From Volume 5, Issue Number 16 of EIR Online, Published Apr. 18, 2006

Western European News Digest

Prodi's Center-Left Coalition Is Official Winner in Italy

The final results of the elections April 9-10, as published by the Interior Ministry, are the following: In the lower house, the Chamber of Deputies, Romano Prodi's Unione coalition has 348 seats against 281 won by Prime Minister Silvio Berlusconi's Casa delle Libertà (center-right coalition). In the Senate, the Unione has a minimum of 158 and a maximum of 164, whereas the CdL has a minimum of 156 and a maximum of 157 (possibly, but not necessarily, five Life Senators and one Independent might join Prodi's coalition, while two Life Senators would join Berlusconi's).

Voter turnout, traditionally high in Italy, was even higher than usual, at about 84%, or 39 million voters. However, most of them voted "against" and not "for" either candidate; Prodi voters do not necessarily like Prodi, but they do hate Berlusconi, and vice versa. Some 25% of the voters made their decisions only in the last week, reflecting the general crisis of leadership throughout the Western world.

Chirac Buries Hated 'First Job Contract'

After the rejection of the European Constitutional Treaty on May 29, 2005, the French population did it again. On April 10, after a weekend of intense negotiations among all parties, President Jacques Chirac decided to bury the First Job Contract (CPE). Prime Minister Dominique de Villepin, in a national TV address, announced Chirac's decision that "the necessary conditions of trust and serenity for the application of the CPE were not there, with the youth, nor with the firms," and that he regretted "not having been understood by all." He claimed to have tried to "act quickly," to deal with youth unemployment, that now stands at 23%.

The burial of the contract is the victory of an alliance of labor unions, student unions, and parent associations, who took to the streets to defend the rights of youth, the labor code, and the republican traditions that go back to the National Council of the Resistance at the end of World War II. The Resistance leaders elaborated a program which reduced the power of banks and insurance companies and upheld the fundamental rights of people to have a job, a home, a quality education, health insurance, and a pension fund. That policy was inscribed in the Preamble to the 1946 Constitution, later confirmed by the Constitution of de Gaulle's Fifth Republic.

Computer Game: Hedge Fund Attack Could Destroy Europe

A computer-based exercise, said to be "close to reality conditions," with an army of aggressive hedge and equity funds attacking the system, resembles the Soros-run attack on the European Monetary System in 1992, but on a much larger scale: According to the script, there is a grave financial crisis erupting in one EU member state, with contagious effects on the rest of the EU; in the end, the EU fails to contain the crisis.

The exercise was designed to cover the collapse of a major bank in one country, and to test the effect on other EU countries, whether the collapse was intentional or inadvertent.

The scenario was carried out on the eve of last week's meeting of the EU Finance Ministers and central bank governors in Vienna, and was accompanied by what was then a "confidential" report compiled by EU members financial regulators, which says that hedge funds and credit derivatives were "sources of concern," because they "can also be sources of systemic risks."

Chairman of German Social Democrats Resigns

Surprising most observers, Mathias Platzeck stepped down as the chairman of Germany's Social Democratic Party (SPD) on April 10. Citing health reasons, he made his announcement just two weeks after having been treated at a hospital for a mild stroke (with damage to his hearing).

Platzeck quits the party chairmanship after only five months, but for the time being will stay on as Governor of Brandenburg, where he heads an SPD/CDU Grand Coalition. On Nov. 15, 2005, Platzeck replaced Franz Muentefering as SPD chairman, who held that job for 18 months.

SPD Vice Chairman Kurt Beck, who was just re-elected Governor of Rhineland-Palatinate and is a centrist with an aversion to the Greens, will take over the vacated chair for the time being, and run for election as chairman at an SPD national convention at the end of May. Beck's post as party vice chairman is to be taken over by Jens Bullerjahn, the junior partner of the likely SPD/CDU Grand Coalition in Saxony-Anhalt.

The unanswered question is whether and how the "young" generation of the ecologist-monetarist self-styled "networkers," which is already ensconced at the party's top echelons since last November's anti-Muentefering coup, will gain even more direct influence on the party's orientation.

Berlin Fin-Min Seeks To Crush Resistance to Locusts

Thilo Sarrazub wants a Maastricht intervention to crush growing resistance to the next round of privatizations in Berlin. Sarrazin, city-state finance minister of Berlin, in March wrote to the EU Commission to request legal action against those in Berlin who oppose his plan to sell off the municipal Bankgesellschaft Berlin to financial "investors."

The top German financial regulatory agency BaFin and the association of savings banks have protested the Sarrazin plan, on grounds that the Berlin Sparkasse savings bank, part of the Bankgesellschaft holding, owes its service to the common good, which would expire once the holding became private property. More than 1.5 million Berliners, that is every second citizen of Berlin, have bank accounts at the Sparkasse.

Sarrazin has called on the EU Commission to take legal action against the BaFin and the savings banks association, on scandalous grounds that they "violate" the freedom of financial services in the EU and prevent him from "balancing" the Berlin budget. Sarrazin hopes to sell the holding for EU3 billion. As for Sarrazin's "balancing the budget": Since he took office in January 2002, Berlin's public debt has increased from EU45 billion to more than EU60 billion, in spite of billions' worth of sales of public municipal property.

Arrest of Sicilian Mafia Boss Raises Speculations

Bernardo Provenzano, the capo dei tutti capi (boss of all bosses) of the Sicilian Mafia, was apparently found in a run-down peasant house a few kilometers from his hometown, Corleone. He had been sought by police since 1966. He became the head of the Mafia after the arrest of Tot Riina, the alleged author of the 1992 assassination of anti-Mafia Judge Giovanni Falcone.

The circumstances and the timing of his arrest have led to speculation: The announcement of Provenzano's arrest came an hour after the official word that Romano Prodi was the winner of the general elections. Police authorities reported that they had found Provenzano's hiding place several days ago, but they had waited for hard evidence of his presence. Initially, they reported that in order to identify Provenzano, they had done a DNA test. Since the results of a DNA test take several days, this means that Provenzano was possibly arrested earlier than officially declared. Eventually, the police withdrew the DNA statement.

Some observers speculate that police chief Gianni De Gennaro, a "man for all seasons," wanted to make a present to the new "landlord," Romano Prodi, and that Provenzano might soon start to release "useful" confessions involving former Prime Minister Berlusconi.

Cash for Knighthoods Probe Moves Closer to 10 Downing

The ongoing criminal investigation into the cash for honors that has hit the British Labour Party has scored its first arrest, that of Des Smith, head teacher and former advisor to the Specialist Schools Academies Trust. Smith resigned from the SSAC in January after it was revealed that he was recorded by an undercover journalist saying that the Prime Minister's office would recommend a donor "for an OBE, a CBE, or a Knighthood" if he made donations to the Trust. Now, no fewer than 12 millionaires who made donations of between 1 and 2 million pounds have been warned that they will be questioned. These 12 had either received such honors or were recommended for them.

The key issue here is that Lord Levy, Prime Minister Tony Blair's chief fundraiser, is president of the SSAT. Levy also raised funds from another group of millionaires, some of whom were nominated for honors, who donated money secretly to the Labour Party. Although Levy is not yet expected to be questioned in the SSAT case, the arrest of Smith gives a lot of credence to charges of wrongdoing.

French Socialist Segolene Royal Rising in the Polls

With over 3 million people regularly taking to the streets to protest neo-liberal "flexibilization," the international financial oligarchy is looking for "options" which will work in France. They are trying to get control of France by promoting Nicolas Sarkozy on the right, and Segolene Royal on the left for the upcoming 2007 Presidential elections.

A former advisor and minister of President Francois Mitterrand and Prime Minister Lionel Jospin, Royal has shot up suddenly in the polls to 42%, becoming the most popular Presidential candidate on the left. Support for Royal, who must still go through Socialist Party (PS) primaries, has come not so much from her own Socialist camp, but from the Sarkozy right wing, which views her as a weaker candidate against Sarkozy.

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