The PIGS—Portugal, Italy, Greece and Spain

Sovereign Risk Meets Sovereign Reality








by Ian Bremmer and Nouriel Roubini
Friday, February 5, 2010
provided by
After
months of shrugging off debt problems in Dubai, Greece and other
smaller economies, markets yesterday seemed suddenly aware of the risks
of sovereign default.Back
in November, when the question of Dubai's solvency came to a head, it
was ultimately bailed out by its rich older brother, Abu Dhabi. Now,
the European Union is doing its best to avoid promising a similar
bailout to Greece, though in the end few believe Brussels will allow
Athens to go under.The current crisis in Greece is only the
worst example inside the EU. The PIGS—Portugal, Italy, Greece and
Spain—all boast public debt above or headed for 100% of GDP. Though the
PIGS acronym was apparently coined by British bankers, Britain, Ireland
and Iceland also smell distinctly of bacon.The problem isn't
confined to Europe. Japan and the United States, by most reckonings the
world's largest economies, also face pressing questions about their
sovereign debt levels. To be sure, the U.S. and Japan can sustain such
deficits more comfortably than small countries like Greece or Portugal
where the government's ability to curb public-sector spending is
rightly suspect. Yet even in economic giants, bad policy could cause
investors to move out of debt they have long considered a safe haven.
The moment is approaching when the artificial line separating the
wealthy from emerging markets will lose much of its relevance.Countries
like Germany, whose fiscal balances have deteriorated largely due to
the economic downturn, might have a greater capacity to stabilize their
debt ratio. The U.S. and Japan will also be among the last countries to
face investor aversion. This is because the dollar is the global
reserve currency, and the U.S. has the deepest and most liquid debt
markets. Japan is a net creditor and largely finances its debt
domestically. But over the next few years, investors will become
increasingly cautious about even the U.S. and Japan if the necessary
fiscal reforms are delayed.Investor perceptions about how
Brussels handles the current crisis will be a key factor going forward.
European countries such as Spain and Greece have delayed reforms and
face a severe competitiveness problem. Japan's aging population and
economic stagnation is reducing domestic savings. The U.S. is a net
debtor with an aging population and slower growth.For the U.S.,
the implications are clear. The annual fiscal deficit in the U.S. will
remain close to $1 trillion over the next decade. Ultimately, concerns
among foreign investors about a weak dollar will force Washington to
put its house in order. The U.S. will have to raise taxes on most
income groups and investors, close tax exemptions and loopholes, and
reduce entitlement benefits.Foreign creditors won't suddenly
move away from U.S. Treasurys—the trend will play out gradually. The
same holds true for domestic investors who consider U.S. Treasurys a
safe haven and remain confident about the country's debt-servicing
ability relative to other developed economies.But as the Federal
Reserve begins to raise interest rates to head off inflation—something
likely to begin only in 2011—foreign investors and central banks will
be willing to finance the U.S. only at higher yields. Rising interest
costs will be one of the factors constraining U.S. policy. That's where
sovereign risk meets sovereign reality.Mr. Bremmer,
president of Eurasia Group, is author of the forthcoming book "The End
of the Free Market: Who Wins the War Between States and Corporations?"
(Portfolio). Mr. Roubini is a professor of economics at New York
University's Stern School of Business and chairman of Roubini Global
Economics.

Ainda hoje os especialistas diziam que a contaminacao pode espalhar-se para o Norte da Europa!!!
Tudo isto deve-se ao fim da independencia da politica monetarioa. Nao podem fabricar EUROS nem baixar ou aumentar as taxas de juro!!! Acabou-se a FARRA. Acabaram-se as mentiras e as fantasias Socialistas. Portugal vai estar mais vigiado que o burro do cigano!!

E aqui também se usa vigiar ciganos... e ciganas...

vamos ser tintos ( nao gosto do claro )
Nunca nenhum governo teve amarrado a directivas vindas da estranja
Quando haviam problemas desvalorizava-se a moeda e jata ...ressalovo as manifes de traqbucas a pedir aumentos de cacau em que ai se mandava a PIDE e porrada neles
Acho salutar esta afliçao da classe politica perante uma imposiçao de cumprir Orçamentos
meus meninos sempre trabalhei com o0rçamento e quando me via á rasca avisava o pessoal
sabem que cheguei a parar a fabrica porque tinha uma previsao no meu PIB para dai a 7 anos
e o administrador chamou-me e furioso
porrah mango eu ...bla bla bla ...e eu bla bla bla bla
O gajo queria fazer brilharete áminha custa e eu manguito com ele ´omo sabem ou devia saber uma arvore florestal tem uma idade economica de corte
Avalia-se um crescimento pela media de crescimento em m3 |ha |ano ---e ha uma curva descendente quanto a media anual se encontra algurews numas contas que eu era obrigado a fazewr
na minha eu queria dizer o seguinte
RIGOR nao é aparecer kas calças na mao e dizer
Porrah pah enganei-me no pib ?
Outra é mandar travar o barco e dizer ...se seguirmos neste rumo vamos embater kuskornos numa rocha


POR ISSO acho completamente salutar esta discussão anaçlitica das c ontas publicas
pela primeira vez na historia de Portugal os politicos fazem contas