From Volume 36, Issue 32 of EIR Online, Published Aug. 21, 2009

Global Economic News

Outraged Icelanders Taking to Streets Against Banking Bailout

Aug. 14 (EIRNS)—About 3,000 outraged Icelanders took to the streets in protest against the scandalous bailout deal planned by their government yesterday, calling on the parliament vote it down. Speaking at the demonstration today, Icelandic author Einar Gudmundsson protested the punishment of a people for deeds by private banks and said: "It is a crime we as a nation have nothing to do with."

Socialist Prime Minister Johanna Sigurdardottir tried to save her traitorous deal by demanding some facesaving changes in it, in an article in the Financial Times today. She writes that the cost will be 50% of Iceland's GDP!

German GDP Shrank by 7% in Past Year

Aug. 15 (EIRNS)—June 2009, which, according to the German government, brought the "start of the upswing," in reality, showed a German GDP that was 7.1% lower than in June 2008. That is mainly due to the dramatic and continuing decrease in new orders and output of the core branches of German industry—steel and machine-building, automobiles, shipbuilding, chemicals and petrochemicals. It comes as no surprise, therefore, that between May and June 2009, almost 155,000 jobs were eliminated in the productive economy. The highest rates of job loss occurred in the automobile, metal and plastics, and rubber sectors.

The decrease in real working hours, which in June 2009 was 12.6% as compared with June 2008, reflects the massive expansion of short-work arrangements, which affect a total of 1.4 million German workers whose layoffs have been postponed to the next year. A drop in GDP by 7% between June 2008 and June 2009 translates into EU100 billion of additional burden on the state: This is the combined effect of decreases in income tax and social/health tax payments (EU6 billion and EU4 billion respectively, per year) to the state on the one hand, as well as increased unemployment pay of EU5 billion, which the state has to shoulder per every 1% of workforce being laid off.

All rights reserved © 2009 EIRNS