Electricity link loan would bankrupt Sark
THERE are some on Sark who would like Sark to come under Guernsey so that Sark could join the Guernsey system of Social Security. Some powerful members of Chief Pleas have publicly said as much. Perhaps this would suit Whitehall too. But it is not, as far as I am aware, what either Guernsey or the majority of the population of Sark wants.
I am not sure if Guernsey is seriously contemplating lending Sark the money to fund the proposed £6m. electricity link or not. And acquiring the Sark Electricity Company at the market price will cost millions on top of that – unless, of course, Chief Pleas expect to take the company from its current shareholders, which perhaps I should not put past them.
Having run the island in credit for 450 years, this would put Sark in debt to a level, as a proportion of GDP, comparable to that of Greece and other bankrupt nations which will never be able to repay their debts.
Surely no sane person honestly believes that Sark would ever be able to pay such a loan back – no more than Greek politicians ever expected to pay their international bailout 'loan' back when they took it on.
In 1844, Seigneur Ernest Le Pelley took on a mortgage of £4,000 for his silver mine project, which resulted in the jurisdiction's previous major bankruptcy event. £4,000 in those days meant 4,000lb of sterling (92.5% pure) silver – at today's prices, 4,000lb of 99.9% pure silver costs, in round figures, £740,000.
The proposed level of debt is, in real terms, eight times greater than that taken on by Seigneur Le Pelley, while Sark's population is about two thirds of what it was then, and rapidly declining.
Sark's current financial woes were caused in large part by Chief Pleas taking on a £700,000 loan to buy a boat for Sark Shipping which the island did not need, which has resulted in endless bailouts of that company which Sark is unable to cope with. How will it cope with a £6m. loan to a power company it will then have to continuously bail out to an eight-times greater tune?
If it lends this money to Sark, Guernsey will be sleepwalking into a place where it does not want to go consciously – to a place where it will be, as a creditor, involved in Sark's financial woes and will necessarily have to become involved in its bailout – just as Germany and the EU have become responsible for Greece.
TOMAZ SLIVNIK,
La Pavlaison,
Sark.
