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Lisboa, Portugal
Nasci no dia 11 de Junho de 1964 na cidade da Beira, MOÇAMBIQUE.

A Estação dos CFM, Beira

A Estação dos CFM, Beira
Ex-libris da cidade, 1966

The Euro, as a single currency, should be abolished

Another black and white motion statement leaving me no option but to choose No.
While I agree to the first part I am not prepared to contemplate the idea that the Euro should get abolished.
Abolished? Then what?
All 17 countries now sharing the single currency would revert back to their old monies?
Or a new version of yesteryear's currencies?

Simplistic as I made it out to be packed in a few odd questions, every single serious economic, financial and social consequence is inextricably wrapped up within each.
That is where the stakes are high enough to ensure that the Euro is given a new lease on life.
It calls for closer European integration.
What form and shape this will take is for policymakers and far-sighted politicians to grasp and propose.

It would seem to me that the Euro has many underlying strengths but will not - contrary to the founder's beliefs - assure convergence between all the economies it services. How could it?
The divide has been felt acutely lately (1-2 years) the logical consequence of relevant economic under-performance among member-countries.

There has obviously got to be a political solution rooted in realistic economic fundamentals.
The road traveled so far proved artificially smooth during the first 10 years I dare say but unsurprisingly very bumpy in the last 1-2.
It could not have been otherwise given the structural differences setting these countries apart. And excessive spending pursued mostly by a few Southern European States who could not see beyond the present.
Adherence to the Maastricht criteria never again seemed to be taken seriously once countries landed themselves inside the Euro club. Not to mention Greece that never fulfilled the criteria in the first place or ever bothered to balance its books.

Very disappointing to admit but the Euro Zone is indeed right in the middle of a storm testing its main crews to the limit.
The latest summit decisions seem to indicate that where there is a will there is a way.
It may have just been one first small step in the right direction.

The specifics are very hard to work on.
Yet it would seem to me that the 17-member Euro Zone and the larger EU can hardly afford shooting down the Euro.
The broader picture needs to come into full view.
An hypothetical demise of the single currency would deal another severe blow to Europe's economic fortunes.
Its relative decline vis-a-vis the rest of the world would get a further boost.

I do not like misplaced calls for solidarity from Southerners but would rather see the stronger half of the dividing line realize where their medium-to-long interest lies.
To that end many balances across the Euro Zone need to be restored at the earliest.

Europe agrees a "shock and awe" bailout for Greece

A rescue package of epic proportions, epic challenges for the Greek government and people, epic uncertainties and epic stakes for the single-currency.

It was the Euro's defence that ultimately forced politicians from Germany to Malta to perform a hard balancing act whose overall success is far from assured.Each finance minister has enough reasons to fret and grumble about.It being the Euro as a common currency, because of Greece despite Greece.
Up to now every 'least damaging' approach failed miserably to cool down the financial markets that remained as unimpressed as ever throughout.
For its part Greece is effectively the main winner in this high-finance gamble.The country bought time the markets were not willing to give it once confidence vanished.Precious time desperately needed to restore credibility and good governance at home.
A daunting internal fix with daunting external implications.
Three full years is what the government and Greek society top-down and bottom-up now have to set the record straight in so many ways.
Literally and figuratively.

For the other 15 Eurozone countries - each facing own troubles to varying degrees - keeping fingers crossed would be mild to describe the monitoring of Greece's performance over the coming 36 months.Potentially they are all losers, starting out by losing simply to avoid bigger losses!
There are so many relevant questions that might be asked to which full answers ought to be provided.
They won't get asked or get answered.
Tellingly, each and every single one of them would now seem rhetorical or at best an exercise for academia.

The spectre that haunts Europe

I am still hopeful that Greece will not require a bail-out in whatever form pinning my hopes on the PM's own words.

He did sound very bold and brave in the face of such overwhelming odds but until a deal is actually in place I would rather believe the Greeks can and will take care of themselves.

My stance is wholly based not on immediate needs triggered by the Western financial meltdown that led to the economic downturn.This in turn led to a collapse in tax revenues across countries caused by economies shrinking badly.

To a large extent Greece is indeed a one-off case-study for the worst reasons, its latest fiscal deficit the sum total of profligate spending, widespread cultural-rooted tax evasion, underbudgeting, creative accounting, weak notion of public service and duty, etc - all conspiring over decades to bring the country to the brink of bankruptcy.

I am sure many Greeks will have seen it coming and warned their governments in years past.To no avail as even the present government was elected as recently as late 2009 on a platform to increase spending.

According to EMU rules public finances were clearly to remain national responsibilities.A considerable chunk of sovereignty for States to manage through their democratically-elected governments of the day.
Would the Greeks have liked their Finance Ministry to be ruled or dictated to from Brussels or Frankfurt just so the Maastricht-agreed criteria could not have been so despondently ignored?

Current turmoil is the Euro's hardest test ever but one that will also represent a defining moment in the single-currency's future.

It is a fact that Southern European countries are faced with similar issues though not on the same scale and urgency.Others in Northern Europe, the US and Japan also recorded their biggest fiscal deficits and added up noticeably to their debts in 2009.
Each one has its own track-record, however.
This is exactly what sets Greece apart from the rest.
Each country is unique in its own way, there being obviously overlapping between them.

International rating agencies must make the effort to closely monitor and register those differences and then advise financial markets.

After all it is sovereign countries and sovereign debt one is dealing with.

There is much more at stake than strictly soulless bundling of nations.

Arquivo do blogue

segunda-feira, 29 de novembro de 2010

TEc - "Europe and America" Why the EU needs to stand tall on its own, or...

Since long the European Union has been punching below its real weight - well below its potential weight.This owes much to the failure of EU leaders to sell to their own peoples and the larger world the European ideal as envisioned by the founding fathers and successive generations of statesman-like politicians. Most of them deepened the economic and political project best exemplified in the Treaty that changed designation from EEC-European Economic Community to EU-European Union.Later by the creation of the now troubled single currency and the EU's two latest arguably overambitious speedy enlargement rounds from 15 to 25(2004) to 27(2007) member-States.

With the Western world (mainly the US and Europe) severely knocked-down by the 2008 American triggered sub-prime crisis that led to the overwhelming financial meltdown, both the EU and the US remain far too busy finding their own bearings to afford entertaining each other meaningfully.
Indeed viewing it all in one big picture that combines many sub-images neatly conveys a critical juncture enveloping Europe and America.
Their taken-for-granted relationship is not threatened on fundamentals least of all is it beleaguered in any way. But unless the two sides of the Atlantic resume sustained economic growth - especially an even spread across the EU's 27 members - already visible imbalances of sorts will increase.
I believe it falls mostly on the EU to demonstrate where it wants to be over the next 10 years.
Should it succeed pulling itself together and moving forward as one - despite every welcome difference setting member-countries apart - and America will listen and value the EU for its real worth.
If not the call from Pacific rim nations and beyond will strengthen further leaving Europe out to a sentimental line and NATO. Effectively pushing the EU into secondary player status.
This might come about through practical evidence rather than any intentional policy shift.
Conversely, the EU which remains a formidable economic and trading bloc, still could secure its rightful place as seen from Washington.
It will, however, take far more purposeful leadership and renewed commitment to the European political project to achieve this.

In a nutshell a vision from Brussels extending well over and above today's shadowy lows that have so profoundly sagged Europe's ambition is utterly needed.

sexta-feira, 26 de novembro de 2010

TEC debate motion "This house believes that America's political system is broken" I disagree and wish to stress why yet again.

I have already cast my vote earlier on but if I had to do it again I would unequivocally side with the minority once more.

In fact the gap has marginally widened showing what I believe is mainly overwhelming mistrust of America's political system as people perceive it.
The very system that produced by all means and measures - despite inevitable shortcomings - one of the world's most successful countries.
Proud Americans would not hesitate to say 'the' world's most successful country. 

When dealing with such a complex edifice that took long painstaking work and very many bright minds to put together one needs to humbly step back a distance that would allow viewing the broad picture.
Perhaps this is what is lacking nowadays blinding many to the virtues of a system that delivered so much to excessively focus on the failures of the immediate instead.

To my mind such an assessment is very short-sighted no matter how relevant or even substantive.
Any political system may require adjustment to keep up with ongoing challenges posed by a dynamic free society and an ever moving wider world.

If co-operation across party lines has worked in the past there is no reason why it should not be made to work again. Especially at a time when the US is faced with tough core issues/choices from within and major multiple shifts from without.
That rather hinges on the quality of a majority of politicians in Washington, not necessarily on the political system.

Sometimes it may become easier to find fault with political institutions when a sound ideological divide needs only be bridged by smart reasoning and eventual agreement. In the nation's interest first and foremost not a party's short-term political gain. And on some issues we might just as well politely agree to disagree.

Whatever Americans make of it, I do not think that their compreehensive and thoughtful political system based on values, checks and balances and responsibility deserves such radical blame for current woes.
Blame lies elsewhere perhaps much closer to many than they would care to admit.

terça-feira, 23 de novembro de 2010

TEC debate motion "This house believes that America's political system is broken" I disagree, the issue is rather different.

The American political system is far from broken in the broad sense.
In the narrow sense it can certainly be improved upon to deliver best and faster for the majority.
The real issue is that the system is to a large degree permanently held hostage by unelected money wielding power brokers.Politics has been hijacked to a level that places it in the back seat not the driver's where it legitimately ought to be.But then insiders to the banking and financial sector will never bat an eyelid if they need to go back to the Treasury again... and again.
Basically the political system must be realigned to re-take its central role and focus on serving the people.In the US there is a healthy divide between the two parties that have steered it for most of its history.Each has made a contribution into the making of America as we know it.The main challenges facing the country over the coming decades have to do with how effectively it deals with the economy in a changing world.Perfecting the Union by perfecting the political system - that cannot deflect from its core activity and raison d'etre which is to represent and deliver for the people at all times - is an ongoing call.
Going back to basics wherever required.
Given the disproportionate weight money-holders now have in the political set-up, whether or not that is achievable remains very much an open question.

TEc - "Atlantic trouble" - Portugal fights for exclusion...

This is a situation resembling a death row.
The accused is not an individual but a collective body.
Each frightened country queued up to go to the gallows wishing it may earn last-minute mercy from the executioner.Above all not wishing to be taken for someone else.Innocently paying extra for someone else's misdeeds.
Seriously, Portugal is neither Greece nor Ireland.Greece is neither Portugal nor Ireland.Ireland is neither Portugal nor Greece.Period.
There are enough differences between them - past, present and future - to warrant separate treatment from that unidentifiable entity named financial markets.Unfortunately what they've shared in common - the need to go back to the markets selling debt, perceived sluggish economic prospects (Ireland is more promising) and the fact they are smaller countries - made them very vulnerable to poaching.
Portugal has defied the worst expectations by posting an expected plus 1% export-driven growth this year.If financial markets/investors should allow it some breathing space 2011 might just be a little less bruising than what forecasts anticipate.As long as overdue internal adjustments are carried out within Portuguese society by strong purposeful government.

TEc - "Saving the Euro" - Unending woes for the single currency

Excellent writing by The Economist that perhaps for the first time highlights the marked differences between the stricken countries of the Eurozone.
However much Greece, Ireland and potentially Portugal may have caused havoc and suspicion in the financial markets - producing similar nerve-wrecking outcomes within the 16-member club - each country is one of a kind with its own track-record, institutions, economic set-up, social attitude and, crucially, future growth prospects.The Eurozone will likely remain in the spotlight, the strains of its unbalanced make-up showing until a common framework for economic management is eventually (re)defined.And enforced by responsible governments of the day.
The Euro does not appear threatened in this re-run of the trials experienced earlier in the year.There can be no doubt however, that unless the strikingly different weaker links return to sustained levels of economic growth troubles within the Eurozone will be recurrent.

TEc - "Slowing down to speed up" - On the credibility of forecasting by international agencies/organizations

Forecasts from international bodies such as the OECD, and many others, have to be read through sharply refined glasses lest readers be grossly misled.At best they offer light look-ahead pointers at worst useless pieces of information adding to bafflement.
Nonetheless, I am always inclined to check them for what they are.Eagerly hoping for the best while fearing the worst.Their overall credibility has doubtless been severely dented over the last three years.

terça-feira, 16 de novembro de 2010

TEc - "Of inhuman bond spreads" Ireland is poached, Portugal becomes more visible

The financial markets remain jittery and suspicious.

Unpredictable is their assessment of risk presented by the affected, should I say afflicted countries.
The sad trio - with Greece already in full rescue mode - continue to share significant bad publicity despite major differences between them.
The fact that this is about sovereign debt each built up to varying levels (with unmatching maturity dates), serviced by dissimilar economies does not seem to impress the markets the least bit.
The Eurozone therefore may yet face another tough test stretching its internal balances to the limit.
In Portugal and I suppose in Ireland too, the government, politicians, economists, opinion-makers are nervous enough to make any meaningful statements.
The financial markets will unravel themselves to hold the final say over the fate of millions whose leadership over many years - whatever the reasons - placed respective countries at their mercy.

sexta-feira, 12 de novembro de 2010

TEc - "Still crazy after all these yields" Portugal and Ireland are tested by financial markets

As this article went to press and as I now write Nov,12 it is not at all clear which way these two countries are heading for.Except that government spending in either is to be severely axed in the coming years.
This time with tangible and widespread implications across societies.

On the bright side a golden opportunity for countries to adjust themselves to more realistic levels multifold.
Despite both presenting largely different standings in many ways, the almighty markets have poached them for their vulnerability rather than anything else.
In retrospect Portugal did position itself wrongly from the outset - perhaps out of an overly optimistic wishful belief the markets would drift away from the Eurozone following Greece's bail-out earlier in the year.
The economy here remains weak and the country might very well experience a double-dip recession next year.
A daunting prospect at the very least.

Meanwhile latest figures indicate Portugal's feeble yet relevant 2010 growth is export-driven.
This holds out the only hope of narrowly avoiding next year's worst forecasts.
Financial markets are unlikely to be impressed by any measures announced whose implementation cannot produce outcomes until well into 2011.
The capitalist system shows itself in full view and coldness.
But then governments cannot pretend, ever, not to have known about its ruthless rules of engagement.

TEc - "Containing engine failure" - Rolls-Royce faces unexpected hiccup in the wake of A380 engine explosion

Every word said about what led to the explosion of this engine is premature until Rolls-Royce engineers step forward to report the full findings of their investigation.
An oil leak is being suggested as the root cause to the failure.
Assuming it was a leak it could have just as easily been catastrophic.

The whole issue is technical enough that besides fixing the leak aircraft-engine makers will need to look again into ways of containing unlikely explosions - whatever the cause - within the engine's cowling.
Hot high-speed rotating metal parts/shreds randomly hurtled in all directions are lethal enough that this A380 owes its survival to the wing luckily not being fatally hit. Or perhaps the fact this was the number 2 inside engine not the number 1 outer one, or...
The ifs, ors and buts are now irrelevant.

Rolls-Royce's reputation will not be tarnished if, as expected, it lives up to its own high reliability and safety standards.

quinta-feira, 11 de novembro de 2010

TEc - "Enough's enough-but what next" Zimbabwe remains in sorrowful political and social limbo

Only the content of the very last paragraph to an otherwise depressing text offers a glimmer of hope for Zimbabwe.

The country remains permanently in a heightened state of political gridlock.
There are far too many oddities pervading the governing coalition that nothing looks set to move forward fast enough, if at all.
Meanwhile, it is likely that a tiny few have never had it so good.
Why bother about the plight of millions around them, or the future of the country, if they can enjoy the spoils of past struggles today?

segunda-feira, 8 de novembro de 2010

TEc - "Divided we fall" Britain and France join up men( ) and kit to save treasure

How telling of changed times it is that cash-strapped Britain and France should throw themselves headlong into military partnership.
The two governments have acted swiftly since David Cameron took over and decided the UK's top priority to be slashing spending - never heard of any such plan for the military from Labour.
The 50-year pact sounds almost visionary for longevity into the future.
The UK, with solid military traditions in the distant past as well as the more recent successfully fought and won major and minor battles of the 20th. century, seems to me the biggest loser of the two.
Already both countries have shrunk their armed forces relevantly but harnessing hardware to efficacy could indeed prove wise and deliver greater punch in real armed conflict scenario.
Notwithstanding the perceived change in the nature of 21st. century threats what the move undeniably underscores is the relative decline of military powers of yesteryear.
Unless most of Europe gets economies to grow meaningfully over the coming years/decades I suspect that firmly established trend to accelerate further.

quarta-feira, 3 de novembro de 2010

TEc - "How did it come to this?" - asks The Economist of Obama's fading popularity.The going is tougher ahead but hope remains.

Won't even attempt go into the technicalities of governing a country with a huge private-sector economy made fragile by years of easy credit, spending binges and financial recklessness.

Barack Obama's two-year White House stint could hardly have achieved more in so far as jobs are concerned.

It is only fair to acknowledge his Administration's diminished blame or fault delivering quicker after the overpowering debacle of 2008.
Change has come to the USA in ways that are not tangible enough to the average American yet.This mostly explains the popularity loss suffered by Democrats readily seized by political opponents whose main thrust stems from frustration and anxiety over economic underperformance.

America's electoral cycles while ensuring a near-perfect system of checks and balances may nonetheless prove extremely vulnerable to shifts in public sentiment due to timescales being very tight .

The US finds itself in a changed world setting with China's quick rise and major multiple shifts undermining its hitherto unchallenged role as the single dominant political, financial, economic and military superpower.
The upheavals of its domestic politics are also a reflection of increased uneaseness with a predictably ever diminishing role.
Not yet over military capability and outreach or external trade - the US economy is by no means dependent - but certainly due to its grossly unbalanced public finances, excessive external debt, debtor nation status, sluggish internal market and fast declining manufacturing without clear volume-alternatives found as yet.

Obama's job has now been made considerably more difficult.Losing the House of Representatives is a major blow that is hard to recover from.It cannot be underestimated for the wider political fallout, especially getting legislation through that would accomplish that promise of change.

It will now be for him to demonstrate Yes he Can despite it all...
His Administration's judgment day, however, is not due until 2012.

segunda-feira, 1 de novembro de 2010

TEc - "No surprises this time" - Dilma Rousseff wins Brazil's Presidency

Dilma Rousseff's unsurprising ride to the Palácio do Planalto on a borrowed ticket from incumbent Lula da Silva should not be underestimated for its wider political overtones of sorts.

The first ever woman, the Worker's Party candidate yet again, the people's desire for continuity and most important of all Brazil's high-performing economy, social policy, higher international profile and overall good fortune.

Brazil has shown itself and the world that it is a vibrant Democracy - in fact as colourful and amusing too.
And mature to the extent that Dilma was not awarded carte blanche by winning outright in the first round.
José Serra scored solidly and, significantly, green candidate Marina Silva put up a brave fight with a strong showing.

Votes will likely have been split between the two across all walks of life in yesterday's run-off.
There is a point in the article's second paragraph regarding the big numbers.
But that hides the welcome fact that Brazilian society has been on the move as the country grows richer and displays far better self-awareness.
Millions of educated Brazilians increasingly realise Brazil's massive wealth must be more evenly spread from North to South, East to West.

José Serra may have been the better prepared of the two but Dilma may very well prove a refreshing continuity with a difference.
Just as Lula surprised many during the 8 years since taking charge. He silenced his loudest critics while largely overcoming his own overblown shortcomings.

Brazil is better-balanced today than a decade ago.
Its challenges remain daunting but the country is firmly on an upward swing.