Portugal’s image takes a hammering

The first 20 days of the New Year have been disastrous for Portugal’s international reputation. Following on from Bank of Portugal decisions over the festive season designed to ‘resolve’ crises at Banif and Novo Banco, Portugal’s stock market has taken a hammering with investors selling up in a bid to avoid any more ‘capricious’ moves presented as ‘accounting exercises’. Then came the horrific news that Bial, one of the country’s leading pharmaceutical companies, was at the centre of a drugs trial disaster in France that has killed one previously healthy volunteer and left at least three others suffering permanent damage. And within days of the troika due back for a post-adjustment check on the country, Germany’s influential Commerzbank has warned Portugal risks once again being dubbed “the problem child of Europe”.

As Joaquim Cunha, executive director of Health Cluster Portugal, told reporters earlier this week, the “shock waves” that have emanated from France in the wake of the Phase 1 drugs trial that went horribly wrong have created “reputational damages” for the country’s health sector, which had actually doubled its exports in the last six years.

Fears are that the Bial incident will “contaminate” what has been a glowing picture, he said.

To add to the upset came the words of France’s health minister Marisol Touraine who said Bial should have been quicker off the mark in reporting the disaster.

The Phase 1 trial, involving 198 healthy volunteers at a private laboratory in Rennes, actually began in July, and had been progressing without incident until January 10 when a group of volunteers on a stronger dose “suddenly began showing severe side effects”.

When the story broke last week, every national and international media source latched onto it, recalling past horrors like the “elephant man” drugs trial in the UK in 2006.

BBC health editor James Gallagher explained: “This is the bitter price of the new medicines we take for granted. Testing such experimental drugs at the cutting edge of science can never be completely risk free.

“The safety and effectiveness of these drugs are rigorously tested in animals. The risks are low, but there must still be a leap of faith when they are tried on people for the first time.”

Bial, a Porto-based company selling to 55 countries, has obviously attested to the trial having been conducted with all the necessary approvals and in accordance with “best business practices”.

The company’s president António Portela has described himself as “profoundly shocked” by what happened in Rennes, and guarantees that his company is working “tirelessly” to find out what went wrong, and to try and ensure the full recovery of the remaining affected volunteers.

With at least three separate inquiries ongoing, the incident has already been labelled “the worst of its kind in French medical history”.

Marisol Touraine told reporters that the volunteers’ “distress is immense. Their lives have been brutally turned upside down”.

And the worst of it is that no-one yet knows what really happened. Scientific journal Nature explains this is largely down to the fact that structures of new compounds are often not revealed at these ‘early stages of development’.

“That lack of information left researchers trying to guess the structure from published Bial patents over the weekend,” explained scientist Christopher Southan.

But while researchers continue to work on the problem – with the drugs trial well and truly shutdown – Portugal’s own ails have continued.

Financial failures

The repercussions of decisions made by the Bank of Portugal in December have seen almost daily press updates, each one of them more critical than the last.

Económico’s television channel ran an interview with PS MP Ascenso Simões last week, in which he predicted the central bank’s governor Carlos Costa would resign “within the next few days”.

“We need to find another person who can give the Bank of Portugal competence to satisfy international creditors, credibility and who can replace a perspective of normal relations with the government, which is essential” for the workings of Portugal’s financial system, he told his interviewer.

“Portugal isn’t Venezuela!” he added, referring to remarks in the Financial Times earlier in the week. “We haven’t failed on any of our promises to international creditors” but Portugal “has to guarantee the credibility” of its financial system and, as such, Costa’s controversial €2 billion bond dump – coming out of the blue, over a year after the good bank/bad bank carve up – has been “extremely damaging”.

It has also resulted in the creation of yet another association of damaged investors who told the Resident last week that the legal advice they were getting was “very positive”.

“If we went to court, I am 95% confident we would win,” said one of the leading campaigners.

But the truth is these people do not want to go to court. Despite Carlos Costa’s assurances that his decision would not affect ‘everyday folk’, it has seen some bond investors reduced to the clothes they can carry in a suitcase.

This is led to claims that suicides could follow and again, Portugal’s reputation for good business practices has been dragged through the mud.

Confident Costa

But Commerzbank’s report, coming earlier this week, has somehow pulled all the threads into focus: Portugal could find itself “in a similar position to that of Greece last summer”, it claims, as the new Socialist government’s reforms threaten Portugal’s competitivity and could even lead to requests for a second bailout.

Described in the media as devastating, it remains to be seen how much of the report is a political ploy to rein the Socialists in – and whether it will have this effect.

For now, Prime Minister Costa looks loathe to play ball. At a press conference on Tuesday, he stressed the government would succeed in reducing Portugal’s deficit without sacrificing its electoral promises about “turning the page on austerity”.

Thus the juggling act continues, in the face of mounting odds – and harbingers of doom gather along the horizon with all the storm clouds.

By NATASHA DONN [email protected]