Monday, March 28, 2011

Portugal - Has been there, seen it and done it!

Portugal has had its ups and downs in recent years, but in the past the rest of Europe could calmly ignore the problems. Not so in the nightmare world of the European Union and the euro currency it brought with it. The following from Wikipedia, nicely illustrates this point:

In 1960, at the initiation of Salazar's more outward-looking economic policy, Portugal's per capita GDP was only 38 percent of the EC-12 average; by the end of the Salazar period, in 1968, it had risen to 48 percent; and in 1973, on the eve of the revolution, Portugal's per capita GDP had reached 56.4 percent of the EC-12 average (though the figure is necessarily dampened by the 40% of the budget that went to African wars). In 1975, the year of maximum revolutionary turmoil, Portugal's per capita GDP declined to 52.3 percent of the EC-12 average. Due to the new revolutionary economic policies, oil shocks, recession in Europe, the return of hundreds of thousands of overseas Portuguese from the former overseas provinces, Portugal underwent an economic crisis starting in 1974–75.[26] Convergence of real GDP growth toward the EC average occurred as a result of Portugal's economic resurgence since 1985. In 1991 Portugal's GDP per capita climbed to 54.9 percent of the EC average, exceeding by a fraction the level attained during the worst revolutionary period.[27] After the revolution Portugal's economy would collapse and it took 16 years for the GDP as percentage of the EC-12 average to climb to 54.9 percent again. Portugal had been one of the founding members of EFTA (European Free Trade Association) in 1960. After the fall of the Estado Novo regime and the loss of its overseas territories in 1974 and 1975, Portugal left EFTA and entered into the European Economic Community in 1986.

This crisis this time, however, may be the last that the EU can face, according to this report from the Wall Street Journal! The ECB, of course, knows no restraints, resuming its bond purchase programme today, according to Reuters. Whose money with value are they using to acquire worthless and soon to be unsupported bonds, one must once again wonder?



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