Portugal Is A Tick Away…
Portugal next as EMU’s Máquina Infernal keeps ticking
The Portuguese seemed baffled – and pained – that investors should link their country in any way with Greece or Ireland. I am afraid they must come to terms very soon with some unpleasant facts.
By Ambrose Evans-Pritchard
22 Nov 2010
So must Europe’s leaders, who comfort themselves that Greece is a special case because it cheated, and that Ireland is a special case because it allowed its “Anglo-Saxon” banks to go berserk. They have yet to acknowledge the deeper truth that monetary union has insidiously destabilised much of Europe and trapped a ring of largely innocent countries in depression.
In my experience it is hazardous for English-speaking journalists to write about Portugal without being accused of betraying the Aliança Velha, or pursuing a perfidious Palmerstonian agenda.
It is an article of faith – an Iberian trait – that Portugal is the victim of an orchestrated calumny intended to divert attention from a bankrupt Britain, or America. The rating agencies are deemed agents of Anglo-Saxon hegemony.
So with some trepidation, let me point out that Portugal will have a current account deficit of 10.3pc of GDP this year, 8.8pc in 2011, and 8.0pc in 2012, according to the OECD. That is to say, Portugal will be unable to pay its way in the world by a huge margin even after draconian austerity.
This is the worst profile in Europe. It requires a drip-feed of external funding that can be shut off at any moment, and undoubtedly will be unless the global economy goes full throttle into another boom. Or as the IMF puts it, “the longer the imbalance persists, the greater the risk the adjustment will be sudden and disruptive”.