Instability and market aggression are, unfortunately, essential ingredients of the globalized economy, with obvious repercussions for weaker and more troubled – financially – countries.
The illustrious butterfly effect is confirmed every time there is a political upheaval or unfavorable financial predictions are made for a country.
In that respect, the political upheaval in the Ukraine, the political crisis in Turkey and the exacerbation of the financial crisis in Argentina, in conjunction with the restrictions imposed by the American Central Bank on the bond market, have triggered a domino effect in finances that affects us, as well as Portugal.
As the investors are abandoning the currency of these countries, a generalized sense of instability is becoming established, which after a long period of decline, worked in favor of Greek and Portuguese bonds since they mostly are in the possession of hedge funds and as suck, their value is rather sensitive to the slightest agitation.
In a period where our country is trying to improve its international profile in finances and hopes to a possible return to the markets, which will be the first step in ending the suffocating dependence on our creditors, it is obvious that this development is not the best possible.
It is however a warning for all those who like to make promises with ease, that they can better manage the crisis by canceling the debt, that the situation could quickly get out of control. We can see how ten years after the default the situation in Argentina has not only remained the same and not improved, it has become worse with increasingly more restrictive measures.
Unfortunately for our country and primarily the people who are in suffering, there are no easy or convenient solutions. The divisive political conflicts unfolding before us are not helpful and only manage to extend the climate of political instability, with all of the consequences for an economy that has been trying to exit a vicious cycle of recession for the past five years. The sooner the government and opposition understand this, the more chances we will have to finally see light at the end of this tunnel.
