IBERIA
PENA PALACE IN SINTRA, PORTUGAL
A report by Camilla Sutton
THE FEAR of financial default in Iberia is very real. Legal practitioners are feeling the impact of the
eurozone debt crisis.
PUBLIC DEBT
Both Spain and Portugal have suffered a downgrading
of their credit ratings and are now under immense pressure to slash their national deficits. Without the option
of quantitative easing to create more liquidity, the
Portuguese and Spanish governments have had to face
unpopular policy decisions on raising taxes and postponing or axing public investment.
‘The major issue is whether such deflationary measures will narrow the internal market and economy to
such an extent that they will dampen potential growth
and turn a liquidity issue into a solvency problem,’ says
Luís Oliveira, a corporate and M&A partner who specialises in project finance at Miranda Correia
Amendoeira & Associados (Miranda).
PORTUGAL
TIGHTENED SPENDING
Public spending on projects has all but dried up in
Portugal. During 2009 some PPP projects were implemented, but generally this was because they were
already in progress before the global financial crisis and
were too far advanced in implementation to be
stopped.
‘Logistics and transport infrastructure has witnessed
most of the latest investment,’ says Luís Oliveira. ‘This
includes, for instance, in association with private investment, the setting up of various logistics hubs, mostly
through intermodal connections at the major airports
and ports, aimed at leveraging the geographical advantages from being at a crossroads between Europe,
America and Africa. But it also includes investment in
high-speed rail lines, in particular to link Lisbon with
Madrid and from there, to the rest of Western Europe.
