FacebookTwitterGoogle+RedditEmail

Goldman Sachs in Denmark

by BINOY KAMPMARK

Broody Danish politicians have been hitting the screens for some time now, becoming the subject of celluloid chic. From more familiar territory in crime novels and series, Scandinavians are now moving into parliaments as drama. Scripts are being produced looking at gridlock politics and tense negotiations. Actors like Sidse Babett Knudsen are becoming European household names, and even finding a presence in the US, UK and Australia.

The drama series Borgen has anticipated two things in Danish politics. The election of its first female prime minister, Helle Thorning-Schmidt, was the first one. (Moderate Party leader Birgitte Nyborg is Borgen’s equivalent, a woman whose character claims she has “the balls to admit her mistakes”.)

The second analysis vital in Borgen is the nature of how fragile coalitions can be. If the arithmetic doesn’t add up, governments can collapse. Electoral blackmail becomes attractive. Last week, Denmark revealed how exciting, even degenerate, its politics could actually become. The spoiler here was a certain Wall Street giant.

It all stems over the troubling involvement of Goldman Sachs and other investors in Danish politics. Last Thursday, Thorning-Schmidt found the votes to partially privatise the state-owned energy company Dong Energy. In so doing, the neo-liberal fantasy of putting state services into private hands got a solid kick along in a state which has found such measures suspect. The late Margaret Thatcher might have just been interested to take a peek to see what all the fuss was about. Were those socialists up for turning?

The deal forged by Thorning-Schmidt will let Goldman and other investors buy up to an 18 percent stake in the energy provider for $1.5 billion. (Other accounts suggest 19 percent.) The aim of the arrangements is ostensibly to cut utility costs, reduce overall debt and increase investments in oil, gas exploration and wind farms. Goldman Sachs will acquire its stake through its European merchant banking unit in News Energy Investment S.a.r.l, partnering with ATP and PFA, both of which are Denmark’s two largest pension funds (Bloomberg, Feb 1).

The negotiators are talking sweetly about the arrangement. “It’s a good contract,” claimed ATP Chief Executive Officer Carsten Stendevad. “It’s good for all parties. We hope for the sake of Dong that soon our focus can return to the very difficult investment case” (Bloomberg, Feb 1).

But the restructuring arrangement does not stop at that. A provision in the deal will allow Goldman Sachs veto powers in such matters as management changes in exchange for its investment. Wall Street, effectively, will be incorporated into the fabric of Danish energy politics, bringing it into the energy grid. This measure has proven deeply unpopular in Denmark. Thousands of protestors gathered outside Parliament on Wednesday expressing their disapproval of the measure. A poll done for Denmark’s TV2 station found a 68 percent disapproval rating for the plan.

The Danish Socialist People’s party has shown the most aggressive disapproval for the antics of the government, pulling out of Thorning-Schmidt’s coalition. Party leader Annette Vilhelmsen suggested that, “We do not wish to be part of a government at all costs.”

Frank Aaen, a legislator of the Red-Green Alliance, questioned Finance Minister Bjarne Corydon on January 28 over a period of 4 hours wondering what exactly Goldman were up to. After all, claimed Aaen, the Goldman stake in Dong would be held in structured units across Luxembourg, Delaware and the Cayman Islands. This could only suggest one primary motivation: tax avoidance.

Sophie Ramsay, spokesperson for Goldman in London, answered such claims without actually answering them at all. In an email exchange with Bloomberg, Ramsay claimed that, “The Cayman and Delaware shareholders of the Luxembourg company are partnerships that broadly represent two buckets of investment capital: the first primarily for non-US investment capital, the second primarily for US investment capital.” Tax, she argues, is reportable according to tax law in the specific home country. Goldman, in short, will behave in accordance with what it is allowed to do.

Goldman’s conduct in the past has been spectacularly unethical. Lloyd Blankfein of GS had to answer charges of such conduct when fronting up before the US Senate in April, 2010. After all, even as other banking giants were falling, Goldman was raking it in. He defended the behaviour of GS in light of selling securities that its traders thought were bad to begin with while still betting against those very same securities. “In the context of market-making, that is not a conflict. What the clients are buying, or customers are buying, is – they are buying exposure.”

That is what the Dane’s will be getting into – “exposure”. As Denmark’s Politiken Magasinet (Jan 29) observed, Blankfein had severe problems in clarifying, let alone justifying, such speculating conduct. Former Prime Minister Rasmussen has flagged the warning signals – the sale is a “disaster” which involves dealings with a company with a “tarnished” reputation. That’s putting it mildly.

Thorning-Schmidt’s government, by deciding to move the socialist welfare model from its base, has stirred up the voters. Since coming to power in 2011, her government has introduced measures of means testing child care benefits and study grants. Services previously regarded as the sacred realm of state obligation and service, are now becoming qualified and restricted. The measures have also extended Denmark’s retirement age. Pay taxes, yes, but don’t assume you will necessarily get the service you want.

Having corporate interests muscling in on state enterprises is hardly unusual. It has been done with disastrous consequences to the quality of service and prices in such countries as Britain. When it comes to creatures of the banking and finance world as Goldman, eyebrows are entitled to rise in concerned wonder. As University of Copenhagen academic Peter Kurrild-Klitgaard suggests, the idea of having “someone from the outside control energy distribution” will be regarded as “very strange” by Danes. Yet only 20 years ago, Denmark’s socialists were insisting on broad nationalisation of production resources. How things do change.

Dr. Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge.  He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

April 24, 2017
Mike Whitney
Is Mad Dog Planning to Invade East Syria?    
John Steppling
Puritan Jackals
Robert Hunziker
America’s Tale of Two Cities, Redux
David Jaffe
The Republican Party and the ‘Lunatic Right’
John Davis
No Tomorrow or Fashion-Forward
Patrick Cockburn
Treating Mental Health Patients as Criminals
Jack Dresser
An Accelerating Palestine Rights Movement Faces Uncertain Direction
George Wuerthner
Diet for a Warming Planet
Lawrence Wittner
Why Is There So Little Popular Protest Against Today’s Threats of Nuclear War?
Colin Todhunter
From Earth Day to the Monsanto Tribunal, Capitalism on Trial
Paul Bentley
Teacher’s Out in Front
Franklin Lamb
A Post-Christian Middle East With or Without ISIS?
Kevin Martin
We Just Paid our Taxes — are They Making the U.S. and the World Safer?
Erik Mears
Education Reformers Lowered Teachers’ Salaries, While Promising to Raise Them
Binoy Kampmark
Fleeing the Ratpac: James Packer, Gambling and Hollywood
Weekend Edition
April 21, 2017
Friday - Sunday
Diana Johnstone
The Main Issue in the French Presidential Election: National Sovereignty
Paul Street
Donald Trump: Ruling Class President
Jeffrey St. Clair
Roaming Charges: Dude, Where’s My War?
Andrew Levine
If You Can’t Beat ‘Em, Join ‘Em
Paul Atwood
Why Does North Korea Want Nukes?
Robert Hunziker
Trump and Global Warming Destroy Rivers
Vijay Prashad
Turkey, After the Referendum
Binoy Kampmark
Trump, the DOJ and Julian Assange
CJ Hopkins
The President Formerly Known as Hitler
Steve Reyna
Replacing Lady Liberty: Trump and the American Way
Lucy Steigerwald
Stop Suggesting Mandatory National Service as a Fix for America’s Problems
Robert Fisk
It is Not Just Assad Who is “Responsible” for the Rise of ISIS
John Laforge
“Strike Two” Against Canadian Radioactive Waste Dumpsite Proposal
Norman Solomon
The Democratic Party’s Anti-Bernie Elites Have a Huge Stake in Blaming Russia
Andrew Stewart
Can We Finally Get Over Bernie Sanders?
Susan Babbitt
Don’t Raise Liberalism From the Dead (If It is Dead, Which It’s Not)
Uri Avnery
Palestine’s Nelson Mandela
Fred Nagel
It’s “Deep State” Time Again
John Feffer
The Hunger President
Stephen Cooper
Nothing is Fair About Alabama’s “Fair Justice Act”
Jack Swallow
Why Science Should Be Political
Chuck Collins
Congrats, Graduates! Here’s Your Diploma and Debt
Aidan O'Brien
While God Blesses America, Prometheus Protects Syria, Russia and North Korea 
Patrick Hiller
Get Real About Preventing War
David Rosen
Fiction, Fake News and Trump’s Sexual Politics
Evan Jones
Macron of France: Chauncey Gardiner for President!
David Macaray
Adventures in Labor Contract Language
Ron Jacobs
The Music Never Stopped
Kim Scipes
Black Subjugation in America
Sean Stinson
MOAB: More Obama and Bush
FacebookTwitterGoogle+RedditEmail