Oh, Portugal!!

Submitted by Erico Matia Tavares of Sinclar & Co.,
It has been centuries since the Portuguese last dominated the world’s seaways, but in glancing over recent headlines one would be forgiven for thinking that their pirates are still running around.
With the economy still reeling from the effects of the devastating financial crisis in 2010-11, Portugal has been rocked by a series of corruption scandals which go to the very core of the political and financial establishments.
None other than Jos Socrates, Prime Minister from 2005 to 2011, is being held in custody in connection with money laundering, tax evasion and corruption charges; the figures involved are rumored to be in the many millions. A number of top officials of the current government have also been detained on graft charges targeting wealthy foreigners – mostly Chinese – seeking Portuguese residency under the “golden visa” scheme.
Earlier in the year, Grupo Esprito Santo, a significant conglomerate that owned a large stake in BES, one of Portugal’s largest private banks, failed spectacularly, after dodgy accounting practices and money transfers supposedly intended to fool regulators and investors could no longer remain hidden. Here we have the blue blood of Portuguese finance, with close ties to major domestic and international corporations and governments. The resulting losses are in the many billions.
Over the years there have been recurring allegations of corruption and unsavory dealings in the press, but these have been largely inconsequential. For one, Portugal is still perceived as being ‘cleaner’ than its Southern European peers: according to Transparency International, in 2013 it ranked #33 “cleanest” country in the world, compared to Spain at #40, Italy at #69 and Greece at #80.
Which is why these latest scandals are particularly shocking. Judicial actions of this nature being taken against very high profile political and business figures are extremely rare, even unprecedented in Portugal’s contemporary history.

This post was published at Zero Hedge on 12/04/2014.