domingo, novembro 23, 2014

GED, TTIP and Supplier Diversity in Europe

Portugal's Gross External Debt keeps rising by leaps and bounds, to EUR 410 billion as of Sept 2014 (vesus EUR 370 billion at the end of 2009) .   As  credit analysts, we must  focus on Gross Liabilities which are set in concrete since Gross Assets are more ephemeral and  have a tendency to disappear or fall sharply in value in a crisis.
Portuguese companies" borrowing to invest" in the US would be another  foolish mistake of the type that brought  Portugal Telecom  to its knees. 

 Portugal and its creditors seem to be  suffering from a bad case of  "collective denial" .  Thinking that Portugal could ever began repaying  this debt, which serves only the original "foolish creditors who lent to much",  the European version of the subprime bubble.   

Of particularly concerne is  Portugal's  Current Account Balance turning  negative again.
We have few options:   we either export goods, we  export services    or ..... we export people.  
If we  can't export more and import less, the interest on our  huge external debt will have to be paid in kind:   bottles of wine and hotel vouchers.   

This brings us to another and more optimistic suggestion:  Supplier Diversity in Europe. 

Supplier Diversity:  All Portuguese exporters are "disadvantaged" by their size and their lack of access to credit, technology, etc, but the big European clients and creditors could care less.  Or rather, they quite like having one less miniscule competitor.  

One valuable contribution of the TTIP negotiations would be to bring Supplier Diversity concepts to Europe, to give a boost to the severely disadvantaged   suppliers from  the highly indebted Eurozone countries.   It is encouraging to learn that TTIP promises to boost Portugal GDP, but we must recall that similar promises of benefits failed us in the past, so we should review the assumptions carefully.  

Otherwise, Portugal and the other smaller countries may not  benefit from TTIP if  most  of the gains from trade accrue to the bigger suppliers and trading partners.   

We must avoid the repeat of the negative consequencees of the  Single Market and the Single Currency which have given "free trade" a bad name,  as the weaker partners have become hightly indebted and empoverished.  

Mariana ABRANTES de Sousa 
PPP Lusofonia 

Gross External Debt    

TTIP and Portugal

Supplier Diversity

Testing the limits of divergence

Erros da Troika