Governments just can’t stop interfering

The Finnish government has been happily wasting €4 billion to €9 billion of taxpayers’ money on handouts to big Finnish companies that have been making huge profits grants for the last few decades. The companies pay big salaries and bonuses to their bosses as well as generous dividends to the owners. Why does the government want to do this when innovative SME’s get just fraction of what they need to grow. SME’s are the source of growth and innovation, not these big companies and their bosses in dark suits and silk ties. FinnishNews&NordicWeek published a column on this topic recently called “Public grants to big companies is wrong”.

The media has recently reported that German Finance Minister, Mr. Scholz, has been in London holed up with Goldman Sachs and Bank of America, 2 of the largest and most aggressive American banks. He has been asking them what he should be doing with Deutsche Bank and Commerzbank. 

He is the same politician that forced Commerzbank and Dresdner Bank to merge in 2008 – both were facing huge problems then, like Deutsche Bank and Commerzbank now…

… and he is the same man who admitted losing €11 billion to €14 billion when he sold the state owned HSH Nordbank to private equity investors in 2016. HSH Nordbank was created as a result of a merger between Hamburgische Landesbank and Landesbank Schleswig-Holstein in 2003.

In 2017, FinnishNews&NordicWeek published and article on banking and government interference called “Banks for sale… Banking stories from Germany and Finland…” – it looks like our German government friends never seem to learn from past mistakes. Naturally it is important to ask why the German government wants to talk with German’s biggest banking competitors on how to restructure Deutsche Bank and Commerzbank! It appears that the German finance minister Olaf Scholz is not paranoid enough…

Then you go on to read about the Nissan and Renault affair where the 2 governments, France and Japan are trying their best to kill off one successful car company because the French government wants to take over Nissan and Renault, while the Japanese government refuses to allow this to happen and end up putting its hapless CEO in prison for a few years. Governments have no place in such affairs and the results will be a huge waste of resources. Macron, for his part, an ex-banker, just cannot stop behaving as if he were a banker…

In the UK, METRO Bank has just been caught with its trousers down. They were deliberately under-reporting their risks and got caught. They follow the rather distinguished list of British banks that  have been badly managed – the Royal Bank of Scotland (RBS) was taken over by the government to avoid bankruptcy after a few other banks collapsed in the UK. The same bank, RBS, was involved in awarding Metro Bank with a massive £120m prize from an EU-mandated competition fund designed to boost competition in the business banking sector. RBS funded the prize as a condition of its bailout during the financial crisis! Just imagine how the EU and the UK government managed to mess that up. You must wonder how incompetent both sides are, which is of course obvious when looking at Brexit! 

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