WE ALL remember when Alex Salmond, the economist, cited Iceland as the type of economy Scotland could aspire to be. Iceland went broke. Then we were told that we could be like Ireland, “a Celtic Tiger”. Ireland went broke. Salmond was at pains to contact Fred Goodwin and congratulate him on the great deal he did in the Royal Bank of Scotland takeover of ABN Amro. The result of that great deal was a banking crisis of horrendous gravity.
Recently, we have been hearing that we should be looking toward Norway and Sweden as examples of economies we should aspire to follow. On Friday, a report stated that Sweden has become the first country in northern Europe to slide into serious deflation. Professor Svensson , the former Princeton University professor who wrote the world’s most cited work on deflation, has said that Sweden was at risk of a “liquidity trap” akin to the 1930s, with deflation causing debt burdens to ratchet up in real terms. Swedish household debt is 170 per cent of disposable income, among Europe’s highest. Comments Alex?
Why don’t we just aspire to stay in the UK whose current policies are being proven to be working and improving the economy. Be careful what you wish for – you might just get it.