Carlos Filipe Jorge Manuel Miranda Collaco

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.

sexta-feira, 17 de fevereiro de 2012

TEc - Too many cars, too few buyers - Europe's beleaguered car industry

Newsy article that fills one in on what is going on with European carmaking.

Overcapacity in the midst of impending further contraction of markets is seemingly the problem of the day. Yet, there are many more variables that should be considered in order to make decisions wise enough to look into the future.

While German makers are clearly one of a kind and are not affected even by the drop in volume sales across many big and small markets near home - GM Europe excluded, others on the continent are facing tough choices as they seek to adjust supply to demand.
From a weakened home-base coupled with a strengthened world one.

But, if it is €1,300 cheaper to produce a unit in Turkey than it is in France does it follow that all production should shift there?
Is that the only logic the market economy system offers that justifies company decisions with consequences reaching far and wide?
In a nutshell, should that be case - or just about - than most industrial production across Europe is doomed to shutdown.
Examples aplenty that that has already occurred.
Thousands of companies everywhere, large and small, have moved out in the sole pursuit of lower costs and higher profits.
Germany seems successful at managing both, keeping its home industrial base largely intact while producing elsewhere too.

Shouldn't business leaders and politicians look straight into it to find what's best for their business as well as their communities/country from a longer-term perspective?

Production costs in lower cost regions today will likely go up in the future. As a matter of fact they already have in more than a few countries.
What then?
Will production be clawed back and old facilities revived once more?

There is much, much more to this than meets the eye and lines the pockets of a few big winners in the short run...
A vision is needed if Europe - Germany, The Czech Republic, Slovakia, Poland and Russia aside for the time being - is to remain a force to reckon with in carmaking as indeed across many other industrial sectors.

sexta-feira, 10 de fevereiro de 2012

TEc - The shores of El Dorado

One look at these figures knocks you off your feet.
A second look reveals the whole extent of a partly rotten banking and financial system that has allowed, nurtured or stoked tax havens to thrive unimpeded for so long.

Apparently there never was and there may never be political will or elected power to take relevant action on behalf of common folk around the world. Folk who duly pay their taxes and bailout the majors when it is deemed they are suddenly found to be too big to fail...

For it is not only the filthy rich ruling few from Africa, Asia or South America who would rather have their ill-gotten gains safely stashed away in Switzerland, that quintessential nation of bankers and precision timepieces.

Everyone knows something ought to be done.
I've known about those deals sought by Britain and Germany and America's tougher moves lately.
What I definitely do not know is what has noticeably come out of them (?).
Can anyone expand on the subject?

sábado, 4 de fevereiro de 2012

TEc - The next special case? - Portugal's fate

There are far too many unknown quantities and moving variables to arrive at a clear-cut conclusive statement.
Beyond wishful thinking I believe that only time will tell which way market sentiment shifts. A few developments earlier on in 2012 - the ECB's bountiful lending featuring big - point to a changing mood albeit localized and insufficient as yet.

Uncertainty remains the buzzword for Portugal.
But if it stays the course as its seemingly resolute government propounds and enacts a sudden shift in the country's outlook as seen from outside might just ensue.
That would spell a welcome turning point that now hinges on internal as much as on external factors.

So much for running up debts way above reasonably serviceable levels.

sexta-feira, 3 de fevereiro de 2012

TEc - Facebook by numbers

I do not count myself as one amongst Facebook's 840m plus population.Yet.
Who knows one of these days I might change my mind to join in?!

The numbers are impressive at the very least confirming beyond a shred of doubt just how successful this young company turned out to be.
A giant social media network that keeps pulling in ever more people from kids to Presidents!
All experiencing the joys and thrills of communicating online by hitting a few keys et voilá...

Facebook has become the face of a fast changed world where anyone can build a platform to reach out to a greater number of buddies and foes alike.

MZ is pretty much a self-made ingenious genius.

segunda-feira, 16 de janeiro de 2012

TEc - Winners and losers

This is what concerned people should have their eyes and minds on.
GDP per person - nominal and at PPP - is as accurate a reflection of overall economic performance as has been invented so far.
It gauges the wealth of nations and makes it possible to cross compare them.

I believe the rise of the BRIC+S to which a host of other successful nations around the world could be added is a most welcome development towards a fairer better balanced global economy and society.

What is very worrisome and should indeed be taken very seriously by the relevant people is the declining worth of long established developed countries. More so their trendlines and future prospects.
Germany and Japan are faring relevantly better in this lot despite each facing own problems to varying degrees.

In brief, the rise of the rest is only natural and entirely positive to bridge yawning gaps prevalent as recently as 5-10 years ago.The gaps exist and will remain for decades to come but are seen to be diminishing across multiple fields.

Sluggish, stagnant or declining economies of the not-so-rich-world-anymore, in relative terms, must find ways and means to prop up sound growth quickly.
Relative decline is unavoidable, absolute decline is not.

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Absolutely right!
There are many instances leading to relevant skewing of mean values.
That is, however, a matter for the more studious or better informed people such as yourself to investigate and critically evaluate.
GDP per capita is an important input assessing countries' economies, nonetheless.
Wealth distribution is a chapter that merits its own case.

segunda-feira, 9 de janeiro de 2012

TEc - Summit for one - The EURO

As much as I like to assemble a few words on the Euro's troubles to sensibly contribute to The Economist, never before have I felt how meaningless the whole exercise has become.
Nothing of what has been said or written from reputed editorialists, economists, experts, opinion-makers, politicians and citizens seems to have any bearing on unfolding events commanded solely by financial markets.
I have therefore taken a New Year's resolution not to attempt to closely understand the single currency's agony if only to keep my own sanity. Until, that is, some major politically driven initiative is made that represents a true break with standard practices over the last 1-2 years.

A sense of déjà vu is now pervasive, as if holding out merely hoping that the Euro muddles through is too uncomfortable to describe.

Too little and dismally poor as it is the only words I can think of are: "que sera, sera - what will be, will be" from that beautiful song!

sexta-feira, 30 de dezembro de 2011

TEc asks - Will the Euro survive 2012 intact?

I am utterly and wholly unable to answer this question.
As it turns out the Euro's survival no longer depends on politicians' ability to convince financial markets that they are prepared to mount its defense at any cost.
In 2012 the markets will continue to push yields up - they will have plenty of opportunity to do so picking one country at a time - taking the EMU to the brink.
Which domino will eventually withstand upright drawing a neat line beyond survivability mode?

For the rest of us mere passive onlookers there remains only uncertainty on top of uncertainty.