LOSING CUSTOMERS
Denmark has an established state Lutheran church, with the monarch as its head. There is a Church Minister, and the Government pays priests' salaries and for the upkeep of buildings. A small increase in the income tax covers the cost of all of this; you don't have to pay it, but you have to opt out if you don't want to.
This system has worked well for more than 300 years (though there are some who think that the link between church and state should be broken, as it was in the similar system in Sweden). But it is now being undermined by a precipitate fall in numbers. The church itself reckons that 1,000 members is the minimum required if a parish is to be sustainable. Yet of the country's 2,201 parishes, just over half (1,144) have less than that, and 40 have less than 100 members. These are nearly all on islands or on the west coast of Jutland, which have experienced population declines as the young move to the cities. Maintaining an old building for such a small population is not economic, particularly in these straightened times.
All of which means that the church is having to think out of the box in the same way as every other major Danish organisation. Priests will have to serve more than one parish, some parishes will not have services every Sunday, in the worst case some churches will have to close or be used for alternative purposes. The church has survived religious strife, heresy and schism, but it has difficulty dealing with indifference.
Walter Blotscher
Tuesday 28 February 2012
Monday 27 February 2012
THIS BLESSED PLOT
This blessed plot is a phrase that forms part of a famous speech by John of Gaunt in Shakespeare's Richard II, which eulogises his country. Starting "this royal throne of kings, this scepter'd isle", it ends "this blessed plot, this earth, this realm, this England".
This Blessed Plot is also the title of a brilliant book by Hugo Young, the former political columnist of the U.K.'s Sunday Times and Guardian newspapers. First published in 1998, it charts the history of Britain's relationship with first the E.E.C. and then the E.U. Having just reread it, I firmly believe that it should be a standard text for anybody interested in that relationship; every British schoolchild, for example.
The U.K. ended the Second World War as the only European country apart from the former Soviet Union that was indisputably a winner. However, it had also been brought to its knees economically, and had only survived thanks to massive financial help from the U.S. Understandably, but wrongly, the governing classes, politicians, civil servants and others, chose to highlight the former and ignore the latter. So, for instance, Churchill's pre-war calls for greater solidarity amongst the European nations (meaning Europe, including Britain) had by the late 1940's metamorphosed into calls for greater solidarity amongst the European nations (meaning Europe, excluding Britain). The U.K. could not be part of any European solidarity that had as its main aim the goal of preventing the terrible events of 1914-18 and 1939-45, since unlike the continentals, it had overlapping spheres of interest; Europe was undoubtedly one, but so too were the "special relationship" with the U.S. and the need to maintain the Empire (which later became the Commonwealth).
There were pockets in the establishment who were clearer-sighted, but they were few and far between. One such was Sir Henry Tizard, chief scientific adviser at the Ministry of Defence, who wrote in 1949:
"We persist in regarding ourselves as a Great Power, capable of everything and only temporarily handicapped by economic difficulties. We are not a Great Power and never will be again. We are a great nation, but if we continue to behave like a Great Power, we shall soon cease to be a great nation".
This prescient memo did not go down well with the powers-that-be. And so began the country's long strategic dilemna, a dilemna which persists to the present day, in which the U.K. can't make up its collective mind whether it wants to be part of the European project or not. True, the rhetoric changes from time to time. But the usual pattern is of initial scepticism about any new inititiative, often accompanied by ridicule; followed by distance and non-engagement, if not active attempts at sabotage; a grudging acceptance later that things have changed; a belated request to be involved; and finally (the worst thing) a pretence by the relevant people that they had somehow got deceived into accepting it. It was true of the original coal and steel community; true of the E.E.C.; true of majority voting and the single market; true of economic and monetary union; and (I predict) will also be true of the euro itself. The pattern cuts across political parties, and across generations. In short, very few Brits are willing to take Sir Henry Tizard's advice.
Should they have? Young's thesis is that they should, and it is persuasive. Not least because of events in those two other spheres of interest. The history of the post-war British Empire is of a transition to independence, sometimes peaceful, often messy and bloody (eg the partition of India). Coupled with an obvious realisation that the markets of the former colonies, who often ran hopeless post-independence economic policies that kept them in poverty, could in no way make up for the fast-growing economies located just over the Channel. Even more importantly, the trauma of the Suez crisis in 1956 demonstrated that when push came to shove, the Americans did not view the special relationship as being more important than their strategic interests in the Middle East. That lesson was learned in respect of defence, and prompted a gradual slimming down of the U.K.'s military commitments, and an eventual withdrawal "east of Suez". Yet the lesson was not learned in respect of the economic and political fields; and the habitual - and ritual - regurgitation of the "special relationship" with the U.S. is something which every British Prime Minister has banged on about for the past 55 years, notwithstanding any evidence that contradicts it.
With two of the three spheres of interest gone or sagging, Britain should have turned to the third and made a clear, if belated, commitment to Europe. But it didn't. The one exception to the general rule was Ted Heath, a much maligned figure these days, yet the only postwar British Prime Minister to have engaged in the sort of statesmanship that puts one's country before one's party interest. Heath had been the point man on Harold MacMillan's doomed application to join the then 6-country arrangement in the early 1960's that was brutally vetoed by de Gaulle. The other countries all wanted Britain in, indeed had wanted Britain in from the start, not least as a counterweight to the imperious French President; de Gaulle, for exactly the opposite reason, wanted to keep Britain out, so that France could dominate. Only when de Gaulle had left the scene could Heath, now Prime Minister, do the necessary deal with Pompidou that led to Britain's joining on 1 January 1973.
Yet even the europhile Ted Heath succombed to another British malaise that has affected, and continues to affect, British politicians when they talk about Europe, namely a tendency to pretend that they are not doing what they are in fact doing. It was already clear in 1972, for instance, that the treaties (and, notably, the jurisprudence of the European Court of Justice) represented a major transfer of sovereignty away from the U.K. and into something supranational. As Lord Denning, a famous judge, said in a 1974 case, the treaty was "like an incoming tide. It flows into the estuaries and up the rivers. It cannot be held back". Public opinion had consistently shown that the British people were willing to be led by their leaders on European matters; but their leaders chose not to do so. Heath presented entry as a purely economic/trading matter. His successor Margaret Thatcher signed the Single European Act into power, but then pretended that she had not known what she was doing. The result has been a ceding of the media stage to the anti's, some of whom have sensible things to say, but many of whom are complete nutcases who once argued for the exact opposite of what they argue today. Not surprisingly, after nearly 40 years as a Member State, the U.K. is perhaps the most Eurosceptic nation within the E.U.
Young's book ends in 1998, and he himself died in 2003. With the arrival of Tony Blair, he tries to be optimistic, believing the latter's publicly stated desire to be at the heart of Europe. But even then, there are clouds on the horizon. Britain held the rotating Presidency during the first half of 1998, less than a year after Labour's landslide election victory after eighteen years in the wilderness. At the summit on 3 May 1998, eleven of the then fifteen member states of the E.U. pledged to complete their economic and monetary union. Britain chaired the meeting, but did not sign the pledge.
And has stayed out since. Again, barriers have been put up to stop contamination. Before, it was the Commonwealth and the special relationship that were the hurdles, now it is the Treasury's five tests and protection for the City. Never mind that the Treasury's five tests do not include fixing what everybody now agrees are the euro's flaws, namely a lack of a central fiscal transfer mechanism and mutualisation of euro-debt; nor that any specific proposal that adversely affects the City can be vetoed as and when it arises. Other countries (Denmark, for instance) have opt-outs and prickly domestic electorates. Yet the most striking thing about David Cameron's E.U. veto late last year was that when Head Girl Angela Merkel demanded changes, nearly all of the countries outside the euro chose to go along with them rather than be outside the group. It seems that the only thing that Britain learns from European history is that it learns nothing.
That is not to say that everything in Euroland is wonderful. A very Eurosceptic, if not little Englander, friend of mind is fond of pointing out that the European Commission regularly fails to have its accounts approved by the Court of Auditors, and that if it were a company, it would be struck off or closed down. However, while true, that misses the point, in my view. The European project is real, and has come a long way in a relatively short period of time. The key question for Britain is, as it has always been, do we want to be part of this and make it work better, or don't we? Yet that is the very question that the country's political leaders, of all parties, continue to shirk.
Walter Blotscher
This blessed plot is a phrase that forms part of a famous speech by John of Gaunt in Shakespeare's Richard II, which eulogises his country. Starting "this royal throne of kings, this scepter'd isle", it ends "this blessed plot, this earth, this realm, this England".
This Blessed Plot is also the title of a brilliant book by Hugo Young, the former political columnist of the U.K.'s Sunday Times and Guardian newspapers. First published in 1998, it charts the history of Britain's relationship with first the E.E.C. and then the E.U. Having just reread it, I firmly believe that it should be a standard text for anybody interested in that relationship; every British schoolchild, for example.
The U.K. ended the Second World War as the only European country apart from the former Soviet Union that was indisputably a winner. However, it had also been brought to its knees economically, and had only survived thanks to massive financial help from the U.S. Understandably, but wrongly, the governing classes, politicians, civil servants and others, chose to highlight the former and ignore the latter. So, for instance, Churchill's pre-war calls for greater solidarity amongst the European nations (meaning Europe, including Britain) had by the late 1940's metamorphosed into calls for greater solidarity amongst the European nations (meaning Europe, excluding Britain). The U.K. could not be part of any European solidarity that had as its main aim the goal of preventing the terrible events of 1914-18 and 1939-45, since unlike the continentals, it had overlapping spheres of interest; Europe was undoubtedly one, but so too were the "special relationship" with the U.S. and the need to maintain the Empire (which later became the Commonwealth).
There were pockets in the establishment who were clearer-sighted, but they were few and far between. One such was Sir Henry Tizard, chief scientific adviser at the Ministry of Defence, who wrote in 1949:
"We persist in regarding ourselves as a Great Power, capable of everything and only temporarily handicapped by economic difficulties. We are not a Great Power and never will be again. We are a great nation, but if we continue to behave like a Great Power, we shall soon cease to be a great nation".
This prescient memo did not go down well with the powers-that-be. And so began the country's long strategic dilemna, a dilemna which persists to the present day, in which the U.K. can't make up its collective mind whether it wants to be part of the European project or not. True, the rhetoric changes from time to time. But the usual pattern is of initial scepticism about any new inititiative, often accompanied by ridicule; followed by distance and non-engagement, if not active attempts at sabotage; a grudging acceptance later that things have changed; a belated request to be involved; and finally (the worst thing) a pretence by the relevant people that they had somehow got deceived into accepting it. It was true of the original coal and steel community; true of the E.E.C.; true of majority voting and the single market; true of economic and monetary union; and (I predict) will also be true of the euro itself. The pattern cuts across political parties, and across generations. In short, very few Brits are willing to take Sir Henry Tizard's advice.
Should they have? Young's thesis is that they should, and it is persuasive. Not least because of events in those two other spheres of interest. The history of the post-war British Empire is of a transition to independence, sometimes peaceful, often messy and bloody (eg the partition of India). Coupled with an obvious realisation that the markets of the former colonies, who often ran hopeless post-independence economic policies that kept them in poverty, could in no way make up for the fast-growing economies located just over the Channel. Even more importantly, the trauma of the Suez crisis in 1956 demonstrated that when push came to shove, the Americans did not view the special relationship as being more important than their strategic interests in the Middle East. That lesson was learned in respect of defence, and prompted a gradual slimming down of the U.K.'s military commitments, and an eventual withdrawal "east of Suez". Yet the lesson was not learned in respect of the economic and political fields; and the habitual - and ritual - regurgitation of the "special relationship" with the U.S. is something which every British Prime Minister has banged on about for the past 55 years, notwithstanding any evidence that contradicts it.
With two of the three spheres of interest gone or sagging, Britain should have turned to the third and made a clear, if belated, commitment to Europe. But it didn't. The one exception to the general rule was Ted Heath, a much maligned figure these days, yet the only postwar British Prime Minister to have engaged in the sort of statesmanship that puts one's country before one's party interest. Heath had been the point man on Harold MacMillan's doomed application to join the then 6-country arrangement in the early 1960's that was brutally vetoed by de Gaulle. The other countries all wanted Britain in, indeed had wanted Britain in from the start, not least as a counterweight to the imperious French President; de Gaulle, for exactly the opposite reason, wanted to keep Britain out, so that France could dominate. Only when de Gaulle had left the scene could Heath, now Prime Minister, do the necessary deal with Pompidou that led to Britain's joining on 1 January 1973.
Yet even the europhile Ted Heath succombed to another British malaise that has affected, and continues to affect, British politicians when they talk about Europe, namely a tendency to pretend that they are not doing what they are in fact doing. It was already clear in 1972, for instance, that the treaties (and, notably, the jurisprudence of the European Court of Justice) represented a major transfer of sovereignty away from the U.K. and into something supranational. As Lord Denning, a famous judge, said in a 1974 case, the treaty was "like an incoming tide. It flows into the estuaries and up the rivers. It cannot be held back". Public opinion had consistently shown that the British people were willing to be led by their leaders on European matters; but their leaders chose not to do so. Heath presented entry as a purely economic/trading matter. His successor Margaret Thatcher signed the Single European Act into power, but then pretended that she had not known what she was doing. The result has been a ceding of the media stage to the anti's, some of whom have sensible things to say, but many of whom are complete nutcases who once argued for the exact opposite of what they argue today. Not surprisingly, after nearly 40 years as a Member State, the U.K. is perhaps the most Eurosceptic nation within the E.U.
Young's book ends in 1998, and he himself died in 2003. With the arrival of Tony Blair, he tries to be optimistic, believing the latter's publicly stated desire to be at the heart of Europe. But even then, there are clouds on the horizon. Britain held the rotating Presidency during the first half of 1998, less than a year after Labour's landslide election victory after eighteen years in the wilderness. At the summit on 3 May 1998, eleven of the then fifteen member states of the E.U. pledged to complete their economic and monetary union. Britain chaired the meeting, but did not sign the pledge.
And has stayed out since. Again, barriers have been put up to stop contamination. Before, it was the Commonwealth and the special relationship that were the hurdles, now it is the Treasury's five tests and protection for the City. Never mind that the Treasury's five tests do not include fixing what everybody now agrees are the euro's flaws, namely a lack of a central fiscal transfer mechanism and mutualisation of euro-debt; nor that any specific proposal that adversely affects the City can be vetoed as and when it arises. Other countries (Denmark, for instance) have opt-outs and prickly domestic electorates. Yet the most striking thing about David Cameron's E.U. veto late last year was that when Head Girl Angela Merkel demanded changes, nearly all of the countries outside the euro chose to go along with them rather than be outside the group. It seems that the only thing that Britain learns from European history is that it learns nothing.
That is not to say that everything in Euroland is wonderful. A very Eurosceptic, if not little Englander, friend of mind is fond of pointing out that the European Commission regularly fails to have its accounts approved by the Court of Auditors, and that if it were a company, it would be struck off or closed down. However, while true, that misses the point, in my view. The European project is real, and has come a long way in a relatively short period of time. The key question for Britain is, as it has always been, do we want to be part of this and make it work better, or don't we? Yet that is the very question that the country's political leaders, of all parties, continue to shirk.
Walter Blotscher
Sunday 26 February 2012
FREE SCHOOLS (2)
In my earlier post, I highlighted the reasons why Danes choose to use free schools, and why developments in the U.K. are unlikely to follow the same path.
New figures just published show that free schools remain a minority taste here. Since 2000, the number of state schools has fallen from 1,673 to 1,388 (a drop of almost 20%) while the number of free schools has risen from 460 to 526 (up 14%). However, the differences in pupils are less marked. Since 2007 state school pupils have fallen from 587,643 to 573,393 whereas free school pupils have risen from 92,885 to 96,071.
Taken together, this confirms what I said earlier, namely that one of the main driving forces behind free schools is the consolidation of the state sector into fewer, but larger, schools, mainly on the grounds of cost. This is a process which parents in rural areas in particular don't like. But it is not one which is the prime motivator for free schools in the U.K.
Walter Blotscher
In my earlier post, I highlighted the reasons why Danes choose to use free schools, and why developments in the U.K. are unlikely to follow the same path.
New figures just published show that free schools remain a minority taste here. Since 2000, the number of state schools has fallen from 1,673 to 1,388 (a drop of almost 20%) while the number of free schools has risen from 460 to 526 (up 14%). However, the differences in pupils are less marked. Since 2007 state school pupils have fallen from 587,643 to 573,393 whereas free school pupils have risen from 92,885 to 96,071.
Taken together, this confirms what I said earlier, namely that one of the main driving forces behind free schools is the consolidation of the state sector into fewer, but larger, schools, mainly on the grounds of cost. This is a process which parents in rural areas in particular don't like. But it is not one which is the prime motivator for free schools in the U.K.
Walter Blotscher
Saturday 25 February 2012
FINNAIR
Finnair is the national flag carrier of Finland, and is majority owned by the Finnish Government. It has been flying since 1923, and has not had a fatal or hull-loss accident since 1963.
My wife and I flew with Finnair to Hong Kong. And therein lies a tale. Within Europe, Finland sits awkwardly at the top, with nothing except snow, sea and ice to the north, and vast, empty expanses of Russia for much of the east. If you are not visiting Finland directly, then you are unlikely to go there. With regard to East Asia, on the other hand, Finland sits in exactly the right place, on the relevant great circle that aeroplanes use. In 1983 Finnair became the first airline to fly non-stop between Europe and Japan; it then followed it up in 1988 with the first non-stop service between Europe and China.
In conjunction with Helsinki Airport, Finnair has built on that geographical advantage. The airport has a separate "Asia" terminal, necessary for passport checks in and out of the Schengen region. You would expect all of the signs to be in Finnish, English and Swedish (there is a sizeable Swedish-speaking minority in Finland), but not that they are also in Mandarin and Korean. Daily flights to China, Korea, Japan and Hong Kong are coordinated so that they leave around midnight, arriving mid-afternoon local time the next day. On the way back, the process is the same, so you leave around midnight and arrive in Helsinki around 6am. You can fly to Asia with other airlines (eg KLM and Air France); however, not only would that add an extra 4 hours or so each way (2 from Copenhagen to Paris/Amsterdam and 2 back again), but the schedules are hopeless with regard to sleep patterns. I normally get terrible jetlag, but this time I was barely affected, even though we went almost halfway round the world.
Asian sensitivities in Helsinki are matched in the aircraft itself. Roughly half of our crew were Hong Kong Chinese, and all of the announcements/in-flight entertainment were in the three European languages and Cantonese. I was impressed.
All in all, it was a good example of how a small, rich country has thought through its global competitive advantages, and then put them into practice. Helsinki gets terrible weather in the winter, but the airport has invested in the necessary infrastructure and equipment to make sure that there are no operational problems. Other countries with better weather (the U.K. springs to mind immediately) could learn from those unobtrusive Finns.
Walter Blotscher
Finnair is the national flag carrier of Finland, and is majority owned by the Finnish Government. It has been flying since 1923, and has not had a fatal or hull-loss accident since 1963.
My wife and I flew with Finnair to Hong Kong. And therein lies a tale. Within Europe, Finland sits awkwardly at the top, with nothing except snow, sea and ice to the north, and vast, empty expanses of Russia for much of the east. If you are not visiting Finland directly, then you are unlikely to go there. With regard to East Asia, on the other hand, Finland sits in exactly the right place, on the relevant great circle that aeroplanes use. In 1983 Finnair became the first airline to fly non-stop between Europe and Japan; it then followed it up in 1988 with the first non-stop service between Europe and China.
In conjunction with Helsinki Airport, Finnair has built on that geographical advantage. The airport has a separate "Asia" terminal, necessary for passport checks in and out of the Schengen region. You would expect all of the signs to be in Finnish, English and Swedish (there is a sizeable Swedish-speaking minority in Finland), but not that they are also in Mandarin and Korean. Daily flights to China, Korea, Japan and Hong Kong are coordinated so that they leave around midnight, arriving mid-afternoon local time the next day. On the way back, the process is the same, so you leave around midnight and arrive in Helsinki around 6am. You can fly to Asia with other airlines (eg KLM and Air France); however, not only would that add an extra 4 hours or so each way (2 from Copenhagen to Paris/Amsterdam and 2 back again), but the schedules are hopeless with regard to sleep patterns. I normally get terrible jetlag, but this time I was barely affected, even though we went almost halfway round the world.
Asian sensitivities in Helsinki are matched in the aircraft itself. Roughly half of our crew were Hong Kong Chinese, and all of the announcements/in-flight entertainment were in the three European languages and Cantonese. I was impressed.
All in all, it was a good example of how a small, rich country has thought through its global competitive advantages, and then put them into practice. Helsinki gets terrible weather in the winter, but the airport has invested in the necessary infrastructure and equipment to make sure that there are no operational problems. Other countries with better weather (the U.K. springs to mind immediately) could learn from those unobtrusive Finns.
Walter Blotscher
Thursday 23 February 2012
CONGESTION CHARGES (2)
A month ago, I said that the chances that the new Government's "payment ring" for Copenhagen would go ahead were finely balanced. A flagship policy, particularly for the Socialists, versus fierce opposition from Social Democrat mayors in the western suburbs.
In the end, the mayors won. Yesterday Social Democrat Prime Minister Helle Thorning-Schmidt announced that the plan would be scrapped. Kr.1 billion would instead be spent on public transport, while an independent commission would urgently look at alternative measures to reduce congestion in the capital.
This is a major defeat for both the Government and the leaders of both the above parties. To abandon such a high-profile measure only 5 months into a new Government's life smacks of both weakness and ineptitude. The Social Democrats have been rewarded in the latest opinion polls with a rating of just 20%, their lowest ever.
The chances of this Government's lasting a full term look much reduced today. Margrethe Vestager of the Radikale Venstre, who wisely stayed out of the payment ring spat, must be wondering when she should ditch her two coalition partners and try to form a Government with the Opposition instead.
Walter Blotscher
A month ago, I said that the chances that the new Government's "payment ring" for Copenhagen would go ahead were finely balanced. A flagship policy, particularly for the Socialists, versus fierce opposition from Social Democrat mayors in the western suburbs.
In the end, the mayors won. Yesterday Social Democrat Prime Minister Helle Thorning-Schmidt announced that the plan would be scrapped. Kr.1 billion would instead be spent on public transport, while an independent commission would urgently look at alternative measures to reduce congestion in the capital.
This is a major defeat for both the Government and the leaders of both the above parties. To abandon such a high-profile measure only 5 months into a new Government's life smacks of both weakness and ineptitude. The Social Democrats have been rewarded in the latest opinion polls with a rating of just 20%, their lowest ever.
The chances of this Government's lasting a full term look much reduced today. Margrethe Vestager of the Radikale Venstre, who wisely stayed out of the payment ring spat, must be wondering when she should ditch her two coalition partners and try to form a Government with the Opposition instead.
Walter Blotscher
Wednesday 22 February 2012
HONG KONG (2)
I am now back in Denmark after 10 days with my wife spent visiting my son in Hong Kong. A great holiday; very interesting, very exciting, but also pretty tiring.
Where to start? Well, Hong Kong has a dramatic setting. Imagine Manhattan Island with a range of steep 300m high hills running through the middle of it, and you get an idea. The geography puts a premium on flat land, and forces builders upwards. 30-40 storey buildings, both offices and residential apartments, are everywhere, just like in New York. But they are also interspersed with a surprising amount of greenery, not least because 40% of the former colony is given over to national parks. When combined with the many small islands, you get fantastic views.
Since there are a lot of people, and not much room, living areas are small (a 50 sqm flat seems to be pretty standard) and expensive. So, not surprisingly, people appear to spend most of their leisure time on the street. Shops are everywhere and open all hours; so too are restaurants. Indeed, it's as if the two major preoccupations of the local Chinese are shopping and eating. We certainly did quite a lot of both.
The British were pretty snotty colonialists when they ran the place. But they also bequeathed to China a love of trade, the concept of a cooked breakfast, trams and double-decker buses, city parks, the common law, and school uniforms for girls (complete with knee-length socks), all of which flourish today. Plus a Victorian sense of public hygiene. Hong Kong has far and away the largest number of public lavatories in any city I have ever visited. Nearly all of which were spotlessly clean.
There were some surprises. First, there were fewer expats than I anticipated, and many Chinese spoke little or no English. It was cool and windy, rather than hot and humid (though, admittedly, it was winter). There was no graffitti and very little litter. The traffic was dense, but moved, certainly more quickly than in London. Chinese (or, at least, Cantonese) food is not at all spicy and doesn't include much rice. Shenzhen, the border town in China proper, is no poorer than its more famous neighbour. Chinese people are quite small; at 6 feet, I am only of average height in Western Europe, but I never saw anyone taller than me, and many of the older generation only came up to my ribcage. And some of the best tourist attractions were the cheapest; both the tram on Hong Kong Island and the ferry from Kowloon across to it cost only HK$2.30, roughly kr.2 or 20p.
Finally, four small things, that I really liked, all to do with service. A free shuttle bus from the hotel to the local metro station. A haircut which was half the price of a Danish one, but which included a free facial rub and (for the first time ever in my life) an extra rinse after the hair had been cut, meaning I didn't have to take a shower later in order to get rid of all those small cut hairs that get stuck under the collar. A forex bureau, which changed all of our remaining Chinese renminbi back into Hong Kong dollars, including the coins. And an Octopus card (see my son's blog post http://globe6joachim.blogspot.com/2012/01/octopus-cards.html), that goes negative, if you take a longer journey on the underground than your existing balance. At some point, you will want to use the card again, and when you top it up with your next HK$100, it will simply deduct the negative amount to give a net balance. A much better system than locking you inside the metro system until you find the missing HK$1.60 or whatever, and a refreshingly adult attitude.
More thoughts on Hong Kong in due course, but that's all for today.
Walter Blotscher
I am now back in Denmark after 10 days with my wife spent visiting my son in Hong Kong. A great holiday; very interesting, very exciting, but also pretty tiring.
Where to start? Well, Hong Kong has a dramatic setting. Imagine Manhattan Island with a range of steep 300m high hills running through the middle of it, and you get an idea. The geography puts a premium on flat land, and forces builders upwards. 30-40 storey buildings, both offices and residential apartments, are everywhere, just like in New York. But they are also interspersed with a surprising amount of greenery, not least because 40% of the former colony is given over to national parks. When combined with the many small islands, you get fantastic views.
Since there are a lot of people, and not much room, living areas are small (a 50 sqm flat seems to be pretty standard) and expensive. So, not surprisingly, people appear to spend most of their leisure time on the street. Shops are everywhere and open all hours; so too are restaurants. Indeed, it's as if the two major preoccupations of the local Chinese are shopping and eating. We certainly did quite a lot of both.
The British were pretty snotty colonialists when they ran the place. But they also bequeathed to China a love of trade, the concept of a cooked breakfast, trams and double-decker buses, city parks, the common law, and school uniforms for girls (complete with knee-length socks), all of which flourish today. Plus a Victorian sense of public hygiene. Hong Kong has far and away the largest number of public lavatories in any city I have ever visited. Nearly all of which were spotlessly clean.
There were some surprises. First, there were fewer expats than I anticipated, and many Chinese spoke little or no English. It was cool and windy, rather than hot and humid (though, admittedly, it was winter). There was no graffitti and very little litter. The traffic was dense, but moved, certainly more quickly than in London. Chinese (or, at least, Cantonese) food is not at all spicy and doesn't include much rice. Shenzhen, the border town in China proper, is no poorer than its more famous neighbour. Chinese people are quite small; at 6 feet, I am only of average height in Western Europe, but I never saw anyone taller than me, and many of the older generation only came up to my ribcage. And some of the best tourist attractions were the cheapest; both the tram on Hong Kong Island and the ferry from Kowloon across to it cost only HK$2.30, roughly kr.2 or 20p.
Finally, four small things, that I really liked, all to do with service. A free shuttle bus from the hotel to the local metro station. A haircut which was half the price of a Danish one, but which included a free facial rub and (for the first time ever in my life) an extra rinse after the hair had been cut, meaning I didn't have to take a shower later in order to get rid of all those small cut hairs that get stuck under the collar. A forex bureau, which changed all of our remaining Chinese renminbi back into Hong Kong dollars, including the coins. And an Octopus card (see my son's blog post http://globe6joachim.blogspot.com/2012/01/octopus-cards.html), that goes negative, if you take a longer journey on the underground than your existing balance. At some point, you will want to use the card again, and when you top it up with your next HK$100, it will simply deduct the negative amount to give a net balance. A much better system than locking you inside the metro system until you find the missing HK$1.60 or whatever, and a refreshingly adult attitude.
More thoughts on Hong Kong in due course, but that's all for today.
Walter Blotscher
Friday 10 February 2012
Thursday 9 February 2012
RICK SANTORUM
Rick Santorum seems to have thrown a spanner into the otherwise well-oiled machine that is Mitt Romney's campaign for the Republican Presidential nomination. The former Senator from Pennsylvania won all three contests up for grabs this week, in Colorado, Minnesota and Missouri. Romney must have been particularly concerned about his third place in Minnesota, behind libertarian Ron Paul.
Santorum is the sort of modern politician, who could only succeed in America. He is, by European standards, extremely right-wing, illiberal (he is anti-gay) and very religious. Unfortunately, there are a lot of people in the U.S., most of them in the Republican Party, who think like him. They also tend to vote in the primaries, so he has a chance to win the nomination, even if Romney has a C.V. eminently better suited to running the biggest economy on earth.
The U.S. has an odd political system. On the one hand, it really is a winner-take-all contest, a choice of only two candidates being narrow, viewed in world terms. On the other, there are so many checks and balances built into it, that extreme Presidents find it difficult to get anything done. Having said that, I for one would find a President Santorum alarming. The last thing we want in a troubled world is politics based on smug moral and religious certitude. Tony Blair was enough for one lifetime.
Walter Blotscher
Rick Santorum seems to have thrown a spanner into the otherwise well-oiled machine that is Mitt Romney's campaign for the Republican Presidential nomination. The former Senator from Pennsylvania won all three contests up for grabs this week, in Colorado, Minnesota and Missouri. Romney must have been particularly concerned about his third place in Minnesota, behind libertarian Ron Paul.
Santorum is the sort of modern politician, who could only succeed in America. He is, by European standards, extremely right-wing, illiberal (he is anti-gay) and very religious. Unfortunately, there are a lot of people in the U.S., most of them in the Republican Party, who think like him. They also tend to vote in the primaries, so he has a chance to win the nomination, even if Romney has a C.V. eminently better suited to running the biggest economy on earth.
The U.S. has an odd political system. On the one hand, it really is a winner-take-all contest, a choice of only two candidates being narrow, viewed in world terms. On the other, there are so many checks and balances built into it, that extreme Presidents find it difficult to get anything done. Having said that, I for one would find a President Santorum alarming. The last thing we want in a troubled world is politics based on smug moral and religious certitude. Tony Blair was enough for one lifetime.
Walter Blotscher
Tuesday 7 February 2012
ALBERTO CONTADOR
Alberto Contador is without doubt the best stage racer in cycling today. He won the first six Grand Tours (those of France, Italy and Spain) that he entered, and only lost last year's Tour de France in July because he had tried to win it after dominating the Giro in May, widely held to have been the toughest ever.
Now, however, he is out of the sport. Yesterday the Court of Arbitration in Sport gave him a 2-year ban for doping. At the 2010 Tour de France (which he won), a random doping test found that his urine contained a microscopic amount of the banned substance clenbuterol, a medication often given to cattle in order to beef them up. Contador's story was that it was due to a steak that he had eaten during the Tour, which had been brought up to France by a friend from Spain. The Spanish cycling federation freed him on the grounds that he had not knowingly ingested the banned substance. UCI, the world cycling body, appealed; and after a very long delay, CAS upheld their claim.
Unlike (say) EPO, clenbuterol is a funny substance within the anti-drug regime. First, the rules call for zero tolerance, rather than a minimum threshold; so any trace constitutes a breach. Secondly, although the drug is banned for use in livestock within the E.U., it is not elsewhere in the world. So some athletes - including cyclists - caught with it in their systems have been let off, because it happened in (say) Mexico. Contador's problem was that Spain is a country that bans it, and he could not plausibly demonstrate how the meat in question could have become contaminated.
A 2-year ban is often the kiss of death for a professional cyclist, not least because Contador will now be stripped of his victories in both the 2010 Tour and 2011 Giro. However, in this case, it has been backdated until 5 August 2010, meaning that he will be able to race again in 6 months' time. This will allow him to compete in the Vuelta - for which he must be the hot favourite - but not the Tour de France.
The relatively light ban suggests that CAS believed that there were some mitigating circumstances, presumably the fact that the recorded dosage was highly unlikely to have had any affect on Contador's performance. Expect calls for minimum thresholds to become more vocal in the future.
Walter Blotscher
Alberto Contador is without doubt the best stage racer in cycling today. He won the first six Grand Tours (those of France, Italy and Spain) that he entered, and only lost last year's Tour de France in July because he had tried to win it after dominating the Giro in May, widely held to have been the toughest ever.
Now, however, he is out of the sport. Yesterday the Court of Arbitration in Sport gave him a 2-year ban for doping. At the 2010 Tour de France (which he won), a random doping test found that his urine contained a microscopic amount of the banned substance clenbuterol, a medication often given to cattle in order to beef them up. Contador's story was that it was due to a steak that he had eaten during the Tour, which had been brought up to France by a friend from Spain. The Spanish cycling federation freed him on the grounds that he had not knowingly ingested the banned substance. UCI, the world cycling body, appealed; and after a very long delay, CAS upheld their claim.
Unlike (say) EPO, clenbuterol is a funny substance within the anti-drug regime. First, the rules call for zero tolerance, rather than a minimum threshold; so any trace constitutes a breach. Secondly, although the drug is banned for use in livestock within the E.U., it is not elsewhere in the world. So some athletes - including cyclists - caught with it in their systems have been let off, because it happened in (say) Mexico. Contador's problem was that Spain is a country that bans it, and he could not plausibly demonstrate how the meat in question could have become contaminated.
A 2-year ban is often the kiss of death for a professional cyclist, not least because Contador will now be stripped of his victories in both the 2010 Tour and 2011 Giro. However, in this case, it has been backdated until 5 August 2010, meaning that he will be able to race again in 6 months' time. This will allow him to compete in the Vuelta - for which he must be the hot favourite - but not the Tour de France.
The relatively light ban suggests that CAS believed that there were some mitigating circumstances, presumably the fact that the recorded dosage was highly unlikely to have had any affect on Contador's performance. Expect calls for minimum thresholds to become more vocal in the future.
Walter Blotscher
Monday 6 February 2012
CHINA
China had long had economic muscle, but it is beginning to flex its political muscles as well. Three recent developments.
First came the shift in America's military strategy, which puts more emphasis on the Pacific Region, including the stationing of troops in Australia. The U.S. is particularly concerned that spats between China and its neighbours over uninhabited rocks and the sovereignty boundary lines in the South China Sea will increase tensions.
Secondly, both China and Russia vetoed last week's U.N. Security Council resolution condemning the violence in Syria. That was despite diplomatic efforts to placate them, which resulted in a watering-down of the original text.
Thirdly, today's "ban" on Chinese airlines' participating in the E.U.'s emissions trading scheme. Air transport has since 1 January been included in the scheme, which levies a charge on flights within E.U. airspace based on carbon emissions. China is not alone in disliking this scheme, but has been more vocal in its response.
China faces a once-in-a-decade change of leadership this year, and so values stability above all else. 2012 will not be a year of concessions, in the U.N., E.U. or anywhere else.
Walter Blotscher
China had long had economic muscle, but it is beginning to flex its political muscles as well. Three recent developments.
First came the shift in America's military strategy, which puts more emphasis on the Pacific Region, including the stationing of troops in Australia. The U.S. is particularly concerned that spats between China and its neighbours over uninhabited rocks and the sovereignty boundary lines in the South China Sea will increase tensions.
Secondly, both China and Russia vetoed last week's U.N. Security Council resolution condemning the violence in Syria. That was despite diplomatic efforts to placate them, which resulted in a watering-down of the original text.
Thirdly, today's "ban" on Chinese airlines' participating in the E.U.'s emissions trading scheme. Air transport has since 1 January been included in the scheme, which levies a charge on flights within E.U. airspace based on carbon emissions. China is not alone in disliking this scheme, but has been more vocal in its response.
China faces a once-in-a-decade change of leadership this year, and so values stability above all else. 2012 will not be a year of concessions, in the U.N., E.U. or anywhere else.
Walter Blotscher
Saturday 4 February 2012
BARBARIANS AT THE GATE
The book to read (re-read, in my case) after Liar's Poker is Barbarians at the Gate. The former is about the bond market during the 1980's; the latter is about mergers and acquisitions and leveraged buy-outs. In particular, it's about the scrap to win the late 1988 buy-out of the American food and tobacco company RJR Nabisco, a battle eventually won by LBO specialists Kohlberg, Kravis, Roberts.
BATG is not as funny as Liar's Poker, it is written more in the style of a thriller. But it's a good read nevertheless, since both books are, at the end of the day, about financial excess and terrible decision-making.
RJR was a sprawling conglomerate run by a cheerful Canadian called Ross Johnson. Johnson's mission in life was to have a good time, using the company's cashflow to pay for it. RJR had a fleet of eight corporate jets, and corporate apartments for most of the senior staff. When Johnson moved the company's headquarters from Winston-Salem to Atlanta, he had a new hangar built at Atlanta Airport; his only comment on the design plans was to make them bigger. He schmoozed his Board by putting them all on consultancy contracts, and not small ones either. In terms of business, Johnson was not very good; his big new idea, a smokeless cigarette called Premier, was a disaster.
A company like that cried out to be knocked into shape by cutting out the fat, and running it properly. Investment banks queued up to entice Johnson to go for a management-led LBO, which would be the biggest in history. Johnson liked the idea of being his own boss, but not the cutting the fat bit. He squared the circle by opting to team up with Shearson, Lehmann, a bank that had not really ever done an LBO before. Shearson's boss was so desperate to become a player in the market, that he agreed to let the management team of 7 people have (for free) a slice of the deal that could have netted them US$1.9 billion (and you think that Fred Goodwin was greedy!). One of the recurring themes of the book is a succession of top Wall Street financiers saying to themselves or other top Wall Street financiers "we've got to do something about Ross' management agreement", but never actually getting around to doing anything about it.
In the end, after many twists and turns, the Shearson/management bid was topped by KKR. Johnson resigned before he was fired, and had to console himself with a US$53 million golden parachute. Nabisco profits rose by 40% the following year; though they needed to in order to service all the debt taken on to fund the US$25 billion deal.
What goes around, comes around. And the only thing you learn from history is that you don't learn anything.
Walter Blotscher
The book to read (re-read, in my case) after Liar's Poker is Barbarians at the Gate. The former is about the bond market during the 1980's; the latter is about mergers and acquisitions and leveraged buy-outs. In particular, it's about the scrap to win the late 1988 buy-out of the American food and tobacco company RJR Nabisco, a battle eventually won by LBO specialists Kohlberg, Kravis, Roberts.
BATG is not as funny as Liar's Poker, it is written more in the style of a thriller. But it's a good read nevertheless, since both books are, at the end of the day, about financial excess and terrible decision-making.
RJR was a sprawling conglomerate run by a cheerful Canadian called Ross Johnson. Johnson's mission in life was to have a good time, using the company's cashflow to pay for it. RJR had a fleet of eight corporate jets, and corporate apartments for most of the senior staff. When Johnson moved the company's headquarters from Winston-Salem to Atlanta, he had a new hangar built at Atlanta Airport; his only comment on the design plans was to make them bigger. He schmoozed his Board by putting them all on consultancy contracts, and not small ones either. In terms of business, Johnson was not very good; his big new idea, a smokeless cigarette called Premier, was a disaster.
A company like that cried out to be knocked into shape by cutting out the fat, and running it properly. Investment banks queued up to entice Johnson to go for a management-led LBO, which would be the biggest in history. Johnson liked the idea of being his own boss, but not the cutting the fat bit. He squared the circle by opting to team up with Shearson, Lehmann, a bank that had not really ever done an LBO before. Shearson's boss was so desperate to become a player in the market, that he agreed to let the management team of 7 people have (for free) a slice of the deal that could have netted them US$1.9 billion (and you think that Fred Goodwin was greedy!). One of the recurring themes of the book is a succession of top Wall Street financiers saying to themselves or other top Wall Street financiers "we've got to do something about Ross' management agreement", but never actually getting around to doing anything about it.
In the end, after many twists and turns, the Shearson/management bid was topped by KKR. Johnson resigned before he was fired, and had to console himself with a US$53 million golden parachute. Nabisco profits rose by 40% the following year; though they needed to in order to service all the debt taken on to fund the US$25 billion deal.
What goes around, comes around. And the only thing you learn from history is that you don't learn anything.
Walter Blotscher
Friday 3 February 2012
A GALA EVENT
Halfway through the third year at gymnasium (sixth form) in Denmark, the students have a big party. They all get dressed up in their finest, dance a special dance, change out of their finest and then go off and get very drunk. Their proud parents come to the first bit, but then get shunted off home so that they don't become too embarassing.
This year, the party is this evening. My 17-year old daughter has just gone off to the pre-gala class dinner, clad in a long black evening gown and looking very pretty. I shall have to go home and shave.
Walter Blotscher
Halfway through the third year at gymnasium (sixth form) in Denmark, the students have a big party. They all get dressed up in their finest, dance a special dance, change out of their finest and then go off and get very drunk. Their proud parents come to the first bit, but then get shunted off home so that they don't become too embarassing.
This year, the party is this evening. My 17-year old daughter has just gone off to the pre-gala class dinner, clad in a long black evening gown and looking very pretty. I shall have to go home and shave.
Walter Blotscher
Thursday 2 February 2012
A CREATURE OF HABIT
After my shower this morning, I cut my toenails. And as I was doing this, I became aware of how much I (and, I suspect, you readers) am a creature of habit.
Three examples should suffice. First, when I cut my toenails, I always start with the right foot, and go from second toe to little toe, leaving the big toe until last. Then I do the same with my left foot.
Secondly, when I shave, I always start with my left cheek, from the sideburn down, followed by my right cheek, then the chin and neck, and finally the moustache area.
Thirdly, when I iron a shirt, it is always in the order collar, stock, cuffs and front buttons, sleeves, the shirt itself and then the collar once more.
All three examples are not just "well, I usually do it like that", but "I always do it like that, every single time". I did think it was because that was how my mother taught me to do it when I was little. But then I remembered that she doesn't shave, so I realised it must have something to do with me.
Walter Blotscher
After my shower this morning, I cut my toenails. And as I was doing this, I became aware of how much I (and, I suspect, you readers) am a creature of habit.
Three examples should suffice. First, when I cut my toenails, I always start with the right foot, and go from second toe to little toe, leaving the big toe until last. Then I do the same with my left foot.
Secondly, when I shave, I always start with my left cheek, from the sideburn down, followed by my right cheek, then the chin and neck, and finally the moustache area.
Thirdly, when I iron a shirt, it is always in the order collar, stock, cuffs and front buttons, sleeves, the shirt itself and then the collar once more.
All three examples are not just "well, I usually do it like that", but "I always do it like that, every single time". I did think it was because that was how my mother taught me to do it when I was little. But then I remembered that she doesn't shave, so I realised it must have something to do with me.
Walter Blotscher
Wednesday 1 February 2012
EUROPACTS
It is important to realise what the latest Europact may do, and what it certainly won't do.
25 of the 27 E.U. countries (the U.K. and the Czech Republic being the naysayers) have agreed to enshrine in their respective national laws an agreement limiting public sector budget deficits. In fact, existing E.U. legislation already had this; there were limits on deficits (3% of GDP) and debt (60% of GDP). However, when France and Germany, two of the biggest countries, broke these limits during the noughties, they got away with it, not least because they were big. Putting the agreement into national legislation, rather than leaving it at the E.U. level, makes it more likely that Governments will adhere to it next time round.
But making a crisis less likely in the future will do absolutely nothing to sort out the existing one. Indeed, since almost all countries are currently outside the proposed limits, getting from A to B will necessarily involve Governmental belt-tightening. Reduced Government (net) spending automatically reduces overall economic demand (unless the private sector and/or net exports make up the shortfall, and they don't seem to be doing that); so fiscal stringency today may well make the situation worse rather than better.
I think Angela Merkel, architect of the pact and general schoolmistress of the E.U., well knows this. However, she was both determined to put the longer-term measures in place (in order to placate domestic German voters fed up with feckless southerners) and aware that the E.U. only embraces radical change when there is a crisis. The risk, of course, was that the whole Euro zone would implode before the longer-term measures were in place. She has managed to avoid that - just. And once the national Parliaments have duly done her bidding, I fully expect her to reduce her hostility to greater intervention by the European Central Bank and/or some kind of Euro-area bonds, the two things needed to sort out the current mess.
In other words, and despite criticism from many quarters, I think she has played her hand with impressive skill.
Walter Blotscher
It is important to realise what the latest Europact may do, and what it certainly won't do.
25 of the 27 E.U. countries (the U.K. and the Czech Republic being the naysayers) have agreed to enshrine in their respective national laws an agreement limiting public sector budget deficits. In fact, existing E.U. legislation already had this; there were limits on deficits (3% of GDP) and debt (60% of GDP). However, when France and Germany, two of the biggest countries, broke these limits during the noughties, they got away with it, not least because they were big. Putting the agreement into national legislation, rather than leaving it at the E.U. level, makes it more likely that Governments will adhere to it next time round.
But making a crisis less likely in the future will do absolutely nothing to sort out the existing one. Indeed, since almost all countries are currently outside the proposed limits, getting from A to B will necessarily involve Governmental belt-tightening. Reduced Government (net) spending automatically reduces overall economic demand (unless the private sector and/or net exports make up the shortfall, and they don't seem to be doing that); so fiscal stringency today may well make the situation worse rather than better.
I think Angela Merkel, architect of the pact and general schoolmistress of the E.U., well knows this. However, she was both determined to put the longer-term measures in place (in order to placate domestic German voters fed up with feckless southerners) and aware that the E.U. only embraces radical change when there is a crisis. The risk, of course, was that the whole Euro zone would implode before the longer-term measures were in place. She has managed to avoid that - just. And once the national Parliaments have duly done her bidding, I fully expect her to reduce her hostility to greater intervention by the European Central Bank and/or some kind of Euro-area bonds, the two things needed to sort out the current mess.
In other words, and despite criticism from many quarters, I think she has played her hand with impressive skill.
Walter Blotscher
Subscribe to:
Posts (Atom)
