Portugal's cutbacks halt high-speed train to Spain

 

The Portuguese austerity plan presented by Pedro Passos Coelho's conservative government last week is not to Spain's liking. It was particularly irked by the announcement that construction on the high-speed railway project between Madrid and Lisbon would be "suspended". The high-speed train would have connected the two capital cities in two hours and 45 minutes by 2013, instead of nine hours at present.

While conservative opposition to the project has regularly postponed work on the Portuguese side, work is well under way in Spain. Nearly €800m ($1.6bn) in public money has already been paid out from the total €3.8bn cost of the Spanish segment of the line.

Although the former Portuguese prime minister, Socialist José Sócrates, had made it a priority during his mandate, in the past two years the Portuguese track (estimated cost €3.3bn) has been facing vetoes from the centre-right opposition, which has criticised the high cost of the project at a time when the public deficit (9.3% of GDP) calls for austerity measures.

In exchange for a €78bn European bailout plan, the Social Democratic party (PSD), voted in on 6 June, has committed itself to a number of measures and reforms to reduce the public deficit to 3% of GDP by 2013. But Passos Coelho, who has boasted that he will exceed the austerity targets agreed in the EU-IMF bailout, has added objectives that weren't on the cards, including the postponement of the Iberian high-speed line.

In Spain, that Portuguese zeal is not appreciated. The Spanish transportation minister, José Blanco López, has described the Portuguese decision as a "bad" one and reminded his neighbour that "the project has obtained European financing". Madrid fears that the European funds allocated to the railway will be scaled down if the Portuguese decide to pull out permanently. To press his point, Blanco has asked to meet his Portuguese counterpart at the earliest opportunity.

In the Spanish regions that were to be covered by the high-speed train, there is concern about the local repercussions in terms of jobs and tourism, although according to the president of Extremadura, Guillermo Fernández Vara, "this decision won't affect the Spanish end of the line".

Last week, the Portuguese prime minister announced that further budget cuts would be put before parliament.

source: guardian