MY MUM (2)
My Mum is staying with me this week, having come to be present at my daughter's "translocation" (the ceremony where Danish children leave the sixth form). Now 86, any sort of travel is a bit of an ordeal for her these days, particularly mentally. The physical side is, in many ways, a lot easier for old people, since there is someone to help you on both the railways and through Stansted Airport. But there is always a risk that it doesn't work out as planned, I suppose.
We had a pretty gentle day today, not least because it was tipping down with rain. So I gave her a private sitting at the local cinema. She watched the Best Exotic Marigold Hotel, a lovely film about pensioners decamping to India, which seemed appropriate. Then this evening we watched the England - Italy football quarter final. She thought that Italy deserved to win, which was a fair comment, even if she is not really a sports fan.
We'll try to take things easy this week, since she gets tired. But there's always Wimbledon to make her relaxed; tennis is the one sport she really likes.
Walter Blotscher
Sunday 24 June 2012
Friday 22 June 2012
FOOTBALL AND ECONOMICS
I suspect that a lot of people, and not just Greeks, were hoping that Greece would upset Germany in their Euro 2012 quarter final this evening, particularly since Angela Merkel was present at the game. But although the Greeks equalised after an hour or so, the outcome was never really in doubt, and a 4-2 result fairly reflected Germany's superiority. As in economics, strength in depth matters.
Walter Blotscher
I suspect that a lot of people, and not just Greeks, were hoping that Greece would upset Germany in their Euro 2012 quarter final this evening, particularly since Angela Merkel was present at the game. But although the Greeks equalised after an hour or so, the outcome was never really in doubt, and a 4-2 result fairly reflected Germany's superiority. As in economics, strength in depth matters.
Walter Blotscher
Thursday 21 June 2012
SEX DISCRIMINATION
Denmark puts a lot of weight on the equality of the sexes, notably in the job market. But results don't always end up equal.
Research shows that women are moving to the cities, leaving men behind in the rural areas. In the suburbs of Copenhagen, the ratio of women to men of working age (15-64) is more than 106 : 100; while in parts of West and North Jutland, it can be as low as 90 : 100. On the southern islands such as Ærø, it is even lower.
"So what?" you might say. But if you are a man, you ought to be worried. Because the areas where there are a preponderance of men are also the areas which have above average mortality. Basically, there are fewer doctors and other healthcare providers in these areas; and men tend to go to the doctor much less often than women. These factors, combined with men's lower life expectancy, result in poorer health.
I live in a kommune which has 94-98 women for every 100 men, and above average mortality. Something to ponder as I pedal on my bicycle.
Walter Blotscher
Denmark puts a lot of weight on the equality of the sexes, notably in the job market. But results don't always end up equal.
Research shows that women are moving to the cities, leaving men behind in the rural areas. In the suburbs of Copenhagen, the ratio of women to men of working age (15-64) is more than 106 : 100; while in parts of West and North Jutland, it can be as low as 90 : 100. On the southern islands such as Ærø, it is even lower.
"So what?" you might say. But if you are a man, you ought to be worried. Because the areas where there are a preponderance of men are also the areas which have above average mortality. Basically, there are fewer doctors and other healthcare providers in these areas; and men tend to go to the doctor much less often than women. These factors, combined with men's lower life expectancy, result in poorer health.
I live in a kommune which has 94-98 women for every 100 men, and above average mortality. Something to ponder as I pedal on my bicycle.
Walter Blotscher
Wednesday 20 June 2012
ACCOUNTING
The good thing about accounting is that accounts should balance, down to the final penny. The bad thing about accounting is that if they don't balance, even if only by a penny, then you have made a mistake.
I thought about that a lot this morning as I redid the accounts for the local cinema. Two major changes took place on 1 January this year; the cinema got a new person to do the accounts, and it also got a new accounting programme, which is much more up to date and user-friendly. The problem caused by the two changes was that the year-end results and adjustments for 2011 had to be manually put into the new system by the person managing the transition (i.e. me). This took some time, but eventually it was done, and off we went with the new system.
Then disaster struck. I got a panic-stricken sms from the new accountant last week, saying that the new accounts had somehow "disappeared". Exactly how this happened has not been revealed; but it meant that all those results and adjustments had to be reinserted into the new programme, with the added complication that it is now more than five months after the event and memories are fading fast.
Still, nothing like a challenge. And I am pleased to be able to report that I got everything to balance in the end, down to the last penny (well, øre). We are back on track.
Walter Blotscher
The good thing about accounting is that accounts should balance, down to the final penny. The bad thing about accounting is that if they don't balance, even if only by a penny, then you have made a mistake.
I thought about that a lot this morning as I redid the accounts for the local cinema. Two major changes took place on 1 January this year; the cinema got a new person to do the accounts, and it also got a new accounting programme, which is much more up to date and user-friendly. The problem caused by the two changes was that the year-end results and adjustments for 2011 had to be manually put into the new system by the person managing the transition (i.e. me). This took some time, but eventually it was done, and off we went with the new system.
Then disaster struck. I got a panic-stricken sms from the new accountant last week, saying that the new accounts had somehow "disappeared". Exactly how this happened has not been revealed; but it meant that all those results and adjustments had to be reinserted into the new programme, with the added complication that it is now more than five months after the event and memories are fading fast.
Still, nothing like a challenge. And I am pleased to be able to report that I got everything to balance in the end, down to the last penny (well, øre). We are back on track.
Walter Blotscher
Tuesday 19 June 2012
HOUSE OF LORDS REFORM
Many people (not just me) might think it odd that, when most European countries are experiencing the most difficult economic situation in a long long time, the U.K. coalition Government has chosen to spend time reforming the House of Lords, the upper chamber of Parliament.
Let's be honest, if the House of Lords did not exist, then you would not invent it. Its origins, as the name suggests, go back to the earliest days of Parliament in the fourteenth century, when the nobility (the Lords) met separately from the representatives of the middle classes (the Commons). Although during the Civil Wars of the 1640's between King and Parliament, the Lords were generally on the royalist side, they were not uniformly so. And when peace was restored, both houses retained their importance. Indeed, for most of the eighteenth and nineteenth centuries, the British Prime Minister was just as likely to be a peer as a commoner.
The crucial battles between the two chambers came in the years just before the first world war. After a series of skirmishes between the Liberal Government and the (Conservative-dominated) House of Lords, the Lords vetoed the 1909 finance bill based on the Government budget. This broke a long-standing convention that the Lords would not stand in the way of money bills, the traditional remit of the Commons, and was justified on the grounds that the budget did not reflect the will of the people. The Liberals tested that theory by holding a general election in January 1910; and although they did badly, they retained a majority thanks to the support of Irish nationalist M.P.'s. The budget was duly passed.
After that exhausting dispute, the Liberals decided to assert the supremacy of the Commons once and for all. A Parliament Act was introduced, which would do just that. Again it was rejected by the Lords, after tortuous discussions in joint committees. Again there was a general election, this time in December 2010; the outcome was pretty much unchanged. The King was then persuaded to say that if the Lords continued to defy the Commons on the Parliament Act, then he would create as many Liberal peers as necessary to get it through. The Lords backed down and the Parliament Act became law in the summer of 1911. Since then, the Lords have had no power over money bills; other public bills, generally those mentioned in the Queen's Speech setting out the Government's legislative programme, can not be vetoed indefinitely, but they can be delayed by up to two years.
The main effect of the Parliament Act was to make the Lords an advisory and amending, as opposed to a deciding, chamber. And in my view, it worked pretty well. Sure, there were a load of hereditary peers, whose only right to be there was an accident of birth. But there were also life peers, people who had been given a title. Some of those people were extremely knowledgeable on certain subjects, so it sometimes made a lot of sense to have them suggest amendments and improvements to bills put forward by hot-headed political zealots in the Commons. Bills which potentially affected everybody in the community - social care, for instance - were sometimes introduced in the Lords first, for that very reason.
So, the Lords became - in democratic terms - an anomaly. On the one hand, it was the guardian of democracy (notably under Margaret Thatcher, who was opposed more by the Lords than by the Commons); on the other, it was completely undemocratic itself. A curiously British solution.
There's a lot to be said for the saying "if it ain't broke, then don't fix it". Tony Blair, anxious to promote constitutional reform along with devolution to Scotland and Wales, decided that the Lords needed reforming. The obvious answer, if you were going to reform seriously, was to abolish the hereditary peers and have some sort of election for the whole house, making the Lords similar to other second houses in other countries. But that is not what happened. The 1999 reform got rid of most of the hereditary peers, except for 92 (I don't know where that precise number came from) as part of a reduction in the size of the house from 1,330 to 669; nothing was said about elections. Ten years later, Gordon Brown's Government put forward proposals to get rid of the remaining hereditaries, but it did not have time to implement them before it lost power.
And so here we are today, with a few hereditaries, a lot of life peers, and still no elections. Within the coalition Government, the Liberal Democrats, long-time experts on constitutional matters, are itching to put in place the comprehensive reform that (in their view) should have taken place long ago. In other words, an elected second chamber, as happens elsewhere. The Conservatives, on the other hand (and possibly the Labour opposition, though nobody is quite sure), are more sceptical. Although they accept that the current system is hard to defend, they worry that a fully elected House of Lords will become assertive, and aim for equal weight with the Commons, as (say) the Senate does with the House of Representatives in the United States. That would go against the history of Parliament, and in particular the Commons' victory by way of the Parliament Act.
So, difficulties for the Coalition, and difficulties for the two major parties. But at the end of the day, does it really matter to the man on the Clapham omnibus? I would say, probably not, but it should. I would not have reformed the Lords in 1999 in the way it was done; and I would not do it now, because the timing is all worng. The way forward in my view would be for each party to include a proposal in their election manifestos for the next general election, and have the resulting Government implement a comprehensive reform at that time. However, I also predict that that is precisely what will not happen.
Walter Blotscher
Many people (not just me) might think it odd that, when most European countries are experiencing the most difficult economic situation in a long long time, the U.K. coalition Government has chosen to spend time reforming the House of Lords, the upper chamber of Parliament.
Let's be honest, if the House of Lords did not exist, then you would not invent it. Its origins, as the name suggests, go back to the earliest days of Parliament in the fourteenth century, when the nobility (the Lords) met separately from the representatives of the middle classes (the Commons). Although during the Civil Wars of the 1640's between King and Parliament, the Lords were generally on the royalist side, they were not uniformly so. And when peace was restored, both houses retained their importance. Indeed, for most of the eighteenth and nineteenth centuries, the British Prime Minister was just as likely to be a peer as a commoner.
The crucial battles between the two chambers came in the years just before the first world war. After a series of skirmishes between the Liberal Government and the (Conservative-dominated) House of Lords, the Lords vetoed the 1909 finance bill based on the Government budget. This broke a long-standing convention that the Lords would not stand in the way of money bills, the traditional remit of the Commons, and was justified on the grounds that the budget did not reflect the will of the people. The Liberals tested that theory by holding a general election in January 1910; and although they did badly, they retained a majority thanks to the support of Irish nationalist M.P.'s. The budget was duly passed.
After that exhausting dispute, the Liberals decided to assert the supremacy of the Commons once and for all. A Parliament Act was introduced, which would do just that. Again it was rejected by the Lords, after tortuous discussions in joint committees. Again there was a general election, this time in December 2010; the outcome was pretty much unchanged. The King was then persuaded to say that if the Lords continued to defy the Commons on the Parliament Act, then he would create as many Liberal peers as necessary to get it through. The Lords backed down and the Parliament Act became law in the summer of 1911. Since then, the Lords have had no power over money bills; other public bills, generally those mentioned in the Queen's Speech setting out the Government's legislative programme, can not be vetoed indefinitely, but they can be delayed by up to two years.
The main effect of the Parliament Act was to make the Lords an advisory and amending, as opposed to a deciding, chamber. And in my view, it worked pretty well. Sure, there were a load of hereditary peers, whose only right to be there was an accident of birth. But there were also life peers, people who had been given a title. Some of those people were extremely knowledgeable on certain subjects, so it sometimes made a lot of sense to have them suggest amendments and improvements to bills put forward by hot-headed political zealots in the Commons. Bills which potentially affected everybody in the community - social care, for instance - were sometimes introduced in the Lords first, for that very reason.
So, the Lords became - in democratic terms - an anomaly. On the one hand, it was the guardian of democracy (notably under Margaret Thatcher, who was opposed more by the Lords than by the Commons); on the other, it was completely undemocratic itself. A curiously British solution.
There's a lot to be said for the saying "if it ain't broke, then don't fix it". Tony Blair, anxious to promote constitutional reform along with devolution to Scotland and Wales, decided that the Lords needed reforming. The obvious answer, if you were going to reform seriously, was to abolish the hereditary peers and have some sort of election for the whole house, making the Lords similar to other second houses in other countries. But that is not what happened. The 1999 reform got rid of most of the hereditary peers, except for 92 (I don't know where that precise number came from) as part of a reduction in the size of the house from 1,330 to 669; nothing was said about elections. Ten years later, Gordon Brown's Government put forward proposals to get rid of the remaining hereditaries, but it did not have time to implement them before it lost power.
And so here we are today, with a few hereditaries, a lot of life peers, and still no elections. Within the coalition Government, the Liberal Democrats, long-time experts on constitutional matters, are itching to put in place the comprehensive reform that (in their view) should have taken place long ago. In other words, an elected second chamber, as happens elsewhere. The Conservatives, on the other hand (and possibly the Labour opposition, though nobody is quite sure), are more sceptical. Although they accept that the current system is hard to defend, they worry that a fully elected House of Lords will become assertive, and aim for equal weight with the Commons, as (say) the Senate does with the House of Representatives in the United States. That would go against the history of Parliament, and in particular the Commons' victory by way of the Parliament Act.
So, difficulties for the Coalition, and difficulties for the two major parties. But at the end of the day, does it really matter to the man on the Clapham omnibus? I would say, probably not, but it should. I would not have reformed the Lords in 1999 in the way it was done; and I would not do it now, because the timing is all worng. The way forward in my view would be for each party to include a proposal in their election manifestos for the next general election, and have the resulting Government implement a comprehensive reform at that time. However, I also predict that that is precisely what will not happen.
Walter Blotscher
Sunday 17 June 2012
GREECE (8)
My last post on Greece got me into trouble with one of my regular readers; I was accused of sloppy thinking. Yet my prediction that a) the previous election would not result in a Government, so b) there would be a new election, in which c) the Greek electorate would "sullenly" give New Democracy/Pasok a narrow Parliamentary majority, turned out to be spot on. In the second election today, the two parties increased their total seats in the 300-strong Parliament from 149 to 162, enough to form a coalition. New Democracy, as before, bagged the extra 50 seats given to the winning party, and increased their total by 21; Pasok continued to slide, losing 8.
I also think that sullen was a pretty good description. As a percentage of the vote, Pasok/ND got 42% between them, which is hardly a ringing endorsement of their pitch to back the bail-out. Furthermore, the abstention rate rose from 34% on 6 May to 40% today, which suggests a certain apathy or disgust with the whole political process. The big winner was the left-wing Syriza party, which had campaigned on the (in my view, fanciful) policy that Greece could both stay in the euro and tear up the existing bail-out deal. They came second with 27% of the vote, and increased their representation from 52 seats to 71. Fringe parties on both the right and left were the big losers.
Because of their lukewarm support, Pasok/ND are talking about trying to renegotiate the terms of the bail-out. Headgirl Angela Merkel has already said publicly that this isn't on, and I suspect that she means it. Any concessions made to the new Greek Government will be cosmetic. There will be no alternative to the austerity medicine prescribed by the Germans.
Walter Blotscher
My last post on Greece got me into trouble with one of my regular readers; I was accused of sloppy thinking. Yet my prediction that a) the previous election would not result in a Government, so b) there would be a new election, in which c) the Greek electorate would "sullenly" give New Democracy/Pasok a narrow Parliamentary majority, turned out to be spot on. In the second election today, the two parties increased their total seats in the 300-strong Parliament from 149 to 162, enough to form a coalition. New Democracy, as before, bagged the extra 50 seats given to the winning party, and increased their total by 21; Pasok continued to slide, losing 8.
I also think that sullen was a pretty good description. As a percentage of the vote, Pasok/ND got 42% between them, which is hardly a ringing endorsement of their pitch to back the bail-out. Furthermore, the abstention rate rose from 34% on 6 May to 40% today, which suggests a certain apathy or disgust with the whole political process. The big winner was the left-wing Syriza party, which had campaigned on the (in my view, fanciful) policy that Greece could both stay in the euro and tear up the existing bail-out deal. They came second with 27% of the vote, and increased their representation from 52 seats to 71. Fringe parties on both the right and left were the big losers.
Because of their lukewarm support, Pasok/ND are talking about trying to renegotiate the terms of the bail-out. Headgirl Angela Merkel has already said publicly that this isn't on, and I suspect that she means it. Any concessions made to the new Greek Government will be cosmetic. There will be no alternative to the austerity medicine prescribed by the Germans.
Walter Blotscher
Saturday 16 June 2012
PROPERTY IN DENMARK
Denmark had a property boom during the noughties. Prices, particularly in Copenhagen, rose spectacularly; though they would still seem low by (say) U.K. standards. And when the financial crisis hit, the property market nosedived. Particularly out here in the countryside, there are lots of For Sale signs, as I saw on my recent pilgrimage.
New data released this week show just how depressed the property market is. One in ten of all house sales at the moment is due to a repossession; and on Zealand outside of Copenhagen, the figure is a staggering 27%.
The overhang of properties trying to be sold will take a long time to work its way through the system. This financial crisis still has a long way to go.
Walter Blotscher
Denmark had a property boom during the noughties. Prices, particularly in Copenhagen, rose spectacularly; though they would still seem low by (say) U.K. standards. And when the financial crisis hit, the property market nosedived. Particularly out here in the countryside, there are lots of For Sale signs, as I saw on my recent pilgrimage.
New data released this week show just how depressed the property market is. One in ten of all house sales at the moment is due to a repossession; and on Zealand outside of Copenhagen, the figure is a staggering 27%.
The overhang of properties trying to be sold will take a long time to work its way through the system. This financial crisis still has a long way to go.
Walter Blotscher
Friday 15 June 2012
INGERLAND (2)
Andy Carroll isn't worth his transfer fee of £35 million, but he scored a cracking opening goal with his head, as Ingerland beat Sweden 3-2 in Kiev. One interesting fact is that before this evening, Sweden had never lost to Ingerland in anything other than a friendly. Yet despite letting a one-nil lead slip to one-two shortly after halftime, Theo Walcott injected much needed pace when he came on as substitute with thirty minutes left, scoring one and setting up the third for a narrow victory.
Ingerland's fans were their usual pasty selves on the terraces. After a victory at the stadium, I suspect they'll head downtown for more beer, and perhaps a bit of action.
Walter Blotscher
Andy Carroll isn't worth his transfer fee of £35 million, but he scored a cracking opening goal with his head, as Ingerland beat Sweden 3-2 in Kiev. One interesting fact is that before this evening, Sweden had never lost to Ingerland in anything other than a friendly. Yet despite letting a one-nil lead slip to one-two shortly after halftime, Theo Walcott injected much needed pace when he came on as substitute with thirty minutes left, scoring one and setting up the third for a narrow victory.
Ingerland's fans were their usual pasty selves on the terraces. After a victory at the stadium, I suspect they'll head downtown for more beer, and perhaps a bit of action.
Walter Blotscher
Wednesday 13 June 2012
TAX AND PROPERTY RIGHTS
The flipside of the coin, whereby Denmark has the highest tax take in the world, is that there is a huge incentive to try to evade tax. One of the biggest loopholes is "black work", where builders and carpenters do work on the side in exchange for cash. The customer is happy, since he or she saves, at a minimum, 25% VAT on labour rates. Furthermore, those rates, instead of being kr.500 an hour, can be negotiated down to perhaps half of that. The handyman is still happy, since kr.250 cash is perhaps twice what he would have received after tax through his wage packet. A win-win deal (for everyone except the taxman).
The obvious solution to this problem is to reduce tax rates, and the resulting incentive to cheat. However, the Danish Government has taken a different approach. Today they passed a law giving the Inland Revenue the power to go onto people's private property when handymen are working there, in order to check that they are doing it officially. This is a power, that not even the police have, since they have to get a search warrant first. It is also against the Danish constitution, which makes a sharp distinction between public and private rights.
Governments everywhere are desperate for cash at the moment, and so need to collect as much in taxes as they possibly can. However, I suspect that they have overreached in this particular instance. I predict a serious backlash, once the first prosecutions start arriving in the court system.
Walter Blotscher
The flipside of the coin, whereby Denmark has the highest tax take in the world, is that there is a huge incentive to try to evade tax. One of the biggest loopholes is "black work", where builders and carpenters do work on the side in exchange for cash. The customer is happy, since he or she saves, at a minimum, 25% VAT on labour rates. Furthermore, those rates, instead of being kr.500 an hour, can be negotiated down to perhaps half of that. The handyman is still happy, since kr.250 cash is perhaps twice what he would have received after tax through his wage packet. A win-win deal (for everyone except the taxman).
The obvious solution to this problem is to reduce tax rates, and the resulting incentive to cheat. However, the Danish Government has taken a different approach. Today they passed a law giving the Inland Revenue the power to go onto people's private property when handymen are working there, in order to check that they are doing it officially. This is a power, that not even the police have, since they have to get a search warrant first. It is also against the Danish constitution, which makes a sharp distinction between public and private rights.
Governments everywhere are desperate for cash at the moment, and so need to collect as much in taxes as they possibly can. However, I suspect that they have overreached in this particular instance. I predict a serious backlash, once the first prosecutions start arriving in the court system.
Walter Blotscher
Tuesday 12 June 2012
ANGRY FARMERS
Danish farmers are up in arms. Farmers are generally quite angry these days, but this time it is serious. From 1 September they will not be allowed to grow crops, spray chemicals or use manure on any land within 10 metres of water. That means ponds, lakes, rivers and streams. The idea is to prevent chemicals from seeping into the water supply, and thereby protect the environment. But farmers believe they are not being compensated enough for having to give up what will be, in total, a lot of land.
To add insult to injury, in farmers' eyes, the general public will have the right to wander along all of these new paths. This will be good for hikers and nature lovers, but not for agriculturists.
Farmers are so angry that their representative organisation is threatening to sue the Danish state on 1 September, on the grounds that the expropriation is against the constitution. This is gearing up to be quite a battle.
Walter Blotscher
Danish farmers are up in arms. Farmers are generally quite angry these days, but this time it is serious. From 1 September they will not be allowed to grow crops, spray chemicals or use manure on any land within 10 metres of water. That means ponds, lakes, rivers and streams. The idea is to prevent chemicals from seeping into the water supply, and thereby protect the environment. But farmers believe they are not being compensated enough for having to give up what will be, in total, a lot of land.
To add insult to injury, in farmers' eyes, the general public will have the right to wander along all of these new paths. This will be good for hikers and nature lovers, but not for agriculturists.
Farmers are so angry that their representative organisation is threatening to sue the Danish state on 1 September, on the grounds that the expropriation is against the constitution. This is gearing up to be quite a battle.
Walter Blotscher
Monday 11 June 2012
RAFAEL NADAL
Rafael Nadal cemented his reputation as the best clay court tennis player of all time by winning the French Open this afternoon. In eight attempts, he has won the title seven times, which is a phenomenal record. Apart from the satisfaction of going one better than Bjorn Borg, he did it by beating his nemesis, world number one Novak Djokovic. Djokovic had won the last three Grand Slam finals (Wimbledon, U.S. Open and Australian Open), defeating Nadal each time, and was trying to be the first player since Rod Laver to hold all four at one time. However, on clay, which is not his forte but is what the Spaniard grew up on, he was never really in with a chance. A rally gave him the third set, but he was otherwise outclassed.
Can Nadal, who now has 11 Grand Slam titles, go on and beat Roger Federer's record of 16? Given that he has just turned 26, it is certainly possible; though as Federer (almost 31) will confirm, tennis is a young man's game and it gets much harder after the age of 25. Furthermore, one of the reasons for Federer's longevity is his simple style, that puts the minimum amount of stress on his body. Nadal's shots, particularly his forehand, put tremendous stress on his wrist and shoulder, and I doubt he will play for as long as Federer has. Still, he should win some more titles, not least the French, where nobody else looks like having a chance. But 6 more? That I doubt.
Walter Blotscher
Rafael Nadal cemented his reputation as the best clay court tennis player of all time by winning the French Open this afternoon. In eight attempts, he has won the title seven times, which is a phenomenal record. Apart from the satisfaction of going one better than Bjorn Borg, he did it by beating his nemesis, world number one Novak Djokovic. Djokovic had won the last three Grand Slam finals (Wimbledon, U.S. Open and Australian Open), defeating Nadal each time, and was trying to be the first player since Rod Laver to hold all four at one time. However, on clay, which is not his forte but is what the Spaniard grew up on, he was never really in with a chance. A rally gave him the third set, but he was otherwise outclassed.
Can Nadal, who now has 11 Grand Slam titles, go on and beat Roger Federer's record of 16? Given that he has just turned 26, it is certainly possible; though as Federer (almost 31) will confirm, tennis is a young man's game and it gets much harder after the age of 25. Furthermore, one of the reasons for Federer's longevity is his simple style, that puts the minimum amount of stress on his body. Nadal's shots, particularly his forehand, put tremendous stress on his wrist and shoulder, and I doubt he will play for as long as Federer has. Still, he should win some more titles, not least the French, where nobody else looks like having a chance. But 6 more? That I doubt.
Walter Blotscher
Sunday 10 June 2012
PHARMACISTS
Denmark leads Europe in the pharmacy world; though not in a good way. There is a pharmacy for every 17,252 inhabitants here, which is almost twice as many as in Sweden and almost four times the E.U. average (4,503). Both Germany and France are below the E.U. average, though nowhere near Greece, which has one pharmacist for every 1,035 inhabitants. I suppose that with their economic problems, there must be a fair demand for anti-depressants.
Medicines can be dangerous, so you need to know what you are doing. But Danes seem to have a peculiar aversion to letting anybody other than qualified pharmacists anywhere near them. Part of it is historical; the state has been regulating the market since 1546. But current legislation also covers where pharmacies may be set up, who can own them (non-qualified pharmacists should not apply, even if they employ pharmacists to run them), their opening times, the prices of medicines, and much else. Perhaps the worst aspect is a complicated system, whereby part of the profits from pharmacies in rich, crowded areas like Copenhagen are recycled to pharmacies in poor, deserted places like West Jutland, in pretty much the same way as local authorities are compensated for social services. Basically, the amount of competition in the sector is zilch, and there is not much incentive to do anything about it.
Sweden and Norway used to have similar systems, but liberalised them some years ago. The results have been uniformly positive, with more pharmacies, lower prices, better service and more choice. Indeed, what you would expect, once competition between outlets is allowed.
A Danish pharmacist is challenging the current system on the grounds that it is anti-competitive. He has teamed up with Matas, a chain of shops selling healthcare products, and now sells medicines through 50 of their outlets. Because of this collaboration, he has been thrown out of the pharmacists' official purchasing organisation, but is soldiering on regardless, having increased his business from 6 employees when he started to 21 today. Interestingly, he is of Indian origin. Perhaps it takes an outsider to shake up a cosy system.
Walter Blotscher
Denmark leads Europe in the pharmacy world; though not in a good way. There is a pharmacy for every 17,252 inhabitants here, which is almost twice as many as in Sweden and almost four times the E.U. average (4,503). Both Germany and France are below the E.U. average, though nowhere near Greece, which has one pharmacist for every 1,035 inhabitants. I suppose that with their economic problems, there must be a fair demand for anti-depressants.
Medicines can be dangerous, so you need to know what you are doing. But Danes seem to have a peculiar aversion to letting anybody other than qualified pharmacists anywhere near them. Part of it is historical; the state has been regulating the market since 1546. But current legislation also covers where pharmacies may be set up, who can own them (non-qualified pharmacists should not apply, even if they employ pharmacists to run them), their opening times, the prices of medicines, and much else. Perhaps the worst aspect is a complicated system, whereby part of the profits from pharmacies in rich, crowded areas like Copenhagen are recycled to pharmacies in poor, deserted places like West Jutland, in pretty much the same way as local authorities are compensated for social services. Basically, the amount of competition in the sector is zilch, and there is not much incentive to do anything about it.
Sweden and Norway used to have similar systems, but liberalised them some years ago. The results have been uniformly positive, with more pharmacies, lower prices, better service and more choice. Indeed, what you would expect, once competition between outlets is allowed.
A Danish pharmacist is challenging the current system on the grounds that it is anti-competitive. He has teamed up with Matas, a chain of shops selling healthcare products, and now sells medicines through 50 of their outlets. Because of this collaboration, he has been thrown out of the pharmacists' official purchasing organisation, but is soldiering on regardless, having increased his business from 6 employees when he started to 21 today. Interestingly, he is of Indian origin. Perhaps it takes an outsider to shake up a cosy system.
Walter Blotscher
Saturday 9 June 2012
EURO 2012
Only three games in, and already the tournament is producing some surprises. First, 10-man Greece missed a penalty that would have put them 2-1 up against hosts Poland. Then Russia produced some scintillating football to thrash the Czech Republic 4-1. And then this evening Denmark beat favourites Holland (and my tip to win) 1-0, their first victory over the Dutch in 45 years.
What about all that stuff about human rights in Ukraine? That's for politicians, I'm a football fan.
Walter Blotscher
Only three games in, and already the tournament is producing some surprises. First, 10-man Greece missed a penalty that would have put them 2-1 up against hosts Poland. Then Russia produced some scintillating football to thrash the Czech Republic 4-1. And then this evening Denmark beat favourites Holland (and my tip to win) 1-0, their first victory over the Dutch in 45 years.
What about all that stuff about human rights in Ukraine? That's for politicians, I'm a football fan.
Walter Blotscher
Friday 8 June 2012
SYRIA (3)
I have to say that I don't understand the West's position on Syria. Given Russia's and China's veto-wielding rights in the U.N. Security Council, they should in my view let them take the blame for what is happening on the ground (which is pretty grim and getting worse). What they shouldn't do is allow Kofi Annan or anybody else to come up with ever more complicated and unrealistic plans for a ceasfire, monitoring force and/or other non-military options. President Assad is not going to respect bits of paper, as I said a month ago.
I know that diplomats like to diplome, so to speak. But this is an example where diplomacy is not going to work.
Walter Blotscher
I have to say that I don't understand the West's position on Syria. Given Russia's and China's veto-wielding rights in the U.N. Security Council, they should in my view let them take the blame for what is happening on the ground (which is pretty grim and getting worse). What they shouldn't do is allow Kofi Annan or anybody else to come up with ever more complicated and unrealistic plans for a ceasfire, monitoring force and/or other non-military options. President Assad is not going to respect bits of paper, as I said a month ago.
I know that diplomats like to diplome, so to speak. But this is an example where diplomacy is not going to work.
Walter Blotscher
Wednesday 6 June 2012
IMAGINATIVE THINKING
What do you do with the old nineteenth century urban prison, when it is replaced with a state-of-the-art new one on a greenfield site out of town? That was the question in 2006 facing Horsens, a pleasant city of some 55,000 people in east Jutland. Prisons are, after all, perhaps the ultimate niche activity, so it is difficult to think of alternative uses. Demolition is one option; but that leaves a big hole right in the middle of town, which creates problems of its own.
Horsens' solution was to turn it in a cultural centre, with a prison museum, conference centre, and - above all - a place to give concerts. Plans were disrupted by the financial crisis; but the project finally got underway this evening with a concert by Metallica, one of the world's biggest rock bands (and of major interest to Danes, since the drummer is Danish). 40,000 people turned up to celebrate; Tom Petty and the Heartbreakers are due next week.
My old university town Oxford in the U.K. had a similar problem in the 1990's, though the prison there was part of the even older mediæval castle, which is a listed building. Part of it was preserved as a museum, and another part was turned into a hotel. It's amazing what you can come up with if you put your mind to it.
Walter Blotscher
What do you do with the old nineteenth century urban prison, when it is replaced with a state-of-the-art new one on a greenfield site out of town? That was the question in 2006 facing Horsens, a pleasant city of some 55,000 people in east Jutland. Prisons are, after all, perhaps the ultimate niche activity, so it is difficult to think of alternative uses. Demolition is one option; but that leaves a big hole right in the middle of town, which creates problems of its own.
Horsens' solution was to turn it in a cultural centre, with a prison museum, conference centre, and - above all - a place to give concerts. Plans were disrupted by the financial crisis; but the project finally got underway this evening with a concert by Metallica, one of the world's biggest rock bands (and of major interest to Danes, since the drummer is Danish). 40,000 people turned up to celebrate; Tom Petty and the Heartbreakers are due next week.
My old university town Oxford in the U.K. had a similar problem in the 1990's, though the prison there was part of the even older mediæval castle, which is a listed building. Part of it was preserved as a museum, and another part was turned into a hotel. It's amazing what you can come up with if you put your mind to it.
Walter Blotscher
Tuesday 5 June 2012
SAVERS AND BORROWERS
Historically low interest rates (this is Denmark, not Greece) are terrific for borrowers such as myself, who have seen the cost of their mortgages fall over the past four years (mine will fall again this coming 30 June).
However, as with most things economic, there are two sides to every coin. What is very good for borrowers is not at all good for savers. Indeed, so low are the available returns for savers that it is becoming critical for pension funds that have guaranteed their members a minimum rate of return. A guaranteed 5% a year might have seemed parsimonious ten years ago; but when the maximum available return on Danish Government bonds today is only 2.5%, then that target suddenly looks all but impossible. Some funds may end up going bust.
Another financial headache for the Danish Government to have to think about.
Walter Blotscher
Historically low interest rates (this is Denmark, not Greece) are terrific for borrowers such as myself, who have seen the cost of their mortgages fall over the past four years (mine will fall again this coming 30 June).
However, as with most things economic, there are two sides to every coin. What is very good for borrowers is not at all good for savers. Indeed, so low are the available returns for savers that it is becoming critical for pension funds that have guaranteed their members a minimum rate of return. A guaranteed 5% a year might have seemed parsimonious ten years ago; but when the maximum available return on Danish Government bonds today is only 2.5%, then that target suddenly looks all but impossible. Some funds may end up going bust.
Another financial headache for the Danish Government to have to think about.
Walter Blotscher
Monday 4 June 2012
THE REPEAL OF THE CORN LAWS
The repeal of the corn laws by the British Government in 1846 was one of the seminal events of the nineteenth century. The basic law had been introduced by the administration of Lord Liverpool at the end of the Napoleonic wars, and provided for a prohibitively high duty on foreign corn if domestic prices fell below a threshold. As such, it was a high measure of protection for the landed interest at the expense of the consumer. In 1828 the all-or-nothing threshold was replaced with a sliding scale; and in 1842, the Government reduced the scale. However, with the industrial revolution really starting to get traction, the basic issue was whether the incomes of a (mainly) aristocratic minority should take precedence over cheap food for the masses flocking to the towns. The general consensus was that they shouldn't; the problem though was that in 1846, most of the masses had no vote, whereas the landed aristocracy dominated Parliament.
The man who cut through this Gordian knot was Sir Robert Peel, leader of the Conservative Party and Prime Minister since 1841. The irony was that although Peel himself came from manufacturing stock (his father was a first-generation baronet who had made money in Lancashire), the Conservative Party in general, and his Cabinet in particular, represented the landed interest in spades. Against that background, Peel decided to resign and pass the baton over to Lord John Russell, the leader of the Whig Opposition, who had announced his commitment to repeal in November 1845. However, after two weeks of dithering, Russell declined to accept what he perceived was a poisoned chalice (politicians were not so greedy to lead in those days), so Peel took up office again. By the following June, the bill abolishing the corn laws had passed through both Houses of Parliament. Almost immediately, however, Peel resigned as Prime Minister, following defeat on another issue.
The repeal of the corn laws was the biggest single reason behind the prosperity of the third quarter of the nineteenth century, and would not have happened without Peel. However, that same act both cost him his political career (he never held ministerial office again and died in 1850 after falling off his horse), and split the Conservative Party, condemning it to 28 years before it again commanded a Parliamentary majority. Although some party contemporaries undoubtedly wished to retain the laws, the driving force behind the split was the opportunism of Benjamin Disraeli, who took the opportunity to - in effect - destroy Peel as party leader, even if the party that he eventually took over was now a rump. In party-conscious Britain, Peel acquired a reputation as a splitter, even though his crime was to put the interests of his country before that of his party, a rare case of true statesmanship.
Indeed on that score, Peel has a justifiable claim to be Britain's greatest ever Prime Minister. Other Prime Ministers have put country before party; Gladstone over Ireland, Churchill over rearmament, Heath over Europe. However, Peel did it not just once, but twice, having promoted Catholic emancipation some years before. Politicians trying to sort out Europe's current problems could do worse than trying to follow Peel's example.
Walter Blotscher
The repeal of the corn laws by the British Government in 1846 was one of the seminal events of the nineteenth century. The basic law had been introduced by the administration of Lord Liverpool at the end of the Napoleonic wars, and provided for a prohibitively high duty on foreign corn if domestic prices fell below a threshold. As such, it was a high measure of protection for the landed interest at the expense of the consumer. In 1828 the all-or-nothing threshold was replaced with a sliding scale; and in 1842, the Government reduced the scale. However, with the industrial revolution really starting to get traction, the basic issue was whether the incomes of a (mainly) aristocratic minority should take precedence over cheap food for the masses flocking to the towns. The general consensus was that they shouldn't; the problem though was that in 1846, most of the masses had no vote, whereas the landed aristocracy dominated Parliament.
The man who cut through this Gordian knot was Sir Robert Peel, leader of the Conservative Party and Prime Minister since 1841. The irony was that although Peel himself came from manufacturing stock (his father was a first-generation baronet who had made money in Lancashire), the Conservative Party in general, and his Cabinet in particular, represented the landed interest in spades. Against that background, Peel decided to resign and pass the baton over to Lord John Russell, the leader of the Whig Opposition, who had announced his commitment to repeal in November 1845. However, after two weeks of dithering, Russell declined to accept what he perceived was a poisoned chalice (politicians were not so greedy to lead in those days), so Peel took up office again. By the following June, the bill abolishing the corn laws had passed through both Houses of Parliament. Almost immediately, however, Peel resigned as Prime Minister, following defeat on another issue.
The repeal of the corn laws was the biggest single reason behind the prosperity of the third quarter of the nineteenth century, and would not have happened without Peel. However, that same act both cost him his political career (he never held ministerial office again and died in 1850 after falling off his horse), and split the Conservative Party, condemning it to 28 years before it again commanded a Parliamentary majority. Although some party contemporaries undoubtedly wished to retain the laws, the driving force behind the split was the opportunism of Benjamin Disraeli, who took the opportunity to - in effect - destroy Peel as party leader, even if the party that he eventually took over was now a rump. In party-conscious Britain, Peel acquired a reputation as a splitter, even though his crime was to put the interests of his country before that of his party, a rare case of true statesmanship.
Indeed on that score, Peel has a justifiable claim to be Britain's greatest ever Prime Minister. Other Prime Ministers have put country before party; Gladstone over Ireland, Churchill over rearmament, Heath over Europe. However, Peel did it not just once, but twice, having promoted Catholic emancipation some years before. Politicians trying to sort out Europe's current problems could do worse than trying to follow Peel's example.
Walter Blotscher
Sunday 3 June 2012
DIFFERENTIAL VAT RATES
Value added tax is, as its name suggests, a consumption tax on the value added of goods and services (technically, supplies). It is a "good" tax, in the sense that businesses get relief for their inputs, so no tax is paid if there is no added value (eg because the good sold is unprofitable); contrast that with sales tax, which is applied even if the good supplied is loss-making. Critics of VAT say that the tax is regressive, meaning that it adversely affects the poor. However, this criticism is overblown. VAT is only regressive if rich and poor purchase the same basket of goods and services, and that they do not do. If the rich person buys champagne for £20 a bottle and the poor person plonk for £4, then the tax is regressive only if the rich person's income is more than five times that of the poor person. It is not quite as simple as that, not least because you have to look at everyone's purchases and everyone's incomes; but you get my point.
Under E.U. law, all Member States must have a VAT system (not least since the E.U. budget is fixed as a percentage of Member States' VAT revenues). There is a minimum percentage - 15% until the end of 2015 - but no maximum. Member States are also allowed to have certain categories of goods and services taxed at lower rates; and Governments accede to this, either in order to help certain classes of business (eg restaurants in France) or to deal with the regressive point outlined above. In Denmark VAT is 25% and is charged on virtually everything; in the U.K., on the other hand, the big exceptions have traditionally been food, books and children's clothing, which are zero rated. It has never been clear to me why Brits would starve if there were VAT on food, whereas Danes manage to survive paying 25% on it; but domestic political considerations are not always easy to follow.
So differential VAT rates are allowed; but it is now that the fun starts. Because once you have differential VAT rates, you start having quibbles about where the boundaries lie, as the recent "pasty" row in the U.K. demonstrates. Food, for zero-rating VAT purposes, generally means cold food; hot takeaway food has traditionally been treated akin to restaurant services rather than as a basic necessity, and so has been VAT-able. In the recent Budget, the Chancellor decided to levy VAT at the standard rate of 20% on cornish pasties, a peculiarly British invention, since they are often purchased hot. Enter the pasty lobby, fronted by the Cornish Pasty Association. After a sustained campaign, the Government has now backed down, sort of. If the hot pasty is sold straight from the oven, it is not being kept hot, and so is not VAT-able; if it is left on a rack to cool down, it is also not being kept hot, and so is not VAT-able; but if it is taken out of the oven and kept hot in a cabinet or similar, then it is being kept hot and so is VAT-able. Clear?
If you think that this is complicated, then you should read the history of the protracted litigation in the Marks and Spencer case, dealing with VAT on chocolate covered teacakes (of which M&S used to sell a lot). This went on for thirteen years, and involved two trips to the House of Lords and two references to the European Court of Justice. Food is in general zero-rated, but one exception is "confectionery", which is VAT-able. However, there is an exception to that exception, namely "biscuits". There is then an exception to that exception to that exception, namely biscuits wholly or partly covered with chocolate. Between 1973, when VAT was introduced, and 1994, the authorities treated the teacakes as biscuits, so the teacakes were VAT-able; they then changed their minds and decided that the teacakes were, in reality, cakes, and so should have been zero-rated. The case arose because M&S then claimed back all of the VAT which they had paid on the teacakes for some 20 years.
A salutary lesson in Governmental micro-management, if ever there was one. I eagerly await the case, which depends on defining what "being kept hot" means.
Walter Blotscher
Value added tax is, as its name suggests, a consumption tax on the value added of goods and services (technically, supplies). It is a "good" tax, in the sense that businesses get relief for their inputs, so no tax is paid if there is no added value (eg because the good sold is unprofitable); contrast that with sales tax, which is applied even if the good supplied is loss-making. Critics of VAT say that the tax is regressive, meaning that it adversely affects the poor. However, this criticism is overblown. VAT is only regressive if rich and poor purchase the same basket of goods and services, and that they do not do. If the rich person buys champagne for £20 a bottle and the poor person plonk for £4, then the tax is regressive only if the rich person's income is more than five times that of the poor person. It is not quite as simple as that, not least because you have to look at everyone's purchases and everyone's incomes; but you get my point.
Under E.U. law, all Member States must have a VAT system (not least since the E.U. budget is fixed as a percentage of Member States' VAT revenues). There is a minimum percentage - 15% until the end of 2015 - but no maximum. Member States are also allowed to have certain categories of goods and services taxed at lower rates; and Governments accede to this, either in order to help certain classes of business (eg restaurants in France) or to deal with the regressive point outlined above. In Denmark VAT is 25% and is charged on virtually everything; in the U.K., on the other hand, the big exceptions have traditionally been food, books and children's clothing, which are zero rated. It has never been clear to me why Brits would starve if there were VAT on food, whereas Danes manage to survive paying 25% on it; but domestic political considerations are not always easy to follow.
So differential VAT rates are allowed; but it is now that the fun starts. Because once you have differential VAT rates, you start having quibbles about where the boundaries lie, as the recent "pasty" row in the U.K. demonstrates. Food, for zero-rating VAT purposes, generally means cold food; hot takeaway food has traditionally been treated akin to restaurant services rather than as a basic necessity, and so has been VAT-able. In the recent Budget, the Chancellor decided to levy VAT at the standard rate of 20% on cornish pasties, a peculiarly British invention, since they are often purchased hot. Enter the pasty lobby, fronted by the Cornish Pasty Association. After a sustained campaign, the Government has now backed down, sort of. If the hot pasty is sold straight from the oven, it is not being kept hot, and so is not VAT-able; if it is left on a rack to cool down, it is also not being kept hot, and so is not VAT-able; but if it is taken out of the oven and kept hot in a cabinet or similar, then it is being kept hot and so is VAT-able. Clear?
If you think that this is complicated, then you should read the history of the protracted litigation in the Marks and Spencer case, dealing with VAT on chocolate covered teacakes (of which M&S used to sell a lot). This went on for thirteen years, and involved two trips to the House of Lords and two references to the European Court of Justice. Food is in general zero-rated, but one exception is "confectionery", which is VAT-able. However, there is an exception to that exception, namely "biscuits". There is then an exception to that exception to that exception, namely biscuits wholly or partly covered with chocolate. Between 1973, when VAT was introduced, and 1994, the authorities treated the teacakes as biscuits, so the teacakes were VAT-able; they then changed their minds and decided that the teacakes were, in reality, cakes, and so should have been zero-rated. The case arose because M&S then claimed back all of the VAT which they had paid on the teacakes for some 20 years.
A salutary lesson in Governmental micro-management, if ever there was one. I eagerly await the case, which depends on defining what "being kept hot" means.
Walter Blotscher
Friday 1 June 2012
WIKILEAKS (3)
Wikileaks founder Julian Assange has lost the latest round in his long attempt to resist being extradited from the U.K. to Sweden. The authorities there want to question him in connection with the complaints of two women that he sexually molested and raped them during a trip to Stockholm. He has not been formally charged, denies the complaints and is happy to talk to the prosecutors about the incidents, which he says were consensual. But he doesn't want to go to Sweden, since he fears being sent on to the United States, very keen to get their hands on him because of Wikileaks' leaking confidential documents from U.S. embassies (see my earlier post).
This week the U.K.'s Supreme Court decided 5-2 that he should be extradited. The key legal point was what constitutes a "judicial authority" for the purposes of a European arrest warrant. Mr. Assange had argued that a public prosecutor (who was the person in Sweden who had issued the warrant), was not a judicial authority, and that warrants could only be issued by a judge or a court. The Supreme Court disagreed, thereby upholding the decision of two lower courts. Although the relevant U.K. legislation was unclear on this point, most European states allowed public prosecutors to issue warrants, and it was best to go along with this rather than sticking to a literal interpretation of the English text.
Mr. Assange has the option of appealing to the European Court of Human Rights, but I suspect that he won't get very far with that. And so, at some point, he will be put on a plane to Stockholm, and the next chapter in this saga.
Walter Blotscher
Wikileaks founder Julian Assange has lost the latest round in his long attempt to resist being extradited from the U.K. to Sweden. The authorities there want to question him in connection with the complaints of two women that he sexually molested and raped them during a trip to Stockholm. He has not been formally charged, denies the complaints and is happy to talk to the prosecutors about the incidents, which he says were consensual. But he doesn't want to go to Sweden, since he fears being sent on to the United States, very keen to get their hands on him because of Wikileaks' leaking confidential documents from U.S. embassies (see my earlier post).
This week the U.K.'s Supreme Court decided 5-2 that he should be extradited. The key legal point was what constitutes a "judicial authority" for the purposes of a European arrest warrant. Mr. Assange had argued that a public prosecutor (who was the person in Sweden who had issued the warrant), was not a judicial authority, and that warrants could only be issued by a judge or a court. The Supreme Court disagreed, thereby upholding the decision of two lower courts. Although the relevant U.K. legislation was unclear on this point, most European states allowed public prosecutors to issue warrants, and it was best to go along with this rather than sticking to a literal interpretation of the English text.
Mr. Assange has the option of appealing to the European Court of Human Rights, but I suspect that he won't get very far with that. And so, at some point, he will be put on a plane to Stockholm, and the next chapter in this saga.
Walter Blotscher
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