FT - The financial implications of SWAP deals

This is way too outrageous to begin to find proper words that might vent a semblance of anger.

For no other rationalised emotion would ever match the enormity of what is now unfolding.

The Finance Minister is expected to answer questions from deputies in Parliament tomorrow.
But it is obviously Portugal's hard-pressed taxpayers who should be given full explanation.
The Portuguese State - broadly the country's tax take and indebtedness - has over the years been hijacked by the very people entrusted with upholding it.
It is always after the fact - usually years later - that a new deep hole is found invariably to the State's loss. To vested interests' gains at the expense of the already overburdened taxpayers.
On whose behalf both the State represented by the government of the day and concerned interest groups acted.
Unfailingly claiming to act in the best interests of the taxpayer.

I will save my words until after Vitor Gaspar has provided relevant insight into yet another disgusting matter.

TEc - The new collapsing building - Multistoreyed factory building pancakes due to multiple forms of cumulative corruption

Yet another shameful event that may shed some more light on the plight of real people caught up in the big money-making-racket-for-a-few parts of the global economy have become.
Once indignation and emotion subside it will be, more likely than not, business as usual until the next tragedy unfolds, perhaps with a vengeance.
A tipping point may eventually be reached down the line.

One look - not even a close one - at the pile of rubble under whose tonnes many still barely cling to life in agonising pain reveals the whole extent of a multifold scam.
Will not describe it here for the evidence is abundantly clear.
Lobbying, political connections, power games are hardly worth a mention when human misery is the main price that never gets factored in.
As it is the winners are/have been factory owners, some government officials and akin in Bangladesh, nameless middlemen and major household brands over in the West.
Their purchasing managers instructed to source where it is cheapest, sell with a significant yet a little below expensive mark-up on the High Street and pocket the difference.....!

A fair global economy is only achieved when a level-playing-field is defined first and foremost.
General safety of buildings does cost some money - not a whole lot by the way.
Decent working conditions cost a little more.
Negligence, corruption, lack of enforcement of existing codes or any other costs a lot more. Every damn day.

When doomsday accidents like this one strike can anyone who hasn't lost his/her sense of decency put a price tag on it?

FT - Plan envisaging economic growth is presented

The main significance to yesterday's announcement is finally the economy is seen to receive explicit attention from the government. While the approach or measures themselves may come up for close scrutiny they do signal a departure from the near non-issue lack of economic focus had become since the onset of the adjustment programme.

From the government's standpoint the last two years have witnessed a clean sweep that saw thousands of businesses fold up under the weight of recession and a stop to credit flow.

Whether or not healthier parts of the economy will kick up as conditions improve is not known.
Whether or not surviving businesses will perform better into the future remains to be seen.

Targeting exporting companies and setting a goal for the export-share of GDP indicates a policy option based on a vision for the country and its enduring need for rebalancing.

Only time will tell but it would seem a fresh start is being attempted by an embattled government still up against formidable odds.

Hopefully there will be a pick up in economic activity in the Eurozone and EU towards the end of the year.

TEc - Euro wobbles - a common currency that does not deliver equitably across the Eurozone

A very well written to-the-point text that adds to knowledge on Portugal-centered ongoing troubles in the Eurozone.
It does justice to the Portuguese case, specific as it is like every other.
But I vehemently disagree with the subtitle while grasping the intent fully.

Problems in the Eurozone built up over many years of laxed oversight at EU-wide level. While the going was good - market finance seemed to flow easily - apparently no-one at Central Banks, crucially at the ECB and the European Commission, realized imbalances were growing by leaps and bounds to eventually become unsustainable. As they did!

National governments failed to act responsibly just as EU cross-country institutions comfortably looked the other way.
Arguably it seemed the win-win could last forever.
The rest of the story is unfortunately too painfully well-known to all.

How to break free from the current stalemate that has produced millions of unemployed, declining or sluggish economies and a deep divide between the 'haves' few and the 'have-nots' many within the European Union?

Portugal's Constitutional Court is as relevant to the country as Germany's equivalent.
Or any other like-for-like entity in each of the remaining EU25.
In fact its ruling on the 2013 budget is to my mind the sole display of remaining sovereignty from this debtor country since the onset of the bailout.
The government has meanwhile stuck to its guns saying cuts to State spending will be made elsewhere to achieve the now relaxed deficit target of 5.5%. I do not doubt their resolve and ability to deliver.

For their part, creditors must show flexibility where and when it falls due. Portugal has made remarkable strides in a very short timespan at a huge cost to the economy and employment.
A look at each Eurozone-member country as a stand-alone is required for individual analysis and assessment.
A review of the 17-member Eurozone bloc then becomes mandatory if the Euro - our cherished common currency - is to survive and thrive into the future.

Upmost on policymakers' minds should be kickstarting growth as soon as possible.
Even if most clearly remain in the dark on how to achieve this.
At the very least focus has got to be seen to be shared between restoring budget balances, macro balances and domestic economic growth.
Failure to achieve the latter threatens creditors as well.

TEc - Austerity plans overturned - The Constitutional Court snubs the government (and international creditors)

There's at least one strikingly favourable outcome from the Constitutional Court's ruling:
it sends a clear signal to creditors (and outsiders) that if "beggars cannot be choosers" they can still demonstrate there's an internal constitutional-judicial order in Portugal.
What good is that at a time of financial emergency that placed countries well into the uncomfortable lap of creditors?
I do not know but somehow relish the idea that a Portuguese State institution - an independent Court - stood up to pass judgment running contrary to the wishes of both national government and international creditors.

The sovereign-debt crisis in the Eurozone continues unabated.
This is only the latest episode of many concerning Portugal in ways that depict the extent of today's woes.
It is my firm belief, rather certainty, in a long long time - very long before the Eurozone ever existed - that Portugal begs structural internal fixes successive governments have repeatedly walked away from. And society's most influential members have in practice all but boycotted them one way or the other.
At the outset of the current imbroglio I even thought the game was up, the time had arrived for an externally-induced reformist agenda to finally become mandatory.
This remains part true.
But the terms and time frame being haphazardly pursued are just too tight and too short to produce the lasting results needed.

With an economy in tatters, unemployment at historical highs and an anxious society that could suddenly turn restless - those who make decisions from within and from without have got to adjust their mindsets to accommodate many more relevant variables.
Not least the collectively worsened business environment in Europe. Most of all the daily needs of common people...
What's the whole purpose of politics anyway?

Within the EU, to look at a single country as a stand-alone does not suffice.
Not on shared problems borne out of a shared currency.
While the origins and causes of their troubles are different - from Cyprus to Portugal across Ireland, Italy, Spain or even France (not a sovereign-debt issue yet) - they all face common/overlapping consequences that have depressed economies now showing little scope for growth anytime soon.
The UK, though outside the Eurozone, is struck down by the latter's recession but is also up against severe economic and social issues of its own.
Despite retaining tools such as the pound sterling and the Bank of England allowing considerable extra leeway.
Therefore a radical new approach has to be sought out at national level and at EU-wide level.

Which way is Europe headed out to?
Providing the same answers as when Greece's early pains were felt does not seem to be an option any more than piecemeal decisions made to put out a fire here or there.

TEc - A cut above the rest - Homage to Margaret Thatcher

A well deserved title to a neatly structured text full of content celebrating a great politician of conviction.

Mrs. Thatcher left an indelible mark on British politics, economy and society. She also made an outsized contribution to political freedoms as well as economic liberalization worldwide.
Controversial she was, as controversial remain some of her core policies whose outcomes were not always as commendable as might have seemed.

On balance Margaret Thatcher was a staunchly patriotic Briton whose Russian-coined nickname "Iron Lady" best describes her political temperament and actions while leading government. At home and abroad.
Her legacy lives on.

RIP MHT.

FT - Spain, and the threat from Portugal and Cyprus - are there no lessons to be learnt?

If any lesson should be drawn since the beginning of the sovereign-debt triggered Euro crisis it ought to be that austerity in and of itself will not deliver.
Adjustment programmes are to a large extent self-defeating. Shrinking GDPs make set budget deficit targets much harder to achieve.
Countries are found chasing their own tails with a negative spin.
While options are limited at the outset, fact is enough time has elapsed to make compelling assessments on overall outcomes of adopted policies.

Everyone agrees that the Eurozone is an incomplete construction whose major building blocks are missing.
There's widespread agreement too that the whole context is rather complex - politically, financially, economically, culturally, etc - but isn't there a logic arising out of experience?

to the FT - in the aftermath of the Constitutional Court's ruling counter to the government's wishes

The PM is due to make a televised address to the nation later today.
Pointless to try guessing what goes on in his mind as head of government in full knowledge of where Portugal stands.
The Constitutional Court is either a fully-fledged Court whose rulings may be questioned but have to be upheld or a cumbersome institution whose decisions are read according to context and political expediency.
I believe the former to have far more substance than the latter.

It goes without saying that Portugal is under financial assistance.
Does that mean targets agreed with creditors must be met irrespective of all else?
Looking from outside maybe yes but from inside the case is much harder to grapple with.
The government has got two years' record to look back on and realize how unrealistic those targets were.
Governments everywhere are experiencing great difficulty meeting set budget deficit targets even where economies are not shrinking as is Portugal's case. Throwing further austerity on top of austerity already in place is not likely to make things any better.
On the contrary, the downward spiral would only accelerate.
It should therefore not be an option at all.

Portugal finds itself boxed in in a particularly tight spot.
How to break loose by restoring sound growth to the economy remains the only worthy way out. Yet that is a million dollar question no-one is willing to find an answer to!

TEc - Down and out in Paris - France is down along with a President struggling to find his bearings

The Economist's dislike of François Hollande is perhaps unsurprisingly a common denominator to all articles on France.

Popular ratings of a politician should not deflect him/her from pursuing what is required. Bottom line is a simplistic commitment to leave the country better off at the end of the mandate.
One of democracies' worst failings is far too many people in positions of power are constantly worried about public image.
On the wrong side of it.
While it is important never to lose touch with the people by staying connected to them, government is about making decisions including unpalatable ones when the going is tough.

France is no exception at a time when the Eurozone, the EU and Europe as a whole face incredible odds all of which converged to make a bad situation worse.
Even where economic performance and social challenges are concerned France is the pivotal country in the EU.
Unfortunately it now jostles within the bloc rather uncomfortably facing up to Germany clearly from a position of relative weakness.

Regardless of how it is looked at, everything narrows down to this:
it's the economy, stupid!
Especially in the absence of men and women of greater political stature at the helm.
Politics of cause and conviction are sadly missing from Europe over many years.
This explains the pains and troubles of the Eurozone made much worse than they might otherwise be.

French businessmen and cadres will matter nearly as much, if not more, as political staff - under FH or any other - getting France back on a relevant growth path.
Ultimately the only way France will again measure up to Germany, retaking its essential political drive in the EU as well.

to the FT - Anxiety over what the Constitutional Court will decide on 9 items from the 2013 budget

Portugal continues to navigate through very choppy waters.
Sea lanes are exceptionally narrow tapering off into the unknown.

The main significance to today's no-confidence motion tabled by the PS - Socialist Party - lies precisely in that fact. The mainstream party that triggered Portugal's requirement for financial assistance has broken ranks with the government charged with pursuing it to the end.
From now on political acrimony is set to increase to the next level.

Most of what could go wrong with the Troika-imposed adjustment programme - in exchange for bailout money - has indeed gone wrong.
Also, multiple recessions in European countries Portugal does most trade with have meant exports, despite holding up remarkably well in adverse conditions, no longer bring in as much cheer as they might. Their contribution softening the impact of recession was bound to be relatively small anyway.
Yet they offered (still do) just about the only glimmer of hope.

The ruling by the constitutional court is eagerly awaited by all. The government's critical action tool - the 2013 budget - hinges on it deciding whichever way.
Will the judges make a binding footnote provision on the country's financial emergency situation or deliver a purely judicial verdict according to the highest Law of the Land?

Political storms are brewing capping every other storm hitting the economy hard daily.
And a growing number of disgruntled citizens for whom politics is increasingly too far-fetched.