The Great Portuguese Hollowing Out

by Edward Hugh, Euro Watch With every passing day Portugal has less and less economy left, while fewer and fewer people remain to try to pay down the debt. As Portuguese President Aníbal Cavaco Silva once put it, “A country without children is a nation without a future.” He was, of course, referring to his country’s …

Euro Crisis: Are Germany and IMF Lighting a Fuse?

by Elliott Morss, Morss Global Finance Introduction In earlier articles, I have talked of the “weak sisters” (Greece, Italy, Portugal and Spain) together, arguing they will never be able to compete with Germany and other more “efficient” Eurozone countries. Of course, each weak sister is different. In this piece, I consider each separately and whether …

Nothing has Changed for Greece

by Elliott Morss, Morss Global Finance Introduction Last fall, I said that Greece and the other “weak sisters” should leave the Eurozone. My argument was: the weak sisters (Greece, Italy, Portugal, and Spain) cannot compete with Germany; they need currencies that devalue against the German currency to stay competitive. Since then, nothing important has changed: …

Austerity to Growth – IMF Double-Talk on Greece and Spain

by Elliott Morss Austerity – What Should Have Been Learned The IMF should have known that austerity policies (reduce government deficits) cause unemployment to grow. After all, its own research found that a reduction in the government deficit of 1% in GDP results in an increase of .3 percentage points in the unemployment rate. But …

Out of the Garden of Europe and into the World Economy

by Macrotides Monetary policy is a bit like watering a garden. Its nourishment is intended to foster growth and jobs, and when in full bloom, a rising standard of living for the majority of people in society. A functioning spigot (central bank) and nozzle at the end of the hose (banking system) are needed for …