11/11/2012

Geneva wealth

If riches increase, set not your heart upon them (Psalm 62:10).


This quote from the Holy Bible was included in the 11 November Service of Remembrance and Reconciliation service at Holy Trinity Service, Geneva. It set me thinking on how this can be taken in Geneva, in particular as regards the contrast between our riches and the relative poverty in much of Europe, to which more and more people fly.

In the previous meeting of the Geneva Airport Environment Commission, 24 September, the Director of the airport announced that passenger traffic had increased by 6.1% in the first 8 months of this year, compared to the corresponding period in 2011. This compared to the European average (at end June) of 2.3%. This was explained as being due to the bad economic situation in certain countries.

One of these poor countries is certainly Spain, where Iberia has just announced the suppression of 4,500 jobs, thus worsening an already catastrophic unemployment problem there. With other countries in that region, to which there are many cheap flights from Geneva, also suffering, it is instructive to try to understand why, especially since the population in these countries in difficulty is unlikely to have spare money to fly here.

So is the increase in flying a case of people trying to enjoy themselves while they still can? Will the increase continue in the winter seasons, for which ski holidays (in particular from the United Kingdom) are a major part of the Geneva airport and Swiss economy. Will the Brits keep coming to Swiss ski resorts, or will the high value of the Swiss Franc drive them elsewhere?

My feeling is that Geneva is becoming a rich city almost surrounded by regions much less affluent. Part of this is certainly due to some commercial enterprises coming (near) to Geneva for fiscal reasons, whilst another part might possibly be people who have assets in Swiss banks, wanting to use them for air travel (rather than having them repatriated to a home country which would tax them).

Can this continual increase in air travel to and from Geneva continue indefinitely? Recently the UBS forecasters warned that the conditions for the possible collapse of a property bubble here are close to being reached. Could a collapse seriously affect air travel? Even in Geneva, the unemployment figures are rising, and are the worst in Switzerland. Announcements of job suppression in Switzerland in general continue to happen: after UBS we now have Credit Suisse announcing lay-offs.

Even if economic problems, including the possible collapse of property prices, can be avoided in Geneva, there are events on a much wider scale that could affect us. The short-term ones might include at least one European country pulling out of the Euro or the new Obama administration failing to strike a deal with hard-line "Tea Party" Republiucans to avoid the fiscal cliff. Then there are geo-political events which might overtake us. In the Middle East, the Syrian situation is a powder keg waiting to explode, whilst the situation with Iran is potentially even worse. In the background is also a possible nuclear conflict between India and Pakistan. Finally, there is the long-term catastrophe scenario due to climate change, which could go well beyond the recent Sandy storm in the USA. Any of these would bring to mind the oft-quoted remark of Sir Edward Grey, in 1914 at the outbreak of the war which was the origin of Remembrance Day

"The lights are going out all over Europe and I doubt we will see them go on again in our lifetime"

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