Austerity bites.

"Out with this  assassin government"

The swinging cuts being imposed in Portuguese public sector pay and conditions in the new national budget are to be challenged in court by a number of opposition parties and other organisations. Meanwhile the gloom deepens.

When you speak to local people there is a definite feeling that things will get much worse before they get better and in some quarters older people mutter about "strong leadership" in a barely disguised  yearning for a return to dictatorship. Younger people are once again deserting the country in droves in search of employment elsewhere in Europe with the UK in particular a favourite destination.

Santa Luzia is no exception to the downturn and the above building project appears to be just one of the local casualties with the builders graffiti leaving no one in any doubt about who he blames for the abandonment of the venture.

Other victims of the downturn are Casa de Picanha (the Brazilian style rodizio restaurant) and A Loja Chinesa (the chinese shop) on the promenade.

Elsewhere proprietors of the villages businesses report that they are barely able to cover their overheads at current trading levels.

As an ex-publican and knowing the prices charged at the local cash and carry it is patently clear to me that following recent increases in IVA  (VAT) and other business taxes prices in the cafes, bars and restaurants need to rise and rise significantly if  gross profit margins are to be restored and businesses survive.

The dilemma being if people are cutting back at today's price how severe will be the resistance to any price rise?

Sooner or later someone is going to have to bite the bullet and find out.