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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

quarta-feira, 24 de outubro de 2012

TEc - Forward and reverse - European car-makers are hard-pressed

The one and only issue - just about - with car-making in Europe is the deep economic mess the Continent finds itself in.
There are a few bright spots such as Poland, The Czech Republic, Finland, Sweden, Norway, Germany, Austria perhaps a couple more, if as many. Even many of these countries now face tougher times with their own markets beginning to feel squeezed.
Europe - the Old Continent where the motor-car was born - home to some of the best household brand-names the world has ever known is being toroughly tested from within and from without.
The Continent that boasted 4 major world car-making countries for decades: Germany, France, the UK, Italy.
Europe's main decision-makers - a very broad class ranging from industrialists, businessmen, financiers, bankers, politicians, etc - have to act now. They have to deliver on where they wish their individual countries and the whole Continent to stand in a fast changed/changing world.
It is not good enough to candidly say Volvo is now Chinese-owned or JLR is Indian-owned or mock the French State for trying to save Peugeot providing it with a lifeline.
Or realize Italy is now but a junior player in motor-vehicle production having been relentlessly overtaken by new producers who started from scratch.
Or the UK whose volume makers of indigenous brands disappeared altogether.
All these rather seem the outward signs of manufacturing decline brought about by unchecked globalisation, ultra-free capital flows and greedy profit.

Where would US industry be if the Obama Administration had not rescued GM 4 years ago allowing management time to turn its fortunes around? Or in pure capitalist logic is it indiferent for the US economy, society and country to have a GM or not to have it?
Yes there was downsizing, factory closures, brands were lost but the huge company is up and running again. Making cars in America at a profit. In fact, if the American market rebounds further, as looks increasingly likely, it might even open new factories once more.
Europe as a whole, the Eurozone in particular, needs to reshuffle itself by kickstarting the economy with a visionary widespread growth plan.
Not fake growth based on deficits, excessive credit and excessive debt that triggered current woes. One that spurs production and consumption on balanced grounds.
It has been achieved in the past, why not revisit it again?
It is in the very nature of a market economy to witness companies set up shop to grow and prosper while others age, wilt and shutdown. What is very worrying - ultimately untenable - is to see far too many closures, relocations, outsourcings and a willingness on the part of many to deem it as the natural course.
Unless Europe (at the highest levels) considers itself a spent force whose economy, society and political relevance in the larger world is inexorably set to decline absolutely.
I used to think up until recently it need be no more than a relative decline.
The 13m car market has to bounce back at some point in time.
To that end European leaderships must pay much more than lip-service to its wounded economy.

segunda-feira, 22 de outubro de 2012

TEc asks - Will manufacturing return to the West? - I believe every country aspiring to become/remain rich needs manufacturing

A vote that reflects more a wish than a certainty.
For there are far too many variables that interplay in the world of business decisions.
What is now plain for everyone to see is the West in general, Europe in particular, face terminal decline if manufacturing is increasingly lost to other regions. As we debate a trend reversal has not clearly established or if it has I have failed to grasp it.
Rising labour costs in China are of course a natural consequence of the country's growing wealth, development and social aspirations. China's hinterland, however, still holds vast reservoirs of untapped potential before the country's average costs become unattractive to many a Western company seeking to relocate manufacturing.
Then, there are still vast regions of the developing world whose supply of cheap labour, educated to varying degrees, is plentiful.
At the core of it all what is required in the highest circles of the West's power corridors and crucially, company Boardrooms, is awareness as to the multiple consequences of unchecked relocation of manufacturing. One needs to go no further than to examine existing evidence.
Short-term gain to individual companies has already spelt major loss to local communities and a country's economy as a whole. In brief, the sum total of individual companies' gains equals the total loss to a given economy's output. Social and other related losses are not even accounted for.

My argument stands firmly on solid ground:
If the social-economic set-up has not changed relevantly from yesteryear - people still need to consume the same goods to have a decent living standard - manufacturing remains as vital as ever.
Whether the goods are made in A or B country is by no means irrelevant in the larger scheme of things.
Indeed countries that have lost siginficant chunks of manufacturing industry face permanent imbalances even where financial services are strongest as in the UK.
Retaining manufacturing in the West - whatever's left of it - is as much about far-sight as it is about China's and other low-cost regions' attractiveness within a typically capitalist mindset.

sábado, 20 de outubro de 2012

TEc - More pain, less gain - Portugal's troubles add up

Something has changed in Portugal in a matter of weeks.
The government backtracked on its controversial proposal to shift part of the social security tax burden from employers to employees. Then it presented the 2013 budget that jolted just about everyone including the governing coalition as well as prominent members from the ruling parties.
Talk of the day - the 2013 draft budget - rumbles on endlessly until the budget is approved. Many seek to predict the extent of further doom and gloom brought about by punishing income tax raises and cuts to social benefits. 
Others suggest amends or would rather see it ditched altogether.
Few offer workable alternatives that might ease the economic plight.
The Finance Minister has the upper hand as would be expected in such circumstances. Respected for his technical credentials yet accused of social insensivity and for staying aloof.

The country's mood is sad, angered and restive.
Mostly there is apprehension in the air as to what the future holds in store. 
For the underlying case is Portugal is overloaded by a debt pile which is barely manageable under current (and future?) conditions.
The government's top and only priority is to assure that bailout funds keep flowing in (at regular intervals) until the country is eventually able to borrow from markets at affordable rates.

An early return to economic growth seems as distant as ever.
The export sector continues to outperform itself displaying remarkable resilience in the midst of a worsening world economy.
Some say, however, that export growth is explained by sales of household gold and refined oil only. I suspect there is more to it.

Portugal remains in a very tight corner would be understatement.
The country's wish to break free from the shackles imprisoning it is for the moment severely hampered by both internal and external constraints. Until such time as the EU moves forward on key issues of Eurozone's monetary policy.
Or there is an unlikely change of heart by the trio of lenders.

It is hoped that once the adjustment program is complete there will still be an economy and a people sound and upbeat enough to start anew.

segunda-feira, 8 de outubro de 2012

TEc - Meet the Fukushima 50? No, you can't - The true heroes following the Nature-triggered nuclear accident

Revulsion is what I feel on reading this article.
Well over a year since the momentous event at Fukushima in the wake of a major natural calamity hardly any public recognition - endorsed first by Tepco management then by Japan's government - has gone to those 50 brave men.
It goes far to show the workings of Japan's establishment and wider group interests at the very top.
Yet Japan as a country, as a nation, as a technologically sophisticated entity made to kneel down by Mother Nature owes so very much to so very few.
It cannot be overstated that the 50 are the only heroes in the aftermath of the accident. Without their direct intervention - and exposure to unknown risks - much more serious consequences would have ensued.
I deem it highly relevant that the full story of what happened at Fukushima be told.
Praise and outward recognition should be lavishly heaped on the 50 lone men.
Also, official rebuke and public disapproval should fall on those who did not live up to their responsibilities.
All facts have by now been established.
Japan would feel much more at ease with itself if only objective recognition were placed where it falls due: the 50 men who had their hands on the job and their lives on the line and none other could fill in for them.
Least of all Tepco's top manager...or the PM of the day!