Portugal And Its Difficulties

By Author: PAOLO BRERA
Total Articles: 62
Comment this article

'Pigs', hogs, they call them media Saxon from the initials of Portugal, Ireland, Greece and Spain. Or Piigs, adding-us Italy. And if most of the country which disturbs the sleep of the investors in reality is not at all worse than the Great Britain, that the old saying "Quod licet io, non licet oxen": some may ... And some, like Portugal, is seen by an overnight plunge into the abyss of distrust.
To be in this pit a government realizes when investors are made to pray to raise loans and ask interest rates significantly higher than those paid by Germany (which is the benchmark). Portugal has been promoted to a role as a center of attention of operators around the world, writes Nuno Serafim, an analyst at IG Markets, "pelas piores razões' for the worst reasons. Rate on government bonds came to 4.72%. The most synthetic indicator of this malevolent attention however is the level of credit default swaps, which are about 160 basis points (400 for Greece, whose default is considered likely) after you register a maximum of 230 or more.
But Portugal is not like Greece. Its finances have never been so nonchalant and his ...
... statistics never equally mendacious. Over the past two decades there have been numerous privatization and liberalization, including the areas of finance and telecom. The country is a member of the monetary union by 1998 and by 2002 there circulating coins and banknotes. Economic growth has remained above the EU average for the nineties but has slowed in the new millennium, marking the last three years real GDP growth rates of 1, 9, 0 and -3 , 3%. The current level of GDP per capita is equal to two thirds of the EU average.
The problem, if anything, is that as the austerity measures in Greece are facing active opposition of large sections damaged by fire belt. Moreover, the socialist government is a minority government, so in essence weak and provisional. In the last few days the Parliament passed a law on regional financing deviates from the "right way" of fiscal consolidation. A bad sign, said Finance Minister Fernando Teixeira dos Santos, who has been declared that they will be done because the law is not applied. But the position of Portugal, he added, is actually manageable. "Our fundamental me look good," he said, "We have already implemented important structural reforms in social security, public administration - a lot 'of major changes to modernize the country, increase competitiveness and improve the skills of our resources human.
But the figures still bleeding: a public deficit to 9.3% and 76.6% State debt to the Gross Domestic Product. A recent study by the banking giant Unicredit has found that Portugal "has strong fiscal imbalances and trade balance. Moreover, his approach to bring the fiscal deficit on track is too warm, taking into account that in 2010 the forecasts are still a drop in GDP (-1%). What's more, the government of Lisbon - always write Unicredit - has a tenuous majority, "and appears unable to make the necessary reforms."
Unfortunately, this seems to be also the opinion of the lords of finance in recent weeks are focusing their paws against the euro in the belief that smaller countries are really in trouble - and even in street celebrations of the strongest countries wish to become guarantor of their debts. That debtors must undergo several years of lean is now indisputable, but in no country wants to appear the Shylock shift that requires children to live badly. If he did the IMF, which in this field is completely shameless and protests is not even more appropriate would be for Europe a double whammy: the euro shows that monetary union is not sufficient in itself and would say in the United States, which the Fund are the real puppet masters.
Paolo Brera.
Photo: Fernando Teixeira dos Santos.