From Volume 38, Issue 19 of EIR Online, Published May 13, 2011

Western European News Digest

Portuguese Bailout Deal Is Official

May 4 (EIRNS)—The Portuguese caretaker government has reached a deal with the European Central Bank (ECB), the EU, and the IMF, for a EU78 billion bailout, EU12 billion of which will go to recapitalize banks.

Portuguese media report that a special tax on pensions above EU1,500 a month is being discussed, as well as a freeze in public sector pay and pensions until 2013. Unemployment benefits will not be paid for any longer than 18 months (compared with three years currently), and will not exceed EU1,048 a month (down from EU1,258). Major state infrastructure projects along with public-private partnerships (PPPs) are to be suspended while their viability is reassessed.

On May 17, the EU Economics and Financial Affairs Council is expected to approve the deal.

Belgian Appeal: 'Split Up the Banks Before It's Too Late'

May 6 (EIRNS)—With this title, the Belgian website published on May 5 an op-ed coauthored by Dirk Van der Maelen, a member of the Belgian Parliament and former vice-president of the Flemish Socialist Party (SP.A), and Karel Vereycken of Agora Erasmus, the LaRouche movement in Belgium.

Van der Maelen, known for his criticism of the banking sector, is a respected member of the Belgian House of Representatives and author of several proposed laws aimed at limiting banking abuses. On Oct. 28, 2010, Van der Maelen and two other Belgian Socialist MPs reintroduced his 2009 proposed law to "confine" and protect the activities of savings banks from speculative investment banks.

Today, the text with 6,000 signers has been picked up by several other Dutch-language news websites in Belgium and the Netherlands.

Eurozone Emergency Session Talks on Greece Debt

May 7 (EIRNS)—The finance ministers of the six governments with triple-A rating (France, Germany, Netherlands, Austria, Finland, and Luxembourg) met for a crisis emergency session at Senningen Castle in Luxembourg. The meeting was also attended by Olli Rehn, EU Commissioner for Finance; Jean-Claude Trichet, director of the European Central Bank; and Greek Finance Minister Giorgos Papaconstantinou.

Reports from Greece are talking about a "velvet restructuring" that could include extending outstanding debt and a voluntary agreement to modify repayment terms before 2012.

Scottish National Party Wins Majority in Scottish Parliament

May 6 (EIRNS)—The Scottish National Party (SNP) won an outright majority in the election to the Scottish Parliament yesterday, which opens the way for a Scottish referendum on independence. The referendum will take time; but now it will almost certainly be held during the new five-year term of the Scottish Parliament. The vote results were dramatic. The SNP vote rose by over 12%, to about 45%, giving it 69 seats in the 129-member Parliament. This is the first time one party has had a majority since the Parliament at Holyrood (in Edinburgh) was restored in 1999 for the first time since 1707.

The Scottish Parliament is a "devolved" legislature, whose powers are limited by the government of the United Kingdom. The British Parliament retains the ability to amend the "terms of reference" of the Scottish Parliament, and can extend or reduce the areas in which it is permitted to make laws.

Anti-Green Resistance in German Industry

May 5 (EIRNS)—While the big banks and part of industry like Siemens have sold out to the green hysteria, other parts of industry have not. Kurt Bock, the incoming CEO of BASF, Germany's leading producer of chemical products, including fertilizer, attacked the government's "renewables" plan as not sustainable for industry: "We already have the highest electricity prices in Europe. Our demand is very clear: We need affordable energy prices in Germany."

RWE, Germany's biggest producer of electricity, reiterated that it will take the government to the Constitutional Court over the March 17 nuclear moratorium, and not accept suffering major damage from a government decree to break previous agreements with that industry, and shut down the industry's facilities.

Strike Joined by a Quarter-Million in Portugal

May 7 (EIRNS)—Portugal's National Federation of Civil Service Unions, which had called the 24-hour strike, said that around 60% of Lisbon's trash collectors and staff stayed away from work, and most emergency staff at main hospitals walked off the job. Some schools cancelled classes and several hospitals postponed scheduled surgeries, but court hearings and national school exams largely went ahead as scheduled and most public offices were open, according to media reports. Members of other labor unions, notably from the UGT federation, joined in protest actions.

Real Unemployment Among Spanish Youth Tops 60%

May 2 (EIRNS)—Spain's National Institute of Statistics reported on April 27 that official unemployment in the country had risen in the first quarter of 2011 to 21.3% of the labor force—a 1% increase. But among youth aged 18-25, official unemployment leapt by 2.5%, up to a 45% national average. There are now 860,000 unemployed, out of a youth labor force of some 2.1 million.

However, what's far worse is the fact that workers, young and old alike, have been leaving the official labor force in droves, simply because they have given up on finding a job. For example, 1 million fewer youth are looking for jobs today, than in 2008. That means that there are actually at least 1.86 million youth who are unemployed, out of a youth labor force of 3.1 million—which means real unemployment is over 60% among 18-25 year-olds.

"What that fall in the economically active population reveals," labor specialist Sara de la Rica told the daily El País, "is a brutal lack of hope."

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