Cameron Brings Northern Europe Together

During a two day Nordic Baltic Summit, the British prime minister said that, “right across the north of Europe there stretches an alliance of common interests.” He believes Britain, Scandinavia and the Baltic nations can lead in European job growth and prosperity.

Political and business leaders from Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden joined Prime Minister David Cameron for the summit in London. There is much the countries have in common, he professed. Read more “Cameron Brings Northern Europe Together”

Economic Freedom in Denmark and Sweden

Every year The Wall Street Journal and the conservative Heritage Foundation publish the Index of Economic Freedom which ranks countries according to ten indicators that affect market freedoms throughout the world.

For several years now, Australia, Hong Kong, New Zealand, Singapore and Switzerland have made up the top five of economically freest countries in the world. Government spending as a share of national income is relatively low in these states; property rights are well protected while investment and trade can take place with few restrictions. Much of the developing world ranks poor by comparison. North Korea is at the very bottom of the list.

What is notable is that otherwise extensive welfare regimes as Denmark and Sweden rank relatively well — eighth and twenty-second in the world respectively.

A closer look at these countries’ rankings reveals that while government spending is extremely high, more than 50 percent of GDP in both Denmark and Sweden, in most other areas, they perform exceptionally well. Taxes are high, especially in Sweden which has a “burdensome income tax rate” according to the Index, but otherwise both Scandinavian nations are very free economically.

With its economy open to global trade and investment, Denmark is among the world leaders in business freedom, investment freedom, financial freedom, property rights and freedom from corruption. The overall regulatory and legal environment, transparent and efficient, encourages entrepreneurial activity.

The same is true for Sweden, albeit to a slightly lesser degree. Whereas Denmark has flexible labor laws, regulations in Sweden remain rigid. “The non-salary cost of employing a worker is high and dismissing an employee is costly and burdensome.”

Both countries maintain open borders to trade and investment from abroad at the same time. Corruption is perceived as almost nonexistent while property protection is solid. Neither government interferes much in small- and medium-sized businesses. Starting a company is simple and straightforward. The business framework in both Denmark and Sweden is highly conducive to innovation and productivity growth.

It’s just too bad they tax their people so heavily.

The Rise of a New Right in Europe

Old-school socialists may allege that the credit crunch once and for all proved that free-market capitalism and globalization had failed yet across Europe, a new generation of liberal and conservative politicians is stepping up who favor even smaller government.

In the wake of the financial crisis, social democrat and labor parties across Europe lost ground to both their larger conservative counterparts as well as third or fourth party liberals who championed deregulation and austerity. As countries braced for spending cuts this summer, from Britain to the Netherlands to the Czech Republic, voters had greater confidence in candidates who were frank about the need to slash public spending than politicians on the left who resisted any suggestion of welfare reform. Read more “The Rise of a New Right in Europe”

European Navies Train for Coastal Warfare

In September, the navies of thirteen nations gathered at the port of Turku in Finland for Exercise Northern Coasts 2010, a two week training event meant to “improve the interoperability between participating units and countries with main emphasis on maritime operations in confined and shallow waters,” according to the Finnish military. The event was tailored for “smaller naval units, such as fast patrol boats, corvettes, small frigates and Mine Counter-Measure Vessels,” Warships International Fleet Review reported. Read more “European Navies Train for Coastal Warfare”

Fear of Change Propels Populists to Power

Throughout Europe, fringe movements have been able to maneuver themselves into the political spectrum, rallying anti-immigration forces and a renewed sense of nationalism with considerable electoral success. While the world is globalizing and Europe becoming one, millions of people, from Finland to Italy, want to have no part of multiculturalism and change. Read more “Fear of Change Propels Populists to Power”

Rise, Arctic, Rise!

The Russian Geological Survey’s first Arctic summit is currently underway in Moscow. Nearly three hundred delegates, including 58 from the Scandinavian countries, Canada and the United States, meet to discuss climate change and the future exploitation of the Arctic’s natural riches. Prime Minister Vladimir Putin of Russia addressed the convention today.

Three years after Russia planted its flag onto the seabed beneath the North Pole, the Kremlin is reportedly regarding the summit as an opportunity to forward its claims in the region. Putin struck a conciliatory tone however. “Even though the Arctic is at the juncture of geopolitical and economic interests,” he said, “all Arctic related issues, including the continental shelf, can be settled by negotiation on the basis of existing international agreements.” Putin envisaged the region as “a venue for establishing true partnership on economic and security issues, education and science and for preserving the cultural legacy of the North.”

Under current UN sea law, the eight Arctic states have jurisdiction over waters extending twelve nautical miles from their shore while their exclusive economic zones stretch up to two hundred miles into the Arctic Ocean. Russia counts for the bulk of Arctic land and has made its designs abundantly clear in recent years. In good Cold War fashion, it has resumed patrolling the region with bomber planes and warships while Moscow invested more than a billion dollars in the expansion of the port of Murmansk which is supposed to double its capacity by 2015.

Canada, Denmark, Finland, Iceland, Norway, Sweden and the United States all claim part of the polar region as well which is rapidly becoming accessible to shipping and mining activity due to global warming.

The Arctic is estimated to contain about 13 percent of the world’s undiscovered oil and so much as 30 percent of the world’s undiscovered natural gas. Together this represents 22 percent of all untapped but technically recoverable hydrocarbons. Over 80 percent of these resources lie offshore.

Last April, Norway hosted a large-scale NATO exercise above the Arctic Circle. More than 8,500 troops along with 1000 special forces from fourteen different nations participated, including soldiers from Germany, the Netherlands, Sweden, the United Kingdom and the United States. Arctic tensions have been rising since Russian president Dmitri Medvedev said in March that his country is prepared to defend its claim on the region’s natural resources.

“We have seen attempts to limit Russia’s access to the exploration and development of the Arctic mineral resources,” said Medvedev at the time. “That’s absolutely inadmissible from the legal viewpoint and unfair given our nation’s geographical location and history.”

Russia most recently clashed with Canada over which country controls the Lomonosov Ridge, a mountain chain that runs underneath the Arctic. Russia and Norway on the other hand signed a treaty last week that ended a forty year-long dispute over their maritime borders in the Barents Sea.

In order to fully appreciate these countries’ eagerness to gain a foothold in the Arctic region, Laurence Smith painted the following picture for The Wall Street Journal last week.

If Florida coasts become uninsurable and California enters a long-term drought, might people consider moving to Minnesota or Alberta? Will Spaniards eye Sweden? Might Russia one day, its population falling and needful of immigrants, decide a smarter alternative to resurrecting old Soviet plans for a 1,600 mile Siberia-Aral canal is to simply invite former Kazakh and Uzbek cotton farmers to abandon their dusty fields and resettle Siberia, to work in the gasfields?

Smith predicts the emergence of a “New North” above the 45° parallel, “a place of rising human presence and world interest in the twenty-first century. Such a bloc,” he notes, “would contain over twelve million square miles (more than triple the land area of China), a quarter-billion people, some of the world’s most livable cities and a $7 trillion economy.”

I imagine the high Arctic, in particular, will be rather like Nevada — a landscape nearly empty but with fast growing towns. Its prime socioeconomic role in the twenty-first century will not be homestead haven but economic engine, shoveling gas, oil, minerals and fish into the gaping global maw.

The Arctic nations so far have haven’t exactly rushed to annex the region yet but Smith points out that urbanization and economic opportunities are cause for fast paced growth. Some of these countries, including Norway and Russia, are heavily dependent on the export of natural resources. Moreover, if the earth does warm up quickly; if sea levels rise and natural disasters formerly confined to the tropics become more common in North America and Europe, a northward population shift may not be so far stretched after all.

Anti-Islamism as Impediment to Growth

For almost ten years, Denmark has enacted policies that limit immigration and promote the integration of ethnic minorities in Danish society. Some now fear that the country’s economic woes can be attributed, at least in part, to its Islam backlash.

Since the start of this decade, Denmark has been ruled by a minority government of liberals and conservatives, sustained in parliament by the Dansk Folkeparti (Danish People’s Party) which is known for its nationalistic, socially conservative platform and tough positions on law and order. Since it first participated in the country’s parliamentary elections in 1998, the party’s popularity has risen sharply to stabilize at a little over 13 percent of the vote in recent years.

Under the People’s Party’s influence, Denmark’s ruling coalition has approved of different measures meant to curb immigration to the country, including the enforcement of laws that were designed to prevent marriages from being arranged and forcing migrants to learn the Danish language. Read more “Anti-Islamism as Impediment to Growth”

Cold Response

Between February 17 and March 4, Norway hosted the Cold Response 2010 military exercise in Troms county, above the Arctic Circle. More than 8,500 troops as well as 1,000 special forces from fourteen different nations participated, including soldiers from Germany, the Netherlands, Sweden, the United Kingdom and the United States.

The exercise, the first of its kind to take place exclusively in the minus thirty degree Celsius temperatures above the Arctic Circle, tested cold weather amphibious operations as well as interoperability between expeditionary forces. Ground operations ranged from company-sized maneuvering to a brigade-sized beach assault. Both American and Royal Marines hit the beaches in landing craft, with air and naval support, responding to the “invasion” of fictitious Northland by the enemy from Eastland. Read more “Cold Response”

Arctic Tensions Rising

Tensions between Russia and its Arctic neighbor states flared up against last week when President Dmitri Medvedev told his Security Council on Wednesday that the country must be prepared to defend its claim on the region’s natural resources.

With global warming rapidly changing the Arctic landscape, the region might well emerge as a future battleground between the former superpower and nearby interested states, including Canada, Denmark and Norway. The whole Arctic contains about 13 percent of the planet’s untapped oil resources and so much as 30 percent of the world’s undiscovered natural gas. Medvedev predicted that conflict will arise over possession of these riches. Read more “Arctic Tensions Rising”

Losing Iceland

The ravage left by the Icesave debacle still frustrates relations between Iceland and the United Kingdom and the Netherlands. The latter two insist that the island nation repay the four billion euros which they spent compensating consumers who nearly lost all their savings last year when the Iceland bank went under. Although the country’s parliament, the Althing, which is actually the oldest of its kind in the world, decided that the money must be repayed, President Olafur Ragnar Grimsson has vetoed their bill. Four billion euros is a lot of cash for a country of 300,000 people. In fact, it amounts to a third of their yearly GDP. A referendum March 6 will decide the confrontation between president and parliament. Read more “Losing Iceland”