Portugual's Problems

Idbatterim

what are people opinions on the Portuguese problems? Personally putting Ireland aside for a minute, I wouldnt be to happy with bailing them out, for the following reasons 1. what do they do other than tourism? 2. they dont have the bank problems that we have 3. they are obviously not living within their means, without even looking into it I assume they have the usual problems, PS and welfare... Like us, they must not have any considerable military budget, I dont know whether they have a large elderly population or not. I heard their politicians voted to reject the "austerity" plan. Can it be this simple, that they say "NO" like Ian Paisley and someone else will pick up the tab? I think its ridiculous that people in the likes of greece, portugal and to an extent Ireland, think we should have as good as if a not better standard of living than Germany for example! The sense of entitlement is obviously not an Irish phenonmen!I think the Irish situation is much more complicated. In the case of greece and portugal, they are taking the p*ss!

ardmacha

There is no reason why Ireland (or even Portugal) should not have as high a standard of living as Germany. Being in the centre of a continent is not a guarantee of greater success than being on its edge, otherwise Kansas would be wealthier than California, and Tajikistan wealthier than Japan.

What you have to is do the right things, and not do the right things for a while and then go on the piss, as we did in Ireland. While some here are rightly concerned with educational standards in Ireland, it still has had real achievements in this regard. Portugal has the worst education in western European, and lower than much of eastern Europe too. Portugal has had slow growth for years, Ireland has had and will have again a high growth rate by western European standards.

Kevo

Idbatterim wrote: »

Can it be this simple, that they say "NO" like Ian Paisley and someone else will pick up the tab?

They will have to make cuts either way. If they get a bailout they will have more time to do so but will have targets set in the terms of the bailout. In the end they will be paying a premium for the chance to do so. I don't see this as letting someone else pick up the tab.

Amhran Nua

Idbatterim wrote: »

think we should have as good as if a not better standard of living than Germany for example!

Eh in fairness, the Germans are no models of austerity either. Many of their local authorities are going bankrupt

At the start of 2010, a number of local town and district councillors in Germany began to reveal the catastrophic current state of local authority finances. Government budget policies, together with the international financial-industrial crisis, have drastically intensified the economic pressures on many municipal and district authorities. Their level of debt in 2009 climbed to €5 billion, and it is feared that these debts could rise to €50 billion within the next five years. Hitherto unimaginable cutbacks and economy measures will be the result.

And speaking of bankrupt, here are German bank bailout figures:

How much did Germany pay to rescue its banks in trouble? To answer this question, I will again use the figures notified to the Commission.
Between 1 October 2008 and the same day in 2010, we approved measures for almost €600 billion. The funds actually used amounted to €192 billion in 2008 and €262 billion in 2009, equivalent to 7.6% and 10.9% of Germany’s GDP for the respective years.
As I did earlier, I would like to give you the detailed figures for 2009:

• € 212 billion in guarantees on bank liabilities,
• € 40 billion in capital injections, and
• € 10 billion for the relief of impaired assets.

They've already overstepped EU deficit rules in 2010 (last time they did that was 2005), as a result of their own internal stimulus packages. At this stage its starting to look like every man for himself, really, which probably explains the German/French attitude towards the peripherals. Sloppy forward planning all across the EU.

Idbatterim

Ardmacha, I agree with what you are saying, and you have reinforced my point, its time for these countries to get there fingers out! the germans didnt become wealthy sitting around on their collective as**es! feeling sorry for themselves and holding their hand out like beggars!

Idbatterim

I was being simplistic in the way I meant Germany was prudent, but arent their lending rates on the bondmarket, priced at "no chance of default effectively" so in term of the overall countries debt liability and ability to pay, they are very secure...

Amhran Nua

Idbatterim wrote: »

I was being simplistic in the way I meant Germany was prudent, but arent their lending rates on the bondmarket, priced at "no chance of default effectively" so in term of the overall countries debt liability and ability to pay, they are very secure...

They have some good ideas, no doubt, and we need to adopt and adapt what we can of those ideas, but lets not paint them as lilly-white martyrs here.

later12

Idbatterim wrote: »

I wouldnt be to happy with bailing them out

Presumably Ireland will be a stepping out guarantor of the EFSF aspect of the Portuguese bailout, i.e. non contributor.

1. what do they do other than tourism?

How is this a point against bailout? Any sustainable and sustainably profitable resource or industry is as good as any other for the purposes of future growth. And that doesn't include building pointless, unnecessary houses. Portugal has a lot of scope for even further growth as a tourist centre, and that is a merit to their application.

2. they dont have the bank problems that we have

Right, so their difficulties should be that bit easier both to predict and to remedy without as many externalities arising from disinterested, often non European market forces such as happened with Ireland.

3. they are obviously not living within their means,

The avergae wage in Portugal is about 200 euro per week - that's similar to the dole in Ireland.

eco2live

Anyone see this?

http://www.dailymail.co.uk/news/article-1370134/Fury-Portugal-bailout-grows-Tories-blame-Darlings-EU-deal-6bn-bill.html?ito=feeds-newsxml

Somebody should tell the Conservatives in the UK that in Portugal and Ireland's case it was not the citizen's but the banks who borrowed the money. Britain has only began to face up to its own problems and along with Germany and France will be exposed for poor lending also if I or P or G or S default. They have their own problems and can keep their condescending complaints. They have hid their own problems by reducing the value of their currency and nothing more then that. See the following link for the real story:

http://www.sovereignindependent.com/?p=16477

We should tell them all to fug off at this stage and so should Portugal. You cant repossess a country.



This is one of the things I hate about taking these bailouts.

Idbatterim

Im wondering how they generate wealth in Ireland I could say 1. tourism, 2. Financial services 3. Export, pharmaceutical & computer software etc 4. Agriculture. My point being, that isnt it funny how the likes of Greece and Portugal dont seem to do much of anything?

later12

eco2live wrote: »

Somebody should tell the Conservatives in the UK that in Portugal and Ireland's case it was not the citizen's but the banks who borrowed the money

What about private debt? Those private citizens who borrowed the money from the banks. It was the citizens who borrowed the money in our case, not the bogeyman... we just didn't do it through the vehicle of the state and therefore did not do it equally and uniformly.

We should tell them all to fug off at this stage and so should Portugal. You cant repossess a country.

Yeah, but neither can you fund it with marbles and jellybeans, which is pretty much what we're left with if we tell our current bankers to clear off; who is going to ensure that cash comes out of the ATM? International investors charging 10% on coupons and committing us to measures that the IMF were often also committing us to but on far lower interest rates?

eco2live

later10 wrote: »

Presumably Ireland will be a stepping out guarantor of the EFSF aspect of the Portuguese bailout, i.e. non contributor.

How is this a point against bailout? Any sustainable and sustainably profitable resource or industry is as good as any other for the purposes of future growth. And that doesn't include building pointless, unnecessary houses. Portugal has a lot of scope for even further growth as a tourist centre, and that is a merit to their application.

Right, so their difficulties should be that bit easier both to predict and to remedy without as many externalities arising from disinterested, often non European market forces such as happened with Ireland.

The average wage in Portugal is about 200 euro per week - that's similar to the dole in Ireland.

They do have the same banking problems that we have. Thats why they need a bailout. The markets know the underlying issues. Same as Ireland. The crap the average person swallows in Ireland regards to the banks does not wash with the markets. They know that there is a storm coming and until the EU and even the international community take some practical action then nothing is going to change and we will not be able to go to the markets.

eco2live

later10 wrote: »

What about private debt? Those private citizens who borrowed the money from the banks. It was the citizens who borrowed the money in our case, not the bogeyman... we just didn't do it through the vehicle of the state and therefore did not do it equally and uniformly.

Yeah, but neither can you fund it with marbles and jellybeans, which is pretty much what we're left with if we tell our current bankers to clear off; who is going to ensure that cash comes out of the ATM? International investors charging 10% on coupons and committing us to measures that the IMF were often also committing us to but on far lower interest rates?

Yes those citizen's who where given credit by banks that where acting like loan sharks. If they had done proper checks on peoples ability to pay back the loans then that would have sorted out that problem.

To be honest there needs to be some action on private debt also. That has not even started to be dealt with. Bury our heads in the sand and all the people with 20 and 30k salary's paying 400k mortgages will be grand.

I would not give a loan to Ireland either. That is my point in regards to future funding. Time to face the problems and deal with them. Some will win some will lose but it will be real and we can all move on and buy another 30k house when the whole thing goes belly up.

Keeping Ireland and Portugal in this situation because they are worrying about a contagion is not real and not fair and if they want to continue doing that then that is the price of keeping us down.

ardmacha

They do have the same banking problems that we have. Thats why they need a bailout. The markets know the underlying issues. Same as Ireland.

Do they. What problems do Portugal have with banks?
No wonder there is a problem is even people in the PIIGS cannot distinguish the difference between them.

later12

eco2live wrote: »

They do have the same banking problems that we have.

To say that Portugal have the same problems with their banks as Ireland does is a bit like saying that Ireland has a social welfare problem, France has a social welfare problem, therefore Ireland and france have the same social welfare problems.

The fact is that in Portugal public debt and mismanagement of the public sector is the primary tumour and private debt is the secondary tumour. In Ireland, the situation is the exact reverse. They are not the same banking problems, although certainly Portugal probably will require many of the same remedies, likely to a lesser extent.

later12

eco2live wrote: »

Yes those citizen's who where given credit by banks that where acting like loan sharks.

And could the Irish banks not retort that they were equally given credit by the cold and devious international loan sharks, no? just the eternally innocent private citizen?

eco2live

ardmacha wrote: »

Do they. What problems do Portugal have with banks?
No wonder there is a problem is even people in the PIIGS cannot distinguish the difference between them.

Fair enough. Their banking system is in a much better state then ours but their growth prospects are far worse (we will see about that ). Also they owe a lot of money to foreign investors as we do. They also loaned a lot of money to the state. Its more a case of afunctioningg banking system being let down by the state.

They do have the same problems in that they can now not borrow money from the markets and the economic problems mean that there is a lot of doubt about their ability to pay back what they now owe.

I suppose in the next few days or couple of weeks we will hear the full story as we are only now have started to get about Ireland. Lets see what the newest banking system review will bring.

mlumley

So, let me see, it's ok for portugal to help bail us out, but not ok for us to help them. Get real, we aint a special case jus cos builders and bankers rob us. England is paying 8 billion to help, and they aint in the euro.

eco2live

later10 wrote: »

And could the Irish banks not retort that they were equally given credit by the cold and devious international loan sharks, no? just the eternally innocent private citizen?

The banks can and will sell off these troubled loans on the basis of not having the ability to pay (non performing). Even after all this is dealt with average person will be grand with their 60 year mortgage rather then writing down any of their debt. The banks borrowed that money and then loaned it out again. That is not the same as somebody trying to put a roof over their head for the going rate. A going rate that was created by lax lending in the first place. Not really the same thing.

Maybe I should drop into the bank and tell them that my house is not performing for me and I am going to sell it on at a loss and see how much they will write off for me?

What about the people who did not take part in any of this borrowing and now have to bail out reckless people, banks and financial institutions without the question of if they can afford to do so.

eco2live

mlumley wrote: »

So, let me see, it's ok for portugal to help bail us out, but not ok for us to help them. Get real, we aint a special case jus cos builders and bankers rob us. England is paying 8 billion to help, and they aint in the euro.

They are lending 8 and getting their money back + interest to avoid losing 100 billion. A real 100+ billion that is already out there. Nothing to do with the Euro.

eco2live

later wrote: »

To say that Portugal have the same problems with their banks as Ireland does is a bit like saying that Ireland has a social welfare problem, France has a social welfare problem, therefore Ireland and france have the same social welfare problems.

The fact is that in Portugal public debt and mismanagement of the public sector is the primary tumour and private debt is the secondary tumour. In Ireland, the situation is the exact reverse. They are not the same banking problems, although certainly Portugal probably will require many of the same remedies, likely to a lesser extent.

You are correct of course about the cause of their problems is not the same. They do have the same banking problems now in that the banks cant get funding from the markets.

I think we have the same issues with our management of the public sector also but it is overshadowed by the banking crisis. This is the area that the IMF are focusing on for instance. Lets see how much we save with the crock of **** agreement (I mean croke park).

sarumite

Reading the OP I couldn't help feel that it was a bad case of the pot calling the kettle black to be honest. The argument that Protugal only does Tourism is a bit like saying Ireland only does agriculture.

mlumley

eco2live wrote: »

They are lending 8 and getting their money back + interest to avoid losing 100 billion. A real 100+ billion that is already out there. Nothing to do with the Euro.

Isn't it? The mess is caused by the euro in the first place. The problem is that when the euro was started up, Germany was saying then, that Italy was a basket case, and if it run into problems they will have to bail them out. And they cited Spain and Grece as possible problems. If we were, and portugal and Spain had our old monies, we could devalue, making our goods cheaper and inports dearer. It's an old age way of managing courencies, the only outher proven way was raising unemployment. England did it in the 60's, and so have other countries. So, if we cant devalue and are tied to the euro we can not manage our curency, hence, the euro is a problem. As for ngland, yes, they have lent money to get money back. But if Ireland lends money they have to borrow, they will be paid intrest on the money. So in the long run we make a few euro to help pay our debts, admittedly not a lot. But as Tesco say's, every little bit helps.

eco2live

mlumley wrote: »

Isn't it? The mess is caused by the euro in the first place. The problem is that when the euro was started up, Germany was saying then, that Italy was a basket case, and if it run into problems they will have to bail them out. And they cited Spain and Grece as possible problems. If we were, and Portugal and Spain had our old monies, we could devalue, making our goods cheaper and inports dearer. It's an old age way of managing currencies, the only other proven way was raising unemployment. England did it in the 60's, and so have other countries. So, if we cant devalue and are tied to the euro we can not manage our currency, hence, the euro is a problem. As for ngland, yes, they have lent money to get money back. But if Ireland lends money they have to borrow, they will be paid interest on the money. So in the long run we make a few euro to help pay our debts, admittedly not a lot. But as Tesco say's, every little bit helps.

Yes you are right about the reason for the problems. I agree. It makes no sense at all. We need to devalue to get us out of this or have some sort of debt forgiveness or we are fooling ourselves. Thats not the reason we are being loaned the money from the UK. It is as above and the UK media need to know this instead of lording it over the rest of Europe. Our biggest problem is private dept has put us in the very dangerous position of a possible Sovereign debt default due to political incompetence. We are racking up further debt as the nile is not only a river in Egypt.

Permabear

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K-9

Permabear wrote: »

This post had been deleted.

That's mad Ted! Maybe puts our claim of being well educated into perspective!

Greece and Portugal seem to inherently have this budget deficit problem, we have it, but not near that extent. The banks weren't a big issue in Greece and Portugal as has been pointed out.

maninasia

We have a lot of people with an education. I don't think that's the same thing as being well educated.

Permabear

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Highly Salami

maninasia wrote: »

We have a lot of people with an education. I don't think that's the same thing as being well educated.

Explain please?

Nody

Highly Salami wrote: »

Explain please?

Education inflation; more people pass but the standards are lower for the grades then earlier and the net result being that people are not educated enough for the level they claim to represent internationally.