Western European News Digest

Sarkozy Bashes Unemployed; Public Sector Workers; Seniors

PARIS, Sept. 19 (EIRNS)—Speaking at the Senate yesterday, French President Nicolas Sarkozy announced he would proceed with the harsh social measures he had promised in his campaign, but had postponed for fear of a repeat of the national strikes that paralyzed Paris for a full month in 1995, when then-President Jacques Chirac had tried to implement similar measures. The worst elements of those measures which Sarkozy has given the trade unions two weeks to respond to are:

1) Unemployed persons who do not accept one of two consecutive job offers and a "training program" proposal will be thrown off unemployment benefits;

2) The public-sector workers receiving higher retirement funds, which account for the greater hardship of their work, will have their retirement pay "harmonized," i.e., slashed to the levels of all other public-sector workers;

3) The government wants senior citizens to work longer hours, and will be drawing up legislation to discourage "pre-retirement" schemes through high taxation, and has announced that no "automatic" retirements will be imposed under 65 years of age;

4) Senior citizens' expenses for long-term illness will no longer be covered automatically, and their own savings will be taken into account in the reimbursement of social security expenses. They will be encouraged to take on private health insurance, with some subsidies from the government.

EU Ends Agricultural Set-Aside Policy

Sept. 14 (EIRNS)—Faced with the collapse of grain stocks and food price increases, the European Commission took the historic decision of reversing a decades-long malthusian policy of "set asides," by which agricultural production in Europe was curbed, in order to avoid "overproduction."

The EC announced that it would suspend for at least one year, the rule requiring farmers to set aside at least 10% of their land. However, this decision might come too late for the next wheat-planting session, which starts next month in some European countries. And it is highly probable that farmers will choose to grow rapeseed or corn for the biofuel industry.

Wheat prices rose 78% year-on-year in August, and maize prices rose 50%, the EU said. In Italy, yesterday, there was a protest against rising pasta prices. The European Central Bank has reported that food prices in Italy have risen 30%.

BAE Systems Corruption Probe Widens

Sept. 21 (EIRNS)—Swedish prosecutor Christer van der Kwast announced Sept. 14 that he was expanding the investigation of bribery charges against the BAE-Saab joint venture to sell Swedish Jas-Gripen jet fighters to the Czech Republic, and that he will include in the investigation the leasing of 14 similar aircraft to Hungary.

A class-action suit filed by the Harper Woods (Michigan) Employees' Retirement System, claims that BAE staff paid illegal kickbacks and bribes totalling $2 billion to Prince Bandar bin-Sultan of Saudi Arabia and his associates, to win lucrative weapons contracts. In addition to Prince Bandar, former BAE Systems directors such as Michael Portillo (once the British Minister of Defence); and PNC bank, which took over the Washington D.C. Riggs Bank through which the $2 billion in bribes was routed, were also named.

On Sept. 17, the Saudi and British defense ministries announced that BAE Systems has won an $8 billion contract to supply the Saudi military with 72 Eurofighter Typhoon jets. The deal is said to be part of a much larger package of military hardware, training, and infrastructure construction, that was negotiated by former British Prime Minister Tony Blair in his final days in office in June of this year.

200,000 Jobs Threatened in Spain's Mortgage Crisis

Sept. 20 (EIRNS)—A report issued Sept. 18 by Spain's Institute for Business Practice (IPE), states that there will be 100,000 fewer housing starts this year than last This is causing reverberations throughout the construction industry and beyond.

In March of this year, according to the daily ABC, the construction industry association Seopan warned that every 100,000 drop in housing starts would mean the loss of 200,000 jobs. Although using different calculations, IPE arrived at the same conclusion as Seopan, but elaborated that for every ten houses not built, an investment of 1 million euros in infrastructure would be required to maintain current levels of employment in the construction industry.

Gordon Brown Warned by City Mouthpiece: No FDR Measures

Sept. 18 (EIRNS)—British Prime Minister Gordon Brown had better not try to imitate Franklin Roosevelt by having the British Treasury guarantee the British population's bank deposits, threatened the Times business editor James Harding in a commentary today. Harding claimed that British Chancellor of the Exchequer Alistair Darling, by giving Northern Rock customers a "gilt-edged guarantee" for their deposits, had set off the "creeping nationalisation" of Northern Rock, a "humiliation for the British banking system and the Labour government." Harding concluded: "Gordon Brown has long stood in awe of Franklin D. Roosevelt, the President who told Americans 'the only thing we have to fear is fear itself,' and then assured them that the Government would honour their deposits. But, for all his admiration of FDR, Mr. Brown, surely, does not want to emulate him in office?"

Globalizers Pull the Strings of Belgian Break-Up Scenario

PARIS, Sept. 19 (EIRNS)—Inquiry into the background of the drive to break up Belgium leads to a handful of pro-globalization free-trade maniacs. The central figure is Harvard economist and international columnist Alberto Alesina. In 2003, Alesina published The Size of Nations, a book he wrote with Enrico Spolaore, chair of Economics at Tufts University.

The personal involvement of the authors in the scheme became evident when Spolaore developed the core argument of the book in an address to the Flemish Parliament in Brussels on June 11, 2005. Not surprisingly, the book got a positive review in the same London Economist that called for the break-up of Belgium earlier this month.