Western Europe: Portugal - Downgraded But Not Out - Portugal Is Making A Comeback After Recession, Although Recent Cuts In Deficits Have Not Yet Been Enough To Win Over Rating Agencies, Writes Peter Wise.

Banker, The, May, 2007 by Wise, Peter

Byline: PETER WISE

Success has it drawbacks. As Portugal slowly emerges from an economic recession and struggles to reduce the biggest budget deficit in the EU, banks have found themselves under attack for achieving strong profit growth while the rest of the country is being asked to make sacrifices.

Critics, mainly from the political left, say banks should be paying more taxes. Claims that fees and commissions are too high have led to heated debates on television and new regulations that will, for example, limit the charge for transferring a mortgage account to a maximum of 0.5% of the loan.

Not surprisingly, bankers and economists believe these political commentators and media pundits have picked the wrong target. Rather than attacking...