Debt-laden Madeira votes under Lisbon scrutiny

9th October 2011, Comments 0 comments

Portugal's autonomous Madeira archipelago picked its parliament Sunday amid resentment from Lisbon at a recent debt scandal that piled more pressure on its teetering economy.

According to opinion polls, the man who has ruled the far-flung Atlantic archipelago for 33 years, Alberto Joao Jardim, is on course to lead his Social Democrat Party (PSD) to yet another victory.

The PSD is also the governing party in Lisbon since June but Jardim has angered the Portuguese government lately with a scandal that has further reeled Portugal's already ailing economy.

The southern European country was bailed out earlier this year by the EU and the International Monetary Fund, the third country to be rescued after Ireland and Greece.

On Friday, the Fitch ratings agency said the outlook for Portugal was negative, meaning that its BBB- rating could be further downgraded in the future.

Madeira, which is best known for its fortified sweet wine, has thrived as tourism developed and turned the once poor Portuguese province into one of the country's richest regions.

But the extent of the debt clocked up by the archipelago's Jardim administration in the process has recently emerged, revealing that Madeira was on the brink of default.

Madeira's supremo is believed to have accumulated a public debt of 6.3 billion euors, a considerable amount considering the island only has 270,000 inhabitants.

The Madeira bill further burdened Portugal's deficit, which stood at 8.3 percent of GDP in June, some way from the target of 5.9 percent Lisbon has pledged for year's end.

The central government said Madeira's uncovered debt risked denting its credibility with creditors who forked out 78 billion euros to save its economy in exchange for an austerity plan.

"These irregularities... impact negatively on the country's credibility," Finance Minister Vitor Gaspar said recently.

Madeira's maverick boss retorted that his territory's debt was "a drop in the ocean" and vowed to silence his critics with "a good beating" in Sunday's elections.

Jardim modernised the archipelago, bringing motorways and state-of-the-art hotel infrastructure, but some other pharaonic projects have had to be abandoned.

His popularity has dropped since a comfortable 2007 reelection but he still musters 53 percent voter intention in opinion polls.

"We trust him. If he's been in power for so long, it's because people vote for him," said David Santos, a 23-year-old Madeira resident.

His friend Pedro however accused Jardim of "concealing the debt not to lose any votes" and predicted the move could now backfire.

The opposition Socialist Party pounced on the scandal and gloated it was headed for a "historic" score but surveys only credit the archipelago's perennial runner-ups with 17 percent of the vote.

© 2011 AFP

0 Comments To This Article