Views From the Streets of the Former East Germany, Poland, and Other Interesting Places
Why read: To learn economic 'views from the street' recently expressed in Copenhagen (and elsewhere in Denmark), Gdansk (Poland), Gotland and Stockholm (Sweden), Helsinki (Finland), Riga (Latvia), St. Petersburg (Russia), Tallinn (Estonia), and Warnemunde (former East Germany).
Commentary: Last evening my wife and I returned to Toronto from a two week, twelve city/town trip to Europe/Russia's Baltic Sea area. Among other highlights, we were the first North Americans to play golf at a golf course near Warnemunde, Germany - first opened for play in 2003.
If you are a regular reader of this Newsletter you will know I believe in learning from people with 'feet on the street', and from business operators who understand the detailed risk/reward metrics of the industries they work (or worked) in.
I found our Baltic trip, and the conversations I had with the tour guides, restaurant waitresses, taxi drivers, and other 'main streeters' we met hugely interesting and informative. Certainly the older and younger people I met represented a broad cross-section of age groups, educational backgrounds, and 'life experiences'. A number of the older people I spoke with had lived as children and young adults under communism, and as mature adults in a form of 'free enterprise regime' after either, depending on country, 1989 or 1991.
Three of the countries my wife and I visited (Estonia, Finland and Germany) are part of the 17 country Eurozone. All the countries visited except Russia are part of the 27 country European Union.
Here is a summary of things that I learned and think important:
- without exception, the 'people on the street' I met were far more interested and better informed with respect to what is going on economically in Europe generally, and in the Eurozone in particular, than is any cross-section of 'main street' Americans or Canadians I know.
You might say that is to be expected, given they live in or close to those geographies. Then again, I am concerned (and strongly believe everyone should be concerned) about the contagion issues that may arise in the United States (in particular) in the event of a continued escalation of the Eurozone's financial crisis, and the current United Kingdom double-dip recession.
Accordingly, if you read this Newsletter you know I believe those in the U.S. and Canada who care about their economic futures ought to know a lot more than most seem to about economic events developing outside North America;
there is great concern among all those I spoke with respect to the Eurozone - and in particular with:
Spain's economic future, and to a lesser degree that of Italy, and
their perception of the role Germany will have to play for the Eurozone to survive in its current form - and whether Germany indeed will do that;
there was no real consensus among the many people I spoke with as to whether the Eurozone would survive in its present form, or whether in the end the euro would survive in a different structure than it currently does.
That said, the majority of the people I spoke with thought that on balance Germany would support the euro and the euro will survive for at least the time being. Three of the people I spoke with, each of who I consider to be among the best informed and thoughtful of my 'people on the street' were pessimistic with respect to the long-term survival of the euro;
to a person every 'mainstreeter', irrespective of country, expressed concern with youth unemployment issues, and in some of the eight countries we visited (most notably Latvia and Poland) with the fact that young people were leaving to search elsewhere for jobs;
while no surprise, people of all ages in Denmark were to a person the happiest, and the ones most positive about their country's system of governance;
those who lived in the former Soviet Bloc countries and in St. Petersburg were the least positive about their own personal prospects - but to be fair, those countries (or at least what I saw of them) struck me as being in a continuing state of economic transition. That struck me as also being true of the former East Germany area we visited, notwithstanding the now over 20 years of West German subsidization to this area; and,
the people I spoke with in Estonia, Latvia, Poland and Russia itself were the ones that seemed most concerned with possible prospective inflation.
In summary, I am very glad my wife and I took the trip we did. I had visited Denmark previously, West Germany many times, and East Germany just after the Berlin Wall came down in 1989. I had not visited the other countries previously. That said, I:
found nothing on 'main street' in those countries particularly surprising,
thought the 'main-street' people I spoke with seemed far more informed than I expected them to be, and certainly far more informed on a lot of what we discussed than I was,
was particularly impressed with the abilities, educational diligence, and balanced views of most of the people I met and spoke with. In particular, some of the young students I met where linguistically astonishing and accomplished. I can assure you I would bet on them in any contest where our North American 'young adults of privilege and entitlement' were contesting a 'be first to get the dollar on the floor' if there was only one dollar there, and
otherwise confirmed, for me as a non-statistically valid sample, many of the macro-economic concerns that I have been expressing from some long time in this Newsletter.
The other thing I confirmed - again based on a non-statistically valid sample - is what I consider to be the broadly uninformed and U.S. centric attitude of at least some Americans.
When I asked an American I met on the trip - who was not retired, and who worked in the U.S. public service - what his thoughts were with respect to the ongoing financial crisis in the Eurozone his immediate and curt reply was:
"I don't know anything about it and could care less. I only care about what happens in America in my area of expertise".
Certainly many Americans I know are thoughtful, caring and well informed people. That said, I believe the attitude I experienced is all too often an American 'first responder' answer to a lot of things. Simply put, I think the sort of answer I got from one American on our trip has a very high probability going forward of biting him in the precise spot I suspect he doesn't want to be bitten.