4 Jul 2013
Flash: The Portuguese story is fairly straight forward - BBH
FXstreet.com (London) - Brown Brother Harriman analysts comment that the Portuguese story is fairly straight forward, at least in comparison to the tribulations elsewhere in the Eurozone.
They note that the government's austerity in the face of continued contraction and high levels of unemployment has cost it public support and Finance Minister Gaspar, the architect of the austerity program, resigned. They add that having served as a director of research for the ECB (1998-2004), Gaspar was well connected and well liked in the halls of Brussels and Frankfurt, but in some ways it is surprising he lasted this long. They write, “Not only were significant sacrifices made in the name of reaching budget deficit targets, but they were consistently missed. Moreover, the Troika has moved away from the emphasis on austerity, with the IMF acknowledging months ago that it under-estimated the fiscal multiplier.”
They note that the government's austerity in the face of continued contraction and high levels of unemployment has cost it public support and Finance Minister Gaspar, the architect of the austerity program, resigned. They add that having served as a director of research for the ECB (1998-2004), Gaspar was well connected and well liked in the halls of Brussels and Frankfurt, but in some ways it is surprising he lasted this long. They write, “Not only were significant sacrifices made in the name of reaching budget deficit targets, but they were consistently missed. Moreover, the Troika has moved away from the emphasis on austerity, with the IMF acknowledging months ago that it under-estimated the fiscal multiplier.”