In this issue:

Italy To Withdraw Troops from Iraq; Ukraine Follows Suit

Rumblings of a Grand Coalition Government in Germany

Journalist Echoes BueSo in Defending 'Social State'

Cheminade Calls for a 'No' to the European Constitution

Schroeder Fantasy: Calls for Growth and Austerity

From Volume 4, Issue Number 12 of EIR Online, Published Mar. 22, 2005

Western European News Digest

Italy To Withdraw Troops from Iraq; Ukraine Follows Suit

Italian Prime Minister Silvio Berlusconi, who has made clear that he intends to seek re-election in 2006, pointed to rising public discontent with Italy's presence in Iraq, especially following the recent checkpoint tragedy in which an Italian secret service agent, Nicola Calipari, was killed. "I've spoken about it with British Prime Minister Tony Blair, and it's the public opinion of our countries that expects this decision," he said.

Berlusconi told ANSA news agency, "In September, we will begin a progressive reduction of the number of our soldiers in Iraq," adding the caveat that the withdrawal would be tied to the Iraqis being able to secure Iraq.

Italian deputies voted by a large majority March 15 to maintain Italy's 3,000 troops in Iraq for another six months, reflecting the approval of the Senate in February. Currently Italy has the third-largest troop deployment in Iraq, after the U.S. and Britain.

The following day, March 16, after a call from President Bush, Berlusconi tried to backtrack, emphasizing that the withdrawal is contingent on successful training of Iraqi troops. The backtrack was widely attacked in Italy as a capitulation to the U.S., at a time of intense anger in Italy over the U.S. military killing of an Italian intelligence official in Iraq.

Rumblings of a Grand Coalition Government in Germany

The former Christian Democratic Governor of Baden-Wuerttemberg, Lothar Spaeth, expects a grand coalition government to emerge in Germany. At a semi-official event of 30 people, Spaeth, who in 1990, was chairman of Jenoptik, the biggest optical company in former East Germany, forecast a grand coalition government between the Social Democrats (SPD) and Christian Democrats (CDU). He expressed a growing assessment, that with the Greens in government, it is completely impossible to solve Germany's economic crisis.

Therefore, he expects a revolt within the SPD labor faction against the Greens, which will erupt around the Greens' so-called "anti-discrimination law," which sets hiring quotas for new employees among minorities (e.g., homosexuals, foreigners, etc.). This will be rejected by the SPD, which may lead to the rupture of the red-green coalition.

In general, Spaeth reflects the saner view inside Germany's elite. "Can we allow reduction of ancillary expenses for the wages [i.e., withholdings by both employers and employees for benefits]?" Spaeth asked, rhetorically. "No, we can't, because if we do that, we would destroy our public pension system!" As for the solution, Spaeth said, "We have to double the productive profit generation per capita, and this is only possible with a massive investment in science and technology." He strongly supported nuclear energy and the development of new raw materials ("We can replace any working material today by something else!")—also he was very clearly in favor of a strategic partnership with Russia, China, and especially the Islamic world, praising Schroeder's trip to the Arabian Peninsula. In this context he wants Turkey in the EU—and very emphatically he argued against any "clash of civilization" policy, accusing the Bush Administration of a new Crusade, which will ultimately bring the West down.

Journalist Echoes BueSo in Defending 'Social State'

In a politically well-calculated move, one week before Chancellor Helmut Schroeder's unemployment summit, Heribert Prantl of Sueddeutsche Zeitung released a book in Berlin March 14, titled, The Destruction of Social Justice.

The author strongly defends Article 20 of the German Grundgesetz (Constitution), which declares the nation to be a social state; and Article 14.2, which declares private property to be an obligation to serve the general welfare. This open defense of the Constitution is especially important in light of Olaf Henkels, Arnulf Barings, and other German neoconservatives' ongoing attacks on the German Constitution. Up to the present time only the newspaper Neue Solidaritaet, the paper of the party, Buergerrechtsbewegung Solidaritaet (BueSo), headed by Helga Zepp-LaRouche, wife of Lyndon LaRouche, the former 2004 Democratic presidential primary candidate, has made this argument.

The book was presented by a judge from the constitutional court, who in 2004, had questioned the constitutionality of the Hartz IV austerity laws. A new front line is opened up with this, in defense of the social state and the Constitution.

Cheminade Calls for a 'No' to the European Constitution

Jacques Cheminade, head of the LaRouche Movement in France (Solidarité and Progres), issued a statement at the beginning of March, which is being widely distributed, on why his party is resolutely against the proposed European Constitution, which would impose a financial dictatorship over the sovereign nations of Europe.

Among the reasons outlined by Cheminade are:

1) Under the proposed Constitution, Europe would be subject to free competition, i.e. a financial dictatorship.

2) Reference to a "social market economy" is replaced by "an open market economy with free competition." The word "market" appears 78 times, "competition" 27 times, and "social market economy" only once!

3) The European Central Bank System, led by the European Central Bank, has one and only one objective: "price stability." It is forbidden for any national government or European institution to try to influence the ECB. This ushers in a financial dictatorship, free from any political overview or control by the citizens.

4) It eliminates "restrictions on both movement of capital and payments between member States and between member States and third countries." The free flow of capital, i.e., the law of the jungle, is protected by the Constitution.

5) The principle according to which the European budget must be balanced is made perpetual. Public stimuli are banned!

6) Public services and utilities are subject to the primacy of the "rules on competition." Without state aid, public services will have to finance their own costs; to survive, they will have to increase prices or reduce their offer. That means social austerity.

7) Concerning defense, mutual aid between member States is subordinated to "commitments under NATO. The purpose of this is not to defend Europe, but to allow interventions "outside the Union."

The statement of Cheminade then presents his proposals for the future of the European Union, notably investments in great infrastructure projects and fundamental research, abolition of at least some articles of the Maastricht Treaty, national banking systems for the respective member States, and a New Bretton Woods system.

Schroeder Fantasy: Calls for Growth and Austerity

The special address that Chancellor Gerhard Schroeder delivered to the German Parliament on March 17 contained positive aspects, such as more loans, at lower interest rates, for the Mittelstand (small and medium-size industries), and an infrastructure construction program with the main emphasis on highways. Schroeder also made reference to the deep shock that is still felt by many over the immense loss of money in the New Market (high-tech) crash two years ago, and warned of the drastic effects which the oil price increase is having.

But the Chancellor unfortunately defined Agenda 2010 as the framework for his program and defended budget-cutting reforms such as Hartz IV as necessary and positive. The German economy has begun its recovery, Schroeder claimed, pointing to the export boom, adding that he categorically opposes people painting the economy in dark colors. The official record-high in unemployment of 5.2 million jobless, is, naturally, reason for deep concern, he said, but rather than scrapping the austerity program associated with Hartz IV, he offered a series of slight changes to alleviate some of the pain.

In a first response to the Chancellor's Bundestag speech, Juergen Peters, chairman of the metal workers union (Germany's largest labor union), said there are some meaningful points in the speech, like the measures to create incentives for infrastructure, the housing sector, and new concessions for the long-term unemployed.

But, Peters added, the scope of the measures is much too small: Instead of the Chancellor's 2 billion euro program, Germany needs to spend 20 billion, annually, over a period of several years. Peters said the funding should mainly be organized through the Kreditanstalt fuer Wiederaufbau, with longer-term, low-interest loans, and the main emphasis should be put on municipal and other public infrastructure projects.

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