Western European News Digest
Budget Vote Fastest in Italian History
July 15 (EIRNS)Following threats that Italy would face imminent fiscal collapse and bring the Inter-Alpha banking system down with it, the Italian Parliament passed an austerity budget in the shortest time in its history.
In the Chamber of Deputies, the lower house, the vote was 316-284 for the austerity budget, with 2 abstaining. The opposition Democratic Party decided to vote against the measure, but not to block its passage. However, it did ask for early elections after the vote.
The Senate voted 161-135 in favor of the budget, with 3 abstentions.
The vote took place in an atmosphere of terror generated by Italian sovereign bond debt's escalating towards Greek and Irish levels, with yields on ten-year bonds shooting up to over 6% on the secondary market earlier this week. Yields only fell below 6% after intervention by the European Central Bank, which reportedly bought bonds on the secondary market. If yields hit 7%, Italy will be seen by the statistical geniuses as heading for a blowoutand the need for an impossible bailout.
Greek Case Proves: Austerity Doesn't Work
July 12 (EIRNS)Despite the crushing austerity the government has imposed, the Greek deficit continues to expand, simply because the policy is collapsing the economy, and therefore tax revenues have collapsed. The austerity plan that passed Parliament last month amid a huge cloud of tear gas, was based on trying to reduce last year's EU3.2 billion budget deficit for June 2010. But the latest figures now reveal that this year's deficit for June 2011 was EU4.5 billion, an increase of 1.3 billion.
The net revenues decreased by 8.3% to EU21.81 billion, which is EU3.27 billion less than expected. Ordinary spending increased by 8.8% between January and June to EU33.2 billion, because the increase in unemployment has led to a collapse of contributions to the social welfare funds, while an increase in unemployment required an expansion of unemployment and welfare payments.
The lead commentary of the website of the Greek Research Institute for European and American Studies calls for cancelling all of Greece's debt as the only way to save the country.
Swedish Banker Pushes for Euro Dictatorship
July 13 (EIRNS)The chief strategist on currencies for Sweden's SEB bank, Carl Hammer, told Svenska Dagbladet today that the crisis in Europe has no "middle way." The alternatives, according to him, are that the euro disappears as a currency, or there will be political integration, which he sees as the main option.
Hammer said: "To say that we approach a political union within a week or two is clearly not unreasonable, but if the people say stop to politicians deciding on more collective solutions, then there will be a halt in that process needed to keep the euro. So there is a clear political risk." The chairman of SEB is Marcus Wallenberg, who also serves as the treasurer of the Institute of International Finance, Inc., which, according to the Financial Times, sent a six-page ultimatum to the Eurogroup of finance ministers, demanding that the EU buy Greek government debt.
Movisol Interviewed on Speculative Attack Against Italy
July 13 (EIRNS)Liliana Gorini and Andrew Spannaus, chairwoman and secretary, respectively, of the Italian Movimento Solidarietà (Movisol), the LaRouche movement in Italy, were interviewed by Radio Padania yesterday and today, on how to stop the speculative attack against Italy. Host Roberto Ortelli opened the first interview by quoting from the EIR Strategic Alert on Jacques Attali's exposé of the euro as an anti-democratic system.
Many listeners called in to ask questions and wrote their compliments on Ortelli's homepage, saying that it was "high time to invite Movisol again to speak on the radio," and that Gorini's statements were "very clear and to the point."
Sinn Fein Accuses Government of Sleepwalking into New Bailout
July 13 (EIRNS)After Moody's Credit Rating Agency suddenly slashed Ireland's credit rating to junk status, the banner headline on the Sinn Fein website showed a picture of the Fine Gael/Labour coalition, with a caption reading, "Junk StatusGovernment or Credit Rating?"
Moody's not only made Ireland the third European nation with a credit rating downgraded to junk status, but also offered the "analysis" that Ireland would have to accept a second bailout.
Speaking in the parliament, following Moody's July 12 action, Sinn Fein finance spokesperson Pearse Doherty said, "This government is sleepwalking Ireland into a second bailout. The failure of the government to impose losses on the EU61 billion of private banking debt, two-thirds of which is unguaranteed by the state, is a catastrophic mistake."
Group of German Rebels Against Bailout Growing
July 14 (EIRNS)In Germany, the anti-bailout camp in the national parliament keeps growing: The group's last meeting on July 12 was attended by about 40 Christian Democrats and Free Democrats. This is 15 more than at the meeting the week before.
Frank Schaeffler (FDP), one of the organizers of the group, said that he expects 50 rebels soon, and that Chancellor Angela Merkel (CDU) has no chance of passing her bailout mechanism law in the parliament in September.
The mass-circulation daily Bildzeitung runs a banner headline that sums up all the fears in the German population about the escalating crisis: "Can the whole world go bankrupt?"
Spain's 'Indignados' Reach Out to Unemployed
July 10 (EIRNS)In their effort to reach out to the population at large, Spanish youth from the "Indignados" mass-strike movement are holding public meetings in working-class neighborhoods to explain their cause, and especially to take up the issue of the huge speculative bubble in the country's real estate sector. Groups of Indignados activists have taken to gathering at the homes of unemployed workers who are about to be evicted, to try to physically stop the process. One of their statements reads: "With the housing bubble burst and unemployment rising, either they feed their children or they pay the mortgage."
The Indignados are demanding a change in Spanish law, which currently makes the mortgage-debtor liable for the full amount of the mortgage, even if the value of the house has plummeted to much less than the debt, which they are obligated to pay with all their current and future assets. The Indignados are calling for a change to what they call "payment in full through forfeiture," meaning if they hand over their house, they have no further liability.
Germany Faces Power Shortages Without Nuclear
July 15 (EIRNS)A government-commissioned report on the future of German energy supplies confirmed warnings coming from numerous independent experts, that the country is facing power shortages and blackouts this Winter, unless it restarts one of the seven mothballed nuclear plants. The report, compiled by the German Federal Network Agency (DENA), responsible for oversight of the power supply, warns that unless sufficient power-generating capacity is kept in reserve, power shortages cannot be avoided. Outside of some capacities in presently idle coal power-generating units, there is only the option of bringing one of the closed nuclear plants back online, Matthias Kurt, head of the DENA, said in Berlin yesterday. "The numbers that we currently have indicate that one of these nuclear energy plants will be needed," he said.
Indeed, already long before Winter arrives, Germany is faced now with the challenge of replacing about 8,000 MW of nuclear-generated power which is shut down now, with extra imports from France and the Czech Republic. This has its extra price, naturally: Electricity prices per kilowatt-hour are already up by 20%, and are certain to increase further, as each one of the 20 remaining German nuclear power plants is shut down.