From Volume 4, Issue Number 40 of EIR Online, Published Oct. 4, 2005

Western European News Digest

UK Treasurer Exaggerated Growth Figures

Chancellor of the Exchequer Gordon Brown has admitted that he totally exaggerated British economic growth figures. Brown had claimed there would be 3%-3.5% growth, and now has dropped that to 2%. Brown is erroneously blaming high oil prices, rather than the huge financial bubbles, for the problem. Just six months ago, Brown had called the IMF "plain wrong" for predicting low growth. Brown told the IMF finance ministers' meeting that the "world is coming to terms with an oil shock as big as that in the 1970s. It will be seen in all the major industrialized economies over the next few months." Brown absurdly claimed that there is no inflation problem in Britain.

But other economists in Britain are at least pointing to the real problem: the vast debt bubble. HSBC economist John Butler said oil is not the fundamental problem now, but that "growth has been slower is because consumers have reacted to slower house prices and the higher levels of debt." York University Prof. Peter Spencer, economic adviser to the Ernst Item Club forecast unit, said: "It is the consumer slowdown taken with oil prices that exposes the serious weakness in the British economy, particularly in the industrial and export sectors. The real question is that oil is just exposing some fundamental weaknesses that have built up over the past eight years." Tory "Shadow Chancellor" George Osborne, responded that: "Gordon Brown was living in a dream world.... He may blame oil prices but that is only part of the story. Consumer confidence is fragile, retail sales are falling, investment is weak and the public finances are in a complete mess."

Blair Calls for 'Permanent Revolution'

British Prime Minister Tony Blair's speech to the Labour Party Sept. 28 called for "permanent revolution," as one commentator wrote (only half joking). Almost every other word out of Blair's mouth was "change" (unless it was "values" or "progressive"); the speech was titled: "We are the change-makers." "New Labour," Blair asserted, "was a fundamental re-casting of progressive politics." (This is the mantra of the Baby-Boomer generation in Britain.)

Blair asserted his neo-con outlook by saying that since the New Labour victory in 1997, "we have won the battle of values. The age we live in is democratic not deferential," implying, you can attack any nation you label "undemocratic."

Blair asserted the inevitability of "globalization," saying "I hear people say we have to stop and debate globalization. You might as well debate whether autumn should follow summer." And he even went beyond the "end of history," to assert that the "character of this changing world is indifferent to tradition.... It has no custom and practice."

Blair Reasserts Commitment to Iraq War

In his Labour Party convention speech Sept. 28, Tony Blair refused to give any suggestion of withdrawal from the Iraq war, and asserted that the "fight behind the standard of democracy in Afghanistan or Iraq or Kosovo or Sierra Leone [i.e., regime change] ... is a progressive cause."

Chirac Coordinating with Rice on Lebanon/Syria Policy

A prominent French general recently told EIR that he is convinced that France and the other members of the European troika (Germany and Britain) are not out to provoke a war with Iran, but are under pressure from the majority of EU countries who are far more hostile to the new Iranian regime. The general also reported, with some concern, that there is tight U.S.-French coordination on Lebanon/Syria. The general said that initially, French President Jacques Chirac had been supportive of Syrian President Bashar Assad, but his stalling on pulling out of Lebanon, and then the Hariri assassination, set Chirac against the Syrian regime. The U.S.-French ties are maintained directly by Chirac and U.S. Secretary of State Condoleezza Rice, through Chirac's most trusted diplomatic spokesman, Maurice Gourdault-Montagne.

German TV Celebrity Likens Merkel to Hitler

Telling about the deep discontent with Merkel among Germans in general, and Christian Democrats in particular, is the "Heck affair": At a reception for this year's ceremony for German television's music awards Sept. 24, Dieter Thomas Heck, a longtime prominent entertainer and interviewer, and a 50-year member of the CDU party, said that Merkel personally is to blame for her defeat on Sept. 18:

"Most of you know my political views. My chairwoman is Angela Merkel. She failed in the election, because she made a decisive mistake—she always talked about I, never about we... In the last century, there once was a man who only talked about I, in politics. And that ended in a disaster."

Heck's remarks produced a shocked response, and he has since apologized; but that he did say it bespeaks the mood in the CDU establishment, as not being friendly towards Merkel.

Organizers Optimistic About Dresden Housing Referendum

Organizers of the referendum in defense of the WOBA (German housing authority) and its 51,000 municipally-owned flats in Dresden, are optimistic that the required 63,000 signatures will be gathered in the next two months.

A spokesman for the referendum group told this news service Sept. 27, that their optimism is based on the fact that "the election [Sept. 18] showed that, for market-radical ideas, there simply is no majority." The WOBA struggle has a pilot-project character, as it will "help to build a line of defense against the locusts, on a national scale. If we resist, many other cities will do so, too."

The source said that defending municipal housing is crucial, because it is an important aspect of the common good concept that municipalities have reserves in housing, so that they can provide citizens with low incomes with flats at affordable rents. "If we sold the WOBA, the city would keep no more than 500 flats, most of them inhabitable, and the municipal housing sector would be gone, completely."

Locust Funds Posed to Devour Dresden Housing

Several sources in Dresden, notably among Social Democrats and in the tenants association, have pointed to the heavy, aggressive interest shown by the U.S. private equity fund, Cerberus, in the full takeover of the WOBA. Two other big private equity funds, the U.S. fund Fortress and the British Terra Firma group, are interested, as well.

The latter's Deutsche Annington subsidiary company, several months ago, bought 145,000 flats from Viterra, the real estate branch of the German energy giant, E.on.

Cerberus, which also bought a good part of the former municipal housing sector of Berlin, otherwise specializes in eating up Mittelstand firms, whose debt it buys up from the creditor banks, only to approach the debtor firms then, with the ultimative demand to enter a brutal streamlining process—i.e., to turn them around for sale to yet another fund.

German Tenants' Group Joins Dresden Housing Fight

In what has been presented as a "campaign of signal character for the national housing situation," leaders of the German tenants association Deutscher Mieterbund will deploy to Dresden, in the coming days and weeks, to actively support the referendum against the privatization of the WOBA, there.

Franz-Joseph Rips, president of the Mieterbund, said that "greedy [financial] locusts are out to get control of the municipal housing sector in Germany, with enormous capital resources deployed." A defeat of the locust takeover attempt in Dresden is crucial, Rips said, because that would send out a strong message to the rest of the country that the interests of the tenants are not at disposal, but will and can be defended.

In a discussion with this news service several weeks ago, Rips had said that about 20 billion euros are in the war chest of international hedge and equity funds, for the takeover of the municipal housing sector in Germany.

Polish Elections Sweep Out Post-Communist Leaders

In reaction to the Polish parliamentary elections Sept. 25, various European sources, as well as newspaper commentaries, point to the "systemic" change which occurred in the recent elections in Poland. The elections swept away the entire post-communist system, which had completely discredited itself under the previous SLD (Democratic Left Alliance) government. During the election campaign, Kaczynski's conservative party PiS (Law and Justice) found a lot of support among the population in their attacks against "liberalism." The word "liberalism" wrote the Swiss daily Neue Zuercher Zeitung, has become almost a "slander" for most of the Poles who experienced Balcerowicz shock therapy.

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