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|Corruption affects all 28 member countries of the European Union and costs their economies about $162.19bn (120bn Euros) a year, according to an European Union report.
The report, the EU’s first on corruption, was issued on Monday by Cecilia Malmstrom, EU Commissioner for Home Affairs, the AP news agency reported.
Malmstrom said in a statement that “corruption undermines citizens’ confidence in democratic institutions and the result of law, it hurts the European economy and deprives states of much-needed tax revenue.
“Member states have done a lot in recent years to fight corruption, but today’s report shows that it is far from enough.”
The report said that an increasing number of EU citizens, who were surveyed as part of the report, thought it was getting worse.
Almost all companies in Greece, Spain and Italy believe it is widespread and, among businesses, belief is widespread that the only way to succeed is through political connections.
Corruption is considered rare in Denmark, Finland and Sweden, according to the report, a finding that reflects the work of Transparency International’s corruption perception index. It named Greece as the worst performer in the EU, sharing 80th place with China. Denmark was seen as the least corrupt.
Construction companies, which often tender for government contracts, are the most affected. Almost eight in ten of those asked complained about corruption.
Overall, 43 percent of companies see corruption as a problem. The cost to the European economy is almost equivalent to the size of the Romanian economy.
Corruption is commonplace
Eight out of ten EU citizens believe that close links between business and politics lead to corruption.
“Europe’s problem is not so much with small bribes on the whole,” Carl Dolan of Transparency International in Brussels, told Reuters. “It’s with the ties between the political class and industry.”
“There has been a failure to regulate politicians’ conflicts of interest in dealing with business,” he said.
“The rewards for favouring companies, in allocating contracts or making changes to legislation, are positions in the private sector when they have left office rather than a bribe.”
The European Commission recommended better controls and a redoubling of enforcement.
The report was published shortly after Romania’s former prime minister, Adrian Nastase, was sent to jail for four years for taking bribes. He was the first prime minister to be put behind bars since the collapse of communism in Europe in 1989.
The EU has repeatedly raised concerns about a failure to tackle corruption at high-level in Romania and Bulgaria, the bloc’s two poorest members. They have been blocked from joining the passport-free Schengen zone over the issue since their entry.
In October 2012, former European Health Commissioner John Dalli was forced to quit after an associate was accused of asking for 60 million euros from a tobacco company in return for influencing EU tobacco law.
Europe is recovering, right? Wrong. As Nigel Farage raged last night, things are not what they seem and even the IMF is now beginning to get concerned again (especially after Lagarde’s call yesterday for moar from Draghi and every other central banker). As Bloomberg’s Niraj Shah notes, it’s not just the PIIGS we have to worry about (or not), Denmark, Finland, Norway and Poland have been added to the IMF’s list of countries with the potential to destabilize the global economy.
Via Bloomberg’s Niraj Shah ( @economistniraj ),
The IMF’s decision means the four nations will be subject to mandatory financial sector assessments. The total number of countries on the list has risen to 29 from 25. The IMF’s decision may further undermine the safe-haven status of the Nordic nations, where rising household debt imposes a financial risk.
Ballooning Household Debt
Household debt and government-imposed austerity measures are deterring consumers from spending in the Nordic region. Denmark’s financial regulator is considering curbing banks’ lending policies to address the record household debt load. Danish households owe creditors 321 percent of disposable income, the OECD says. Norway’s household debt reached a record 200 percent of disposable income in 2011.
Austerity Triggered by Rising Government Debt
Finland’s debt-to-GDP ratio will almost double to 60.5 percent by 2015 from 33.9 percent in 2008, the IMF forecasts. The fund estimates the Finnish economy shrank 0.65 percent last year. Polish government debt reached 57.6 percent of GDP last year. A clause in the country’s constitution states that breaching a 55 percent ceiling triggers mandatory austerity measures.
Competitiveness at Risk
Denmark has dropped to 15th place in the World Economic Forum’s global competitiveness report from third in 2008. Labor costs rose 9.1 percent between 2008 and 2012, compared with an EU average increase of 8.6 percent in the period. Norway has the highest labor costs in Europe at 48.3 euros per hour in 2012, compared with 30.4 euros in Germany. That may undermine competitiveness and the growth outlook.
Most Financially Interconnected Countries
The inclusion of three Nordic nations for mandatory assessment is the result of a new methodology by the IMF that gives more weight to financial interconnectedness. The U.K. is the most financially linked nation in the world, followed by Germany. Seven of the top 10 most interconnected financial nations are in the euro-area.
So as the world congratulates itself (most notably Ben Bernanke today), the IMF seems concerned that this could all get worse again very quickly. Think they are all too small to worry about? Remember Lehman?
Finland has little room to deviate from a proposal to fill a 9 billion-euro ($12.3 billion) gap in Europe’s fastest-aging economy if it’s to avoid debt levels doubling in the next decade and a half, according to the central bank.
The northernmost euro member risks joining the bloc’s most indebted nations if the government fails to reform spending, according to calculations by the Helsinki-based Bank of Finland. Without the measures, debt could exceed 110 percent of gross domestic product by 2030, according to the bank. The ratio was 53.6 percent in 2012. Success with the plan would help restrain debt levels to about 70 percent by 2030, the bank said.
The central bank’s assessment shows that the government’s plan would have a “real impact,” Finance Minister Jutta Urpilainen said in an e-mailed response to questions via her aide. Structural reforms are needed if “the Finnish welfare state has a chance to survive,” she said.
The only euro member with a stable AAA grade at the three main rating companies, Finland’s economy is struggling to emerge from the decline of its paper makers and its flagging Nokia Oyj-led technology industry. Export demand has failed to offset weak consumer demand, as companies fire workers and the government responds to deficits with cuts. Lost revenue is hampering government efforts to set aside funds needed to care for the fastest-aging population in the European Union.
In the period August to November, Finland’s six-party coalition put together a package to streamline and reduce public spending to eliminate a gap of more than 9 billion euros in public finances by 2017. The package consists of several different measures, each to be sent to parliament independently. Some of the measures, including changes to pensions and health-care providers, are still being drafted.
Finland’s “costs related to aging will grow faster than elsewhere within the next two decades,” Petri Maeki-Fraenti, an economist at the Bank of Finland, said in an interview. Aging costs will be “decisive” in accelerating debt growth after 2020, he said.
The government reduced its economic forecasts on Dec. 19 for the 10th time since coming to power in June 2011. Even as exports look set to recover and rise 3.6 percent in 2014, GDP will grow only 0.8 percent after declining 1.2 percent in 2013, the Finance Ministry said.
The Bank of Finland’s calculations assume an average economic expansion of about 1.5 percent in the long term, compared with an average of 3.7 percent during 2003 to 2007, according to a February 2013 report by economists Helvi Kinnunen, Maeki-Fraenti and Hannu Viertola.
“We must get used to slower economic growth for an extended period of time,” Maeki-Fraenti said.
The average debt level in the euro area shot up more than 25 percentage points in five years after hovering around 70 percent for the majority of the last decade. Finland has followed suit, with the Finance Ministry estimating its debt-to-GDP ratio rising to 60 percent this year from 33.9 percent in 2008.
Euro-area debt reached 93.4 percent of GDP at the end of the second quarter, according to theEuropean Central Bank. Italy reduced its government debt to 103 percent of GDP in 2007. Since the debt crisis, its debt has begun mounting again, rising to 134 percent of GDP this year, the European Commission forecast Nov. 5.
Debt levels exceeding 90 percent hurt economic growth, Harvard University economists Carmen Reinhart and Kenneth Rogoff argued in a 2010 paper. Three years later, their claims were refuted by University of Massachusetts researchers, citing “serious errors” that overstate the significance of the boundary.
The World Bank set a similar “tipping point” at 77 percent in a 2010 paper, while a 2011 studyby the Bank for International Settlements identified a sovereign debt threshold of 85 percent. An IMF report from 2012 found “no particular threshold” that would consistently precede low growth.
Finding an absolute threshold for debt after which economic growth starts slowing is “quite impossible,” Bank of Finland’s Maeki-Fraenti said. Addressing sluggish growth and public debt is necessary for Finland due to the pressure from aging and the decline of its cornerstone industries, he said.
“As the debt level is still relatively tolerable and our unemployment hasn’t shot up in the same way, it has perhaps led some to believe that the problems shall be fixed on their own as export demand revives,” he said. “Our view is slightly more pessimistic.”
To contact the reporter on this story: Kasper Viita in Helsinki at firstname.lastname@example.org
To contact the editor responsible for this story: Christian Wienberg email@example.com
It was the winter of 1939, only a few months earlier the Soviet Union and Hitler’s Third Reich had just signed a partially secret accord known as the Molotov-Ribbentrop Pact; essentially a non-aggression treaty which divided Europe down the middle between the fascists and the communists. Hitler would take the West, and Stalin would take the East. Stalin’s war machine had already steamrolled into Latvia. Lithuania, and Estonia. The soviets used unprecedented social and political purges, rigged elections, and genocide, while the rest of the world was distracted by the Nazi blitzkrieg in Poland. In the midst of this mechanized power grab was the relatively tiny nation of Finland, which had been apportioned to the communists.
Apologists for Stalinist history (propagandists) have attempted to argue that the subsequent attack on Finland was merely about “border territories” which the communists claimed were stolen by the Finns when they seceded from Russia during the Bolshevik Revolution. The assertion that the soviets were not seeking total dominance of the Finns is a common one. However, given the vicious criminal behavior of Russia in nearby pacified regions, and their posture towards Finland, it is safe to assume their intentions were similar. The Finns knew what they had to look forward to if they fell victim to the iron hand of Stalin, and the soviet propensity for subjugation was already legendary.
The Russian military was vastly superior to Finland’s in every way a common tactician would deem important. They had far greater numbers, far better logistical capability, far better technology, etc, etc. Over 1 million troops, thousands of planes, thousands of tanks, versus Finland’s 32 antiquated tanks, 114 planes which were virtually useless against more modern weapons, and 340,000 men, most of whom were reservists rallied from surrounding farmlands. Finland had little to no logistical support from the West until the conflict was almost over, though FDR would later pay lip service to the event, “condemning” soviet actions while brokering deals with them behind the scenes. Russian military leadership boasted that the Finns would run at the sound of harsh words, let alone gun fire. The invasion would be a cakewalk.
The battle that followed would later be known as the “Winter War”; an unmitigated embarrassment for the Soviets, and a perfect example of a small but courageous indigenous guerrilla army repelling a technologically advanced foe.
To Fight, Or Pretend To Fight?
Fast forward about seven decades or so, and you will discover multiple countries around the globe, including the U.S., on the verge of the same centralized and collectivized socialist occupation that the Finnish faced in 1939. The only difference is that while their invasion came from without, our invasion arose from within. The specific methods may have changed, but the underlying face of tyranny remains the same.
In America, the only existing organization of people with the slightest chance of disrupting and defeating the march towards totalitarianism is what we often refer to as the “Liberty Movement”; a large collection of activist and survival groups tied together by the inexorable principles of freedom, natural law, and constitutionalism. The size of this movement is difficult to gauge, but its social and political presence is now too large to be ignored. We are prevalent enough to present a threat, and prevalent enough to be attacked, and that is all that matters. That said, though we are beginning to understand the truly vital nature of our role in America’s path, and find solidarity in the inherent values of liberty that support our core, when it comes to solutions to the dilemma of globalization and elitism, we are sharply divided.
While most activist movements suffer from a complete lack of solutions to the problems they claim to recognize, constitutional conservatives tend to have TOO MANY conceptual solutions to the ailments of the world. Many of these solutions rely upon unrealistic assumptions and methods that avoid certain inevitable outcomes. Such strategies center mostly on the concepts of “non-aggression” or pacifism idealized and romanticized by proponents of Gandhi, Martin Luther King Jr, and the anti-war movements of the 1960’s and 1970’s. The post-baby boomer generations in particular have grown up with an incessant bombardment of the “higher nature” of non-violence as a cure-all for every conceivable cultural ailment.
We have been taught since childhood that fighting solves nothing, but is this really true?
I can understand the allure of the philosophy. After all, physical confrontation is mentally and emotionally terrifying to anyone who is not used to experiencing it. The average “reasonable” person goes far out of their way on every occasion to avoid it. Most of the activists that I have met personally who deride the use of force against tyrannical government have never actually been in an outright confrontation of any kind in their lives, or if they have, it ended in a failure that scarred them. They have never trained for the eventuality. Many of them have never owned a firearm. The focus of their existence has been to hide from pain, rather than overcome their fears to achieve something greater.
There is nothing necessarily wrong with becoming an “intellectual warrior”, unless that person lives under the fantasy that this alone will be enough to defeat the kind of evil we face today.
Non-aggression methods rely on very specific circumstances in order to be effective. Most of all, they rely on a system of government that is forced to at least PRETEND as if it cares what the masses think of it. Gandhi’s Indian Independence Movement, for example, only witnessed noticeable success because the British government at that time was required to present a semblance of dignity and rule of law. But what happens if a particular tyranny reaches a point where the facade of benevolence disappears? What happens when the establishment turns to the use of the purge as a tool for consolidation? What happens when the mask comes completely off?
How many logical arguments or digital stashes of ethereal Bitcoins will it take to save one’s life or one’s freedom then?
Arguments For And Against Violent Action
The position against the use of “violence” (or self defense) to obstruct corrupt systems depends on three basic debate points:
1) Violence only feeds the system and makes it stronger.
2) We need a “majority” movement in order to be successful.
3) The system is too technologically powerful – to fight it through force of arms is “futile”, and our chances are slim to none.
First, violence does indeed feed the system, if it is driven by mindless retribution rather than strategic self defense. This is why despotic governments often resort to false flag events; the engineering of terrorist actions blamed on scapegoats creates fear within the unaware portions of the population, which generates public support for further erosion of freedoms. However, there is such a thing as diminishing returns when it comes to the “reach, teach, and inspire” method.
The escalation of totalitarianism will eventually overtake the speed at which the movement can awaken the masses, if it has not done so already. There will come a time, probably sooner rather than later, when outreach will no longer be effective, and self defense will have to take precedence, even if that means subsections of the public will be shocked and disturbed by it. The sad fact is, the faster we wake people up, the faster the establishment will degrade social stability and destroy constitutional liberties. A physical fight is inevitable exactly because they MAKE it inevitable. Worrying about staying in the good graces of the general populace or getting honest representatives elected is, at a certain point, meaningless. I find it rather foolish to presume that Americans over the next decade or two or three have the time needed to somehow inoculate the system from within. In fact, I’m starting to doubt that strategy has any merit whatsoever.
Second, the idea that a movement needs a “majority” of public backing to shift the path of a society is an old wives tale. Ultimately, most people throughout history are nothing more than spectators in life, watching from the sidelines while smaller, ideologically dedicated groups battle for superiority. Global developments are decided by true believers; never by ineffectual gawkers. Some of these groups are honorable, and some of them are not so honorable. Almost all of them have been in the minority, yet they wield the power to change the destiny of the whole of the nation because most people do not participate in their own futures. They merely place their heads between their legs and wait for the storm to pass.
All revolutions begin in the minds and hearts of so-called “outsiders”. To expect any different is to deny the past, and to assume that a majority is needed to achieve change is to deny reality.
Third, I’m not sure why non-aggression champions see the argument of statistical chance as relevant. When all is said and done, the “odds” of success in any fight against oligarchy DO NOT MATTER. Either you fight, or you are enslaved. The question of victory is an afterthought.
Technological advantage, superior numbers, advanced training, all of these things pale in comparison to force of will, as the Finnish proved during the Winter War. Some battles during that conflict consisted of less than a hundred Finns versus tens-of-thousands of soviets. Yet, at the end of the war, the Russians lost 3500 tanks, 500 aircraft, and had sustained over 125,000 dead (official numbers). The Finns lost 25,000 men. For every dead Finn, the soviets lost at least five. This is the cold hard reality behind guerrilla and attrition warfare, and such tactics are not to be taken lightly.
Do we go to the Finnish and tell them that standing against a larger, more well armed foe is “futile”? Do we tell them that their knives and bolt action rifles are no match for tanks and fighter planes? And by extension, do we go to East Asia today and tell the Taliban that their 30 year old AK-47’s are no match for predator drones and cruise missiles? Obviously, victory in war is not as simple as having the biggest gun and only the uneducated believe otherwise.
The Virtues Of Violence
The word “violence” comes with numerous negative connotations. I believe this is due to the fact that in most cases violence is used by the worst of men to get what they want from the weak. Meeting violence with violence, though, is often the only way to stop such abuses from continuing.
At Alt-Market, we tend to discuss measures of non-participation (not non-aggression) because all resistance requires self-sustainability. Americans cannot fight the criminal establishment if they rely on the criminal establishment. Independence is more about providing one’s own necessities than it is about pulling a trigger. But, we have no illusions about what it will take to keep the independence that we build. This is where many conceptual solutions are severely lacking.
If the system refuses to let you walk away, what do you do? If the tyrants would rather make the public suffer than admit that your social or economic methodology is better for all, how do you remove them? When faced with a cabal of psychopaths with deluded aspirations of godhood, what amount of reason will convince them to step down from their thrones?
I’m sorry to say, but these questions are only answered with violence.
The Liberty Movement doesn’t need to agree on the “usefulness” of physical action because it is coming regardless. The only things left to discern are when and how. Make no mistake, one day each and every one of us will be faced with a choice – to fight, or to throw our hands in the air and pray they don’t shoot us anyway. I certainly can’t speak for the rest of the movement, but in my opinion only those who truly believe in liberty will stand with rifle in hand when that time comes. A freedom fighter is measured by how much of himself he is willing to sacrifice, and how much of his humanity he holds onto in the process. Fear, death, discomfort; none of this matters. There is no conundrum. There is no uncertainty. There are only the chains of self-defeat, or the determination of the gun. The sooner we all embrace this simple fact, the sooner we can move on and deal with the dark problem before us.
Guest Post: Finland’s Gold | Zero Hedge. (source)
On Wednesday Finland gave in to public pressure and revealed where she stores her gold reserves. The statement followed a press release by the Bank of Sweden on similar lines released on Monday.
The totals (in tonnes) for these two Scandinavian countries are as follows:
|Bank of England||61.4||25.0|
|New York Fed||13.2||8.8|
|Swiss National Bank||2.8||3.4|
|Bank of Finland||–||2.0|
|Bank of Canada||33.2||–|
So far, so good. But then the Head of Communications for the Bank of Finland added some more information in Finnish in a blog run on the Bank’s website. It is not available in English, so I asked her for a translation, but I am still waiting.
Instead, a Finnish reader of my own blog and a Finnish journalist who has been following this topic have independently given me an English translation of a highly relevant and interesting paragraph, three from the end. This is the journalist’s:
“Maximum half of the gold has been within investment activity over the years. Gold has been invested among other things in deposits similar to money market deposits and using gold interest rate swaps. Gold investment activity is common for central banks. The risks associated with gold investments are controlled using limits, investment diversification and limitations concerning duration.”
And my reader’s translation:
“Throughout these years no more than half of the gold has been invested. Gold has been invested in for example deposits similar to money market deposits and gold interest rate swap agreements. Gold investment activities are common for central banks. Risks related to gold investments are controlled with limits, decentralising investments and limits regarding run times.”
Half Finland’s gold is stored at the Bank of England, and “no more than half” is “invested”. If any “investment” is to take place it would be in London. It is not immediately clear what is meant by invested, but presumably this is a result of translation of what has happened from English into Finnish plus explanation for a non-specialist readership. However if it has been invested, then by definition it is no longer in the possession of the Bank of Finland, and will most probably have been sold into the market in return for a promise to redeliver at a later date. This follows the Austrian National Bank’s admission to a parliamentary committee a year ago that it had earned EUR300m by leasing its gold through London.
The evidence is mounting that Western central banks through the Bank of England have been feeding monetary gold into the market through leasing operations. Indeed, the Finnish blog says as much: “Gold investment activities are common for central banks”.
This explains in part how the voracious appetite for gold by China, India and South-East Asia is being satisfied, without the gold price rising to reflect this demand. It is also consistent with my disclosure earlier this year of the discrepancy of up to 1,300 tonnes between the gold in custody as recorded in the Bank of England’s Annual Report, dated 28th February 2013 and the amount recorded on the virtual tour on the Bank’s website the following June.
- LBMA Collapse To Expose US, Europe & BIS Gold Is Gone (wchildblog.com)
- Where’s Finland’s Gold? (lewrockwell.com)