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!
Monday, 30 January 2012
Wednesday, 25 January 2012
Think positive V
- 5 young Portuguese researchers have won Howard Hughes Medical Institute awards for their research in several medical fields. Portugal was actually the second country with most awards, just after China - and considering the size of the country that is quite an achievement. So, kudos to them and also to the foundations and institutions they work for - and the former Portuguese Science Minister, Mariano Gago. http://www.publico.pt/Ci%C3%AAncias/cinco-cientistas-portugueses-premiados-com-bolsa-norteamericana-1530398
- This week, Richard Branson (Virgin CEO and business superstar) praised again Portugal's campaign against drugs and the bold movement of considering its consumption a health and not a police problem. In Portugal, too many times, we forget how amazing the results were, strongly decreasing drug addiction problems. See Richard's December remarks on the subject on his blog http://www.virgin.com/richard-branson/blog/time-to-end-the-war-on-drugs .
- And last but not least, even Public Deficit was better last week than what was previously expected. Of course, maybe some means for this success might be debatable, but still, let's not forget how positive and important that figure still is (when compared to our 2010 deficit).
A quick glance on the Eurozone
CNN put together an interactive map that, if it doesn't tell all the story, is still quite good to have a glimpse at some of the major figures per country. But it fails to have a look at the Eurozone as a whole, which, in itself, is a bad sign...
Tuesday, 24 January 2012
Second help package?
Today's Wall Street Journal article saying that Portugal will need a second help package in 2013 seems... likely. The point is though Portugal is in better shape than Greece, it will still need it. The economy is contracting (not a surprise, given the severe adjustment in Spending), the necessary cuts in Public Administration were not done (thus, savings are still to be done, and further economy contraction should actually be expected in 2013) and the constant downgrades are escalating interest rates for the Portuguese debt, making it unfeasable to expect market financing. So, Portugal should be ready for a much needed help package being announced towards the end of the year - and, hoping everything goes ok, we will then be in a much better position and fitter than we are today (but, let's act and see...).
Monday, 23 January 2012
I want to see all State owned companies doing this
EPUL, the city owned company that is responsible for House Holding in Lisbon, has reverted its economical situation. From a €-3.8 million EBITDA to a €10.5million in 2 years. From a bankruptcy situation to a positive one. Reducing its bank Debt in 6%. And it has done so by doubling its Turnover (now at €66 millions), changing offices (from rented to already owned ones), reducing Board members compensations in 5% and shrinking its car park from 31 to 14 vehicles. A great achievement!
Now, we need to demand that all State owned companies do exactly this! Reduce its non-productive spending, cutting higher level compensations (a good example: only pay bonus when really owned - it doesn't make much sense if bonus are paid to a Board that didn't improve Cash Flow and Balance situation), increase revenues (but still looking on company social mission). We, as tax payers that are paying for these companies, demand it!
Sunday, 22 January 2012
A good picture off the streets of Portugal
This CNN article is 1 month old and I don't know how it elluded me. But it is a very nice, unbiased picture of the Portuguese situation. And, don't doubt it - Portugal will come through!
Saturday, 21 January 2012
Good news! But...
The news that the Portuguese deficit was cut by 50% in 2011 is very good news! It really is! But when we look at the figures, we see that a large part of that cut comes from an one-off Pensions Fund transfer and not enough was cut on Public Spending. That needs to be corrected in 2012!
http://economia.publico.pt/Noticia/defice-do-estado-caiu-quase-50-no-ano-passado-1530033
Thursday, 19 January 2012
Barbie and Ken in Iran
Does anybody knows if MacDonald's and Coke are in Iran? Do you know why is this question relevant?
According to a recent study (I am sorry, I really don't remember which one, but believe me, it is from a respectable institution), the US never started a war against a country that actually drinks Coke and eats MacDonald's! It is as simple as so! And it tells how strong cultural proximity is in terms of global politics - countries that are culturally closer are less prone to engage in wars against each other. Thus, the US cultural strength (MacDonald's, Coke, Hollywood, ...) is a strong war deterrent - and an influence to align other countries with US politics!
So, seeing Iran forcefully cutting symbols of US culture may not be a good sign for peace in the Middle East - and oil prices...
Tuesday, 17 January 2012
Falls short of what I expected
I was actually expecting that the Labour agreement for 2012, that was signed by the Government, one of the main Portuguese Unions and companies would actually address productivity issues. By focusing only on work extension (number of hours worked) and not quality of output (value added or value produced by unit of time), Portugal is actually not reinforcing its competitiveness. And that is a mistake!
Monday, 16 January 2012
Icy water
Friday's S&P decision to downgrade the credit rating of a number of European countries was a bucket of icy water for all the eurozone. The market was starting to throw positive signs, amidst the successfull debt issuances of several countries. But this decision is not a complete surprise - Europe is failing to be convincing on answering to eurozone's governance and future economical models and to get back to growth.
Wednesday, 11 January 2012
German Bonds
Tuesday, 10 January 2012
2012 – The year of stretching our resilience
The Portuguese Central Bank just published its latest estimate for 2012 – and it means a 3% recession, on the back of public spending cuts, austerity tax measures, lower internal demand and a decline on exports (driven by a global slow down). It is a grim forecast for the future of the Portuguese productive and commercial tissues – and, therefore, for all Portuguese. It will be tough, it will be messy at times, it will never be easy. One way or the other, Portugal needs to be able to actually cope with this very challenging year, think thoughtfully where to focus its developments efforts (can someone start discussing a 5 to 10 years strategic plan for the country?) and get ready to get back to grow above expectations in 2013. But 2012, will really be the year of stretching
On risk rating agencies bias
I already talked here about the potential bias on risk evaluation work done by the big agencies. I agree with Stiglitz - rating agencies shareholder structure, as well as monetization model might bias risk evaluation work. The present day oligopoly also doesn't play positively on this dimension. Probably, a greater degree of regulation and competition would benefit the risk rating market. Or... does anyone really thinks that Portuguese 3 months Governmental bonds are riskier than 10 years Brazilian ones?
Sunday, 8 January 2012
Some sentences on the Portuguese renewable energy cluster
Portugal has been building up one of the most innovative, competitive and interesting clusters in the world. When we know energy is at the core of any economy, fossil energy is time-constrained and Portugal doesn't have any confirmed gas and oil reserves, we understand how crucial the investment on renewable energy has been. We are minimizing our oil dependency (with clear advantages for our commercial balance) and developing exportable technology and products. All Portuguese should have it clear - how important this investment is for the future. As the CEO of Partex says in the interview below, we should cherish and protect this investment - it must part of our future!
Friday, 6 January 2012
We share the same views
I have the same views as Alessandro Benetton in what concerns the Euro debt crisis. It should promote unity, and not division. Critical mass is crucial in the current world, key for establishing ever important sustainable competitive advantages, for playing a relevant role in the world's economy and politics. Europe needs to stay together - and don't even think about trying to create a North-South break-up! Southern Europe has a lot to bring to Europe - don't discard it! But let's work to correct what is wrong - throughout our economical and political union!
Then, it is also interesting to see his last sentence: "A successful business model always pays its debts" - I really agree with you, Alessandro!
Monday, 2 January 2012
A true Champion
"In general the match wasn't good for me - not because of the wind though. The conditions can have an effect, but it's better to find solutions inside myself than outside" - Rafael Nadal (after the first match of the 2011 Roland Garros Open, which he eventually won)
Everybody should know this quote. Because, one day or another, you'll have to remember it.
Growth - needs a strategy and should be country driven
When I look at the Portuguese President New Year's address, I start by agreeing with it - and then think it is a rather short message. The President is saying that Portugal should have a voice to demand growth to the European Union - I say that's wrong.
Who reads my blog knows that I am a strong europeist - I clearly defend the need of more political integration. But I think Portugal shouldn't rely on "having a voice" - we need to put together our own growth, and have some alignment with the EU. If we wait for Europe to decide on growth strategy for its countries, the answer will be too late, too slow, too focused on the big countries and too ineffective, disregarding country's competitive advantages. Portugal needs to take the growth problem on its own hands - like Ireland did!
And, just let me stress it once again - growth is not an easy subject. Growth needs a well thought strategy and fast and efficient execution. Will someone (like the President) kick-off a national long-term growth strategy?
Sunday, 1 January 2012
I agree with this statement
The message is very clear - Europe will only recover its economy when it starts implementing a stronger political union. This is absolutely key for the future economic development of Europe and should be at the root of every single economist and politician in Europe. And then, the last statement is a question I also have - shouldn't we start devaluing the Euro vs the USD and BRIC currencies?
http://edition.cnn.com/2011/12/29/business/barclays-julian-callow/index.html?hpt=hp_bn1
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