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Portugal reeling from corruption inquiry

Monday, November 24, 2014 - 02:10

Portugal's former Socialist prime minister Jose Socrates remains in custody in Lisbon after he was arrested in a corruption investigation. As Ciara Lee reports the scandal raises questions about Portugal's reputation as the poster child of the euro zone.

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He officially opened Lisbon's metropolitan police headquarters five years ago - now Portugal's former Socialist prime minister is inside - under arrest. Jose Socrates is being interrogated as part of an inquiry into suspected tax fraud, corruption and money-laundering. The 57 year-old was arrested at Lisbon airport late on Friday as he arrived from Paris. He resigned as prime minister three years ago as an escalating debt crisis forced him to seek an international bailout for Portugal . That led to painful austerity measures and a public backlash. The country exited its bailout earlier this year. But CMC Markets' Michael Hewson says the corruption probe is cause for concern. (SOUNDBITE) (English) CMC MARKET COMMENTATOR, MICHAEL HEWSON, SAYING: "I think there is significant greater damage to be done to the political fabric in Europe. If you look across Europe, significant populous parties are gaining a greater share of the vote across the board. Portugal has elections in 2015 as does Greece, as does Spain. Politically it could be fairly significant going forward." Socrates has weathered several investigations before, including allegations that he misused his post as environment minister. He denied wrongdoing then and no charges were brought. Prosecutors are now intensifying their fight against corruption in a country notorious for its slow justice system. Portugal's interior minister Miguel Macedo recently resigned over an investigation into alleged corruption linked to "golden visas" for wealthy foreigners. The government programme gave non-EU citizens residency permits in return for investing in real estate It brought in more than one billion euros in much-needed investment, mainly from Chinese buyers of property. Opposition politicians have long argued the scheme stoked corruption. Police have also arrested several high-ranking officials, including the head of the country's immigration and border service, in connection with the inquiry.

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Portugal reeling from corruption inquiry

Monday, November 24, 2014 - 02:10