I was at a seminar in Copenhagen the other day… no, I should probably admit that I was one of two people leading this seminar.
(It is not out of modesty I hesitate to mention that. The discussion somehow got away from us and the whole thing turned out a bit of a shambles.
My apologies to everybody present for that.)
The subject was the licorice pipe-story. You may have come across it, it is yet another of those news of how the EU I banning this, that or the other. They´re usually good fun so they get enormous coverage in the media and politicians are never shy about popping up and giving the EU a good old bashing for it.
You know the kind of thing I mean.
We had a number of these headlines at the seminar and if not informative, (you´ve seen one, you´ve seen them all) at least we had a good laugh:
”The EU is banning vacuum cleaners”, “The EU is banning the Queen from our bank notes”, “The EU is banning the United Kingdom” (I kid you not).
Most of them came from the British press and used words to describe the EU or Euro MPs as “bonkers”, “crackpots” or “madhatters”.
By the way, the EU is not about to ban licorice pipes. Of course not. I feel a sudden urge to emphasise that because these stories do have a persuasive note to them.
And this is precisely why they really are more than just a bit of fun.
Put together the sheer number of these kinds of news stories and the amount of attention they are getting, then add to that the lack of attention and coverage that proper EU news get (f ex, 700 000 Europeans die from tobacco use every year, most of them started smoking as teenagers, the big tobacco firms are targeting the young and the children.) and you can start to see that the problem.
These mad stories end up being the ones that shape peoples´ perception of what is going on in the EU.
How can democracy work when people don´t know what is being done in their name or, are under the impression that what the EU legislators are doing is completely irrelevant?
I don´t have to remind anyone of the fact that the EU nowadays regulates most aspects of our daily lives.
You may love or hate that fact, but you need to be aware of it since it concerns you.
So is there anything to be done about it and in that case, what?
Unfortunately, I don´t think there´s much we can do.
The way I see it, your average European citizen is two steps removed from the goings on in the EU. Between him/her there are two actors in our society that we trust to serve us with information on what´s happening.
First, the media. But media no longer serves this function in our societies.
You could blame the Internet for that, slowly killing off newspapers as we once knew them. Nobody subscribes to a daily paper anymore, we get our news on the Internet for free. With readers shifting to the net, so does the ads, making news papers lose out on their biggest income. This of course is forcing them to get rid of reporters in large numbers, leaving the few left at the news desk working that much harder, not offering them any time for research or background.
A licorice pipe story in this context is perfect for the news industry. There is no need to do time consuming research (throw in a mention of the first paper that printed is as source and you´re home free) but if you like, add a national politician saying how ridiculous this is and that Brussels must be bonkers.
It´s a fun and easy read, so it´s bound to get many hits on any website. And having a large number of hits on a website translates directly in to more income from ads.
Second, we have politicians. Most of them positively loooove the “EU-wants-to-ban…”-news.
Of course they do, their political life depends on being seen, getting attention, being in the limelight. How else are they going to win votes?
But in order to be noticed through the constant noise and chatter, they must express strong opinions, be firm, and preferably fight for something or against something. Being firm and strong generally carries a risk of stepping on somebody´s toes which is a thing no politician wants to do… the great exception to this rule, of course, being the EU.
There is no price to pay for a politician to come out in full fury, railing against the lunacies of EU. “The EU” is not very likely to answer back, to defend itself. No voters have ever turned against a politician for defending (what for the short sighted looks like) a national interest or even better, a long standing tradition.
Attacking the EU would appear to be the safest way for any politician to win votes. (Ironically, that is even true for politicians running for the European Parliament.)
There you are.
With the two main actors standing between the ordinary citizen and the EU actually gaining from this constant EU bashing, I don´t see how it is going to change anytime soon.
Oh, and by the way, my partner at the Copenhagen seminar, more practical minded than me, would have offered you a useful test for the next time a funny EU-story appears in the news:
Try replacing the word “EU” off the headline: “EU wants to ban vacuum cleaners/candy/walks in the park”, with the name of your Prime Minster or national parliament:
“Rutte wants to ban vacuum cleaners”… “Kenny wants to ban licorice pipes” …
Naah, don´t think so, right?
You may dislike the politicians running your country butat least you feel pretty confident they are not outright crazy.
Well, if a news headline doesn´t stand up to this test, it most likely isn´t true for the EU either.
After all, it is the very same politicians, the same political parties that run our countries, who also run the EU.
If the fluttering of a wing of a butterfly in Brazil can start a storm in Asia, just think how the turning of a wing of a windmill in the Baltic Sea may shape Europe´s political future.
The former super power USA has lost interest in the Middle East.
Oh, they´ll say they haven´t but we first noticed it during the Arab spring when, after initially calling the dictator Mubarak a factor for stability and a strong ally, the US opted not to save their ally from the wrath of the people. The US would then have very little to do with intervening in Libya, President Sarkozy had to twist their arm to make the Americans at least threateningly park their battle ships on the coast line.
Then the US would not intervene in Syria. Now President Obama is talking soothingly to its long-standing enemy Iran.
For a while the change of course could be interpreted as being the work of a somewhat liberal president Obama. But we´ve since seen how powerless he is in Washington, so that clearly is not the answer.
Is it because the US is so poor they can´t afford to defend their interests?
That could be part of the reason surely, but they don´t act as if they are poor, still happily borrowing trillions (4 of them last year) of dollars and spending it.
No, the main part of the reason is more likely oil.
The US don´t really need the oil from the Gulf anymore, so why spend money and ressources combating the unrest in the Middle East?
This is all thanks to discovery of shale gas and light oil, turning the US from the largest importer to the largest producer of oil in the world 2013. In 2004, the EIA projected that the U.S. would need to import 5 trillion cubic foot of liquified natural gas by 2025. The EIA now predicts that the U.S. will be exporting the same amount by 2025.
As a result of this American twist of fate, the status quo of the Middle East exists no more.
Israel has already got the message loud and clear and can see it is now on its own. Its politicians may spend their mornings railing against the USA, they spend their afternoons tying up new relationships, with France, with Russia, with Mexico, with China and Australia.
Saudi Arabia, no longer vital for maintaining stability in the region – this no longer being a priority - nor for oil supplies, and therefore silently dropped by their great ally in the West, turned in desperation to Russia, hoping to make a deal, oil supplier to oil supplier.
It would seem the Saudis went about it the wrong way and clumsily angered Putin into becoming even more of an enemy than he already was (here´s an account of this, can´t vouch for it being true but it´s an interesting read).
The royal family of Saudi Arabia is also on its own. Will they be the next dictatorship to face the people´s wrath?
Or will it be Russia?
See, Russia is not in such a good situation either what with the oil price falling and its oil exports being priced out of the European market by cheap coal from South America (a commodity that used to sell well in the US but the Americans, rich on shale gas and oil, are not buying anymore).
So Russian export incomes are down… and the Ukrainians are thinking about signing up with the EU instead of Russia? That has to be stopped, pronto!
To convince the Ukrainian leader at the very last minute (remember?, the EU leaders were waiting with the agreement in Vilnius, pen in hand, sumptuous dinner set out for after) proved not so hard. A 15 bn bail-out and President Yanukovych was their man.
To convince the Ukrainian people is proving much harder. Just to make sure the EU doesn´t get any ideas of meddling further in this Russian-Ukrainian affair, the Russian foreign minister Sergei Lavrov took to TV the other night and warned the Europeans to stay out.
Putin and Lavrov can rest assured, there may be harsh words from the EU but there will be no European intervention in the Ukraine. No European country has much appetite for intervening in other countries businesses (not quite true, French President Hollande would have us all storm over to the Central African Republic, ostensibly so as to save refugees from getting shot but really to save his terribly unpopular Presidency. Even with this war being about a really tiny enemy, he is not getting many offers from other EU countries).
Ah, but don´t relax just yet, Mr Putin.
Sure, the EU is not about to step up and try to be a super power/world police now that this position is wide open what with the USA on the decline and China not ready to step in. But far away from the foreign ministers and defence ministers, the EU is har at work, creating an energy single market.
And energy, as we´ve seen in this tale, is a vital part of politics and of independence of super powers.
Only two days ago, the EU commission presented a new master plan on climate and energy and guess what, Europe looks like it´s going full steam ahead with expanding the sector renewable energy (the UK is against, obviously but they do not win many fights in the EU these days).
Not realistic? Between 2008 and 2012, the EU countries rasied the total share of renewable energy to 12.7% (from 8,5%). Some countries are better placed than others to expand the sector of renewables – the Scandinavian countries have a surplus of energy, have between 23 and 50% of renewable energy in their mix already and are busy as bees building more and more windmills. This will be useful for everybody now that the EU goal of 27% will apply to the whole Union instead of nationally.
And that´s how a fluttering of the wing of a windmill in the Baltic Sea may change our political situation, by buying us independence from Russia, the Middle East and others.
 …and there you have the “being poor” part of the argument.
 Oh yes, the debate on whether the US is in a decline is over. The debate is now on whether the US will stage a come-back. (I´m happy to be convinced but the US haven´t found THAT much shale gas, you know.)
 …and might never be. Let´s not count out the Chinese population. The idea of freedom is intoxicating, look at the brave people of Ukraine. And Turkey. And Egypt. And…
I would like to discriminate against you, Mr Martin Schultz, on grounds of nationality. I do not want you to become the next President of the European Commission.
It is not a very European thing to do, I´m aware of that but I believe it is the right thing to do, under the circumstances.
I´m not holding against you the fact that Germany dominates the European Parliament. You have more seats than anybody else on account of there being more of you Germans – fair enough.
Also, the German members of the European Parliament are playing the political game skilfully – good on them.
I´m not even holding against you the interference from your government in Commission decisions concerning the European car industry or the lack of competition in the German energy sector. Germany will defend its national interest in Europe at every turn – as is logical, as does every other EU country.
What I am holding against you however, is your Chancellor, Angela Merkel. She is simply too good.
She has the personality; she has the tactical game down to a T. There is no other politician in her league in Europe.
This is a serious problem, to my mind.
EU politics need to be balanced between different national interests; otherwise the outcome will not be the best for Europe as a whole. And there certainly is no balance to be had, when the only strong European politician comes from the economically strongest and most dominant country.
Now, if you Mr Schultz came from an almost-as-big country but with a President scrambling in vain to get a grip on domestic politics and blundering about European politics demonstrating no insight whatsoever into how it works, then I wouldn´t feel so worried.
I´d feel safe too, if your home country was a big island-country but with a leader trying to bully people into unravelling the whole European game in favor of playing it his way, but having with so little clout that he ended up playing alone.
Or if you came from an also-big-country where a rapidly shifting succession of Prime Ministers were busy scratching each other’s eyes out – I would rest easy.
Let´s say your quite-big/smallish/small country – or your country´s whole bank sector –owed a lot of money to the biggest country in Europe. Well, then I would relax knowing that you could not allow yourself to push your opinion through at every occasion since you would totally lack credibility.
Also, if you came from one of the calm, successful countries in the north where politicians turn themselves into lame ducks in Europe, by preferring as their main domestic strategy to vilify Europe, as a way to win the national vote.
I would sleep soundly at night.
But you don´t, Mr Schulz. So we have a problem.
As long as there´s no serious counterweight to Mrs Merkel, most decisions will tend to German needs, not to European needs.
This is how Europe has lived through the financial crisis and it still goes on. The scariest example recently was Germany pressing for the EU banking union giving the last word last word on future decisions about failing banks to EU governments.
Next time around (and there will be a next time, unfortunately) Europe needs some hard-headed businesslike decisions on banks in trouble, we do not need politicians protecting rubbish banks because they believe it will secure them the next election.
That´s what Mrs Merkel gave us the first time so now we know for a fact that the common European market is not well served by having decisions taken on banks based on national interests. What Ireland did to protect its banks, spilled over on German, Danish and British banks. What Germany did spilled over on Greece. What Italy did, affected France, etc., etc.
(Some figures to sum it up; since the global financial crisis, 500 American banks have been closed and 40 European banks. That would indicate several hundred ailing European banks still being in business and if so, running on tax payers´ money.)
And this is why I am not comfortable handing over the post as President of the European Commission to you Mr Schultz, although the EU treaty says the candidate should reflect the outcome of the European elections and the European Socialists have named you, should the European voters be favorable to the Socialist side of politics.
It´s unthinkable to have a German running the European Commission as well as the European Council while at the same time dominating the European Parliament.
It´s nothing personal.
For me, you are out of the running, on account of being German.
So here we are – the EU has now got itself a Banking
Union. The biggest centralisation of power in Europe
since the creation of the single currency, according to the Financial Times.
But!, say hordes and hordes of critics, it´s a rubbish banking union. It´s not
even properly done yet. Loads of important – even crucial detail – has been
left for later.
And the money in this rescue fund! Ridiculous. Wouldn´t even do for saving a middle
sized Irish bank and when they went bust, they all sank together.
No matter. It will happen anyway.
You see, this is a classic EU move, this is how the European Union does it.
They decide upon the goal – in this case a full-fledged banking Union.
They decide upon the date – in this case 2025.
They leave the rest to the indomitable bureaucrats of the European Commission.
Sure, you say. In an Alice-In-The-Wonderland-world, maybe.
But if you know anything about Europe, you know it would be a mistake to discard the Banking
Union on its merits.
Remember the Single Market? The EU summit of 1986 decided to remove all
national borders for goods, services, capital and people – basically in 300
different sectors of the economy – by January 1993.
Now, see the clever thing with the date?
You must set it far ahead, enough to make sure that the politicians actually making
the decisions will not have to deal with the uncomfortable reality of it (i.e.
facing their voters).
That what´s makes it possible to agree on an enormously ambitious goal – it might
I know that in my country people laughed at the very idea of removing borders
in Europe. The Europeans hadn´t even been able to a harmonize standards for a
midwife education and they´d been at it for 17 years!
But the Swedes were proven wrong. True, every EU government huffed and puffed
their way through the harmonizing work but they all caved in under the argument
that it had already been decided, it was just the details that remained to be
On January First of 1993 the border controls were lifted. So maybe not
everything was in place ( som what?, we´re Europeans, we don´t believe ´perfect´ belongs in
this world) but that´s the other thing with the EU machine –it has no reverse
It just keeps grinding on, relentlessly coming back with new proposals
and revisions of earlier directives.
As I mentioned earlier – the EU bureaucrats are indomitable.
If it doesn´t work the first time, it just might, a second time around.
Ancient history?, just a one-off?
The euro? Same procedure.
Impossible, the critics decided. The EU countries would never agree to give up
that kind of independence.
Besides, they were not at all in sync, the economies differed too much and
besides, no way could enough countries meet the criteria for membership in
In any case, ordinary people wouldn´t stand for it.
The politicians didn´t worry, the date was ten years away! And it sounded like
a decent idea to hook on to the German D-mark. (The Germans owed us, so there.)
Everybody went home and forgot about it until the bureaucrats from Brussels started
calling about this detail and that, having to be put in order.
Some huffing and puffing, but what could you say? It was already decided, right?
On January the 1 of 2000, the euro was introduced and ordinary people didn´t
even bother with the three months they were accorded to get used to the new
currency, they switched over straight away.
I f you still won´t believe me, I could tell you the saga of the European Climate
Policy from 2007.
But you know how the story goes by now; Crazy ambitious idea, set for muuuch,
much later, lots of huffing and puffing but in the end, here we are. The only
place in the world where climate reforms still take place while the rest of the
globe seems to have forgotten about the climate changes.
So. This rubbish Banking Union?
I´m willing to bet money on it falling into place.
There was some bad news today for the Swedish finance minister Anders Borg (up for reelection next year with numbers in opinion polls looking distinctly bleak).
The (Swedish) National Institute of Economic Research lowered its forecast of GDP growth, due to the fact that…: “The Swedish economy is being held back by problems abroad, which are only very slowly being resolved”.
Surprised? No, of course not, no one can be. Except the Swedish finance minister…
Mr Borg was never shy in telling the world – and most certainly the Swedish voters – that the healthy state that the Swedish economy has been enjoying (years and years of surplus budgets) was down to him and his clever steermanship.
He wanted nothing to do with the economic problems in Europe. The Swedish government would not lend a helping hand when asked. The euro countries hade themselves to blame. They could have done what he did (he told them so, repeatedly. He is not a modest man).
This was a short-sighted policy. After all, the debt ridden countries of Europe happen to be the best customers and main buyers of Swedish goods and services.
Mr Borg pretended otherwise: “I am protecting the tax payers´ money”, he declared when refusing to lend any money.
He wasn´t really, it turns out.
The richer EU countries that actually did lend a euro or two to euro countries in need have so far ended up winners since their help was given as loans at market rates. The ECB made enough profit out of this in 2012 to be able pay out EUR 998 bn to the central banks, the main share, obviously, going to Germany.
And more is to come.
“Assuming no further defaults”, explains an analyst at German insurance giant Allianz, “these programmes should generate a net gain of about 70 bn EUR – 80 bn EUR.”
The German tax payer is the winner here, not the Swede tax payer.
It was short sighted also, to argue like Sweden did (along with the UK, Germany, Denmark and the Netherlands) in favor of a shrinking EU budget over the coming seven years.
It did lower the Swedish yearly EU contribution.
Ignoring the crisis other EU countries are currently undergoing, Sweden even argued for maintaining its rebate on its EU contribution and managed to retain 80% of it.
Now, the EU budget was the one instrument through which richer EU countries could have given a hand to the suffering ones, without this being an outright bail-out (that the rich so worry will create a moral hazard).
Here now was the chance to transfer fresh capital along with strict conditions attached to it, detailing in what productive way it must be spent so as to lift the depressed economies out of their quagmire.
Because if things were to brighten up a bit for the recession countries, the Swedish economy (alongside the German one, as well as the British, Dutch and Danish economy) would be able to take full advantage of this and the Swedish prospects for GDP growth might not look quite so glum.
Lately, Mr Borg has needed another story, what with the slowing of the Swedish economy, the rising levels of unemployment and national election coming up. Mr Borg took the credit when things were going well but he was hardly going to take the blame for things going bad.
So the story of finance minister Borg has changed to: It´s the fault of Europe.
And it is, of course. There is no way that Sweden can thrive when most of the continent is in recession.
The point is, there never was.
Because European countries are part of Europe.
I believe many things would be easier if politicians would act on that simple fact. I don´t see any of us sailing away into the sunset, leaving the messy bargains and difficult compromises behind.
This is why I find it sad to see politicians convincing their public that this is not so, for the sole reason of them winning votes.
 Andreas Uterman, Global Chief Investment Officer of Allianz Global Investors, daughter company of Allianz.
Carbon Capture and Storage never seemed like a very convincing idea. Sucking up CO 2 emissions and shoving it in the ground? Who would want to have that under your feet?
Especially since no one really knows what happens when you displace the stuff that is already there, with tons and tons of gases.
To be honest, I´m not particularly open to ideas of the kind. I also think creating artificial clouds to protect us from the sun is mad and to create artificial trees that suck up CO2 is even madder.
However, seven years of trying and many billions of Euros later, I think we can all agree to drop the
1. Out of the 15 large scale CCS installations that the EU planned to have up and running by 2015, there will be exactly – none.
2. The energy companies are dropping out.
The largest CCS installation in the world, Norwegian Mongstad, was abandoned by Statoil and the Norwegian government a few months ago. It had already swallowed EUR 790 Mill (you guessed it, of tax payers´ money)
Swedish state owned Vattenfall gave up on their EUR 1.5 bn CCS project in Jänschwalde two years ago.
3. The European Commission last December had EUR 1.2 bn to hand out for anyone ready to take up the CCS challenge. There were no takers.
You don´t need signs in the sky in this one – give it up, already!
But no, the European Commission keeps at it. The idea was fine and if the reality says otherwise, then the EU governments are to blame, not being prepared to finance their share.
Or else it´s the fault of the European emissions trading system (ETS), not making CO2 expensive enough so as to create a will to invest in CCS.
The EU Commission is out to revive the dying horse, flogging it like mad.
The remedies hinted at, are scary. There is talk of “legal incentives” (force businesses to invest in a technology that they don´t want?) or to rearrange the emissions trade system (and undermine the success of renewable energy?)
And the European Parliament seems just as much in love with the impossible dream of keep spitting out CO2 emissions at today´s rate and have a machine sucking it up so it does no harm.
The Industry Committee of the European Parliament in its opinion actually proposes to artificially create “a competitive environment” where the CCS stands a chance against the renewable energy sources.
How could you possibly do that?, when solar and wind energy today produces at the same cost as coal with no emissions and that´s before you´ve even started with the CCS´ silliness of sucking up CO2 emissions – at a price between 70 and 250 US dollar per ton CO2 emission - that actually creates new CO2 emissions when doing its thing.
What will it take to make them see that it really, really doesn´t work?
Denmark is up in arms over the cinnamon roll. Today´s big story in the media is an EU ban on this tasty afternoon treat. Bound to get you all the familiar reactions.
You get the sighs: “What´s with the EU bureaucrats, have they nothing better to do?”.
You get the humorous protest actions: The politician posting on Facebook how he daringly started his day with a cinnamon roll, the baker putting a funny sign of “Killer roll” on his cinnamon buns.
Another day in EU land.
A couple of weeks ago it was the liquorice pipe in sweets shops which supposedly faced an EU ban. Didn’t take many hours before you had a Facebook group set up in its´ defence and young people handing them out for free in the streets. In your face, bureaucrats!
Googling “EU” and “ban” will give you endless reading material. In the Czech Republic it appears they´ve been raving recently about an alleged EU ban on vacuum cleaners. (Surprisingly, you get people coming out in high numbers defending vacuum cleaners).
In Sweden, you´ll find how “EU bans snuff” , snuff being – in case you´ve not tried it yet– a smelly tobacco paste you put under your upper lip and then spit out when you´ve sucked all the juice out of it.
Forbes has a good one: “EU bans communism”.
Honestly, have they nothing to do in Brussels all day?!
No, Forbes. EU won´t ban communism and obviously nobody has ever suggested it.
You´ve mixed the EU up with some freelancing organization in Paris, composed by a number of has-been-politicians (many from Eastern Europe which may explain the really curious idea).
And no, Swedish snuff was never under any threat – the EU was banning adding the taste of strawberry, apple and what have you to the tobacco so as not to lure children to pick up a bad habit.
The vacuum cleaner will live on but from now on, producers must make sure they are less noisy. And cinnamon rolls are threatened by a Danish ban – not an EU one – and only if they carry too much of the substance coumarin that can be found in the cheaper kind of cinnamon that may be poisonous for little children.
So what, everybody´s had a moment of fun and EU bureaucrats are surely paid enough to put up with a bit of ridicule now and then?
Here´s when it gets serious: People end up believing that the EU is a really mad organization, capable of coming up with absolutely anything.
So when the Swedish government announced this week, that Sweden needs to restrict the citizens´ 200 year old right of transparency into public affairs, the government only had to blame the EU to shut any potential opposition up.
Now, the EU has not, in any shape or form, gone against the Swedish constitutional right of transparency or demanded any changes to it. 18 years of EU membership has proven that open access in Sweden does not constitute a problem for negotiations in the European Union.
Not once has it become an issue.
(Why? Because, as anyone who has ever been in Brussels can tell you, the EU already leaks like a sift, nothing a bit of Swedish openness could add to that.)
So why does the Swedish government need to change the law?
Well, the governmental proposal does state that the new secrecy will apply to all cooperation that Sweden may enter into within the EU or with another foreign power.
Courtesy of Mr Edward Snowden, we are all now aware that Sweden is one of the countries that have been especially generous in handing over secrets to the USA and the NSA.
(The government never bothered to inform us Swedes about that.)
So the secrecy is already working out fine?
Not really, it freaked the Americans out when a group of Swedish journalists managed to get their hands on most of the information on CIA secret rendition flights. It would seem that Swedish civil servants used their constitutional right to speak to journalists.
Can´t have that happening again.
And it won´t have to, because since of this week, any new cowboy action of the same kind would be covered under the new secrecy laws.
Introducing these curfews went swimmingly, met hardly any opposition at all since the Swedish government cleverly blamed it all on the EU and we all know what the EU is like.
A young energetic Icelander is touring European capitals, promising good returns for investing on Iceland.
Hang on, haven´t we´ve ben down this lane before?
Ah, but it´s different this time! The new –(ish) Prime Minister Sigmundur Davíd Gunnlaugsson boasts about Iceland´s speedy recovery from the international financial crisis and hands out advice to others how to run their countries.
The first thing is to not be a part of the Euro.
True, Iceland has seemed to make a remarkable recovery from a deep and scary crisis. Sure enough, economists and commentators will compare Iceland to crisis hit Euro countries and it doesn´t do any favours to the Euro.
Short recap: The Icelandic banks had grown to a size matching 10 times the Icelandic economy, by borrowing and loaning in a fast spinning carousel. When the international financial crisis put a stop to the circus in 2008, they just about took the whole country down with them. The crisis came complete as we now know them, with housing bubble and consumerism-by-creditcard gone mad.
Free of the Euro, the country was able to step on all the brakes and save the country from immediate ruin.
The government put in place capital controls (no one could buy or sell Icelandic Kronas), took over the three crashed banks and refused, for the time being, to pay up their creditors.
No euro country could have done that – because they would have been out of the European community on their ears and certainly not have got a cent from Germany, the ECB, or the IMF to restore their economy.
Iceland on the other hand, received large amounts of money in aid (a sum corresponding to over a third of its economy) from the IMF.
Three short years later Iceland was considered out of the crisis.
Lesson learned – do not become a Euro country.
Ah, but I think there´s another lesson to be learnt here:
Do not do business with Icelanders. If things turn sour, they will keep your money, laugh at you and happily tell you how to run your economy.
The thing is, Iceland has still not dared to lift its capital controls. When they do, the people and institutions that Icelandic banks owe money to, will expect to get (some of) their money back.
Now, the Icelandic Prime Minister needs to hold on to that money because he has promised his voters to relieve them of their large house hold debts.
That´s a vote winner, if you ever saw one, right?
This goes to show, in the words of Prime Minister Gunnlaugsson, how independent-minded and Viking like, the Icelandic population is.
Maybe not so popular in the rest of the world.
Today, the Icelandic government very badly wants to lift those capital controls. See, nobody is investing in Iceland.
The foreigners are staying away. The main holders of capital on Iceland, the pension funds and the banks, have problems finding anything worthwhile to invest in, since the whole import-export thing is pretty much closed down (capital controls, remember).
The economy of Iceland is shrinking really fast.
Greece and Spain are in a terrible place but investment is picking up. Nobody is afraid to have their money confiscated, should they venture into a Euro country.
Prime Minister Gunnlaugsson acknowledges to the publication City A.M. that `it is natural for people to ask ‘is it safe to invest in Iceland now, is there a danger we will get new capital controls on new investment?’ But he hits back that safety is a relative concept .`
Oh, that´s reassuring!
So who would want to do business with Icelande again?
We may not have to.
Icelanders have withdrawn their request of EU membership. Instead of joining Europe and the Euro they seem to consider joining the Americas and the Canadian Dollar (and I´m not joking here, they really are.)
Best of luck to you!
It´s common wisdom, these days, that you shouldn´t start a war without an exit strategy. It´s a very public thing, a war. It´s hard to sneak away, unseen in the night, if you change your mind about the whole venture.
Another very public thing is promising your voters that you will renegotiate your EU membership and serve up to them a “Fresh Start” to vote on.
For this venture, undertaken by the British Prime Minister David Cameron, there is of course a ready made exit, staring in everybody´s face, the Brexit.
Mr Cameron has been overflooded by warnings from every quarter imaginable that achieving different membership conditions for a British membership than for the rest of us, cannot be done. The only ones liking his suicidal like attempt, are therefore the ones hoping for a Brexit to happen – even they know full well where this venture must end.
Still he marches on.
Let´s put aside the theory that Mr Cameron is simply brain dead. One remaining possibility is that the Prime Minister really believes that he is going to win support in other EU countries for changing the EU.
Mr Cameron seems to banking on the idea that there are so many EU countries fed up with the EU meddling in absolutely everything, that he will get broad support for a renegotiation.
He is right in the first part. You call the EU a burdensome meddler, and you will have most Europeans cheering their agreement with you.
But surely Mr Cameron has caught on to the fact that the EU countries do not agree on which particular business the EU should stop meddling in?, and where it definitely should continue to be meddlesome?
Hard to believe, I grant you, but the British Prime Minister does act like he hasn´t.
At the EU summit a week ago, Mr Cameron popped out while the other heads of states were in session, to present to the media some of the points he would like to renegotiate with the EU.
He called it “Cut The Red Tape”.
-This is not just a British concern, he announced proudly, and went on to list seven countries (out of 27 possible…just saying…) that had that very morning accepted to take part of a breakfast meeting of his. They were Italy, Germany, the Netherlands, Sweden, Finland… and then he couldn´t remember the last two and had to resort to vaguely waving his arms about (I checked, they were Poland and Estonia).
-They are all happy to come together under this banner (that would be the cutting-of-red-tape-banner), Mr Cameron declared.
Dear Prime Minister, that would be because you hadn´t given them a chance to read your document first, on what bits of “Red Tape” it is more specifically, that you want to cut.
Did they maybe only read the first part? That´s when your task force bravely states the urgent need of reforms already underway, having been debated in the EU for quite some time.
Your breakfast guests did not read the second part, of this I´m sure. Because when you do go into detail, you attack the very things that your friends at that October meeting have fought the hardest for.
Let me give you a few examples.
Abolish burdensome proposals for sending workers to other EU countries, more specifically the “joint and several liability in subcontracting”.
Never mind the technicalities, this is THE one thing the unions of all the Northern European countries have fought for to control cheap labour and there is no government north of Belgium that would consider scrapping it, if they want to stay in power.
Do not raise maternity leave from 14 weeks
The proposal would cost the UK £2.5 bn per year, you say? Well, a part from Germany (and have you been following the German debate lately?), it would cost most of Europe strictly nothing since most of us already allow more generous maternity/paternity leave (waaaaay more). Including the Easter European countries.
No further action to give workers rights to information and consultation
Same thing, no way a Northern European country is going to oppose this (seen as most of us have introduced it already).
Allow UK style training schemes for young people
You´ve got to be kidding! Allowing employers to take in unpaid labour, crowding out other workers? Are you not aware at all, that the unions are an extremely strong force in politics in Germany, the Netherlands, Denmark, Sweden, Finland…?
Rewrite inflexible and unclear rules on working time
Seriously, when the EU court decreed in 2000, that all time spent on call must be paid fully, you had every government in the EU begging for a rewrite of the rules.
But you Brits got greedy, you veto´ed the whole thing over opt-outs and extra opt-outs for you, that the others balked at. If there still is today, 14 years later, no updated working hours´ directive, a lot of the blame lies on you. So if you are looking for friends to achieve your ultimate goal of a treaty renegotiation, go easy on this one.
Stop the proposals for new calculations of greenhouse gas emissions from fuel.
The oil industry is concerned, you say, that additional reporting could be costly for UK refineries.
And the rest of us would care, because…?
Do not introduce stringent criteria for defining country of origin for labelling of fresh and frozen meat.
Remember the horse meat in the lasagnas?
Withdraw food controls proposal whereby European states would charge businesses for the majority of official controls carried out in agri-food businesses.
Again, remember the horse meat in the lasagnas?
This, Mr Cameron, is how you are drumming up support for renegotiating the EU treaties?
That seems to me an extremely careless way to handle with a nation´s future.
You think you´re a real old cynic and then the world smacks you in the face and you realise that you´re really nothing but a closet optimist, after all.
So the European leaders at the summit in Brussels decided to roll over* when confronted with the business interest of the American Internet businesses.
On the say-so of British Prime Minister David Cameron.
I did not see that one coming.
Did not think that when Chancellor Merkel telephoned President Obama to ask about his tapping her personal mobile phone, she was not outraged but keen to get in on the game – eager to learn how she could tap phones too.
I blame Hollywood.
I blame Hollywood for making Americans look so cool, so sophisticated and making every one want to be like them.
I blame Hollywood for the fact that Merkel, Cameron, Reinfeldt, Hollande and the whole European bunch have fallen in love with President Obama.
If you ever had a chance to watch them up close, in the vicinity of the American President, you know what I mean. The giggling, the shuffling to get closer, the posturing to catch his eye…
Honest, they behave like love struck teenagers. And Mr Obama plays them, expertly.
My Prime Minister, Mir Reinfeldt? He even changed the way he knots his tie, after a meeting with the great idol. (Wanna see the pictures?, click here.)
As for actually being a President, Mr Obama is clearly not up to it. He is so rubbish at the political game that his country not once, not twice but over and over ends up in the most twisted, near-the-brink-scenarios the world has ever trembled to watch.
He has let himself become not only the hostage of the political opposition but to be pushed around by the military showing him up as a man with no principles. Remenber, he promised to take the Guantanamo prisoners to court instead of holding them illegally – not happening.
He would take the USA out of war but ends up vetoing, personally and some say daily, the illegal killing of people in other countries by droners.
He´s shown himself a man with no integrity by taking in Wall Street capitalists that not only played a big part in unleashing the financial crisis but made billions out of it, into government.
He´s shown himself a weak politician, letting himself be put in the most awkward situations, by the powerful `we´re-allowed–anything-for-waving-the-terroristcard` spying organisations of the USA when touring the world and meeting Prime Ministers and Presidents that are learning (probably at the same time as him) that they are being spied upon by Obama´s people.
But Mr Obama knows one thing, he does the Hollywood President perfectly.
The Kennedy thing you know, the little skip down a set of stairs or up. He does the humble smile, the cheerful, slightly surprised wave – the `oh-have-you-all-come-out-for-me?. He does the cool, laid-back “un-buttoning-of-his-jacket before he greets a group or an audience, the eagerly leaning forward `can´t-wait-to-hear-you` before he starts to speak.
Hollywood churns out films and we devour them, lapping up the idea that justice cannot be done if you do not brake the rules, but that´s OK because the Americans are the good guys and it´s only baddies that cop it anyway.
So the European leaders end up so in love with an American President that they are willing to sell out their citizens to American big business, telling the US: By all means, spy away!, collect all the information you want on our people, sell the intel on to whomever you care…
I blame Hollywood, I do.
* My definition of a roll over: a) Asking for an agreement on sharing of intelligence when the EU already has 3 of those with the US. b) Postponing the new and (hopefully) tougher European rules on data protection.