Tuesday 18 December 2012

Great example


I think this article just highlights how pervasive, unnecessary and inefficient bureaucracy is - and, in the case of Portuguese Justice system, how corrosive for the integrity of results and effects in the normal rule of society bureaucracy leads to. We need to simplify systems, reducing its costs to do two things that people usually think opposite - improve deliver and value while lowering costs. It is possible when systems are as inoperative as this example highlights.

http://www.publico.pt/sociedade/noticia/metade-da-duracao-media-dos-processos-e-gasta-com-notificacoes-1577840

Monday 17 December 2012

Don't overtax success


Really! Don't overtax success! Governments should ensure honest hard work and talent are rewarded - that is what pushes a society forward! Too much tax and people will start asking "why should I work so hard?". Taxes should be progressive (who earns more also should pay more, to help promote social balance and as solidariety), but 75% tax rates on income are an absurd! A dangerous absurd!

Wednesday 12 December 2012

Is this what I have been asking for?


Over the past years, you have read me bickering about the need for a growth strategy in Portugal, that would allow us to focus resources while thinking on the long term. Might this industrial foster strategy be a significant part of it? I really hope so!

Monday 10 December 2012

Growth is an assumption of any Wellfare State

I agree with Ferreira do Amaral. And I think this is quite obvious. You need sustainable growth to fund a wellfare state. The solution on the medium term should thus be to actually fuel and promote that growth. You can't keep on taking responsibilities without a clear way to fund them. Very simply.

Thursday 6 December 2012

How the tax burden has changed in the US

A very interesting article from the New York Times, comparing the burden of tax in the US, over the last 30 years and across income class. It is data centric (so, analysis is limited) but it really is very interesting to see the shift from federal income tax to local and payroll ones. And it is also very curious to understand Americans are now paying less taxes (as a percentage of their household income) than they were 30 years ago - and the distribution of the burden. Does anyone if there is a similar study for Portugal?

Tuesday 4 December 2012

This is shock for me

Brasil is only Portugal's 11th export market! This doesn't make any sense, considering the size of the country, Portuguese heritage and cultural similarities.

Sunday 2 December 2012

Time article on PIMCO...

... was especially interesting. Most of all, because it is very clear on the connection between economic growth and bonds performance. And, for all the cowboys out there that like to speculate, understanding this is actually the only way to enjoy strong, sustainable return on investment in these titles.

Monday 26 November 2012

A good example


I don't trust public companies. Why? Read this article and you will understand a couple of my reasons. A very good example of lack of customer and consumer focus. Shameful!

Saturday 24 November 2012

Science4You

Science4You expansion fills me with joy! Because it is a Portuguese company that produces interesting, educative toys - how not to love it?

Good luck guys! Really!

http://forum.geocaching-pt.net/viewtopic.php?t=9556

Wednesday 21 November 2012

Clear messages from the IMF to Portugal

- Portugal needs to fight tax evasion - more taxes will be counterproductive, and the focus should now be in ensuring everybody that should be paying taxes is actually doing so.

- We need to cut public expense, focusing on return on investment (results / service versus money that is poured into public administration). In a couple of words, we need to get better service / results with less money (which is possible, given the extremely high level of bureaucracy and corruption of the Portuguese administration).

- We need to simplify the Labor market, turning it more flexible.

And, though I think some of them will be pretty painful, I agree with all of them - I actually think only the ones that don't understand (or don't want to understand because of their own agenda) will be able to deny the need to ensure these 3 big actions are taken.

I would just add my usual point. We also need to come up with a growth strategy - where and how will we grow, so we can start aligning resources behind those growth areas.

Friday 9 November 2012

One of the things I really can't understand is...

... IMF's lack of alignment between speech and action. Lagarde has been saying (and I agree with that statement) that we should be cutting on unnecessary spending while driving strategic growth (2 things that we are still to do in Portugal), but then the policy it is following in Portugal is very different (to raise taxes in income). We should be shifting the focus from income tax raising (that will impact savings and internal consumption) to Public Administration simplification (we need to do a lot more on this), solve public companies structural inoperance (namely in the transports sector) and understand our growth model for the next 20 years. If we don't do this, the (needed) austerity policy will crumble soon.

http://economia.publico.pt/Noticia/fmi-alerta-que-austeridade-pode-tornarse-socialmente-insustentavel--1571717

Monday 5 November 2012

French competitiveness

The loss of France's competitiveness, burden with very high labor costs, is not new. It has been sensed and felt many times, as we see industrial output going down, amidst regular (and terribly disturbing strikes). It is not a Hollande problem (nor even Sarkozy's). But I don't think that France should wait long before addressing it - ideally not through a financial shock, but through a succession of well thought and planned actions. Shocks seldom produce the desired effects, and are incredibly efficient at disarraying personal feelings, lead to major strikes and generate negative ripples throughout the economy. Better start right now through immediate action on a 3 to 5 year journey than to leave it all to a sudden 2015 harsh move - my take.



Sunday 4 November 2012

"Get a MBA, don't be a MBA"

I have a MBA from one of the best Business Schools in Europe and the world (a top-ten one, according to FT). I am very proud of getting it, believe me, as it was not easy - I paid for it myself (with a Portuguese salary) , and took it part time, while travelling the world. I really think this was a very good accomplishment, something to be proud of. But that's it - it doesn't define who I am, it is just more information and experience I get in this world. And I really feel aligned with this article (from which I stole the title for this post), from Hunter Walk - http://www.linkedin.com/today/post/article/20121104000733-7298-it-s-fine-to-get-an-mba-but-don-t-be-an-mba . 

Friday 2 November 2012

Stiglitz has been saying it for a while...

... and so have I - there can't be a way out to the current euro crisis without a clear growth strategy. Yes, cut unproductive expenses, but don't forget this part!

Medical and bio research set back after Sandy

I think this is just highlighting what I was saying in my previous post. The destruction we are seeing now in the US East Cost might be only part of it - the implications, set backs and costs it implies might be as severe, and might actually hinder New York position in the global economy. I hope not (I really love the city and its pace), but it really highlights how environmental change might hinder metro areas competitiveness.



Wednesday 31 October 2012

How severe was Sandy?

Looking at the utter destruction across Jersey shore and Manhattan that is now going on TV, one can only wonder how severely affected were New York / New Jersey harbors. These are extremely important harbors for US, the East Cost and the lifeline of New York metropolitan area. The costs of this storm might not be only the clean up and the recovery of infrastructure. It might be about momentum as well. How deep were and will be the cuts to New York economy? We will see...

Tuesday 30 October 2012

Please, tell me!

Why does Portugal need to wait another year for cutting €4.000 million to public expenses? They are one of the 2 main reasons for the Portuguese deficit (the other one is lack of global competitiveness). Why don't we start putting forth those measures immediately (I have been saying the same thing since 2010, so...)  instead of raising taxes so much and killing an economy? We should be decreasing the terrible weight of public sector  in the economy (around 46%), not the opposite (as will happen next year, through reduction of private consumption and close to 0 private investment).

If anyone has a decent answer, please, tell me!



Monday 15 October 2012

Are Portuguese only complaining about the economy?

I don't think so. They are also widely complaining about corruption.

The truth is Portuguese feel corruption crippled their economy and takes a large part of the blame of the current economic situation. More than that, I guess most Portuguese aren't seeing significant work is being done in this area - actually, the fact the Governmen is failing to deal with the corruption charges to some of its  members only adds to that feeling.

The huge number of redundant highways (with very heavy contracts behind them), the shady connections to private universities, the number of public works done by municipalities without any reasonable benefit (vs the cost), the planning for high-velocity trains and airports, the schemes with European funds that were diverted from meaningful investment, the unreasonable benefits for public leaders (members of parliament, managers of public foundations without any meaningful work done, sub-secretaries of state and public consultants with no curriculum but being part of one of the major parties)... and the list goes on and one... I feel Portuguese are really sick of this - and it is at the root of their protests.

Corruption is a must tackle in this period of turbulence!

Good news for the Portuguese language

When a reference newspaper, like the New York Times, announces plans to establish a Portuguese language edition (focused on Brazilian readers), that can only be considered good news! And a sign of the growing importance of Brazilian economy in the world.

Friday 12 October 2012

Nobel Peace Prize 2012 - the European Union

It totally deserves it! For my generation, it is impossible to think of war in Western Europe. Still, that was the bread and butter of the continent for endless centuries - until 1945, a full generation would not pass without having lived through a war. The European Union (and NATO as well, actually) is the main responsible for that achievement. The European Union gave us prosperity, but, most of all, it gave us peace.

And the time is right for such a recognition. Because many might doubt its importance, in the midst of all the turbulence that goes around it. As so, let me also laud the incredible sense of opportunity of awarding such a prize right now - we, Europeans, should remember that we all live together in peace because of UEs work. We should remember its importance, even when it (and we) face huge challenges now and ahead. Let's work to ensure we rise to them!


Thursday 11 October 2012

Major disappointment

A terrible increase in taxes to fund an unproductive public system, that will only deepen recession and escalate a vicious cycle nobody believes in. Neither do I. This is the opposite of what we should be doing. It only shows that politicians are terrible economists. And that in Portugal, Politics can only attract mediocre economists.

Supporting (and challenging) João Salgueiro's words

Public administration should be streamlined - so, simplified and implying headcount reduction (which would lead to less burocracy). But, and full supporting João Salgueiro there, we need to do these while we put forward a growth strategy based on productive investment - which would allow to reduce unemployment (that would rise initially due to public administration layoffs) - and to provide the conditions for that. The only way to control deficit is to be more productive while controlling unnecessary spending. We need to raise GDP while spending less. But we need to walk the talk - and we are still far away to understand that we need both streams to be successful.

Tuesday 9 October 2012

Austerity multipliers failing

According to the IMF, each "austerity euro" is having an impact of €0.9 to €1.7 in the economy - versus the €0.5 initial estimated. This is actually meaning a deeper recession than initially forecasted, generating further public spending deficits.

I am not a big supporter of some IMF measures - they actually have a very long story of wrong predictions and policies. But, this time, I think IMF might only have been naif. Because the fact is that it was probably predicting that Governments would "austerize" spending fats - while, actually, as many of them lack the political ability and courage to do it, they are mainly raising taxes (which has a stronger impact on consumption and hence on GDP). As so, I don't think that it was only a bad prediction from the IMF - I think most of the impact comes from the fact that Governments are implementing the wrong measures.




That would be good news

Portuguese economy has 2 problems: a public spending one (the famous public deficit) and an economic one (lack of productivity and competitiveness). Attacking the public deficit by not tackling on expenses and just raising taxes doesn't solve the first problem and only deepens the second one. That is why I am against the current solution of raising income taxes (it will kill our economy) and I am hopeful on the news that the Finance Minister will try to reduce that increase and shift correction to the spending side of the equation. I will be looking forward to this.

Thursday 4 October 2012

It won't work

The worst point on the "enormous tax increase" in Portugal is that nobody believes it will work. The contraction on spending will be too high and we will only be supporting noneffective public administration spending - it actually is a very communist scenario, and we all know how well that worked...  The only solution for the Portuguese problem is to attack the problem at its root (strongly cutting public daily spending) and to generate and follow a growth strategy. That is not being done. And that is why Portugal will fail. Sadly true.




Sunday 30 September 2012

Simplifying

Simplification of the Portuguese "county" map is aimed at reducing complexity (duh!), improving service to taxpayers, while reducing public expenses. The last time this was done was 200 years ago - so, yes, it is needed, and yes, it took too long. The challenge though is to balance this with the need to keep people in inland Portugal, where the low number of inhabitants, rugged landscape and low education levels might hamper service improvement efforts. But, let's wait and see!

Friday 28 September 2012

What's the tax limit a society wants?

So, how far should society provide services to tax payers? But also, a strong push for efficiency - if society demands inputs put it is not ready to increase its tax burdens, where will it cut or how will it be more efficient? An interesting debate - and not, by any chance, an academic one. It is a real and very present one, especially in Western societies.

Monday 24 September 2012

2 words on the changes in the Social Contribution rate in Portugal

I am for the decrease on the Social Contribution rate (TSU) paid by the companies in Portugal. But I am against that decrease being funded by an increase on taxes on tax-payers. It needs to be funded through public expenses cuts. It is as simple as so.

Sunday 23 September 2012

Exploiting the Prophet

This is the name of a great article in The NY Times, presenting a balanced picture on what all the mayhem that is going in the Muslim World, because of a "movie" that insults Mohammad. Believe me, it is worth reading it. 

Putting the budget back on voters hands

Participating budgets (sorry, I am sure there is a better name for this) are on a rise in Portuguese cities, putting back a (small) part of those cities budgets on the hands of the voters. Though the amount is relativelly small (you can see it in the Cascais example I am linking this post to), it gives an empowering sensation to tax payers - and the possibility to head start projects that they feel important for their areas. Now... don't forget to take part on them!

Saturday 22 September 2012

Next move

It really is good news that the Government has rejected the 7% plus rise on income taxes. Now, the next question is: what will it do to further finance the public deficit - I hope that it is a serious effort on the area of state expenses reduction, and I pray that doesn't need to be as violent as I usually say. But it needs to sustainably reduce the gap on state income vs expenses, while helping to relaunch the economy. Which is not an easy move - to understate the challenge...

Thursday 20 September 2012

Cut Public Expense

It is really the only way forward. The current public structure (including state-owned companies) is clearly overburdening the economy - not only with taxes, but also with bureacracy and inefficiency. Portuguese tax payers (and economy) are clearly choking due to this heavy, out-dated machine. Cutting it strongly (including laying-off several dozens of thousands of workers) is unavoidable (as well as tackle down corruption). We need this to low taxes and to drive economic growth.

Summing it up: More taxes are not the solution, simplification of public administration is.

Science fiction

According to Government projections, the announced measures that imply a 7% tax hike on individual income will compound only to a -1% GDP decrease (sorry for the double statement, just to make everything clearer), well below the current -3.2% in 2012. I am sorry for the blunt statement, but that seems like science fiction. Nobody can look at those predictions and consider them real.

But this is not a joke - it is a very serious matter. Because, truth is, a number of projections (tax returns, employment,...) rely on this figure. Which means that by not achieving it, the sovereign budget will miss its figures again. And then need a sharp readjustment - that will be exactly like this and send the economy tumbling even deeper into a negative spiral.

Why don't we cut unproductive spending in Public Administration instead? We know we will have to do it somewhere down the road, we know it will take time to succeed and we know it is the right measure. So... why don't we do it?

Tuesday 18 September 2012

Yes, Portugal lacks strategy

Let me fully agree and mirror Filipe de Botton's opinion - Portugal is nowadays a country dedicated to public finance and budgeting, without a growth strategy or agenda. I already said it several times, but let me stress it. Budgeting is only part of the problem - actually, I think that budgeting is just a surface issue. At its root, there is the massive uncompetitiveness of Portugal's economy. Growth would kick start employment, tax collection, internal and external economy. Growth would boost our GDP, dilluting deficit and debt. We need growth. And for that, we need a long-term strategy.

Monday 17 September 2012

Fully agree with Barroso

As you can see from my posts over the last few years, I think an European Federation is unavaiodable, to ensure financial discipline, an aligned growth strategy and more relevant political presence in the world. In today's world, you need scale - and a 25-plus set of small countries (each of them with less than 100million inhabitants) simply doesn't work. Those ways of working belong to the past...

Austerity and reforms doesn't mean huge tax increases

It means expenses cut and Public Administration reform. It means State intervention simplification. Laying off 50.000 public servants - and not delaying that, which is unavoidable. Exactly the opposite of what is happening.

http://economia.publico.pt/Noticia/merkel-defende-continuacao-da-austeridade-em-portugal-mesmo-com-recessao-1563406

Peaceful demonstrations

Let me congratulate the fact that 1 million Portuguese (around 10% of the Portuguese population) demonstrated peacefully on the streets of all major Portugueses cities on Saturday. The fact there were no major incidents (just 3 persons arrested for minor disturbance) is an obvious compliment to the Portuguese people itself.

Friday 14 September 2012

Tomorrow's demonstrations in Portugal


We all hope they are big enough for the Portuguese Government to understand it is taking the wrong path, by choosing tax increases instead of unproductive costs cutting. And we all hope they don't turn violent.

http://www.publico.pt/Economia/manifestacoes-antitroika-amanha-em-mais-30-cidades-em-portugal-1563045

Thursday 13 September 2012

It is exactly the other way around

The measures that were now taken by the Portuguese Government don't help to economic (and financial) recovery - they will actually choke the Portuguese economy. Instead of taking the path of cutting unproductive Public Expense, the Portuguese Government chose to increase taxes and take money out of the economy to fund the State - anyone that has actually watched the fall of the Soviet Union knows that is simply the wrong policy. It kills the market and the economy. 

Still, it is important to carefully go through Miguel Macedo's words. He is subtly trying to drive the thoughts away from the violent attack to the Economy, saying that this is the only choice to recover access to international markets. He is deliberately forgetting that before this, the Government should cut on the number of public servants, public companies spending and bureacratic costs - that is their mandate.

Want to read a good interview from a respected economist and politician?

Read Manuela Ferreira Leite. I always told that she should have won the elections vs Socrates - her programm and true grit would preempt most of the austerity measures we are now having, by imposing softer measures of them when the time was right.

Wednesday 12 September 2012

How to kill an economy with...

... an absurd tax policy.

The announced severe hike on tax rates announced by the Portuguese Government jeopardize any possibility of economic recovery. By taking the path of taking more money out of the economy through taxes (instead of actually cutting down on unproductive expenses), the Portuguese Government is actually increasing its blueprint on the Portuguese Economy, killing it. Any prospect of economical recovery has now been washed out by an irresponsible choking of private income and Demand.

Portuguese people have bravely endured the austerity measures, and were (and are) ready for more. But, I really doubt they will passively let their economy be killed.

http://static.publico.pt/homepage/infografia/economia/TabelaIRSset2012/

Tuesday 11 September 2012

Clarity and accountability

He (a member of Iceland's Central Bank) is right. And that is a clear difference between Portugal and Iceland - Portuguese accountability (in every dimension) is quite low.

http://economico.sapo.pt/noticias/islandia-defende-investigacao-ao-governo-portugues_117513.html

Sunday 9 September 2012

It is the Economy, stupid!

So, let me explain it:

Tax rate increase => Less Consumption => Less Tax income

On top of that

Tax rate increase => Less Consumption => Higher unemployment => Less Consumption and Higher Social Security expenses

Ah! Let me also say that:

Tax rate increase => Less Consumption => Lower Investment => Higher unemployment and low technology renovation of business tissue.

Again, I make myself available to give free lessons on Economics to all the Portuguese Government members. Believe me, it has a positive return on investment for me...

Saturday 8 September 2012

Elasticities

For budget cuts and tax increases to work, they depend on a key concept to work - elasticity. The proportion of the effect of those measures in Consumption / Demand of goods and services in the economy. And, though the first signs were actually encouraging, it seems Consumption elasticity on the austerity measures taken by Portugal has now failed us, leading to weaker tax income for the State. But the point is that a tax increase like the one that has just been announced will only depress it further. It is the wrong measure. Government has not followed my advise of further cuts in unproductive expenses - and we will all pay for that.

Thursday 6 September 2012

"If I look behind, I am lost"

This sentence, often repeated by Daenerys Targaryen (the character from "Game of thrones"), is probably the perfect depiction of ECB's recent announcement that it will be buying euro country's sovereign debt in the market, in order to keep interest rates under control. Though the benefits are clear (it will also allow tighter control over who owns that debt), it escalates the risk of impact in Europe if things go wrong. But, what short term alternative is there, if the efforts for political and economical consolidation in the Eurozone have been so slow?

Saturday 1 September 2012

Are we hitting a break point?

I believe we might. Portuguese population has, until now, showed its legendary resiliency in bearing with the austerity that has been asked - to recover not only public balances, but also economical external ones. But, lets face it, the news and suspections on forgery of documents and corruption by some Government members (that have still not resigned), the (still) too high-level of spending for flaw State services and the distance to a balanced budget (that is pushing down the news that there might be a new surge on taxes) might  push Portuguese society to a break point - and after that, Portuguese may show their fury vs a corrupt politic system. I agree with Adriano Moreira.

Friday 31 August 2012

One of the most idious mistakes...

... by the previous Portuguese Government was the change on T-bills baypack rules to ensure a higher return to the State. By doing that, they prompted small investors fear from those financial tools, generating a "run away" movement and little confidence on future investments in it.Bravo...

Monday 30 July 2012

3 things europe needs to do

- cut on unproductive spending (low roi public investment, administrative burocracy,...)

- devalue our currency (europe has lost competitiveness)

- think and put on working an european strategy for sustainable growth (and integrate countries strategy in it)


- enviado de dispositivo móvel.

Saturday 28 July 2012

The problem in europe...

... Is not exclusively on the costs dimension. I am not sure if everybody realises it, but a major chunk of the problem is on competitiveness. And, if a couple of years ago we could afford to tackle those issues separately, now, we need to solve them at the same time. We are running out of time. Because the truth is, the world has simply changed, and it won't wait for us.


- enviado de dispositivo móvel.

Thursday 5 July 2012

What are the maths?

Over the last few days, in Portugal, a number of dissonant opinions have been heard on the ability of the country to actually meet the deficit targets for this year - basically, it seems that at the heart of the question is if we need 1, 2 or 0 additional years to meet the targets. That's the wrong perspective to look at this issue - actually, at any issue! Politicians seem to be venting out these figures, without any real calculations to support them - there is no discussion based on current situation and evolution of expenses and income for the next months! All the opinions that have been shared (for both Portuguese and European responsibles) are void words, without no rationals behind them! I must say I am utterly shocked! 




Wednesday 4 July 2012

The reforms that Portugal is still waiting for


The Portuguese Government rose to power a little more than a year ago. And with a clear mission ahead – to kick start and deploy a number of urgent and much needed political and economic reforms, the only way to actually step out of the current hazardous situation. A huge task – and one that takes long. Still, one year into the term, results are disappointing:

-                  - Public Administration reform – still too departments, many of them with blurred competences – still, a number of them have been identified and extinguished, so, that is a start. But still, there isn’t a clear individual performance system in place and no clear incentive to excel while working for the State; there are still too many people working directly for the State. Public Administration is still overburdening the economic with inefficient spend and bureaucracy

-           - Judicial reform – part of it is underway, with the new judicial map. But a simplification of judicial procedures is still to be put in place, resulting in too much bureaucracy, too much time for sentences to be applied and an impunity sentiment.

-                  -Corruption – nothing is being done on this area and there are disturbing signs that the current Government is actually following the same trend as previous ones

-            - Too much state in the economy – encouraging signs with  the privatization of several companies already listed, but 2 huge problems remain: 1) a number of too important and big companies still don’t have a clear profitability model that allows for their privatization and are overburdening the State deficit (namely transportation and hospitals); 2) obscure municipal companies still exist, without any clear purpose as to provide jobs for “party boys”

-                 - No clear economic strategy – that would integrate a number of other areas (namely education) and would drive hard choices, economy and employment.


When these areas are handled, then I can start talking about others – as, believe me, there is much to be done in terms of State efficiency in Portugal. But, by now, whoever is able to actually handle the 5 reforms I have listed above, will have my vote and confidence. I believe they are the areas we should now be focusing on.

Tuesday 3 July 2012

Accountability

An internal audit conducted by the Portuguese Finance authorities unveiled that a number of high-ranked State managers didn't follow instructions, and didn't cut their own salaries, as mandated by the austerity program (that they are then actually enforcing). Finding this out is important, but lacks clear measures. It's not stated what will be done now - will those managers have to repay the State the abused funds, will they be fired? It is important to state the corrective and punitive measures and a specific time-frame from them - as it would happen in any private sector company. 

Monday 2 July 2012

Education alignment with the marketplace

When East Germany fell, all of a sudden, hundreds of thousands (maybe millions) of Germans saw themselves without a job. Not the workers in the factories, but upper middle class. A shock! What happened there? The fact is that many of those persons had strong college studies - but in areas that didn't have a connection to the new marketplace. They were High German Professors, Philosophers, Communist Doctrine Historians,... that were employed by the State (who paid for their education) - but once the State fell down and stopped demanding their work, the new real market economy didn't need them.

Why am I pulling this over? Because we see a similar movement nowadays in Europe. Maybe not purely motivated by ideology, but still similar. States are funding or pushing forward a number of college courses, that the market is not absorbing. Look at the millions of young Europeans, searching for a job with a college degree - being it lawyer, history, sociology,... The marketplace, the companies don't need them all. The State doesn't need them all. That is the truth! One of the things that is needed is to clearly stop all this huge number of people - to stop them to start studying in these areas. And to do it not by barring someone from attending colleges but by stoping funding some courses and providing information on employment rates of the courses. And then, to actually better inform of alternative education or courses. Some of them college oriented (believe me, there is a huge demand for systems and computing engineers and that will only grow in the near future) others to professional courses.

Regulation of rating agencies is important...

... to ensure market transparency and ensure arbitrage. Especially when the market is dominated by agencies that have close shareholders ties between them. 

Tuesday 26 June 2012

Consumption is taking a hit!

It was not unexpected. The level of tax increases, salary freezes, increasing unemployment rates, lower than anticipated exports growth - that generates a Consumption slowdown. Now, lets be completely frontal and say that the austerity is necessary, because it is. But, lets also face it - we are not doing enough on the State Spending side. We should refrain from increasing taxes now and focus on State efficiency - put the power back on private hands and cut down on State fats. Do you think we can do it? 

Tuesday 12 June 2012

Strikes in Portuguese mass transit companies

I am sorry, but just let me burst out for a couple of seconds. Why are Portuguese people paying taxes to fund a company that is always on strike? Isn't there a Board to actually take a position on this and solve it? Come on! If CP is not working as it should, should we keep on funding it? Shouldn't we just let it go bankrupt? There probably is a better use to the money that is being spent in CP than financing trains that don't work because they are on strike!

Monday 11 June 2012

Lender of last resort

When the banking system is not able to sustain itself per se, than, the State should intervene, lending money at more favourable rates than the market, to ensure the economy will not colapse - that is what the ECB and the European Union just did to the Spanish banking system. And that is good news, given the present situation.


Saturday 9 June 2012

The big question on Spain now is

Will the Spanish Government limit the bailout to the banks needs or will it also need money to finance the autonomic regions, like Catalunya and Valencia? This will have a direct impact in the consolidation measures that will be needed and thus on the shock the economy will suffer...


Monday 4 June 2012

Latest troika feedback on Portuguese evolution

It is generally a good one - reforms are on the right track, budget consolidation seems to be moving strong and sovereign budget targets though tough are achievable and higher than expected growth is possible. Which, when you look at how tough and difficult is the program, is actually good news. And it provides an intermediate feedback to a medium term goal - this program will only produce real effects 3 years after being launched, so, expect some troubled times still ahead.

But there is also a very fair warning - unemployment levels are too high. Which means (opposite what many people are saying) that the job market needs to become more flexible. And that active policies for employment (and stimulate growth on the strategic areas of the economy) need to be put in place - the only problem is that we are still to identify those areas... 

Sunday 3 June 2012

Europe needs further integration


Europe needs to strengthen the robustness of its model - and that means to actually reinforce integration. To build more muscle and minimise internal assimetries (that will always exist), but also to build a more solid growth strategy and enhance each country's sustainable advantages. So, I think a step towards deeper sovereign budget integration is a good one, but I don't think that is enough - Europe's problem is also growth, and we need to address it urgently.


Friday 1 June 2012

Statute of limitations and corruption

Given the fact that corruption is a serious crime that actually has a negative impact in the whole people of a country (specially when its widespread, as we see in countries like Portugal, Spain and Italy), does it make sense that statute of limitations apply to it? So, does it make sense (given the high negative impact and the damage it inflicts to public finance, country economy, Rule of Law and morals) that these crimes are not punishable after a specific amount of time? My opinion is "no" - these crimes should always be punishable.

That is my view point as well

I agree with Jorge Sampaio (former Portugal's President and current UN's High Representative for the Alliance of Civilizations), on that the current degradation of economical situation in Europe might have very dangerous consequences at social and political level on the short and medium term. Europe has very high standards in terms of protection of individual rights, tolerance, social support and the fact we are facing tensions in terms of economical development and on how to finance our social models might have dire consequences. Let's make it change for the best!


Thursday 31 May 2012

Draghi is right

The European Union needs to clarify its vision of the Euro:

- what will be its role and strong points

- what will be the monetary and European tax policies behind it

- what will be the governance model behind it

- what will be the shape of the Eurozone and the role of each of its states

Without this, the Euro will be doomed to fail - because nobody will understand what is it for...

http://economia.publico.pt/Noticia/presidente-do-bce-pede-aos-responsaveis-europeus-clarificacao-do-futuro-do-euro-1548328

Tuesday 22 May 2012

Transport Tycoon?


In Portugal, the transport sector is dominated by the State, who owns the only infrastructure railroad company, the only railroad transport company, the major bus companies operating in the major cities, the metro systems, the boat transport in Lisbon, the major airline,… Except for TAP (the airline) that has been worked on to be privatised and that is efficient (far from a good example, but a fair one, never-the-less), all of them are crippled by strategic indefinition, lack of sustainable business models, being a pawn in political games, politically based management teams, unproductive unions, and the list goes on and on… This perfect storm of indefinition has actually driven these companies to be numerous and incredibly inefficient, sinking them into heavy debt – that has to be supported by the State (aka the taxpayers, aka all of us). It is thus urgent for the State to actually start the redefinition of its presence in the transport sector, merging companies, terminating others, streamlining its structures, putting professional and capable managers running them, liberalising prices. And, actually, understanding what role it wants to play in the transport area – which for me, seems quite clear: the State should not own any operator, but should consider staying in the infrastructure area. Those are my 2 cents on the State as a transport tycoon in Portugal.


A quick line on Facebook shares

Facebook lost around 11% of its value on a single day after it went public. This is probably reflecting concerns on monetization of its consumer base - a long anticipated problem (that actually should only raise eyebrows on why to additional shares at the high-end of the price range). And a problem that is still not exclusive of Facebook - most of the big digital and social companies are still struggling to ensure revenues that match its consumer base (we are talking about names as Twitter, Pinterest,...). That is why I always talked about a possible bubble looming in these area of trade. Warren Buffett once said that you shouldn't invest in a company with a business model that you don't understand how to it is making money - a very good warning that if nobody knows how the company is making money, then, probably, share price gains are being made through speculation. Which is not good...


It will be interesting to follow Facebook over the next few months and understand market trust on the company. But let me disclose it to you - yes, there is a share price that will make me buy Facebook shares... (I will just not tell you which).




Monday 21 May 2012

8th

Portugal is the 8th European country in terms of tax burden - and that is having dire consequences in terms of choking economic growth. The solution can only be one - decrease the size of the State and its weight in the economy. We need that to ensure future growth - but it is a painful and long process...


Thursday 17 May 2012

You know I agree with him

Europe needs a growth strategy, as Hollande and Moscovici are saying. And I agree with that. But that shouldn't be understood as a way to invest in lax ROI projects. Budget rationality should still be at the core of investment.


http://economia.publico.pt/Noticia/franca-nao-ratifica-o-tratado-orcamental-sem-medidas-de-crescimento-1546464

Wednesday 16 May 2012

White Elephants in Spain - a reminder

This week's Time is highlighting Spain's white elephants - the cheer number of expensive cultural centers, airports, high-speed rail connections... I have already talked about them here  http://my2centsontheworld.blogspot.co.uk/2011/06/spanish-elephants.html . But I think it is useful to remind them, as symbols of what happens when there isn't a strong Governance spending process - most of them were actually built and promoted by autonomic regions budgets, based on lose assumptions and with regional pride and voters as their main aim. And what happens when projects don't have a Return On Investments menthality at their core, supported by sound calculations and educated assumptions. It is a common mistake - but with dire consequences. And in 5 years time, we should still remember this lesson.

Tuesday 15 May 2012

A benefit of global teams

Working with people from all over the world, all seated at the the same table, holds an amazing benefit - we can understand how different countries, cultures, people feel and live the same situations. Listening a Greek and a German talking about the euro crisis, understand the Indian - Pakistani riff is not that important for the people, share the hardships of non-European nationals to travel to so many countries. It is an amazing and eye-opening experience!

Friday 4 May 2012

Henrique de Castro's interview

It seems I am in a positive mood. Again, I identify with many of the points Henrique de Castro (one of Google's Presidents) highlighted. Namely the need to rethink the return Portugal offers investitors, the need to refocus university work towards output and importance of private investment and initiative and of free-will. It is a good interview - very pragmatic.


Thursday 3 May 2012

Yes, I agree with Mario Draghi

As you know, I believe Europe needs to reduce non-productive expenses, while supporting higher competition and consumer power and defining new productivity and growth strategies. Let's do it?


Wednesday 25 April 2012

When I hear people talking about growth in Portugal...

... I realise how deeply rooted is one of the biggest paradigms of the Portuguese economy - that growth is only possible through public investment. This is a deep lie - and a dangerous one. Due to lack of adequate internal and external pressure, usually, the State is actually incredibly inefficient in its investment - and Portugal is actually a ver good example of it.


The main role of the State in an economy should be to provide the adequate framework in terms of laws that allow for a sustainable development of a country's economy, while protecting the best interests of its people. It should additionally incentivise and protect foreign trade, invest in major infra-structures that provide additional necessary support (and here, I include schools, public hospitals, public health insurances, highways and airports with the support of the private sector,...) and should define and implement (through taxes and limited subsidies) an economic and welfare strategy (I am only refering to the economic role of state, let's not include here Justice, Health, Education, Security and Safety, Culture,...). Additional investments are proven to be inefficiently sustained by an excess of taxes.


As so, it is absolutely crutial to actually break the excessive role of the State in the Portuguese economy (where it is actually taking up private space and eating an unproportional amount of resources) and let the private sector generate more efficient growth to its share and stakeholders. And yes, I am a proud liberal - and a very concerned citizen.

Tuesday 24 April 2012

Labour cost per hour is half of the Eurozone

Yes, this is true. But, the fact is that this is a wrong measure. The relevant statistic is not this one, but the one where the labour cost is compared per unit of output - a good indicator of productivity. And there, believe me, the picture is pretty grim to Portugal and is part of the structural problems of the Portuguese economy.


That's what we are talking when we say...

... that Portugal needs to cut down on public spending - a massive cut on overheads. The measures that are on the table on what concerns public human resources aim at:


- close the gap vs human resources at private companies;
- increase efficiency and productivity of current talent;
- decrease the costs of firing on the public sector.


Some calculations point out that Portugal needs a public overhead reduction between 30.000 and 50.000 persons, to balance productivity, cost efficiency and help on deficit mitigation. Still, I think a key point is missing - the need to have a clear set program for talent evaluation, based on performance and behaviours. Contrary to many, I believe the vast majority of public sector is productive (or potentially productive in some cases), but a clear evaluation process is needed to ensure less productive talent is spotted and worked on (either by enhancing its productivity or by firing it) and ensure competitiveness and results from everyone.


But those measures are all needed. There are many unproductive spends in the Portuguese Government budget - and this is one of them. We need to have them all addressed, as Portugal can't afford to carry these extra-loads any more, with the consequences it has on lack of service, public spending and tax overloading.


http://economia.publico.pt/Noticia/propostas-do-governo-poem-em-causa-liberdade-no-local-de-trabalho-alerta-fesap-1543349

Monday 23 April 2012

Not entering the euro...

... would never be a solution. The real cause for the crisis (the lack of competitiveness of the economy) would still be there, but would be hidden behind currency devaluations. I really don't agree with Cadilhe on this dimension. The euro was (and is) a major opportunity for Portugal, but we need to address the lack of productivity and strategy of our economy - then, we dream of growth.


Friday 20 April 2012

Just don't increase taxes any further...

... to face the decrease in tax revenue. The multiplier is simply not holding up to expectations...


http://economia.publico.pt/Noticia/receitas-fiscais-caem-mais-do-que-o-previsto-e-agravam-contas-publicas-1542924

Terminating contracts?


Should European Banks and investors terminate contracts with major US rating agencies, like Denmark is doing? Would that have a positive or a negative impact in the European sovereign debt situation?

Wednesday 18 April 2012

Austerity and strategy

Let's be very clear. Economically, Portugal needs two things:

- austerity, to stop public and private debt progression, especially on unproductive spending;

- a clear micro-economic strategy, that identifies and highlights the areas of growth and thus the key areas of investment.

This is key! We need to stop investing in the low or no return investments, and have a sustainable growth agenda, exploring our stronger key competitive advantages. We need to do this at the same time - that is the secret to move out of our current situation! We can't only do half of it...

Tuesday 17 April 2012

I keep saying there is a bubble in the tech market

Apple losing 9% of its market value overnight should not come as a surprise. The fact is that so many companies (like Apple and Facebook) are valued primarily on estimated future earnings heavily based on assumptions, that their stocks are proner to especulation. This is nowadays a major threat as, for many of those companies (not Apple, nor Google), there monetization models and profitability are still unclear - will they really make as much money as anticipated? In the words of Warren Buffet, you shouldn't make an investment if you don't understand how the company will money and thus how you will make money with it...

Competition is always good


That is my first comment when I see that Europe wants to set up a new ratings agency. And my second one is that has become crucial - to establish a new, European rating agency. That is credible and can actually break the almost monopoly of the big 3 American ones. Now, a few additional thoughts:

- Europe needs this agency to allow for a voice in the ratings world. But the agency needs to be credible. If Greece or Spain debt is actually not trustworthy, the European agency needs to be frontal and direct on that;

- This means that the capital structure of such a company needs to be closely evaluated. Now, I don't think that by taking in soverein capital this is more threatned than by having big banks one - as it happens with the big 3 American rating agencies;

- Last point - the 3 American agencies act like a block, because of close capital ties between their investors. Shouldn't this be looked in from a Competition Law and Equity markets stand point?

Wednesday 4 April 2012

A good sign


Today, Portugal issued 18 months Sovereign debt - the first time it did so since the start of 2011. It seems it was a very successful placement with interests decreasing 166bps vs beginning of 2011. Yes, the interests are still high for a 18m maturity (4.332%), but we must be happy for this - we were able to sell debt at a lower interest. It means investors are starting to trust Portugal's ability to pay its debts. And that is extremely positive.

Monday 2 April 2012

To the attention of European leaders

A 10.8% unemployment rate across Europe (with Spain soaring to 23.6%) is unacceptable. A high under-25 unemployment rate (again, Spain an example, with an incredible 50.5%) is unacceptable. High unemployment rates lead to recessions, revolutions and wars. Austerity without a growth plan associated just fuels it. European leaders, it is time to show real leadership, to clearly define where and how to invest, to generate high and positive Return On Investments and employment. Guys... honestly, I don't believe we have much time - we need to start doing this now.

Thursday 29 March 2012

Dilma is insisting again on the same point


To fully understand what BRICs are worried about, please, have a look at my short article from early February - http://www.my2centsontheworld.blogspot.co.uk/2012/03/on-real-appreciation.html .

Think positive VI


The Scientist (science research magazine) has just nominated Champalimaud Foundation in Portugal as the best place to work for post-graduates outside of the US! Congrats for the good work!

A quick note on strikes


Strikes are necessary in a democracy, and their importance should never be played down. I firmly believe in strikes as a last resort action from workers. Now, 2 very quick thoughts:

- I will never understand and actually tolerate picketers, who try to force their positions and opinions upon others. If some workers want to work and not be a part of the strike, for me, the action of picketers is a serious offense to freedom of speech.

- I don't like the sellfishness that unions are showing in many Southern European countries, fighting to keep some privileges to a restricted number of workers, while actually staving off youngsters from the labor market. It is striking to look at Spain and understand that with a 40% youth unemployment rate, unions are fighting against the possibility of firing unemproductive people to create job openings. It is very sad, in may opinion.

Sunday 25 March 2012

Rule of Law

The case of Portuguese SPE company participation in Angolan SML just highlights how important it is he Rule of Law on foreign investment. Without independent, trusty and fast courts, able to work and effectively decide on disputes, any investor risks being in very difficult situations caused by arbitrary rules of State or strong local interests. And it also highlights another reason why investment in Angola is extremely risky.

Tuesday 13 March 2012

Loosening it up a bit


The European decision to let Spain have a bit more of flexibility on its deficit consolidation in 2012 (giving up on a 4.4% target, to accept a 5.8% one) is a wise one and it may be showing European leadership is starting to understand the message that we can't only control the deficit by cutting selvatically on public spending - we need to wisely cut it, but maintain a growth outlook. Let's see what comes next on this...

Vatican statement on water


I am always very ready to criticise the Vatican when they actually take a stance I don't like. So, it is only fair that I highlight when they do somethig I appreciate. Though I don't fully agree with some of the things the Vatican is saying about water, I agree with the bottom line principle - water is more than a commodity, it has an intrinsec social value, and access to it should be guaranteed.

Monday 12 March 2012

Assertivity and productivity


One on one, the Portuguese situation. If you understand Portuguese, you really need to read this interview - it conveys some very good messages and imagens and what not to do.

Saturday 10 March 2012

90% of Portuguese savings is done by 20% of the families


Two quick words on this stat:

1) It shows there is a huge assimetry in the Portuguese population, in terms of earnings;

2) Savings are an engine for growth through bank investment. If a population is not saving enough, and benefiting consumption (especially of foreign products), it is effectively jeopardizing its future.

So, we need to address this, by playing on clear rules and remunerations and giving incentives to savings. We need to find out how.

Thursday 8 March 2012

This morning's taxi driver


I love talking with taxi drivers. In those 15 or 20 minutes, I have the opportunity to have a good talk with real, everyday people - to sense the pulse. This morning, I had a good character - worried with unemployment, with strong opinions on Greece and Europe, Portugal lover (of course) and Mourinho fan. And, amidst all the things he said, one thing keeps jumping to my mind - "Some years ago, Spain's youth unemployment at 45% would mean a war". And I think he is right - there is a bomb ready to blast in Southern Europe.

Monday 5 March 2012

Political accountability


A former Iceland Prime-Minister is facing Court today for negligence in the process that led to his country bankruptcy. A group of Members of the Parliament formalised the charge after the Parliament considered him as having significant responsibilities in the process. Thus, a special Court that is in place under the Constitution, to try former Government members, is now trying him. My friends, that is political accountability - can anyone imagine if something like this existed and worked in Portugal?

Sunday 4 March 2012

You can't copy only part of the example and expect the same level of results


That's my comment on Villas-Boas getting sacked by Chelsea. Villas-Boas joined the club under the nickname "Special 2" - a softer, nicer version of cult manager José Mourinho. But, the fact is that the harsh and controversial attitude of Mourinho is a design to make sure the whole team is reunited behind him, and the players know he will be there for them, whatever it happens. Villas-Boas failed to understand that, and to actually get players support. For me, this is a very clear example of a "you can't copy only part of the example and expect the same results" - managing teams (whether football or business) is complex, and everything is interrelated. You need to know to manage each piece as part of the whole, to get to your overall objective - not your small, partial ones.

Friday 2 March 2012

An Economist article worth reading

It is not a big analysis. But, for a quick summary of the Portuguese feeling nowadays, I think it is worth reading this Economist article - http://www.economist.com/node/21548977

On real appreciation


BRR (Brazilian Real) is on a valuation trend. Still, President Dilma is wrong in pointing the finger to the US and (especially) Europe alone. It is true that (mainly in the US) some measures were taken in the developed countries to protect their economies (and, in my view, actually, not enough, probably, at least in Europe). But we can't forget that a currency value is directly linked to productivity, and, as Brazilian economy gets modernized and Labor gets more qualified, productivity will go up and will tend to value the BRR. Dilma is trying to blame others on a movement that is just natural in economy.

Now, having siad that, if you base a country's economy on basic undifferentiated products, then, a currency valuation is bad news. And that is what Dilma fears - that by getting production more expensive through currency valuation, the commodities commerce that has been Brazil's engine source will eventually stop working as swiftly as it is. But Brazil economy is getting increasingly more competitive on other products as well, and its economy is swiftly moving towards value increase and not low cost. So, you know, BRR valuation willnot be easy to stop - and that might be good news to Brazilians, who will have an increased buying power. Let's see what happens in the next years...

You get what you give


The study saying that Germany gets back €1.25 per each €1 given to its EU partners, as part of the European Cohesion funds should not be a surprise. After all, they are generating Investment for economical modernization, and Germany is an expert on that matter, with a solid exporting industry.

Monday 27 February 2012

The Government deficit is a relative measure...


... to a country GDP. That means that, if you strongly cut Spending and raise Taxes too much, the Income contraction might actually put in a worst situation than before. That just another good reason for the need to cut inefficient Spending, but have strong and clear strategic bets to invest and fuel growth.

Tuesday 21 February 2012

That is why we need to improve our productivity


Spanish Central Bank Governor has said today that adjusting prices and wages to reflect productivity is the only way to recover competitiveness. He is right, and he is thinking about salary cuts, for those who didn't understand. In Portugal, and from what we have seen prior to 2011, that cut would probably need to be between 20 and 25% (or even 30%, gulp...). Without that, our economy will face real issues in going back to growth, adjusting in things like unemployment...

Now, I don't like salary cuts - I also depend on one, and I think there are millions of workers in Portugal that earn a lot less than I do, many of them going through very hard times. But I think it is important to look again at this problem - we need productivity to be competitive and get back to growth. We need to increase our productivity so that our competitiveness isn't coming from salary cuts. And we need to go after that productivity in any imaginable way. So, please, let's all start talking on how to kick-start it!

Thursday 16 February 2012

The US new upper class risk


In this post, I am refering to Charles Murray article on Times, that you can (and I advise you to) read in http://ideas.time.com/2012/02/07/the-new-upper-class-and-the-real-reason-we-dislike-them/ .

I have always looked in amazement to the US incredible capacity for social movement. It really is a fabulous asset for a society to be able to so effectively link success to merit. But, from what I understand from Charles' document, an enclosed elite is forming and it can jeopardize ability. It would be a shame and a direct threat to the US way of living if it starts being run by a group of people with limited feel and grip on its population, that can' really understand their needs and dreams and can't hear their voice in the heart.

Wednesday 15 February 2012

Savings reduction = bad news


The news that the Portuguese families are saving less due to the austerity measures that have been taken is bad news. This probably signals that, as Soros and Stiglitz are saying, the austerity measures have gone too far... The austerity measures should be aimed at reducing excessive spending and unproductive investment, but shouldn't impact savings - that are an important part of bank financing and thus of privat investment. A reduction of savings means a reduction of investment, growth and even public refinancing inside country boundaries. As so, this is actually very bad for the Portuguese economy - probably worst than any demonstration could sign.

Monday 13 February 2012

Ortography


I must say I am very sad with all the doubts that suddenly sprinkled around the latest Portuguese Ortographic Agreement (AOP). This agreement was designed to keep Portuguese as one language, widely spoken throughout the world, for the next 2 centuries. It was designed to strengthen cultural and economical ties between Portugal, Brazil, Angola, Mozambique, East-Timor, Cape Verde, São Tomé and Principe,... If we don't do nothing about it, it is known that languages will slip to differentiation, according to the place where they are spoken. If we want Portuguese to still be one language, that our grand-children can be understood after flying half a world away, we need to act - and that was the objective of AOP.

But then, there is also the economical link. Portuguese is nowadays one of the world's most important languages - mainly thanks to Brazil (the world's 8th economy) strength. The fact that we speak one common language, enables economical, business and personal mobility ties, making the Portuguese countries community stronger globally. AOP stands for that. And, always travelling around the world, and understanding the benefits of one Portuguese language, I stand for AOP as well.

Saturday 11 February 2012

Portuguese scientific articles


This is a very good sign. The number of Portuguese scientific articles being published has tripled in only a decade. In an increasingly competitive economy, where innovation, differentiation and flexibility are key (especially for a small country), this is an incredible of sign of economical potential. And when we look at the rising number of start-ups coming out of college in Portugal, I would say that the potential is quickly being transformed in something more real and tangible. Let's not choke this potential with a complex, burocrat and tax-overburding State.

Monday 6 February 2012

I have been saying this...


I hate to put it so bluntly - but I told so! Europe needs to grow! We need to stabilize our spending, but we also need to grow - and right now!

Friday 3 February 2012

Bharara

The news that Ney York prosecutors have been moving on inside trading is very good news. It is a strong step towards leaner, clearer, more agile and more competitive markets. And, in the end, it is good news to consumer. We should all support it and follow its example.

Thursday 2 February 2012

This time, I agree with Riley


I think there has been a tentative to blow the Portuguese situation out of its context in the last few days. Being in the UK this week, I could see the comments from some press and media, trying to find similarities between Portugal and Greece's situation - and implying that Portugal is on the verge of bankruptcy. That is simply not true.

Portugal is not in a good shape, but has been setting a number of strong and hard reforms, aimed at bringing competitiveness back to the economy. A few of them are changes in the labor market, judicial reforms that are starting, reduction on the drag of a high and uneffective public sector (like transportation,...) and reducing State participation in companies outside of its purpose. Of course, we (including myself) would always like to happen faster - but, for others, the ones who are most affected, it is too quick. We have to find a balance there, but, we are doing and implementing them in a 2 to 3 years period. Those changes will effectively change the Portuguese economy, towards a more agile, modern and entrepreneurial one.

The Portuguese banking system is under control. Of course it is still far from being perfect and we still might have a few issues - namely on BCP. But we shouldn't expect any major disaster coming from that area, one that goes beyond the level of help that is already in place for all european banks - actually, when we look at stress tests results, most Portuguese banks are in a better shape than Italians and French ones.

Despite the huge number of reforms and changes, the Portuguese people understands we need them. And, though it doesn't like the impact of those changes, it accepts them, as it knows it will pay in the near future. Portuguese are especially... resilient and tough, and are ready to pass tough times but still make it through. You can see that even in terms of political alignment, as the main parties, share common trends on the current situation (with, naturally, some discussion and different opinions on specific subjects). This is a huge difference vs Greece or even Italy's.

It is true that Portugal might need to request help in 2013 - and I think we shouldn't try to hide it. But, the fact, is the situation will be under control. Meaning we might need it to make sure we are able to pay our debts, but the economy will be in a better shape and, hopefully, starting to recover, the huge unbalanced situation we have in the public sector and in some towns will be addressed - we will be in good shape to controlling the deficit and to start making the economy grow again. I agree with Riley - even if Portugal might need further help from EU and FMI, default is not a likely situation. And you can quote me on that!

Monday 30 January 2012

Growth, we need it


Growth and budget discipline are 2 big parts of the solution to the present European crisis - why is it that most of the people try to put them in different parts of the table? Why is it that we are straightforward in not considering well-planned, positive return investment? Because, that is what investment should be - capable of generating sustainable positive return. And why is it that we are seeking macro-solutions to micro-economic problems? We should be discussing business competitiveness throughout the eurozone - not if Greece should have its independence curtailed!