i guess he is quite clear indeed.........in master
do well = try better PhD in US.
do bad = exercise the option to stay at UPF, which is a decent school in macro.
the major downside of getting a PhD in UPF is........indeed the general reputation if you leave Europe after graduation (i.e. in non-academics / non-public sector), but I guess it is not really likely for macro guys to go on that path.