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A24
BUSINESSMonday 11 April 2016
Global Horizons:
In Europe, states challenge austerity but lack cash to spend
BARRY HATTON
Associated Press
LISBON, Portugal (AP) — The
construction cranes poking
up from the jumble of terra-
cotta roofs on Lisbon’s sky-
line can be counted on one
hand — a dismal reminder
for Ricardo Gomes of how
little work there is for his con- sector collapsed amid the
struction company.
The Portuguese Socialist
government has promised
to change that, advocating
an end to Europe’s years of
budget austerity by increas-
ing spending and cutting
taxes. Even respected in-
dependent policymakers,
like the president of the Eu-
ropean Central Bank, have
said governments should do
more to support growth.
But there’s a catch: despite
an easing in Europe’s fo-
cus on austerity, countries
like Portugal or Italy that
need to increase spending
to boost economic growth
can’t afford to do so without
breaking the bloc’s rules.
And those that can, mainly
Germany, are still penny-
pinching. “There are obvious
limitations” in Portugal’s abil-
ity to finance its economy,
says Gomes, CEO of con-
struction company SETH.
Dubai: Burj Khalifa builder plans taller viewing tower
ADAM SCHRECK
Associated Press
DUBAI, United Arab Emir-
ates (AP) — Dubai is reach-
ing for the sky once again,
with the developer of the
world’s tallest building vow-
ing Sunday to build an even
taller tower bedecked with
rotating balconies and ele-
vated landscaping inspired
by the mythical hanging
gardens of Babylon.
The government-backed
company behind the
project, Emaar Proper-
ties, hopes the new tower
will entice a fresh wave of
view-seeking homeowners
even as it raises numerous
other promised skyscrap-
ers and repairs a prominent
one gutted by fire on New
Year’s Eve.
Company Chairman Mo-
hamed Alabbar said the
new observation tower
would be “a notch” tall-
er than the 2,717-foot
(828-meter) Burj Khalifa.
Just how much taller he
Construction workers repair the roof of a building in Lisbon. The country’s construction sector col- budget deficit below 3 per-
cent, from an expected 4.3
lapsed amid the financial crisis, which saw the state take a 78 billion-euro ($87 billion) bailout in percent last year. Private
investment is faring no bet-
2011. The number of construction workers has more than halved from 612,000 in 2005 to roughly ter, as caution reigns: After
years of handing out poorly
277,000. (AP Photo/Francisco Seco) judged loans, Portuguese
banks are sitting on close to
The country’s construction month will put more cash erage price tag of a public 18 billion euros of bad debt.
in people’s pockets, gen- works project in austerity- That’s roughly equivalent to
financial crisis, which saw erating a spurt of domestic minded Portugal last year 10 percent of the country’s
the state take a 78 billion- demand and firing up the was a measly 89,000 euros gross domestic product.
euro ($87 billion) bailout in wider economy. That might (currently $99,000), accord- With the national economy
2011. The number of con- have a modest impact, con- ing to sector association stalled, Gomes’s company,
struction workers has more cedes Gomes, but he’s not AECOPS. Public investment which specializes in coastal
than halved from 612,000 in expecting a big pay-off for is being cut by a further 5.6 and port engineering, has
2005 to roughly 277,000. Por- firms like his. Capital is still too percent this year as the gov- survived by going abroad —
tuguese officials hope tax scarce for big, job-creating ernment strives to meet the 80 percent of its business last
cuts coming into force this investments, he says. The av- eurozone’s demand for a year was in Africa.
The situation is similar in many
of the economically weaker
parts of the 19-country euro-
zone.
Italy is challenging Germa-
ny’s focus on debt reduc-
tion head on, arguing that
spending more would help
the economy. “Europe has
taken the wrong road, aus-
terity alone is not enough,”
Premier Matteo Renzi wrote
in an open letter last month.
Italy’s economy slowed in
the fourth quarter of last
year and government debt
is the highest in the eurozone
after Greece at 135 percent
of GDP.
The Chicago-based Coun- Calatrava Valls, to a 21st-
Spanish-Swiss architect Santiago Calatrava Valls poses in front cil on Tall Buildings and Ur- century Eiffel Tower that
ban Habitat, for example, can act as a magnet not
of a rendering of his project during a press conference in Dubai, says at least 50 percent of just for tourists but also for
a structure’s height must property buyers willing to
United Arab Emirates, Sunday, April 10, 2016. contain usable floor area pay a premium for nearby
for it to be considered in its apartments with a view. It
(AP Photo/Kamran Jebreili) ranking of the world’s tall- is due to open by the time
est buildings. That typically Dubai hosts the World Expo
wouldn’t say. boutique hotel, restaurants disqualifies telecommuni- in 2020. “Many ... of our
Unlike the Burj Khalifa, the and glass balconies that ro- cations and observation customers would like to
new $1 billion tower will not tate outside the wall of the towers that have only a have that view. And if you
be a traditional skyscrap- tower. small number of floors. ask me what is the financial
er but more of a cable- The structure’s design It and the Burj Khalifa could model, that is the financial
supported spire contain- means it is unlikely to be also be surpassed by a sky- model,” he said.
ing “garden” observation widely recognized as a tall- scraper being built in Jid- Emaar followed a similar
decks graced with trees er “building” than the Burj dah, Saudi Arabia, that strategy when it raised the
and other greenery. Emaar Khalifa even if it surpasses it promises to rise more than 1 Burj Khalifa, which opened
says it will also contain a in height. kilometer (3,281 feet) high. in 2010. The silvery skyscrap-
The new Dubai tower will er is flanked by fancy low
be the centerpiece of a and high-rise apartment
new 6 square-kilometer (2.3 complexes, some of which
square-mile) development are still being built, as well
on the edge of the Dubai as hotels, restaurants and
Creek, near a protected one of the world’s biggest
wildlife sanctuary that reg- shopping malls.
ularly attracts flamingoes The area is also home to
and other water birds. The Address Downtown, a
Alabbar likened the struc- 63-story luxury hotel built
ture, designed by Spanish- by Emaar that went up in
Swiss architect Santiago flames on New Year’s Eve.