Scandinavia

SkandanaviaThere is a lot to be said for a country that hosts the oldest functioning kingdom in the world (1070 years), has expanded the Christmas brunch from one to as many as thirty consecutive days, and serves a lighted candle with nearly every meal. Mostly though, the word independence surfaces in economic, political, and more friendly conversations concerning Denmark – as well as two of its Scandinavian brethren, Norway and Sweden. These countries have avoided the difficulties that come with the adoption of the presently moribund Euro. The same cannot be said for Finland who has adopted the Euro and is literally paying for its decision – more on them later.

The type of currency that a given country is utilizing these days is perhaps the most significant explanation for why some economies are, or are not, wallowing in economic and financial mud. When a country decides to adopt a ‘common’ currency like the Euro it is similar to a car without shock absorbers . . . the passengers feel every bump, large or small.

So while European neighbors have been jolted and shaken along current crises, the brethren have had a more comfortable and shock absorbing ride. Denmark, for example, continues to charge its citizens upwards of 180% (this is no typo) tax on each new automobile purchase. And the region (based on environmental and social engineering strategies) charges the populace heating and electricity rates that are three to five times more than found in the USA. Having an independent currency means that each country can run its economy and finances in a way that the general populace agrees to. However, those that belong to the Euro are not so fortunate. When the wheels fall off (Greece), the tail pipe rusts through (Ireland), and the transmission is dropped (Italy) the mechanic (the European Central Bank) presents all members of the Euro with the bill. This happens even if the automobile body (Germany) is as good as new.

How did the brethren have the perspicacity to maintain their independence? The short answer is that they still produce stuff – natural resources as well as some value added goods, and happen to be really good at it. A central tenant of becoming part of the Euro was that various countries were required to give up something so that another could produce more of the same thing. While it sounds stranger than fiction, this was done to guarantee that the countries became more interdependent. And how have they! So while the internally compromised Euro is stuck in the mechanic’s shop, the brethren are still out on the road.

It is a bumpy road, but the shock absorbers of energy production from petroleum, geothermal and hydroelectric extraction combined with seafood products sold the world over have positioned these fortunate independent countries to remain so. In a day of currency regimes that are piled high atop debt and budget deficits it is refreshing to find westernized countries that are going it on their own.

As a parting shot I thought that you may enjoy an interesting orchestral composed in 1899 that played a historically important role in Finland gaining independence.  ‘Finlandia’ is conducted by Sakari Oramo. Listen closely and the ‘Jaws’ theme can be heard gently playing in the background. Yes, truth is sometimes stranger than fiction. I point this out, because the brethren surrounding Finland have some of the highest standards of living according to various gauges – even with substantial taxes that the populations clearly support. Finland, on the other hand, really does have a real life ‘Jaws’ soundtrack playing in the background due to its selection of the Euro as its currency. Perhaps they will run from the mechanic’s shop before vastly larger bills come due and all the Euro area countries are shipped off to debtor’s prison.