The VR (Finnish Railway) executive resigned in mass this week.
"Henri Kuitunen, VR's chief executives, and Antti Lagerroos, chairman of VR's board, resigned Tuesday, citing disagreements on the timing of equipment acquisitions as their reason for leaving."
Disagrement, so I though the "invisible" hand of the gorvernment was in action. For the worse or the worse...
What was the reason?
"The fully state owned Finnish Railways (VR) is to acquire 20 new double-decker sleeping carriages on top of its previous investment plan, the prime minister's office said in a statement Wednesday."
I suppose competent manager left a company run by the uncompetent state civil servant. Not surprising.
So the government is burning "tax money" to bail out some friends, somewhere in Kainu:
"Henri Kuitunen, VR's chief executives, and Antti Lagerroos, chairman of VR's board, resigned Tuesday, citing disagreements on the timing of equipment acquisitions as their reason for leaving."
Disagrement, so I though the "invisible" hand of the gorvernment was in action. For the worse or the worse...
What was the reason?
"The fully state owned Finnish Railways (VR) is to acquire 20 new double-decker sleeping carriages on top of its previous investment plan, the prime minister's office said in a statement Wednesday."
I suppose competent manager left a company run by the uncompetent state civil servant. Not surprising.
So the government is burning "tax money" to bail out some friends, somewhere in Kainu:
"A competition for tenders for the manufacture of the rolling stock is to take place, according to EU rules, but it is generally considered a foregone conclusion that the contract will go to the Kainuu-based Transtech."
Competition? you said; yes, one competing against itself under the government wing. That's the almost "Free Market", the Nordic version...
In the meantime the "canard" Financial Times, you know the famous business news paper, have the following to say:
"Some European governments are struggling to raise money in the bond markets because of the vast financial pledges that they have made to bail out their battered banking sectors.
Spain failed to launch a bond last week, while Belgium and Finland were having difficulty attracting investors for debt offerings after governments set aside billions to recapitalise their banks and guarantee their debt."
But what do Matti think about that?
"Matti Vanhanen (centre), the prime minister, dismissed the story as a canard."
How about KoKoomuus?
"Jyrki Katainen (cons), the finance minister, said Finland had had no trouble finding investors for debt offerings."
I guess the Financial Times (FT) could be right. The politicians are backward looking while the FT has a forward looking view... I understand as well that they are starting to use state pension fund to provide funding to struggling companies...so the ECB is not the last resort, it looks like it's the government... I guess they don't understand that the world has changed and the condition ex- ante will not come back due to the severity of the financial crisis. So no temporary patch should be used, the 1990 lesson are the wrong lessons in todays world. 1990 was a bump in a still growing global economy. Today we have a bump in global economy that is in free fall. The consequence are unknown and most probably will let a mark for generations to come.
Coming back to the Baltics, next year, the number of default will shoot up dramatically in the Baltics. This next wave of default could trigger a financial tsunami in the Nordic Banks. They will have to raise cash and fast. And that's the reason this week they passed a 50 billion Euro Guaranty package...
"The upper limit for state guarantees for bank financing is to be set at 50 billion euros, Finland's finance ministry said in a statement Monday. Due to the credit crunch, the state is prepared to give guarantees for three month to five year loans.
Peter Nyberg, director general of the ministry's financial markets department, said a maximum of four billion euros are to be reserved for capital injections. Finnish banks have so far not said they need capital injections."
So like a domino, one is falling after the other. Yesterday it was Iceland, today it's Hungary and tomorrow Estonia...who knows when will this stop?
4 comments:
Sometimes HousingFinland you can be very unpatriotic to the interests of Finland. At a time like this a country like Finland which says it have very good public finances can be forgiven for wanting to help out is own industries rather than giving it people further away. There has been recently a never ending series of job losses as far as i can see.
Meanwhile this company seems to sum up all that is extraordinarily amazingly good about Finnish engineering
Wärtsilä sees "limited" impact from financial crisis
24.10.2008 at 11:07
Finnish heavy diesel engine and power station maker Wärtsilä on Friday reported its third-quarter pretax profit rising by 35 per cent year-on-year to about 127 million euros on sales of about 1.14 billion euros, up by 22 per cent from July-to-September last year.
Said in a statement Ole Johansson, the chief executive of Wärtsilä: "The accelerating financial crisis has changed the economic landscape dramatically."
"The implications for Wärtsilä have, however, been rather limited. For the first nine months of this year our order intake grew 18 per cent and the order book is 26 per cent higher than a year ago."
Wärtsilä kept its full-year sales and profit outlook unchanged."
I must admit though that i very much doubt they will see a "limited" impact.
"Finnish banks have so far not said they need capital injections."
Nordea reported yesterday and said they had not had any problems getting finance at 'near LIBOR' all thru October. They also said they had a healthy covered bond take up rate and have ongoing interest in all their other methods of accessing finance as well as increases in depositors moving out of invesments. Lending in the Baltics was not producing loan losses even though there were fairly high impairments in loans the default rate was still low and they expected to recover their money. Denmark was also not causing problems in loan defaults. So it seems that at the moment Nordea is pretty optimistic. :-)
"Yesterday it was Iceland, today it's Hungary and tomorrow Estonia"
Before summer 2009 USA will be in default. They will not be able to pay back their creditors.Also UK will be in troubles, let's see if rest of europe will save it.
"Gold into Hashes"
Is there something you want to share with us HousingFinland?
http://video.google.com/videoplay?docid=-2089202430655084102
:-)
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