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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, 27 de junho de 2011

FT asks "Could Germany divorce Europe?" - Gideon Rachman sets the question...

Is this a rhetorical question or one that deserves a qualified answer?
No matter how painful and challenging the adjustments now taking place on multiple fronts worldwide Germany's place and safe anchor belongs in Europe and the most ambitious political project ever undertaken: the EU.
It has many failings and is far from a straightforward bloc of countries trying to tread a common path.
Evolution to another level of engagement between its 27-member States is called for more than ever before.
Germany will always take the driver's seat sharing it with France on many issues.
As a stand-alone Germany might even believe that its role in the world might feel freer and more comfortable. On second thoughts it would find such a proposition preposterous.
A third way fits in whereby Germany leads the EU in a committed stance while taking on the rest of the world from a strongly-footed European platform as well.

sábado, 25 de junho de 2011

TEc "The brewing storm" - Greece's plight continues to grab the headlines

Greece remains very much under the spotlight for every wrong reason that may be summoned.
The only question that pops in my mind is how did so many let it come to this in the country as well as in the world's financial centres?
They did lend all that money didn't they?
Without bothering to take a closer look at how it was getting spent right?
Sadly Greece's reputation is in the gutter and there's hardly anything the Greeks can or will do in the near future to pull themselves out of it. Meaningfully.
Worse still is the unpredictability of it all as if rock bottom hasn't been hit yet or keeps on shifting to an ever lower position.
After enduring nearly 2 & 1/2years of deep recession - to be followed by another 1 & 1/2 - the most disturbing line in this article is on Greece's economic uncompetitiveness.
How can a country - whose economy is now deemed profoundly uncompetitive - turn its fortune around when it is simultaneously bust, unable to exercise currency devaluation and shut out from financial markets for the foreseeable future?
Is Greece fast becoming a permanent burden on the EU potentially dragging other weaker countries downwards too?
As hard as I try to find sensible answers core questions only pile up with greater reading input.
In a dead end situation like this something unheard of will have to be devised to save Greece from the Greeks, the Euro-zone from the EU and the capitalist system from itself.
When the talk now is about tiny old Greece threatening to turn into a second Lehman Brothers my writing time is up.
I must wind up leaving it to the ghostly forces to fight it out.
Eventually some balance will be reached.
We just don't quite know which one, at what cost and to whom.
I certainly do not.

quarta-feira, 22 de junho de 2011

TEc asks "Who wants to be a millionaire?" - Simple question after counting millionaires - HNWI - HighNetWorthIndividuals, around the world.

I'd say that the novelty here is China already ranked 4th likely to add up many more over the coming decades.
Switzerland stands very tall being a small country/nation yet so conspicuously wealthy for the few (not so few) but on average as well.
The US, Japan and Germany top in the populous countries' league within an exclusive rich-man's club.
Still, who doesn't want to be a millionaire?

terça-feira, 21 de junho de 2011

TEc "Indian equivalents" - An attempt to assess India is always part flawed

Quite an interesting and helpful guide to measure up India against itself and versus the big wide world.
It disguises the fact that in such a big country of huge diversity mean values unfortunately don't deliver the full picture.Dispersion or standard deviation values are extremely high.
The wealth in India is massively unevenly spread but in an age of plenty for many millions there never was such a period of raised hopes for countless other millions. As long as the country keeps expanding its already big economy in absolute terms. Not big enough in relative terms, yet.
Regional disparities are observed in most countries but in India they are likely to increase further.
India's promise is still unfulfilled - will it ever? - to vast sections of the population within each State and on a cross country analysis.
The strides made, potential and capacity already displayed have to be justly acknowledged.

quarta-feira, 15 de junho de 2011

TEc "It's all Greek to them" - What is held in store remains for the Gods to know

So much for Greece, the Euro as a single currency and the European Union!
Words may be easy to flow, harder, much harder are the actions to back them up in a country that allowed itself to descend so low.
Let us bear in mind that the Greek malaise is older than the 2009 financial meltdown and the sovereign debt crisis that quickly ensued.
It is mainly about how to mismanage government and mishandle a people by seeking financial markets and EU funding to pick up the tab.
Would the Greek leadership believe they could do so indefinitely?
Of course not, in the Euro zone or outside of it.
The simple truth is no country can spend its way out year in year out running ever larger deficits. There are obvious limits to indebtedness just as there are limits to most things in life - including life itself.
Piling up debt is useful if the money is used mainly to develop society and contribute to real wealth creation through tangible production.Or to adopt smart counter-cyclical measures when the economy is down aiming to climb up.
It is next to impossible for me to gauge the depth of Greece's problems. I'd need a 6-month stint there to soak them up.
Like any other people around the world the vast majority of Greeks want to have a decent life.
They also yearn for their country to be run properly.
They certainly grasp the imbalances that built up internally.
They intuitively know they were unsustainable.
I too believe the silent majority realize that multiple structural reforms are direly needed.
How to achieve them when the economy declines and the country goes into receivership calls for statesmanship from all in the political, judicial, economic and social establishment.
Social unrest will only add to existing complexities, lead to capital flight, further aggravate the brain drain and put off any semblance of economic recovery. Yet, the people need to let off steam and vent their frustration.
It is a very tight spot indeed but one that could open out a window of opportunity.
A year has rolled by since the bail-out money started pouring in.
Apparently the omens are not good but if Greece goes full-speed against the wall - despite the efforts of so many (?) - more questions than there are answers have to asked about the capitalist system...

quinta-feira, 9 de junho de 2011

TEc "A grim inheritance" - A change of government in Portugal at a time of hardship

In many ways the incoming PM and government have their work cut out for them.
The actual implementation of the measures contained in the Memorandum of Understanding signed with the EU/ECB/IMF falls fully upon his government's shoulders. And the newly-turned main opposition party-PS will not be allowed to look the other way without losing face to seriously undermine its own future prospects.
On the upside Portugal faces a unique opportunity to come to terms with itself. On much needed reform or simple fine-tuning of the internal organizational set-up and ways, broadly understood to include wide-ranging sectors and many public companies used to being overly cosseted by the State.
As a new political cycle begins it won't take more than a couple of months to determine whether or not a small window to a more efficient self-reliant future opens out to the country. Despite nightmarish measures that will come into effect to achieve faster fiscal consolidation.
PSD's victory was welcomed with moderate joy for the country is far from festive mood.
Indeed Portugal is best defined as being subdued, resigned and anxious.
The only promises made on the election campaign trail were the unsaid specifics regarding the actual measures agreed with the Troika in exchange for the financial rescue package.
For now Pedro Passos Coelho deserves every chance to succeed.
His success will mean Portugal's success as much as his failure will spell the country's fall into a bottomless pit.
I suspect though, any honeymoon will this time be forcibly forsaken.

TEc "Disunity among the BRICS" - The race to the IMF - Christine Lagarde

A charm offensive it has been and there could be no better depiction than the sophisticated yet simple picture of Christine Lagarde sitting with Manmohan Singh.
I cannot know what goes through each one's head in this stylishly poised camera moment but this time the race to the IMF's top job carries an extra spicy add-on.
Not only is it DSK who is being replaced under exceptional self-created circumstances but also the European leadership of the financial institution is being openly challenged.
There is no doubt that CL is a major contender who stands out on her own merit. It's just that her candidacy comes at a time when calls for the shifting balance of world power(real or aspirational)to be reflected at the highest levels of international organizations have grown strongest.
The BRIC concept is of course no more than a convenient acronym designed by smart economists. It does not constitute an institutional or even informal bloc pursuing a common agenda.
The overlapping between them is largely nominative and perceptive. Especially when the four upwardly moving economies view themselves against the established international economic order.
It would be a pity if CL were ditched - or simply did not garner enough support outside her 'region and legion' - because she's French/European as much as her getting elected on the traditional Western entente on leading the World Bank and the IMF.
She is a formidable candidate who deserves an unbiased review before formal backing is given or withdrawn.
There cannot be talk of disunity within the BRIC when they are not a united entity in the first place.
The acronym makes sense in more ways than one.
However, any concerted action on world fora requires a great deal more.

segunda-feira, 6 de junho de 2011

TEc "That was the easy bit" - Election time is over, now for the hard part...

Far too many odds are stacked up against the country as it enters a new political cycle. Most of them lie internally and in my view pose the biggest challenge/threat to Portuguese society as it shaped itself to this day.
The electorate here has traditionally been wise enough casting their ballots in a manner that broadly does justice to prevailing political and social context.
It is now for the winning PSD - the Social Democrats led by Pedro Passos Coelho - to put together a coalition government with junior party CDS-PP to deliver what Portugal has needed most, and lacked, over its 37-year old Democracy: strong, purposeful and focused administration that runs daily affairs but also pursues longer-term planning and policy objectives.
Only too often the country's Constitution is referred to as a stumbling block in the way of economic development in a market-economy model.
While the Constitution may require fine-tuning or deeper adjustment of sorts, the main blame for the country's sclerotic functioning lies elsewhere.
Contradictory as it may seem Portugal's best hope for success (whose upcoming government is severely limited in scope by the tight EU/ECB/IMF strait jacket) is to do with that very programme signed up to by the three main parties.
The parties that yesterday got the most votes, nearly 80% between them, which suggests an endorsement by the electorate of the conditionality-based financial rescue plan.
The package will force structural changes to take place if it is to be implemented to full effect.
The Portuguese people have now given the country's politicians a clear mandate.
It is for politicians to provide Portugal with a strong administration ready to take on every tough challenge/decision ahead.
A good start and pointer would be to get the new government up and running much sooner than what has generally been the case here...

quarta-feira, 1 de junho de 2011

TEc "Data guzzlers" - A chart on Internet traffic conveys a global picture(?)

What can we draw from a chart on Internet traffic?
Hardly two people will come forward with the same answer except that we do get a quantified measure on Internet usage.
What type of usage is it?
Does it truly contribute to a nation's collective knowledge/information gain/advancement?
These and many more questions merit a conclusive comparative study on its own.
A few facts do stand out:
1 - Going by the forecast Internet traffic is set to explode across the world.
2 - Traffic volumes vary widely and will likely remain so on a country-wise comparison.
3 - South Korea towers disproportionately above everybody else which broadly indicates a nation of Internet addicts. Or at least a significant percentage of the younger population is permanently online.
Mind-boggling as it is the question still needs asking as to what explains the size of that massive per capita lead?