By: CHRIS GRAEME
THE PRESIDENT of Portugal’s third largest commercial bank, Banco Português de Investimento (BPI), has said that companies with profits over 100 million euros should pay super tax.
FERNANDO ULRICH, in an interview on RTP 2, also said that speculation was not responsible for pushing up oil prices but rather increased demand from countries like China and India which was “a good thing”.
The bank’s president believes that the current international crisis is the most complex he has ever seen and one that would require “readjustments”.
These readjustments included “greater energy efficiency” and “increasing taxes” for the country’s top companies making profits of 100 million euros or more.
According to the banker, Portugal would “grow less than expected” although talking about a recession was “pointless and not helpful.”
Speaking on the programme Diga Lá Excelência, he suggested that if Prime Minister José Sócrates was “worried about social cohesion and society’s worse off” then his government should realise that it had room for manoeuvre and should raise taxes.
When asked to make comparisons with the petrol crises in 1973 and 1979, Fernando Ulrich said that today’s markets were more sophisticated and reached a larger section of the world.
Emerging markets
“In the past, companies quoted on the world’s main stock markets were essentially westernised ones – the United States, Europe, Australia and Japan – but the capitalist market has now extended to Russia, China and other countries, and, for this reason, the world’s markets are a lot larger, interconnected and more complex,” he explained.
Fernando Ulrich also said that the petrol crisis in 1973 had taken people by surprise whereas rising fuel prices had been going on for some time and were “not such a great shock”.
When asked what would happen in the future with regards to petrol, food and credit, he said that fuel and foodstuffs were more expensive because of supply and demand and because the world population was growing and the standard of living had risen.
“The standard of living in these countries has risen significantly and improved creating the necessity for these emerging economies to consume more fuel and other raw materials which has pushed up prices,” he explained.
“I do not share the theories that speculators are responsible for high prices, although I admit they do have some influence to bear. Increased demand is good news but causes problems of readjustment which is why we need to increase our efficiency,” he said.
The banker said that the credit liquidity crisis, the lack of confidence in companies and banks had consequences for all sectors of the financial markets, including those not normally affected.
“When there are market shocks, it is normal that share markets fall and people know that these markets are more volatile and at risk than other markets,” he concluded.
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