False pretences 01/09/2016

There is hardly a month or even a week without a publication, specialized or not, dedicating an article to the ”sad situation” of Switzerland, because of the strong Swiss franc, prices in general, supposedly much higher than in the neighbouring countries, and pointing out the obsolescence of some facilities, the lack of hospitality or insufficient distractions in resorts, etc.

This too simplistic view deserves attention. First of all, the question of prices : with the exception of taxis, certainly more expensive than abroad (they could also benefit from subsidies for the purchase of vehicles and petrol prices), on equal quality and services, Swiss prices are not higher than abroad. If we look at hotel rates outside our borders, in cities of a certain size, they are equivalent or in some cases much higher than ours. The same is valid for restaurants. What price must we pay in Lyon, Paris, Milan or London for the average to upper range? As for various articles, we have as everywhere else, Hermes, Vuitton or Prada, but also Zara or Hennes & Moritz.

There is an inclination to be whiny among our citizens. First, the situation is not so stupendous in other countries where shopkeepers are also complaining, both of decreasing visitors and restrained consumption.

At the company level, many Swiss firms and by no means the least, like Givaudan, Ems Chemie, Roche and Novartis do record, despite the strong Swiss franc, more than respectable results, singularly superior to their foreign counterparts.

The Swiss problem, and there is one, originates elsewhere, more specifically in the lack of foresight of a finance minister, dazzled by public treasuries or the nimble language of former ENA students, who signed anything, with anyone, without compensation, opening a gaping Pandora’s box, before returning to her canton, cradle of wolves and bears, which she should never have left. This is reminiscent of those movies where we see pirates devastating a region before returning to their mountains.

Swiss banks used to serve myriad clients, French, Italian, Spanish, German who had held portfolios of a few hundred thousands francs for decades. Once or twice a year they were visiting their banker to collect the revenues or the product of capital gains which they spent during their stay.

These unfortunates were threatened, intimidated and chased out mercilessly, often within a few weeks. Disgusted, they left, keeping a bitter memory of Switzerland, not without trying to sell off their apartment or chalet. Can we imagine that they will come back as if nothing had happened ? Nay ! What to do then ? Chase exotic clients, who are not always affable, but also travelling with filed down budgets?

Fortunately, Swiss people are often more reasonable than their leaders ! Recently, they confirmed their willingness to keep fiscal packages. Here, there is a place to take and to strengthen. And let no one talk about tax justice : Portugal grants unprecedented conditions to foreigners, while London, freed from the shackles of the EU, will play all its cards to attract wealthy residents, not to mention the USA or Emirates.

Apart from the climate of security (always fragile!), the tax package is one of our last cartridges. The state should tackle this seduction campaign, with the support of banks, that would finally have the opportunity to redeem themselves, as well as of specialized law firms, that could launch road shows in Europe, like their foreign colleagues who, in the past, did not hesitate to go through and canvass the main Swiss cities.
 

The Nordic Ant (July 29th, 2016)

The catastrophic drop of oil, which within a few years has virtually declined from USD 150 per barrel to around 20 before recovering to about 50, caused a trauma to producers.

The time of gold-plated domes, of Aston Martin or Lamborghini collections, the construction of pharaonic stadiums and highways or towers of Babel, belong to the past, to the extent that producers had to pull from their reserves, if only to cover an abysmal deficit generated in the light of the huge inflows of the past.

A producer has yet escaped the slump: Norway. True to an austere or even frugal Lutheran tradition, the country did not succumb to the spendthrift irrational, when its huge energy reserves were discovered. This was demonstrated during the Winter Olympic Games in Lillehammer characterized by an efficient sobriety.

Successive governments have instead focused on the development of infrastructures for the benefit of the population in the form of schools, universities or hospitals, to the extent that any Norwegian can find effective treatments less than one hour from his home away and get there by helicopter in case of emergency. New universities saw their reputation growing rapidly and, in the framework of Erasmus, are often frequented by foreign students who become attached to the country and consider staying. Life is serene, reassuring (sometimes too much) and the inhabitants have middle-class needs; a small apartment, a shack in the countryside, an old Saab to get there, and a boat for fishing. Concerned about the welfare of its youth and aware of the oppressive melancholy which might emerge from the long polar night, the government has been organizing since a few years, from October to April, internships in Italy for middle school students.

This relative frugality enabled the Norwegians to create a sovereign fund, the assets of which are currently reaching more than Euros 900 billions ; they will increase over the coming decades and thus allow the country to consider the distant post-oil period without painful sacrifices, whereas many other producers will have rediscovered their original dunes or jungles.

The only real danger threatening Norway is to lend a sometimes too complacent ear to extremism be it from the right-wing or of Salafi nature and thus deal a fatal blow to an ancestral ethnic diversity which has greatly contributed to its success but now plans to emigrate.
 

The death of the donkey (July 13th 2016)

A miser was lamenting: “After all the time and effort it took me to get my donkey used not to eat any longer, it suddenly happened that it died this morning ! “

Holidays in Greece always leave a mixed feeling. The seashores, the beauty of the sea are unique, not to mention the stunning ancient ruins, while other possibilities to stay around the Mediterranean have gradually faded, mainly for political and religious reasons. Life is pleasant and enchanting nights are only occasionally troubled by the howls of some drunken Brexiters.

As soon as you leave the shores or places of interest, you cannot help remembering the sad story of the preamble.

Around still busy cities, are indeed only lugubrious cohorts of empty shops, abandoned factories, vacant commercial buildings or deserted parking lots except for a few rusty cars. The food industry still resists, especially cafeterias where unemployed young people end up spending the last savings of their grandparents.

And during that time, the candid experts of the Troika, in their dark grey Wall Street style suits, continue their Kriegspiel and provide advice of senseless savings to ecstatic and inexperienced politicians. This is reminiscent of the former Yugoslavia, where Western participants in the conflict could not care less of civilians and were delighted to experiment their new war technologies.

When will there be someone with the lucidity to remind that the famous Greek debt is not a black hole emerged from nowhere, that French, German, British, American companies, to name only a few, have massively contributed to it by selling their goods to the country, that international banks took great advantage of these operations or that Mrs. Merkel, whom everyone worships, sacrificed the poor Greece on the American altar, fiercely opposing eurobonds that would have supplanted the Treasury-bonds and Bills and solved all European problems ? Finally, there are about 100 countries, and not the least important ones, that defaulted and have recovered, sometimes at the expense of greedy banks. Therefore, instead of dragging the metastatic millstone many institutions are still benefiting from, it would be better, either to simply cancel the debt or to substitute for it a kind of perpetual War-loan at a symbolic rate.

Without such radical measures, Greece, as the donkey, will die bloodless and will in the meantime have lost its leaders, its strength and desire to work, its capacity for innovation and the little capital that remains.

The experts in dark grey suits could then return home, avoiding tomato or even stone throwings which threaten them when they burst out of taxis to step into their hotels!
 

And now (french)

« Et maintenant, que vais-je faire ? » Cette chanson mélancolique de Gilbert Bécaud va être fredonnée pendant de longues semaines, non seulement en français, mais bien sûr aussi en anglais, en allemand, voire en espagnol. Le pari téméraire de M. Cameron d’organiser un referendum (on peut d’ailleurs se demander quel eût été le résultat dans d’autres pays européens !) plus les errements nostalgiques et ambigus d’une nonagénaire, impératrice sans empire, expliquent le Brexit, sans le justifier. Nous allons vivre sur le plan politique, économique et boursier de longs mois d’incertitude et d’errements. On s’en remettra, chacun à son rythme : la Communauté Européenne dont l’amaigrissement n’est probablement qu’à ses débuts retrouvera son équilibre dans quelques années, en se réduisant logiquement à ses membres fondateurs, dans l’esprit pionnier de l’après-guerre. Quant aux Anglais, pragmatiques et opportunistes, débarrassés du carcan législatif européen étouffant, avec l’appui de leurs complices américains, ils vont maintenir et étoffer avec des structures nouvelles un centre financier, beaucoup plus occulte et efficient, dans l’esprit des îles bananières tant vilipendées. La Suisse, à son habitude de flexibilité, survivra à tout ça et demeurera le modèle de structure sophistiquée à laquelle la Communauté aspire depuis sa fondation et qu’elle mettra des décennies à adopter. Les seuls à triompher momentanément dans cette aventure, et ce n’est guère rassurant, seront les populistes dont le polichinelle ignare de la côte Est qui sera d’ailleurs rapidement snobé par les Anglais. Sur un plan plus constructif hormis les financières fragiles, les grandes entreprises internationales, indifférentes aux turbulences législatives perdureront, prouvant une fois de plus que le secteur privé est systématiquement gagnant.