Western European News Digest

Coalition Government Formed in Poland

After several weeks of negotiations, a new turn has been made by the Polish government. The new PiS minority government under President Lech Kaczynski concluded its coalition talks with the agreement that the Populist Radical Peasant Party Samoobrona of Andrej Lepper and Roman Giertychs League of Polish Families (LPR) will join as coalition partners in the Kaszynski government. Both Lepper and Giertych will become Deputy Prime Ministers under Prime Minister Kazimierz Marcinkiewic. While Lepper will become Agricultural Minister, Roman Giertych will head the Education Ministry. Two other Samoobrona members will get the Construction Ministry (Antoni Jaszczak) and the Labor and Social Ministry (Anna Kalata).

The new government coalition has caused concern both within Poland, as well as outside. In reaction, Polish Foreign Minister Stefan Meller and Health Minister Religas have resigned. Similarly, the government coordinator for Polish/German relations, Lipowicz, resigned in protest. Commentaries from the European press underline that what is to be expected is a much more nationalist/euroskeptical government. However, it may also be that the "consensus" among the three is so shaky that a new round of elections could be held in the fall, which could lead to an entirely new constellation.

Italy Succeeds in Electing New President

Giorgio Napolitano, the 80-year-old former Communist, received a simple majority for President of Italy, on the fourth vote. Napolitano, the candidate of Romano Prodi's center-left party, received 542 votes, out of 1,009. Most of the others voted with a blank ballot, as protest.

Now, President Azeglio Ciampi has to formally resign, and Napolitano has to be sworn in. Then Prodi can be given a mandate, and form a government, which could be put to a vote in Parliament this week.

Bush Counters Cheney, Praises Merkel on German TV

During a rare half-hour interview with German talk show hostess Sabine Christiensen, in the White House May 7, President Bush described his close personal relationship with Russian President Vladimir Putin: "If I stand up and constantly criticize Putin publicly, he's not going to be interested in listening to what I have to say, and neither would I," Bush said. "When somebody feels like they can lecture to me publicly ... I may not be interested in listening to them," he added. This stood in stark contrast to the sabre rattling comments made by Vice President Dick Cheney, only days earlier, on his tour of Eastern Europe.

Bush also lavished praise on German Chancellor Merkel, whom he called "Angela," and added her to his list of "strong women" in his life.

In comments that are likely to have a big impact on Germany, Bush made a strong pitch for nuclear energy, saying that if "people are genuinely serious about solving greenhouse gas problems around the world, countries like the U.S. and India and China ought to be promoting civilian nuclear power."

Spanish Pyramid Scheme Collapse Triggers Protests

A major financial pyramid scheme in Spain has burst, leading to demonstrations in various cities. The Spanish press May 11 named two companies: Afinsa and Forum Filatelico. Afinsa, one of the largest stamp auction houses in the world, buying and selling precious stamps, had moved into stamp-backed securities which they sold to 350,000. The fraud was based on gigantic overvaluation of stamp-related securities, and now the company has lost over EU5 billion. Thousands of angry investors took to the streets, demanding that the government intervene.

The London Financial Times took note of the crisis, in a commentary, asking whether the stamp fraud is a sign of an economy teetering on the brink. With a current account deficit at almost 9% GDP, by 2007, Spain would be the worst economy in the Eurozone. "Spain cannot devalue its currency to correct external imbalances. Years of negative interest rates have fueled booms in both investment and housing...." The FT concludes by noting that, "an eventual exit from the euro begins to look less inconceivable."

Germany Faces Engineering Shortages in Power, Rail

It is estimated by institutions in the nuclear power sphere that Germany urgently needs at least 1,500 new nuclear power engineers. This is based solely on what is required to keep the existing 18 power plants operating, to say nothing of what would be required to build even one new nuclear plant. The German Physics Society says that in order for Germany to build a single new plant, France would have to supply the engineers and workforce, because Germany's power industry no longer has them.

In addition, the (still) state-owned German railway company, Deutschebahn, has outsourced most if not all of the engineering force to outside units that do all kinds of work, including, sometimes, also work for the railways. The railway company would run into trouble, should it ever decide to launch a major project: It would no longer have the engineers required. (For more on the German economic crisis, see this week's InDepth: Report From Germany, by Rainer Apel.)

Personal Bankruptcies Hit All-Time High in Britain

Over the last three months, there has been a 13% increase in personal bankruptcies in the UK, and there is a 73% increase from the same period last year, the London Times reported May. 6. In the first quarter of this year, 21,251 people filed for bankruptcy. Total outstanding personal debt is now over 1 trillion pounds-sterling.

Meanwhile, there has been an increase in court actions by mortgage lenders to repossess homes: some 33,442 actions over the first quarter, and up 29% from a year earlier. Orders for repossessions rose to 22,990, a 57% increase over last year.