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 26 June 2012
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!
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