Category Archives: EU

10/5/21: COVID19: Nordics v Sweden

Updating data on comparatives between Sweden (the 'natural experiment' for 'Covid19 is just a flu' crowd, albeit the pandemic was not treated as such in the country itself) and the Nordics.

Note: I define three groups of 'Nordics' by composition.

First, for completeness: case counts:

The above is self-explanatory, but open to arguments concerning diagnostics and tests accuracy. Hence, let's take a look at deaths counts, which are much harder to 'fudge' for the 'Covid19 is a flu' crowd:

In simple terms, Sweden's policy approach to the pandemic, as contrasted by other Nordics, has resulted in 

  • 6,137 deaths in excess of Nordics 3 group (Finland, Norway, Estonia, Iceland, the Netherlands and Denmark)
  • 11,219 more deaths than (population-comparable) Nordics 2 group (Finland, Norway, Estonia, Iceland), and
  • 12,512 deaths in excess of Nordics 1 group (Finland and Norway).
Here are country-by-country comparatives: 

2/4/21: COVID19: Nordics v Sweden

Sweden continues to perform poorly compared to peer countries, irrespective of how one defines Nordic countries as a group:

As table above shows, Sweden is the worst performer, by a large margin than any other Nordic or Northern European country when it comes to deaths from Covid19 pandemic.

Per charts below, adjusting for population differences, Sweden performs worse than any Nordic group of countries configuration imaginable in cases and deaths counts:

These facts are now recognized by policymakers in Sweden itself, even though the country continues to be a poster-child for the Covid19 denialists around the world.

14/2/21: COVID19 Update: Sweden and Nordics

Prior posts on COVID19 stats updates covered:

Lastly, let's run through comparatives for COVID19 dynamics in Sweden vis-a-vis the rest of the Nordics.

No matter how you define the Nordics:
  • As Sweden's closest land-linked neighbors of Finland and Norway (Nordics 1); or
  • Adding to the two above Estonia and Iceland (Nordics 2); or
  • Expanding the set to also include Netherlands and Denmark
there is only one conclusion than can be drawn from the above charts: Sweden is not doing too well in terms of cases recorded and in terms of deaths recorded through the pandemic so far.  Sweden's mortality rate per capita is substantially (86%) higher than that of the Nordics 3. 

Here is just how poor Sweden's performance has been:

3/1/21: Covid19 update: Sweden vs Nordics


As before, let's conclude the latest update of the Covid19 trends data with analysis covering comparatives between Sweden and other Nordics. 

Sweden is commonly used as a shining example of 'saving the economy' by not 'panicking' into severe mobility restrictions. This argument is commonly used by the folks who tend to believe in sinister Big State conspiracies around other countries' responses to the pandemic.

Sweden started the pandemic by openly pursuing the strategy targeting 'herd immunity'. In this, the country approach to the pandemic containment was similar to that of the Netherlands. However, unlike Sweden, the Netherlands quickly reversed this approach and switched to the more common policy response of imposing severe mobility restrictions.

When it comes to the Nordic countries, there has been both some significant heterogeneity in Covid19 policies responses and some shared experiences. To reflect some of these, I look at three Nordics groupings to compare these with Sweden:

  • Nordic 1 group comprising Sweden's immediate neighbors of Norway and Finland. This is the 'closest' group to Sweden as the three countries share relatively open borders and, in normal times, have no mobility restrictions between them. All three countries are physically remote from the rest of Europe, with far less mobility across borders to third countries than, say, Belgium or the Netherlands.
  • Nordic 2 group adds Iceland and Estonia to the first group. Iceland is, obviously, an island nation that is also relatively well isolated in physical terms, making its border controls more effective. Estonia is a country that is not physically isolated, but shares less physical land-based borders with the rest of the EU (ex-Finland). Both, N1 and N2 groups are, therefore, characterized as those countries which can impose more effective control of their borders for the purpose of isolating during the pandemic.
  • Nordic 3 group adds two key countries that have much less capacity to isolate from the Continental EU states: Denmark and the Netherlands. 
So, here are the updated charts, in which I adjust all three groups to normalize cases and deaths numbers to Sweden's population scale:

As of the end of 2020, cumulative excess deaths in Sweden compared to other Nordics, adjusting for differences in population sizes are:

  • 7,545 more deaths in Sweden than in Nordics 1 group of Finland and Norway;
  • 7,359 more deaths in Sweden than in Nordics 2 group of Finland, Norway, Estonia and Iceland; and
  • 3,808 more deaths in Sweden than in Nordics 3 group of Finland, Norway, Estonia, Iceland, Denmark and the Netherlands.
Put differently, between 3,800 and 7,545 more deaths took place in Sweden than in its relatively comparable European neighbors, primarily because Swedish Government prioritized economic well-being over public health.

18/7/20: Europe, the Land of the Unliving Leadership

If the U.S. of A. is the land of the brain-dead leadership, Europe (the EU) is the land of the unliving ones. The difference is the ratio of effort to failure. The Trump Administration is almost effortlessly creates daily flow of disasters. Meanwhile the EU27 is endlessly engages in strenuous attempts to not achieve something trivial.

Latest instalment is the European leadership summit this weekend:

One thing of note from Ireland's (and other net contributing states') perspective is that, as I predicted two months ago (, the proposed EU fund for addressing COVID19-induced recession will be a net cost to the more advanced European states.

What's worse is that this cost will be a function of Ireland's famously grotesquely inflated GDP. The tax avoidance shenanigans of the multinational corporations will cost us more in the COVID19 Fund case. And since all measures of our economic activity, from GDP to GNP to GNI to GNI* already include taxes paid by the multinationals to the Irish Exchequer, this added cost is not going to be recovered through tax revenues.

Here are some facts. The latest data for the official "Modified gross national income at current market prices" or GNI* - a measure of economic activity that is published by the Irish authorities, that partially (note: partially) strips out these tax shenanigans - is 2018. So we can use data through that year as a yardstick by which we can measure the official and only partial gap between the real economic activity in the State and the imaginary pretend-to-matter GDP of the Republic.

In 2018, actual GNI*-measured activity was EUR 197,460 million, while official GDP was EUR 324,038 million. The real economy of Ireland was, therefore, at least 39 percent less than the officially-measured economy of Ireland. Put differently, we claim we had a national income of 324 billion, but in reality, we only made 197.5 billion. If Ireland was filling a mortgage application, it would be lying on its income line.

This gap is growing over time (chart next, with estimates for 2019 based on actual GDP reported and estimated GNI* gap from the gross value added statistics, and 2020 forecast):

Yes, you see it right:

  • Officially, actual productive capacity of the Irish economy, was 39.06% lower than implied by GDP measure in 2018.
  • Estimated, based on officially released, but not yet fully aggregated, data 2019 gap was around 39.8 percent. Worse than in 2018.
  • Based on official growth and inflation forecasts for 2020, and gross value added data for multinationals-led sectors vs domestic sectors for 1Q 2020 already reported by the CSO, real economy gap to imaginary GDP is likely to be in the region of 43.5% in 2020, or, possibly even higher. This higher figure is suggested by the booming exports of the Ireland-based multinationals during the first 3 months of the pandemic.
Since EU contributions are, in part, based on GNI (not GNI*), which is closely linked to GDP, and thus to gross accounting effects from the multinationals, Irish contributions to the EU27 budget are excessively inflated, roughly, by the gap factor. We know as much, as even ESRI - the mouthpiece of the 'official Ireland' - said so before.

Now, back to the EU27 'COVID Fund'. 

Irish authorities finally recognised the fact that Ireland will be a net payer into the fund, as opposed to a net beneficiary: Which is what I warned about two months ago, when many Irish commentators were busy dividing the imaginary COVID Fund largesse into spending and investment priorities 'made available' to Ireland from Europe. 

Based on the GDP/GNI* gap, Ireland's repayments on the EU27 'COVID Fund' are likely to be 40% higher than the actual Irish economy's productive capacity would entail. 

The Fund is also likely to alter, long-term, the structure and the distribution of the Member States' contributions. Most likely, it will increase a GDP or GNI-linked share being paid in by Ireland. But even without accounting for this, the fact that we will be net payers into the Fund means that our investment priorities to be financed from the Fund will have to change dramatically. In fact, for every EUR1 borrowed from the fund, we will have to generate EUR 1.43 or more in added activity / return only to account for the GDP/GNI* gap. 

Take a simple example: suppose we borrow from the Fund EUR 1 billion to build a hospital. Nice idea. An expected return from the hospital that justifies such a project should be around cost of administration of investment + cost of funds + return and risk premia. Hard to pin these down, but, say we want to invest in a hospital in the first place because it will have socio-economic returns equivalent to 5 percent net of the cost of raising funds, if we were to issue bonds at 0 percent interest rate. With GDP/GNI* gap we have 5%*(1+43% Gap) = 7.15% required return to make that investment compatible to the Fund. And that is assuming we are just repaying our own share to the Fund. If the Fund also lends money to, say, Poland - a net recipient of transfers from the normal EU budgets, we will have to pay, roughly a GDP-weighted share of Poland's borrowings into the fund, too. Say that amounts to our normal net EU taxes contribution of ca 0.15 percent of GDP (historical average for 2016-2018 is actually 0.153%). This means we are actually going to be repaying 0.2145% of our GNI*-based economic capacity for Poland's financing. And so on. 

What could have been economically feasible or efficient to invest in under GDP base consideration may not be feasible or efficient under the repayment cost linked to our real economic activity measures, e.g. GNI*. That hospital we would like to have, and that makes sense as a combination of a fiscal stimulus and socio-economic investment, will no longer make sense to invest in, solely because we have spent decades fooling ourselves and the world around us that we are richer than we really are... whooping 38-40 percent richer. Playing a role of a rich uncle is has a cost, folks... 

Worse, the need for the repayment of the funds in the future, and more egregiously, the need to pay for the funds not borrowed by Ireland, will mean that in the longer run, Ireland will have to run higher debt or higher budget surpluses or both. If, say, Malta or Slovakia, or Hungary or Poland were to draw down funds from the COVID Fund, Ireland will need to contribute to repaying the money they borrowed. Such a repayment will either require Ireland issuing new debt or Ireland paying in from budget surpluses in years to come. 

In other words, the COVID19 Fund is a prescription for more austerity in Ireland in the future years. Not for less. 

Irish PM / Taoiseach says it is a good thing: rescuing Europe is also favourable to Ireland. I agree. The problem is that every little bit counts and Ireland will be going into 'rescuing Europe' with a pretend-to-matter GDP base, not with the real economy-measuring GNI*. And that is wrong. It is a right thing to contribute to other countries' recovery. It is a stupid thing to do so while playing a 'rich uncle' role we hoisted out of vanity and some strategic venality (yes, truth hurts, and truth about MNCs in Ireland hurts our pretence at not beggaring our neighbours though our tax rules).

Ireland's kommentariate will really enjoy investing in public infrastructure, the EU-style... the unliving leadership of Europe is setting us up for another 2012 'Game-changing Deal' ( Then, again, the hope is that by the time the EU27 actually agree to the terms and conditions of the 2020 COVID19 Fund, we will be dealing with the recession of 2025 or 2032 or 2087.