- 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.
Monday 30 July 2012
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.
- 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.
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