PORTUGAL AND GALICIA, THE NEW EURO MARRIAGE
The European Union have decided to upset all this Dickensonian world of
international trade transactions. Theyve invented the wretched Euro!
1st marks the beginning of a new era. Twelve European Union states
will introduce the Euro, the new common currency. The Economist,
in its December 1st edition has amply analysed its effects, its
pros and its cons, and its impact on the future of Europe as governments,
businesses and citizens begin to taste the introduction of the new
bills and coins. From practical handling difficulties by retailers
and the rounding up or down from the old currencies, to price differentials
of goods and services between countries, the survey has been written
in a thorough and professional manner. Although it covers the impact
on Europe as a whole it does not touch on, for obvious reasons,
the intricate peculiarities of individual cases.
Old standing historical commercial transactions across borders happens
to be one of them. A typical example is that between the towns of Valenca
in northern Portugal and Tuy, Galicia (Spain), two border towns separated
by the river Minho. Without delving into the vast historical background
of both countries, suffice to say that Portugal was, off and on
a part of the Spanish Empire. Following a war that lasted for decades,
Portugal finally attained its independence in 1668. Galicia on the other
hand, floated throughout the centuries in a kind of no-mans-land
of feuding amongst royal families, tribes, religious fanatics and other
misfit factions. Although it ended up as an autonomous Spanish region
in todays Europe it somehow managed to maintain an identity of its
own. It does however, share a great deal of common interest and customs
heavily interwoven with its Portuguese neighbour.
Valenca and Tuy did not escape these historic feuds. In fact they were
a sort of cross over point between both countries. The extremely beautiful
and preserved fortifications of both towns were built in 1661 and are
todays most important tourist attractions. Although strife continued
to plague the peninsula in the XVIII and XIX century, with the usual war
mongering assistance from France and Britain, progress finally came to
unite these two important border communities. The Eiffel Company built
the first railway and road bridge across the river in 1881-1884, and in
1993 the new bridge linking the North South European motorway finally
brought together both countries under the European Union banner. Trade,
of course, managed to survive centuries of military and political differences.
Everyone loves coffee and foreign currency. Despite years of dictatorships
in both countries that followed on from WWII which brought about extreme
border controls, the Galicians always found a way across the River Minho
to continue their traditional trade with their counterparts in Portugal.
There was no problem in the usual bartering process as their language
(Galician) is a mixture of Castilian and Portuguese. Galicians affinity
for coffee, hand woven linen and other exotic foreign elixirs,
soon brought about a regular exchange of Portuguese colonial
products for hard Spanish currency. Before the economic growth of the
60s and 70s that introduced massive motor transport, human
movement across the bridge was confined to broken down post war buses
and, naturally, the north south international train. The Wednesday ferias
were always a must for most Galician housewives. The whole process was
a real weekly adventure. But not all trading was strictly legal.
I remember years ago, how smuggling and poaching was the order of
the day along the banks of the river. The bribing of border officials
permitted a complete lack of control of the Minho, said Francisco
Sanchez, the 84 year old retired head of the Marine Administration in
Tuy. I tried to put a stop to it then by prohibiting the tips, yet
the uppers couldnt do without their monthly coffee intake,
he adds. Other more mundane trading tended to be both-ways. Fat ladies
dressed in mourning dresses carrying heavily laden baskets on their heads
would walk for miles to bring their agricultural products to market. Anything
ranging from local cheeses to a recently slaughtered pig would attract
the foreigner to the weekly marketplaces on both sides of the river. Border
trade throughout the world is no different, although in those days it
was confined to innocent products. Todays illegal trafficking
is much more lethal and dangerous and its complexity goes beyond the mere
payment of a few shekels to the under nourished border controllers. But
what about the money?
Oddly enough, and avoiding the introduction of incomprehensible economic
formulae and statistics, the Spanish Peseta and the Portuguese Escudo
have managed to maintain a consistent differential. The peseta has always
been slightly higher than the escudo 20 % to be exact.
Nevertheless, Portuguese banks thrive with exchange rate outlets that
have popped up like mushrooms along the Valenca High St. Regardless of
these facilities, the Portuguese retailers, from bars to supermarkets
will willingly accept pesetas from Tuys buyers, albeit with that
little extra profit on the exchange rate. The pigs are still
being slaughtered and the fat ladies continue to bring the pieces
to market, smiling, as they place the exchanged duros- the
Spanish currency nickname - into their grubby handbags. But trouble is
looming from up North. The European Union have decided to upset all this
Dickensonian world of international trade transactions. Theyve invented
the wretched Euro!
I think it will make things easier all round, was Pedro Jimenez,
a local Galician bank managers answer. To start with, the
percentage difference that we charge on exchange rates will disappear.
The modern cash machines will only charge a fixed usage rate. Goodbye
to the extra exchange rate charge, he added. His final statement
was: modern banking institutions no longer depend on profits from
exchange rates. In fact they are more trouble than its worth. Good riddance
to the peseta and the escudo. Josefa, a Valenca wine shop owner
was not so sure. I think we will have problems to begin with. During
the transition period we not only have to deal with the euro and our national
currency, but if the Galicians come with pesetas we have a third
currency to worry about, was her concern. In the long run
it will be beneficial, at least we hope so, she concluded.
The best comments came from a Valenca taxi driver: Im sure
some of my clients will feel that Portugal has been annexed to Spain.
Why? I enquired.
When the Galicians start bringing their Euro coins over here with
King Juan Carlos head on the reverse side...
Eh!? You figure it out!
© James Skinner. 2001.
James on Gibraltar
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