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Counting the Cost

Portugal's financial burden

What are the challenges facing Lisbon as it tries to keep the country's deal with the IMF on track?

Last Modified: 13 Apr 2013 08:23
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The eurozone's economic problems are never far from the headlines.

Portugal, which is already on the periphery of Europe, is perhaps drifting further after the constitutional court blocked some of its reforms. The country faces legal challenges to meeting its agreement with the International Monetary Fund (IMF).

Portugal is one of the eurozone countries which has gone down the bailout road. Previous Prime Minister Jose Socrates even pleaded for months that all his country needed was support, not cash.

But the economy's shrinking - it contracted 3 percent last year. And unemployment is still high, having increased from 12.7 percent in 2011, to 15.3 percent in 2012.

Portuguese public debt was at 119.7 percent of GDP in 2012, which is the 9th highest worldwide. And it is in hock to the European Union and IMF as well, with loans amounting to $68bn and $34bn respectively.

This week, Counting the Cost goes behind the numbers to look at the real hurdles Lisbon is facing, as it tries to keep the country's deal with the IMF on track.

But it is not all bad news.

A report from Grant Thornton says businesses are starting to spend again, investing in future growth and betting the global economy is on the rebound. But are they jumping the gun in these turbulent times?

One company, Starwood Hotels, is placing the emphasis firmly where the growth is, and moving its entire management team to Dubai for a month. The chief executive tells us why that is not a gimmick and explains how the company is targeting one of the fastest growing regions in the world.

Finally, staying in the United Arab Emirates, we take a look at companies that are somewhat unique for this part of the world.

Crescent Petroleum and one of its subsidiaries, Dana Gas, are oil and gas businesses which are private, and not state owned.

The companies have also become heavily involved in the oil and energy industry in Iraq, managing to supply almost continuous energy in the northern Kurdish region. While attending the Doha Energy Forum, Crescent's CEO Majid Jafar spoke to us about the impact of the economic downturn.

 
Watch each week at the following times GMT: Friday: 2230; Saturday: 0930; Sunday: 0330; Monday: 1630. Click here for more Counting the Cost.

Follow Kamahl Santamaria @KamahlAJE and business editor Abid Ali @abidoliverali

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Source:
Al Jazeera
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