Not a question of if, a question of when

The Euro is as responsible for the sovereign debt crisis as each of the individual state actors. Sure they borrowed vast sums of money that they could likely never pay back, but the Euro system gave them the ability to do that, and it did so at a time when falling interest rates were reducing the return on their bonds. We're only human after all.

The crisis would not have happened, at least to the degree at which it did without the Euro. Without the Euro, Greece for one would never have been able to borrow the sums of money that they did, and countries like Ireland and Spain would not have seen a housing bubble on the scale that they did. Drachma were not worth the paper they were written on, and when faced with rampant inflation a country that cannot set it's own interest rates to control said inflation can do little to improve their situation. As we saw, low interest rates which were set to help the stagnating economies of France and Germany did little to calm the housing markets in Spain and Ireland, with drastic consequences.

Furthermore when hit by a crisis, a country does have the option of devaluing their currency, which although drastic, can be used to increase export receipts, and particularly with reference to a country which is heavily reliant on tourism, the number of tourists visiting the country. Neither Greece nor Spain have this option, and as anyone will tell you, both are no longer cheap holiday destinations in the vein that they were in the 80s and 90s. Both are also suffering from unprecedented unemployment, especially among young people.

The Euro as a concept is fundamentally flawed, you cannot have a customs union where countries have not only entirely different tax regimes but also lack effective labour mobility (like it or not, language is a barrier that the EU can do little about, it has tried, and failed). Why can the United States dollar function regardless of the differences between the 50 member states? One de facto language and a large federal body which receives the majority of tax receipts. If the economy in one region begins to fail as happened with the manufacturing sectors of the Mid West, then people move to find work elsewhere. Hence the current trend of migration from states such Michigan and Ohio to Texas and Georgia. This does not happen in Europe, at least on any scale which would be of any economic benefit. Furthermore since the federal body is in receipt of the majority of tax receipts, they can make fiscal transfers to poorer states. Again the EU is not able to do this on any realistic scale.

What Merkozy wants to do, by having states submit their budgets to the EU for approval, is the first step to taking control over national budgets. The problem with that is the inherent lack of democracy in the European system, and furthermore I do not believe either, that the European Union would exercise any more fiscal responsibility than any national state actor. It would not solve the problem of labour mobility either. So the question is, how much growth we will continue to steal from future generations in order to shore up this failed project? It's not a question of if it will collapse, merely a question of when.

Reply to "Bye, bye England? SNP plans closer Scandinavian ties after independence"

The full article as published in the Independent 5th December. (Despite the name the paper has nothing to do with the Scottish independent movement, with Independent referring to an independence from the media establishment). The full text can be found here.

The history of Scotland and the Scandinavian countries is very interesting. Scottish mercenaries fought in huge numbers in Scandinavia, particularly in the service of Sweden. Indeed some commentators have referred to Swedish-Scottish relations of that time as an unofficial alliance. There also existed a thriving trade between Scotland and Scandinavia with the port of Aberdeen having exported wool and fish for timber and iron ore. This trade far exceeded trade with England right up until 1707. Although the other Royal Burghs were geographically closer to England, Berwick of course saddling the border, this Scandinavian trade was still significant. However after the Act of Union was signed, due to economic protectionism these industries dried up.

It also worth noting that the Northern Isles themselves were once a part of Denmark-Norway, and the assistance given to Norway during the Second World War in the form of the Shetland Bus has not been forgotten by the people of Norway. Now we have the potential for huge investment from Scandinavian companies who are world leaders in renewable energy, with Statkraft and Vestas already active in building both offshore and onshore wind farms in Scotland. Is it really so preposterous to consider that Scotland could have a more active relationship with Sweden, Norway and Denmark? As far as I can see it is something that has been neglected by the Act of Union and not an eniterly new and fanciful idea.

The day the country changed

Originally published in Swedish at www.makthavare.se

Thursday 5^th May 2011 was an historic day. The SNP won the Scottish Parliamentary elections, winning not just a second term in office, but also the parliament’s first majority government since it’s foundation in 1999. The parliament holds power over such areas as education, health and justice while matters of defence, social security and foreign affairs are reserved to the Westminster parliament. Scotland has maintained a separate legal system even after becoming a part of Great Britain in 1707 and in that sense a Scottish legislative body was long overdue. Labour’s thinking was that the Scottish parliament “would kill nationalism stone dead” but in 2007 the SNP surged to a surprise victory and were able to form a minority government. 4 years later and the party have won 69 out of 129 seats. This is nothing short of a political landslide. The Scottish National Party can now assert themselves as the national party of Scotland.

The party was founded in the 30’s but it wasn’t until the early 70’s that the party saw any tangible success. Since then they have had continuous representation in the Westminster parliament, and have sat in both the European and Scottish parliaments since their inception. In order to challenge the dominance of the Labour party in Scotland the party has broadly adopted a social democratic stance supporting progressive taxation, free education, and aside, Scottish independence. However it cannot be compared with the British National Party. The party supports immigration to Scotland, seeing Scottish nationality not as a matter of race but of identity. Indeed the first muslim representative to the Scottish parliament, the late Bashir Ahmad was elected for the party. Their heartland of the agricultural areas of the North East of Scotland warrants a strong support of enterprise. One of their first moves as a minority government was to reduce taxes on small business. Their best comparator in Sweden therefore is probably the Centre party.

Why were the party so successful this time around? Their first term saw a freeze on council tax which coincided with a reduction in the disposable income of voters. This was obviously a very popular measure, and can be compared with the popularity of the Alliance’s Job Tax Deduction. Scottish unemployment has also began to fall at the same time as it continues to rise across Great Britain, with the party taking most of the credit. Labour’s decision to fight a negative campaign, to use Gordon Brown as a campaign heavyweight, and mount a campaign more against the Tories than against the SNP backfired. It associated them with their previous failures. The Liberal Democrat and Conservative parties were hurt by the Westminster coalition government’s unpopular austerity measures. All of these other parties lost seats to the SNP, with just the Scottish Green party holding onto the same 2 seats that they held in 2007.

With a clear majority, a referendum on Scottish independence, a dream of the party since their inception, will be tabled. What is of course unclear is which way this would swing. A vote for the SNP doesn’t necessarily equal a vote for an independent Scotland, and turnout at such a referendum could be much higher. It is now entirely plausible however, that Scotland could become a sovereign nation within the decade, something unthinkable just a few years ago. It is clear that the political climate in Great Britain is different. Whilst Labour lost the election, the Liberal Democrats were politically bankrupt. Both of the parties’ Scottish leaders have been forced to resign, and Vince Cable, a senior Liberal Democrat and the coalition Business Secretary has attacked the Tories as “ruthless and calculating” in an attempt to distance the party from the association that plagued it. This will most likely prove ineffective, and dissent against the leader of the party, Nick Clegg, from within is rising. He may also be forced to resign, or bid a tactical retreat from the coalition. This would put the Conservatives in a weak position, could lead to a hung parliament and an early general election. Speculation it may be, but it gives an understanding of how big an upset this election was for the traditional heavyweights of British politics.

End of the Road

I have to say that it's the end of the road for the Circumstantial Times, at least for the foreseeable future. It was my first blog, and although I've never been such a regular poster, I hope those who read them have enjoyed them half as much as I enjoyed writing them. Alas, the site is being mothballed. Learning a new language is difficult enough without continuing to write a blog, and the stresses of an intensive language course have taken their toll over here, much as working for the marketing company did this time last year.

I leave you with a word cloud of what's been posted; the word "Swedish" is very prominent.

The Economist, Scotland and how to alienate an entire country

Anyone that doesn't agree that the Economist has a chip on it's shoulder regarding Scotland should read this weeks issue. In my humble opinion there have been numerous articles portraying Scotland in a negative light, which, were at times both incredibly ignorant and unbelievably predictable. Nevertheless, I had always put this down to a particular editorial stance regarding the current Scottish government, which unfortunately, is less than unusual in the British press at the moment. See Al-Megrahi et al. However an article in this weeks paper really goes beyond the pale by defaming the entire population of Scotland.

My attention was garnered immediately through the use of the title "Scotland and Sir Walter Scott: Sham country, but not sham bard" although one could say that this was for all the wrong reasons. The majority of the article is fairly well written and reviews a book which I have not read, so neither am I in position to consider it's contents, nor am I particularly interested. For me Sir Walter Scott has always seemed somewhat overated, and the author of this particular article doesn't seem to have heard of quality over quantity since he spends almost an entire paragraph detailing how many books Scott wrote in his lifetime. However it is the last paragraph with which I shall concern myself here, as it, beyond all reasonable doubt, exhibits the anti-Scottish sentiment expressed within this particular newspaper. That's right I said beyond all reasonable doubt, we can leave any not proven verdicts for the High Court to deliver.

The writer begins this paragraph by lambasting Scott's critics who said that his Ivanhoe-esque-romanticised-tartan-picture-postcard of Scott-land may be fake, but continues "so is the new-nationalist, Burns-burnished alternative, a nation forged of feel-hard-done-by Braveheart movies, Celtic lettering on tawdry signs and synthetic rage at ancient clearances." It begins predictably by slogging the current Scottish government and anyone who voted for them. Then advances on anyone who might appreciate Burns, over a whisky, on Hogmanay even. For Auld Lang Syne indeed. Nonetheless, don't ask me to defend the Braveheart comment. Mel Gibson probably deserves everything he gets for that.

However the author then moves to suggest that Gaelic is some kind of lesser language. That to have dual language signage is some kind of weakness and that the signs make us look cheap. Unfortunately the idea that Gaelic was something to be ashamed of was all to common a view, as a result of which there were less than 60,000 speakers of the language at the turn of this century. As an article from the Scottish American Journal in 1868 suggested "the preliminary indispensables for acquiring Gaelic are... catching a chronic bronchitis, having one nostril hermetically sealed up, and submitting to a dislocation of the jaw." I did think that such views were in the past, sadly they are not.

That is not to say that I support the idea of Gaelic road signs everywhere, such road signs in Edinburgh are, in my opinion, ironic to say the least. This is not a place to argue whether Edinburgh takes it name from Dun Eidyn, gaelic for fort on the slope, or Edwin's Burgh, named for King Edwin of Northumbria, a speaker of Old English. Nevertheless there do remain siginificant areas within the Borders and, and also the Northern Isles, where dual language signs are not appropriate since the etymology of the place names is not Gaelic in origin or history. Indeed, the status of Norn, the Norse dialect spoken at one time in both the Orkney and Shetland Islands, as an extinct language provides a lesson to temper the ignorance of those who see Gaelic as unimportant. For a large proportion of both the country and the population, Gaelic is a part of our history.

Indeed it is for this exact reason, remembering our history, why we continue to learn and speak of the Highland clearances which drove millions of Scots from our shores or into forced poverty in the Glasgow slums. An event which I think, still bears a causal link to some of the societal problems we face today, granted there is no-one left to blame. To say that continuing to speak of what was an incredibly dark passage in Scottish history is fake is therefore incredulous. The truth is we all need to remember our history and thus learn from our mistakes. Indeed forgetting ones history is not a mark of wisdom for precisely this reason. The author finishes his article with a quote from Edwin Muir, who apparently "called Scott a genius." That is now beyond the point, the fact is, the editorial stance of the Economist in alienating an entire country, isn't.

Death of a Salesman

One may have noticed that I appeared to have taken a leave of absence from my blog; a sabbatical if you will. Equally, you may not have, but a quick glance to the bar on the right will show you that this is my first post since October of last year.

The reason for this 6 month gap in my writing can be answered very simply. It's no coincidence that I started a new job in that very same month of October, and it's no coincidence that I find myself writing again now. You see, I have the time to write again, and what a liberty it is, because I no longer work there (there, being business to business sales for an events company.)

The reasons why I chose to move on are many. Most importantly I saw the opportunity of new horizons. When I started working in the company, I had envisioned myself earning a great deal more commission than I actually did. Not to say that I wasn't good at it or that I didn't work hard enough. Quite to the contrary, I consistently worked harder that almost anyone in my division, and I think it is also safe to say that I sold better than most. Indeed I was offered the option to take up my position again; as my former sales director said, should I ever wish to "dip my toes" again.

However, the fact remains that I did not take home enough each month to justify the hours that I found myself working each week, which were considerable, mainly due to the fact that my base salary was very basic, and the sales commission was not generous enough to make the job competitive. Indeed it was so uncompetitive, as to make it more worthwhile for me to leave the job market entirely for a year, study Swedish full time, and further a career as a Swedish lawyer. In short there were too many pockets before mine.

Nevertheless that is not to say that I view the time there as wasted. Quite the contrary, I feel that the work offered me a great deal in terms of experience and confidence that only working with senior level decision makers can provide. But alas, that ship has run it's course; like the proverbial Willy Loman, there has been a death of a salesman, but in his stead was born a student in intensivsvenska för akademiker, and very happy he is.

North Sea Oil is Running Out?

Everyone that I know who works in the North Sea, and being from Aberdeen those are quite a few people indeed, tells me that North Sea oil is running dry. It's days are numbered. Why then do I read that a new oil refinery is planned for Teeside in the North East of England? Sonhoe, a London-based company that specialises in the development of hydro-carbon processing and infrastructure facilities, is planning to build a new £2 bn facility "designed to process 200,000 barrels a day of heavy crude oil into high quality, low sulphur diesel, petrochemical feedstock naphtha and kerosene for use in the UK or for export."

I can't argue with the site of the facility, Teeside is an excellent location, not only for access to a deep water port, but also in terms of proximity to the oil fields which it would service. I would surmise that it is for the latter reason more than the former, that the project is even being considered at all.

I would contend that this is part of a larger Westminster strategy, to isolate the idea of Scottish independence, which is deepening in it's support and momentum, with the natural possession of Scotttish oil. By ensuring that Grangemouth is no longer the lynchpin between the North Sea oil fields and the United Kingdom supply chain, they can cut Scotland out entirely. Indeed as such, there are other commercial reasons to promote such a strategy. The Ineos strike at Grangemouth in 2007 provided a harsh lesson when it forced the vital BP oil pipeline to close, shutting down operation across almost the entire UK sector of the North Sea at an estimated cost to the industry of £50m per day.

Indeed this may be a theory, with little basis in fact, but it does ride roughshod over the notion that the oil is running out. North sea production may be in decline, but there is still more than enough to satisfy a return on investment of a £2bn on oil refinery. Sonhoe clearly think that the oil will keep pumping for the next few decades at least.

It is somewhat famous in Nationalist circles that the Westminster Government have consistently lied to the Scottish people about the scope of Scottish oil. As such it has either not been viable, or actually running out since the first barrel was extracted on November 3rd, 1975.

In re-call reading in 2005 an article published in the Independent entitled How black gold was hijacked: North sea oil and the betrayal of Scotland. The article highlighted a report written by an economist, Gavin McCrone, and for the Cabinet Office in April 1975, but released in 2005 under the Freedom of Information Act.

"At the time of Professor McCrone's report to the cabinet office, the SNP claimed that North Sea Oil would yield £800 million a year for the government by 1980. Professor McCrone's main criticism of their analysis was that their forecasts were "far too low". He put the sum at about £3 billion."

Meanwhile Westminster has siphoned around £200bn of North Sea oil revenue since 1975, the majority of that since the oil price boom and subsequent windfall tax. The idea that the rest of the UK subsides Scotland is ridiculous to say the least. Without the taxation and licensing of Scotland's oil, Darling's budget would be shorter than the list for potential Labour donors.

The Independent article also went on to say that by "the mid 1970s, international convention had already agreed that the North Sea north of the 55th parallel was under Scottish jurisdiction. That meant around 90 per cent of the UK's oil and gas reserves fell within Scottish waters."

If the Scottish people voted "aye" in a referendum on Scottish Independence the United Kingdom government would therefore be duty bound under International law, to accept the free will and volition of the Scottish people to posit themselves on the international stage as a sovereign nation would they not? Indeed along with such a partition they would also have to follow this international convention that all waters North of the 55th parallel are Scottish waters, including the oil and gas which is reserved underneath them. But what if the Westminster government did not follow this convention and attempted to maintain their jursidiction over Scottish water, at the same time as offering independence? Giving with one hand, while taking away with the other.

The first task of a fledgling Scottish Government therefore, in such a situation, would be to appeal to the international community for support, particularly in Europe. After all, if Westminster would so readily ignore it's international obligations with regards to an independent Scotland, then why should it be expected to follow them with it's other neighbours? Appropriation without consent is tantamount to theft under Scots law, would we stand idly by?