Friday 28 January 2011

Why not...

... use the EU funds to pay off the public debt?

It's unlikely that the rates of return of future projects involving EU funds exceed the current cost of borrowing, especially given all their rent-seeking, crowding-out and misallocation costs.

Sooner or later, Portugal will have to come to terms with the fact that the nature of State intervention in economic activity in the country is such (asymmetric information, waste, cronyism), that the less the State does, the better-off the people will be.

It would be much better to focus on getting right what really makes a difference: courts, schools, hospitals.

4 comments:

  1. Who are you?? portuguese?
    I like this!

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  2. The EU funds? Which ones?
    Are you aware that they are NOT helicopter money? They all have a specific purpose, and the member state has to contribute a share to that purpose, in order to prevent misuse...like paying debt.

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  3. http://economia.publico.pt/Noticia/poceiraocaia-deve-ficar-mais-caro-cerca-de-70-milhoes-de-euros_1477594

    ReplyDelete