Sameh El-Shahat’s Blog

The Financial fallout has provided an excellent opportunity for little countries in Europe to show the big players, humbled by the global recession, who’s boss.

This is a salutary tale of how and why you should think carefully before badly treating a small country, however harmless it may seem. Not so long ago, 65million years to be exact, the dinosaurs thought they had the Earth to themselves and  thought nothing of riding roughshod over little creatures called mammals that were all to intents and purposes insignificant. Then came the Asteroid (the precursor to the sub-prime crisis) and wiped out the big dinosaurs leaving the meek to inherit the earth. History could be repeating itself.

Here are two sobering tales from our times:

How Switzerland Turned on Germany To Teach The Americans A Lesson

This is a truly bad time for Germany. In classical Götterdämmerung style, it is being assailed by its friends and allies for money.

Only yesterday, I wrote about how its Euro-area partners are trying to fleece it, so that they may carrying on living way beyond their means. To fill up its rainy day chest, beleaguered Germany is being forced to turn on small tax haven Liechtenstein to claw back some of the money stashed away there by its rich barons.

Don't Mess With UBS!

And now, in a typical kick’em-while-they’re-down fashion, Switzerland has entered the fray as the latest country asking Germany to bail it out, and it is doing so in a very imaginative fashion. We’ve been dumping on the Swiss for a while now about their banking secrecy laws, so it seems that they are fighting back to secure a future in a rather bleak financial future.

The Swiss are neither in the Euro nor in the EU. They also have no natural resources to speak of, aside Milka cows, fresh air and great scenery. For their fabled chocolate, they have to depend on some pretty dodgy African countries for supply, and for their legendary timepieces, they need a constant supply of people with at least two free wrists to wear them, if the business is to remain sustainable.  So they had to be resourceful. First, they invented secret numbered bank accounts where, behind the façade of respectable cute family-owned banks that looked like something out of Legoland, anyone could hide their money and have access to it with no questions asked. But then the Americans and the Germans turned on them to try to get them to divulge the assets of their nationals. And so, in an attempt to show they are still in control, the Swiss have unveiled their new and deadly weapon.

Swiss Chocolate may be innocent for children,but the Swiss secret service has been using it as their weapon of choice for seduction and espionage for centuries. Ever wondered how a country could live off chocolate?

The Swiss Gigolo.

The Swiss Treasury, together with their fabled Nestle-fed Secret Services have sent their best agent first to seduce and then blackmail Germany’s richest woman who is heiress to the BMW fortune. The Swiss Secret services must have planned this operation very carefully, and they counted on certain German national proclivities. For example, they Swiss are obsessive about time-keeping, and so are the Germans. And so it was most natural that Ms Susanne Klatten, a member of the reclusive Quandt dynasty, and a major shareholder of BMW, would fall for suitor whose charm lay, largely, in being punctual and arriving on time for their secretive trysts. If there is one thing the Germans love, it is punctuality. A punctual yet unimaginative lover from the clock making Germanic  races could easily trump a constanly late but more ardent latin lover. If there are two things the Germans and the Swiss adore in a partner, they would be constancy and punctuality. The Swiss then asked their chocolatiers to produce to the most aphrodisiacal confectionaries for their man to ensure that his prey would offer no resistance.

He is considered "good-looking" by German matrons, and she's a good catch if you're a nerdy looking Swiss spy on the make. But he always "came on time", and that's what really made her fall for him. She became his "Swiss Made"

Having sold her some cockamamie story about running over some US mafia kid and the mafia dad asking for EURO10 million to care for his daughter. He would put up EUR3m and she the remaining EUR7m, which she did. Then he asked for her to leave her husband and place EUR290m into a trust fund for their future lives together. When she refused, he threatened to show intimate videos of them making love (punctually, of course). She reported him to the police, he was arrested and just sentenced to six years imprisonment by a Munich court.

It turned out that Ms Klatten was nothing more than the fourth wealthy woman he had seduced then conned and duped into coughing up the cash. He had been practicing for his big hit. While this may seem like a failed mission by the Swiss secret service, it is in fact a very successful mission. The Swiss wanted the Germans to know that they can strike at the heart of the industrio-financial complex. BMW had been penetrated (excuse the pun). What of Mercedes?

Unbeknownst to a German car manufacturer with a similar logo, this the coat of arms of the Swiss secret service. It stands for Blackmailing Married Women

This was also a shot across the American bow. UBS, the Swiss bank has been forced to hand over a few hundred client account details under duress by the US with the threat of criminal action. The Americans want details of 52,000 more clients who, they say, are flouting America’s stringent tax laws. For the Swiss, banking is their means of survival and they will defend it at any cost. Is it any coincidence that the Sgarbi case has been made public now? No, they Swiss are simply warning the Americans. Every American leader of industry, major banker, or politician, must now be wondering if his wife is currently being seduced by a suave, charming, and very punctual Swiss agent masquerading as an “attentive” lover, as Ms Klatten touchingly described Mr Sgarbi. Every package of Swiss chocolate entering the US can now justifiably be considered a tool of industrial espionage, aimed at giving the Swiss an unassailable advantage over the Americans.

How The Central Europeans Finally Got To Screw Austria

Up until less than a century ago, Austria had reigned supreme for over a thousand years over large swathes of Central Europe. The Holy Roman Empire, in the hands of the Hapsburg dynasty, kept a tight rein over the whole area. From 962 to 1806 (when it was dissolved by Napoleon). Then it was revived again briefly and managed to keep going till WWI when it was finally laid to rest.

So it was quite big, as you can imagine.

The Holy Roman Empire would eventually become a Wholly Austrian Mess

The Austrians, in typical Imperial fashion, lorded it over the Central Europeans and treated them like they were some oafish backward louts. They did have a favourite in Hungary, but generally treated the whole area with the disdain reserved for exotic diseases. They waited and bided their time, these Central Europeans, and they knew that eventually, they would have the last laugh.

The WWII came and went, and they all fell under the Soviet Yoke and got even more abused. Then the Iron Curtain fell and they were free again for a while, and then they saw their opportunity. Austria was so near, and yet so far.

In 2004, a whole bunch of them joined the EU where Austria had found refuge. A rump state and a far smaller one, but still a haughty one, all the same. Their revenge would be sweet.

http://www.eurointelligence.com/Article3.1018+M545e0be824a.0.html

They all then secretly agreed to start building shakiest and most advanced banking system that money could buy, and they made sure that they didn’t use their own money. In effect, the Central Europeans got Western Europeans, with Austrians at their forefront, to buy them a banking system from scratch. Then, in a concerted action that History will remember as the true end of the Hapsburgs, they encouraged their citizens to borrow their mortgages in Euros and Swiss francs, where the rates were lower than local currency banana republic rates. The Central Europeans then went on the kind of profligate shopping spree that one only does with other people’s credit cards! When the financial downturn came, all the local currencies collapsed, and all the mortgage repayments became huge as the local currency value of the foreign currency loans shot up sky high.

When people talk of the banking system of Hungary being screwed, they are in effect saying that Austria’s banking system is screwed. That is because Austria, in a last fit of imperial grandeur, thought it its god given right to recreate a financial Holy Roman Empire all over again. They fell into the Central Europeans’ trap. Austria got burned badly and the Central Europeans know that the Austrians, much as they would love nothing better than see them go to hell, must now bail them out as that’s the only way to save the Austrian banking system.

“After leading the way in providing credit to the eight former communist nations that joined the European Union in 2004, Austria’s banks are now on the hook for 201 billion euros ($254 billion) in loans, equal to about 71 percent of the nation’s gross domestic product. International investors rank Austria’s bonds as less safe than those of Italy, Spain or even Slovakia”. ©Bloomberg 2009

http://www.bloomberg.com/apps/news?pid=20601085&sid=aSskJbEPpc4A&refer=europe

Who’s having the last laugh now??

© Sameh El-Shahat 2009

© Sameh El-Shahat 2009

Times are very grim out there. All the world’s economies are in trouble and it is the same old story everywhere… Don’t you just wish you could start afresh? You know, not just a new life and in a new country, but in a TOTALLY NEW COUNTRY uninfected with the credit crunch and other diseases. Yes, it has never been a better time to start your own country and make a really fresh start. If you are so inclined, then here is a cheat sheet I prepared this morning to help you get organised…

Country-Making 101

There are few places left in the world that have not already been claimed by anybody. If you are the lucky owner of such a piece of land, then you’d better get on the sovereignty ladder quickly before somebody else annexes you. Equally, if you are thinking of seceding, or making a Unilateral Declaration of Independence (UDI), or even having a coup, read on. The idea is to create facts on the ground for your state and your regime, however tenuous their reasons to be there and as often the case is these days, it’s not so much content that matters but image. Let’s call that country Soveronia, after it’s all about sovereignty.

The following is an idiot’s guide to statehood:

1. Have a flag
   Make one up, and if you cannot get a top branding agency to do it for you. It has to be distinctive, embody some meaning, and with symbols which will appeal to the mass of left-wing students in the West who can wear it on their bandanas and sport it on their rucksacks when they demonstrate for your independence in the capitals of their countries for lack of anything to do. Also, you can liberally use it everywhere and anywhere in the territory you hope to secure for your state. It will flutter over the “presidential building” in your “capital” and if you are lucky, it might flutter abroad over a little undistinguished building that, thanks to some scheming foreign regime that has decided to recognised you for Machiavellian reasons and given you an embassy, “that will be forever Soveronia”

1. Have a currency
   Even if you’re bankrupt, in these highly financial times (if the ads are to be believed), there is no more effective way of saying that you’re for real and legit than banknotes and a catchy-sounding name for your currency. He who says currency, says central bank, and a central bank means that you’ve got a state with institutions and a budget to bankroll them. Don’t worry about having any reserves and even there is a parallel economy going on in Soveronia operating in hard currency because nobody else can value, let alone recognise The Sovero. Money with your name on it is another fact on the ground.

1. Have Existential Enemies
   Forging a national identity in a place that used to be nothing beforehand is difficult enough, but luckily forging one in a place that is breaking away from something that used to exist is easier. This is because it provides you with an enemy to hate, thereby mobilising Soveronia’s resources for the single goal of despising those out to destroy you (we’ll assume it’s not an amicable break-up, it rarely is). Sometimes, if you don’t know who you are, it is good to be reminded by your enemies of who you’re not or no longer wish to be.

1. Have a huge military budget
   Given that you’re going to have to fight to exist, it pays to have an army on your side. If you’ve already got an armed force, then make sure the soldiers are well fed and get first pick of “white goods”, restaurants, and cars and other luxuries. All the chocolate and other delicacies goes to them because they need their energy to fight, and the rest of the country can go without. It makes sense. If the army turns against you, your plans for sovereign greatness will be dead in the water. Also make sure they have very sexy-looking well-cut military uniforms. Whatever your political affiliations, it pays to look like “El Che”, for foreign war correspondents.

1. Get Somebody Else To Recognise You
   Ideally another country, although non-recognised territories have exchanged embassies if they can’t get the real thing (Abkhazia and Transdniestr have diplomatic relations, for example). But what you want is a real sovereign country that sits in the UN to say that it recognises you. It will give you a boost and will allow you to have your calls taken by other people.

1. Have A Distinguishing Feature
   Ideally, the people of Soveronia should be part of an oppressed racial, religious or linguistic minority. Then you can get people like Clooney and Vanessa Redgrave fighting your corner, and Amnesty International will take your side (they’ll take anybody’s, so don’t be offended, they’re very principled that way). Nowadays, it pays to be non-Muslim persecuted by Muslims, or anything persecuted by the Burmese. If not, then being a different colour helps, or if not, then definitely another language is a fillip. A preponderance of moles on the epidermis of your people, or more than average illiteracy doesn’t count.

1. Have Elections
   Yes, yes, I hear you say, but we don’t even have a country yet. But that is really hardly the point. The West, where your fate will be decided, loves that sort of thing because of its liberal democracies and its recent history. To be seen to be wanting to have a democratic regime with bullets still flying overheard will go down very well with people abroad. PS They don’t have to be totally fair.

1. Have an airline
   Learn from Kurdistan. It is not a state (yet), and yet it has international flights and an airline. In the age of cheap no-frills airlines when anybody can have an airline, we still cling onto the outdated notion of national airlines. Having an airline means, to most people who are considered “average” by pollsters, that you’ve arrived as a nation. If they think you have an airline, they’ll think you’ve already secured all the accoutrements of statehood. They will therefore be very upset if their politicians decided not to recognise you.

1. Have a distinctive artistic or musical heritage
   It is a difficult one, I know, but if you do, then it will play to your advantage. While trying to secure statehood, exhibitions and concerts of Soveronia’s national heritage will help cement in foreigner’s minds (and especially the moneyed artistically-inclined classes and powerful Hollywood Brigade) your strong national identity. Remember, it is just simply not done these days to destroy a people who can make a valuable artistic contribution to the West. Artists will be falling over each other to support you. Make sure it looks like a flute that the Ancient Greeks may have used… We have a soft spot for the Ancient Greeks, the Fathers of Western Civilisation, not the contemporary ones who have no culture.

1. Have A War
   If all else fails, and you are lucky enough to have enemies who hate you as much as you them, then by all means keep a state of hostilities going. It could be skirmishes, or a full-blown war. That sort of thing is good to keep your cause in the news and/or maintain a sense of national purpose and cohesiveness.

1. Have A National Building Programme
   For those with a faltering sense of statehood, or have a state that is losing a sense of purpose (just as dangerous), what better than to imitate the Pharaohs and have monumental building programme. A “Palace of the People” helps instil a sense of pride (the more Stalinist, the better). It will also keep people busy. If you have the contact and the money, get one of the Starchitects such Foster, Rogers or Hadid to design some “Art Museum” for you. Your people may start to take more pride in their country and even love you more in the process. Foreigners will come to see you as a permanent fixture and not withdraw support.

1. Have A Commodity That Everybody Wants
   The Burmese junta know we need their rubies, and the Arabs and Iranians know we need their oil, and the Finns know we need Nokia. That’s why they can all get away with murder and forge states that we can no longer ignore, or choose not to recognise. Not only so, it will allow you to create recognition through the other most important fact on the ground: if they pay you for something you have that they need, then you exist.

1. Be good at sports
   The East Germans did it, albeit with steroids, but it certainly helps that you can field a sports team from time to time. After art, the West loves nothing more than promoting sports. It comes from our misplaced Romantic nostalgia about Ancient Greece, the home of our democracy. No matter that most inhabitants of Athens were not slaves and could not vote, and that women were 3^rd class citizens and could not vote. THEY DID SPORTS AND SAW THEM AS MORALLY ELEVATING AND DEMOCRACY-INDUCING. What matters is the Olympic spirit, which means that some very unpalatable regimes sit together with democracies on the IOC.

© Sameh El-Shahat 2009