European ripples on the Island

Blake
Blake Doyle
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Our Island remains far removed from the debt crisis that is plaguing Europe. With the exception of an occasional news headline most of us don't give the issue a passing thought.

In fact, the more we hear of the issue the more immune we come to the story. The sovereign debt situation in Greece is most likely as benign to most of us as high winds on the Confederation Bridge or another misdemeanor by Wes the Cat.

But on the ground in Europe the profoundness of these cascading crises is not lost. It is omnipresent for those living with the consequences of credit restrictions, unemployment and displacement, declining home values and potential debt defaults of nations.

I am in Scotland as I submit this article. For the most part Scotland is relatively more secure than many other nations in the European Union. But the union is too integrated to not have referral pain throughout its member parts.

The capital city of Edinburgh has long since transitioned from an industrial base. As a result of this shift they escaped their last recession, a recession which hit the manufacturing sector.

Today Edinburgh is primarily a financial services city. Large insurance and large banks are the economic employers today; but this current recession is a financial recession. The pain of recession reverberates in Edinburgh this time around.

Adding more calamity to the economic uncertainty are the forces of self-protectionism and self-reliance. Scotland's governing party, a party elected under a proportional representative system, is advocating separation from the United Kingdom. Scotland's First Minister, Alex Salmond, is mounting the first credible threat of independence in 300 years. Economic friction has been the cause of many significant global events in our human history and Scotland will not be the last flash point of economic stress.

Earlier this week, Don Drumond, former chief economist with the TD Bank, released his report on what changes Ontario "must" make to address their distressed economy. The austerity measures being contemplated would make many Canadians cringe.

Ontario's issues are complex, their primary economic engine, the manufacturing sector, is not recovering and frankly may never fully rebound. In addition the population is aging and requiring more services; services which may no longer be affordable.

Why do individuals, businesses and governments get into debt? They spend beyond their means. We have developed a culture of overspending and at the expense of saving. Governments, at their base, are a reflection of the attitudes of its citizen voters. Governments are obliged to deliver what the electorate has advised them to do.

Greece has only implemented policies supported by the Greek people. Ontario has been caught in a recession which has structurally affected the underpinning of their economy; yet their policies must reflect the wishes of the voters who elected their governance.

Prince Edward Island is no different. We are and will be affected by international and domestic events. Governments can try to steer the will of the populous, but in the end they are responsive to electorate demands.

As Islanders we should be perceptive enough to see what is coming our way, we need to advise our government how to act in our collective interest. If we chose to spend beyond our means there is precedent to show us how we will end up.

Blake Doyle is The Guardian's small business columnist. He can be reached at blake@islandrecruiting.com.

 

Organizations: European Union, TD Bank

Geographic location: Prince Edward Island, Scotland, Europe Greece Edinburgh Ontario United Kingdom

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  • benbarr
    February 20, 2012 - 11:48

    scotland only wants a bigger share of their oil revenue and tax their people to death