Jutland Briefing // Week 9

Money makes the world goes round – and whether it’s Aarhus University or Haderslev Kommune, Jutland just doesn’t seem to have enough of it. Fortunately, Jutland Briefing explains all. Pick a picture to get started:

 

by Sam Richardson @SamRich91. Photos: Sam Richardson and Aina Vidal

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On the map

Haderslev

…which is taking the drastic step of suing a bank. It’s not the first time the southwest-Jutland town has been featured in Jutland Briefing; last week we discussed its division over whether to build a local mosque. This time round, Haderslev municipality is suing Nordea bank for 98 million kronor, citing bad financial advice given by the bank from 2007-2012. During those years the municipal debt increased from 600 to 800 million kronor, and Haderslev also claim that badly-written agreements concealed large hidden costs.

What makes this story interesting to foreigners – or, for that matter, anyone outside of banking, is the relative lack of interest surrounding the case. In the much of the western world, since the 2008 financial crash, attacking bankers has become phenomenally popular – ‘banker-bashing’ as it’s known in the UK. Haderslev’s lawsuit made headlines on Friday, but has since then quickly receded to the page of specialist business and finance papers, despite the news that many municipalities want to follow their example; many more millions of taxpayers’ money will be fought over in the courts.

It seems that Danes just don’t care – whilst they might regard banks with a degree of cynicism (as with many things), the financial services industry hasn’t become a target for abuse as it has abroad. One could suggest that a strong manufacturing industry means that Danes don’t depend quite as much on financial services jobs, or that Denmark’s financial institutions are better at public relations than their foreign counterparts. Yet given Danes have one of the highest levels of personal debt on the planet, this lack of interest could reflect a general lack of financial awareness and education. In the most satisfied country in the world, it seems that ignorance is indeed bliss.

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A talking point

Denmark’s biggest university is about to get a lot smaller. On Monday, Tuesday and Wednesday 197 employees at Aarhus University (AU) will be made redundant, whilst 162 have accepted voluntary redundancy, in an attempt to save 225 million kronor from the university’s budget.

They can’t claim they hadn’t seen it coming – the decision was taken in November – but many remain confused at why an apparently healthy university has taken such drastic steps. In all other respects AU is growing – there were 7000 more students in 2012 than in 2003 – and building work continues across campus. But, as Dean of Arts Mette Thunø told staff in a letter about the cuts last November, “the time has come to apply the brakes”. She blamed the decision on a reduction in government funding; the new 3-year budgets introduced by the Danish Finance Act reduced funding for students by 2% per year. The university is keen to present the situation as a ‘slowdown’; Rector Bech Nielsen stated that “our revenues are stagnating, while our costs continue to increase. So we’ll have a permanent annual budget deficit if we don’t do something about this,”   But did they really need to sack so many staff?

To those who see universities as hopelessly extravagant in their spending, it should be pointed out that many small cost-cutting measures have already been made, for things as trivial as making students pay for printing. And, unsurprisingly, administration was the area pinpointed by the Rector’s statement for the greatest budget cuts. The Rector might have refused to make administration a ‘scapegoat’, but the figures suggest otherwise; administration faces a 10% cut, three times more than the average the university need to save. Cutting bureaucrats and ‘red tape’ is always a safe choice – almost all the politicians we interviewed for last year’s municipal elections suggested it – albeit not always the best choice. Services like the International Office and Housing Office are absolutely essential if the university is to continue to attract international students and staff, who need the support these departments provide.

To borrow a famous phrase, there’s no such thing as a victimless cut. The university has certainly been guilty of overconfidence in its drive for rapid expansion in the face of a government determined to reduce expenditure whatever the cost. Now they are just as guilty of under-confidence; they should be searching for new sources of revenue rather than reversing the hard work of many years. Universities in the USA and UK now receive a large proportion of their income from private and corporate donations; grateful and successful alumni often wish for others to follow in their footsteps. Whilst the Danish system is very different, it’s clear that Aarhus University could be far more innovative in getting funding. Aarhus University could become one of Europe’s best universities, but it can’t let the whims of the Danish government hold it back.

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And why we should look again…at Aarhus airport

Airports, and specifically Aarhus airport, has undoubtedly been on Jutland Station‘s mind over the past two months. The current airport, as we’ve reported, creates enormous losses for the municipalities, and with the agreement for rail upgrades finalised in Janurary, is increasingly pointless altogether. Whether to allocate more money is currently being discussed in Aarhus city council.

Now it appears the airport will need to be privatised by 2024. New EU laws agreed on Thursday stipulate that regional airports like Aarhus’ with fewer then three million passengers can only receive public funds for 10 years, after which time they have to cover their own costs. Conservative and Liberal Alliance members will undoubtedly be pleased by the news, given the 17 million kronor the airport cost its owners Aarhus, Randers, Favrskov and Norddjurs and Syddjurs Kommunes in 2013.

Ten years is a long time in business and politics, but perhaps not long enough for Aarhus airport. Any private business faced with the challenges facing the airport would hardly do better; an ageing and small building, terrible location in a forest 50 minutes from the city (with minimal public transport) and a large and established competitor in Billund Airport. Ten years from now the situation will if anything be worse, as Billund gets a rail connection and Aarhus-Copenhagen trains will take just two hours. Privatisation won’t solve these problems, it’ll just make them someone else’s problem.

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*translations from the original Danish, so mistakes may have occurred – contact the editors

Sam Richardson is a journalism student and freelancer, and Society Editor of Jutland Station. He’s worked at the BBC, The Times, Daily Telegraph and Islington Gazette newspapers, and studied History at Oxford University. You can see his portfolio here:  http://flip.it/CNH5t