Thursday, 11 March 2010

Portugal hires lobby firm to help steer off speculative attacks

The Portuguese weekly Expresso reports that the Portuguese government is about to hire lobby consultancy firm Kreab & Gavin Anderson (KGA) to lobby on its behalf. Expresso writes that KGA will advice the government on the PR strategy for its Stability and Growth Pact, a new austerity program of welfare cuts and privatisations aimed to bring the country's deficits within EU limits.

The Portuguese government, according to Expresso, hopes KGA can help avoid attracting negative attention from financial markets, who may compare the state of the country's economy with that of Greece. If investment funds smell blood, this could unleash speculative attacks similar to what Greece has recently experienced. KGA's CEO Richard Constant refused to comment to Expresso about the contract. KGA is one of the top-5 largest lobby firms in Brussels, after a merger in 2008 between Kreab and Houston Consulting.

How ironic that the Portuguese government has turned for help to a consultancy that is specialised in helping large banks and investment firms influence EU decision-making. Lobbying by firms like KGA, whose current clients include JP Morgan, Morgan Stanley, Prudential, State Street and other banking giants, has been a major cause behind the weak regulations for financial markets which led to the financial meltdown and the resulting economic crisis.

Rather than filling the coffers of a lobby consultancy firm whose allegiance is with the financial giants whose speculative attacks it fears, the Portuguese government should join hands with other governments to promote strong progressive regulations that can help disarm the destructive capacity of financial markets.

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