A Small Country — Finland — Casts Doubt on Aid for Greece

FRANKFURT — France and Germany may effectively run the European Union, but Finland has been demonstrating how even a small country can disrupt their grand designs.

By insisting that it receive collateral from Greece in return for aid, Finland is threatening to upend an agreement that euro zone countries, led by France and Germany, made in July to expand the E.U. bailout fund.

Finland would contribute less than 2 percent of the guarantees provided to the fund, known as the European Financial Stability Facility. But the country’s demands, the subject of intense negotiations in recent days, threaten to derail the fragile consensus that is preventing Greece from defaulting on its debt.

Finland is the most vivid example of the way parochial domestic politics can become Continental problems, threatening the unity of the 17 euro zone members as they face their deepest crisis ever. But Germany, the Netherlands and Austria — all wealthy countries with strong economies — also harbor deep opposition to bailing out Greece, Portugal, Ireland or any other country that may become overwhelmed by debt.

“In countries like Finland the opposition to what are described as bailouts is huge,” said Philip Whyte, senior research fellow at the Center for European Reform in London. “Governments are politically constrained.”

In Finland, Prime Minister Jyrki Katainen faces discontent within his governing coalition as well as pressure from a nationalist opposition group, the True Finns, which rode euro-skepticism to big gains in April parliamentary elections.

Finland is just one of 17 euro zone countries whose parliamentary approval is needed for the expanded bailout fund and whose domestic politics could upset the process. The case of Finland points to a bigger governance problem in Europe, said James Savage, a professor at the University of Virginia who has published a book on European monetary union.

“You have all these multiple veto points, so they can’t come to a reasonable conclusion, at least not easily,” Mr. Savage said. “You have increasingly less efficient decisions that are being made.”

European squabbling has contributed to market turmoil around the world and alarmed policy makers.

The possibility that euro zone members will not agree on an expansion of the bailout fund is a concern of the Federal Reserve Bank of New York, according to a person briefed on issues there. Matthew Ward, a spokesman for the New York Fed, declined to comment.

Christine Lagarde, the president of the International Monetary Fund, warned European leaders Saturday that their fractiousness was threatening the common currency.

“The current economic turmoil has exposed some serious flaws in the architecture of the euro zone, flaws that threaten the sustainability of the entire project,” Ms. Lagarde, the former finance minister of France, said in Jackson Hole, Wyoming, where makers of economic policy were meeting.

The dispute provides one more measure of market uncertainty this week as the summer lull ends and trading regains a more normal volume.

Officials from European Finance Ministries spent much of Friday in long- distance negotiations about the collateral issue but did not reach an agreement. Conflicting reports about the negotiations have fed market confusion. The news media in Germany and other countries reported Friday that Finland had dropped its demands, but the reports were swiftly denied by Finnish officials.

The climate created by the collateral dispute could make it more difficult for the European Central Bank to continue to defend Italy and Spain in bond markets and contain their borrowing costs. This month the E.C.B. has spent €36 billion, or $52 billion, intervening in debt markets in an effort, so far successful, to cap bond yields for the two countries.

The E.C.B.’s task could prove more difficult when trading volume picks up, especially since both Spain and Italy are scheduled to try to sell debt this week. “A litmus test for the effectiveness of the E.C.B.’s bond-buying program is in the cards,” Rainer Guntermann, an analyst at Commerzbank, wrote in a note.


Legislators’ junkets give public the right to kick

Sitting here buzzed on post-surgery meds and nursing a very sore neck, it is easy to be generous about lawmakers.

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They work harder than you would imagine — at least some of them. They often find themselves in impossible spots. Seldom thanked, often cursed. Everybody wants something — and right now — including the impossible. They have to contend with the media slapping them around and making fun of them. Sometimes, like the rest of us, they do really dumb things. Oh, and when I say dumb, I’m not saying funny.

There is that empty $240 million, 1,500-bed prison we cannot afford to operate. A gas line that may never be built. An oil tax that kills North Slope investment and production, hamstringing the state economy. None of that begins to address their past faux pas. Dare I say grain terminals? Dairy farms?

In the end, most of our lawmakers are like us, undeterred, bullheaded, refusing to learn from the past. Too often, watching others of them is like watching a herd of Obamas: entitled, elitist, insulated, isolated, disconnected, and, painfully arrogant.

In a time when our nation is in a fiscal funk — even if Alaska is making out by raping its economy to fatten its rapacious government — you would think politicians would strive to be models of fiscal restraint, exuding leadership and, above all else, integrity. You would think they would set the example. Our president, of course, failed miserably on all counts when he winged to Martha’s Vineyard to hobnob with the rich and powerful as joblessness soared, but at the local level we certainly can expect more, can’t we?

Apparently not. Instead, we wind up occasionally with guys like Wasilla rock star, er, city councilman Steve Menard. He goes to Sitka for a city- sanctioned Alaska Municipal League meeting, drunkenly trashes his Westmark hotel room and tells the hotel to bill the city $350 for repairs.

But there is this more troubling, but unsurprising, headline: “Legislators run up expenses at out-of-state conferences.”

More than a dozen lawmakers it turns out — including certified good guys who should know better — flew to Hawaii on the state dime for the Council on State Governments-West conference, whatever that may be. Worse, Sitka Sen. Bert Stedman spent six nights in a $900-a-night Waikiki beach suite. The media went bonkers.

It turns out, two other lawmakers had just returned from state travel to a New Orleans meeting of a pro-business group that crafts “model legislation” for lawmakers to use back home. It makes you wonder why we do not hire the pro-business group and sack the lawmakers.

Stedman, who has taken all manner of heat, laid off the bill on his staff, the Daily News reported. He mistakenly thought he was getting his suite upgraded for free, he said — just as the hotel does for you and me all the time. Imagine his surprise. “I about crapped,” the Republican co-chairman of the Senate Finance Committee told the newspaper. He thought the room was going to be a measly $697 a night.

It turns out, the story said, that lawmakers spent $710,300 last year in state-paid travel, not including money wasted lugging legislators back and forth as the session begins and ends. That is a wad of money, but Alaska, at least now, can afford the tab. That aside, what message does all this send to Alaskans who are not having an easy time of it despite government’s getting ever more jowly at the oil industry’s expense?

Does anybody in the Legislature really believe Alaskans do not see these trips for what they are — junkets? Yes, I know, serious work gets done, blah, blah, blah, but all Alaskans will remember is the numbers: $900 a night; $710,000 last year. All of that is huge to people barely making ends meet. It will leave a bad taste and does the Legislature’s image no good. Constituents will feel, again, as if they have been scammed by people supposed to be looking out for their interests, not perks.

Lawmakers would do well to acknowledge the economic times; that their constituents aren’t sure that travel to the Special Olympics, or Greece, or Hawaii, or Norway or any of a hundred other places will help Alaska. In their world, they must rely on teleconference calls, not jets and swanky resorts.

Something to think about.


Paul Jenkins is editor of the AnchorageDailyPlanet.com.


Euro fall travel opportunities abound

An aerial view of the Eiffel Tower in Paris on Bastille Day, July 14, 2011. REUTERS/Charles Platiau

Just because fall is around the corner doesn’t mean that Europe has stopped welcoming Canadian travellers.

In fact, savvy Canadians know that fall and even winter presents travel opportunities across the continent.

Not only are there fewer crowds but in many instances prices drop. That’s the case with well-known escorted tour company Globus.

The company offers 15 tours which are offered in fall, winter and spring, ranging from the seven day A Taste of Greece to the 27-day Europe in Depth holiday.

In between is a host of choices in Britain, Italy, Spain and Eastern Europe.

Tour prices range from $1,149 plus air to $4,629 – savings of up to $730 per person off the peak season prices.

For more information visit www.globusjourneys.ca.


Have a blast on Santorini

Q: We are pensioners and would like to find budget accommodation on the Greek island of Santorini, preferably near the harbour. Is there any chance of pensioner’s discount? – Suki van Niekerk

A: Santorini is one of Greece’s most expensive islands, but it is still possible to find affordable accommodation. I am not sure whether you want to be close to the actual harbour (which is a busy transit point) or higher up the mountain in one of the scenic towns overlooking the port. The main tourist zones are the towns of Fira, Imerovigli, Firastefani and Oia which have the “picture postcard” views and are the most expensive. Then there are the towns of Perissa and Kamari, best known for their black sand beaches. There are plenty of other villages, close to archaeological sites or beaches, which are less known and offer the best value. Perhaps one of the more developed areas close to all facilities would be best for your group.

Any time outside of peak season – July and August – you should be able to negotiate affordable accommodation with a travel agent on arrival or one of the many guesthouse touts. If you would like to ensure your accommodation in advance, then check out some websites. Try www.travellerspoint.com, www.hotels.com, www.booking.com and www.santorini-hotels.info. With many hotel rooms priced at hundreds of dollars a night, a nice room in a hotel with a swimming pool for less than $100 would be considered affordable. I don’t know of discounts for pensioners.

Q: We are going to be in New York for about 10 days before departing on a cruise and would like to spend some time out of the city, be it a day or a few hours. Can you suggest any train journeys from Grand Central? – Enid Knight

A: Manhattan’s Grand Central is the terminus of the Metro-North Railroad (MNR), which offers you some great opportunities for day trips. You can take the New Haven Line to Greenwich, Connecticut. The journey takes 40 minutes and there is plenty to do and see in this wealthy community. It has some good beaches and great views over Long Island Sound. With some luck, you may be able to attend one of the festivals and fairs held regularly. There is a brochure titled Metro-North One-Day Getaways, which is available from tourism offices in New York or you can consult the www.mta.info/mnr/html/getaways.htm website.

For more traditional sightseeing, you could take the train to cities like Washington DC, Baltimore, Philadelphia and Boston. These cities all have their own attractions, which are viewed during walking tours or organised excursions. If you are happy to travel from Penn station, you can head for scenic Rhinecliff, where you can enjoy small-town life in horse-farm country. The journey is only 90 minutes, but you may well opt to stay over at one of the pretty hotels – the Beekman Arms (www.beekmandelamaterinn.com) or the riverside Rhinecliff Inn (www.therhinecliff.com).

For longer journeys, there’s the Empire Service from Penn. It will take you all the way up the Hudson River, and is the most scenic train journey on the East Coast, full of rivers, mini-fjords, waterfalls, forests and historic villages. For a really great trip, take this service to the Niagara Falls. Much of the route follows the New York State Barge Canal and Hudson River. The trip takes nine hours and costs $78 each way. Visit www.amtrak.com for details.

Q: When do the January shopping sales in London start? Do all the big stores participate and are there real bargains on offer? – Jane Leerkom

A: The January sales in London actually start on Boxing Day, December 26. The start of the sale season is signalled by the Harrods Boxing Day sale, which offers big discounts on everything from designer wear to electrical goods. Other famous stores that start their sales on Boxing Day include Harvey Nichols, Fortnum Mason, Selfridges and House of Fraser. Shops in Oxford Street and Regent Street are also open with discounted goods on sale. Apparently there are great bargains to be had, especially on goods that were aimed at the Christmas gift market. The sales run throughout January, but the best bargains will have been snapped up by the time 2012 dawns.

Q: My wife and I are staying in San Francisco in September for four nights. Can you recommend a hotel near the waterfront and restaurants? – Rob Baudinet

A: One of your best bets is the four-star Sheraton Fisherman’s Wharf, which is only a 10-minute walk from Pier 39. It has all the luxurious touches one would expect and there is an outdoor swimming pool. The best daily rate I could find for your dates in September was $304 a night.

Another good hotel is the Radisson Hotel Fisherman’s Wharf, located close to the pier and light rail station. Expect to pay around $254 a night for a double room. The Holiday Inn Express Fisherman’s Wharf offers comfortable three-star accommodation for $246. All these prices were offered on the discount website www.booking.com and exclude 15.50% in taxes.

Other hotels close to the waterfront include the Courtyard by Marriott Fisherman’s Wharf Hotel, the Hilton San Francisco Fisherman’s Wharf and Holiday Inn.