Western European News Digest

MI5 Chief Signals Reorganization of Empire

Jan. 7 (EIRNS)—Jonathan Evans, head of Britain's MI5 security and counterintelligence agency, gave the first-ever press interview by MI5's director general today. He emphasized that the global economic crisis poses a new security threat to Britain.

Evans called the world financial crisis a "watershed moment" which can shift the world situation, and that the West would become less economically dominant. "Where there have been watershed moments, there have often been national security implications from that, a new alignment," he said. "We have to maintain flexibility and respond to threats. The world will not stay the same.... We have this at the back of our minds, it is too early to say."

What should be considered is what would happen if the "West becomes less economically dominant.... There is no single path that leads people to violent extremism. Social, foreign policy, economic and personal factors all lead people to throw their lot in with extremists."

German Exports Collapse

Jan. 8 (EIRNS)—German exports dropped by 10.6% from October to November, and by 11.8% as compared to November 2007. All in all, Germany exported goods worth Eur77.1 billion in November. More significantly, exports to the other EU countries—by far the biggest share of German exports, with 70%—dropped by 14% in the same month. The German trade balance, which was a positive Eur19.4 billion in November 2007, was down to a positive Eur9.7 billion in November 2008. How big the drop is, becomes clear if one looks at the trade balance in October 2008, when it was still 16.4%. Industrial contracts were down by 27.2% in November, compared to November 2007.

Unemployment increased by 114,000 in December 2008, the real dynamic covered up by many firms' decision to extend the Christmas holidays. January is expected to show another drastic increase of unemployment, along with the other aspect of short-work, which in the case of Opel at its Bochum plant will bring short-work for about 100 days in 2009, according to a press release by Rainer Einenkel, the chairman of the Bochum factory labor council. A critical situation is also reported from BASF, which has suffered heavily, not only from the effects of the automobile crisis, but also from an almost total collapse of foreign orders for ammonia, a component of fertilizer production, since October.

Germans Disoriented on Economic Program

Jan. 5 (EIRNS)—Germany's political parties are going into the final round of discussions about a second incentives program. The Social Democrats have the most detailed proposal, so far, centered around a "Germany Fund" of Eur10 billion which is to be financed by the federal government and the 16 state governments. The Fund is to promote investments on the municipal level into modernization of daycare centers, schools, energy efficiency, and roads.

Another Eur30 billion, mostly to be financed through new state borrowings and a number of tax increases for higher incomes: a one-time children bonus for families, special bonus for children of long-term unemployed, support for research in alternative energies (overlapping with support for Mittelstand "innovations" in the same area), one-time payment of Eur2,500 for every German who scraps his ten-year-old car and buys a new one. There will also be more consulting services for unemployed citizens who seek a new job.

So confused is this program, that SPD Chancellor candidate Frank-Walter Steinmeier, in an interview with the Süddeutsche Zeitung this morning felt it necessary to state that "this is not a hodge-podge, it is a concept." The SPD and CDU-CSU will likely not decide on anything concrete before Jan. 18, the day of the Hesse state election, or before the inauguration of Barack Obama on Jan. 20.

Italians To Challenge 'Rule Britannia'?

Jan. 7 (EIRNS)—Apparently, the City of London fears a class action lawsuit from some 600 Italian local and regional authorities against British investment banks, and is preparing a defense strategy, "with the support of the Treasury," today's Il Riformista reports. "It is a question of days, and the storm will burst in all its virulence. It is the match between London investment banks and many Italian local authorities on the scandal of derivative swap contracts that have seriously damaged the accounts of municipalities, provinces, and regions." London's strategy is to "turn the scandal of the derivative contracts in a new Parmalat case, i.e., present it as the last 'Italian job'."

A legal solution, and a just one, is difficult "in a world in which the [U.S. Securities and Exchange Commission], eight times, has been unable to stop the Madoff mega-swindle," writes Riformista. However, more than the legal aspect, the political one is going to have implications, if ever a class action is started in Italy. It will be the Italian people against Britannia. Prosecutor Francesco Greco, who leads the probe into the derivatives swindle, and was the government attorney in the Parmalat trial, described the Parmalat case as a microcosm of the entire financial system. And he has blasted the current bailout of the financial system as immoral. Greco was among the three prosecutors who opened distinct investigations of George Soros, based on the LaRouche movement's legal brief, in 1995.

Tremonti: We Must Choose Between the Banks and Families!

Jan. 10 (EIRNS)—In a follow-up to his intervention at the Paris conference on "New World, New Capitalism," Italian Economy Minister Giulio Tremonti, speaking at a town meeting in Roccaraso, said that U.S. President-elect Barack Obama's economic plan might not be enough, and if that fails, there is only one thing to do: freeze the derivatives bubble and save "families, enterprises and those banks which finance them."

"With our heart, we all hope that it will work like Obama says, but with our head we must also imagine that the U.S. President's plan might not be enough. At that point, we shall make some choices, because to save everything is in God's power alone," Tremonti said, according to Corriere della Sera. More than Obama's economic plan, America is benefitting "from the new political figure represented by Barack Obama." But, if Obama's plan fails, "all of us government leaders have the duty of thinking of an alternative plan. We shall choose: Do we save families or the bankers? Speculators or enterprises? I have no doubt whom to save: the families, the enterprises, and those banks which finance them. If you try to save everything, you risk losing everything, because there is a point beyond which not even government can go."

With the exception of a Dow Jones wire Jan. 8, Italian Finance Minister Giulio Tremonti's call for separating sound bank activities from rotten ones, made at the international "New World, New Capitalism" conference in Paris with Sarkozy, Blair, Merkel et al., has been covered only by Italian media. Michel Rocard's call for bankruptcy reorganization did not even get coverage in France. In other words, they are getting the LaRouche treatment.

Italian President Decries 'Resurgence of National Interest'

Jan. 10 (EIRNS)—The followers of H.G. Wells' world-government policy see their dreams being swept aside by the systemic collapse and the progress of Lyndon LaRouche's ideas for a new Westphalian world order. Italian President Giorgio Napolitano, a supporter of the European "Tower of Babel," stated yesterday that he sees "with concern, a reemerging rhetoric of national interest," which is blocking the construction of a European super-state. Speaking at a presentation of Jacques Delors' latest book, in Parma, Napolitano complained that national interest leads to decisions based on "small-minded and tiresome negotiation among governments."

Napolitano said that since 1993, Europe has undergone "15 years of dumbness and skepticism" which have prolonged "a delay" in the construction of a European government. "The ratification and implementation process of the modest Lisbon Treaty has not yet been completed," Napolitano complained. "Seven years have gone by, there has been a major enlargement of the Union, but we have not yet succeeded in implementing the minimum indispensable by way of institutional innovations."