PORTUGAL

Portugal stealing homes from British expats
If only the gutter press were as vigilant at reporting the massive seizure of properties right across the UK from men caught up in family court theft

Hundreds of British expats in Portugal may lose their homes due to 19th-century 'land grab' law where government can seize land if built on state property

British expats in Portugal could lose their holiday villas under a draconian new law which could force them to prove their property was built on private land.

A new 'water resources law' in the country states the government can take back any land which was originally owned by the state. Hundreds of retired couples and families with second homes in the country now face an anxious wait to see if their property will be affected. The Times reported the new legislation will affect houses close to the sea - meaning thousands of holiday homes built around the country's beaches could be affected. Jersey-born Paul Abiati, 50, who owns a £123,000 seafront house in Madeira, has hit out at the new law, which has yet to be ratified. He told the newspaper: 'This is a breach of international and European laws. A citizen, when they buy a private property, has a right to a certainty over it, and peace and enjoyment under fundamental human rights principles.' Another expat, Roger Hardy, said he will struggle to sell his property in the Algarve until the issue is made clearer.

Some homeowners were given a reprieve when a clause was added to the law meaning it did not apply to properties built before 1951. But those with more newly-built villas face potentially months of uncertainty while waiting to see if their homes will be affected. A government spokesman claimed the policy was important for the country's environment and not a 'land grab' as has been claimed.

He said: 'The law was designed to preserve coastal, river and reservoir areas from over-development. It is within EU law.' Portugal introduced a special, lower tax rate for foreigners two years to encourage them in and boost the economy. But many expats are now fleeing southern European countries and selling off their homes as property prices tumble as the region struggles with recession. Recent figures show nearly 90,000 abandoned their Mediterranean dream last year and moved back to Britain.

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  • PORTUGAL'S DEBT RATING CUT TO JUNK BY MOODY'S
    portugal flag Moody’s Investors Service cut Portugal’s debt rating to junk status on Tuesday, ratcheting up the pressure on euro zone governments to work out a lasting solution to their financial woes.

    Workers at the gate of a shipyard in Viana do Castelo, Portugal, preparing to oppose layoffs. Prime Minister Pedro Passos Coelho of Portugal, speaking in Lisbon last week, called for higher taxes to trim a budget deficit. Moody’s cut its rating on Portugal’s long-term government bonds to Ba2 from Baa1 and said the outlook was negative, suggesting more downgrades might be in store.

    Even though Portugal negotiated a $116 billion rescue package in May, the ratings agency cited the risk that the country would need a second bailout before it could raise funds in the bond markets again and that private sector lenders would have to share the pain. It also warned that Portugal might fall short of the financial goals it had worked out with the European Union and the International Monetary Fund under the terms of its bailout because of the “formidable challenges the country is facing in reducing spending, increasing tax compliance, achieving economic growth and supporting the banking system.” The downgrade came a month after a general election in Portugal in which voters unseated the Socialist government of José Sócrates. Since then, the new center-right coalition government, led by the Social Democrats and Prime Minister Pedro Passos Coelho, have pushed ahead with austerity measures and other reforms pledged by Portugal in return for its bailout.

    Among such austerity measures, Mr. Passos Coelho’s government said last week that it would need to raise taxes to meet its budget deficit target. Under the plan, the government hopes to collect 800 million euros ($1.2 billion) in additional tax receipts this year by introducing a special tax that will amount to a 50 percent cut on the traditional Christmas bonus given to Portuguese workers, equivalent to one month of salary. Responding to Moody’s decision on Tuesday, the finance ministry said in a statement that Moody’s had “ignored the effects” of the tax plan outlined last week in Parliament. The tax increase, the ministry added, “constitutes a proof of the government’s determination to guarantee the deficit targets for this year.” The finance ministry said Moody’s downgrade vindicated the government’s recent policy initiatives since “a robust program of macroeconomic adjustment constitutes the only possible approach to reverse the tide and recover credibility.” The new government has also shelved several infrastructure projects, including a new high-speed train link between Lisbon and Madrid, as well as pledged to speed up the privatization of state-controlled companies.

    Still, proposals like raising taxes will most likely yield more pain for citizens of a country whose economy is forecast to contract 2 percent this year and next. As a practical matter, the downgrade “means that a smaller universe of investors can hold Portuguese debt on their books,” said Carl B. Weinberg, chief economist at High Frequency Economics in New York, referring to rules banning many investment vehicles from holding debt rated below investment grade. Portugal does not have to borrow in the markets, he noted, so the immediate damage to government finances is limited Still, with all the confusion about another bailout for Greece, “this adds to the perception that there might not be a ready solution,” Mr. Weinberg said. “It revives the concern that a multicountry sovereign default could happen.” “They’re playing with dynamite in euro land,” he added.

    Hopes that Greece’s problems might be brought under control soon were deflated after Standard & Poor’s said Monday that a proposal by French banks to help Greece to meet its medium-term financing needs would constitute a de facto default because banks would be required to roll over loans for a longer term at a lower interest rate. “We’re continuing to work for a possible solution,” Michel Pébereau, chairman of BNP Paribas, the biggest French bank, said Tuesday at the Paris Europlace conference, a gathering attended by hundreds of international bankers. If the current ideas do not work, Mr. Pébereau said, “we’ll come up with something else.” French and German bankers were scheduled to meet Wednesday morning at BNP Paribas’s headquarters in Paris with central bank officials, under the auspices of the Institute of International Finance, an association of the world’s biggest financial companies, to discuss how to proceed, said people briefed on the plan who were not authorized to speak about it publicly.

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