Global Economic News
Banco Santander CEO: 20% Unemployment? Great! Let's Go for More!
May 17 (EIRNS)Alfredo Saenz, Deputy Vice-Chairman and CEO of London's enforcer in Spain, the Inter-Alpha Group's Banco Santander, last week endorsed Spain's 20% unemployment as a sign that Spain's economy is becoming more "productive." One-fifth of Spain's labor force is officially out of work, which he declares to be proof that "the private sector is at the helm of austerity measures ... and this is good"; it eliminated "garbage jobs," and that increases productivity. Now the public sector must follow suit, he ordered.
Saenz was addressing a conference at the ESADE business school, a free market bastion, on May 12, shortly after Spanish Prime Minister José Luis Rodríguez Zapatero had gone, head bowed, before the Parliament to announce that the European bailout of Greece by other EU countries required that the living standards of 5 million pensioners, 2.8 million public sector workers, hundreds of thousands of elderly requiring assistance, and of 400,000 new parents in Spain be cut, along with EU6 billion of government investment in public projects.
It is common knowledge in Spain that Saenz's boss, Santander head and London agent Emilio Botin, had been hounding Zapatero for months to adopt these measures, as part of the City of London-directed blackmail operations against Spain. Saenz endorsed those cuts in living standards as "essential" and "inevitable," during his speech to ESADE on the subject of "Necessary Austerity Measures in the Economy and the Financial System: The Case of Spain." The CEO of Spain's largest bank then lectured Spaniards to stop blaming the financial markets for the crisis; their role "is not that of a speculator, instead they are giving us money."
On May 17, Zapatero buckled again, promising in a press conference that his government will next move to rip up labor rights (impose "structural labor reforms"), something he had resisted until now.
British Government Could Face a 'Papandreou Moment'
May 18 (EIRNS)The new government in Great Britain is preparing for a possible "Papandreou moment," now that they are looking at the national accounts they have inherited from the previous Labour government. Like Papandreou, they fear that the previous government has covered up gaping holes in the budget and huge debts.
The new Chancellor of the Exchequer, George Osborne, has ordered a "forensic" audit of the country's finances by the newly created Office for Budget Responsibility headed by Sir Allan Budd. The review will not only look at the official debt, but also the billions of government liabilities in Private Finance Initiatives which the previous Labour government kept off the books. According to figures from the Institute for Fiscal Studies, calculated for the Guardian, public debt could double from £890 billion to £1,790 billion, taking into account some of the PFIs and pension liabilities. But the figure would triple if the bailout of the banks is taken into account, which would add another £1 trillion.
Austria and Belgium May Follow Germany Soon, in Banning Short Sales
May 21 (EIRNS)European policy chaos was evidenced once again by the stonewalling which Germany's Finance Minister Wolfgang Schäuble ran up against in Brussels, when presenting his nine-point financial reform plan, which apparently was rejected mainly because it was a proposal coming from a country that has unilaterally decreed a ban on short sales of securities. But that will likely enrage the Germans even more, so that more of such unilateral decisions are possible and likely.
The German ban on short sales will, however, most likely be joined by similar steps of the governments of Austria and Belgium, and maybe also by the Netherlands. Some insiders have been assessing these developments as first signs of a kind of "d-mark bloc" forming inside the eroding system of the euro, since these are countries that earlier grouped around Germany, when its currency was the deutschemark. The Czech Republic and Switzerland are said to orient in the same direction.
Meanwhile, rebellious momentum is building up in Germany also, in reaction to the scandalous majority vote in the Bundestag, the national parliament, today, in favor of the EU's bailout fund of EU750 billion. First of all, Chancellor Angela Merkel's government coalition lost 20 votes from their own ranks, which normally count 322 votes in the Bundestag, so that only with some votes from the opposition Greens, could the required minimum majority of 312 be exceeded by meager 7 votes, thereby passing the bailout with 319 votes. That vote has already prompted two legal complaints at the Constitutional Court: one by Christian Social Union Bundestag member Peter Gauweiler, the other by Prof. Joachim Starbattyboth of whom were plaintiffs in the lawsuit against the Lisbon Treaty a year ago.
Banks Dumping Greek Debt Quicker than the ECB Can Buy It
May 18 (EIRNS)The trillion-dollar bailout of the banks by the European Union and the European Central Bank has begun. Yesterday the ECB bought EU16.5 billion worth of Greek, Portuguese, Spanish, and Irish state debtnot from the states, however, but from the banks which have been dumping old debt that has not yet matured. Today, the ECB will buy another EU20 billion worth.
The banks are taking full advantage of this latest giveaway. City of London mouthpiece Ambrose Evans-Pritchard, writing in today's Daily Telegraph, quotes one banking source as saying, that there has been a "sharp acceleration" of banks dumping their debt as soon as the ECB started buying. "It rather suggests that investors leaped at the opportunity to clear their balance sheets.... This leaves the ECB itself in an unpleasant situation, since it now faces a deterioration in its own balance sheet."
Greece is to receive its first payment of EU14.5 billion from the EU110 billion EU-IMF bailout package, but as soon as it is transferred to the Greek Central Bank, it will immediately be deployed to pay off EU8.5 billion worth of bonds which expire tomorrow. Another EU9 billion will be transferred in September, and another EU9 billion in December, which will go through the same revolving door, directly to the banks. Meanwhile, the EU and IMF will be auditing Greece's accounts every month to ensure that the mandated cuts in the budget are made. These cuts will reduce the living standards of most Greeks by 20%; the EU-IMF loans are not being made at reduced rates. According to IMF supremo Dominique Strauss-Kahn, the destruction of Greek living standards will make Greece more "competitive."
The country's two largest trade union federations, the public sector union ADEDY and private sector GSEE, will hold a 24-hour general strike on May 20. The Greek Lawyers Association announced that it would join the strike.