Five inmates escape from prison near Lisbon

Five prisoners have escaped from ‘Vale dos Judeus’ prison, in Alcoentre, near Lisbon, with the aid of external assistance. According to a statement from the Directorate-General for Reintegration and Prison Services, the escape occurred using a ladder that allowed them to scale the prison wall and flee. Note that the escapees, all convicted of serious crimes, were under special security protocols, only allowed outside under supervision by prison security teams, which raises the question about whether or not they had internal assistance.  As a result, the authorities have launched an internal investigation, led by the Audit and Inspection Service under the Public Prosecutor’s Office, while criminal police agencies are working to recapture the fugitives, described as extremely dangerous and under special security measures.

The escaped prisoners include:

• Fernando Ribeiro Ferreira, 61, sentenced to 25 years for drug trafficking, criminal association, theft, robbery, and kidnapping.
• Rodolf José Lohrmann, 59, sentenced to 18 years and 10 months for criminal association, theft, robbery, false declarations, and money laundering.
• Mark Cameron Roscaleer, 39, sentenced to 9 years for kidnapping and robbery.
• Shergili Farjiani, 40, sentenced to 7 years for theft, post-theft violence, and document forgery.
• Fábio Fernandes Santos Loureiro, 33, sentenced to 25 years for drug trafficking, criminal association, extortion, money laundering, insults, qualified theft, resistance and coercion against an official, and driving without a legal license.

The President of the Republic, which is actively monitoring the situation, has expressed the need for an urgent resolution, and the competent authorities are working urgently to track down and recapture these dangerous individuals.

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Portuguese Air Force monitored four Russian ships in national waters

The Portuguese Air Force conducted its third mission of the week to monitor Russian vessels, bringing the total to 17 missions this year. This most recent mission, which lasted three hours, tracked four Russian-flagged ships, including the submarine Novorossiysk, the refueling ship Vice-Admiral Paromov, the auxiliary ship Evgeniy Churov, and the training ship Kruzenshtern.

Note that these missions, which are part of broader monitoring efforts towards foreign ships in national waters, often coincide with fishing activity inspections. Earlier in the week, on Monday and Tuesday, the Air Force monitored three additional Russian ships, with a total of seven vessels identified in national waters this week. This year, the Portuguese Armed Forces have dedicated over 60 hours to foreign vessel monitoring, reflecting the heightened need to track military and training ships near Portuguese waters.

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Portugal, Germany, and Spain pressure European Commission’s President, Ursula Von der Leyen

Portugal, Germany, and Spain, leading eight other European nations, have called on Ursula Von der Leyen to push for a fast conclusion to the EU-Mercosur negotiations by the end of 2024. In a joint letter signed by leaders like Luís Montenegro, Olaf Scholz, and Pedro Sánchez, the countries emphasize the need to capitalize on the progress made since the 2019 political agreement. They caution against delays, warning that failing to conclude the deal now could lead to increased influence from other global powers in Latin American markets, both economically and politically.

The European leaders stress that the EU’s geopolitical role is at stake, highlighting the 15% loss in market share European companies have faced in the region over the past decade. They argue that it is critical to finalize the agreement by building on the political groundwork from 2019 and ensuring that the EU remains competitive in the Latin American region. The leaders underscore the importance of a political decision, rather than prolonging technical negotiations, with an eye on signing the agreement in 2025.

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EDPR-Engie consortium chosen to develop offshore wind energy farm in the U.S.

The EDPR-Engie consortium, under the name Ocean Winds (OW), has been selected to develop 1.3 GW of offshore wind energy in the United States, between Massachusetts (1,087 MW) and Rhode Island (200 MW), as part of the SouthCoast Wind project. This marks a significant step in what concerns the OW’s expansion in the U.S., with the next phase focusing on negotiating contracts and starting construction by late 2025. Note that the company is also committing $93 million to support local workforce development, the fishing industry, and environmental protection.

Formed in 2019 when the Portuguese company EDP Renováveis and the French group Engie merged their offshore wind assets, OW has grown substantially, with a target of 5 to 7 GW of projects in operation, or under construction, by 2025. The company’s total gross offshore wind capacity now exceeds 18 GW, highlighting its position as a global leader in the offshore wind sector.

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TAP’s privatization process

The Portuguese Government wants to accelerate TAP’s privatization, aiming for a formal tender launch in 2024, which will likely conclude in 2025. Although Parpública, the entity holding TAP’s capital, has not yet hired a financial advisor or established a mandate, the Government believes that moving forward will allow taking advantage of favorable international market conditions. Lufthansa’s CEO, Carsten Spohr, presented intentions to participate in TAP’s reprivatization, but did not specify the percentage of the airline’s capital it is interested in acquiring. Reports suggest Lufthansa might aim for 19.9%, likely to avoid exceeding the 20% threshold, which would trigger an evaluation by the European Commission.

Meanwhile, Air France-KLM is eagerly awaiting the specific terms and timeline for the privatization process. The group has repeatedly expressed interest in acquiring a stake and is following the process closely, expecting the Government to clarify the terms and calendar. In addition to Lufthansa and Air France-KLM, the IAG group (which includes British Airways and Iberia) has also shown interest in the privatization.

Lufthansa’s potential interest in acquiring 19.9% of TAP mirrors its strategy of staying below the 20% threshold to avoid mandatory reviews by the European Commission. This approach is in line with similar moves in the aviation industry, such as Air France-KLM’s recent acquisition of 19.9% of SAS. Although these potential buyers are waiting for the terms of TAP’s privatization, they may be signaling the beginning of a new phase in European aviation consolidation.

Read more from our sources here, here, and here.

Privatization of Azores Airlines has been postponed

The privatization of Azores Airlines has been postponed to 2025 by the Regional Government of the Azores. Although the authority is resuming the process, it cannot be completed this year. Artur Lima, vice-president of the government, clarified that “haste and quality rarely go hand in hand,” emphasizing that they now have time to launch a better privatization tender, one that will better defend the interests of the Azores. The company’s value has increased by 14 million euros since the start of the process, and the government is committed to a thorough analysis of all options.

Note that negotiations for public service obligations (PSO) for air transport between the Azores and mainland are ongoing. The regional government continues to press the national Government to address the issue, as SATA bears the costs of these obligations, which should be handled by the national Government. While some efforts have been made, the matter remains urgent for the region.

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The fourth Portuguese medal at the Paralympics

At 51 years old, Luís Costa won bronze in the individual time trial at the Paralympic Games, marking his first podium finish in his third appearance. This achievement represents Portugal’s fourth medal in Paris, matching the medal count from Rio 2016 and surpassing Tokyo 2021. The oldest athlete in the Portuguese delegation, Costa, had previously earned four Paralympic diplomas, but it wasn’t until this week that he finally reached the podium.

The athlete, who once served as a paratrooper and Judicial Police inspector, saw his life change dramatically after a serious motorcycle accident in 2003, which resulted in the loss of one leg. However, he found a new passion in cycling. He purchased his first adapted bike in 2012 and began competing shortly after. Costa, now an athlete for Sporting, found success both nationally and internationally, but his third Paralympic appearance brought him his first taste of Paralympic glory.

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Bonuses exempt from IRS but will increase tax withholding on salary

The bonus of up to 4,100 euros, paid as a 15th month in the form of profit distribution, is exempt from IRS but will increase the withholding tax rate on the regular salary. A worker with a gross salary of 2,000 euros, usually withholding 41 euros, will see their withholding jump to 278 euros if they receive the bonus, representing an increase of 237.35 euros. This happens because the bonus itself is tax-free, but it counts for determining the overall tax rate on the total monthly income. In this case, the worker’s withholding increases nearly sixfold (582%), as the tax rate is based on both the salary and the bonus, which together create a global income of 4,000 euros.

For a salary of 1,500 euros, withholding will rise by 710% when receiving the bonus. Even though the bonus is exempt, it affects the calculation of the tax on the regular income. Note, however, that this temporary surge in deductions will be adjusted during the next year’s tax settlement, ensuring that while withholding is higher, the overall tax burden may be neutralized. Still, the worker receives a tax-free bonus in their pocket, amounting to up to 4,100 euros. For higher earners, such as those with a gross salary of 10,000 euros, the penalty is proportionally smaller, but the bonus still counts toward determining the final tax rate. However, despite the temporary withholding increase, this remains an extraordinary, tax-free reward that offers immediate financial relief. Note that the 2024 State Budget ensures that this bonus can only be granted this year, provided that employers raise the wages of all employees by at least 5% compared to 2023.

Read more from our sources here and here. 

President of the Republic convenes Council of State to discuss the economic and financial situation

The Portuguese President of the Republic, Marcelo Rebelo de Sousa, has called for a meeting of the Council of State on October 1 to discuss the country’s economic and financial situation at both the national and international levels. This session will take place just before the 2025 State Budget proposal is submitted to the Assembly of the Republic on October 10. This marks the 36th Council meeting of Marcelo’s presidency and the second under the current PSD/CDS-PP government, led by Luís Montenegro following the March 2024 snap elections.

The previous meeting, held on July 15, focused on the Ukraine crisis, and involved newly appointed State Councilors, including Carlos Moedas, Pedro Nuno Santos, and André Ventura. The Council of State, chaired by the President, is composed of key political figures like the Prime Minister, former Presidents, and other officials, alongside five citizens chosen by the President and five elected by parliament. Note that the urgency of the upcoming meeting underlines the need for a thorough analysis of the economic and financial challenges ahead of the 2025 State Budget.

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Socialist Party accuses Government of “lack of good faith” for failing to send the budget margin for 2025

The Portuguese Socialist Party has accused the Government of showing a “lack of good faith” in the negotiations for the 2025 State Budget, as it has failed to provide the budget scenario requested over a month ago. António Mendonça Mendes, vice-president of the party’s Parliamentary group, emphasized that, without this information, the PS cannot present proposals for ensuring budget balance. The Government’s delay in sending the Multi-Annual Framework for Public Expenditure (QPDP), which should have been delivered in July, is further complicating the discussions.

In response, Prime Minister Luís Montenegro rejected the criticism, assuring that all necessary information will be provided and dismissing the Socialist Party’s complaints as unnecessary “tantrums”. The Prime Minister emphasized that meetings between the Government and parliamentary groups are scheduled, reflecting the need for dialogue with political parties to finalize the budget and ensure fiscal balance for 2025.

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