There are some language issues in the movie that one could take as goofs. But in fact the movie takes English as a convention. The option to maintain portuguese where logical would had made it a portuguese film trough the entire flashback and even some present scenes. So, all the crocheter's do speak English, even if they should speak portuguese, or german. The reference to their actual language is made trough their accents. Thats why most of the actors playing portuguese- even Brits- do speak English with an effort to have the typical portuguese accent.
Raimund Gregorius: We threw a party for our colleagues... our friends. And she found this quote, from Pessoa: "The fields are greener in their description, than in their actual greenness." And somebody said: "Oh, that'a beautiful sentence" and I said: "Yes, but only a few people will ever understand it". And there was this terrible silence. And then she said, my wife: "And I suppose you are one of the chosen few?".