the UN Security Council's blacklist, but one company controlled by the latter does not feature on the list. Namely LAP (Overseas), unipessoal S.A., run by Bashir Saleh Bashir and Filipe Gago,with its headquarters at on the first floor of nº 20 Rua Brito Câmara. The company was set up in October 2008.

Judge Resigns from Election Commission

Judge Paulo Barreto, the National Commission of Election's delegate in Madeira has resinged from the Commission, citing his weariness with the systematic violation of the election laws.

During the campaign, tens of complaints were lodged against the use of state means to carry out party propaganda and denouncing the impartiality of Jardim's speeches at inaugurations/official ceremonies.

The National Commission of Elections allowed these abuses to go on, all the way through the campaign and has yet to take any public position on these violations of the election law.

Election Results

The PSD loses overall majority in terms of votes:
PSD 48,56%
CDS/PP 17,63%
PS 11,50%
PTP 6,86%
PCP/PEV 3,76%
PND 3,27%
PAN 2,13%
MPT 1,93%
BE 1,70%
but retains overall majority in terms os mandates

PSD 25, CDS 9, PS 6, PTP 3, PCP/PEV 1, PND 1, PAN 1, MPT 1.

Judge: Campaign unfolds with 'usual abnormality'

Judge Paulo Barreto, the national Comission of Elections' representative in Madeira has confounded the mainland commentators with the statement that the election campaign is unfolding with the 'usual abnormality'. Surely he should be saying 'normality'. Since Jardim has blatantly been violating the election law for decades without state entities intervening, the judge's statement hits the nail on the head.

Anyone watching the news, for instance, will watch 15 minutes devoted to Jardim, as Regional President, using state functions to promote his campaign and then will see him again, this time campaigning as party leader for another five minutes.

EU: Madeira's Budget deficit

At the ECOFIN Council on Friday 16 September EU Economic and Monetary Affairs Commissioner Olli Rehn described the Bank of Portugal's announcement that the autonomous Portuguese region (island) of Madeira had failed to provide details of public spending of more than a billion euros in 2008-2010 as an unwelcome surprise, and said that the information would now be incorporated in the notification to be submitted to the European Commission by the Portuguese government on Friday 21 October under the excess deficit proceedings against Portugal. This hidden spending will increase Portugal's public debt by 0.3% of GDP. The Portuguese government says this is a one-off case and drastic measures will be taken to force Madeira to tighten its belt and ensure such matters never arise again. The Portuguese finance minister, Vítor Gaspar, attended the meeting in Wroclaw but refused to comment.

This is bad news for the new Portuguese government, which is currently implementing a three-year austerity programme as part of an international aid deal worth €78 billion. Under the terms of the loan, Lisbon must cut its public deficit from 9.1% to 5.9% of GDP and then reduce it further to return to below the 3% cut-off point in 2013. Its economy is in recession and is expected to shrink by 2.2% of GDP in 2011 and 1.2% in 2012, according to government forecasts. Rehn commented that implementation of the Portuguese austerity programme, which includes consolidation of public spending and the introduction of structural measures to stimulate growth, was “on track”, and therefore the first instalments of aid had been paid out. He explained that it was crucial that the momentum was kept up

(EuroMP Nuno Teixeira at an inauguration)

PND protests violation of election law

The PND has been present at many official inauguration ceremonies, protesting against the use of state functions for party-political propaganda. Jardim already has a case against him for doing this, but he is protected by his parliamentary immunity and cannot be brought to stand trial.

Alberto João feeds us!

Banquet for the masses at the official inauguration ceremony of the Cota 500 motorway. This scene is repeated in all the seventy official ceremonies in the period preceding the election. People are bussed in to eat and listen to propaganda.

New Democracy Party sit-in in the Jornal da Madeira - church

The New Democracy Party sit-in had the objective of drawing attention to the use of the Jornal for PSD propaganda in violation of the election law. The aim was to speak to the direction of the Jornal and to the major stake-holders, the Church and the Government.

Though the Church has only a symbolic share in the Jornal company, according to the company statutes, it is the Diocese (i.e. the Bishop) who appoints the editor and is responsible for guiding the editoral line. Over the last few years, the PND has repeatedly written to the Bishop to request an audience to discuss the Jornal. It was never granted.

On entering the building, the delegation was immediately received with violence on the part of the Jornal administrator, Rui Nobrega (marreid to a prominent local judge), who expelled the accompanying journalists from the building and tried (with the help of staff) to focefully evict the PND delegation.

Nobrega then lodged a complaint at the Police requesting a forceful eviction of the PND. In mid-afternoon, the Police informed the Rapid Intervention Brigade was ready to forcefully remove the delegation from the building. They were then informed that the builing belonged to the Diocese and that the eviction request could legally only be made by the Bishop. The Bishop refused to lodge criminal charges against the sit-in and later in the day, the Police informed that this being the case their mission was over.

Throughout the day, a crowd of hundreds gathered outside the Jornal in solidarity with the sit-in. Various oppoisition parties made statements in solidarity with the action. The Socialist Party, the largest opposition party, stated that whereas the PND were barricaded in the building for a few hours, President Jardim has been 'barricading' himself inside for over three decades. The Animal Party also joined the protest ouside for some time and José Manuel Coelho, from the Workers' Party, parked his van outside and addressed the crowd throughout the day. The sit-in lasted until 20.15 - ten hours.

In the evening, the Diocese issued a statement saying it did not meet with political parties in the period preceding an election; it omitted to say that it has repeatedly denied requests made over the last few years to discuss the Jornal. The current Bishop is the cousin of the President of the Republic - a former PSD prime-minister, who similarly refuses to even comment on election violations in Madeira.

New Democracy Party sit-in in the Jornal da Madeira - reasons

The New Democracy Party staged a sit-in in the government-owned propaganda paper, the Jornal da Madeira. The Jornal has continued biased reporting of the election campaigns and had failed to comply with the National Comission of Election deliberation ordering it to respect pluralism of opinion.

The National Comission of Elections (NCE) had twice ruled against the Jornal for its biased coverage and lack of pluralism in two previous elections, remitting the information to the Public Prosecutor's Office. This, however, was the first time that the Comission had taken a decision prior to the election date itself.

The New Democracy Party had lodged a complaint regarding lack of pluralism at the beggining of August and the NCE deliberated in early September that the Jornal should comply with the law and observe the rules of impartiality and pluralism. The decision, however, was overturned by the Supreme Court following an appeal by the Jornal, saying that the NCE had not provided enough evidence. The Comission repeated its decision, this time with ample factual evidence and the Supreme Court upheld the decision, which was made public on the 22nd of September.

The Jornal has cut the number of its political opinion peices, but continues only publishing articles from the ruling party and it coverage is totally biased towards the PSD and the Jardim Government.

Madeira Debt: 5,800 million Euro

Two weeks ago President Jardim was claiming the Madeira debt did not exceed one year's budget, now he has admitted it is over four budgets. The revelations have been made due to the fact that the 'Troika' (European Bank, FMI and EU Comission) have been auditing the Madeira accounts and it was no longer possible to hide the magnitude of the debt. The audits had already uncovered a hole o 2,000 million Euro of undeclared debt. Oppostion parties fear the real debt is well over 6,000 million Euros and that there is more hidden debt that has not yet been uncovered.

The national PSD - CDS coalition government has refused to divulge what measures the international institutions are imposing on Madeira in order to reduce the debt and President Jardim himself (already taking for granted that he will be elected with a new overall majority), though he has refused to participate in any debates or reveal any measures to pay back the debt, has already stated that he will not comply with any measures imposed and has threatened to declare Madeira's independence.

Polls show Jardim set for new absolute majority

Despite his failing popularity this is hardly a surprise. The means he has at his disposal to campaign are overwhelming. 

Jardim controls the government-owned newspaper (jornal) which is totally biased and gives minimal coverage of opposition parties and none at all to the PND. The paper is financed to the tune of 4 million Euro a year and its 15000 copies are distributed for free throughout the island. The Jornal only carries (highly virulent) opinion pieces of Jardim's closest circle. 

There is no competition possible with this propaganda machine and the 'best' of it is: all this free publicity does not even eat in to the PSD campaign funds, its a a government funded newspaper! 

The other major scam is the use of official ceremonies as party rallies. 'With millions i hold inaugurations; with inaugurations I win elections', as Jardim succinctly put it. These usually involve the opening of  a new public work or private investment, where food and entertainment is provided and the local population is invited to hear Jardim's hallucinated rants against the opposition 'traitors', 'colonialists', 'foreigners' etc.  

Again, these events to not eat into his campaign budget since they are government or private funded.

Are these advantages legal? No, but state entities have up until recently turned a blind eye.  Had they ever obliged Jardim to compete on equal terms he would not have managed to stay 33 YEARS in POWER.

But the state entities are not alone to blame, for the larger opposition parties, despite moaning about the unfairness, have never seriously taken the matter up with the authorities or made a firm stand. This makes people wonder if they are deliberately playing to loose or are unwilling to take on Godzilla, head first. 

What are the clues?

Inconceivably, the Socialist Party, instead of pressing the authorities to oblige the Jornal to provide them with the opinion space they should be entitled to, is paying large sums for whole page adverts in the Diário (which does not even have such a big readership since it is not given out for free). Meanwhile, the CDS, while they complained to President Cavaco about the unfair use of the inaugurations, were themselves hosts to Jardim at a private inauguration during the last elections. 

Head of Madeira Tax Office Accused in Tax Evasion Scheme

The Public Prosecutor’s Office has brought a case against the Nacional Football Club for an alleged tax evasion scheme accusing the club of paying footballers through offshore accounts in order to avoid paying taxes. According to today’s Publico the document states that the scheme was mounted with the knowledge and consent of all members of the board, ‘composed by its president and eight vice-presidents’. Among the accused is João Machado, the head of the Madeira tax office, who was at the time one of the club’s vice-presidents. Only one of the vice presidents, Carlos Santos, then also head of the Public Prosecution in Madeira, was not accused. Since the Public Prosecutors cannot accuse their peers, he was subject to a separate process, which was later dropped.  The case dates to the 2002/2005 mandate and notes that both Machado and Santos resigned from the club leadership before the end of their respective mandates.

'ERRADICATE THE OPPOSITION MOSQUITOES'

This is one of the sub-headings of the article on the PSD party rally held on the 30th of July, published in the Jornal da Madeira the following day. It is unclear if this incitement was made by President Jardim or one of his fellow party members. Perhaps the Bishop of Funchal should clarify this, seeing as he is is responsible for the paper's editorial line. It is incredible that the powers that be continue to turn a blind eye to Jardim's excesses and appeals to violence, which apparently also enjoy the blessing of the hierarchy of the Catholic Church in Madeira.

President Sues Police Trade Union Leader

Following the Police Trade Union leader's declaration (see previous post), President Jardim said he was lodging criminal proceedings against him for defamation. The Trade Union leader, he claimed, had been paid to come from Lisbon to Madeira to tell lies. Here's a short reminder of Jardim's relation with the Police.

Compared to a few years ago, the police is now fairly autonomous, obeying their own hierarchy and the law, rather than the whims of our petty dictator. Gone are the days of Nuno Homem Costa who, when chief of police, was always at Jardim's beck and call. Jardim loved to use the police as his own personal instrument, particularly where expropriations were concerned and the police were used to strong-arm people off their property - the victims lost their land without due compensation (or even the basic formalities being observed). Jardim would often interrupt Costa's social life, by summoning him up at parties to sort out some demonstration or other. Costa would protest that Jardim may be in charge of politics, but he was in charge of law and order and could not be ordered about. Then he would toddle off to do Jardim's dirty business.

One time Jardim berated Homem Costa publicly for not using force, when he had ordered him to disperse a peaceful demonstration to protest the death of a child on a dangerous piece of road (where two other people had previously been run over). When Homem Costa retired from the Police he was nicely rewarded by being appointed CEO of the public bus company Horários do Funchal - which is now practically bankrupt under his 'experienced' leadership. Curiously, the bus station headquarters is stationed on a piece of land occupied by the Government in the 1980s and never paid for - one more of those dodgy expropriation that will have to be paid for one day. 

Jardim still still tries to misuse the police for his own purposes and there are always minor Homem Costa figures ready to please him.