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.
Saturday, 8 September 2012
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.
- 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.
- 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!
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