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A minha foto
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

quinta-feira, 27 de outubro de 2011

TEc - No big bazooka

Yet again the latest deal has shown that Mrs. Merkel's step-by-step approach won the day.
There does appear to be real boldness however, when all three major decisions are assessed independently and taken together. Not least formal acknowledgment of Greece's inability to pay its debts and the generous haircut agreed upon.
Technicalities are complex enough, consequences far-reaching that political will was on display to a considerable degree.
It is fair to say that while a final resolution to the Eurozone crisis is still a long way off, substantial extra track has now been covered to that end.
Unlike previous ones this has been the bigger step forward so far.

quarta-feira, 26 de outubro de 2011

TEc - Time for Super Mario

Super Mario?
The one who felled or who rescued the Euro?
Is it a matter of personality (that does count but not fully) or are we all looking for something radically different as a last hope?
Questions aside the ECB is the cornerstone of the Euro edifice.
Its top leadership and direction does therefore matter especially in troubled times such as the current one.
Perhaps understandably very few people are truly aware of the gargantuan tasks needed to redress the Euro.
If it is a bridge too far then the world will shortly know from the meetings due.
I find a single lonely word to best describe the current state of affairs: uncertainty.
A freshman at the helm of the ECB should provide a renewed breeze.
Delivery on the sovereign-debt crisis now engulfing a fair number of European countries takes a much wider circle.
In tune on critical issues.

domingo, 23 de outubro de 2011

TEc - In the mire - Portugal

A generally well-captured view of Portugal's predicament as it sails into unknown waters, i.e. the outcomes of current austerity presented and largely understood as a no-alternative programme are far from assured.
Doom and gloom should follow with a grin of resignation at best.
The country's institutions/companies/society got used to and got away with ingenious ways of circumventing sound management and accounting practices. Adjusting forcefully to smaller budgets at micro level will now be as challenging as meeting the macro targets set for Portugal as a whole.
The game in town is called "holes" that for longer than I can remember - both in fat and lean years - kept cropping up suddenly from the apparent normality of day-to-day business.
On the upside there is also a resilient country able to deliver quickly. Booming export sectors despite tough competition bear testimony to this.
Next year's contraction put at 3%(?) is despairing enough.
But Portugal might yet disprove its own pessimism to post a better all-round result at the end of 2012.
So I remain hopeful.

quarta-feira, 19 de outubro de 2011

TEc - Squashing mosquitoes with dollar bills

The graph highlights that a targeted public health initiative backed by adequate funding does deliver relatively quickly.
A yearly average of US$500 million over 10 years has cut mortality rates meaningfully especially in Africa where the disease is felt acutest.
Progress has not been as relevant elsewhere particularly in South-East Asia.
A nagging doubt remains in that it is not clear whether the funding is on R&D only or R&D and the Malaria Vaccine Initiative by the WHO across the world. From the text I take it to be the latter(?).

TEc - Nut cluster

A smiling news as beaming as the two workers pictured.
An example of how an Indian company is introducing technology and providing opportunity to local communities.
The text's gist suggests a win-win formula built up straight from Nature's bounty. Matching production to the demands of discerning consumers everywhere.
The way forward is to move up the value chain by having more processing plants within Africa.
Rajkumar Impex is doing its part to strengthen trade ties between Africa, India and a host of countries worldwide.
I would wish to see Mozambique back to volume production and processing, one of the country's prized exports formerly.
Nuts is it!

terça-feira, 18 de outubro de 2011

TEc - Friends in need

Hardly surprising that the Tories should swim in a sea of contradictions vis-a-vis Eurozone troubles or the larger EU.
The British never quite made up their minds on 'the Continent' to always on the brink choose between pragmatics and the lesser evil.
The Eurozone project is indeed under enormous stress.
As we write uncertainty seems the only right word to use until a structural breakthrough eventually takes shape. If not, British scepticism or outright non-belief/rejection from early days will have been proved ominously right.
In the meantime how not to be worried when the UK is surrounded by Euro countries who are major trading partners too?
At 40% UK exports to the Eurozone are significant but not overly so.
It is the case, however, that there are no substitutes to these markets as dictated by geography, logistics, economics and history.
Then, the underlying political question remains largely unaddressed. As to whether or not the UK might favour further EU integration, which successive governments have not, or essentially an economic Union loosely bound by a set of common Treaties.
For now long-standing British reservations have confirmed themselves. The EU project has stalled as the Eurozone grapples with pressing economic and financial complexities derived from its own hurried monetary union.
Eurozone fortunes could still swing either way depending on political will as much as on economic reality.

terça-feira, 11 de outubro de 2011

TEc - Is China a currency manipulator?

If anything the chart lets us know China has widened its trade surplus with the US in spite of an appreciating yuan.
The yuan rose up to 2008 to remain remarkably flat till 2010, resuming an upward trend since.
There is no clear case of currency manipulation, rather a continuing erosion of America's manufacturing base largely made up for by Chinese imports.
The trade imbalance is absolutely phenomenal and there appears to be room for further one-way swinging.
My point is that America Inc. should collectively ask itself how it views the country in the years ahead.

sábado, 8 de outubro de 2011

TEc - What will next year bring?

To predict the World in an unpredictable age is a bold attempt between the wishful and the irrelevant.
A semblance of prediction is nonetheless required that would mostly rest on basic common-sense, whatever that is meant to be.
2012 will broadly spell the continuation of underlying trends where the World's Economy is concerned.
My best assessment is one of a three-speed world - a booming part encompassing vast regions across continents, a laggard one resembling an old man tired of life and a region of relative indifference.
Countries largely fit into these three categories according to past choices made by their leaderships or those of the blocs they are attached to.
At the dawn of 2012 champagne bottles will still get popped everywhere, regardless.
In keeping with tradition best wishes will be exchanged.
So I predict!

segunda-feira, 3 de outubro de 2011

TEc - Chasing the dragon - China & India

Despite the outstanding progress made and the obvious gap between the two, China and India remain on track for decades of substantial growth.
If the starting line is taken into account then the giant strides already made come into sharp view. Given their huge populations even some of the lower ratios are beginning to look impressive in absolute numbers.
China's adult literacy rate compares favourably with more than a few countries in the developed world. It speaks tons for the massive efforts of the Central government over many years to take education to the people.
The most striking aspect from the chart is how much growth potential exists in both countries albeit to different degrees.