From Volume 5, Issue Number 4 of EIR Online, Published Jan. 24, 2006

Western European News Digest

Supranational European Union Suffers Two Major Defeats

After several continent-wide targetted strike actions the previous week, on Jan. 18 the European Parliament voted against port deregulation, with a 75% majority. On the third day of its debate on the EU Commission's Port Package II proposal, the plan was voted down, with the final vote in Brussels being 532 against 120, with 25 abstentions.

EU Commissioner Jacques Barrot, in charge of the plan, has promised to work out and present a new version of the proposal, but that remains to be seen, given in a heated debate which took place. The governments of France, Germany, and Sweden have already let it be known that they do not want to see another such proposal, after versions I and II were defeated.

Spokesmen for the transport workers federations in the EU countries welcomed the vote, warning that should the Commission think of a Port Package III version, protests and strikes would continue.

On the same day, the Euro Parliament also overwhelmingly voted down the draft Euro Commission budget for 2007-2012. The budget compromise formula of the EU summit early December had met strong opposition in all EU member countries, which were faced with budget cuts at their expense, whereas most of the special "British Rebate" (established in 1984) which grants Britain substantial reimbursements from Brussels, was left in place. The compromise in the last minute which "saved" the summit and ensured Tony Blair's "yes" to the draft budget, was praised by German Chancellor Angela Merkel and French President Jacques Chirac, but met strong criticism in their respective national parliaments, as well as in the Euro Parliament, which wanted the British Rebate out, and called for more funds for infrastructure and social integration projects, especially in Eastern Europe.

The whole procedure of working out and debating a draft budget proposal, will have to start all over again now, but this time, there are options for putting new aspects on the agenda, like those addressed by the LaRouche Movement: Dump Maastricht, tax speculators, stop deregulation and privatization, invest into productive projects.

German Economist Says Dump Euro To Revive Sovereignty

German Green Party economics professor Wilhelm Hankel, one of the four academics filing a constitutional lawsuit against the euro, asserted as much Jan. 17, in a full-page article published in the leading German economics daily Handelsblatt. The piece, headlined, "The Tasks of the Nation-State," is a reply to an earlier feature in the same paper by a neo-liberal writer denouncing the state investment policy of the 1966-69 Grand Coalition under Economics Minister Karl Schiller. Hankel defends the achievements of Schiller, who generated about 1 million new jobs in a very short time period. Neo-liberals today want to exclude the state from economy. However, Hankel says, "economic policy without the state and macroeconomics" is like performing "Hamlet without a Danish prince."

If it's true that globalization and supranational entities like the EU and the European Central Bank (ECB) are incompatible with a "national growth and job creation program à la Erhard and Schiller," this means that it's "the duty of politics" to correct this problem and "cut down the supranational influences." Schiller had been a proponent of a joint European currency policy. However, he was strictly against introducing a single currency, knowing that this would have devastating consequences. Today, he says, we see that, due to the euro and other supranational structures, Europe is destroying its main growth engines, that is, in particular, the German economy. Inside the EU and the European Monetary Union (EMU), conflicts are escalating by the day. At the same time, people see their social protection being stripped away on the demand of "incalculable markets."

His conclusion: A state investment policy for creation of new jobs is possible today, as it was in the time of Karl Schiller. But it requires the elimination of the single-currency "stupidity."

Gazprom Squeeze Forces Italian Contingency Plans

Allegedly due to the extraordinarily severe winter conditions in Russia, Gazprom has reduced gas supplies to a list of foreign customers, including Austria, Hungary, Serbia, Finland, and Italy. The shortfall in supplies to Italy has steadily increased from 4 million cubic meters on Jan. 17, to 5 million on Jan. 18, to 8 million on Jan. 18. The latter amounts to 2.3% of Italian consumption. Gas produces 50% of Italian electricity, and three out of four households are dependent on gas. This has created an energy crisis in Italy, with the government announcing contingency plans for selective cuts to industries, starting as early as Jan. 23.

Industry Minister Claudio Scajola has called for an emergency government meeting on Jan. 24. The head of the Energy Authority, Alessandro Ortis, has stated that "Reserves are insufficient and inadequate if climatic and geopolitical emergencies continue."

An inside source told EIR: "There are other reasons than climatic ones for Gazprom's cuts. Last year was just as cold as this year, and Gazprom has a powerful production [capacity]." He also indicated that not all European countries have been hit by Russian supply cuts, and pointed to the fact that Italy is just negotiating a contract for increased supplies, which includes a direct presence of Gazprom on the Italian market, in exchange for ENI's drilling of Russian fields. (ENI is the Italian state oil company.) The contract has been suspended by Italy's antitrust authorities because of irregularities in favor of companies connected to Prime Minister Silvio Berlusconi, and "the Russians are angry about that," the source said. On the other side, Gazprom is trying to enter the Italian market on their own terms, he added.

Sarkozy Accused of Aspiring to Absolute Monarchy

The fight against the "unitary executive" is also on in France, after Interior Minister Nicolas Sarkozy announced his intention to expand the powers of the French President, were he to occupy that office. During his weekly press conference Jan. 17, Jean Louis Debré, the President of the National Assembly, close associate of President Chirac, and leader of the anti-Sarkozy clan in the UMP, raised his political shotgun against Sarkozy and declared: "There are those who are obsessed by the need for a 'break,' who want to find a system which Cardinal Richelieu called the 'Principate': an absolute monarch and a main minister, a simple secretary executing the will of an all-powerful prince." Sarkozy has been campaigning on the need for a "break" with the French social model, a theme popular with the neo-con right-wing revolutionists in the U.S., and in the tradition of French extreme right-wingers such as Boulanger, Maurras, Barres, and others.

Prime Minister Dominique de Villepin also targetted this theme in his New Year's speech, going after the "declinologists," the people who are bemoaning the "decline" of France, only to propose more IMF and Synarchist-type reforms be implemented. Unfortunately, given the economic and strategic policies of de Villepin and Chirac, they are contributing to hand power over to fascist Sarkozy.

De Villepin Moves for More Flexibility of French Labor Code

French Prime Minister Dominique de Villepin just announced the launching of a new "assisted job creation" program to "solve" youth unemployment. The "first job contract," created specifically to absorb some of the whopping youth unemployment (24% among high-school graduates; 40% among those without diplomas), is a government assistance program whereby companies can hire youth, up to 26 years old, under a contractual two-year trial period, during which the employer can fire the youth almost with impunity. This is the same contract which Villepin had created previously for older generations of unemployed, with some more "protections," however, for the youth. If the youth gets fired before the end of the trial period, he can receive two months' unemployment pay for a grand total of 468 euros per month. The contract also calls for the employer to offer special training programs to the youth.

All rights reserved © 2006 EIRNS