From Volume 37, Issue 50 of EIR Online, Published Dec. 24, 2010

Western European News Digest

Italy's 'Britannia' Faction Loses Vote Against Berlusconi

Dec. 14 (EIRNS)— The Italian government won a no-confidence vote yesterday, despite the fact that the opposition, plus former ally Gianfranco Fini, had a majority on paper. While Parliament was voting, Black Bloc radicals were staging guerrilla warfare with police in the middle of Rome. Prime Minister Silvio Berlusconi's defeat had been a subject of political and financial speculation, with Financial Stability Board (FSB) head Mario Draghi ready to take over as head of a bankers' government, and financial vultures ready for a run on Italy's sovereign debt. Draghi is part of what is called the Britannia faction, referring to pro-British politicians.

The decisive vote took place in the Chamber of Deputies, where Fini and the opposition were supposed to have the majority. However, despite the fact that three Deputies in advanced pregnancy were brought in to ensure success of the no-confidence vote, the opposition lost with 311-314, thanks also to the "surprise" defection of Catia Polidori, a long-time ally of Fini. Polidori motivated her vote with the necessity of maintaining political stability in the context of global financial uncertainty. Her statement caused an outraged reaction from the Fini camp, almost leading to a fist fight.

Italian MEP Calls for Glass-Steagall

Dec. 17 (EIRNS)— European Member of Parliament Mario Borghezio asked on the floor of the parliament on Dec. 15, "Why is there no discussion on adopting measures to effectively separate commercial banks from speculative banks, as in the Glass-Steagall Act?" Borghezio also called for investigating the "secret club of nine banks—one of them being a European bank, Deutsche Bank—meeting every Wednesday to conspire on derivatives," and summarized his previous written interrogatory to the EU Commission on the U.S. Federal Reserve bailout of Inter-Alpha banks.

Ireland's Council of State Convened on Bailout

Dec. 17 (EIRNS)—The President of Ireland, Mary McAleese, made the very unusual move, today, of calling for convening the Council of State, to examine the constitutionality of the Credit Institutions Stability Bill. That CISB was rushed through the Dail (parliament) on Dec. 15, along with the rubber-stamping of the IMF/EU Memorandum of Understanding, even though the entire opposition voted against the bills. The CISB is, essentially, the implementation side of the bailout for the Irish banks.

The Council of State, which will meet on Dec. 21, is an official body made up of leading serving and former senior office holders. After discussing the Council's advice, the President will decide whether she will sign the bill, or refer it to the Supreme Court. The constitutionality of the bill and the memorandum of understanding itself were both challenged by all opposition parties in the Dail.

OECD Report Exposes Youth Unemployment Disaster

Dec. 17 (EIRNS)—The Organization for Economic and Cooperation Development (OECD) today issued a report on youth unemployment, showing rates for youth (15-24) double that of the average for all workers. Youth unemployment in the OECD area jumped from 13.5% in 2007 to 18.4% in 2009, and reached 19.6% in the second quarter of 2010. The OECD, which begins its report by claiming that "the global economy is recovering," projects that youth unemployment will remain at around 18% in 2011, and 17% in 2012.

The report breaks down the statistics by country, with one dramatic figure being that for Spain, where a full 42% of the youth (age 15-24) are officially unemployed. There are at least 16 million youth in the OECD area who are classified as "NEET"—neither in employment, education or training.

Is the ECB Already Bankrupt?

Dec. 14 (EIRNS)— While the European Central Bank (ECB) is reported to be seeking new capital from its shareholders (i.e., the governments of European nations) to deal with the increasing pile of junk in its vaults, the FT Alphaville blog questioned the solvency of the Bank Chairman Jean-Claude Trichet's institution. Tracy Alloway wrote in Alphaville that the ECB has EU5.8 billion in capital, but holds EU60 billion in covered bonds, EU70 billion in government bonds, and a whopping EU130 billion in "potential problem assets" such as mortgage-backed securities and collateralized debt obligations. Alloway speculates that a 1% interest rate hike could create unavoidable losses, which would wipe out the ECB's capital.

Greece's Seventh General Strike vs. Austerity

Dec. 15 (EIRNS)— In the seventh general strike this year, at least 70,000 Greek workers and their supporters took to the streets today, while the simultaneous general strike has all but shut down the country. Protests, strikes, and mobilizations against the government's changes to labor relations, and in the public utilities and organizations, legislation which passed the parliament this morning, have been led by the country's two largest umbrella labor federations, GSEE and ADEDY, representing the private and public sectors, respectively. Up to 50,000 demonstrators gathered in Athens' Constitution Square; another 20,000 demonstrated in Thessaloniki, Greece's second largest city.

Sinn Fein: Stop Squeezing Poor, Tax Super-Rich!

Dec. 14 (EIRNS)—Attacking the Irish government once again for its brutal austerity package, the opposition Sinn Féin party yesterday cited statistics from an IMF survey, showing that private individuals residing in Ireland have no less than EU1.25 trillion invested in overseas securities—but nobody in the government is talking about it. EU659.2 billion of this is held in bonds. The level of overseas securities has doubled since 2003.

Sinn Féin Workers Rights spokesman Martin Ferris said: "These figures prove that while the government is justifying attacking the very lowest-paid in our economy, that a small number of people and institutions not only control a vast amount of wealth, but that most of that wealth is being invested abroad."

India-Germany Summit: Nuclear & Infrastructure

Dec. 12 (EIRNS)— Indian Prime Minister Manmohan Singh and German Chancellor Angela Merkel met today in Germany. At a joint press conference afterwards, Singh said: "On the bilateral side, we deeply value Germany's consistent support, including in the Nuclear Suppliers Group, for the opening of international commerce for India in the field of civil nuclear energy. We have discussed the possibilities of entering into bilateral cooperation in civil nuclear energy."

India and Germany will scale up their cooperation in areas such as high technology, nuclear power, skill development, and infrastructure, both leaders announced. "If Germany further liberalizes its technology trade policy, its companies will tremendously benefit from the vast market in India," Singh said.

Merkel accepted an invitation from Singh to visit India sometime in 2011. The two leaders will support each other's efforts to become permanent members of the UN Security Council, and for other UN reforms.

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