MILK QUOTAS

When I was growing up, one of the big political talking points was the overproduction of food in the E.U. What had started as a sensible policy in the post-war world, namely that Europe's citizens should have enough to eat - had become a victim of its own success. Scarcity of product had been replaced with mountains of butter, and lakes of wine.

One of the biggest problem areas was milk. In 1984 a quota system was set up, with each Member State having a national quota, which was then divided up into quotas for individual dairy farmers. Production over and above the quota led to a fine. However, in order not to penalise efficient farmers, quotas were tradeable, allowing the good to buy up quotas from the poor.

This somewhat cumbersome system is now to go; from tomorrow, dairy farmers will be able to produce as much milk as they like. Milk production, particularly in the four northern countries of Ireland, England, Holland, and Denmark, is expected to soar. In Denmark, they expect to produce an extra billion litres of milk a year.

Good news for farmers? Well, the problem with extra production in a free market is that it inexorably leads to lower prices. In the case of milk, that will be exacerbated by the fact that only about 4-5% of production is traded internationally, so an extra 5% at the farm gate could easily lead to a doubling of the amount traded. It will take a couple of months for the new rules to filter through the whole system, but it would not surprise me if less efficient farmers were calling for the reimposition of quotas later this year.

Walter Blotscher

MOBILE PAY

One of my New Year resolutions was to get some sort of mobile payment application, so that I can pay for things using my mobile phone. This has been available for years in places like Kenya (with its mPesa system), but has only recently come to Denmark.

Anyway, I can now - with some pride - reveal that I have succeeded. Today I managed both to download the app, and make my first payment, for kr.140.

This is one of those things, like riding a bicycle, that when you have done it, you wonder why you haven't always done it. Better late than never, I suppose.

Walter Blotscher

CHINA

China was  .....what? A fascinating insight into a culture that goes back continuously for more than 2,000 years or a nightmare vision of an urban future dominated by megacities? Well, a bit of both really.

To take the first. The school we were exchanging with, Shi Shi High School, is the oldest recorded school in the world, with documents dating back to its founding in 143BC. While there, we visited the Dujiangyan irrigation system, which is also 2,000 years old (though the stones wrapped in bamboo that made up the original dam have been replaced by concrete). As is the Wuhou memorial temple in the middle of the city. The Sichuan plain has always been a fertile region (Sichuan means four rivers), so Chengdu has always been an important city. Bits and pieces testifying to that history pop up all over the place.

However, it is also a modern city of some 14 million people, up from 500,000 as recently as the 1950's. 20-30 story tower blocks litter the ground in the same way that 1-storey housing estates would in Europe or America. The traffic is terrible, even though all commercial vehicles are banned during the day (so all deliveries take place at night). Everything is go, go, go, and it was a lot richer than I had expected. BMW and Mercedes seem to be doing a roaring trade.

Walter Blotscher

CHENGDU

I am off to China this morning for a student exchange with my school. 12 days in Chengdu, where the pandas are. I am really looking forward to it.

China has funny internet rules, so I am unlikely to blog while I am there. Back at the end of the month.

Walter Blotscher

9 APRIL

Denmark's fight against Germany in the Second World War was, in reality, a minor skirmish. The Germans crossed the border early in the morning of 9 April; six hours later, it was all over and the Danes had capitulated. Danish losses amounted to 16 killed and 20 wounded; German losses were higher, but still minimal.

Germany was not really interested in Denmark, it was a stepping stone towards the strategic prize of Norway, which they took later in the year. Still, it provided a useful base, particularly with regard to food, and the occupation of the country lasted until 1945.

The Second World War has undergone a bit of a renaissance in Denmark the past few years, with films about the resistance movement proving a big hit. This evening I watched at the local cinema a new film, 9 April, which traces the events of those 6 hours. Almost documentary like, it follows a bicycle unit charged with defending the border area. The main thing I got from it was that the fight was a hopeless mismatch; in order to last even six hours, the Danes had to fight pretty well.

As I said earlier, what is now needed is a film about collaboration during those five years. Not everyone in Denmark thought that the Germans were a bad thing, But perhaps that remains a touchy subject.

Walter Blotscher

MAD MEN

My wife and I are enjoying watching all of the episodes of Breaking Bad on Netflix. But it's an iron rule that we only watch it together.

She is away on an exchange trip in Poland with her school this week, so I have to find alternative entertainment. So I getting into Mad Men, which is also on Netflix.

Mad Men is all about advertising people on Madison Avenue in New York at the end of the 1950's/early 1960's, and I am getting quite into it. Three things in particular have struck me. How chauvinist the men are, how much alcohol is drunk at work, and how much everybody smokes.

Walter Blotscher

SCANDINAVIAN AVIATION

Scandinavian aviation has problems. A week or so ago cabin personnel went on strike at SAS. The strike was illegal, something which the courts duly confirmed. But it still took a couple of days for talks to break down, writs to be issued, opinions to be drafted and so on. And every day that an international airline doesn't fly means a big loss of revenue and an even bigger load of disgruntled passengers.

Then it was the turn of Norwegian, the low-cost carrier that is doing to Scandinavia what Ryanair has done to the rest of Europe. This time it was the pilots, and the strike went on for longer. The only people happy about the new development were SAS; with many routes within Scandinavia a duopoly, SAS were able to recoup the revenue that they had lost the week before.

In both cases, the fundamental issue was the same. In what is increasingly becoming a global industry, can Scandinavian airlines continue to pay Scandinavian wages and benefits when the competition is paying much less? Transport businesses are essentially fixed cost, so if your costs are higher, then you are less competitive. True, the Gulf carriers (and Chinese airlines) don't - yet - want to fly around Scandinavia. But SAS and Norwegian can't survive as regional players, and on the long-haul routes which are more profitable, they compete head-on.

The result of the two strikes was that the Scandinavian labour model in the aviation industry has survived for now. However, I am not convinced that it will survive much beyond 2020.

Walter Blotscher

TAXES

One reason why I am optimistic about paying yesterday's dental bill is that I am going to get a tax rebate.

The Danish tax system is both burdensome and complicated. However, after much work, today I managed to type in all of the data from mine and my wife's affairs. She will get quite a big rebate, and I will get a smaller one. Better than a poke in the eye with a sharp stick.

Walter Blotscher

A VISIT TO THE DENTIST

A couple of weeks ago, I broke a tooth, chewing on a nut or something. Unfortunately, it was the top molar on the left hand side, the one that does most of my chewing.

So this morning I had to visit the dentist, which I hate. Fortunately, I had an injection, so the cleaning out of the tooth and filling it with plastic didn't hurt, it was just very uncomfortable.

However, the most surprising part of the whole affair was the bill. I was expecting the worst, but it turned out to be only kr.1.600, which should be manageable.

Walter Blotscher

A.P. MØLLER-MÆRSK

A couple of years ago, following the death of Mærsk Mc-Kinney Møller, I advocated the break-up of the conglomerate he controlled, and which is Denmark's biggest company.

It seems they are beginning to listen. Last year it sold its 50% share of the country's largest supermarket chain to the family which controlled the over half. And there has been more investment in ports and containers, the group's core areas. But the biggest development to date is the recent announcement that the group will sell its roughly 20% stake in Danske Bank, Denmark's largest financial institution. It's a pity that it has taken so long, but better late than never.

True, the stake is merely being moved from A.P. Møller-Mærsk to the family trusts that control the company. And those trusts control the company because of the judicious use of special B class shares. Nevertheless, A.P. Møller-Mærsk is on the way to becoming a company like other companies. That can only be a good thing.

Walter Blotscher

RESERVES

The Danish krone is acquiring a reputation as a safe haven. So, despite the fact that interest rates are negative here, there is upward pressure on the currency.

Denmark's official exchange rate policy is to maintain a peg with the Euro. In order to reduce that upward pressure, the Central Bank sells kroner (which it can do indefinitely) and obtains foreign exchange.

Recently released figures show just how much this tactic is working. Foreign exchange reserves are up from kr.200 billion in 2000 to kr.738 billion today. In February alone the bank sold kr.169 billion of domestic currency.

Walter Blotscher

COASTAL EROSION

The west coast of Denmark is sandy and windswept, making it a magnet for tourists, both Danes and foreigners, particularly Germans. Unfortunately, after every major storm, the coast moves a couple of metres inland. Eventually, the erosion takes the odd summer house with it.

None of this is rocket science. If you buy a summer house on the west coast, then erosion is an occupational hazard. Not surprisingly, summer house owners think differently. They believe that it is the state's responsibility to compensate them if their beloved property disappears into the sea.

I vehemently disagree.

Walter Blotscher

BIG BRIDGES AND TUNNELS

Denmark loves building long bridges and tunnels, those of 20km or more. A big link goes over the Great Belt and joins Fünen, where I live, with Zealand. The next one was built over the Øresund from Copenhagen to near Malmø in Sweden, the bridge in the TV serien "Broen". Now there is a plan to link southern Zealand with Germany, the so-called Femern link.

The Germans have always been iffy about the project. From their perspective, it's easy enough to get to Denmark; north of that, there's only Norway, Sweden and Finland, and there is already an overnight ro-ro ferry from Lübeck. So although they agreed to the link, it was on condition that Denmark financed the whole thing. The only bit that they would pay for are some onshore works where the bridge/tunnel comes onshore.

That's probably not such a bad decision. The original cost of the project, which has barely begun, was kr.33 billion, to be paid back over 29 years; that has already spiralled to kr.49.4 billion, to be paid back over 39 years. Nobody expects the final price to come in under that.

Still, large-scale infrastructure projects can often end up bringing great benefits for many years to come (witness the Victorian railway boom). The only problem is that there is less money today for this sort of thing than in the 1840's, and a lot less entrepreneurial spirit.

Walter Blotscher

MUTUAL INSURANCE

Some insurance companies are owned by shareholders; others are mutual, meaning that they are owned by their customers. The advantage of this arrangement is that any profits from the year in question can be paid out to the policyholders, thereby (in effect) reducing the premiums and making everything cheaper.

My car insurance is with a mutual company, and the results for 2014 have just come in. I will get a rebate of kr.861, thereby reducing my annual premium of kr.4,774 by a tidy sum.

The question then becomes, why isn't all insurance done through mutual companies? The answer is that it only really works if you have a stable base of customers, have enough data to be confident about losses, and can then put figures on those losses relatively quickly after the year end. Third party motor insurance works well; insuring an oil rig doesn't.

Walter Blotscher

DANISH BANKS (5)

The number of bank branches in Denmark has fallen rapidly since the start of the financial crisis in 2008, but it is still surprising just how fast. Nordea has gone from 319 to 156, for instance, and Danske Bank from 367 to 144. The number where you can be served by a human has fallen even faster (286 to 64, 310 to 54).

A necessary prerequisite for profitability, say the banks. Poor service, say I. The local cinema had its bank account with Nordea, whose branch in the local town has just closed. Either we could drive 16km each way in order to deposit cash in the nearest Nordea branch or we could change bank. Not surprisingly, we chose the latter.

Walter Blotscher

CROSS-COUNTRY SKIING (3)

Back in 2011 I wondered why the Norwegians are so good at cross-country skiing. They still are. In the recent Nordic world championships they won more gold medals than all of the other countries combined, 11 out of 21. In fact, their cross-country skiing prowess is even greater, since the Nordics include events such as biathlon and the combined, where the Norwegians are merely very good.

Norway's dominance is not quite as crushing as Holland's in speed-skating, but it's close. And whereas there is only really one low-lying, frozen swamp in the world, there are a number of countries with similar terrains and populations. Sweden and Finland, for instance. Don't get me wrong, they are good at cross-country skiing, it's just that the Norwegians are even better.

Walter Blotscher

A NEW PASSPORT (2)

As I was wasting my time in the U.K. passport office, I asked an employee why things had to be so complicated. In Denmark, you just go down to the local authority office, make an application (without having to go through security), give them the old passport and a photo, and get the new one some 10 days later.

His first answer was because there were ten times as many people in the U.K. than in Denmark. True, but irrelevant, said I; there would also be ten times as many people to process things.

Having realised that his first attempt was a non-answer, his second was that the Danish system was "not secure". But that's also a non-answer. It's one thing to have a central computer system that holds all passport data, indeed I can see sensible reasons for having such a system. But that doesn't mean that log-on access to that system can only be from one physical location, namely a shabby office block just outside Victoria Station. After all, the tax authorities have similar issues, and they don't make you travel to Newcastle in order to file your annual return.

The real reason is that British citizens don't have ID numbers. In Denmark every resident has a 10-digit CPR number, made up of the six numbers of their date of birth and four more, odd for men and even for women. This CPR number is used in most things to do with officialdom (tax matters, for instance), opening a bank account, going to the doctor etc etc. There are issues of data security - you don't necessarily want your doctor to know how much you pay in tax, for example - but the way forward is to solve that, not abolish the principle of being able to identify every resident fairly easily.

The British have got in a tizz about personal ID's, since they believe that they represent an infringement of civil liberties. The problem is that in not having them, you end up having other infringements of civil liberties, such as making it very difficult to get a passport.

Walter Blotscher