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
Sunday, 17 June 2012
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
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