From Volume 4, Issue Number 37 of EIR Online, Published Sept. 13, 2005

Western European News Digest

German Media Condemns Bush's Mangling of Katrina Disaster

A review of German media on Bush's botching the Katrina crisis declares Bush as having "Disqualified himself for office." "In Germany, no politician could stay in office for much longer, had he acted like Bush." These comments, which reflect what many Christian Democrats think, were made Sept. 7 by Baden-Wuerttemberg State Social Affairs Minister Andreas Renner at an election campaign event.

The media in Germany instantly attacked Renner because he used the term, "he should be shot down" (der gehoert abgeschossen). Refusing to capitulate to demands for his resignation, Renner said he was admittedly "boiling over, when we talked about New Orleans," but that he just used a well-known popular saying which means to force someone out. Renner added that he knows he just said what many in Germany think about Bush. (This is definitely true also for the CDU, and this implies a factor of nemesis which will strike, when the time comes, also against CDU neo-con Chancellor candidate Angela Merkel).

Italian Economist Endorses Zepp-LaRouche's Candidacy

Italian economist Nino Galloni, a supporter of LaRouche's New Bretton Woods proposal, and former General Director of the Italian Labor Ministry, endorsed Helga Zepp-LaRouche's election campaign and program on Sept. 5. Galloni, who is now the auditor in the largest public employees pension fund (INPDAP) in Rome, wrote: "I am following with deep interest the evolution of the German election campaign and I share fully the program of Helga Zepp-LaRouche. In substance, the Maastricht agreements are blocking Europe because they were imposed, ignoring the fact that, when the economy stagnates, and there is no advantage to private interests in promoting large investments, it is necessary to launch productive state investments, also through the creation of new debt. I do not believe that the euro will have a future if the monetary sovereignty is not given back to the representatives of the citizens."

German Financial Times Announces Death of 'Swedish Model'

Whereas the establishment parties in Germany keep pushing their own, only slightly different, variants of the "Swedish Model," various German media, notably the German edition of the Financial Times Sept. 7, report on the worsening economic situation in Sweden.

A massive wave of layoffs in big industrial firms like SAAB (owned by General Motors) and SCA (paper) has already caused as much new unemployment during the first six months of 2005, as during the entire year 2004. With an unemployment figure of 1.6 million, one out of every four Swedes of working age is without a job. The Central Bank reports that foreign direct investments have dropped to zero, during the first six months of 2005, and domestic investments are down.

In this situation, the conservative opposition parties have no better idea, other than calling for more cuts in the social welfare and labor market budgets, and more administrative pressure on long-term jobless to accept deeper payment cuts or take minimum-wage "jobs."

In what mirrors the development in Germany, the governing Social Democrats are almost certain to lose the next national elections, scheduled for September 2006, if they don't turn things around and stop the drastic loss of confidence.

German Catholic Labor Movement Attacks Kirchhof Model

In sharp contrast to other sections of the Christian Democrats which should have protested, but did not, against the Merkel-Kirchhof plan (CDU Chancellor candidate Angela Merkel and her neo-con economic adviser Paul Kirchhof) for a flat tax, the Catholic Labor Movement (KAB) did protest. KAB national chairwoman Birgit Zenker said in an interview with her organization's newsletter, that Kirchhof's model of the capital-market-based pension system is "a hostage of the conjunctural ups and downs of the economy, and of the speculations with stock prices on the financial markets. A [new] Sept. 11 with all the disastrous after-shocks on the world stock markets, would put in question the regular earnings from revenues. The American funds just recently had that experience."

The problem is not, as Kirchhof claims, the labor costs, but "the decline in productive work volume" and certain burdens of German reunification that were laid on the social security funds, but especially the problem is that "more money is made today from rent, monetary speculation, and stock market operations, than from productive work," Zenker said.

"Privatization [of social security] as called for by the member of the management-tied Initiative for a New Social Market Economy, Paul Kirchhof ... desolidarizes the society and widens the divide."

Neo-Con Evans-Pritchard Calls For 'Anglo-German Condominium'

In an op-ed in the Telegraph Sept. 5, neo-con Ambrose Evans-Pritchard, which assumes Angela Merkel and Paul Kirchhof will take over in Berlin, wrote that alleged German "economic success" under the euro regime, will break the euro, forcing out Italy and, eventually, even France. Evans-Pritchard claims that Germany "has overtaken America to become the world's biggest single exporter," with a huge trade surplus bigger than China, Japan and India combined have, and corporate profits of over 33% of national income.

Britain should learn from this "great Teutonic rebound," Evans-Pritchard wrote. This includes the great asset buy-out by George Soros and "fellow hedge funders." Other EU nations, led by Germany, "have all starved the public sector over the past decade, while Britain swells ever fatter," and Britain "could soon be Europe's sick man again," choked by big government. But France is also "sick," and Jacques Chirac "is drawing up lists of strategic sectors to be defended against capitalist predators." But, claims Evans-Pritchard, "this sacred model" of state protection, "is bust."

"It is hard to see how the EU's Franco-German axis can survive as the two wheels begin to spin apart." Germany is achieving "higher productivity"; German firms are "sweeping southern Europe like conquering Goths. A senior economist at the European Commission told me that German success would ultimately break the euro itself, starting with the ejection of Italy. But France may not be spared either."

If the Franco-German axis falls apart, the "task of holding Europe together may now fall to Britain, since no other EU state can possibly do it. Or Britain could opt for the entirely different strategy of Anglo-German condominium, creating a fresh EU axis, this time run on free-trading, pro-American lines—and let the Latin chips fall where they may. Unwise perhaps, but very tempting."

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