Protugal vs Spain/ no-austerity vs austerity

What do you think about the situation of Portugal right now? A left government, no austerity, growth through the last 13 quarters, low unemployment rate and yet their bonds are being rated as being garbage by the big rating companies.

Official response from submitted

Partly the progressive (Keynesian) tilt of fiscal policy by the left coalition government (socialists, communists and greens), partly good luck enables the Portuguese to avoid the downward spiral of, say, Greece, or even the ongoing difficulties of Spain and Italy. The bg rating companies' judgements should always be taken with an extra-large grain of salt since they need to curry favor with the big governments whose debt they rate, and those governments (especially Germany and France) have worked extra hard for years to demonize Greece and any other govt leaning left much as the major private banks have.

Showing 3 reactions

How would you tag this suggestion?
Please check your e-mail for a link to activate your account.
  • Bobbi Wings
    commented 2017-05-21 01:11:14 -0400
    Does this mean that investing in Portuguese bonds might be a sleeper good investment? Or is a bond investment doomed to fail for a country being demonized by the big countries and banks?
  • Richard Wolff
    responded with submitted 2017-05-20 18:44:30 -0400
  • Swen Gerards
    published this page in Ask Prof. Wolff 2017-05-20 11:02:23 -0400