One of Europe’s smaller principalities and an economy too small to insulate from the problems of neighbouring nations, Ruritania has struggled to meet the challenge of the Eurozone crisis. While not an EU member, the adoption of the single currency in 2002 was a measure necessary for the business of daily life.
The tiny nation, drawing upon its medieval city state tradition, it is presided over by a Burgermeister since the overthrow of the monarchy after the Second World War. The Burgerhaus, its national assembly, recently voted to ratify the European financial stability treaty, a treaty that will place severe constraints upon the capacity of the country’s administration to find ways to rebuild an economy that has suffered a sharp recession.
Mining, the traditional industry, has declined as extraction costs have risen and environmental restrictions have increased. A series of European Union directives have closed markets once open to Ruritanian metals. Attempting to reinvent itself as an international financial centre in the 1980s, two decades of company registrations and inflow of funds came to a dramatic end in 2008.
A traditional, conservative people, ordinary Ruritanians have struggled to come to terms with financial and economic news stories that belong more to the realm of some fictional land than to places where people do business in the real world.
‘How can men who have bankrupted their countries walk away with millions?’ asks one woman in the city’s main square. ‘Making up money and lending it to people who cannot pay it back: this is the stuff of children’s story books’.
‘The Ruritanian administration plan to meet the challenges with resourcefulness’, says their finance minister. ‘We have had to make plans for deep spending cuts. One third of pensions and benefits will no longer be paid in cash – instead there will be commerce vouchers. Traders will then use these to reduce their liability for charges and taxation. We shall be able to show that we have balanced our budget without causing hardship’.
‘Economic growth has been a great problem, but we shall increase our national turnover by the payment premium. Each product will be bought twice, if not more. Someone will go into a shop and buy, say, a washing machine. They will hand over payment, and this will be recorded. Then the salesman will say, ‘that’s a fine washing machine, can I buy it back?’ And the person will sell it to them and the transaction will be recorded. Then they will say, ‘I would like to buy that washing machine’, and they will pay for it’. Our national income will escalate rapidly. Of course, we shall be no better off, but the statisticians will be pleased’.
When challenged about the economic policies at a recent press briefing, the minister responded with a question, ‘what logic is there that counts the sale of pornography through satellite television as part of national income, but attaches no value to those who stay at home to raise their children? Only in a fantasy land would porn, alcohol and gambling be counted as more important than home life’.
Ruritanian economics have found little sympathy in countries where bankers and financiers are held in high esteem.