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

August 31, 2016
NEVE GORDON - NICOLA PERUGINI
Human Shields as Preemptive Legal Defense for Killing Civilians
Jim Kavanagh
Turkey Invades Syria, America Spins The Bottle
Dave Lindorff
Ukraine and the Dumbed-Down New York Times Columnist
Pepe Escobar
Brazil’s Dilma Rousseff, a Woman of Honor, Confronts Senate of Scoundrels
Jeff Mackler
Playing the Lesser Evil Game to the Hilt
Steve Horn
Dakota Access Pipeline Tribal Liaison Formerly Worked For Agency Issuing Permit
Patrick Cockburn
Has Turkey Overplayed Its Hand in Syria?
John Chuckman
Why Hillary is the Perfect Person to Secure Obama’s Legacy
Manuel E. Yepe
The New Cold War Between the US and China
Stephen Cooper
Ending California’s Machinery of Death
Stacy Keltner - Ashley McFarland
Women, Party Politics, and the Power of the Naked Body
Hiroyuki Hamada - Ikuko Isa
A Letter from Takae, Okinawa
Aidan O'Brien
How Did Syria and the Rest Do in the Olympics?
David Swanson
Arms Dealing Is Subject of Hollywood Comedy
Jesse Jackson
The Politics of Bigotry: Trump and the Black Voter
August 30, 2016
Russell Mokhiber
Matt Funiciello and the Giant Sucking Sound Coming Off Lake Champlain
Mike Whitney
Three Cheers for Kaepernick: Is Sitting During the National Anthem an Acceptable Form of Protest?
Alice Bach
Sorrow and Grace in Palestine
Sam Husseini
Why We Should All Remain Seated: the Anti-Muslim Origins of “The Star-Spangled Banner”
Richard Moser
Transformative Movement Culture and the Inside/Outside Strategy: Do We Want to Win the Argument or Build the Movement?
Nozomi Hayase
Pathology, Incorporated: the Facade of American Democracy
David Swanson
Fredric Jameson’s War Machine
Jan Oberg
How Did the West Survive a Much Stronger Soviet Union and Warsaw Pact?
Linda Gunter
The Racism of the Nagasaki and Hiroshima Bombings
Dmitry Kovalevich
In Ukraine: Independence From the People
Omar Kassem
Turkey Breaks Out in Jarablus as Fear and Loathing Grip Europe
George Wuerthner
A Birthday Gift to the National Parks: the Maine Woods National Monument
Logan Glitterbomb
Indigenous Property Rights and the Dakota Access Pipeline
National Lawyers Guild
Solidarity with Standing Rock Sioux Tribe against Dakota Access Pipeline
Paul Messersmith-Glavin
100 in Anarchist Years
August 29, 2016
Eric Draitser
Hillary and the Clinton Foundation: Exemplars of America’s Political Rot
Patrick Timmons
Dildos on Campus, Gun in the Library: the New York Times and the Texas Gun War
Jack Rasmus
Bernie Sanders ‘OR’ Revolution: a Statement or a Question?
Richard Moser
Strategic Choreography and Inside/Outside Organizers
Nigel Clarke
President Obama’s “Now Watch This Drive” Moment
Robert Fisk
Iraq’s Willing Executioners
Wahid Azal
The Banality of Evil and the Ivory Tower Masterminds of the 1953 Coup d’Etat in Iran
Farzana Versey
Romancing the Activist
Frances Madeson
Meet the Geronimos: Apache Leader’s Descendants Talk About Living With the Legacy
Nauman Sadiq
The War on Terror and the Carter Doctrine
Lawrence Wittner
Does the Democratic Party Have a Progressive Platform–and Does It Matter?
Marjorie Cohn
Death to the Death Penalty in California
Winslow Myers
Asking the Right Questions
Rivera Sun
The Sane Candidate: Which Representatives Will End the Endless Wars?
Linn Washington Jr.
Philadelphia District Attorney Hammered for Hypocrisy
FacebookTwitterGoogle+RedditEmail