Smiling faces sell the euro across the EU

The euro is a good thing. That, at any rate, is the message being broadcast on Portuguese TV. I'm making a bit of an assumption here because (despite having been to Portugal a number of times) I haven't made any progress in understanding the spoken language.

The first time I heard Portuguese, I thought I was actually speaking to someone from Russia. But, allowing for possible misinterpretation, the TV advertisements show happy, smiling people old-age pensioners, middle-income suburbanites and young children

all looking in delight at the euro emblem. Which I think is pretty conclusive evidence that, in Portugal, they are pushing ahead with the monetary union ideal with as much enthusiasm as we are.

We were in Vale de Parra which is a few kilometres outside Albufeira. The first time we went there (about six years ago) it reminded me of Connemara, only sunnier. Vale de Parra is a lot more unchanged than any part of Ireland over the last six years. Whereas it's almost impossible to turn a corner here without seeing some old building razed and another (usually high-density housing) taking its place, there hasn't been a single new building that we could identify on this part of the Portuguese coast.

In fact, buildings that were unfinished when we first went are still unfinished. Before we left we had uncomfortable thoughts that a new development might have taken place on the land opposite the villa we had rented not a bit of it. We were still woken by the donkey braying and the cock crowing every morning (not exactly great when you've been imbibing the local brew the night before).

All the more surprising that property prices are actually quite high. We looked in a number of estate agents' windows and even the smallest villa was in the six-figure region. I suppose it's still cheaper than your average semidetached in Dublin, but I was surprised at the cost.

But inflation is low in Portugal. I'm going on empirical data here because the price of a pint of Sagres beer hasn't changed at all in the local. Still about 80p which is cracking good value, especially when sipped on the verandah while the sun warms the back of your neck.

The only downside to the holiday was coming home. Charter flights bring out the absolute worst in people (myself included). Mostly because everyone arrives at pretty much the same time to check in and there are hoards of kids running around with the bucket and spade that they refused to leave behind or (and I blame that TV ad for this) young boys who want to play football in the airport terminal while harassed mothers wonder where they've got to.

We arrived early for check-in. We'd allowed half an hour to hand back the hire car and complete the paperwork, but it was all done in a couple of minutes and so the check-in desk wasn't open when we got to the airport. But there were other early birds there too. And everyone kept looking at the checkin desk, ready to rush forward when it finally opened. There were men with laden trolleys trying to edge each other for pole position beside the pillar while anxiously eyeing a second desk in case it opened first. Meanwhile, the boys played football, the babies cried and the mothers looked around for their missing child. Nightmare city and there must be a better way of doing it.

When I go on holidays I bring loads of books and refuse to look at the English language newspapers so that I don't spend time thinking about current affairs. It didn't work for my October week in the Dominican Republic where the hotel had CNN and I couldn't help but keep up with the Asian market meltdown, but the only TV available to us was local TV or Sky Sports (which showed nothing but World Cup warmup games. Warm-up games it's going to be bad enough when the competition starts, why show us boring friendlies as well)? But I couldn't help seeing the FT headline which informed me that Asian fears were hitting world stock markets. It was a dose of deja vu because that was almost the exact headline in the first CNN report last October.

As we left for Portugal, the talk was of the possible ousting of President Suharto in Indonesia, where conditions were getting grimmer by the day. Since new President, BJ Habibie has taken power I see that many of Suharto's relatives have resigned their positions on various boards, which is a start. But it's still very troubling for Indonesia and there is just no way you can expect a quick-fix solution.

Worrying too is the whole nuclear testing situation in India and Pakistan. Both countries should be concerned about the economic sanctions that have followed these events. Since Pakistan is the recipient of loans from the IMF, sanctions could be potentially very damaging.

The most surprising bit of news was the Russian interest rate hikes. Russia has been bubbling away as a problem area for quite some time, particularly since Yeltsin sacked his cabinet and forced the appointment of Sergei Kiriyenko, but rates of 150 per cent have a touch of crisis management about them.

I suppose they felt that they didn't have much choice as equities have almost halved in value since the beginning of the year, but it all sounds very familiar when the central bank chairman says that the rates hikes are to ward off "speculators". Those damned speculators always ready to bring the market back to equilibrium! Officials in the IMF are being kept particularly busy these days the Russians have been talking to them about a fund to defend the rouble.

Crisis in Asia, crisis in Russia, political scandals at home it's good to be back!

Sheila O'Flanagan is a fixed-income specialist at NCB Stockbrokers.