Where is the mandate for change in Europe? - A Thatcher lesson
Source: Saxo Bank , Author: Steen Jakobsen
Posted: Thu May 3, 2012 10:15 am

INTERNATIONAL. I have been widely quoted – particularly in France – for saying that Europe needs a new Margaret Thatcher. But my references to Thatcher have less to do with an endorsement of her politics and far more to do with the fact that we haven’t seen a real mandate from voters anywhere in Europe lately for real change like Britain saw when she swept to power in May 1979.

The elections in Denmark, Spain, Finland, and the UK in recent years have simply been protests against the sitting government – never about accepting the stark challenges of real reform.

And now the French, Greek and Dutch elections look like they will favour those who disown their pro-EU credentials, ergo we’re witnessing another round of voter protests with the theme of EU as the source of all that ails the nation. Voters are only against incumbent powers and what they are for has not yet crystallized.

The main point about Prime Minister Thatcher was that she was given a mandate and she acted on it dramatically with sweeping reforms that turned heads and changed lives. That was my point, not whether we need Thatcherist policies, though for my money a forceful new “Lady with a handbag” would only be a positive influence on Europe and help balance out today’s Germany-led 'disciplinarism'.

I realize that Germany is a reluctant leader of Europe and treads very cautiously even if it is digging its heels in the mud at every turn to avoid having the German sovereign getting dragged into the EU morass.  But that brings me to my other point: why is the debate so stale and cautious and why are we so afraid of disagreeing? Only through debate and openness can we deal with this vast debt crisis which in essence is manageable but rapidly becoming less so for every quarter we continue to enact extend-and-pretend policies.

Now is a time for no nonsense in political leadership – that’s what the voters need and should queue up to vote for if they see it. Hopefully, we haven’t all turned into couch potatoes in this self-centered world of social media – permanently lost in the vapid air of our own little personal bubbles and updating our Facebook profiles on our smartphones and iPads. Some of the late EU summits have even felt like Facebook profile updates: “Met Angela, nice dinner, seems fine, here are the photos. Please like me.”

When you travel around Europe you don't see or feel the crisis yet, save perhaps in Greece. But that's because the austerity that we’ve all talked about so much has yet to fully take force. Yes, all governments are talking about austerity, and some have even implemented some reforms into the letter of the law, but if thing look bad now, just wait until we see the actual enactment in the remainder of 2012 and 2013, that’s when the crisis hits.

The low point for economic growth in the EU will be seen in the next few quarters. But, as the crisis grinds on and austerity and tax rises bite, the will for real reform and ending the reign of extend-and-pretend will grow inexorably – that’s the good news. Things will fairly quickly get to where they can’t get any worse, and I am almost certain that before the end of 2013, someone somewhere in Europe, maybe even in Germany, will be given a Thatcheresque mandate for real change.

Ms Thatcher was an extraordinary person whose life and actions still resonate today. For better or worse, her legacy of change, direct confrontation and no nonsense politics was instrumental in changing the landscape of not only Britain, but all of Europe. That’s the kind of political leadership our current predicament demands and let’s hope the right voters can identify that person and put her into office.

About Steen Jakobsen

Steen Jakobsen was appointed to the position of Saxo Bank’s Chief Economist in March 2011.Mr. Jakobsen returned to the Bank after two years’ absence. During that time he has been Chief Investment Officer for Limus Capital Partners. Prior to his departure in early 2009, Mr. Jakobsen was with Saxo Bank for almost nine years as Chief Investment Officer.

Mr. Jakobsen has more than 20+ years of experience within the fields of proprietary trading and alternative investment. In 1989, after finishing his studies in Economics at Copenhagen University, he started his career at Citibank N.A. Copenhagen from where he moved to Hafnia Merchant Bank as Director, Head of Sales and Options. In 1992, he joined Chase Manhattan in London as VP, Head of Scandinavian Sales, and then the Chase Manhattan Proprietary Trading Group. 1995-1997 he worked as a Proprietary Trader and Head of Flow Desk at Swiss Bank Corp., London. 

In 1997, he became Global Head of Trading, FX and Options at Christiania (now Nordea) in New York until he joined UBS in New York in 1999 as the Executive Director in the Global Proprietary Trading Group.



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