Off The British Charts, One Year After Brexit

Flags and bridges in Taipei
Where are the lads?
Arnaud de La Grange

PARIS — Donald Tusk had a dream: The United Kingdom was staying in the European Union — For him, this vision isn't just a pure imaginary digression. The European Council president even appealed to the words of one of Britain's most famous voices, quoting John Lennon's "Imagine": "You may say I'm a dreamer, but I'm not the only one."

Not the only one to dream? Probably not, judging by the wave of recent statements. In his interview this week to Le Figaro, along with seven other European newspapers, French President Emmanuel Macron said "the door is open until the moment you walk through it." In Berlin, meanwhile, German officials think "it would be great if they were to reverse the Brexit decision." One wonders if Europeans truly believe a U-turn is possible or whether they're just being mischievous, pleased to have the chance to tease British Prime Minister Theresa May, who for a long time appeared so self-confident…

Could it be that something is rotten in the state of Brexit? The British people voted in favor of leaving the EU for fear of losing control over their destiny, but now it seems their leaders are losing control of the machine. The impetus towards the open sea was shattered by May's disastrous electoral gamble. And as far as the economy goes, alarm signals are starting to sound. Opinion polls show that more and more Brits are unsure, even though the majority still thinks that things should go on as decided.

The fog shouldn't hinder Europeans

So, will Brexit happen? Will it be hard, semi-hard, soft, semi-soft? It's been one year and nobody knows where we're headed, now even less than before. The fog shouldn't hinder Europeans from seeing their own path. And from taking action. Opinion polls show that the British wanderings have reinforced the European peoples' attachment to the continental Union, when one year ago, they were increasingly falling out of love with it, raising fears of a domino effect.

Emmanuel Macron and his peers shouldn't let the moment pass. If they settle for the self-satisfied preachifying, if they let the bureaucratic monster tie its napkin, it will be a disaster. And we won't be singing "Imagine" anymore, but another British classic instead: "(I Can't Get No) Satisfaction…"

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Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum


SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.

It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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