On The Iberian Pyrite Belt

I found myself writing the other day about the Iberian Pyrite Belt, and a mine in southern Spain. It got me wondering again about one of the great mysteries of the ancient world.

Sorry, one for historical enthusiasts like me, then. The Belt is a huge stretch of mineral-rich deposits that runs some 250 km across the bottom half of the Iberian Peninsula, from the Atlantic coast of Portugal well into southern Spain.

It has been mined for some three millennia and parts are still viable today, though there are plenty of abandoned mines such as the Sao Domingo in Portugal.

In the late Bronze Age, say 1,000 BC or later in Europe, there existed a rich and powerful city state in that region of southern Iberia called Tartessos or Tartessus. It is rather less well known than contemporary civilisations, Minoan Crete or Mycenae, for example, because little of the language survives and its location is debatable.

Some have put it around Huelva, some at the mouth of the Guadalquivir River that flows from Seville to the Atlantic. Tartessos was said by Greek historians to be at the mouth of a great river, and there is even, probably, a mention in the Bible, as “Tarshish”.

This lost civilisation will have owed its riches to the Iberian Pyrite Belt, and have traded in the minerals from there. Those Greek historians say it perished in a great flood, most probably because of a shift in the course of that river.

A great, sea-going lost civilisation out beyond the Pillars of Hercules/Straits of Gibraltar, in the Atlantic, then, that perished in a flood? Raises the odd thought.

(Actually, some historians have firmly identified Tartessos as the source of the legend of Atlantis. Some say not, though they accept it definitely existed. That’s historians for you.)

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On Portugal, And Our Money

The Portuguese authorities have been forced to step in and bail out what was once the country’s biggest bank. Espirito Santo was run by a powerful family for the past century, and the bank’s near-collapse has revealed some odd goings-on behind the scenes.

So? Well, buried some way behind the headlines is the fact that the rescue was in part funded by a bail-out worth 78 billion euros provided by Brussels and the International Monetary Fund in 2011. If it is EU money, then a small, indeterminate amount will have come, indirectly, from you and me, via the EU’s budget which is paid for by member states.

So our money has gone to bail out a dodgy bank on the periphery of Europe. As it happens, and as I wrote here in April, we spent last summer’s holiday in Portugal. It is not somewhere you would want to invest your life savings. The evidence of an economy that abruptly hit the buffers and ran out of money, in the form of derelict buildings and abandoned infrastructure projects, is everywhere.

There is a football stadium somewhere in Portugal, built with EU money, that had to be demolished because no one could afford to play there and they couldn’t afford the upkeep.

The bills are now coming in for this sort of waste and profligacy, and guess who will end up paying them? Those parts of Europe that had the sense to remain solvent.

Probably inevitable. The consequences of letting those crippled economies rot would probably be worse than merely sighing and picking up the tab. I suggested in April the crisis in the Eurozone was a long way from resolved. All this year the euro has been weakening against currencies such as the pound, a clear indication of a loss of confidence on world markets.

This means taking a holiday in the eurozone is now much cheaper than when we went to Portugal last year. We, however, have chosen this time to holiday in expensive old Great Britain. That will be my well-known financial skills and acumen coming into play, then.

On Portuguese Bonds

For those who do not pay as much attention to international bond markets as they perhaps might, something odd is happening in the Eurozone. Three of the real basket cases, Greece, Ireland and Portugal, have all in recent weeks issued bonds at startlingly low interest rates.

This, for the uninitiated, means banks and other investors are prepared to lend them money at favourable rates again. It is not entirely clear why, and frankly, it is a little worrying. We have rather taken our eye off the Eurozone crisis, what with Ukraine and the rest. But the intrinsic problems there have not gone away, and by some measures are increasing.

I talk to executives every day who do business there, and they say prospects are at best mixed. Germany, the strong man of Europe, is doing well enough. France is a mess, and not likely to get much better under the current administration. Holland flips in and out of recession. Confidence among employers everywhere is still low.

Yet hard-nosed investors seem prepared to treat those three above bond issuers as reasonably well functioning economies, where the risks of lending, and of those countries defaulting on their loans, are not significantly greater than in the UK or the US. This makes no sense.

As it happens, I was in Portugal last autumn, and believe me, that is not a place you would want to sink your life savings. Even in the prosperous bits, where we were staying, there are an astonishing number of derelict buildings which no one seems to have the cash or the confidence to buy up and restore.

The lasting image of my visit was a chain of uncompleted electricity pylons stretching across the countryside near to Faro, one of the biggest towns on the Algarve. Someone had obviously started the job and presumably then run out of money. They sat there, mute testimony to an economy wrecked by its adoption of the euro.

The Eurozone is not out of the woods yet, and it would be foolish to pretend it is.