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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

sábado, 31 de março de 2012

TEc - Starting to worry - Spanish troubles

There can no bigger pain than the staggering unemployment rate now gripping Spain.
To a large extent that rate shot back up to where it once stood pointing to the failure of an economic growth model that temporarily merely disguised it.
Reining in public finances and fiscal consolidaton have taken center-stage but actually it is sound economic growth that needs as strong a focus.
As with most countries there are different issues all in need of tackling simultaneously.
Autonomous regions who overspent or made strikingly disastrous investments ought to be checked not an otherwise successful political/administrative set-up that suits well a country as diverse as Spain.
Indeed a financial crisis is the best time there ever will be to bring to book and root out irresponsible behaviour at various layers of government and public entities.
To this end the central government in Madrid has plenty of scope to act in the interests of most Spaniards including those from financially indisciplined regions.
This is a case of good government before it is about financial markets or the Euro.
Basically what we're witnessing across the EU is many States were spending well above their tax-take seeking to finance the balance through continuous increases in public debt.
Sadly, Spain was one a few who even ran fiscal surpluses before the onset of this crisis which was bound to catch up with the country in any event given its housing and banking bubbles that kept growing over many years.
I am confident Spain will ride out of its current fiscal troubles but haven't yet seen what will drive the country's economic growth. Concrete actions by the political and economic leadership have to start taking shape if only to spot a silver lining in the dark clouds now gathered above Spain's blue skies.
For most of Southern Europe, so too for Ireland, France and the UK, a return to relevant growth rates will ultimately be the only way to balance public accounts and restore hope to vast sections of society.

quarta-feira, 28 de março de 2012

TEc - Shopping spree - Singapore military spending

Let me remind you it is not 25% of GDP - which would translate into something like a 5-fold increase over current spending - but 25% of the yearly State budget.
Given its huge private sector services and exports Singapore's budget is lowish compared to the country's total economic output.
Still a respectable US$40-45bn of which nearly $10bn are awarded to the military.
Most of Europe's budgets are overburdened with arguably excessive social spending which has put a permanent check on the defence bill both in fat and lean years.
Not to mention the ongoing debt crisis.
I'm not holding my breath, I am keenly aware Singapore's authorities have traditionally been hushed and unorthodox on what they deem to be sensitive issues.
It has worked lifting them up - putting Singapore firmly on the world map - but the place would now do well with a greater degree of openness across the board.

terça-feira, 27 de março de 2012

TEc - Shopping spree - Singapore's military spending

Who is Singapore afraid of?
This would be an appropriate question for government circles, strategists and the Singaporean establishment to answer.
A tiny city-State of 5m boasting a disproportionately large military budget - outsizing any measure of balance - makes such a question starkingly relevant.
Even more so because if the absolute value is impressive (nudging on US$10bn), as a share of the national budget it is absolutely staggering. Akin to a State at war or preparing for one in the near future.
Or the likeliest option being that of possessing a military powerful enough to serve as a deterrent against threats, perceived or real, from bigger neighbours.
Whatever the case this is hard evidence Singapore does have military thinking now pointing to increased investment on the back of a booming economy.
As for the region as a whole I do not believe there's an ongoing arms race in the traditional sense it once had.
Asian nations do not like to be seen to lag behind each other which itself stokes calls from the military for a greater share of the national budget pie.
While in some countries modernization of aged/aging hardware is a necessity others wish to stand as tall as they possibly can showing off their big guns to friends and potential foes alike.
Anyhow, the surge in the region's weapons procurement is a major boon to Western suppliers ever ready to deliver their merchandise to willing buyers...with cash.

sexta-feira, 23 de março de 2012

TEc - Ports in the storm - Portugal's sea doors.

A well researched piece of writing highlighting Portugal's potential strengths and current constraints weighing on its ports.
Geography is a natural key factor but as noticed is simply not enough.
A lot of investment on capacity expansion and modernization has taken place over the years.
Costs and the overall efficiency of operations still need to improve, more likely the former than the latter.
Driving down costs as part of a strategy to make Sines a transshipment hub calls for managerial best practices too.
Given Portugal's economic size the only way to bolster traffic volumes significantly is by turning one or its three major ports into platforms feeding other ports around Europe, North Africa and neighbouring Spain overland by rail.
Very striking is the large container traffic imbalance in flows between East and West.
China, HK and Taiwan included, has become an overwhelming trading powerhouse sending millions of TEU's across the seas.

TEc - Losing its magic - On India

As with most countries and societies reform is the hardest to come about even where most needed.
India is perhaps the best case in point. Only harder than most.
1991 was a watershed year that opened up the country to the larger world, unleashed inborn existing energy and clearly showed India's vast potential could/can be fulfilled.
The country moved forward against all the odds stacked up against itself from within. Remarkably well it may be said without undue praise.
Still there is, probably there will always be, an unchanged and unchangeable India. An India that only takes so much, allows so little of this or that to, at the end of the day, proceed at its own chosen pace.
Endemic corruption, political and economic gridlock, grinding poverty, systemic bottlenecks are all part and parcel of what makes India, India.
There are many ways to look at it.
The glass is half-empty. Or maybe the glass is half-full.
But we may agree the glass is definitely not empty any more.
This is no minor achievement for a country that awes, stuns, dazzles, stinks, repels, awakens, depresses, basically putting all senses to the test at the same time.

quinta-feira, 22 de março de 2012

TEc - Big guns - World arms' exports

The chart leaves me baffled on at least one count that cannot be overlooked: are these shares measured by value, by volume or any other?
I would assume value to be the best guess making some sensible reading out of it.
Still, taking it for what it shows, France and especially Britain are becoming midgets in a sector they used to excel at.
Not long ago I recall both European countries competing for the runner up spot.
Could it be that they no longer manufacture the kind of multiple cutting-edge-of-technology land, air and sea hardware that made some of their companies famous worldwide?
Even self-conscious defensive Germany now ranks above both?
I know it is about big guns but there appears to be a missing element...

segunda-feira, 12 de março de 2012

TEc - The view from the north - Japan's natural calamity

The magnitude of the natural disaster that struck Japan's north-eastern coastline was such that as individuals it is hard for each one of us to gauge it properly.
I find it is therefore unsurprising that Japanese government - central and local - public and private institutions have had ditherings, outright failings and multiple shortcomings dealing with its aftermath.
Can anyone seriously begin to imagine seawater pouring inland along 700kms of coastline?
After a powerful earthquake that was followed by severe aftershocks?
It soon became clear that most of the devastation was produced by the tsunami whose height, speed and sheer volume of water rushing in could never have been fully anticipated let alone credibly protected against.
Concrete seawalls?
None of what man might engineer will ever be a match to the forces of Mother-Nature as, when and where She unleashes it.
All man can do is to mitigate the most negative impacts realistically planning ahead by building to reasonable and affordable defensive levels in such sensitive territory.
That is lesson number one from 3/11. Not a new one to Japan anyway.
Despite all that may have gone wrong the final death toll, numbers of homeless and displaced people and material destruction is not as overwhelming if set against the scale of the natural onslaught.
Cleanup and reconstruction proceed apace but it will understandably take a few years and a lot of argument before the worst affected areas are finally back on their feet.
Hopefully most of the arguing, whether on waste disposal or nuclear safety, will be useful providing the best answers to Japan as a whole.

sábado, 10 de março de 2012

TEc - Morning in America? - Is the US on the way up?

America's economy has a built-in resilience that is finally showing however feebly so far.
Will the recovery accelerate in the coming months?
From the article it would seem jobs are being created across most sectors including weaker ones except government which on balance is still shedding workers.
In any case the drop in the unemployment rate is tangible confirmation, if proof were ever needed, that economic growth alone can make a dent in such critical statistics.
Contrary to worsening fortunes in most of Europe - not just the Eurozone - the USA is powering ahead at half-steam but powering ahead nevertheless.
A 2.5-3% growth rate in a large mature economy is quite an impressive performance by any reckoning.
The world economy is now unevenly split into a 1-3-6-type pattern. There is no escaping the fact that Europe continues to struggle to barely get by while North America has decoupled and emerging Asia settles down to a cooler yet substantial pace.
Employment and unemployment in each region a clear reflection of economic growth rates as would be expected.
Should America's unemployment rate continue to decline the incumbent President will strengthen his chances of winning in November on the back of improved economic environment into the dying months of his first term.
A well-deserved reward for the road chosen and distance travelled from the day BO took office amid general doom and gloom.
Is there a better example than the turnaround at GM delivered in just over two years?

TEc - Mario, put on your toga - Mario Monti is making a difference

I felt particularly enthralled by this article and learning that one big country in the EU is pulling itself together while pushing forward the European ideal too.
A remarkable turnaround achieved in minimum time.
Italy never was, never will be just another nation in the 27-member bloc. Besides being one of the founding-6 it could and should in many ways be a moderating voice for Southern European nations and their character shaped by culture, history and geography.
To that end Italy must first strengthen itself from within, a fact only too well-known to Mario Monti.
At long last I can say that I am frankly pleased with reading a positive piece of news coming from ITALIA.

sexta-feira, 2 de março de 2012

TEc - The uncertainty society - Portugal

A generally well captured overview of Portugal and its woes.
There are more than a few less-than-accurate remarks I will not care to pick and correct.
The gist of The Economist's analysis, more importantly Portugal's true predicament, is best summed up in both title and subtitle.
Some countries have it rougher than others or are, to an extent, unreformable. This is mainly by choice of major interest groups seen over many years ever ready to jostle and jockey for position at the State's doormat.
The coming years will reveal whether or not some of the country's longstanding tangles and bottlenecks are resolutely addressed.
Not least because there never was such a favourable context for long overdue reform. With a push from abroad the current administration seems eager and able to use. Rightly so.
None of it is simple maths nor rocket science.
It is about adoption of no-nonsense targeted policies with clear goals preferably set against a timeline.
Politicians have long taken the easy path, most of the time giving in to the stronger lobbies in the land with scant regard for the interest of the majority and the country as a whole.
Contradictory as it may seem this 'modus operandi' fits in nicely or is a byproduct of Portuguese society whose organization rests on so-called corporations - professional or otherwise - each fighting for increased State largesse and favour towards their own membership.
Allocating blame is now hardly relevant but I would wish to see change wisely set forth from within some of the major stakeholders in Portugal.
Will the government of the day carry the country along the road to reform at a time of increased economic hardship?
Uncertainty is the only right word finding meaningful place in many different lines and paragraphs.