THE E.U. BUDGET
The E.U. Budget is both small and big. Small, since it represents just over 1% of Member States' collective national income. Because Government spending in most of the respective countries is up around 50%, European contributions are only around 2% of the public purse, much less than (say) health, education or pensions. Against that background, it's hard to see why everyone gets so excited. On the other hand, since the E.U. has a funny way of doing budgets, agreeing them for seven years at a time instead of the more usual one, the 2014-20 proposals add up to just over Euros1 trillion (there's that trillion word again), which is more than quite a lot of money.
Adding to the complications are three twists. The first is that 80% of the money is earmarked for agriculture and cohesion funds (i.e. support for poorer parts of the union), an outcome which reflects the E.U.'s historic priorities and the arrival of poorer members from Eastern and Southern Europe more than the needs of a 21st century international political grouping. The second is that ever since Margaret Thatcher famously banged the table at a 1984 summit and demanded "her" money back, an otherwise straightforward calculation (Member States pay in money to a central pot and agree on how it should be used) is now bedevilled by a complex system of rebates for certain countries, all of whom cling tenaciously to their "rights". Even Denmark has joined this game, having just noisily demanded a rebate of Dkr.1 billion, an arbitrary figure which is nevertheless already included in Government revenue plans for the next few years, making it difficult for the Danish Prime Minister to compromise.
Thirdly, the 7-year framework must be agreed unanimously by all 27 Member States and the European Parliament, all of whom have different priorities and all of whom can use a veto to gum up the works if they so choose. Some countries in the midst of big deficit reductions (eg the U.K.) want big cuts in the proposals, which are bigger (there is disagreement as to how much) than the numbers in the 2007-13 framework. Poorer countries, and the Parliament, want the exact opposite. Member States with farmers and poor people want to preserve the agriculture and cohesion elements, economic liberals and federalists want more for other things, such as cross-border research and transport networks. Rebate beneficiaries want to keep their goodies, net payers want to pay less.
If that sounds like a recipe for gridlock, then it is. A summit on 22 and 23 November is supposed to find a solution, but my hunch is that it will end without an agreement and in a welter of recriminations and bad blood, not least from the Brits. In which case, the 2013 Budget will be rolled over into 2014, with an increase of 2% to take account of inflation. Since that end result would satisfy some of the parties just fine, it makes it more likely that it will come about.
UPDATE: Late this evening the British Government lost a vote in the House of Commons on the E.U.Budget, when 53 Conservatives joined the Labour opposition in backing an amendment calling for a real terms cut in the 2014-20 framework instead of a real terms freeze, which was the Coalition Government's position. Although the vote is non-binding, it does tie Prime Minister David Cameron's hands a bit in advance of November's crucial summit and make gridlock at bit more likely.
Walter Blotscher
Wednesday 31 October 2012
Tuesday 30 October 2012
BRANSTON PICKLE (2)
Branston pickle is one of my favourites. I sometimes have dreams that if I ever bought a major company, it would be them (or Roses, makers of lime marmalade, or something like that, you get my drift). I suppose that's the point of dreams, that they're dreams.
Anyway, I have today read that Branston's has been sold. The current owners, Premier Foods, have too much debt, and need to reduce it. The £92.5million in proceeds will go some way to achieving that.
The only thing I find a bit surprising is that the business has been sold to a Japanese company, Mizkan, who are apparently big in vinegar. I was surprised since I had thought that Branston's pickle was a peculiarly British thing that didn't travel well. Apparently not.
Walter Blotscher
Branston pickle is one of my favourites. I sometimes have dreams that if I ever bought a major company, it would be them (or Roses, makers of lime marmalade, or something like that, you get my drift). I suppose that's the point of dreams, that they're dreams.
Anyway, I have today read that Branston's has been sold. The current owners, Premier Foods, have too much debt, and need to reduce it. The £92.5million in proceeds will go some way to achieving that.
The only thing I find a bit surprising is that the business has been sold to a Japanese company, Mizkan, who are apparently big in vinegar. I was surprised since I had thought that Branston's pickle was a peculiarly British thing that didn't travel well. Apparently not.
Walter Blotscher
Friday 26 October 2012
WOLF HALL (2)
Hilary Mantel's book Wolf Hall was a brilliant book that won a lot of prizes, including the Man Booker award. I have just finished the sequel, Bring Up The Bodies, which won this year's Man Booker Prize. While the first book covered the six years from 1529 to 1535, the second deals with the critical year of 1536, the fall and death of Anne Boleyn and the stripping of the monasteries. Sitting in the narrator's chair again is Master Secretary Thomas Cromwell, now the King's undisputed right-hand man, feared by the court because of his power and influence, yet despised by that same court because of his low birth. And not only narrating; Henry wants to be rid of Anne, it is Cromwell's job to find the means.
I have heard some people say that the sequel is not as good as the first book. I disagree. I loved it just as much as the first, and am already looking forward to the final instalment, Cromwell's own rise to become Earl of Essex, and then his spectacular fall and execution in 1540. If you haven't got into the books, do so, they are terrific.
Walter Blotscher
Hilary Mantel's book Wolf Hall was a brilliant book that won a lot of prizes, including the Man Booker award. I have just finished the sequel, Bring Up The Bodies, which won this year's Man Booker Prize. While the first book covered the six years from 1529 to 1535, the second deals with the critical year of 1536, the fall and death of Anne Boleyn and the stripping of the monasteries. Sitting in the narrator's chair again is Master Secretary Thomas Cromwell, now the King's undisputed right-hand man, feared by the court because of his power and influence, yet despised by that same court because of his low birth. And not only narrating; Henry wants to be rid of Anne, it is Cromwell's job to find the means.
I have heard some people say that the sequel is not as good as the first book. I disagree. I loved it just as much as the first, and am already looking forward to the final instalment, Cromwell's own rise to become Earl of Essex, and then his spectacular fall and execution in 1540. If you haven't got into the books, do so, they are terrific.
Walter Blotscher
Thursday 25 October 2012
ITALIAN PROBABILITY
As a mathematician, I have a pretty good understanding of probability. In particular, I understand that probability is theoretical and relates to the future. It does not say what will happen, it only says what may happen. Even if the chances of getting six sixes in a row are very small, we can't say for sure in advance that it won't happen; it might, though it is unikely.
So this week's decision by an Italian judge to sentence six scientists and an official to six years in prison is extremely worrying. The case arose out of the aftermath of the April 2009 earthquake in L'Aquila, in which 309 people were killed. The seven were all members of the National Commission for the Forecast and Prevention of Major Risks, whose job is to assess the probability of such things as earthquakes. According to the court, they had issued wrongly reassuring statements, which had led (amongst other things) to people staying in the town and being killed, instead of moving to a place of safety. The defendants were convicted of manslaughter and banned from ever holding public office again.
The problem is that earthquakes are inherently unstable, and the world simply does not have the means of predicting when and where they will occur. Like volcanoes, there can be rumbling for a long period of time, yet nothing major happens; conversely all hell can break loose without warning. Those convicted included some of Italy's most internationally respected seismologists and geologists, who undoubtedly gave their considered view. I don't see that they could have done any more.
This being Italy, no sentence is certain until there have been appeals, and it is possible that the verdict will be overturned. More than 5,000 scientists signed an open letter to the Italian President, supporting the defendants. The probability is that the Italian authorities will yet see sense. But as I say, probability does not say what will happen, merely what may happen.
Walter Blotscher
As a mathematician, I have a pretty good understanding of probability. In particular, I understand that probability is theoretical and relates to the future. It does not say what will happen, it only says what may happen. Even if the chances of getting six sixes in a row are very small, we can't say for sure in advance that it won't happen; it might, though it is unikely.
So this week's decision by an Italian judge to sentence six scientists and an official to six years in prison is extremely worrying. The case arose out of the aftermath of the April 2009 earthquake in L'Aquila, in which 309 people were killed. The seven were all members of the National Commission for the Forecast and Prevention of Major Risks, whose job is to assess the probability of such things as earthquakes. According to the court, they had issued wrongly reassuring statements, which had led (amongst other things) to people staying in the town and being killed, instead of moving to a place of safety. The defendants were convicted of manslaughter and banned from ever holding public office again.
The problem is that earthquakes are inherently unstable, and the world simply does not have the means of predicting when and where they will occur. Like volcanoes, there can be rumbling for a long period of time, yet nothing major happens; conversely all hell can break loose without warning. Those convicted included some of Italy's most internationally respected seismologists and geologists, who undoubtedly gave their considered view. I don't see that they could have done any more.
This being Italy, no sentence is certain until there have been appeals, and it is possible that the verdict will be overturned. More than 5,000 scientists signed an open letter to the Italian President, supporting the defendants. The probability is that the Italian authorities will yet see sense. But as I say, probability does not say what will happen, merely what may happen.
Walter Blotscher
Wednesday 24 October 2012
DROPBOX
I have admitted that I am not the world's best at using an iPad. And since Apple will soon release a new version, and Microsoft are due to come out with a sort of iPad/computer hybrid, I am likely to fall even further behind the current lot of teenagers. So it is a source of some pride that I have managed to work out how to use a dropbox.
Dropbox is a free product (the company makes its money by charging for extra space, once your dropbox gets over a certain size). Basically, it's a computer storage "thingy", where you can put documents, pictures and other stuff, which other people (though only those you invite) can also look at. So, instead of sending an E-Mail with family holiday photos to all of your children, or putting said photos on Facebook, where everybody can see them, you simply put them in the dropbox. To use a mathematical analogy, it's a bit like a series of overlapping sets, each set being one person's dropbox.
Computer storage? Yawn. But the really cool thing about the dropbox is that you can access it from any electronic device. So, instead of sending things between (say) computer and iPad, or computer and mobile phone, you simply put things in the dropbox and then access them from anywhere. All you need is your E-Mail address and password.
Not only have I set up a dropbox, but I have also put things in it, and managed to invite some other people to join. All in all, I am feeling pretty pleased with myself.
Walter Blotscher
I have admitted that I am not the world's best at using an iPad. And since Apple will soon release a new version, and Microsoft are due to come out with a sort of iPad/computer hybrid, I am likely to fall even further behind the current lot of teenagers. So it is a source of some pride that I have managed to work out how to use a dropbox.
Dropbox is a free product (the company makes its money by charging for extra space, once your dropbox gets over a certain size). Basically, it's a computer storage "thingy", where you can put documents, pictures and other stuff, which other people (though only those you invite) can also look at. So, instead of sending an E-Mail with family holiday photos to all of your children, or putting said photos on Facebook, where everybody can see them, you simply put them in the dropbox. To use a mathematical analogy, it's a bit like a series of overlapping sets, each set being one person's dropbox.
Computer storage? Yawn. But the really cool thing about the dropbox is that you can access it from any electronic device. So, instead of sending things between (say) computer and iPad, or computer and mobile phone, you simply put things in the dropbox and then access them from anywhere. All you need is your E-Mail address and password.
Not only have I set up a dropbox, but I have also put things in it, and managed to invite some other people to join. All in all, I am feeling pretty pleased with myself.
Walter Blotscher
Monday 22 October 2012
SCOTLAND (2)
In my earlier post on Scotland, I said that there was a tension between the devolved Government in Edinburgh, led by the independence-minded Scottish National Party, and the United Kingdom Government in London, about the terms of any referendum on independence.
Following last week's deal between Prime Minister David Cameron and Scottish First Minister Alex Salmond, that tension has now been resolved, to both parties' satisfaction. The SNP have won, in that the referendum will be held in the autumn of 2014, thereby giving them plenty of time to try and persuade the Scots to go it alone. The franchise will also be widened to include 16- and 17-year olds, who are supposedly less wedded to the idea of a union.
However, the Prime Minister has also won. First, the agreement makes it crystal clear that the Union Government is devolving power (on a one-off basis) to Scotland, so that it has the legal mandate in order to be able to hold a referendum. Secondly, the question to be put to voters will be a simple "in-or-out?". Mr. Salmond had wanted a second question; in the event of a no on full independence, might the Scots get further devolved powers? That idea has now been firmly booted into touch.
And so, in two years' time, the Scots will have the chance to decide if they want to end a 300-year union with their southern neighbour. I have no idea how this will pan out, but at least the result will be clear-cut. Not being Scottish, it will be interesting to watch from the sidelines.
Walter Blotscher
In my earlier post on Scotland, I said that there was a tension between the devolved Government in Edinburgh, led by the independence-minded Scottish National Party, and the United Kingdom Government in London, about the terms of any referendum on independence.
Following last week's deal between Prime Minister David Cameron and Scottish First Minister Alex Salmond, that tension has now been resolved, to both parties' satisfaction. The SNP have won, in that the referendum will be held in the autumn of 2014, thereby giving them plenty of time to try and persuade the Scots to go it alone. The franchise will also be widened to include 16- and 17-year olds, who are supposedly less wedded to the idea of a union.
However, the Prime Minister has also won. First, the agreement makes it crystal clear that the Union Government is devolving power (on a one-off basis) to Scotland, so that it has the legal mandate in order to be able to hold a referendum. Secondly, the question to be put to voters will be a simple "in-or-out?". Mr. Salmond had wanted a second question; in the event of a no on full independence, might the Scots get further devolved powers? That idea has now been firmly booted into touch.
And so, in two years' time, the Scots will have the chance to decide if they want to end a 300-year union with their southern neighbour. I have no idea how this will pan out, but at least the result will be clear-cut. Not being Scottish, it will be interesting to watch from the sidelines.
Walter Blotscher
Sunday 21 October 2012
ISLAM AND EUROPE
At a time when many Europeans are suspicious of, if not downright hostile to, Muslims, it is worth remembering how much the development of Europe is down to Islam.
The new religion swept out of the Arabian peninsula during the 7th century. At the time, the prevailing civilisation in this part of the world was Roman, geographically centred on and around the Mediterranean (which means "middle of the land"). True, the Romans' hold on this territory was in places rather fragile, not least because the Western part of it had collapsed at the end of the fifth century. Nevertheless, it was something to which many people aspired, whereas the idea of Europe would have met with blank stares.
Islam changed all of that. Within a century, Muslims had conquered a huge crescent of territory, from Spain in the west, round through North Africa and Egypt, and up through the Middle East as far as Afghanistan. In 732, they were stopped by the Franks' Charles Martel at the Battle of Poitiers, a couple of days' march from Paris. Retreating across the Pyrenees, they formed an Arab kingdom in Spain that lasted for a further 750 years. For most of the Middle Ages, the biggest building in Europe was the Great Mosque in Cordoba.
The conquests had two consequences. The first was that it cut off European Christians from those outside Europe. There is evidence that Christianity had reached China in the early first centuries; not only was that link broken, but so too were contacts with Christian communities in Egypt, Ethiopia, Armenia and Georgia. Thereafter, Christians of both the Eastern and Western churches were forced to go north and east; to Germany, Scandinavia, Poland, and finally Russia. Since Christianity was the glue that held mediæval society together, this inevitably led over time to a Christian Europe surrounded to the south and east by Islamic societies. The Crusades, in aiming to reconquer Jerusalem, were a long-lasting attempt to change this pattern, but they ended in failure. And to the extent that there were changes in the boundaries between the two faiths, they went the other way, as the Muslim Turks got a toehold in Anatolia after the Battle of Manzikert in 1071, took Constantinople in 1453, and spread into the Balkans thereafter.
The second consequence was that it altered the balance of powers within the Christian world. Prior to the arrival of Islam, there were five patriarchs of Christianity; in Rome, Constantinople, Antioch, Jerusalem and Alexandria. The latter three were lost to Christian influence, leaving two, speaking two different languages (Latin and Greek), and living in two different worlds. When the Eastern Emperor at Constantinople failed to help the Papacy in its struggles against the Lombards, the Pope crossed the Alps in 753 and begged for help from Peppin, Charles Martel's grandson. Thus was forged the long-lasting link between France and the Papacy, reflected in the crowning in Rome of Peppin's son Charlemagne as Emperor on Christmas Day, 800 and much else.
Today, we take Europe for granted, but for centuries, it didn't really exist. By fixing its eastern and southern boundaries, Islam forced it to look inward. For much of the intervening period, that introspection was culturally inferior to (say) Muslim Spain. However, eventually it led to the Renaissance, the Enlightenment, and the European world domination of the 19th century. It's quite a debt.
Walter Blotscher
At a time when many Europeans are suspicious of, if not downright hostile to, Muslims, it is worth remembering how much the development of Europe is down to Islam.
The new religion swept out of the Arabian peninsula during the 7th century. At the time, the prevailing civilisation in this part of the world was Roman, geographically centred on and around the Mediterranean (which means "middle of the land"). True, the Romans' hold on this territory was in places rather fragile, not least because the Western part of it had collapsed at the end of the fifth century. Nevertheless, it was something to which many people aspired, whereas the idea of Europe would have met with blank stares.
Islam changed all of that. Within a century, Muslims had conquered a huge crescent of territory, from Spain in the west, round through North Africa and Egypt, and up through the Middle East as far as Afghanistan. In 732, they were stopped by the Franks' Charles Martel at the Battle of Poitiers, a couple of days' march from Paris. Retreating across the Pyrenees, they formed an Arab kingdom in Spain that lasted for a further 750 years. For most of the Middle Ages, the biggest building in Europe was the Great Mosque in Cordoba.
The conquests had two consequences. The first was that it cut off European Christians from those outside Europe. There is evidence that Christianity had reached China in the early first centuries; not only was that link broken, but so too were contacts with Christian communities in Egypt, Ethiopia, Armenia and Georgia. Thereafter, Christians of both the Eastern and Western churches were forced to go north and east; to Germany, Scandinavia, Poland, and finally Russia. Since Christianity was the glue that held mediæval society together, this inevitably led over time to a Christian Europe surrounded to the south and east by Islamic societies. The Crusades, in aiming to reconquer Jerusalem, were a long-lasting attempt to change this pattern, but they ended in failure. And to the extent that there were changes in the boundaries between the two faiths, they went the other way, as the Muslim Turks got a toehold in Anatolia after the Battle of Manzikert in 1071, took Constantinople in 1453, and spread into the Balkans thereafter.
The second consequence was that it altered the balance of powers within the Christian world. Prior to the arrival of Islam, there were five patriarchs of Christianity; in Rome, Constantinople, Antioch, Jerusalem and Alexandria. The latter three were lost to Christian influence, leaving two, speaking two different languages (Latin and Greek), and living in two different worlds. When the Eastern Emperor at Constantinople failed to help the Papacy in its struggles against the Lombards, the Pope crossed the Alps in 753 and begged for help from Peppin, Charles Martel's grandson. Thus was forged the long-lasting link between France and the Papacy, reflected in the crowning in Rome of Peppin's son Charlemagne as Emperor on Christmas Day, 800 and much else.
Today, we take Europe for granted, but for centuries, it didn't really exist. By fixing its eastern and southern boundaries, Islam forced it to look inward. For much of the intervening period, that introspection was culturally inferior to (say) Muslim Spain. However, eventually it led to the Renaissance, the Enlightenment, and the European world domination of the 19th century. It's quite a debt.
Walter Blotscher
Saturday 20 October 2012
THE A7
There's basically only one road out of Scandinavia, and that's the motorway from Jutland down through Schleswig-Holstein (OK, if you're in Finland, then you can hop across the border to Russia, but that's not recommended if you are in a hurry). Known in Germany as the A7, it goes straight down the middle of the country for almost 1,000km, passing through Hamburg, Hannover, Kassel, Würtzburg, Ulm, and Kempten before ending at the Austrian border.
Denmark relies a lot on trade, and Germany is its biggest trading partner by far. So there's a lot of traffic on the A7, particularly the section before the Elbe Tunnel in Hamburg, after which you can keep going towards the south, turn right for Bremen, Holland and the Ruhr, or left for Berlin. Motorists crossing the Danish frontier keep an anxious ear on German radio for sounds of the dreaded word "Stau", meaning a traffic jam, usually followed by some horrible number of km. Hamburg in particular is a real bottleneck, since there is really only one way through; and even though they manage the tunnels as efficiently as they can, switching the direction of lanes and so on, 10km queues there are quite common.
On our trip to Basel last week, we drove up and down the A7 for nearly all of its length, thankfully without experiencing a major queue. Two things were noticeable. First, there is an awful lot of motorway building, resurfacing and maintenance going on in Germany at the moment. Out of a distance of 1,100 km, we must have travelled at least 100km on the opposite side of the motorway, in those narrow lanes where you have to concentrate in order to avoid hitting the crash barriers. Secondly, there are a lot of solar panels, not just on the roofs of individual houses, but whole fields of them. Germany doesn't strike me as a particularly sunny place, but they seem to have taken to solar power with gusto. My badminton partners, who are big solar panel fans, tell me that cooler climes are in fact better, since the panels don't overheat. I am not sure that I am convinced that it would be a sensible thing to do, if there were no subsidy.
If Denmark is following Germany in subsidising solar power, then there is another area where they most definitely are not. German motorway folk work on Saturdays, as we discovered; there's no way their equivalent in Denmark would do that.
Walter Blotscher
There's basically only one road out of Scandinavia, and that's the motorway from Jutland down through Schleswig-Holstein (OK, if you're in Finland, then you can hop across the border to Russia, but that's not recommended if you are in a hurry). Known in Germany as the A7, it goes straight down the middle of the country for almost 1,000km, passing through Hamburg, Hannover, Kassel, Würtzburg, Ulm, and Kempten before ending at the Austrian border.
Denmark relies a lot on trade, and Germany is its biggest trading partner by far. So there's a lot of traffic on the A7, particularly the section before the Elbe Tunnel in Hamburg, after which you can keep going towards the south, turn right for Bremen, Holland and the Ruhr, or left for Berlin. Motorists crossing the Danish frontier keep an anxious ear on German radio for sounds of the dreaded word "Stau", meaning a traffic jam, usually followed by some horrible number of km. Hamburg in particular is a real bottleneck, since there is really only one way through; and even though they manage the tunnels as efficiently as they can, switching the direction of lanes and so on, 10km queues there are quite common.
On our trip to Basel last week, we drove up and down the A7 for nearly all of its length, thankfully without experiencing a major queue. Two things were noticeable. First, there is an awful lot of motorway building, resurfacing and maintenance going on in Germany at the moment. Out of a distance of 1,100 km, we must have travelled at least 100km on the opposite side of the motorway, in those narrow lanes where you have to concentrate in order to avoid hitting the crash barriers. Secondly, there are a lot of solar panels, not just on the roofs of individual houses, but whole fields of them. Germany doesn't strike me as a particularly sunny place, but they seem to have taken to solar power with gusto. My badminton partners, who are big solar panel fans, tell me that cooler climes are in fact better, since the panels don't overheat. I am not sure that I am convinced that it would be a sensible thing to do, if there were no subsidy.
If Denmark is following Germany in subsidising solar power, then there is another area where they most definitely are not. German motorway folk work on Saturdays, as we discovered; there's no way their equivalent in Denmark would do that.
Walter Blotscher
Friday 19 October 2012
DANISH TAXES (2)
For most of the past 30 years, there have been few countries in the world that tax their citizens more than Denmark, but one of them was Sweden. Denmark had high taxes; Sweden had even higher taxes, more than 50% of GDP around 1990 and again around 2000. However, in recent years things have changed. Denmark has taken over the top spot in the OECD's tax list, harvesting 48.2% of GDP in both 2009 and 2010; and the proportion is estimated to have risen since then. Sweden's tax take, on the other hand, is down to 45.8% of GDP and falling, the biggest difference in Sweden's favour for almost 50 years. In terms of public expenditure, the difference is even starker; Denmark is number one in the OECD, Sweden is fifth, behind France, Finland and Belgium.
The Swedish change of heart came about after a severe economic crisis some 20 years ago. Between 1990 and 1994 the Government budget deficit went from a surplus of 4% of GDP to a deficit of more than 13%. Dealing with the crisis required a series of reforms, notably to the labour market. Those reforms have left the country in good stead, Sweden having weathered the financial crisis perhaps best of all the Member States in the E.U.
Denmark has talked about reform in recent years, and has tinkered a bit; but the political will doesn't seem to be there for more radical changes. Perhaps things need to get a lot worse before they can get better. Or perhaps the Finance Minister here needs to get a ponytail, like the guy across the Øresund.
Walter Blotscher
For most of the past 30 years, there have been few countries in the world that tax their citizens more than Denmark, but one of them was Sweden. Denmark had high taxes; Sweden had even higher taxes, more than 50% of GDP around 1990 and again around 2000. However, in recent years things have changed. Denmark has taken over the top spot in the OECD's tax list, harvesting 48.2% of GDP in both 2009 and 2010; and the proportion is estimated to have risen since then. Sweden's tax take, on the other hand, is down to 45.8% of GDP and falling, the biggest difference in Sweden's favour for almost 50 years. In terms of public expenditure, the difference is even starker; Denmark is number one in the OECD, Sweden is fifth, behind France, Finland and Belgium.
The Swedish change of heart came about after a severe economic crisis some 20 years ago. Between 1990 and 1994 the Government budget deficit went from a surplus of 4% of GDP to a deficit of more than 13%. Dealing with the crisis required a series of reforms, notably to the labour market. Those reforms have left the country in good stead, Sweden having weathered the financial crisis perhaps best of all the Member States in the E.U.
Denmark has talked about reform in recent years, and has tinkered a bit; but the political will doesn't seem to be there for more radical changes. Perhaps things need to get a lot worse before they can get better. Or perhaps the Finance Minister here needs to get a ponytail, like the guy across the Øresund.
Walter Blotscher
Thursday 18 October 2012
HOT AND STEAMY IN BASEL
My wife and I visited our handball-playing son in Basel this weekend. It was good to see him, and good to get away from cold and rainy Denmark for a few days. We watched his team lose in Zürich, a particularly bad-tempered match; went to Bern for the day; and generally pottered about.
On Monday, while he went to handball training, we went to Aqua Basilea, a spa and sauna complex in one of the suburbs. For SFr20 you get two hours of moving between up to a dozen different saunas, steam baths, showers, and pools. The saunas had different temperatures, degrees of humidity, and scents (pine, lemon etc), while the pools were either cold, very cold, or icy. With all that sweating and washing, I don't think my body has ever felt so clean.
There is however a twist. Etiquette at Aqua Basilea is no clothing ("no sweat on the wood" signs mean that you sit on your towel in the sauna) and no separation of the sexes. I thought that this might take me out of my comfort zone, but in fact it was fine. When my son went, he was shouted at by an old woman for not sitting on his towel properly. Armed with his story, I was obviously more careful, and more naked.
Walter Blotscher
My wife and I visited our handball-playing son in Basel this weekend. It was good to see him, and good to get away from cold and rainy Denmark for a few days. We watched his team lose in Zürich, a particularly bad-tempered match; went to Bern for the day; and generally pottered about.
On Monday, while he went to handball training, we went to Aqua Basilea, a spa and sauna complex in one of the suburbs. For SFr20 you get two hours of moving between up to a dozen different saunas, steam baths, showers, and pools. The saunas had different temperatures, degrees of humidity, and scents (pine, lemon etc), while the pools were either cold, very cold, or icy. With all that sweating and washing, I don't think my body has ever felt so clean.
There is however a twist. Etiquette at Aqua Basilea is no clothing ("no sweat on the wood" signs mean that you sit on your towel in the sauna) and no separation of the sexes. I thought that this might take me out of my comfort zone, but in fact it was fine. When my son went, he was shouted at by an old woman for not sitting on his towel properly. Armed with his story, I was obviously more careful, and more naked.
Walter Blotscher
Friday 12 October 2012
EFTERLØN (3)
Last year's deal on the unaffordable efterløn regime, which raised the state pension age and changed the years in which efterløn was available from 60-65 to 64-67, put the system onto a more secure financial footing. The new coalition Government then came up with the idea of kick-starting the economy by giving the electorate a tricky choice; stay in the efterløn regime and continue to pay contributions, or opt out of the regime and get your contributions (+ interest) paid out tax-free. Money which consumers would then spend.
The window for making this choice ran out at the end of September, and the results are now in. 490,700 people took up the offer, with the Government paying out some kr.22.4 billion. This represented roughly 45% of all contributors, but what was really revealing was their distribution. Only 16% of those in the 50-59 year age group (i.e. those close to benefitting from efterløn) took the money, whereas 67% of those under 40 did so. The clear message is that young people simply don't believe that efterløn will be around in the same form when they get to the age where they could take advantage of it. If I were their age, I would probably do the same.
Unfortunately for the Government, getting cash into the hand of consumers does not necessarily mean that they will spend it. Most of it seems to have been put straight back into the bank or used to pay down debt. The Government finances may have improved in the long-term, but the short-term economic outlook remains weak.
I am off to Basel tomorrow to visit my handball-playing son, back blogging on Thursday.
Walter Blotscher
Last year's deal on the unaffordable efterløn regime, which raised the state pension age and changed the years in which efterløn was available from 60-65 to 64-67, put the system onto a more secure financial footing. The new coalition Government then came up with the idea of kick-starting the economy by giving the electorate a tricky choice; stay in the efterløn regime and continue to pay contributions, or opt out of the regime and get your contributions (+ interest) paid out tax-free. Money which consumers would then spend.
The window for making this choice ran out at the end of September, and the results are now in. 490,700 people took up the offer, with the Government paying out some kr.22.4 billion. This represented roughly 45% of all contributors, but what was really revealing was their distribution. Only 16% of those in the 50-59 year age group (i.e. those close to benefitting from efterløn) took the money, whereas 67% of those under 40 did so. The clear message is that young people simply don't believe that efterløn will be around in the same form when they get to the age where they could take advantage of it. If I were their age, I would probably do the same.
Unfortunately for the Government, getting cash into the hand of consumers does not necessarily mean that they will spend it. Most of it seems to have been put straight back into the bank or used to pay down debt. The Government finances may have improved in the long-term, but the short-term economic outlook remains weak.
I am off to Basel tomorrow to visit my handball-playing son, back blogging on Thursday.
Walter Blotscher
Thursday 11 October 2012
LANCE ARMSTRONG (2)
"Was he doped?", I asked back in August, and answered my own question in the affirmative. It seems that he was, with knobs on. USADA has just published a 1,000-page report, the basis for its reasoned decision that Armstrong was doped and should be given a lifetime ban.
The evidence includes affidavits from around a dozen former teammates, all sworn under oath, analyses from doping laboratories, and copies of bank payments, with Armstrong having paid the now discredited Doctor Ferrari alone more than US$1 million. Armstrong was apparently not just a sportsman who took performance-enhancing drugs, but also encouraged and even bullied his teammates to do exactly the same. Either they agreed, or they were out, a difficult dilemna for a young sportsman.
Armstrong himself continues to protest his innocence, and I suspect that he always will. What is more surprising is the speed with which Nike, a major sports sponsor and a great supporter of Armstrong's Livestrong anti-cancer charity, came out in his defence. His reputation is rapidly fraying, and that will inevitably have an effect on Nike, if they continue to support him. It's a sad business, but it seems increasingly clear that the man with one of the greatest ever sporting records didn't in fact do it on his own.
PS Update on 17 October. Nike have just ended Armstrong's contract with them.
Walter Blotscher
"Was he doped?", I asked back in August, and answered my own question in the affirmative. It seems that he was, with knobs on. USADA has just published a 1,000-page report, the basis for its reasoned decision that Armstrong was doped and should be given a lifetime ban.
The evidence includes affidavits from around a dozen former teammates, all sworn under oath, analyses from doping laboratories, and copies of bank payments, with Armstrong having paid the now discredited Doctor Ferrari alone more than US$1 million. Armstrong was apparently not just a sportsman who took performance-enhancing drugs, but also encouraged and even bullied his teammates to do exactly the same. Either they agreed, or they were out, a difficult dilemna for a young sportsman.
Armstrong himself continues to protest his innocence, and I suspect that he always will. What is more surprising is the speed with which Nike, a major sports sponsor and a great supporter of Armstrong's Livestrong anti-cancer charity, came out in his defence. His reputation is rapidly fraying, and that will inevitably have an effect on Nike, if they continue to support him. It's a sad business, but it seems increasingly clear that the man with one of the greatest ever sporting records didn't in fact do it on his own.
PS Update on 17 October. Nike have just ended Armstrong's contract with them.
Walter Blotscher
Wednesday 10 October 2012
MÆRSK Mc-KINNEY MØLLER (2)
I was wrong about what would happen to A.P.Møller-Mærsk, Denmark's largest company, after the old man died earlier this year. I thought that there would be a gradual concentration on Mærsk Line, the world's number one in container shipping, and the ports and terminal division that services it; and a gradual reduction in the other activities in the conglomerate, perhaps culminating in a spin-off or two. Instead, the new plan, announced this week, emphasises the oil and gas division, and downgrades the importance of shipping, which is deemed to be too volatile.
That strikes me as misguided. Mærsk, although a big company, is still a minnow in the energy business, where size really does matter. On the other hand, being the number one in the world is an enviable position, particularly in an industry which is ripe for further consolidation. If "stick to the knitting" is a sensible way to run a business, then Mærsk's knitting is shipping.
There has however been one undeniably positive development arising from the new strategy. Historically, the company has been renowned for its secrecy. Yet oil and gas requires oodles of capital, which Mærsk has to get from the markets; and if the markets are going to provide it, then they need to know what is going on. Yesterday, Mærsk held its first ever open day for financial analysts. The reaction was mixed, but it was at least a start.
Walter Blotscher
I was wrong about what would happen to A.P.Møller-Mærsk, Denmark's largest company, after the old man died earlier this year. I thought that there would be a gradual concentration on Mærsk Line, the world's number one in container shipping, and the ports and terminal division that services it; and a gradual reduction in the other activities in the conglomerate, perhaps culminating in a spin-off or two. Instead, the new plan, announced this week, emphasises the oil and gas division, and downgrades the importance of shipping, which is deemed to be too volatile.
That strikes me as misguided. Mærsk, although a big company, is still a minnow in the energy business, where size really does matter. On the other hand, being the number one in the world is an enviable position, particularly in an industry which is ripe for further consolidation. If "stick to the knitting" is a sensible way to run a business, then Mærsk's knitting is shipping.
There has however been one undeniably positive development arising from the new strategy. Historically, the company has been renowned for its secrecy. Yet oil and gas requires oodles of capital, which Mærsk has to get from the markets; and if the markets are going to provide it, then they need to know what is going on. Yesterday, Mærsk held its first ever open day for financial analysts. The reaction was mixed, but it was at least a start.
Walter Blotscher
Tuesday 9 October 2012
VÆRNEPLIGT
The obligation to do værnepligt ("national service") is part of the Danish constitution. However, both the number of young men doing it and the length of time they do it for, have fallen sharply in recent years. In particular, there are now so many volunteers that it is almost completely non-compulsory. My elder son did it for four months a couple of years ago, since it paid him a good wage, and - being sporty - kept him fit. But I don't think he thought, even at the time, that he was contributing much to Denmark's future defence. What he did learn was that the way to get on in the army is not to have any original thoughts or ideas whatsoever.
Now we are in the middle of hard economic times, and the Defence Ministry has to find kr.2,7 billion in savings; abolishing the expensive and inefficient værnepligt is an obvious target. Because of its place in the constitution, abolition is in fact not possible without a referendum. Politicians are therefore looking to "suspend" it in the first instance.
Britain has not had compulsory national service since the end of the 1950's. If there are enough volunteers, then that is a much better way to recruit. Volunteers tend to be both more motivated and to stay for longer, thereby giving a better return on the investment in their training. Certainly the British Army has a good reputation amongst the world's defence forces.
Some right-of-centre Danish politicians are beginning to foam at the mouth at the supposed weakening of Denmark's defences. Yet the fact remains that Denmark would be very hard pressed to defend itself against anybody, without help from its NATO allies. Recognising that, and reshaping defence priorities to reflect the reality, is a sensible way forward. Værnepligt should go.
Walter Blotscher
The obligation to do værnepligt ("national service") is part of the Danish constitution. However, both the number of young men doing it and the length of time they do it for, have fallen sharply in recent years. In particular, there are now so many volunteers that it is almost completely non-compulsory. My elder son did it for four months a couple of years ago, since it paid him a good wage, and - being sporty - kept him fit. But I don't think he thought, even at the time, that he was contributing much to Denmark's future defence. What he did learn was that the way to get on in the army is not to have any original thoughts or ideas whatsoever.
Now we are in the middle of hard economic times, and the Defence Ministry has to find kr.2,7 billion in savings; abolishing the expensive and inefficient værnepligt is an obvious target. Because of its place in the constitution, abolition is in fact not possible without a referendum. Politicians are therefore looking to "suspend" it in the first instance.
Britain has not had compulsory national service since the end of the 1950's. If there are enough volunteers, then that is a much better way to recruit. Volunteers tend to be both more motivated and to stay for longer, thereby giving a better return on the investment in their training. Certainly the British Army has a good reputation amongst the world's defence forces.
Some right-of-centre Danish politicians are beginning to foam at the mouth at the supposed weakening of Denmark's defences. Yet the fact remains that Denmark would be very hard pressed to defend itself against anybody, without help from its NATO allies. Recognising that, and reshaping defence priorities to reflect the reality, is a sensible way forward. Værnepligt should go.
Walter Blotscher
Monday 8 October 2012
THE RED CROSS
The International Committee of the Red Cross, to give it its official name, sprang from the writings and ideas of the Swiss businessman Henri Dunant. In 1859 he happened to witness the aftermath of the Battle of Solferino in Italy, and was appalled by the casualties and lack of medical facilities for the wounded. He pushed hard for national voluntary relief agencies that would look after wounded soldiers, and for a system of international treaties that would protect both them and medical personnel. The latter eventually resulted in the Geneva Conventions, which still govern human rights in time of war.
Yesterday was the annual collection day for the Danish Red Cross society. Since my wife is chairman of the local branch, it would be difficult for me not to participate; but I would be happy to do it anyway. The Red Cross is often associated with work in war zones, but it also does a lot of things domestically. Integrating refugees and helping their children with homework, visiting lonely people, running a second-hand clothes shop, helping people in the process of dying, and much else.
My route took me to the most rural parts of what is quite a rural area, where houses are not just set back from the main road but are up to a kilometre up a dirt track. I quite like this route, since it gives me the opportunity to see at first hand how much is going on in the local renovation market, as people turn run-down farmsteads into modern dwellings. Not everyone was at home, and of those that were, not everyone contributed; but most people did, even if it was just with a few coins. My wife was pleased with the end result.
In these straightened times, charities are finding it difficult to raise money. But the Red Cross seems to be an organisation that is much appreciated. And not just by me.
Walter Blotscher
The International Committee of the Red Cross, to give it its official name, sprang from the writings and ideas of the Swiss businessman Henri Dunant. In 1859 he happened to witness the aftermath of the Battle of Solferino in Italy, and was appalled by the casualties and lack of medical facilities for the wounded. He pushed hard for national voluntary relief agencies that would look after wounded soldiers, and for a system of international treaties that would protect both them and medical personnel. The latter eventually resulted in the Geneva Conventions, which still govern human rights in time of war.
Yesterday was the annual collection day for the Danish Red Cross society. Since my wife is chairman of the local branch, it would be difficult for me not to participate; but I would be happy to do it anyway. The Red Cross is often associated with work in war zones, but it also does a lot of things domestically. Integrating refugees and helping their children with homework, visiting lonely people, running a second-hand clothes shop, helping people in the process of dying, and much else.
My route took me to the most rural parts of what is quite a rural area, where houses are not just set back from the main road but are up to a kilometre up a dirt track. I quite like this route, since it gives me the opportunity to see at first hand how much is going on in the local renovation market, as people turn run-down farmsteads into modern dwellings. Not everyone was at home, and of those that were, not everyone contributed; but most people did, even if it was just with a few coins. My wife was pleased with the end result.
In these straightened times, charities are finding it difficult to raise money. But the Red Cross seems to be an organisation that is much appreciated. And not just by me.
Walter Blotscher
Saturday 6 October 2012
CREMATION
I went to the funeral this afternoon of a local man. For many years he had been the treasurer of the local cinema, which is how I knew him.
He was cremated, which is still a bit unusual in Denmark, at least out in the countryside where I live. And rather different from how it proceeds in the U.K. My stepfather and my brother were both cremated, and the service was the same. We assembled at the crematorium, the service was held in the chapel, and then the coffin disappeared behind a closed screen into the incinerator round the back.
Here, the service was in the local church. That included the traditional "ashes to ashes, dust to dust" speech, which would normally take place at the graveside, the priest merely putting a small amount of earth on top of the coffin by the altar. Afterwards, the coffin was taken to the hearse at the church gate, while the mourners followed. The car then drove off to the incinerator in Odense, some 30km away. Nobody, not even the immediate family, went with it.
On the way home, I puzzled over why the ritual should be different. Perhaps it is because the Danish Lutheran church is a state church, in which most (in olden times, all) people are automatically registered, and which is still financed by an extra levy on the state income tax. Two hundred years ago, everybody would have been buried in the local churchyard after a service conducted by the priest. Cremation may now be allowed, but old habits die hard.
Walter Blotscher
I went to the funeral this afternoon of a local man. For many years he had been the treasurer of the local cinema, which is how I knew him.
He was cremated, which is still a bit unusual in Denmark, at least out in the countryside where I live. And rather different from how it proceeds in the U.K. My stepfather and my brother were both cremated, and the service was the same. We assembled at the crematorium, the service was held in the chapel, and then the coffin disappeared behind a closed screen into the incinerator round the back.
Here, the service was in the local church. That included the traditional "ashes to ashes, dust to dust" speech, which would normally take place at the graveside, the priest merely putting a small amount of earth on top of the coffin by the altar. Afterwards, the coffin was taken to the hearse at the church gate, while the mourners followed. The car then drove off to the incinerator in Odense, some 30km away. Nobody, not even the immediate family, went with it.
On the way home, I puzzled over why the ritual should be different. Perhaps it is because the Danish Lutheran church is a state church, in which most (in olden times, all) people are automatically registered, and which is still financed by an extra levy on the state income tax. Two hundred years ago, everybody would have been buried in the local churchyard after a service conducted by the priest. Cremation may now be allowed, but old habits die hard.
Walter Blotscher
Friday 5 October 2012
FACEBOOK (2)
Facebook now has over a billion active users. That's a fair chunk of the world's total population, though the company's popularity is not evenly distributed. While in North America and Australia, more than 40% of the population are members, and in Europe almost 30%, Facebook is heavily outgunned in places such as Russia and China by local alternatives. VKontakte in Russia, for instance, has 100 million members to Facebook's just seven million.
Having said that, a billion customers is still pretty good for a company that started less than a decade ago. And all the indications are that that customer base will continue to grow in the future, as Africa and Asia get more and more hooked up to the internet. It's just a pity that I still don't really get Facebook.
Walter Blotscher
Facebook now has over a billion active users. That's a fair chunk of the world's total population, though the company's popularity is not evenly distributed. While in North America and Australia, more than 40% of the population are members, and in Europe almost 30%, Facebook is heavily outgunned in places such as Russia and China by local alternatives. VKontakte in Russia, for instance, has 100 million members to Facebook's just seven million.
Having said that, a billion customers is still pretty good for a company that started less than a decade ago. And all the indications are that that customer base will continue to grow in the future, as Africa and Asia get more and more hooked up to the internet. It's just a pity that I still don't really get Facebook.
Walter Blotscher
Thursday 4 October 2012
SPELLING
It's official. The word that Danes have most trouble spelling is "af sted", meaning away (as in go away).
I am not so surprised. The f is silent, and the d sounds like the th in "the". But the most difficult thing is that it is made up of two smaller words, af (from) and sted (place, as in the older English word stead). When you say it in Danish, it is impossible - even for Danes - to hear whether it is one word or two.
It's often written as one word, but the correct spelling is as two. That's also official.
Walter Blotscher
It's official. The word that Danes have most trouble spelling is "af sted", meaning away (as in go away).
I am not so surprised. The f is silent, and the d sounds like the th in "the". But the most difficult thing is that it is made up of two smaller words, af (from) and sted (place, as in the older English word stead). When you say it in Danish, it is impossible - even for Danes - to hear whether it is one word or two.
It's often written as one word, but the correct spelling is as two. That's also official.
Walter Blotscher
Tuesday 2 October 2012
IT STRUGGLES
Readers of this blog will know that I am no IT-expert. Two things have confirmed that in recent days.
The first was Google's decision to support blogger.com only through their Chrome browser. Although I have Chrome on my computer, it is not my browser of choice; so I often unconsciously go into the wrong browser when I write my blog posts. The effect of this is that sometimes posts get published with only the header and footer, and without the text body in the middle. As happened with this one, I think.
The second is my struggle to master an iPad, which is a new experience. Apple's way of doing things is completely different from the Windows system that I have worked with for the past 20 years. Luckily, my 18-year old daughter has a much better intuitive understanding of the i world than I do. She has just managed to help me make a video on my iPad, that I have to admit I am rather pleased with.
Walter Blotscher
Readers of this blog will know that I am no IT-expert. Two things have confirmed that in recent days.
The first was Google's decision to support blogger.com only through their Chrome browser. Although I have Chrome on my computer, it is not my browser of choice; so I often unconsciously go into the wrong browser when I write my blog posts. The effect of this is that sometimes posts get published with only the header and footer, and without the text body in the middle. As happened with this one, I think.
The second is my struggle to master an iPad, which is a new experience. Apple's way of doing things is completely different from the Windows system that I have worked with for the past 20 years. Luckily, my 18-year old daughter has a much better intuitive understanding of the i world than I do. She has just managed to help me make a video on my iPad, that I have to admit I am rather pleased with.
Walter Blotscher
Monday 1 October 2012
LUKKELOVEN
Denmark woke up to a new era this morning, as the abolition of the Lukkeloven ("Closing Law") came into effect. This was the law that regulated the hours that shops and supermarkets could be open. Like most regulations of that ilk, they were complicated and slightly irritating. However, from today, a shop can open 24/7 all year round if it wants to. The only exceptions are 13.5 public holidays; but even there, the exception can be waived, if the shop's turnover is less than kr.32m (roughly £3.5m) a year.
My local Netto supermarket has already taken advantage of the looser regime, and will now open 8am - 10pm seven days a week. Beforehand it used to close much earlier in the evening, and was not always open on Sunday. So the new rules give me a much greater choice.
Apart from the increased options available to consumers, the main winners from the change will be youngsters under 18, whom the supermarkets will hire to man the check-outs, since they are cheap. However, since longer opening hours are unlikely to lead to more purchases of vegetables, the effect on retail businesses is likely to be some sort of cannibalisation. Bigger supermarkets will probably win at the expense of smaller ones; but rural supermarkets may also win at the expense of big city ones, since people will be able to shop closer to home, and queues/parking are easier.
If the economic effect is uncertain, the legal effect is not. This is a liberalisation that won't be reversed.
Walter Blotscher
Denmark woke up to a new era this morning, as the abolition of the Lukkeloven ("Closing Law") came into effect. This was the law that regulated the hours that shops and supermarkets could be open. Like most regulations of that ilk, they were complicated and slightly irritating. However, from today, a shop can open 24/7 all year round if it wants to. The only exceptions are 13.5 public holidays; but even there, the exception can be waived, if the shop's turnover is less than kr.32m (roughly £3.5m) a year.
My local Netto supermarket has already taken advantage of the looser regime, and will now open 8am - 10pm seven days a week. Beforehand it used to close much earlier in the evening, and was not always open on Sunday. So the new rules give me a much greater choice.
Apart from the increased options available to consumers, the main winners from the change will be youngsters under 18, whom the supermarkets will hire to man the check-outs, since they are cheap. However, since longer opening hours are unlikely to lead to more purchases of vegetables, the effect on retail businesses is likely to be some sort of cannibalisation. Bigger supermarkets will probably win at the expense of smaller ones; but rural supermarkets may also win at the expense of big city ones, since people will be able to shop closer to home, and queues/parking are easier.
If the economic effect is uncertain, the legal effect is not. This is a liberalisation that won't be reversed.
Walter Blotscher
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