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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

sexta-feira, 25 de maio de 2012

TEc - The feeling is mutual - Eurozone, Merkel and Hollande

The long-running saga in the Eurozone appears finally headed towards a change of approach.
It took a new French President to push for that change.
Nobody knows what form or shape the final fix for the Euro will take but important points are now being discussed in broad daylight. This is no minor milestone in a currency union whose construction was left grossly unfinished. It would always be both hard and challenging building it to completion.
The Economist has raised all the right points.
I would, however, wish to highlight that simple question on the interest rate differential between Spain and Germany.
Two States sharing the same currency cannot forever face such disparate financial terms.
Which therefore puts the focus sharply on the best path available aimed at closing a widened gap for the unacceptable consequences it produces.
It would seem to me that the stage is nearly set for major evolution (or something else) to occur within the Eurozone.
It has been suggested that the critical make or break point is now reached whichever way the currency (dis)union is looked at.


In reply to a reader who argued  that Spain and Germany could have such diverging borrowing costs as a result of interest rates reflecting premium risk on their sovereigns.

Why not?
The point you make is exactly the presupposition on which the Eurozone has worked since inception with the known outcomes.
An incomplete currency union without every relevant tool in place to back it up has created the atrocious disparities now seen.
Ultimately the EU-European Union might evolve in the direction of a USE as suggested by you. That will have been the vision of the EEC/EU's founding fathers and many European believers over many years.
I don't see that happening anytime soon either.
The 17 Eurozone nations have already pooled significant chunks of their sovereignty. The major task now is to find a midway compromise that makes the common currency work towards prosperity in the real economy across all countries using it.
As it is we may agree that it has done/is doing the opposite even after issues to do with good government/governance are discarded.
A complex balancing act it is but one that can no longer be put back.

TEc - The choice - Which way for the Eurozone?

Another spot on write-up contributing to a better informed public.
So little has been said over the last couple of years on the European project that sometimes it does seem like Europe is turned upside down.

For all the summitry, Finance Ministers' meetings and parliamentary discussions over the recent past the endgame still seems far off.
That's because sovereign-debt crises, begun in Greece to now affect many more, steered by financial markets have overshadowed every other initiative.
If the EU is (again) at a crossroads when the same was said in the past then it follows that a succession of crossroads must be crossed before the critical one is reached.
Clearly European leadership wasn't something that could ever be taken for granted.
It simply did not exist as has become self-evident in the ongoing Eurozone saga.
National leaders attend EU meetings bearing in mind their internal political agendas.
Whatever, tiredness would be an appropriate word to describe the prevailing stalemate only just being broken by the new French President.
There are distinctly economic, financial and cultural issues dividing the 27-member EU but political drive is essential if the bloc is to move forward.
It remains to be seen whether the critical crossroads is finally upon us.
I would hope so because the current location feels much more like a dead-end the EU direly needs to break open.
Limited version of federalism or a return to the pre-EU European Economic Community?

quarta-feira, 16 de maio de 2012

TEc - "China airborne", a book by James Fallows

Here's a book I will want to read as soon as I lay my eyes on it!
Also, the author's open mindedness as captured by The Economist is only too fitting of anyone knowledgeable on China and its intricacies.
Ambition aplenty and volumes to back it up is half the journey no doubt. Then there is everything else from within, so too the way other present-day major players match up to ongoing/future challenges.
Can anyone begin to imagine a world without America's Boeing or Europe's Airbus? Or scaled down to mere distribution points or commercial fronts?
What would that say about manufacturing, technology, skilled employment, real economy and wealth in the West?
Such questions whose answers seem so darn obvious to me were not even considered over the past 10-20 years, a time driven by quick-profit-only mentality prodded along by objectively weak, short-sighted, ignorant politicians.
That eventually became part of dominant culture as an inevitable? consequence of globalisation and free trade.
Now there appears to be the beginnings, on as yet minute scale, of a reverse process as wages and costs rise relevantly in China.
Predictable to any businessman with a vision and medium-to-long-term strategy.
For me it has never been about how high China will soar.
It is about how low many but not all countries in the West wish to plunge.

segunda-feira, 14 de maio de 2012

TEc asks - Will Greece leave the Eurozone this year?

I have voted No out of lack of a third choice which would be YesNo.
The game is still on, forces pulling opposite ways are powerful. They do not rest entirely within Greece any more. The rope could either snap abruptly or only just hold after fraying badly.
Contrary to what is being predominantly portrayed by the media it is no longer for the Greeks alone to decide - through their internal political process - their country's ultimate fate.
Euro and EU membership, if made intolerably expensive, sets any nation against the wall leaving it with two options: surrender and comply at all costs or proudly defy to choose its own way no matter how hard the going in the short-to-medium run.
I cannot assess how bad the situation is in Greece. Or how much worse it may get on current bailout assumptions. Furthermore, I hardly have a clue as to how bad the implications of quitting the Euro and the EU may be compared to present-day-near-future conditions.
Therefore the stakes remain very high for the Greek people.
For the Eurozone and the EU it is now more a case of confirmation of failure.
A premature attempt at creating a workable currency union encompassing disparate economies without every tool to back it up.
A politically driven far-sighted project gone horribly wrong.

quarta-feira, 9 de maio de 2012

TEc - A spasm of fury

Greece's latest popular outpouring took the country's overall plight to the next level.
On the brink of something as yet untold which can only be guessed at.
Revolt at the polls would be understatement to classify election results propping up fringe parties while over a third didn't even bother to vote.
Plainly the Greeks cannot be blamed for the organised political mayhem but their country's governance is now on the edge of a precipice.
Whether or not it will be pulled back from stepping into the unknown remains open to question.
Words, however, hollowed out to a people stripped of its former framework.
True that framework badly needed fixing but relevant questions have never been answered nor are they likely to be.
Looking in from the outside it would seem Greece is now ripe for implosion.
It could also be the case that media hype portrays a much worse situation than the real one.
Radicals or nutters, extremists or moderates, mainstream or fringe, that society's leadership - a much wider grouping than politicans only - must eventually speak as one.
Telling itself, the EU and the rest of the world what Greece wishes for... and how it intends getting there with or without outside help.

segunda-feira, 7 de maio de 2012

TEc - President Hollande

The first remark that springs to mind is on how close the final official result really was.
Not quite on a razor's edge as NS said it might be nor a ringing endorsement of FH as a plus-5% gap between the two would confirm.
Outgoing Nicolas has not been humbled by crude rejection, incoming François is prudently welcomed to the Élysée with a clear yet not overwhelming victory.
Aside the arithmetic, important though it is for what it means, fact is Presidential elections ultimately deliver one winner, one loser.
What was very striking is Democracy still stirs people's emotions in France.
It could be seen at work in those big outdoor campaign rallies and in yesterday's voter turnout in excess of 80%.
Vive La Republique!
Vive La France!

TEc - A winner in France, alarm in Greece

When no-matter-who French President says "Europe is watching us" he is simply stating the facts especially in the current context the Eurozone flirts in.
I use the same money as the French President, so do Greeks and citizens from the other 14 countries sharing the single currency.
It is about high time top political leadership realise - and let the rest of us know in capital letters - the full implications underpinning a currency union.
To my mind François Hollande - elected President of Eurozone's second biggest economy - has already made a difference by capturing the sentiment of moderate millions in France (and elsewhere) anxious for something substantial to happen if the Eurozone is to survive for the right reasons.
Austerity wasn't ever the correct word to use to adjustment programmes made indispensable following a decade of financial recklessness - States overspending to keep going without clear public/development policies that made sense. A good many of them certainly.
Fiscal tightening will remain the watchword but ways to kickstart economic growth must be found regardless.
It is very comforting to hear a number of relevant people increasingly voicing the need for economic growth.
From Germany to Greece, obviously.
It is a sea change from only a couple of months ago, if as many.

quinta-feira, 3 de maio de 2012

TEc - Sarkozy fails to deliver the killer blow

Besides the French people whom the Presidential election concerns directly, many in EU countries are watching closely too.
I certainly am especially since Mr. Hollande used direct speech to call for turning growth into a political priority in the EU.
It would be hard for anyone to disagree with such a stance after years of economic decline related to excessive debt.
The path travelled so far has been tortuous - perhaps unavoidable - with mixed results at best, a complete failure at worst. The predicament of the Eurozone, as built, is quite complex indeed. Given the limited role played by the ECB - normally a key component in a currency union - working in a typically capitalist contraption.
Financial markets spotted the weakness to pursue a relentless game of pushing up interest on those least able to afford it.
Now raises are driven by fears that contracted economies will never be able to generate enough revenue to repay debt and interest dues.
A lot has been said and written on all factors that played into the current full blown crisis. The time has definitely arrived for an honest assessment to be made.
Or else politics is doomed to irrelevancy in the face of major financial challenges.
Delivery has been patchy across countries affected the most. One common denominator, however, standing tall: massive unemployment, declining economic activity and uncertainty on what follows next.
To my mind Nicolas Sarkozy is a safer bet within the known realms of the system as well as on many other aspects of French public policy.
Unfortunately, as he himself said, this is not one but many crises added together.
It is a challenging world where many variables are changing fast or have changed already.
And Europe - Western Europe in particular - is ill-equipped to face up to them unless a serious review is made of fundamentals previously taken for granted.
Again, Sarkozy would appear to be the better candidate to stay on the job.
Crucially though, I believe the EU needs a shake-up.
I am not at all sure François Hollande will, if elected, deliver such a shake-up starting with the Franco-German entente.
Nor am I convinced by some of his proposed policies to address France's own problems but that is for the French to judge.
Just as France needs to restore multiple balances internally so does the EU as a 27-member bloc.
Each member State pooled significant chunks of their sovereignty in exchange for an European ideal - broadly understood to mean a continuous geography of political freedoms, social advancement and prosperity.
The people in many countries are seeing some of the 'basics' of the trade-off undermined by a sovereign-debt crisis raising many more questions than there are credible answers to.
What next, then?
What room is there for politics and politicians to act on behalf of the people who elected them in the first place?
In this regard the untested François Hollande offered a glimmer of hope.
If he wins we will quickly know.
Very nearly the day after...

quarta-feira, 2 de maio de 2012

TEc - Fighter-fleet response

A recurrent issue ever present plaguing Sino-US relations.
It is quite naive on the US side to suggest China might be distracted by internal issue/s no matter how grave.
To me it smells more like wishful thinking than any real belief the country's rulers might take their eyes off the ball when Taiwan is the ball.
Interesting to read as though it may be, historical facts are plain to see and extract substance from.
China is unlikely to relinquish on what it has consistently treated as an internal affair left unresolved from the time the communists took over in Beijing.
The US then provided cover for the defeated who fled to Taipei to set up modern-day Taiwan.
America has so far managed to help Taiwan build up a formidable defense force whose capability no other army - not even mainland China's - can begin to underestimate.
Despite growing links between China and America, the end of the cold war, the triumph of the market economy in China and more, Taiwan remains mostly an irritant to the Chinese a rather uneasy yet cosy friend to the Americans.
These days not much is heard from the Taiwanese themselves thanks largely to China's growing economic clout and influence.
I believe a tipping point will arrive sometime in the future triggered by an arms sale episode, or whatever, whereby a change in the current situation will push itself in.
When, how and what shape or form that change will be about is for now a worthless exercise in futurology.

terça-feira, 1 de maio de 2012

TEc asks - Would you like your country to hold the Olympics in the future?

For what it is worth I just cast a "Definitely Not" vote.

There are and always will be people with undue influence in many a country who unwittingly adhere to such grand ideas for reasons best known to themselves.
In fact, I've long held the view that major sporting events whose organization runs into the billions of dollars demand scale from the host country's economy first and foremost.
Or a convincing case is made to back an investment that pays for itself, is useful and an affordable asset once the one-off party is over.
Examples abound around the world of big-project failures now putting serious strains on overstretched or non-existing budgets.
What's more, to equipment lying mostly idle or hardly of any relevant use at all.

TEc - The rise of Sarkophobia

A great deal is at stake in France's upcoming Presidential elections.
It isn't about the EU driving Franco-German axis only.
A much wider range of issues need to be addressed within France.
As pointed out in the article the immigration question is far from consensual. Politicians are likely to get pulled in many directions, as they have in the past, looking dejected and haphazard at times. Oddly out of touch or inappropriately populist. The main difficulty being to reach the much harder middle ground.
Fringe parties have made significant inroads time and again and appear particularly vocal in France. This is because politics of moderation has consistently failed to address head-on some of the tougher issues commoners have long waited meaningful answers to.

It may be too late in the day for Sarkozy to provide some of them but the media showing unchecked dislike for the man is unwarranted and unhealthy.
In democracies where political legitimacy stems from popular majority vote the sitting President deserves respect until eventually voted out at the ballot box. Or messing up so badly that is forced to resign.
Attacking political ideas or showing strong disagreement with policies is one thing. Quite another is for there to be smear campaigns that repeatedly take on an overly ideological taint, worse still, a personal twist.