A positive outcome at this week’s European Union summit will help Portugal’s asset management industry, though it will still face many problems, said Paulo Gonçalves, asset coordinator at Banco Popular in Lisbon.
This will affect financial institutions in Portugal and neighbouring Spain as well as further afield in Europe, he said. Banks, which are dominant players in local asset management markets, will need to raise a considerable amount of capital in relatively short time. "It will be a very tough year for asset managers," he said.
Many European banks will have to do what their British counterparts did in 2008-2009 to seek financing to recapitalise themselves. Senior British banks executives visited Dubai, Bahrain and other Gulf countries to find investors. European banks' CEOs will have to visit other parts of the world from China and Singapore to the Gulf region in search of fresh capital, as there will not be enough capital available in Europe, he said.
This week's summit may adopt tough measures that could meet opposition in countries worried about a loss of sovereignty over fiscal policy and budgets, but it will be accepted in Portugal, Gonçalves said. As long as people feel something is being done to resolve the crisis and that their sacrifices are not in vain, they will support it.
Portugal's main parties support the measures imposed by the troika of IMF, European Central Bank and European commission, as part of their rescue package. "There will not be political games here as happened in Greece and other countries. If there is no solution and the euro collapses, then the situation could get out of control," he said.
* A longer article looking at the 2012 outlook for Iberia will appear in the January issue of Investment Europe.