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ECB convenes in Portugal for post-Brexit summit

After a tumultuous weekend in which the world focussed Britain’s Brexit vote and what it could mean, the European Central Bank is meeting in Portugal, bringing “some of the most influential personalities of the world in financial politics to debate the international economic, monetary and financial future”.

Lusa news agency explains that this ECB Forum was scheduled well in advance of last Friday’s ‘earthquake result’ in the UK, but the decision of British voters to quit the European Union will be “the principal theme for discussion”.

Among ‘movers and shakers’ due to take part are the Governor of the Bank of England Mark Carney, President of the United States’ Federal Reserve Janet Yellen, ECB president Mário Draghi, his predecessor Jean-Claude Trichet, the vice president of Bundesbank (Germany’s central bank) Claudia Buch, the governor of the bank of Chile Rodrigo Vergara and the director general of the monetary authority of Singapore Ravi Menon.

Draghi was due to open business this morning as world markets were still in flux, despite a message of reassurance sent out by Britain’s Chancellor of the Exchequer George Osborne.

Says Lusa, “expectations are many” on what those taking part in the three-day summit will have to say, especially considering that Yellen warned days before the referendum that a Brexit result would have “significant repercussions” on the world and US economy.

Added to this is the fact that the eurozone’s inflation rate is still in negative territory, and political news elsewhere is far from heartening.

Yesterday, for example, the Spanish people voted yet again for stability, without finding it.
The conservative party of Mariano Rajoy was hoping to form a majority government, but after the lowest voter turnout in the history of Spanish democracy, this is now as distant a possibility as it was after the inconclusive election result last December.


Here, surprisingly, the fall-out post-Brexit is heartening.

Prime minister António Costa said on Friday that the centuries’ old Anglo-Portuguese alliance could weather the storm and would stay intact.

“We have the oldest alliance in the world with the United Kingdom and it will carry on long after what will be the departure of the UK from the European Union”, he told reporters.

With the risk of ‘referendum contagion’ spreading to other countries, left-wingers Bloco de Esquerda have suggested Portugal should have one – in the context of Brussels imposing economic sanctions – but this has been rejected by all the other parties which are instead calling for calm.

President of the Republic Marcelo Rebelo de Sousa has stressed that Portugal is happy within the European Union, and that any decision to hold any kind of referendum depends on him.

“It’s a question that one simply doesn’t put at this moment”, he said on Sunday.


Tourism for 2016 is already set to break all records, and last Friday’s vote by over 17.4 million Britons is not expected to change the picture in any dramatic way.

“British people will not stop travelling or investing”, Reinaldo Teixeira of Garvetur real estate group told Correio da Manhã over the weekend, while Algarve tourism boss Desidério Silva said there will not be negative impacts this year, as reservations have already been made.

If the pounds remains low, however, this will affect the spending ability of Brits on holiday, though Silva stressed he did not want to be pessimistic. “The British have always loved the Algarve”, he said.

As for expats, until Article 50 of the Lisbon Treaty is triggered by the UK, their situation remains exactly the same as it did before the vote.

In fact, both British prime minister David Cameron, and ‘Brexiteer’ Boris Johnson (now in the running to take the UK’s top job) have pledged that this will continue into whatever scenario lies ahead.

That, however, remains the ‘big unknown’ in this developing situation that has the world both glued to news channels and venting its spleen over social media.

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PIC: Mário Draghi at the last ECB forum in Sintra, May 2015