Carlos Filipe Jorge Manuel Miranda Collaco: janeiro 2014

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.

terça-feira, 21 de janeiro de 2014

BBC - When a vibrant 41-year old passes away suddenly...

Komla Dumor's untimely death has triggered emotions around the world. From common folk to prominent people.

He was truly a towering figure standing for upbeat factual journalism even where misery and doom was reported.

Above all he beamed positiveness about up and coming Africa.

KD combined professionalism with charisma, a sense of mission with overflowing humanity.

I only knew him from his impeccable delivery as BBC presenter regardless of subject or geography.

Will miss him much. I had to pay a little homage to Komla.

Believe all journalists should learn from the stuff he was so naturally made of.

Carlos Collaco

To the BBC on January 20, 2014

quinta-feira, 16 de janeiro de 2014

FT - MartinWolf's Failing Elites threaten our future - missing leadership across society, I believe

I would rather call leadership to the small group of people found in every society whose decisions and actions affect entire communities. It is unlikely that a new order will ever be devised or even that it could eventually be found.
On these presuppositions rests the entire article by MW.
To my mind an accurate analysis that should have leaderships everywhere - each country having its own idiosyncratic leadership - learn from history, both remote and recent.
One cannot foretell the future but failure to read past mistakes meaningfully will inevitably lead to further hardship for the many.
The unanswerable question being the degree of those hardships and exact consequence.

Under the current set of dominant values who cares really?

Carlos Collaco
To the FT on January 15
posted to Martin Wolf’s Editorial Column under:
Failing elites threaten our future
Leaders richly rewarded for mediocrity cannot be relied upon when things go wrong

sexta-feira, 10 de janeiro de 2014

FT - IMF warns Portugal of tough years ahead - I made a few remarks too

It has been crystal clear to me longer than I can remember that Portugal's woes and fixes are essentially structural in nature and domestic in resolution.
Years of easy access to financial markets and EU net transfers have masked many problems while making the country's traditional imbalances worse still. This runs contrary to what might have happened had we had responsible leadership and purposeful government over many years.

It is now time to let bygones be bygones and build on Portugal's strengths from a position of underlying weaknesses. A work in progress the country will forever be given its entrenched dislike of any meaningful reform - where sorely required - of existing practices and rigidities across nearly every segment of human activity.

As long as subsystems benefit disproportionately the few who can tamper with them mainly to keep the status quo.
Exports seem like the only true bright spot as private-sector companies geared themselves up to external markets and delivered. Given their share of GDP they cannot, however, thrust the economy forward on their own.

Portugal's adjustment is far from complete nor is there any certainty it will ever be accomplished.
It is unclear whether or not the leadership have understood the real issues besetting the country.

terça-feira, 7 de janeiro de 2014

TEc - The gates are open - Romania and Bulgaria bring a recurrent theme to the fore

This is of course a sensitive issue that commands both judgment in assessment and balance in policy.
Emigration/immigration from poorer to richer regions has always caused mixed feelings that swing between anxiety and misplaced hysteria.

There will never be barriers that are effective enough stopping people in search of a better life wherever.
Romania and Bulgaria do indeed pose specific problems stemming from their social and economic set up. Their economies, however, are doing relatively well albeit starting off from proportionally smaller bases. More important is their low unemployment rates - very low compared to most EU countries - providing a sound deterrant to volume would-be emigrants.

People who wished to leave already have - 3m Romanians scattered around Western Europe is a pretty impressive figure for the period over which it occurred.
Concentrations in Italy and Spain being particularly striking.
Poverty emigration en masse from these two countries is now unlikely.A fairly mixed bunch ranging from the skilled to the unskilled will be tempted to make the move westwards. Many will which is why potential host countries need to act swiftly to prevent unwelcome societal problems of many sorts.

A controlled steady outflow is likely, not a rush to the borders.

Carlos Filipe Jorge Manuel Miranda Collaco

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