Helena Horton

Late holiday deals to enjoy the warm spell and the spring bank holiday


Wiltshire from 84pp1

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Stay three nights B&B at the four-star Blue Sea Marrakech Ryads Parc & Spa in Marrakech with flights from Luton on June 13. Call 0800 111 6292.


Devon for 2393

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Lisbon from 249pp4

A three-night room-only stay at the five-star Corinthia Hotel in the capital of Portugal. Flights from Stansted on July 4. Call 0800 083 6000.

Neapolitan Riviera from 297pp5

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Madeira from 362pp6

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Santorini from 381pp7

Relax in style on the beautiful beaches of this stunning Greek isle on this seven-night B&B Discount Holidays © holiday at the five-star Antinea Suites and Spa. Flights from Gatwick on May 24. Call 0871 474 3000.


Mauritius from 849pp8

Book by Tuesday for seven nights at the four-star Coin de Mire Attitude on the Indian Ocean island. Flights from Gatwick in June. Call 0344 493 0778.

Travel editor s pick of the week

Paphos from 425pp9

Seven nights half-board at the five-star Azia Resort & Spa. Gatwick flights on May 20.

Call 0844 412 5970.


  1. ^ Wiltshire from 84pp (www.greatlittlebreaks.com)
  2. ^ Marrakech from 107pp (www.lowcostholidays.com)
  3. ^ Devon for 239 (www.woolacombe.co.uk)
  4. ^ Lisbon from 249pp (www.lastminute.com)
  5. ^ Neapolitan Riviera from 297pp (www.easyjet.com)
  6. ^ Madeira from 362pp (www.firstchoice.co.uk)
  7. ^ Santorini from 381pp (www.onthebeach.co.uk)
  8. ^ Mauritius from 849pp (www.britishairways.com)
  9. ^ Paphos from 425pp (www.thomascook.com)

How Immigration And Terrorist Attacks Undermine The Euro


Single currency regions are transfer unions of money and people between less efficient and more efficient sub-regions. The Euro is no exception. Without these money transfers a single currency region like the Euro can not function. Here is why. Mass immigration and attacks provide opportunities for political parties with anti-Europe and anti-Euro agendas.

This will decrease the support for the transfer union and the Euro. When I grew up there was no Euro. Each time we went on vacation we had to go to the bank to get cash in Belgian or French francs or German Marks. We had the Dutch guilder. It was very different. We had a quarter worth 25 cents. We also had a dollar, equal to 2.5 guilder or 1.13 Euro, called “rijksdaalder”, literally “government dollar”.

Our original dollar, the “daalder” worth 1.5 guilder, had already been abolished in 1818. But some things were the same as with the Euro, only on a smaller scale. Like in any country we had well developed regions and less developed regions. Money and people went from less developed regions, for example natural gas city Groningen, to the well developed regions: the so-called Randstad, still one of the most competitive regions in the world.

Sign up for social security or move

To most of us that makes sense. Money searches the highest returns and therefore the best business climate and infrastructure. People look for the best prospects for their further life. I come from one of the less developed regions within the Netherlands.

After I graduated I had a simple choice. Either I could sign up for social security or I could move to another city, for example in the Randstad. A few of us did the first, but most of us including myself were excited to move. Of course money and people can not always flow in the same direction. If money always flows from underdeveloped regions to the Randstad then at some time there won’t be any money left in the underdeveloped regions. The same is true for people. So the government counterbalanced the Dutch economy with social security payments to those who choose to stay.

They spent money on infrastructure projects in for example Groningen. They also moved people, among others by moving government jobs. That wasn’t very successful. At least when I visit the supermarket where my parents live the average age of the customers is at least 30 years older than in Amsterdam. The transfer payments and the movement of jobs weren’t much of a problem for the rest of the Dutch population. What helped was that the regions were unified into one country already hundreds of years ago. What also helped was that one region contributed a lot to the economy by pumping up enormous amounts of natural gas.

How different is that in some other European countries. For instance in Belgium. Their solution is comparable with the US: have 2 states within one state. Another country with 2 regions, south and north, is Italy. Italy became unified only in the second half of the 19th century. After Italy switched to a single currency money and people started to flow from the crime and corruption plagued south to the more efficient north. There is probably more solidarity among the Italian population than within Belgium but less than that there is solidarity within the Netherlands.

In fact most European countries have problems similar to Italy. Even Germany has a less developed former East-Germany. Angela Merkel was lucky and got a great job, her brother less so.

Where would you invest, in Greece, or in the Netherlands?

Since the introduction of Euro more money and people flow from poorer European countries to countries like Germany and the Netherlands. Imagine someone who graduated in Greece. Where would you try to find a job? Or slightly different, if you were from say Macedonia or Bulgaria, and you were young and bright. And you had the choice between Greece and the Netherlands, which country would you choose? Before the internet it was difficult to find a job in a country like Germany, the UK or Netherlands. But now this is much easier.

And employers are more used to it as well. Likewise if you had a million euros what would be the best place to invest it? As a value investor I would first start searching for good investments in Greece. Preferably net-nets or low EV/EBIT stocks1. But most people are not value investors. They look for safer investments, that also have enjoyed a good momentum over the last couple of years. So they invest their money in the Netherlands (NYSEARCA:EWN2) or Germany (NYSEARCA:EWG3) and not in Greece (NYSEARCA:GREK4).

History repeats

So current transfer payments within the Euro region are comparable with the former transfer payments within the Netherlands, or Italy, or Germany, etc. The European authorities have few other options than counterbalancing the movements of money. So far the other countries have pumped about 300 billion euro into the Greek economy. So far without any success. All these billions caused the euro to stay weak, making for example the German economy more competitive. But the Greek economy did not get any better.

Not one-time payments but recurring payments

So far all these money transfers have been presented to the North-European citizens as one-time payments. The receiving country would use the money to restructure its economy. After having been cured it wouldn’t need extra money. I think only the payments to Ireland were really successful. The worst were the payments to Greece. I have no doubt that these payments will remain recurring for many years to come. Will the North-European citizens understand the need for these recurring payments? I don’t think so.

It doesn’t help that the cultural differences within Europe are huge. We also have our own stereotyped impressions. Here is one of mine, from over 20 years ago. When going to college I remember talking to a student classical acheology. He was fluent in Greek and went there often to find stuff from thousands of years ago. According to his first hand experience most Greeks were very lazy.

40 hours per week? No way!

Later I met many very hard working Greeks, although only in the Netherlands and in the US, and not one lazy one. Still when thinking about this his remarks were the first thing I remembered.

What could cause the payments to stop

Let me first mention a less known but very big difference between Europe and countries like the US, Australia, Canada and Russia. This is the population density. In the US, for example, live less than 35 people per square kilometer. In the Netherlands the number is 407. See also the daily population count update5. While the Netherlands is very densely populated other European countries are also densely populated.

Now this year there is an interesting development in Europe. And that is the migration of enormous numbers of refugees from the Middle East to Europe. Well, they don’t go to Europe really, most have Germany or the Netherlands as their destination in mind. While the sun is bright and shining in Greece, they won’t stay there for long. Of course this is not the first time so many refugees reached Europe. For instance in the 1990-ties the Netherlands allowed a million immigrants on a population of about 15 million. The existing population did not like that.

“Sinterklaas” should use a less polluting boat

A good question is of course how many people can live on a square kilometer. I think it can be much more than the 407 in the Netherlands. But then we should adapt. For example I have nothing against motorcycles. As long as they don’t make more noise than necessary, like the silent BMW’s our police drives. But I don’t like certain Harley-Davidsons (NYSE:HOG6) motorcycles and alike because they can be extremely noisy. To me they seem to be designed more as intimidation tools for criminal gangs than to go from A to B. We shouldn’t drive in diesel cars either, and neither on extremely noisy and polluting scooters with 2-stroke engines and so on. Instead we should better use land by building higher, work closer to home, and do something about noise and pollution from airplanes and other traffic.

Switching off polluting coal plants and increasing electricity production from natural gas helps as well. And why does our Sinterklaas (Santa Claus) need a steam boat? It’s windy enough for sailing, and otherwise there is always muscle power. If he can’t do it alone there are plenty of assistants willing to help him.

(click to enlarge)How Immigration And Terrorist Attacks Undermine The Euro

Despite large fumes when he arrives Sinterklaas is more often accused of racism than of polluting.

That won’t happen, at least not any time soon. Though the political establishment will welcome the refugees (Merkel: wir schaffen das) I suppose the silent North-European majority is strongly against a new immigration wave. This new immigration wave will change the political landscape in Northern-Europe. The recent attacks in Paris (129 casualties) will have impact as well.

Anti-immigration parties might win elections. But they are also against these recurring payments to countries like Greece. At the same time some Southern European countries seems to be tired of more economic reforms. See also here7. So within Europe the solidarity between north and south will get under pressure. Future payments to Greece and other countries are not as likely as they were in the past. When these payments can’t be made anymore the Euro will fall apart.

How can investors use these developments?

Even though we know the Euro will eventually fall apart it is difficult to speculate on it. Going long (for example with FXE8 or ERO9) or short (NYSEARCA:EUFX10) doesn’t make much sense when we don’t know when exactly the Euro will move. I’m not a currency trader and there are many possible events impacting the Euro. In the short term the current quantitative easing already sets the Euro under pressure. Elections are also events for considering a short position. Elections are often followed by policy changes. Analyzing the probable policy changes after elections is worth it. Especially the policy changes triggered by the continuing immigration described above.

Which elections could present us with surprises? For example elections in problem countries like Spain (20 December 2015) and Italy. Or elections in big Euro countries like France (April/May 2017), Germany (H2 2017) or again Italy (before 23 May 2018). Also the next Dutch election is before April 2017. Geert Wilders anti-immigration and anti-Euro party is ahead in the polls. So if you would like to bet against the euro then 2017/2018 could present great opportunities.


  1. ^ net-nets or low EV/EBIT stocks (seekingalpha.com)
  2. ^ iShares MSCI Netherlands ETF (seekingalpha.com)
  3. ^ iShares MSCI Germany ETF (seekingalpha.com)
  4. ^ Global X FTSE Greece 20 ETF (seekingalpha.com)
  5. ^ population count update (www.cbs.nl)
  6. ^ Harley-Davidson, Inc. (seekingalpha.com)
  7. ^ here (seekingalpha.com)
  8. ^ CurrencyShares Euro Trust ETF (seekingalpha.com)
  9. ^ iPath EUR/USD Exchange Rate ETN (seekingalpha.com)
  10. ^ ProShares Short Euro ETF (seekingalpha.com)

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