Banking System and Monetary Policy in Portugal report Essay

Banking System and Monetary Policy in Portugal report - Essay Example All of these threats pose serious challenges to the overall health of the Portuguese economy and hence corrective measures are needed to correct the flaws in the system and to make it more competitive and self-sustaining. The assessment of banking system shows that the procedure for borrowing money from banks is easier than other EU countries. As a result, the household debt is as large as 120% of the income. Unemployment trend in the Portuguese economy is also very alarming. It is growing exponentially and poses serious threats to the policy makers to devise strategies to curb this trend. Unemployment can be dangerous for any economy and Portuguese economy is no exception. Unemployment reduces the production potential of a country and results in less output being produced than what can be produced. This hampers the economic growth of an economy and leads government into paying unemployment benefits funds for which the government has to indulge in debt financing. Debt financing can b e very dangerous to an economy in the long-run. Current unemployment rate of Portugal stands at around 11%. (Lipsey and Chrystal, 2003) The fiscal situation of the Portuguese economy shows another flaw in the financial system of the country. Portugal is highly geared and has large levels of debt financing. In fact the debt financing ration has crossed the sixty percent of the GDP mark in the recent years. This makes the Portuguese economy more susceptible to international borrowing and aid which has negative effects in the long-run. According to the estimates published by Banco de Portugal and IMF, the current account position of the country is growing out of control. In the recent years, the current account deficit has widened to around 72% of the total trade carried out by the country. Portugal has been using Euro as its official currency since 1 January 1999. Before that the official currency of Portugal was Escudo. The reason why Portugal shifted to Euro was the weak position of its currency. It was weak and unstable making it very difficult to carryout international trade using Escudo as a â€Å"unit of account† and a base for setting of prices and settling of accounts. As a result, it was deemed that a country like Portugal moved to a more stable monetary base and system that would allow itself to carry out its international trade with traders not having to worry about the fluctuations in Escudo. European Central Bank is playing a vital role in maintain the economic stability throughout the Eurozone. ECB is also responsible for setting up the monetary policy of Portugal and other countries that use Euro as a base currency. Euro banknotes are also issued by ECB and only coins can be issued by the member states and that also only after the consent of ECB. (Eurostar, 2010) Portugal is an active trader in the international markets. It understands the importance of international trade and actively participates in international trade for the mutual bene fits of its importing and exporting partners. Its major imports include wine, fish, agricultural products, computers and heavy machinery. Similarly, Portugal mainly exports wood, copper, clothing and other important minerals. The most important trading partners of Portugal are Spain and Germany which have the highest percentage of trade of done with Portugal. The overall condition of

Microaggressions Essay Example | Topics and Well Written Essays - 1250 words

Microaggressions - Essay Example Having a friend who belongs to the said racial group though, I felt that it was demeaning. As I recall now those episodes in high school, I realize that I was probably not just a witness then. Although I somehow felt that those microinsults were really demeaning, my passivity or inaction towards such incidents was probably reflective of my own distinct biases to people of color. It was clear that students who were clearly not Caucasians were being treated as second-class citizens. However, it was not just because they were of color that they were treated as such. Most of the African American students in high school did not come from well-off families. Their economic status was also a factor that contributed to the treatment. I believe that passivity towards the issue then could be attributed to the fact that while I might not have been very particular about race, I held the belief that society is stratified on the basis of economic status and that such status quo should be maintained. Incidentally, most African Americans and other students of non-Caucasian lineage that I knew in high school were relatively not well-off compared to many of the whites. It was because of this concept that made me think that their being second-class citizens has made them vulnerable to microinsults. I was caught between my belief that they should expect such treatment as second-class citizens and my tendency to develop sympathy to their plight. Such sympathy, however, was also constrained with the idea that in stratified society, such treatment is only normal. Not knowing how to react to over racism, I managed to make a stand that I now realize to be a case of microinvalidation. As I tried to make friends with fellow African American students, I actually introduced myself to them as being color-blind. Every time I meet African Americans whom I wanted to make friends with, I always try to insinuate that I do not mind about the color of one’s skin. Through different ways of