08.03.2010
Baltic = bankrupt? - and where to go from here
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| News2biz senior editor |
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It has been a tough year for those of us who write about Scandinavian business in the Baltics. Scandinavian media have been full of reports that explicitly equal the Baltics to bankruptcy. This has been the most marked in Swedish media where the Baltics have been blamed for the tough times that Swedish banks, notably Swedbank and SEB, are going through. Little line space has been devoted to reflections regarding the following: 1) how much money did the Swedish banks make in the Baltics before they started losing money and 2) who made the decisions that lead to the uncontrolled credit-fuelled boom.
As far as the fickle blessing of media coverage is concerned, those of us devoted to the Baltics may rest a bit as popular financial outrage in Sweden and other Nordic countries is directed at Athens rather than Riga. In Sweden's case this has another consequence as it weakens the euro and strengthens the Swedish krona - and thus we can expect even stronger reactions from the Swedish public if the promised improved growth rates come to nothing, as the boost Swedish industry received from dropping SEK rates subside. Here, post festum, we always wonder: Why did it take so long for everyone to realise this disaster? Did we have moussaka and ouzo in our ears and eyes? Had our spines been weakened by Zorba or untouched island villages in a thousand shades of white? Or was it bad conscience for leaving Greece to the military dictatorship in the sixties?
I'm afraid that questions like these should also be directed at myself and my esteemed colleagues. Were we deafened by hapukapsas? Were we blinded by Rigas balsams? Had we been gagged by cepelinas? Did we report honestly and with sobriety on the state of affairs in the Baltics? No, not as we should have. We tried to report honestly on all the troubles in getting the right staff, holding on to them and adding 20% to their paychecks each year. Clearly this was not sound. Clearly we should have focused more on the fact that this was not sound. Clearly we should have focussed more on the fact that 20-30% property yields per annum was not sound.
I am responsible for that. All I can say is that I hope to do better.
For a long time, we have focussed on the positive effects of the crisis, all of the many new positive developments that we see in many business sectors in the Baltics - without trying to ignore the magnitude of it. And to all you readers out there I just want to say: please help us pen plodders to keep our writings sober and in tune with reality.