Latvia: on the brink of collapse (The Torygraph)

Generali

Sir_Humphrey wrote: »

I am not arguing against democracy.

I would counter that the it is the most neo-Liberal countries that have suffered most in the current crisis. They are the USA, UK, Ireland, Iceland and Latvia. A bit more than a co-incidence I think.

http://en.wikipedia.org/wiki/Democracy_index#2008_ranking

1Sweden9.88Full democracy
2Norway9.68Full democracy
3Iceland9.65Full democracy
4Netherlands9.53Full democracy
5Denmark9.52Full democracy
6Finland9.25Full democracy
7New Zealand9.19Full democracy
8Switzerland9.15Full democracy
9Luxembourg9.10Full democracy
10Australia9.09Full democracy

...

158Guinea2.09Authoritarian regime
159Libya2.00Authoritarian regime
160Guinea-Bissau1.99Authoritarian regime
161Saudi Arabia1.90Authoritarian regime
162Central African Republic1.86Authoritarian regime
163Myanmar1.77Authoritarian regime
164Uzbekistan1.74Authoritarian regime
165Turkmenistan1.72Authoritarian regime
166Chad1.52Authoritarian regime
167North Korea0.86Authoritarian regime

This the Economists ranking of democracy. There appears to be little corellation between democracy and whether you follow neo-Liberal or Social Democratic policies. The latter are what I favour before you try to pretend I am some sort of Trot.

The list of countries I came up with was random, just plucked from the air yet the ranking is clear. Equlity is good (I guess you believe) poverty is bad (I hope you believe).

I think you and many others prefer poverty over inequality. I'd like everyone to be richer than now even if everyone can't be rich.

The list you link to seems to show that a bunch of Socialist (not comunist) counries are most 'democratic' (given a socialist definition of democracy) and that a bunch of hopeless basket cases are a bunch of hopeless basket cases. I don't see how that advances your case in any way.

Please let's not get back to the situation we had before where you'd post 'evidence' like this and then get all grumpy because I'd point out you didn't know a debating point from a herring.

bendix

I think the concept of suffering during this recession is rather over-stated. For the vast majority of people, they are still in jobs and their wages are going further than ever before. The recession has affected single digit percentages of people badly. Even those who wailed about the loss of pension funds or house values are seeing them rebound.

And to call the UK a neo-liberal country is fanciful in the extreme, given the number of people who rely on government expenditure for their income, either through public sector jobs or the 6 million who don't work and are on some kind of benefit (and I don't include state pensions in that).

If that's an example of neo-liberalism, I'm a banana.

In a neo-liberal economy, if you didn't work, you would have to rely on your own savings for support. Indeed, take it further and you can argue that it is precisely those high levels of government expenditure which have exacerbated the problems for those countries you list as suffering.

I'd say Hong Kong and Singapore are much closer to the neo-liberal model and the economic impact on those countries was fleeting, and recovery happened immediately.

Wookster

Sir_Humphrey wrote: »

To do the cuts that Latvia were asked to do is simply impossible in a democracy.

The only countries that have been shown to be capable of doing structural adjustment style policies are dictatorships such as Ghana under Flight Lieutenant Rawlings.

This is where you go wrong Humphrey.

You cannot grasp the concept of living within your means. It is very simple, if you can't live within your means, cannot make necessary adjustments to your lifestyle then the bank (read Bond market, which oddly tends to be quite lenient) will withdraw support.

This is a sober warning to all countries running budgetary deficits.

bendix

Wookster wrote: »

This is where you go wrong Humphrey.

You cannot grasp the concept of living within your means. .

Because, as a civil servant with special responsibilities to save us all from the perils of fireworks, he doesn't need to. If you get paid a salary and benefits for doing something that noone in the real world either wants or would pay for, you lose your sense of economic realism. A pound remains a pound, sure, but it's not your pound and it's not a pound that your labours had to create - it's a pound from this big pile called the Treasury, that mugs like you and I create wealth to fill.

I'm genuinely surprised to see Sir Humphrey on here at this time of the year. I would have thought that the month before Guy Fawkes night was his busy season.

Wookster

bendix wrote: »

I'm genuinely surprised to see Sir Humphrey on here at this time of the year. I would have thought that the month before Guy Fawkes night was his busy season.

Maybe he's not doing any work but instead saving up his ideas for the next government?

Pssst

Sir_Humphrey wrote: »

Which is why they have been unable to force through the necessary cuts! That is exactly my point! Jesus Christ, are you completely unable to follow an argument?!?

Blasphemer....!!!!!
http://www.youtube.com/watch?v=R_hlMK7tCks

inspector_monkfish

14:41 06Oct09 DJN-DJ SWEDBANK BALTIC HEAD: TO CONTINUE LATVIA SUPPORT DESPITE SPAT<SWDBY.PK><SWEDa.ST>
14:41 06Oct09 DJN-DJ SWEDBANK BALTIC HEAD: MAINTAINS LONG-TERM BALTIC STRATEGY<SWDBY.PK><SWEDa.ST>
14:41 06Oct09 DJN-DJ SWEDBANK BALTIC HEAD: LATVIAN DEVALUATION NOT MAIN SCENARIO<SWDBY.PK><SWEDa.ST>
14:42 06Oct09 DJN-DJ SWEDBANK BALTIC HEAD: CAN HANDLE BIG LOAN LOSSES<SWDBY.PK><SWEDa.ST>
14:42 06Oct09 SWEDBANK BALTIC HEAD: WILL LEND TO SMALL CO, REAL ESTATE
14:42 06Oct09 SWEDBANK BALTIC HEAD: SOME CLIENTS TO EXIT CRISIS MORE IN DEBT14:42 06Oct09 SWEDBANK BALTIC HEAD: NO POINT IN PLAYING BLAME GAME
14:43 06Oct09 Swedbank To Continue Latvia Support Despite Spat



STOCKHOLM--Sweden's Swedbank AB (SWED-A.SK) said Tuesday that it would continue to support businesses in the Baltics despite an escalating war of words in which the Swedish finance minister accused Latvia of doing too little to right its economy.

"We are in the Baltics long-term and we have no intention of withdrawing,"
Swedbank's head of Baltic banking, Hakan Berg, told Dow Jones Newswires.

Over the weekend, Sweden's Finance Minister Anders Borg said international
lenders were losing patience with Latvia after the Baltic state said it may make
budget cuts of only 325 million lats ($672.8 million) versus the LVL500 million
agreed for an International Monetary Fund-led EUR7.5 billion loan program.
Tuesday, Borg stepped up his rhetoric, saying LVL325 million in cuts isn't enough and that Latvia needs to fulfill the loan terms to receive the agreed $1.4 billion in Nordic payments to be made at the turn of this year.

Latvian Prime Minister Valdis Dombrovskis accused Borg of being too
aggressive and said the country would meet its 2010 deficit target of no more
than 8.5% of gross domestic product despite making smaller than recommended
budget cuts.

The comments reignited speculation that Latvia may be forced to devalue its euro-pegged currency. If that happens, roughly 85% of Latvian borrowers who hold euro-denominated loans would see their debt burdens increase, leading to heavier loan losses for lenders such as Swedbank.

Berg said Swedbank doesn't expect a Latvian devaluation in its main scenario but it is nonetheless braced for the surge in loan-losses it would trigger. "We
have no reason to question the IMF-program, but, of course, we also need to be prepared for alternative types of scenarios," he said.

The bank met Monday with the Latvian prime minister and the economy minister Artis Kampars. Afterwards, Kampars publicly urged the bank to keep up lending to small-and-midsize businesses. Berg said Swedbank's intention is to do so as long as they have sustainable business models, and that such businesses are part of its core competence.

He added that the bank will continue to offer real-estate loans even though
that sector is expected to generate heavy losses. But he said Swedbank plans to scale back on loans to ventures that are traditionally better supported by
private equity investments. Berg said that sustainable businesses with solid
business models can expect continued financing. "Unfortunately, there are a lot
of businesses that started up in the overheated economy that don't have
sustainable business models and that will have to be closed in a responsible
way," he said.

Berg noted that some customers will end up with bigger debt burdens when the
crisis is over as they opt to defer principal repayments and pay only interest on
loans. Some worry this may lead to further pain later on, but Berg said he thinks
it is manageable and is better than evicting homeowners.

"It doesn't mean that for the rest of your life you will have no payment
capability. You will unfortunately maybe end up after the downturn with a
slightly higher debt than you had started with, but still if you have 25 years to
pay that debt - it gives you slightly more room," he said.

Swedish banks have been accused by Latvian politicians of fueling the credit
bubble that caused the region's economies to overheat. Berg admitted that
Swedbank made some mistakes but said there was little point in apportioning
blame.
"It concerns me from the aspect that I don't think it will benefit anyone if
we play this blame game. We all participated, we all made mistakes and we all
have to join forces to manage the downturn rather than try to find scapegoats,"
he said.

bendix

Wookster wrote: »

Maybe he's not doing any work but instead saving up his ideas for the next government?

He's gone now though.

I suspect there must be an emergency in the Sparkler Division - they've heard the Department of Catherine Wheels are after some of their budget.

Ohhhh, the trials and tribulations of a civil servant.

StevieJ

Sabre rattling by Sweden :eek:

zappahey

Generali wrote: »

The list of countries I came up with was random, just plucked from the air yet the ranking is clear.

http://xkcd.com/552/