1000 Volvo's for 300 million, that's 300,000 euro per Volvo.
Granted, the article says 'adjusted for interest and inflation'. But that seems wrong, if you had the choice in the 70's to buy a Volvo but instead you put the money on the bank, you would have only the accumulated interest by now, not anything else to offset the inflation.
Calculating backwards with an average 4% interest rate for 45 years gives an original price of about 55,000 euro in 1971. For that money you could buy a villa in Sweden around then.
The Swedish Government are as good as professional loan-sharks at getting back what they are due, and sometime using similar tactics.
Case in point, my country was paid $28 million in 1929 by the Swedish Government (or a specific Swedish company, not sure) so that the Swedes would take over control over the entire matches market in Romania, becoming a monopolist, in fact. This by itself is no thing to brag home about, but that's how capitalism works.
20 years later a new regime is installed, the communists, who don't have a pretty view on capitalism much less so on monopolistic practices in which they are not the main actors, so they decide to nationalize the Romanian matches industry from under the Swedes' control.
Come 1989 and the fall of Communism the Swedes become active again and now ask us for $800 million as compensation, never mind that most probably the initial investment had most certainly paid by itself in those 20 years in which it had monopolistic control over a quite big market. To make sure that they get their money back a Swedish official even bribes one of our economy ministers with around $600,000 (for which said Swedish official had some issues at home, probably nothing came out of it), and it all got settled down for "only" $120 million in 2003.
This only happens because countries like Sweden have a disproportionate influence on the world stage. We (Romania) also got swindled out of $1 billion by Saddam's Iraq, the cost of us selling things and services to them in the 1980s. After Saddam fell the Iraqi Government and its babysitters (the US) never felt the urgency of paying us back, our Government also closed their eyes because the US is "actively protecting us against the bad Russian Bear from the East", plus, if a country like Romania would ask for such a big sum of money back you can be pretty sure that no-one in the Western media would pick the story up like it happened in Sweden's case.
The whole Kreuger empire rise and fall (https://en.wikipedia.org/wiki/Ivar_Kreuger) is pretty interesting, but it was still a loan. He did the same thing to plenty of countries, the largest being Germany at $125m.
I've not heard about that bribe, would be interesting to read more about it. You got any more information about that?
Thanks! Had to take a look at this and just a ZZBop mentioned he got sentenced to prison, but as I understand not really because of bribing as that was just a cover up for himself.
Apparently it was Fallenius himself who in court told that the money he took from ABB was going to be used as a bribe, but the court did not agree and sentenced him for tax fraud instead.
See http://www.svd.se/abb-direktor-domd-till-fangelse , (Swedish)
If the "Swedish official" you refereed to is Peter Fallenius, he was sentenced to three years in jail in a lower court and this was upheld by the supreme court (basically his appeal was rejected because he didn't turn up[1]).
When you want to have someones property it is not unfair to ask for its _current_ value.
The Swedes might have bought the property for $28 million back then, but who says that it isn't worth today $800 million or $120 million?
The market could have grown, the Swedes could also have invested a lot of money afterwards in factories and so on.
When looking at a country like Romania and the insane corruption going on there it is really hard to say for outsiders who is to blame in this case.
I mean they nationalise markets (= steal stuff that others built or bought), who is to say that the same Romanian officials that stole the property did not force the Swedes to pay bribes in order for them to not loose everything.
Your argument basically stops making sense for me the moment you mention nationalisation of property as if it wasn't stealing. How would you feel if your government nationalised your house or your car?
Well you lived in your house for 20 years already, so you sufficiently profited from owning it, didn't you? Now get out and go sleep under a bridge! No you're not going to get any money back, except if you bribe me with $600.000.
Come on, there were lots of cases in Eastern Europe where previous owners wanted compensation for property that was stolen by the communists. (This gets extra weight when demands come from inside the EU when the country wants to join the EU, of course.)
Not saying the official Swedish policies aren't disgusting in their shameless double standards, of course.
References to that bribe would be interesting for me, to put on FB for my Swedish friends? (I'm Swedish and have been quite a bit in Romania. This is the first time I hear about it. I don't doubt you, news like that don't really show up in Swedish media -- see previous paragraph.)
I should add -- if you want to talk compensation, talk about how the whole western Europe left the eastern Europe to rot as slaves for generations. :-(
Edit: After the 1980s, the US and Saddam weren't on the best of terms. :-)
Edit 2: lostlogin is correct. Forget previous Edit please, I read sloppily. The comment talks about after 2003, not after the 1980s.
They weren't on terrible terms either and while the jury is still out on exactly what happened, Saddam thought he was given a green light by the US/Glaspie. Chemical and biological weapons were also sold to Iraq during the 80s.
The point is -- Eastern Europe was in practice left under occupation by one of history's worst dictators as part of signing the peace after the 2nd world war.
It is shocking, when you read up on the subject and see how many percent of the population ended up in horrible jails in the "less" bad places like Romania.
And yeah, you don't risk global nuclear war over other people's liberty. (A good reason why places like Iran and North Korea want to go nuclear.)
No, no one "left" someone under occupation, it wasn't the decision to make for the West in the first place. The responsibility for the US is primarily for what happens in the US, the same is true for the UK and Romania.
Romanians ran the Gestapo like security apparatus called "Securitate", Romanians ran the Romanian army and Romanians ran the Romanian government. Whatever happened in Romania is primarily the fault of Romanians. Don't tell me how I should have fought or even died for your freedom, better ask yourself why your people didn't do it.
There are examples of other countries (like Socialist Yugoslavia) that fought for their freedom against the Nazis, and who then stayed independent from the Soviets. (even though Stalin threatened to invade)
When the Nazis came the Romanians went along with them and submitted (not only that, but they also supplied hundreds of thousands of soldiers), when the Soviets came the Romanians went along with them and submitted. (again supplied soldiers to fight for their cause)
What you are essentially doing by calling them victims is asking for some higher authority that should make things right that you don't want to fight for yourself. Maybe some United Nations Socialist world government? I can tell you with absolute certainty that we are not going to have any of that. Maybe you will though, it is your own choice. But don't blame us when it doesn't work out the way you hoped.
In principle I agree for the 1940s, a pan European brotherhood was probably not so important at the time. [Edit: And when they saw what they had done, it was a MAD world...]
But Yugoslavia was a special case, there the new government didn't come in, riding with an occupying tank army that broke the back of the population with hunger, Siberia and torture.
Hungary 51, Czechoslovakia 68, the forest brothers of the Balkans... They did try. Hard. (Edit: Note -- when it was clear that Soviet tanks wouldn't roll in over the borders any more, the dictators went out quickly.)
Democracies should try to spread the liberty. It is the modern missionary statement. If nothing else, it is good for everyone.
Edit: Where I would put the disagreement: History shows that a brutal enough junta can keep a population down for generations. 1984, with history as a foot stomping in a face. (The junta probably needs control over the information for that to work.) So a population have an impossible time freeing itself from a pack of criminals without external help. And it is the moral duty for free societies to aid in this. (I hate idealism. But this is one I can stand for.)
I'm not in any brotherhood, I'm not a missionary and I'm not waging some kind of Jihad to spread my ideology in the world.
You seem to not recognise that freedom cannot be obtained without self responsibility as you are constantly seeking to minimize the responsibility that people had for their own bad decisions and the bad outcomes that resulted from it.
Soviet literally sent most of a troublesome population (and large parts of others) to Siberia. After 1945, a few percent in prison with torture was mild. Troublesome countries/populations could be permanently cured.
You really write I "minimize the responsibility that people had for their own bad decisions" -- when I note that the populations knew that if they rocked the boat it would end with mass deportations to Gulag and/or genocide? (In many cases -- again!)
Seriously... Enough.
Edit: A large fraction of Lithuania did try and paid the price. Deportations and political prisoners in Gulags was 15+% of the population of around 2 millions in total then (see Demographics_of_Lithuania on wikipedia). The point was made that Soviet had no problem continuing up to 100%. https://en.wikipedia.org/wiki/Soviet_deportations_from_Lithu...
It is one thing what I personally dislike (for example what happened in Romania) and what I'm vocal against (Communism, Socialism) and what my country is responsible to fight for. (especially if the adversary was the Soviet Union)
You are not going to convince me that the West is responsible for what happened in Romania unless you prove that the West forced you into Communism and actively helped to keep this Gulag system running.
The only case you seem to make is that countries like Romania and Lithuania are no real sovereign nations because they are too weak. Am I right? What's your suggestion to solve this? You submit to someone else who is not the Soviet Union? Or you hope you'll find someone who will risk his safety for you for free?
"The point is -- Eastern Europe was in practice left under occupation"
No one "left" anyone. Eastern Europe had a right to self determination, which was infriged upon by the soviet block. Blame the soviet block. Western Europe coming in and "spreading democracy" would have been a disaster.
It's easy for you to say, now that the west has won the cold war. At the time, Western Europe was simply either with the US or trying to find a third path, neutral and not involved in the cold war.
It is the responsibility of Eastern European to revolt and make a country for themselves, not anyone else's.
I agree in the main lines but this has limits. I like to take an example with a family living nearby: you hear that the father is spanking his kids, ok, that's none of your business. But if you hear that said father is abusing his kids, you call the cops, and if no cops are available you may group with other peoples to get the kids to safety.
I think Eastern Europe countries were in the "spanking" case, but WW2 Germany and possibly today's North Korea are in the "abuse" case.
I thought so too, until I saw things like these about one of the "nicer" occupations. They broke the resistance with brutality -- then the population suffered silently until it was clear no Soviet tanks would roll in if they threw the yoke off.
It is hard to draw the line, because you need first to build the concept of a "people" (or nation?) then try to find out what's the collective will. But you can't either dismiss this, as people right of self-determination is a core principle.
If a nation somewhere collectively decide they do not want, say, modern medicine, or access to Internet, I will think it is stupid but cannot come there and tell them that I know better.
How many percent of the population forced out and/or sent to prison camps do you think is a serious limit? Lithuania was at ~ 15% after WWII.
Or does it have to be mass murders of a large fraction of the population?
(And yes, 'grive' do have a point -- at the time, there were other problems. It was just not an alternative to continue WWII. After that, a new war would be nuclear. No way to win those.)
It's not a matter of percent. If a very corrupted country decided to get rid of all mafia at once, it could mean a high percentage of the countrymen tried. However getting rid of an ethnic minority, or of the homosexuals, is not ok. The limit is very hard to draw precisely。
Uh, in which country have the organized criminality ever been over 1%? 3%? :D
Regarding Lithuania we talk about getting rid of 15% not of the "ethnic minority" but of the "ethnic majority", then replacing them with a more "dependable" population.
"I should add -- if you want to talk compensation, talk about how the whole western Europe left the eastern Europe to rot as slaves for generations. :-("
Astonishing. That's just on a whole other level of insanity.
Your country refused to pay Sweden back monies owed, and you feel wronged about them asking. Then Iraq refuses to pay your country back monies owed, and you feel wronged about that too?
I guess he objects to corruption coming from WEU while talking about "democracy" and "prosperity"? I can't count the cases similar stuff was pulled off by German, Italian, French etc. companies in EEU, propelling corruption to insane levels, while posing as saviors and pointing fingers at EEU as the ones with the corruption issues? Wasn't there even a German custom of not punishing bribery in less advanced countries while prosecuting it inside Germany; and once managers of a large German company became well-versed in corruption practices outside and tried to pull the same in Germany, weren't they promptly busted?
Pretty much. The $28 million was a loan from Ivar Krueger and one of the stipulations for the loan was monopoly of the matchstick market to which Romania evidently agreed.
Considering $28 million in 1929 in todays monetary value is roughly $3.3 billion, I'd say Romania got a pretty good deal in the end.
I'd say that's an insane way to look at it - a wealthy country demanding payment from an impoverished country emerging from decades of suffering for a debt over 50 years old, and you think that they got a good deal? Wow
Ivar Kreuger was a businessman, not a "wealthy country". The collector of the debt was the company ABB, with help from the Swedish government. Romania essentially got ~$3,28 billion of their (interest free) debt written off if they in the end only paid $120 million. It was a "good deal" in the sense that they didnt have to pay more, or even the full amount.
It wouldn't have been so two-faced if OP in the next breath didn't complain about being swindled by another even poorer country.
Didn't want for my comment to come up as "two-faced", just wanted to make it a little more obvious that when it comes to international relations (meaning relations between countries) the "natural law" or the "common law" or whatever you want to call the law that governs the interaction of people who live in the same "commonwealth" (to borrow from Hobbes) does not apply anymore, it's the rule of the strongest or the most skilful, which generally comes down to how much money a certain country has put aside (either for military spending or for building up "soft power", as in Sweden's case).
That's why countries like Sweden (or Austria or The Netherlands or Denmark or Norway) punch way above their weight when it comes to international relations, while poorer countries (like Romania) have to contend with what's left when the richer countries finish their meal.
I'm not a nationalist nor a patriot, so I don't genuinely care how my country is seen around the world (I lied a little: I'm way over nationalistic when it comes to our football team, but that's about it), it's just that after I started visiting the other European countries I wanted to better understand how come they're so ahead of us in economic terms. Of course, they have better productivity, better access to capital, maybe a more skilful workforce, but that didn't explain said huge difference between a middle-sized town from Austria compared to a middle-sized town from Romania, the people from the two towns seemed to be pretty much the same, how come a teacher from said Romanian town earns 200-300 euros per months while a teacher from the Austrian town earns 10 times as much?
And commenting on this:
> Ivar Kreuger was a businessman, not a "wealthy country". The collector of the debt was the company ABB, with help from the Swedish government
This is the definition of State capitalism, which should be bad (I tend on the libertarian side of things). If said company had unpaid debts from the Romanian Government there were other ways of trying to get back said money, but when you go back to mommy/your Government and ask for help then you're not just an independent "businessman" anymore, you're a State-supported company. Also see Apple and its recent tax-scandal. Not a day had passed since the tax imposition decision and the US Government felt entitled to come and protect its precious little baby. Like I said, this is not capitalism, it's the worst type of mercantilism, which I personally thought it was dead when the 18th century ended.
Why should someone not get the current value for his property just because he is rich?
How exactly is it the rich persons responsibility for what happened to Romania in the last decades? It wasn't the rich person from Sweden that forced Communism on Romanians, it was Romanians forcing it on Romanians and it was Romanians that persecuted and killed Romanians who didn't agree with Communism.
The '70s, '80s and early '90s had unusually high interest rates though. Through compounding with those high interest rates early on, it suddenly becomes more reasonable... 6.7% over 42 years would get you to over 300k already...
One doesn't get to complain for the interest on penalty they deserved half a century ago; most assuredly you don't get to keep it at national bank refinancing rate. Remember it's a penalty, not a bailout. Some commercial insurer had to absorb the cost. I'm sure if they were bought properly in the first place, the figure would be a lot less.
Because the insurer wants their money back..? I'm not even entirely sure if there was an insurer involved or was it Volvo itself who had to hold the bill.
Commercial invoices have late payment penalty clauses in them. The effective interest rate in these clauses are much higher than commercial interest rates since they are meant to be punitive in nature.
4% is probably a reasonable rate given current market interest rates for a debt you expect to be paid back. We are in the middle of an epic central bank created bubble for debt securities. Rates have never been this low. 4% is nowhere near a reasonable average rate over the period concerned. In the 70's, the yields on US Treasuries were in 10% range. As late as the early 1990s commercial real estate loans backed by good collateral were in the high single digits. What seems like a small difference in rates can easily make an order of magnitude difference over a 40-50 year period.
But if those 1000 stolen Volvos put the company in a rough financial situation, eventually leading to a major competitive disadvantage, then the losses could be a lot more than 300 million.
For a good part of that time the interest was actually quite a bit higher than 4%, so it wouldn't surprise me if the calculation with actual interest rates is absolutely spot on. Swedish government tends to be like that more often than not: Unreasonable, but rarely completely wrong in a way you actually can point out - or prove - for that matter.
I have a 20-year-old swedish car that I wouldn't mind keeping in mint condition for another twenty years. But how do I do that (while still keeping it in service)? Rust in particular seems to be a big killer. It doesn't help that the manufacturer is no longer around and spares are likely to become hard to obtain. Did the North Koreans buy spares for their Volvos?
They do in the UK. If you don't acknowledge a debt for 6 years, and during that 6 years the creditor doesn't take legal action against you, the debt becomes unenforceable - statute barred debt is the technical term.
The debt still exists, they can still harass you about it, but you cannot be taken to court and made to pay.
Now, in most cases, that doesn't happen that frequently, as most creditors would take you to court well before the 6 years are up.
Calculating backwards with an average 4% interest rate for 45 years gives an original price of about 55,000 euro in 1971. For that money you could buy a villa in Sweden around then.