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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

terça-feira, 29 de março de 2011

TEc asks "Will Portugal need a bail-out?" - I have to say yes.

At this point in time I am led to believe Portugal will eventually surrender to the inevitability of the inevitable after years of building up to the crunch.
It is with great regret that I am now forced to share the view of those who already could not see any option earlier on.
Knowing the facts as a member of the public I wanted to understand fully the rationale of the German-led Eurozone. Perhaps wishfully harbouring a thought that it might still work out a different deal in time to pull the country from the brink.
It has not come through, markets remain as anxious as ever and rating agencies keep on downgrading their assessments.
The Eurozone's approach is unchanged tackling each country as a stand-alone as and when financial markets determine.
Portugal's sovereign-debt interest rates have relentlessly crawled upwards since long and have ominously stayed there. Simply unaffordable to an economy in recession facing years of slow growth at best.
How the country's financial position plays out with internal politics and the wider Eurozone is an unfolding situation bringing in hardly any good news to dispel the bad.
Only an unforeseen jolt would spare Portugal from impending doom which will be formal acknowledgment that it has reached the end of this line.
Words hollow themselves out to give in to numbers at some stage in the cycle of an unbalanced economy...

sábado, 26 de março de 2011

TEc "A force for good" - Use of firepower to check Libya

The intervention in Libya is not a throwback to the days when France and Britain still held large possessions overseas.
The Suez Canal crisis would truly signal a turning point in big-power aspirations that the two European countries might still nurture by the late fifties.
Such a watershed became increasingly evident over the following decades as the US asserted its dominant military role across the world matched only by the expansionary desires of a then rising Soviet Union.
Times have changed completely though, history made its way and what brings the two countries together again, now in Libya, is a sudden realisation that Muammar Gaddafi has become dispensible.
Knocking him out of power may not prove especially difficult.
It may only take a little extra time and surgical hits to remove his establishment.
Questions on how to organise Libya after his departure should get asked (and get answered) right now, however.
That could prove a lot more challenging and tricky requiring painstaking clever diplomacy.
To sit around the same table a feuding Libyan family of many strands may turn out to be far more complex than flying sorties over Libyan airspace.
Even with a UN mandate and under NATO command coalition forces should not get bogged down in Libya indefinitely.
Politicians must act fast because there is only so much military firepower can do.

sexta-feira, 25 de março de 2011

TEc "Money and politics" - Euro Zone woes within the EU

Most interesting write-up that captures the strains and divides of an uneasy monetary (and political) bloc at a critically complex crossroads.
Portugal and Finland belong in the same Continent but could hardly be further apart in so many ways.
Building a strong European Union was never going to be easy but the Eurozone crisis - now mainly a sovereign-debt crisis affecting the weakest links - has laid bare the many missing blocks of its construction.
Unless the Eurozone hammers out a creative deal - besides what has been produced already - to address core issues left unresolved from inception, highly indebted less competitive economies will remain soft targets for financial markets driven by perceived risk and profit.
And the logic of the markets will move on relentlessly chasing one country after another until, eventually, Germany itself is aimed at.
Some say Spain is decoupling from Portugal and there appears to be some evidence to back it up.
If that should be so then the firebreak has shifted to Spain that is simply to big to let fail in any circumstance.
Time will tell but for now the Finns will go to the polls. The Portuguese will likely follow late May or early June.
The odds, expectations and prospects for both peoples, countries and respective economies could not be farther apart however.

quinta-feira, 24 de março de 2011

TEc "The death of Sócrates" - The gruelling agonising of a Prime Minister

I believe outgoing PM Sócrates will have faced the nation before the cameras yesterday evening with mixed feelings. On the one hand a sense of relief, on the other deep worry over the country's near term direction and fortune.
Portugal continues to face tough choices that have only been lightly addressed over years of internal strife and sniping from a host of stakeholders in the country's State institutions. These include public sector companies that continuously drain the State's dwindling resources...
It is not known whether a critical mass consensus is achievable sectorwise that will set in train longtime much talked about reform. In most cases to little actual implementation.
Except for a handful successful instances much here remains intricate enough.
Conservatism is perhaps a byword that best describes Portuguese society and its political representation.
Sócrates' first mandate did initially push what looked like a reformist agenda. It soon ran into stiff opposition from well entrenched professional lobbies and vested interests.
Gradually that government lost steam and was later too busy dealing with the economic fallout from the financial meltdown and the 2009 recession.
The second mandate has been wholly hijacked by the sovereign debt crisis. Successive ever stricter austerity packages brought before Parliament aimed at faster fiscal consolidation to cool down financial markets presented as optionless must-do policies.
To no avail. Nothing ever seemed enough.
As a result Portugal now slides into a double dip recession only just acknowledged by the government.
But Portugal's underlying problems remain internal structural weaknesses irresponsibly disguised over years of cheap credit. While it lasted that giddy low-interest money-spinner (the markets) suited governments in the periphery, the Eurozone's core countries, lenders and regulators (caught napping) alike.
The joys of the system would anyway be short-lived but only a tiny few could read the small print well ahead of time.
The country's spending binge was unsustainable by definition. Not enough ever found its way into productive sectors of the economy.
On the contrary, that which should have been prioritised was pretty much left to die a slow death hastened by cheap imports from Asia and the EU's two enlargement rounds to take on former Eastern European countries.
A double or triple whammy Portugal was hardly ever able to withstand.
Now the road ahead is narrowed down to a little alleyway the next government cannot get away from.
Dealing with issues of the day is challenging enough.
But if Portugal is to eventually resume sound economic growth the next government will need the backing and commitment from a large enough number of people in high and not-so-high places across society.
Most important of all a leadership with a vision and a sense of purpose is direly called for.
Countries do not pass away.
They may and do wilt and impoverish or bloom and prosper however.

terça-feira, 22 de março de 2011

TEc "Stabilization of sorts" - Questions hang loose...

It is hard to review the Libyan situation right now and make a meaningful projection going forward.
The odds appear to be many on all sides should three be considered the number of parties involved - loyalists, rebels and coalition forces.
As it stands the war actions could drag on endlessly with no clear winner.
But major losses to Libya and disruption to its relatively minor oil production will inevitably add up. Not so minor anyway, as a supplier to specific countries.
The Americans have visibly joined in grudgingly. Their commitment to longer-term efforts at stabilising Libya is far from clear.
The EU remains politically split though resolve does not seem lacking from France and the UK.
What next is the likely question framed in many quarters?
Whichever way the conflict unravels one hopes Libya does not turn into a dead-ended quagmire.

segunda-feira, 14 de março de 2011

TEc "Stoicism amid the debris" - Japan's east coast copes with Nature's wrath.

I find it is still early days to put proper comment on Japan's current predicament following another overwhelming pounding from Mother Nature.
My thoughts and prayers go out to those who perished and the countless thousands now in suffering and forced to start anew.
The images that have caught everyone's attention are powerful enough that the fragility of life is exposed fully yet again. So too nearly every element of modern civilization when up against the Elements.
Nonetheless, most damage seems due to that huge body of water rushing inland than to the prolonged violent shaking.
Japan as a country and nation used to being battered by earthquakes and tsunamis is coping up quietly but with a heavy heart.
Resigned to the trials of Nature inherent to its geography, yet resilient and organized as always the Japanese will rebuild that destroyed coastline sooner than those overpowering images may suggest.

sábado, 5 de março de 2011

TEc "The sultanate suddenly stirs" - Oman hits the headlines unannounced

I too have been surprised with the way protests in Oman took a nasty turn in the city of Sohar.
I do not underestimate that there could be deep-seated grievances for Omanis to claim better political representation, economic upliftment and accountability from their rulers.
Oman is a comparatively small oil producer with a small population which makes its per capita revenues quite substantial.
Sultan Qaboos has steered his country to an ever improving social, economic and material condition since taking over in 1970. Development has been taking place apace on all fronts but the people of Oman are likely to grow increasingly demanding.
He gets that recognition from older generations but younger ones have known no different.
The latest outpouring was brought on by contagion from the larger Arab winter of discontent initiated in Tunisia late last year.
Even if this has been only a one-off bout of dissent the writing is on the wall for Sultan Qaboos to rein in some of the excesses of Oman's governing establishment.
The sooner he reads correctly into what these Omanis are telling the easier it will be for him to continue to rule by consent.
If not, younger Omanis will eventually rebel at a time of their choosing and for reasons not readily perceived.

quarta-feira, 2 de março de 2011

TEc asks "Should rich countries increase spending in agricultural research?"- The case for a nod is self-explanatory.

Spending on agricultural research is both wise and self-rewarding.
It is not only for rich countries to seek greater scientific gain but for poor ones as well.
The green revolutions that did indeed take place in some of the world's poorest and most populous nations confirm just how right their past decisions were.
At official level no effort should be spared anywhere to ensure there is enough food in the world to sustain current population levels and tomorrow's too.
Crucially, besides production, there is an overpowering economic reason that can hardly be argued against.
The universal triumph of the market-economy means that demand must be met by consistent supply. Strong enough to keep a permanent check on prices.
As is widely acknowledged, far too many people around the world cannot afford a decent daily intake due to cost or appallingly deficient food distribution systems.
Every policy should be implemented by concerned governments aimed at raising food production while at the same time making sure it gets to the people at prices that they can afford.
Agriculture will forever remain a pivotal sector of strategic importance by definition. It is the sector that allows every other human activity to develop.
Such a strongly held view may run contrary to dominant opinion that has long favoured the services beyond any rational thinking.
To downplay or simply deal with agriculture over farm subsidies and trade barriers is shortsighted, downright naive or irresponsible.
If markets are distorted they need to be less so.
The quest to find balance should be made to prevail at all times.
Historical records show just how important past research was improving production methods and increasing land productivity multifold.
That being the undisputed case there's every sound reason to put money - both public and private - where the mouth is.
If we already accept there will be 2 billion additional mouths to feed 40 years hence, the time is now to get more from the Earth's bountiful surface.
On predictably declining areas in some parts of the world.