Portugal vows quick budget action after court block
This reminds me of the Bill Black Conundrum.
Every country's Fx rate will be above average,
..Every country will be a net exporter,
Everyone's fiat will be "balanced" ...
.... and now ..... everyone's S&P Rating will be below average!
Just be sure to add students, pesky electorates and national futures to the list of exports. :( Then sit back and enjoy the mosquitos in Swamp WeBeGoners.
If our current mentality keeps up, the same will happen here, voluntarily!
It's either austerity or sovereign culture.
Which will go? Neither, without a fight, it seems. A war between "international creditor" parasites and local populations. Which of them, in every nation, will win the battle to own that nation, and it's citizens?
This excerpt [re Portugal] says it all.
Portugal's prime minister vowed on Friday to find alternatives "as quickly as possible" to a key austerity measure in its 2014 budget that was blocked he previous day by the country's top court.
Pedro Passos Coelho told reporters on the sidelines of a European leaders' summit in Brussels that they would scramble to find a "new, durable and efficient measure" that would "satisfy the objectives fixed by the international creditors" of the country.
Can't some of Portugal's objectives be FIXED by their own citizens? Must they stoop to selling citizens to pay international banksters just to denominate their own, internal fiat? The semantic tricks involved in this are insane.
"I will do everything possible to end the climate of uncertainty created by this situation,"That's what he said at a news conference.
Exactly which uncertainty is he talking about?
The uncertainty as to whether Portugal will retain any semblance of sovereign independence?
Or the uncertainty as to exactly when the banksters can exercise ownership to Portugal itself, through a hostile take over .. er, outright theft?
Or, they could at least give the ECB & Euro Parliament an ultimatum. Scrap the arbitrary local budgetary caps, and let all currency creation return to sovereign management of national fiat. Or, how about something equally mundane, but at least democratic: insist on a Universal Employment Guarantee for all citizens in every EMU member country, with the same Minimum Living Standards for all.
The court case was a major blow to the bailed-out country and came just three days after international auditors from the European Commission, International Monetary Fund and European Central Bank had given Lisbon the all-clear on the terms of its 78-billion-euro ($104-billion) aid package.Apparently, no one told the Portuguese court that public fiat was supposed to go to Portuguese citizens, not to foreign banksters.
The cuts were a key plank of the government's target of bringing the public deficit down to 4.0 percent of output next year and the government must now find the savings elsewhere.Must? Who's threatening them? The dreaded TINA? They still have the option of deposing Empress TINA and nationalizing their own liquidity units. And they'll pay for an escalating tax on output by REDUCING output? Can somebody find a semblance of sanity in this?
Or, they could at least give the ECB & Euro Parliament an ultimatum. Scrap the arbitrary local budgetary caps, and let all currency creation return to sovereign management of national fiat. Or, how about something equally mundane, but at least democratic: insist on a Universal Employment Guarantee for all citizens in every EMU member country, with the same Minimum Living Standards for all.
If they want their nations to survive as credible contributors to their favorite toy, NATO, then something more sane than gutting Portugal seems like the simplest, rational step. If we in the USA don't speak out now, this roll-up strategy will reach our doors too, by hook or by crooks.
6 comments:
UPDATE:
Tortures and a modern Auschwitz
Everyone suspects that the following happen almost everywhere. Western world is transformed into a huge area of brutal police violence and human rights become, more and more, only words in Brussels bureaucrats' papers. The following info come from an article by Kostas Vaxevanis, HotDoc magazine, Issue 42, Dec. 2013.
http://failedevolution.blogspot.gr/2013/12/tortures-and-modern-auschwitz.html
By mid 2014 Portugal will be owing 78 billion euros to the "Troika" (the two European funds - EFSF and EFSM - plus the IMF) and 22 billion euros to the ECB - for a grand total of 100 billion euros owed to sovereign creditors, against whom the option of unilateral default or re-structuring is unavailable.
This is 60% of today's GDP, making the option of a euro exit practically doomed. A new currency would likely depreciate by 30 or 40% initially, and this "official" debt would then represent 100% of GDP in a foreign currency, an untenable position for any country to take.
But there is another way out of the present conundrum: the country has already decided - with the full authorization of the troika - to make its public pension funds buy its sovereign debt. These funds (Official Social Security funds plus mega pension funds that corporations have transferred to the state in recent years) will make purchases of 4 billion euros of public debt in the next couple of years.
This is too modest a step. The government should instruct the pension funds to reinforce the capital at banks presently under intervention by the government (only one among Portugal's major banks has remained fully in private hands after the crisis struck). Say the funds put up 10 billion euros at a couple of banks, thus acquiring majority stakes - said banks could then be instructed to lend up to 100 biliion euros to the government (perhaps by participating at primary debt auctions).
A back of the envelope calculation tells us that such operation would be hugely profitable for the banks. If they buy debt at 4.25% interest and get automatic financing from the Bank of Portugal/ECB at 0.25% this will mean a profit of 4 billion euros a year.
And the market for Portugal's debt would certainly improve after such massive intervention at auctions by the commercial banks.
The government's new deposits resulting from this operation could then be transferred abroad (using the TARGET2 mechanism that guarantees automatic financing to the banks via the NCB/ECB) to pay off all the debt owed to the public foreign creditors.
At the end of the process, the government would be owing the 100 billion euros to its own banks instead. It would be therefore free from the constraint of massive debts to foreigners and gain new leeway to steer its economic policy.
This should be done as quiclky as possible, before the window of opportunity closes once the European Banking Union is adopted in full. This "Union" would likely introduce new requirements forbidding commercial banks from holding a high proportion of their assets in the form of their own government's securities.
Fortunately, Germany has seemingly prevailed in her intention to delay/derail said Union - thus indirectly and no doubt unintentionally providing a longer period for periphery countries such of Portugal to make use of the euro payments mechanism in order to escape from their debt trap vis-a-vis sovereigns. A rare instance indeed of a positive step taken by Germany in the context of the euro crisis.
The stakes are clear and very high. Either Portugal decides to make use of this escape mechanism from debt prison or its future will be dictated by implacable foreign creditors for decades to come.
Let us hope the political forces of the country will soon wake up to this reality and decide to act on it before it becomes too late.
no political force ever wakes up before the electorate does
it's a requisite cascade;
expecting otherwise is like expecting your body to wake up before the brain does; either without the other means nothing
The Euro will be dumped and German is purposefully accelerating it and also purposefully going to embarrass all of those who will "do anything to save the Euro."
They haven't tried the easiest solutions and only put the PIIGS into more debt?
Come on, it's obvious they are going to dump the Euro as soon
as they get their pipeline from Qatar.
First they have not only to torment the PIIGs zone they have to allow another 100,000 Syrians to die in the name of natural gas from source other than Russia.
Call it the Merkl Gas Chamber !
She's allowing a genocide of Syrian women and children in the name of a pipeline from Qatar.
The so called militant jihadists are only escape goats and the EU knew they would be likes flies on to Syria.
no political force ever wakes up before the electorate does
That is generally true, but there have been historical instances when local elites, feeling threatened by foreign interests, seized the initiative in resisting and then let the population follow from behind, so to speak.
The problem in Portugal and other periphery countries also lies in the fact that the local elites have been totally captured by the EU mindset and by the idea that a country can run out of money and must then "pay" for its supposedly profligate "sins".
And this includes what used to be called the Hard Left. For instance, the Portuguese "Left Bloc" was until recently led by a neoclassical economist - a person no doubt full of compassionate feelings - that co-authored an economics textbook based on the discredited loanable funds world view. He is also against exit from the euro and thinks (ill advisedly) that Portugal could solve its problems by simply restructuring its debt, thus overlooking the key difference between debt issued under local law and the tens of billions of euros now owed to sovereign creditors - where local law does not apply and unilateral repudiation is therefore a non-starter.
A generalized ignorance concerning the monetary operations and payments systems of the eurozone may also explain why using the local banks and TARGET2 to pay back the debt has never been in the agenda of periphery governments.
Of course, people working inside the NCBs and ECB are quite aware of the rules of the game (the ECB Vice President is the Portuguese economist and socialist politician Vitor Constâncio, who has even praised, at times, the works of Minsky and Godley) but they have no interest in rocking a boat that provides them with a high standard of living as well as enormous power over the whole European system.
True, Jose, and those "leaders" lead by waking up the electorate.
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