Wednesday, June 5, 2013

Will Portugal leave the Euro?

While the Portuguese government is probably horrified that someone is out getting famous trashing their Euro membership, the subject is probably gaining traction by the day.  The reason is simple—the Euro is destroying their economy.  Portugal really cannot afford to stay.

But man, this must piss off the Portuguese elites.  Membership in the Euro means much more than some petty economic advantage that they may be a part of.  No, this is about being in a a very nice club—the kind of club folks from small nations rarely get to join.  This dynamic is at work in other little countries—some of whom are still trying to join the Euro even with all its problems.

Portuguese bestselling book recommends leaving the euro

Economic tract taps into popular resentment at austerity measures and their punishing effects

Marie de Vergès  Guardian Weekly, 4 June 2013 

The current Portuguese best-selling book is not a whodunit or film star biography but an economic tract. Porque devemos sair do Euro (Why we should leave the euro) by the economist João Ferreira do Amaral (Lua de Papel, €12.60) sets out to prove in 128 pages that the only way forward for the country is to leave the eurozone as quickly as possible.

Already in its fourth printing since it came out in April, the book has generated a buzz and is in the list of top 10 bestsellers – the Wall Street Journal observed that some weeks it is even on a par with Fifty Shades of Grey. According to the author, "it is clear to people that, as it stands, the government's austerity policy is not working. They want to look at all the other alternatives".

Indeed, the Portuguese cannot see the benefits of the drastic deficit-reducing measures the government has inflicted on them in the past months. In 2013 growth will be negative for the third year running. The deficit is taking longer than expected to fall and unemployment remains dramatically high, with 17.5% of the population unemployed.

But will a return to the escudo really be the solution? A longstanding Eurosceptic, Ferreira do Amaral claims that he is not pandering to nostalgia for a symbol of the past. "There is no other way for us to be competitive again," he insists. "I'm not against the euro as such, but the currency is too strong for our Portuguese industry."

The government has refused any possibility of a "Pexit" (Portugal leaving the euro). But meanwhile Ferreira do Amaral is the star guest in all the TV debates on the subject: "Now a taboo is broken." more

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