Covers environment, transportation, urban and regional planning, economic and social issues with a focus on Finland and Portugal.

Monday, September 29, 2008

From the US housing bubble to the (proposed) bailout of US financial system

The bursting of the US housing bubble and the high default rates on "subprime" and adjustable rate mortgages, marked the beginning of the subprime mortgage crisis (2005-2006).

In the end of 2006, foreclosures accelerated in the US, causing a global financial crisis through 2007 and 2008. On August 9 2007, the so-called “credit crisis” became obvious, when a liquidity crisis emerged caused by investors’ loss of confidence in the value of securitized mortgages. This motivated the massive capital injection into financial markets by the Fed and the ECB. On 17 July 2008, major banks and financial institutions around the world have reported losses of about US$435 billion.

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In the initial phase of the crisis, the companies affected were those directly involved in home construction and mortgage lending, such as Northern Rock and Countrywide Financial. Financial institutions which had engaged in the securitization of mortgages, such as Bear Stearns, were badly damaged. In late summer of this year, the crisis aggravated with the Federal takeover of Fannie Mae and Freddie Mac. It was the start of repercussions in the general availability of credit to non-housing related businesses and to larger financial institutions not directly connected with mortgage lending.

Recently, there was a new aggravation of the crisis, with the bankruptcy of Lehman Brothers and the sale of Merrill Lynch to Bank of America on September 14, and the bailout of American International Group by the Fed on September 16.

On September 20, the U.S. Treasury Secretary Henry Paulson proposed the Troubled Asset Relief Program (the proposed bailout of U.S. financial system). As originally proposed, the plan would give absolute and un-reviewable authority to purchase up to US$700 billion of mortgage backed securities from financial institutions for the purpose of stabilizing the market.

On September 23, the three pages plan was presented by Paulson and Bernanke to the Senate Banking Committee who rejected it as not acceptable. As of September 26 2008, consultations over amendments to the plan are on-going.

“Creative destruction” vs bailout of US financial system

It is important to refer the possibility of an economic crisis at global level this year, like the following indicators hint at: - high oil prices, which drive to both high food prices and global inflation; the previously described credit crisis, which leads to the bankruptcy of several large and well established investment banks; increased unemployment.

It’s often adopted one simple rule considering that “a recession occurs when real gross domestic product (GDP) growth is negative for two or more consecutive quarters”. However, this simplistic rule fails to register several official (or NBER defined) US recessions. The National Bureau of Economic Research defines a recession more broadly as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

Concerning US, and because of the recent financial “disasters”, there is a great probability of economic recession and the probability of a severe economic recession has come up.

There are various strategies for moving an economy out of a recession: ”Keynesians” defend government deficit spending to trigger economic growth; ”Supply-side” supporters recommend tax cuts to promote business capital investment.; ”Laissez-faire” economists advise the government to remain "hands off" and not interfere with natural market forces.

Past week, according to Democrats, Speaker Nancy Pelosi will not bring the plan to rescue the financial sector to votes in Congress, unless it gets substantial Republican support.

Other sources of the U.S. press indicate that, according to one GOP lawmaker, some House Republicans are saying privately that they prefer " let the markets crash" than approve the massive bailout.

“For the sake of the altar of the Free Market system, do you accept a Great Depression?", the member questioned.

House Republicans consider that the president is “trying to tear up the Constitution” by committing the federal government to such a massive intervention in the US financial system.

As we can observe there is a confrontation between an option of a massive state intervention in the financial market system, and the “free-market” view (“"hands off" and not interfere with natural market forces”).

Both tactics will probably have serious costs for the economy. The first could induce to a not so intense recession, but very extended in time - a probable economical stagnation for many many years with more government oversight.

The second could be more intense, but perhaps it allows a more rapid capitalist recovery. However, before that, it could led to a severe recession or depression – the “neoliberal” recovery preceded by the so-called “creative destruction”.

Is known that, besides a rapid increase of transnational mobility of capital, a wave of deregulation of financial markets swept over the world, since the last decades. Corporate pressure has intensified on governments to adopt neoliberal “reforms” that regularly produced state spending.

This process has been a form of “creative destruction”, weakening and breaking institutions, social welfare, health care, education and culture. And history shows that governments have been generally powerless to fight the unavoidable and damaging capitalist ‘business cycles’.

Although unstable and unfair, the capitalist system has evidenced a capacity to reform itself to survive economic business cycles. However, these ‘business cycles’ stimulated by corporate greed and maintained by deception of the people, cause huge human and environmental costs.

Having as background the worst global financial crisis in decades, we can also attend to a media spectacle, stage of confrontation between complementing capitalist factions, questioning what really happened and what can be done to maintain alive this economic and social model:

“A good functioning financial system has its rules!”; “We have deregulated the system. Now we must regulate.” “We should learn from mistakes!”; “Financial institutions should be managed by serious people|, not adventurers”; “Central banks should protect major banks and financial institutions - investors need to be protected”; “It´s important to avoid panic selling and allow the markets to stabilise.”


“This is not real capitalism.”; “We don’t need protectionism”; “The banking system is very regulated. More competition is needed”; “Why the state allowed this housing bubble burst?”; “We need only a modernisation of regulation, not more regulation”

In fact, one of the institutions of the capitalist system, the private property, whose integrity is crucial for its survival, shows signs of imploding, particularly in the financial sector. The social power of the private property of finance industry is being dissolved and, for survive as a system, it needs urgently to be replaced by new market forces and new administrators in the financial institutions. For the more well positioned “classes”, this is a opportunity to achieve capitalist power. The social classes that are being pushed down, may not have the required organization and the will to confront and challenge the ruling class in the labour market.

There are also signs showing that some sectors of the capitalist class are not very worried with the spectre of an economic recession. It may be, because that would be an opportune scenario for creating the conditions for the workers to accept, by submission, the continuation of the current unsustainable economic model, based on exploitation of the material and human resources of our planet – more of the same: more oil, more war, more unemployment, more social injustice, more environmental disasters.

In the middle of one alarming economic crisis it will be more easy to use of the “strategy of fear”, exploiting the population feelings of social and economical insecurity, creating problems and then appearing as the protective solution. To overcome this, people need to take conscience of social and economical reality, and, against the logic of competition and exclusion, get the collective liberation from political fear, which should be an individual liberation, at the same time.

Wikipedia article, Economic crisis of 2008
"Creative Destruction' – The Madness of the global economy",

The Panic - Scenes in Wall Street Wednesday Morning, May 14 / drawn by Schell and Hogan, 1884 (LOC) / By , Some rights reserved

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Published on OVIMagazine


Wednesday, September 17, 2008

European Mobility Week 2008: 200 million people expected

This year, from 16 to 22 September, the European Mobility Week (EMW) - an event which permits to test many ideas - should include the participation of 200 million people.

This week, citizens can try alternative transports and the cities that have joined to this initiative, can also test new services and new infrastructures. The only requirement is launching at least one permanent measure that will help to cut the harmful emissions from the transport sector.

The local authorities participating in this initiative are also encouraged to organise awareness-raising activities around the theme - link between mobility and air quality (“Clean Air for All !A dream or a real possibility?”). For example, on 21 September, in Reykjavik (Iceland), it will be realized a city fair based around the themes of sustainable transport and clean air.

More to the south, also the Lisbon municipality intends to improve the air quality of the city through the EMW programme. Thus, the municipality announced that each day will be devoted to environmental issues and mobility, such as air quality, parking in residential areas, prevention and road safety, public transportation and energy efficiency. The European Car Free day will culminate the initiative, being some streets closed to traffic.

The vice president of the municipality referred to the riverside bike path project, as well as to the bike network of shared use. The municipality and the Commission for Coordination and Regional Development of Lisbon and Tagus Valley (CCDR-LVT) signed a protocol to make a public commitment to improving the Lisbon air quality.

Even more to the south, in the Alentejo region, the Évora municipality is encouraging its workers to start a system of car-sharing ( "carpooling") between the residence and the workplace. For the implementation of this system, this municipality will launch one Intranet - a site where the users could identify residence areas and workplaces.

Last year, 2000 cities in 36 countries participated in the European Mobility Week. The initiative is coordinated by the non-governmental organizations Eurocities, Energie-Cités and Climate Alliance.

According to the Portuguese Environment Agency (APA), 65 localities are participating in the 2008 European Mobility Week and European Day Without Cars.


Tuesday, September 16, 2008

Solar Monkey and WS Energia Announce US Manufacturing Agreement on Solar Tracking Systems

A new generation of award-winning tracking technologies comes to the North American solar market. Today, Solar Monkey and the Portuguese company, WS Energia, announced an agreement to establish a new generation of high precision, reliable and affordable solar tracking systems in USA ,based on WS Energia’s patented award winning tracker design. According to both companies these products increase output efficiencies, reliability, and lower the costs of solar energy tracking systems over those currently available.

WS Energia is a solar technology company located in Lisbon, Portugal and one of the top five leading European industrial producers of optic equipment for low-level solar concentration using commercially available solar modules. In 2007 the robotics that controls WS Energia’s trackers was distinguished for its effectiveness on solar energy production, ease of installation and overall configuration by the panel of the Live EDGE Electronic Design for the Global Environment challenge.

The portuguese WS Energia developed a patented self-powered solar tracker for orienting a set of solar PV panels assuring its precise alignment towards the sun. This tracker is based on local geo-positioning, internal measure of time and inclination, driving the installation to the wanted orientation. Because of its high precision this solar tracker is presently in the DoubleSun tracking structure with concentration reflectors which has been producing up to 60% more power and up to 117% more energy than traditional fixed point panel system in the same conditions.

The agreement will allow the companies to jointly develop manufacturing and production facilities within the USA using WS Energia’s technology already available in the EU. WS Energia Research has developed a suite of solar tracking and concentrating technologies and has product installations currently operating throughout Europe.

Full article at
Related article (in portuguese) at


Friday, September 12, 2008

Itarion Solar Project: new photovoltaic cell plant in Portugal

Moura (Amareleja) PV Power Station /Luis Alves,

The Portuguese executive approved a resolution to classify as "strategic interest" an investment in Vila do Conde (north of Portugal), in the area of renewable energies. The investment of approximately 100 million euros will create 200 jobs (142 qualified) and could reach an accumulated sales volume of 2.2 billion euros between this year and 2017.

This solar energy investment will be done by the "Itarion Solar" and it seeks the production of photovoltaic cells. It is one more project in Portugal in this area, having this time the Quimonda AG experience in all relevant processing steps of the crystalline silicon technology.

Recently, it was formed the "Itarion Solar, Lda", a joint-venture between Qimonda AG and the Centrosolar Group AG, planning to construct the crystalline solar cells production plant, at Vila do Conde, near the city of Porto, with an installed capacity of 100 MWp/year, extendable to 250 MWp/year. Centrosolar contributes with its experience in solar module and system application.

Itarion is relying on expertise from Blaubeuren (Germany) based Centrosolar. The master agreement with centrotherm photovoltaics AG, as a leading supplier of technology and services for the manufacturing of solar cells and solar silicon, considers the future possibility of delivery of turnkey production lines.

This major order confirms the South European market growth and it includes several lines with a project planning period of 2 years with the possible delivery of the first line in early 2009.


Saturday, September 6, 2008

Câmara de Évora exige esclarecimentos sobre deslocalização do projecto Skylander para França

É evidente que, em regiões económicamente debilitadas, municípios isolados não possuem a capacidade financeira para realizar projectos de investimento de grande dimensão, sendo obrigados a alienar as suas participações no capital das empresas promotoras. Visto que, nestes casos, a cooperação intermunicipal não tem funcionado, torna-se claro que a implementação da Região administrativa do Alentejo (tal como as outras) poderia constituir um factor de peso para que estes investimentos ficassem, total ou parcialmente, nas mãos da região e do país.

Hoje, foi publicado que Portugal perdera o investimento aeronáutico de 125 milhões de euros previsto para Évora, tendo a Câmara Municipal de Évora exigido esclarecimentos aos promotores do projecto de construção do avião Skylander e à Agência para o Investimento e Comércio Externo de Portugal (AICEP) sobre as razões da deslocalização do investimento daquele município para França.

Em comunicado, a autarquia diz ter sido confrontada com notícias veiculadas pela comunicação social, segundo as quais a GECI International, empresa francesa de aeronáutica, declarava que tinha decidido deslocalizar o projecto do Skylander de Évora para França, para a região de Lorraine.


Friday, September 5, 2008

Wind Power: Greenpeace proposes grid in the North Sea to supply 70m homes

The international environmental organization Greenpeace proposed to the European Union the creation of a transnational wind power grid in the North Sea, to supply 70 million homes. The project - with 10,000 off-shore turbines - would connect England, Belgium, Denmark, France, Germany, the Netherlands and Norway.

According to the newspaper "The Guardian", the experts of the European Commission have been pleased with the idea, even with contained enthusiasm. The proposal was considered "ambitious but realistic".

The EU is committed to cutting greenhouse gases by 20%, producing 20% of primary energy from renewables and reducing energy consumption by 20% by 2020 - the so-called 20/20/20 package.
"The grid would enable the efficient large-scale integration of renewable energy in the power system across the whole North Sea region,"
"A dip in wind power in one area could be 'balanced' by higher production in another area, even hundreds of kilometres away."
said Frauke Thies, a Greenpeace campaigner.


Monday, September 1, 2008

The world’s largest photovoltaic power station [PICS]

In Amareleja, a Portuguese parish of the municipality of Moura, the rural landscape was modified by hundreds of thin metallic structures anchored on the ground by concrete foundations. These structures support arrays of solar photovoltaic modules, which convert sunlight into electricity. Like big mirrors, these new elements emerge in the middle of some trees and typical houses of Alentejo region.


The new solar photovoltaic power station will have the highest power so far installed in the world with this technology and comprehends more than 250 hectares of land, the vast majority without any agricultural or forestry aptitude. The impressive power plant will generate 90 million KWh a year, equivalent to the consumption of 30, 000 Portuguese homes. It has 2,520 solar trackers, 141 m2 each one, supporting 262,080 photovoltaic modules.

With an area of 108.34 km2 and about 2 700 inhabitants, the little village is famous for its maximum temperature records. The good wine, the good sheep's cheese and the black pork , make it good place to enjoy a good meal. Let’s hope they can successfully implement their local low-carbon economy.

Photos by Luis Alves /

This article is the part 4 of the article: “Alentejo: Solar Region”.

“Photovoltaic Solar in Portugal” - part 1 of the article: “Alentejo: Solar Region”
“Moura (Amareleja) Photovoltaic Power Station” - part 2 of the article: “Alentejo: Solar Region”
“Moura Renewable Energies Project“ - part 3 of the article: “Alentejo: Solar Region”