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Discussion Starter · #1 ·
As Euro Zone Faces Strain, Some Question Its Future
Cathal Mcnaughton/Reuters

A shopfront in Dublin. Ireland’s debt crisis has fed speculation about end-game euro-zone scenarios.
By JACK EWING
Published: November 17, 2010
FRANKFURT — Ireland’s debt and banking crisis has again raised a worst-case outcome that few expect, but many fear: the possibility that the euro’s design flaws could cause one or more members to bolt the currency union.
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Though only a small minority of economists predict a splintering of the euro area, a much larger group sees it as a risk — one that has contributed to volatility on bond markets in recent days and helped push the currency down.

“A significant proportion of investors think this is a possible if not probable scenario,” said Elga Bartsch, an economist at Morgan Stanley in London who does not subscribe to euro Armageddon theories. “It seems that the market is giving it a higher probability than before.”

When Morgan Stanley surveyed about 150 clients in September, only 3 percent thought there was a more than 60 percent chance that the euro zone would break up. But only 25 percent of the group, made up primarily of investors, thought the chances of breakup were zero.

Looked at another way, that means 75 percent believed there was a risk of a breakup, however small.

“I have never been advocating a breakup of the euro zone,” said Martin Taylor, former chief executive of Barclays bank, who caused a stir earlier this year with a proposal— “half in jest” — to split the euro into two currency zones, one for the north and one for the south.

But Mr. Taylor added, “If weaker countries don’t behave in a way necessary to sustain the euro zone, it will break up.”

The Ireland crisis has fed speculation about end-game scenarios by again highlighting the fundamental flaws in the euro project. These include the lack of a mechanism for imposing budgetary rigor on the 16 members and the restricted options for members in crisis. Ireland, Portugal or Greece have no national currency they can devalue to regain international competitiveness.

“The main factor will be the growth outlook,” said Elisa Parisi-Capone, senior analyst at Roubini Global Economics, which sees a 45 percent risk over the long term that a euro member will quit the club. “If they don’t manage to close or adjust the competitiveness gap, it will be difficult.”

For policy makers and many economists, the consequences of a split in the euro zone are too terrible to contemplate.

Among other things, if a country like Greece tried to reintroduce its own currency, there would be a run on local banks as panicked depositors tried to withdraw strong euros before they were converted to weak drachmas. If Ireland left, it would lose crucial support for its ailing banks from the E.C.B.

The remaining countries would also suffer. Germans, French, Dutch and others have invested much of their savings in southern Europe. And Europe would no longer have a currency with a stature to rival the dollar.

“Do we have an interest in going back to 16 currencies? I don’t see it,” said Michala Marcussen, global head of economic research at Société Générale in London.

The ensuing unrest could shake the whole European Union, and threaten its mission — born of the horrors of two world wars — of ensuring peace by yoking countries together economically.

“The institution of European monetary union is so highly integrated into every aspect of life you just don’t pick up and walk out,” said Carl B. Weinberg, the chief economist at High Frequency Economics in Valhalla, New York. “It would take the economic equivalent of war to make it happen.”

European leaders have pledged hundreds of billions in aid to the over-indebted countries and made it clear they will do anything necessary to hold together the euro, which will have 17 members when Estonia joins in January.

But some economists argue that the euro area is slouching toward a transfer union, where the stronger members like France and Germany will financially support the weaker members like Greece.

In the long run, a transfer union will only add to tensions, because taxpayers in the wealthier countries will not want to pay for it, said Jörg Krämer, the chief economist at Commerzbank in Frankfurt.

“In the beginning people may say that a transfer union is a price you have to pay so that the euro survives,” Mr. Krämer said. “Fine. But the perceived costs of a transfer union may go up over time. There may be a time when the voters say, ‘We don’t want this.”’

Otmar Issing, the former E.C.B. chief economist, warned last week that forcing a transfer union on voters “subjects the union to the highest possible risk — the refusal of its citizens.”

“If this occurs on a broad front, it won’t be long before not just extremist parties make opposition to the currency union — and more — a part of their agenda,” Mr. Issing wrote in an article for the Frankfurter Allgemeine newspaper.

Among those who have called for debate about euro-area secession is Mr. Taylor, the former Barclays chief executive who is now chairman of Syngenta, a Swiss maker of pesticides, herbicides and seeds.
 

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Discussion Starter · #4 ·
E depois da Irlanda, Portugal?
18 Novembro2010 | 11:53
Helena Garrido - [email protected]

Helena
Garrido
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OpiniãoE depois da Irlanda, Portugal?
OpiniãoPior é possível
OpiniãoEntendam-se, é a vossa obrigação
VER MAIS
Sim, é a sobrevivência do euro que está em causa.
Os danos na credibilidade da moeda única ainda são reparáveis. Mas o caminho que se está a escolher para resolver o problema da dívida pública é auto-fágico.

O primeiro sinal de alerta foi dado ontem. Pela primeira vez desde que começou esta crise da dívida, no início do ano, Portugal enfrentou dificuldades de acesso ao crédito, e não apenas uma taxa de juro elevada. O preço que o Estado português pagou para se financiar a um ano foi superior ao que muitos portugueses suportam pelo seu crédito à habitação. Parece irracional? Pois a irracionalidade não é do mercado, não é de quem investe em dívida pública. A irracionalidade está instalada nas capitais europeias, em Berlim e Paris, de onde se esperava maior capacidade de liderança, de antecipação dos riscos a que estão a expor a União Monetária. E de Frankfurt, onde reside, na torre do BCE, a visão teórica inimiga do pragmatismo e baseada no terror de uma inflação que ninguém vê. Ainda está por se perceber o que levou alguns líderes europeus a insistir com Dublin para pedir ajuda. Uma intervenção na Irlanda, como se começa a confirmar, vai atirar também Portugal para os braços do FMI e do fundo europeu. E a seguir a Espanha, e quem sabe depois a Itália. O que farão os líderes europeus e o Banco Central Europeu num cenário destes? O fundo criado em Maio por causa da crise da Grécia não chega para ajudar os países que vão estar em risco de colapso financeiro quando a ajuda à Irlanda se formalizar.

Nos mercados financeiros, todos sabemos, as profecias têm o dom mágico de se auto-confirmarem. Neste momento, praticamente todos os analistas de dívida pública, que trabalham para bancos que recomendam e decidem onde se deve investir o dinheiro, afirmam que a atenção se vai agora transferir para Portugal e, a seguir, Espanha. A emissão de ontem de dívida portuguesa foi já avaliada à luz da previsão de que o próximo país que não conseguirá obter financiamento no mercado será Portugal. E como pensam que Portugal não vai conseguir crédito e não querem que os seus clientes sejam os únicos e arrisquem perder o seu dinheiro, todos actuam, de acordo com o que prevêem, e assim se confirmam as suas profecias.

Os economistas conhecem os comportamentos de rebanho dos mercados que geram a auto-confirmação das profecias. As lideranças europeias, como o BCE, sabem bem qual está a ser a avaliação dos investidores e o risco que o euro enfrentam se a Irlanda arrastar não apenas Portugal, mas também a Espanha e a Itália. Por que estão a actuar como se nada se passasse é incompreensível.

Do outro lado do Atlântico, a Reserva Federal, indiferente às ondas de choque que a potência imperial que é a América vai causar no mundo, inunda a economia com 750 mil milhões de dólares comprando títulos. Deste lado, o BCE está a fazer basicamente o mesmo, mas transitoriamente, e quer acabar com isso o mais depressa possível. Está preocupado com os efeitos, nas suas contas, dos títulos que anda a comprar à Irlanda, a Portugal, a Espanha. Claro que isso o deve preocupar. Claro que não pode gerar nestes países uma dependência dessa ajuda, que incentiva o adiamento das medidas que reduzem a dívida pública e cria o risco - mínimo, convenhamos - de inflação. Mas há uma enorme distância entre estar alerta para os perigos das medidas excepcionais que está a aplicar e querer acabar com elas quando não há, ainda, ferramentas menos arriscadas para resolver o problema do excesso de dívida. Depois da Irlanda virá Portugal? E depois de Portugal? O BCE não está a defender o euro.
 

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'tou na lua...
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A situação portuguesa é diferente, já foi dito e redito... os americanos têm a mania de meter tudo no mesmo saco... nós é um pouco como a Grécia... despesas sem controlo e depois, buraco. E depois o nosso tecido produtivo foi ao ar, importámos muito alimento que produzíamos e pimba....
E sim, falo das quotas de alimentos, de leite, da imensa frota pesqueira abatida... produtores pagos para não produzirem... e assim se destruiu o tecido económico base do país por causa da dita "modernização à pressa"...
 

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Discussion Starter · #6 ·
Ireland is the first domino to fall in Europe’s great game

Published on 24 Nov 2010

There is confusion, not for the first time, on the Tory back benches.

Some MPs can’t work it out. The euro is in trouble, they say: excellent news. Their own George Osborne, eurosceptic, is Chancellor: splendid news. And yet young George intends to throw billions, between six and 10 of them, at Ireland, the eurozone’s latest money pit.

You can hardly blame these Conservatives for wondering what’s going on. Were you Irish, meanwhile, you might raise an eyebrow at the sight of the British bearing gifts. In Dublin, as in Westminster, though for different reasons, people are liable to ask: what’s in it for Mr Osborne?

They might be better employed starting with a different, basic question: will it work? Will Ireland be “stabilised” thanks to €90bn from the European Central Bank, the IMF, Britain and Sweden? Or will it be a case, where Irish banks are concerned, of “in one end and out the other”?

At first glance, the omens are grim. The enforced rescue of Ireland’s economy did the trick, if trick it was, for only a matter of hours. Then the run on the banks – for such it is – resumed. The bond markets responded accordingly. Smart money decreed that an Irish default remains inevitable. And the “hearse chasers” – lovely phrase – of international finance started their engines.

As Ireland’s government collapses in disgrace, the fear is growing that the eurozone itself is in deep trouble, as an entity and an idea. Will the predators return to pick through the ruins of Greece? How vulnerable – deeply – are Portugal and Spain? How much would it take – not much – to bring down Italy’s house of cards?

The questions are becoming fundamental. Europe’s leaders, far from united, are attempting to take on the market makers. They are attempting to show that they can protect each member of the eurozone. Yet even those leaders do not know if they are bluffing. And they cannot be sure, not least with the Irish example before them, if it will work.

You can sketch out explanations from a number of competing narratives. There was a wave of Chinese funds sloshing around in the debt-addicted west. There was, still is, a eurozone attempting to fix divergent national economies around a single interest rate. There were German savings feeding an Irish spending habit and an Irish property bubble. Finally, there were banks, flouting their own traditions and flirting, in several cases, with outright fraud.

The last of these represent a wound not yet healed. In late 2008, politicians the world over promised fundamental reform. Nothing, they said, would ever be the same. Nothing is what we got. In late 2010, Wall Street and the City of London are flourishing once more, the chief beneficiaries of low interest rates. Beyond their world, national populations, poor Ireland in the van, are picking up the bill.

Ordinary people need to keep the fact in mind: nothing important has been done. The G20 in Seoul was more farcical than usual, if such a thing is possible, in that regard. Only Germany’s Angela Merkel has made the shocking proposal – shocking to such as Mr Osborne, at any rate – that if banks go bust in future their investors must suffer. Unlimited liability cannot be passed to taxpayers forever, she argues.

That thought comes too late for Ireland. It may have come too late for the euro as we know it. It is less a question of why “contagion” should spread than why it should not. As purists would have it, the single currency was based from the start on a fundamental misconception – economic union without a common political leadership – and cannot, therefore, evade its fate.

That argument itself is misconceived, at least to a degree. There may be no political leadership within the eurozone, but there is no lack of political will. Germany and the core countries will not give up the currency easily. Partly this is a matter of mere pride, but partly it springs from an awareness of what might follow.

Take the Germans. Just why should they want to go on bankrolling the zone’s spendthrifts and chancers? Some – Italy and Greece, notably – were fiddling their books even as they “prepared” for the arrival of euro. Others, the Irish in particular, have breached the spirit of the deal, if not its letter, with their business taxes, Ireland’s corporation tax rate being a notorious example.

Germany remains an export-led powerhouse. It doesn’t need anyone’s assistance. But the money it has donated to its eurozone partners could arguably have been better spent. Ordinary Germans have seen their wages depressed – one alternative to spending cuts – in the aftermath of the crash. They have heard Barack Obama demanding that they curb their precious exports. Why should they bother with the Irish or the Greeks?

Perhaps because of the alternatives. First, a huge hit for the German banks that helped to fund Ireland’s boom. Secondly, a decade (at least) of Europe-wide instability, beggar-thy-neighbour devaluations, and – in the fashionable phrase – currency wars. The euro’s collapse is no panacea.

Irish politicians understand as much. They could quit the currency, devalue and, in the process, clear much of their debt. But what if others did the same? And what if those vaunted markets took such actions as final proof that Ireland’s economy could never recover?

Mr Osborne claims to be worried about such things. Ireland is our neighbour, he observes, and its economy is deeply enmeshed in our own. But ask yourself: why would a British Government borrow billions, as borrow it must, to lend to Ireland, hence to Irish banks, simply to insulate Britain’s state-owned institutions from further exposure? Why not – we’ve had plenty of practice – simply underwrite the investments of RBS and the rest?

Ireland’s difficulty, to coin a phrase, is liable to be someone’s opportunity. Talk of a two-tier euro is, meanwhile, liable to be scant comfort, if any, to the Irish people. Things that were promised after the scandals of 2008 were left undone. Real reform, urgent reform, was avoided.

So, the first of Europe’s dominoes begins to fall. But anyone who thinks that this has nothing to do with an unreformed Britain pursuing austerity in the Irish style is in for a very big shock.
 

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Discussion Starter · #7 ·
Economista da EIU defende que Irlanda deve sair do euro
08 Dezembro 2010 | 11:43
Nuno Carregueiro - [email protected]

Megan Greene, economista da Economist Intelligence Unit, diz que só com a Irlanda fora da Zona Euro o país pode voltar a ter boas perspectivas de crescimento.
Num artigo de opinião publicado hoje no “Financial Times”, Megan Greene, economista irlandesa da Economist Intelligence Unit, explica as razões porque defende que a Irlanda deve sair da Zona Euro.

“Incumprimento na dívida soberana, recapitalização massiva do sistema financeiro e forte queda nos salários são as razões apontadas para os países periféricos não saírem da Zona Euro. Mas, no caso da Irlanda, todas estas coisas vão acontecer de qualquer forma”, diz Megan Greene.

A economista considera que o Governo irlandês evitou o “desastre imediato” ao conseguir aprovar o Orçamento para 2011, mas tem agora que decidir o que fazer a seguir. Uma vez que “as novas medidas de austeridade são insuficientes para colocar a Irlanda no caminho certo”, Greene defende que a saída do euro deve ser “seriamente considerada”.

Para a economista, uma reestruturação da dívida irlandesa é inevitável em 2013, quando expirar o recurso ao fundo de resgate do euro e a necessidade do Estado irlandês injectar mais dinheiro nos bancos “parece quase certa”. E dado não ter moeda própria, a Irlanda tem que proceder a uma descida interna dos salários, para ganhar competitividade.

“Tudo isto é pessimista, mas também existe um cenário optimista: se a Irlanda sair do euro, pode passar a ter boas perspectivas de crescimento”, diz Greene, lembrando que o país tem uma força de trabalho “altamente qualificada, um mercado de trabalho aberto e um sector exportador robusto”.

Além disso, defende a economista da EIU, a Irlanda já há muito tempo efectuou as reformas estruturais que Portugal e Espanha estão agora a implementar e o Reino Unido, o seu principal parceiro comercial, tem perspectivas de crescimento muito mais favoráveis do que outros países da Zona Euro.

Reconhecendo que sair do euro “não será um processo fácil”, Greene diz que os investidores iriam reconhecer que a Irlanda tinha “batido do fundo” e depressa iria voltar a apresentar um ritmo de crescimento sustentável.

“Tudo isto seria doloroso. Mas, para onde quer que olhemos, não há respostas fáceis e sem dor para a crise de dívida da Irlanda”, diz a economista, que defende assim que a “Irlanda é a melhor candidata a abandonar o euro”, pelo que os seus “políticos e cidadãos deveriam considerar seriamente esta opção”.
 
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