From Volume 37, Issue 35 of EIR Online, Published Sept 10, 2010

Western European News Digest

Ireland in Forefront of Transatlantic Crisis

Sept. 3 (EIRNS)—Ireland is currently the front end of the euro section of the Transatlantic crisis. It is becoming clearer by the day, that the Irish government has no chance of facing the immense debt burden of Anglo-Irish Bank and of the other liabilities of the national banking system. People are starting to realize that it doesn't matter how much Ireland cuts its budget: The bank bailout is unsustainable.

On Aug. 31, Anglo-Irish Bank said it needs another EU25 billion—which is two-thirds of the national tax revenue. So far, the bailout of the Irish banks has included a direct government injection of EU33 billion, and another EU13 billion of toxic assets put into the Irish "bad bank." If you add the above EU25 billion, then the total becomes EU71 billion, which doesn't include whatever other bailout that banks might need, in addition to what they have gotten already. Banks' balance sheets continue to be filled with toxic mortgages.

Under the headline, "In Ireland, Dangers Still Loom," Peter Boone and Simon Johnson wrote yesterday in their New York Times Economix blog, that what is blocking a default procedure in Ireland, is "a strong lobby of real estate developers, the investors who bought banks' bonds and politicians with links to the failed developments (and their bankers)." They also write that "Ireland, simply put, appears insolvent under plausible scenarios with current policies."

An informed Irish source told EIR that the Irish government is looking with hope at the German initiative for a European-wide insolvency law. At EU home-base in Brussels, the procedure is stalling, he said, but he is convinced that "as soon as volatility is there again, the bill will be back on the table."

'A Sea of Financial Bets' Is Being Built Against Italy

Sept. 3 (EIRNS)—A journalist for the Italian daily Il Riformista looked into some balance sheet reports, and found out that Italy is being singled out as the largest target for credit default swap (CDS) bets globally. And leading these bets is George Soros, who led the assault on the Italian currency in the 1990s!

With $240 billion, Italy is currently the largest target of CDS contracts, accounting for 10% of the global market. The rush to Italian CDS has accelerated since March, going from 5,600 contracts to 6,600. The players fall into two categories: the banks that sell them and the speculators who buy them, i.e., those who bet against Italian debt.

There are 17 banks involved: Bank of America, Merrill Lynch, Barclays, BNP Paribas, Calyon, Citibank, Crédit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, Natixis, Nomura, Royal Bank of Scotland, Société Générale, and Unicredit. The purchasers are: Paulson, Soros, Moore, Citadel, and China Investment Corporation.

Insurance against an Italian default costs $236,000 for a $10 million five-year bond. It is as high as during the apex of the Greek crisis in May.

French Employers Leader Demands Fascist War on Trade Unions

PARIS, Sept. 4 (EIRNS)—The time is ripe for open fascism. That is clearly the opinion of former head of the National Council of French Employers (CNPF), Yvon Gattaz. In the latest edition of the magazine Commentaire, No. 130, founded by the Congress for Cultural Freedom's neocon Raymond Aron, Gattaz asks in the headline, "Isn't the End of Trade Unions Desirable?" The shameless answer he gives is yes. Trade Unions, he writes, "have only survived thanks to two incredibly resistant spiderwebs that support them, still: politics and the media."

Inspired by former British Prime Minister Margaret Thatcher's "historical battle," Gattaz says that, today, "the corporate performance is inversely proportional to how much they are unionized." Whence it follows, "logically," that as far as unionized labor is concerned, "its elimination is economically compelled."

Czech Republic Takes Lead in Reviving Nuclear

Sept. 2 (EIRNS)—The Czech Republic is looking towards the future, announcing plans to build five nuclear plants.

The state power company, CEZ, has announced two new nuclear reactors to form a cluster with the existing Temelin nuclear power plant, but in addition, Vaclav Bartuska, the Czech Ambassador at Large for Energy Security and the Government commissioner for the completion of the Temelin nuclear complex, said on Aug. 31: "In 2007 the decision was made to issue a tender for two nuclear reactors, plus a possible three more.... This is right now the biggest tender in Europe and one of the biggest in the world."

Over the years, the Czech Republic's Temelin nuclear power plant had been under attack from Austria, which is ostensibly worried about Temelin's safety. The plant has been a frequent source of friction with Austria, where protesters have blocked border crossings and where politicians opposed to the plant sought to block the Czech bid to join the European Union. Such is the level of cooperation within the EU.

CEZ has shortlisted three different contractors to bid for the Temelin reactors. Three reactor manufacturers are Westinghouse, Skoda JS, and Areva. Westinghouse and Skoda JS have said that they will source 70-80% of the plant manufacturing work inside the Czech Republic.

Greens Oppose German Nuclear Moves

Aug. 30 (EIRNS)—The German government is saying that it will extend the lifetime of existing nuclear power plants by 10-15 years, which is what Chancellor Angela Merkel said on national television yesterday, as being the time frame "that is reasonable in terms of the facts." That would push the legally mandated final exit date from nuclear from the year 2021 to 2036. The exit as such is not contested by any parliamentary parties, and not even by the nuclear power industry so far, unfortunately.

The German government also plans to force concessions from industry, in return for the extension of reactor lifetime: a nuclear fuel rod tax, additional measures to protect reactors against air crashes, and payments into a national fund for the development of renewable energies. Actually, that will ensure that, of the estimated EU4-5 billion profit which the power industry will have annually from having extended licenses for the reactors, not much will remain in the hands of the nuclear power operators for reinvestment.

And the anti-nuclear camp, prominently including leaders of the Greens, the Social Democrats, and the Linkspartei (Left Party), is threatening a no-limit escalation to stop what they call "nuclear insanity" and keep Germany tied to the real insanity— the final exit from nuclear in 2021.

Tony Blair Unwelcome in Ireland

Sept. 4 (EIRNS)—Former British Prime Minister Tony Blair kicked off his book tour in Dublin, Ireland, today, where an estimated 200 anti-war protesters greeted him with chants of "arrest the butcher Blair," and "Hey, Hey Tony, Hey, how many kids have you killed today?" Four protesters were arrested for hurling a shoe, eggs, and other projectiles in Blair's direction, though nothing hit him.

The night before, Blair was greeted by about 50 protesters outside RTE studios where he appeared for his first TV interview since his book, A Journey: My Political Life, was published. Perhaps because of the protesters, the RTE interview had the temerity to ask Blair if he believed he was a war criminal. Blair replied, according to AFP "Of course, I don't believe that."

The London Guardian speculates that Blair chose to begin his book tour in Ireland because he though he would get a better reception there because of the Northern Ireland peace secured during his time in office. It appears that he may have miscalculated just a bit.

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