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A Market In Countries - By Kitty Miv, Editor

Kitty Miv, Editor
29 September, 2011

The Eurozone crisis rumbles on, with EU leaders finally daring to utter the 'P' word in public, that's 'political union'. All the money being thrown at Greece, Portugal, Italy and Spain (the ECB is buying their bonds like there is no tomorrow) will be autumn leaves down the drain unless there are unbreakable central rules to prevent politicians from cooking the books in future.

Meanwhile, with the searchlights fully switched on, the miscreant countries are pretending to be good, putting on innocent expressions as if butter wouldn't melt in their mouths. Greece has passed its Draconian property tax law (correct use of the word just for once), Portugal adds layer upon layer of hairshirt, Silvio Berlusconi, while continuing to promise lower taxes, is now clearly a dead man walking, and even Spain, with an election pending, is making strangled noises about new taxes. All of them are promising extensive privatization programmes; but it's just hot air. This is exactly the worst moment in the last 50 years to be thinking about selling leaky assets into a buyers' market, and it won't happen. The only people who believe - or pretend to believe - it might happen are the economists at the IMF who inhabit some kind of alternative reality which the rest of us don't recognize. The poor dears need their jobs, of course, so we musn't be too hard on them, even though their organization is long past its sell-by date.

No, I have a better idea.

I have never been able to understand why countries are regarded as being sacred vessels which no-one can touch: you are not allowed to buy or sell them, change their borders, impinge on their sovereignty, attack them or bankrupt them. This is a very modern idea. Through most of its history, Europe was a collection of princely statelets which were swapped about in marriage contracts as if they were no more than the contents of a lady's box of jewels; there was the Louisiana purchase; there was the 19th century African land-grab (all those straight lines on the map); there was the Treaty of Vienna; and lots more. In our own times there has been Alaska (you'd forgotten that one, I bet), there is Sudan, there was Macedonia and Bosnia-Hertzegovina, there was Singapore.

It's no argument to say that countries are sacred because of the rights of their citizens: by and large we don't apply those principles to corporate takeovers and we're not applying them now in the case of Greece, where the entire tragedy is being played out between the EU, the ECB, the IMF, the banks, and the unlucky Greek politicians who found themselves holding the parcel when the music stopped. The Greek citizenry is reduced to the role of a Greek chorus: powerless to affect the outcome.

My proposal is to put Greece on the market; more generally, in fact, to put all countries on the market. Of course, some countries will be too big to be bought, just as some companies are too big to be bought (many companies are bigger than most states). The citizens of countries would be equivalent to shareholders in a merger: they would vote on any proposed deal and would pocket whatever inducements were offered by the buying country (or company), which would assume administrative and economic control of the target country.

There are some immediately obvious pairings: China would surely bid for Portugal, given the growing importance of Macao and Portugal's prime position as an EU member state. Brazil might put up a fight, but China has much more money and would probably win. Mrs Merkel would surely approve. Then Greece? Very strong shipping and tourist sectors might appeal to Singapore; the US would be interested, but hasn't got the money (!) Canada has a thriving Greek diaspora and would surely be interested in a Mediterranean outpost. If you were a Greek taxi-driver, would you rather be administered by your existing, ahem, government, the super-efficient Singaporeans or the polyglot Canadians? Either would be an improvement, no? Sovcomflot (the Russian maritime behemoth) has also probably got the money to buy Greece in its present condition, but that might be a step too far for the EU, not that Brussels should be given any say in the matter.

Me, I will patent a new version of Monopoly with countries instead of streets, and wait to clean up.

Ciao, Kitty


About the Author

Kitty Miv, Editor

Kitty was born in Argentina in 1960 to a Scottish cattle rancher and his Argentine wife. Educated in Edinburgh and at Princeton, Kitty worked for the World Bank as an economist, where she met and married an emigre Iranian banker. During her time with the Bank, Kitty worked in a number of emerging markets, including a spell in the ex-USSR as a Transition Economies Team Leader. Kitty is now a consultant in Brussels and has free-lance writing relationships with a number of prominent economic publications. kitty@lowtax.net


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