Political Party

How does the world stand right now? Who is who, who’s in bed with who and who is on course for collision? Perhaps it is best explained as if the world were a cocktail party.

In one corner we have the beautiful single women. She would be happy to be there mingling with men who were gay or otherwise involved but this is not the case. She is surrounded by five single men, each wanting her to give them the body she has worked for years on keeping in perfect shape. Since she feels badgered it’s unlikely she’ll stick around. First chance she gets she’s leaving and when she does so none of the single men will have any reason to stay and they will all leave themselves.

Enter the EU. Germany, through years of hard work and prudent fiscal planning has become a financial powerhouse, hurt by the recent recession but still extremely wealthy. She is the bank vault of the EU and could is being courted by the increasingly desperate economies of Greece, Portugal, Spain, Italy and Ireland. Like the girl at the party this is annoying Germany so much that she may leave the EU. With her gone the five over indebted countries driving her away will have no reason to stay and may leave themselves.

While four of the men will have to go home to relieve themselves, one of them has a has a booty call. His “special friend”, who wiped the floor with him many years ago, now feels so bad that if his attempts with the beautiful singleton are not successful she will see to it that his needs are met. She too once had the goods but after years of putting out and short term cosmetic fixes the wrinkles are beginning to show and she is going to find out the hard way that none of those poor men she helped out in the past will give her any attention in her time of need.
Despite being one of the biggest casualties of the credit crunch, Britain continues to be one of the worlds biggest donors of foreign aid and in spite of it’s over indebtedness and the masses of money it is sending to those it considers destitute it seems that a little something for Ireland is not out of the question. It seems that only once her coffers are empty and nobody will accept the money she prints will see she should have put herself first and her thankless friends last.

While this little loveless game unfolds some trouble is brewing at our cocktail party. The perpetual drunk who nobody wants to know has been making threats towards those sitting around him all night and now hits the quiet little guy sitting next to him. This little guy works hard and is very prosperous but not physically strong. He does have a very strong friend though. This friend could put the drunk down but realizes the drunk may be packing a knife or gun and can do a lot of damage if provoked. Although the big friend is armed himself and has been in his fair share of fights he is not all that keen on a shootout at a friends party so he tries to play things down. After a single but very painful punch the drunk backs off his problems are still not solved. He has managed to show everyone how much stronger he is than his nemesis and everyone remains uneasy because they know he doesn’t care about consequences and may attack again. Ordinarily, this social nightmare of a man would be completely cut off but because his oldest friend stands by him through thick and thin he is in luck. While condoning this behaviour would put a lower ranking person in great social danger the violent drunks friend is a very popular person right now so everyone bites their tongues and hopes the damage is kept to a minimum.

Moving back to the real world the drunk guy is North Korea. Sitting next to him is South Korea, a very industrious and prosperous nation who’s army is neither as big nor as dedicated as North Koreas. The United States, South Koreas friend and protector, has troops in South Korea protecting them from the North but they are painfully aware that a war will be very costly for both sides. And what is considered prohibitively costly in the free world is a far cry from what the North Korean dictator will risk to stay in power. So bad is the situation that neither the torpedoing of a South Korean vessel nor the shelling of one of its islands has been met with any military response. Added to this is the will China, North Korea’s closest ally. As it’s economy blasts away in the face of the biggest financial crisis since World War 2 any leader with any sense is will continue to invite China to the party. Putting up with North Koreas bullying of the South is a small price to pay for the benefits Chinas friendship has to offer.

Back at the party, the drunk’s friend, who will hereafter be referred to as Mr Red, continues to mingle with the guests and enjoys a lot of pampering. Although nowhere near as rich and powerful as the little victims friend, (hereafter be referred to as Mr Blue), the Mr Red is now also carrying a gun and his business and influence are growing. Mr Blue has seen Mr Reds is packing a gun and isn’t too perturbed. It is a low calibre .22, not nearly as big and deadly as Mr Blues .45 Magnum and Mr Red has not fired a gun for some time. Mr Blue has been firing his gun a lot recently and is rather satisfied that Mr Red does not want a showdown. However, Mr Reds growing wealth and power are a cause for alarm. Also, Mr Blue has just noticed Mr Red dancing with the lady who also carries a .45 Magnum and had a near fatal stand off with MR Blue many years ago. She has since had a facelift, changed her name and seems to be a nicer person. However, most people know she can still be dangerous. Although alert, Mr Blue is not losing sleep over Mr Reds dance partner. He knows how dangerous she can be and what an independent woman she is so is rather unworried about this particular relationship. However, there are rumours of an affair between her and a little guy Mr Blue managed to wipe out several years ago. This is worrying. The little guy lives near to Mr Blues best friend and mercilessly calls for his execution.

Just like Mr Blue with his big recently used gun America still has the world’s best military and it looks like it will stay that way for some time to come. China has upped military expenditure but is still far behind America. As for economic growth, China is steaming ahead. In a world with nuclear weapons war is likely to result in mutual destruction so economic power has become more important than military might. Russia, which in the days of the USSR could match America on the battlefield, has forged close ties with China. However, it remains fiercely independent and only sticks by its new friend in so much as it benefits itself. As a result Mr Blue is weary but as yet not too worried. However, Russia maintains ties with several American foes, most notably Iran. A foe who’s dictator, if given the right technology, could see his calls for Israel to be wiped off the map be put into practice.

Although Mr Blue has not said anything yet he may soon need to turn his attentions to something a little more sinister. Mr Blues wife, it seems, is having an affair. With Mr Red. It is not as if his wife was slutty and just went off with the first man she found. Rather, Mr Blues recent lack of libido forced his wife to get her needs from elsewhere. Of course Mr Blue has his mistress, who he treats very badly and continues to demand favours from. He violently stops her from going elsewhere or giving her favours to anyone else but his wife seems more lucky. She has managed to slip away more easily and her and Mr Red are being seen together in public more and more often. Her affair may turn into something more and she may leave Mr Blue for good. Will he let her go?

Let’s first discuss Mr Blues mistress. She is Iraq. Violently taken and with no anti Americans allowed to stand for president, America is assured ongoing access to Iraq’s mineral resources. With Americas troops firmly embedded around the nation’s oil fields America is assured the last drops of oil will go her way. Of course the big question is Australia. Stinking rich in mineral wealth it has for a long time enjoyed a special relationship with America. However, as the American economy ran out of steam and the Chinese boom began, Australia’s resources increasingly went Chinas way. Until now this has been fine. America is still buying what it needs but with it’s economic slump it is buying less raw materials at prices inflated by Chinas growing demand. However, as resources dwindle and commodities become increasingly unaffordable will America willingly let them go to Chinas blistering economy or will she fight to get them on better terms for herself?

Retrieving Icesave losses

Launching themselves in the UK and Dutch markets and attracting investors with their high interest rates, Icelands banks managed to attract billions of pounds worth of deposits in the years leading up to 2008. At first the tiny country, with a population of just 300 000, saw a massive economic surge but their dependance on the banking sector left the nation ill prepared for the global financial meltdown. By then Icelandic banks held loans and other assets valued at more than 10 times the country's GDP and so even after the goverment stepped in and nationalized the countries three biggest banks there was little they could do to cover the billions of pounds in foreign owned deposits. With the collapse of their banking industry came a collapse of the currency and soon Iceland found itself in rather onerous position of being the first entire nation to go bankrupt as a direct result of the current financial crises.

As far as Britain is concerned, the biggest impact of all this was the £4 billion debt owed by Landsbanki, Icelands third biggest bank who at the time had around 300 000 British accounts held under the "Icesave" brand. With both the banks and Icelandic government coffers empty, the British and Dutch governments have had to step in and make good the refunds on losses incurred by investors in line with their national Deposit Guarantee Schemes. To date no agreement has been reached on how Iceland will repay the £3.3 billion still owed to these nations.

As for the money owed to Britain, the larger of the creditors, another solution may be at hand. As it happens, Iceland's biggest resource is not only virtually ever lasting, it is something the world finds itself needing in ever growing supplies - cheap, clean energy. Geothermal energy is in such abundant supply that the country is not only able to provide all it's energy needs through this clean, renewable source, it can also provide enough surplus energy to fill a significant portion of Britains energy needs.

This concept is by no means a new one. As early as 1990 there was talk of a submarine cable being laid between Iceland and the British to supply electricity. Since then the topic has re-appeared at various points and the possibility of transfering energy between the nations through other means (for example by using Icelandic energy to extract hydrogen from water and exporting the hydrogen) but the economics behind the projects have never added up. Until now that is. With peak oil set to hit within the next few years and the words "peak gas" starting to be uttered by energy experts the issue of whether it is worth distributing Icelandic energy has become one of who it is distributed to. The short answer may be "whoever pays". And who better to pay than the nation they are so indebted to? Although Icelands government has previously stated "it's our energy and we will decide what to do with it" the fact that the nation itself is under mounting pressure to fix it's economy and pay off its' debts will certainly come into play. Securing loans to develop the infrastructure needed may not be an option for a bankrupt nation so foreign investment (and thereby at least partial foreign ownership) of power plants and lines of distribution becomes a necessity. Britain is home to several national and international energy giants should be used to its advantage. These energy giants are well aware that fossil fuel reserves are dwindling and they need to establish reliable sources of alternative energy long before reserves run dry. Although extremely complex, an arrangement between Iceland, the British government and Britains energy sector could see an extremely beneficial relationship for all parties involved. If this arrangement can be reached and the British government factors the £2.3 billion it is owed to the energy sector a substantial intital investment towards this venture will be complimented by a reduction of £2.3 billion in Icelandic debt. In the end everybody wins.