FOCUS ON PORTUGAL - The imbalance of the Euro between rich and poor countries has acerbated and wrecked the Portugese industries of tourism, and of clothes and shoes from cheap Chinese imports into Europe. The debt is unsustainable and to add any more austerity simply makes it worse. It will, along with Greece, need a massive debt forgiveness to solve its problems, and this will happen as sure as night follows day, and Merkel and Germany will have to swallow it whole. I should mention the accelerating decline in the population, and particularly the working age population who actually pay most of the taxes (when they can find jobs that is). Since population size is a significant indicator of GDP ( eg less people equals less demand for all sorts of goods and services from food to haircuts, housing and furniture to put in it etc) this is going to be perhaps the major long term issue for Portugal. This is driven by two factors. The first is that birthrate has been barely half that required to maintain a steady population level for the whole of this century and the second is substantial emigration, especially of graduate level young people who also happen to be just in the age range that provides the majority of children. For a short while the increasing longevity the large number born born from the 1940's to the 1970's is masking what is already certain to happen. But we already know the number of people aged 0-20 years old is barely half that of a generation ago and its thus inevitable that there will be a totally unavoidable drop in the working population for at least the next generation and also because there will be far fewer 20-40 year olds in this period there will also be yet again even fewer children born to them. When you add in the high level of immigration to this the numbers are truly frightening- well they should be if any politician cared to take notice! Demographics is a much ignored and yet very hard to reverse adverse trend that is going to have an unavoidable impact on many European countries. Portugal is probably the most critical but Italy, Germany and to a lesser extent Spain are all going to have a chronic problem emanating from this for decades to come...THE FACT that the IMF is still working with Portugal is a good sign. I just wonder if Portugal could get the same interest rates and terms that Greece is being offered if its debt situation would be so dire. For example, the Portugese government could, much as China is trying to do, consolidate debt and rationalize industry through debt exchanges with the Central government offering low cost loans to solid Portugese companies to take over the zombie firms or refinancing consumer and business loans.