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Debt, Austerity, Devastation: It’s Europe’s Turn


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Like plague in the 14th century, the scourge of debt has gradually migrated from South to North. Our 21st-century Yersinia pestis isn’t spread by flea-infested rats but by deadly, ideology-infested neoliberal fundamentalists. Once they had names like Thatcher or Reagan; now they sound more like Merkel or Barroso; but the message, the mentality and the medicine are basically the same. The devastation caused by the two plagues is also similar – no doubt fewer debt-related deaths in Europe today than in Africa three decades ago, but probably more permanent harm done to once-thriving European economies.

Faithful – and older – New Internationalist readers will recall the dread phrase ‘structural adjustment’. ‘Adjustment’ was the innocent-sounding term for the package of economic nostrums imposed by wealthy Northern creditor countries on the less-developed ones in what we then called the ‘Third World’. A great many of these countries had borrowed too much for too many unproductive purposes. Sometimes the leadership simply placed the loans in their private accounts (think Mobutu or Marcos) and put their countries in hock. Paying back in pesos, reals, cedis or other funny money was unacceptable: the creditors wanted dollars, pounds, deutschmarks…

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Anti-austerity protests in Spain

 

Furthermore, the Southerners had contracted their loans at variable interest rates, initially low but astronomical from 1981 when the Federal Reserve declared an end to the era of cheap money. When countries such as Mexico threatened default, panicked creditor-country treasury ministers, top bankers and international bureaucrats spent some sleepless weekends eating take-out and cobbling together emergency plans.

Plus ça change, plus c’est la même chose.* Decades later, serial crisis meetings still take place, this time in Brussels and, with minor variations, the response is identical: you only get a bailout in exchange for committing to a set of stringent requirements. These once echoed the neoliberal ‘Washington Consensus’; now they are more truthfully labelled ‘austerity packages’ but demand the same measures. Sign here, please, in blood.

For the South, the contracts said: ‘Cut back food production and grow cash-earning crops. Privatize your State enterprises and open up profit-making activities to foreign transnational corporations, especially in raw materials and extractive industries, forestry and fisheries. Drastically limit credit, cancel subsidies and social benefits. Make health and education paying propositions. Economize and earn hard currency through trade. Your prime responsibility is to your creditors, not your people.’

Now it’s Europe’s turn. The countries of southern Europe, plus Ireland, are relentlessly told: ‘You have been living beyond your means. Now pay.’ Governments meekly accept orders and their people often assume that their debt must be paid instantly because the debt of a sovereign State is just like the debt of a family. It’s not – a government accumulates debt by issuing bonds on financial markets. These bonds are bought mostly by institutional investors such as banks which receive an annual interest payment, low when the risk of default is low, higher when it isn’t. It’s absolutely normal, desirable and even necessary for a country to have a debt which will pose zero problems and generate many benefits if the money is prudently invested for the longer term in productive activities such as education, health, social benefits, solid infrastructure and the like.

Indeed, the higher the proportion of public spending in a government budget, the higher the standard of living and the more jobs are created – including private-sector jobs. This rule has been verified time and again since the correlation between public investment and national well-being was first noted in the late 19th century.

Obviously, borrowed money can also be wasted and spent stupidly and benefits can be distributed unfairly. The big family-State budget difference is that States don’t disappear like bankrupt companies. Productive, well-managed investment financed by government borrowing should be seen on the whole as A Good Thing.

The magic numbers

In 1992, European countries narrowly voted Yes to the Maastricht Treaty, which at the insistence of Germany contained two magic numbers, 3 and 60. Never allow a budget deficit greater than three per cent; never contract public debt greater than 60 per cent of your Gross Domestic Product (GDP).** Why not two or four per cent, 55 or 65 per cent? Nobody knows, except perhaps some ancient bureaucrats who were there, but these numbers have become the Law and the Prophets.

In 2010, two famous economists announced that beyond 90 per cent of GDP, debt would plunge a country into trouble and its GDP would contract. That sounds logical because interest payments would take a bigger chunk out of the budget. But in April 2013, a North American PhD candidate tried to replicate their results and found he couldn’t. Using their figures, he got a positive result for GDP which would still rise by more than two per cent per annum. The famous, if red-faced, twosome had to admit they were Excel victims and had misplaced a comma.

Even the International Monetary Fund has confessed to similar mistakes, this time on the austerity cuts issue. We now know, because the Fund was honest enough to tell us, that cuts would hurt the GDP by two to three times more than it initially foresaw. Europe should go easy, says the IMF, and not ‘drive the economy with the brakes on’. The magic 60 per cent of GDP debt limit is no more sacred than the three per cent deficit limit; yet policies remain the same, because the neoliberal hawks seize upon every scrap of dubious evidence that seems to promote their cause.

We are faced with two basic questions. The first is why did the debts of European countries rise so steeply after the crisis struck in 2007? In just four years, between 2006 and 2010, debts escalated by more than 75 per cent in Britain and Greece, by 59 per cent in Spain and by fully 276 per cent in all-time champion Ireland, where the government simply announced it would assume responsibility for all the debts of all the private Irish banks. The Irish people would henceforward be held responsible for the irresponsibility of Irish bankers. Britain did the same, though in lesser measure. Just as profits are privatized, losses are socialized.

So citizens pay through austerity, whereas bankers and other investors who bought the country’s bonds or toxic financial products contribute nothing. After the 2007 crisis, the GDP of European countries dropped by an average five per cent and governments had to compensate. Escalating business failures and mass unemployment also meant more expenditures for governments just when they were taking in less income from taxes.

The New Morality

Economic stagnation is expensive – higher expenditure and lower revenue add up to a single answer: borrow more. Saving the banks and taking the consequences of the crisis they created are the fundamental reason for the debt crisis – and consequently for harsh austerity today. People were not ‘living beyond their means’ but the New Morality is clearly ‘Punish the Innocent, Reward the Guilty’.

This is no defence of stupid or corrupt policies such as allowing the Spanish housing bubble to inflate or Greek politicians to hire masses of new civil servants after each election. The Greeks have a bloated military budget and inexcusably refuse to tax the great shipping magnates and the Church – the biggest property owner in the country. But if your bathtub leaks and the dining room paint is peeling, do you burn down your house? Or do you fix the plumbing and repaint?

The human consequences of austerity are inescapable and well known: pensioners search through rubbish bins at mid-month hoping to find a meal; talented, well-educated Italians, Portuguese and Spaniards flee their countries as unemployment for their age group approaches 50 per cent; unbearable stress is laid on families; violence against women increases as poverty and distress rise; hospitals lack essential medicines and personnel, schools decline, public services deteriorate or disappear. Nature takes the brunt as well: nothing is invested in reversing the climate crisis or halting environmental destruction – it’s too expensive. Like everything else, we can’t do it now.

We know these outcomes, the results of what Angela Merkel calls ‘expansionary austerity’ policies. This neoliberal theory claims that markets will be ‘reassured’ by tough policies and reinvest in the newly disciplined countries concerned. This hasn’t happened. Pictures of Merkel adorned with swastikas are appearing throughout southern Europe.

Many Germans think they are helping Greece – and they don’t want to anymore. In fact, virtually all the bailout money has taken a circuitous route: EU government contributions made through the European Stability Mechanism have been channelled via the Greek Central Banks and private banks right back to British, German and French banks that had bought up Greek Eurobonds to get a higher yield. It would be simpler to give European taxpayers’ money directly to the banks, except that said taxpayers might notice. Why make an ongoing psycho-drama over two per cent (Greece) or 0.4 per cent (Cyprus) of the European economy? A cynic might say: ‘Easy. To ensure Ms Merkel’s re-election in September.’

The second basic question is: why do we continue to apply policies that are harmful and don’t work? One can look at this self-created disaster in two ways. Eminent prize-winning economists like Paul Krugman or Joseph Stiglitz believe that the European leadership is brain-dead, ignorant of economics and needlessly committing economic suicide. Others note that the cuts conform exactly to the desires of such entities as the European Roundtable of Industrialists or BusinessEurope: cut wages and benefits, weaken unions, privatize everything in sight and so on. As inequalities have soared, those at the top have done nicely. There are now more ‘High Net Worth Individuals’ with a much greater collective fortune than in 2008 at the height of the crisis. Five years ago there were 8.6 million HNWIs worldwide with a pile of liquid assets of $39 trillion. Today, they are 11 million strong with assets of $42 trillion. Small businesses are failing in droves, but the largest companies are sitting on huge piles of cash and taking full advantage of tax havens. They see no reason to stop there.

This is not a crisis for everyone and the European leadership is no more stupid than its counterparts elsewhere. It is, however, entirely subservient to the desires of finance and the largest corporations. Certainly, neoliberal ideology plays a key role in its programme but serves especially to emit thick smokescreens and pseudo-explanations and justifications so that people will believe There Is No Alternative. Wrong: the banks could have been socialized and turned into public utilities, like other utilities that run on public money; tax havens closed down, taxes levied on financial transactions and many other remedies applied. But such thoughts are heretical to neoliberalism (although 11 Eurozone countries will start taxing financial transactions in 2014).

I am a fervent European and want Europe to thrive, but not this Europe. Against our will we have been plunged into class warfare. The only answer for citizens is knowledge and unity. What the one per cent has imposed, the 99 per cent can reverse. But we’d better be quick about it: time is running out.

Susan George is Board President of the Transnational Institute and author of 16 books, most recently Whose Crisis, Whose Future? and How to Win the Class War, on her website in June for electronic download and print on demand along with six ‘Susan George Classics’.

* ‘The more things change, the more they stay the same.’

** Public debt is money owed by a government in the form of loans obtained on the financial markets rather than other forms of lending.

via Debt, Austerity, Devastation: It’s Europe’s Turn.

How Austerity Has Failed


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Austerity has failed. It turned a nascent recovery into stagnation. That imposes huge and unnecessary costs, not just in the short run, but also in the long term: the costs of investments unmade, of businesses not started, of skills atrophied, and of hopes destroyed.

What is being done here in the UK and also in much of the eurozone is worse than a crime, it is a blunder. If policymakers listened to the arguments put forward by our opponents, the picture, already dark, would become still darker.

How Austerity Aborted Recovery

Austerity came to Europe in the first half of 2010, with the Greek crisis, the coalition government in the UK, and above all, in June of that year, the Toronto summit of the group of twenty leading countries. This meeting prematurely reversed the successful stimulus launched at the previous summits and declared, roundly, that “advanced economies have committed to fiscal plans that will at least halve deficits by 2013.”

This was clearly an attempt at austerity, which I define as a reduction in the structural, or cyclically adjusted, fiscal balance—i.e., the budget deficit or surplus that would exist after adjustments are made for the ups and downs of the business cycle. It was an attempt prematurely and unwisely made. The cuts in these structural deficits, a mix of tax increases and government spending cuts between 2010 and 2013, will be around 11.8 percent of potential GDP in Greece, 6.1 percent in Portugal, 3.5 percent in Spain, and 3.4 percent in Italy. One might argue that these countries have had little choice. But the UK did, yet its cut in the structural deficit over these three years will be 4.3 percent of GDP.

What was the consequence? In a word, “dire.”

In 2010, as a result of heroic interventions by the monetary and fiscal authorities, many countries hit by the crisis enjoyed surprisingly good recoveries from the “great recession” of 2008–2009. This then stopped (see figure 1). The International Monetary Fund now thinks, perhaps optimistically, that the British economy will expand by 1.8 percent between 2010 and 2013. But it expanded by 1.8 percent between 2009 and 2010 alone. The economy has now stagnated for almost three years. Even if the IMF is right about a recovery this year, it will be 2015 before the economy reaches the size it was before the crisis began.

The picture in the eurozone is worse: its economy expanded by 2 percent between 2009 and 2010. It is now forecast to expand by a mere 0.4 percent between 2010 and 2013. Austerity has put the crisis-hit countries through a wringer, with huge and ongoing recessions. Rates of unemployment are more than a quarter of the labor force in Greece and Spain (see figure 2).

When the economies of many neighboring countries contract simultaneously, the impact is far worse since one country’s reduced spending on imports is another country’s reduced export demand. This is why the concerted decision to retrench was a huge mistake. It aborted the recovery, undermining confidence in our economy and causing long-term damage.

Why Fiscal Policy

Why is strong fiscal support needed after a financial crisis? The answer for the crisis of recent years is that, with the credit system damaged and asset prices falling, short-term interest rates quickly fell to the lower boundary—that is, they were cut to nearly zero. Today, the highest interest rate offered by any of the four most important central banks is half a percent. Used in conjunction with monetary policy, aggressive and well-designed fiscal stimulus is the most effective response to the huge decrease in spending by individuals as they try to save money in order to pay down debt. This desire for higher savings is the salient characteristic of the post–financial crisis economy, which now characterizes the US, Europe, and Japan. Together these three still make up more than 50 percent of the world economy.

Of course, some think that neither monetary nor fiscal policy should be used. Instead, they argue, we should “liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” In other words, sell everything until they reach a rock-bottom price at which point, supposedly, the economy will readjust and spending and investing will resume. That, according to Herbert Hoover, was the advice he received from Andrew Mellon, the Treasury secretary, as America plunged into the Great Depression. Mellon thought government should do nothing. This advice manages to be both stupid and wicked. Stupid, because following it would almost certainly lead to a depression across the advanced world. Wicked, because of the misery that would follow.

Austerity in the Eurozone

Some will insist that the eurozone countries had no alternative: they had to retrench.

This is true in the sense that members have limited sovereignty, wed as they are to a single currency, and had to adapt to the dysfunctional eurozone policy regime. Yet it did not have to be this way.

1. The creditor countries, particularly Germany, could have recognized that they were enjoying incredibly low interest rates on their own public debt partly because of the crises in the vulnerable countries. They could have shared some of this windfall they enjoyed with those under pressure.

2. The needed adjustment could have been made far more symmetrical, with strong action in creditor countries to expand demand.

3. The European Central Bank could have offered two years earlier the kind of open-ended support for debt of hard-pressed countries that it made available in the summer of 2012.

4. The funds made available to cushion the crisis could have been substantially larger.

5. The emphasis could then have been more on structural reforms, such as easing labor regulations and union protections that restrain hiring and firing and raise labor costs, and less on fiscal retrenchment in the form of reduced spending. Reduced labor costs could have made these nations’ export industries more competitive and encouraged domestic hiring.

It is possible to admit all this and yet argue that without deep slumps, the necessary pressure for adjustment in labor costs that is inherent in the adoption of a single currency (which is a modern version of the gold-standard-type mechanism that once ruled the advanced nations and helped bring on the Great Depression) would not have existed.

This, too, is in general not true.

1. In Greece, Ireland, Portugal, and Spain, at least, the private sector was in such a deep crisis that additional downward pressure as a result of rapid fiscal retrenchment simply added insult—and more unemployment—to deep injury.

2. In Italy, the pressure from years of semi-stagnation, with many more to come, would probably have been sufficient to restructure the labor markets, to bring about lower labor costs, provided structural reforms of the labor market were carried out, measures allowing companies to reduce their workforces and adjust wages more easily.

In short, the scale of the austerity was unnecessary and ill-timed. This is now widely admitted.

Austerity in the UK

The UK certainly did have alternatives—a host of them. It could have chosen from a wide range of different fiscal policies. The government could, for example, have:

1. Increased public investment, rather than halving it (initially decided by Labour), when it enjoyed zero real interest rates on long-term borrowing.

2. It could have cut taxes.

3. It could have slowed the pace of reduction in current spending.

It could, in brief, have preserved more freedom to respond to the exceptional circumstances it confronted.

Why did the government not do so?

1. It believed, and was advised to believe, that monetary policy alone could do the job. But monetary policy is hard to calibrate when interest rates are already so low (at or close to zero) and potentially damaging particularly in the form of asset bubbles. Fiscal policy is not only more direct, but it can also be more easily calibrated and, when the time comes, more easily reversed.

2. The government believed that its fiscal plans gave it credibility and so would deliver lower long-term interest rates. But what determines long-term interest rates for a sovereign country with a floating exchange rate is the expected future short-term interest rates. These rates are determined by the state of the economy, not that of the public finances. In the emergency budget of June 2010, the cumulative net borrowing of the public sector between 2011 and 2015–2016 had been forecast to be £322 billion; in the June 2013 budget, this borrowing is forecast at £539.4 billion, that is, 68 percent more. Has this failure destroyed confidence and so raised long-term interest rates on government bonds? No.

3. It believed that high government deficits would crowd out private spending—that is, the need of the government to borrow would leave less room for private borrowing. But after a huge financial crisis, there is no such crowding out because private firms are reluctant to invest, and consumers are reluctant to spend, in a weak economic environment.

4. It argued that the UK had too much debt. But the UK government started the crisis with close to its lowest net public debt relative to gross domestic product in three hundred years. It still has a debt ratio much lower than its long-term historical average (which is about 110 percent of GDP).

5. The government argued that the UK could not afford additional debt. But that, of course, depends on the cost of debt. When debt is as cheap as it is today, the UK can hardly afford not to borrow. It is impossible to believe that the country cannot find public investments—the cautious IMF itself urges more spending on infrastructure—that will generate positive real returns. Indeed, with real interest rates negative, borrowing is close to a “free lunch.”

6. The government now believes that the UK has very little excess capacity. But even the most pessimistic analysts believe it has some. Of course, the right policy would address both demand and supply, together. But I, for one, cannot accept that the UK is fated to produce 16 percent less than its pre-crisis trend of growth suggested. Yes, some of that output was exaggerated. There is no reason to believe so much was.

Assessment of Austerity

We, on this side of the argument, are certainly not stating that premature austerity is the only reason for weak economies: the financial crisis, the subsequent end of the era of easy credit, and the adverse shocks are crucial. But austerity has made it far more difficult than it needed to be to deal with these shocks.

The right approach to a crisis of this kind is to use everything: policies that strengthen the banking system; policies that increase private sector incentives to invest; expansionary monetary policies; and, last but not least, the government’s capacity to borrow and spend.

Failing to do this, in the UK, or failing to make this possible, in the eurozone, has helped cause a lamentably weak recovery that is very likely to leave long-lasting scars. It was a huge mistake. It is not too late to change course.

via How Austerity Has Failed by Martin Wolf | The New York Review of Books.

Austerity News From around the World


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In our greed for ideology, we gorged on light-touch regulation


Irish Examiner
But there’s a problem with austerity. It dawned on me recently that I admire austerity. Some of my life-long heroes were austere. But they practised austerity, they didn’t impose it. When there isn’t a true, genuine, shared austerity, for a higher 
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Ireland : No more austerity ( and dump the euro )
Forbes
Today, my wife and I are traveling to Ireland to visit the town where my grandfather grew up (and maybe have a beer or two–if we survive my driving!). The economy there presents a sad case study for the austerity programs being forced on economies 
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An end to austerity will not boost Europe
Financial Times
The eurozone periphery is on a risky path to end fiscal austerity and accept larger budget deficits. Portugal is the most recent dramatic shift in that direction; Italy, Spain and even France are also abandoning plans to cut spending and raise taxes 
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Civilians on unpaid leave in Pentagon austerity move
Reuters
WASHINGTON, July 8 (Reuters) – Civilian defense workers across the United States began taking unpaid leave on Monday in a Pentagon-imposed austerity move expected to save $1.8 billion through Sept. 30 by effectively cutting the pay of about 650,000 
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Greek municipal workers riled by government’s austerity plans
Globe and Mail
Greek municipal workers riled by government’s austerity plans Add to … The Globe and Mail. Published Monday, Jul. 08 2013, 3:01 PM EDT. Last updated Monday, Jul. 08 2013, 3:28 PM EDT. Oops, something bad just happened, don’t worry, I’m sure it is our 
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‘Maariv’ management says paper won’t print
Jerusalem Post
The management of Hebrew daily Maariv announced Monday that the newspaper would not be printed for Tuesday morning, due to austerity measures. Employees were reportedly instructed to stop work on the current edition, but they instead decided to take 
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IMF, smokescreens and visions
The Express Tribune
There is nothing home-grown about the IMF austerity packages, which have delivered little in Europe or elsewhere. But, at least, the IMF has a vision. Some economist like Joe Stiglitz view it as immune to evidence and that is why they dub this vision 
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Portugal back from the brink, but risks loom
Sydney Morning Herald
The rift was all about the austerity that Portugal is being forced to carry out in exchange for its bailout from the troika of European Union, International Monetary Fund and European Central Bank. Vitor Gaspar, who was an architect of the cutbacks 
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Has Xi’s graft crackdown run out of steam?
South China Morning Post
President Xi Jinping has consulted retired party leaders on his anti-corruption and austeritycampaign, the Communist Party’s official newspaper reported on Monday – a move some analysts believe is a sign that the current leadership lacks the 
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UAE royals eschew wedding feasts to set example of austerity
Financial Times
As Muslims across the region prepare for the start of the annual month-long Ramadan fast this week, the message is going out strongly from Gulf royals, mosques and the street that – theoretically at least – waste is out and austerity is in. It is a 
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Indonesia: Draconian austerity amidst impressive economic growth
In Defense of Marxism
The fuel price increase in Indonesia is part of the capitalist austerity which is now being implemented all over the world. The capitalist crisis that exploded in 2007 has not subsided. On the contrary, it is getting deeper. For the capitalists, there 
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Georgiades Says Cyprus Making ‘Good Progress’ Before Aid Review
Businessweek
Cypriot Finance Minister Haris Georgiades expressed optimism about the first review later this month of the government’s progress in meeting budget-austerity conditions tied to the international rescue of the country. “We are doing good progress 
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Austerity Discredited, Not Defeated – Time to Fight for Jobs and Growth

Truth-Out
Cracked bank (Image: Cracked bank via Shutterstock)For four long years after the recession officially ended, conservative austerity policies have sabotaged America‘s economic recovery, condemning millions of Americans to unemployment and poverty.
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Fighting Austerity

Socialist Project
Dan Gallin is Chair of the Global Labour Institute (www.global-labour.org), a labour service organization established in 1997 with a secretariat in Geneva. This is his speech at a conference co-organized by the GLI, Fighting Austerity: Rebuilding 
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Athens mayor ‘physically attacked’ over job cuts

RT (blog)
The incident happened as the mayor was leaving a Confederation of Greek Municipalities (KEDE) meeting, where he held discussions about the austerity measures and the way they affect thousands of municipal employees. According to reports, he was 
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Portugal general strike rejects austerity

Workers World
To satisfy a stringent austerity program, the government has cut social security, health care, education and other benefits, and reduced workers’ job security. The Portuguese working class answered these conditions with a political general strike on 
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Ireland and the Basque Country: Massive Flight (Emigration) or General Strike?


Introduction

Many billions of Euros are being extracted from Europe’s vassal-debtor nations – Spain, Greece, Portugal and Ireland – and transferred to the creditor banks, financial speculators and swindlers located in the City of London, Wall Street, Geneva and Frankfort. Under what have been termed ‘austerity’ programs, vast tributary payments are amassed by ruling Conservative and Social Democratic regimes via unprecedented and savage budget cuts in salaries, public investment, social programs and employment. The result has been catastrophic growth in unemployment, under-employment and casual labor reaching over 50% among workers under age 25, and between 15% and 32% of the total labor force. Wages, salaries and pensions have been slashed between 25% and 40%. The age of retirement has been postponed by 3 to 5 years. Labor contracts (dubbed ‘reforms’) concentrate power exclusively in the hands of the bosses and labor contractors who now impose work conditions reminiscent of the early 19th century.

o learn first-hand about the capitalist crisis and the workers’ responses, I spent the better part of May in Ireland and the Basque country meeting with labor leaders, rank and file militants, unemployed workers, political activists, academics and journalists. Numerous interviews, observations, publications, visits to job sites and households – in cities and villages – provide the basis for this essay.

Ireland and the Basque Country: Common Crises and Divergence Responses

The Irish and Spanish states, societies and economies (which presently includes the Basque country, pending a referendum) – have been victims of a prolonged, deep capitalist depression devastating the living standards of millions. Unemployment and underemployment in Ireland reach 35% and in the Basque country exceeds 40%, with youth unemployment reaching 50%. Both economies have contracted over 20% and show no signs of recovery. The governing parties have slashed public spending from 15% to 30% in a range of social services. By bailing out banks, paying overseas creditors and complying with the dictates of the autocratic ‘troika’ (International Monetary Fund, European Central Bank and European Commission), the capitalist ruling class in Ireland and the Basque region have undermined any possible investments for recovery. The so-called ‘austerity’ program is imposed only on the workers, employees and small businesspeople, never on the elite. The Brussels-based ‘troika’ and its local collaborators have lowered or eliminated corporate taxes and provided subsidies and other monetary incentives to attract multi-national corporations and foreign finance capital.

The incumbent bourgeois political parties, in power at the beginning of the crash, have been replaced by new regimes that are signing additional agreements with the ‘troika’ and bankers. These agreements impose even deeper and more savage cuts in public employment and a further weakening of workers’ rights and protection. The employers now have arbitrary power to hire and fire workers at a moment’s notice, without severance pay, or worse. Some contracts in Ireland allow employers to demand partial repayment of wages if workers are forced to leave their jobs before the end of their contract because of employer abuse. The Spanish economy – including in the Basque country – is subject to a modern form of ‘tributary payments’ dictated by the ruling imperial oligarchy in Brussels. This oligarchy is not elected and does not represent the people it taxes and exploits. It is accountable only to the international bankers. In other words, the European Union has become a de facto empire – ruled by and for the bankers based in the City of London, Geneva, Frankfort and Wall Street. Ireland and the Basque country are ruled by collaborator vassal regimes which implement the economic pillage of the electorate and enforce the dictates of the EU oligarchy – including the criminalization of mass political protests.

The similarity in socio-economic conditions between Ireland and the Basque country in the face of crisis, austerity and imperial domination, however, contrasts with the sharply divergent responses among the workers in the two regions due to profoundly different political, social and economic structures, histories and practices.

Facing the Crisis: Basque Fight, Irish Flight

In the face of the long-term, large-scale crisis, Ireland has become the ‘model’ vassal state for the creditor imperial states. The leading Irish trade union federation and the dominant political parties – including the Labor Party currently in coalition with the ruling Fine Gael Party – have signed off on a series of agreements with the Brussels oligarchs to slash public employment and spending. In contrast, the militant pro-independence Basque Workers Commission, or LAB, has led seven successful general strikes with over 60% worker participation in the Basque country – including the latest on May 30, 2013.

The class collaborationist policies of the Irish trade unions have led to a sharp generational break – with older workers signing deals with the bosses to ‘preserve’ their jobs at the expense of job security for younger workers. Left without any organized means for mass struggle, young Irish workers have been leaving the country on a scale not seen since the Great Famine of the mid-19th century. Over 300,000 have emigrated in the past 4 years, with another 75,000 expected to leave in 2013, out of a working population of 2.16 million. In the face of this 21st century catastrophe, the bitterness and ‘generational break’ of the emigrating workers is expressed in the very low level of remittances sent back ‘home’. One reason the Irish unemployment rate remains at 14% instead of 20-25% is because of the astounding overseas flight of young workers.

In contrast, there is no such mass emigration of young workers from the Basque country. Instead of flight, the class fight has intensified. The struggle for national liberation has gained support among the middle class and small business owners faced with the complete failure of the right-wing regime in Madrid (ruled by the self-styled ‘Popular Party’) to stem the downward spiral. The fusion of class and national struggle in the Basque country has militated against any sell-out agreements signed by the ‘moderate’ trade unions, Workers Commissions (CCOO) and the General Union of Workers (UGT). LAB, the militant Basque Workers Commission, has vastly more influence than their number of formally affiliated unionized workers would suggest. LAB’s capacity to mobilize is rooted in their influence among factory delegates, who are elected in all workplaces, far exceeding all trade union membership. Through the delegates meeting in assemblies, workers discuss and vote on the general strike – frequently bypassing orders from central headquarters in Madrid. Direct democracy and grass roots militancy frees the militant Basque workers from the centralized bureaucratic trade union structure which, in Ireland, has imposed retrograde ‘give backs’ to the multi-national corporations.

In the Basque country, there is a powerful tradition of co-operatives, especially the Mondragon industrial complex, which has created worker solidarity in the urban-rural communities absent among Irish workers. The leading Irish politicians and economic advisers have groveled before the multi-national corporations, offering them the lowest tax rates, biggest and longest-term tax exemptions, and the most submissive labor regulations of any country in the European Union.

In the Basque country, the nationalist-socialist EH Bildu-Sortu political party, the daily newspaper Gara, and the LAB provide mutual political and ideological support during strikes, electoral contests and mass mobilizations based on class struggle. Together, they confront the ‘austerity’ programs as a united force.

In Ireland, the Labor Party – supposedly linked to the trade unions – has joined the current governing coalition. They have agreed to a new wave of cuts in social spending, layoffs of public employees, and wage and salary reductions of 20%. The trade union leadership may be divided on these draconian cuts, yet most still support the Labor Party. The more militant retail workers’ union rejects the cuts, but has no political alternative. Apart from support from the republican-nationalist Sein Fein and smaller leftist parties, the political class offers no clear progressive political program or strategy. [The Sein Fein has made the ‘transition’ from armed to electoral struggle.] According to the latest (May 2013) polls, it has doubled its voter approval rating from under 10% to 20% due to the crisis. However, Sein Fein is internally divided: the ‘left’ pro-socialist wing looks to intensify the ‘anti-austerity’ struggle while the ‘republican’ parliamentary leaders focus on unification and downplay class struggle. As a result of its collaboration with the ‘troika’ and the new regressive tax laws, the Labor Party is losing support and the traditional right-wing party, Fianne Fail, which presided over the massive swindles, speculative boom and corporate giveaways, is making an electoral comeback – and may even return to power. This helps to explain why Irish workers have lost hope in any positive political change and are fleeing in droves from the perpetual job insecurity imposed by their elite: ‘Better a plane ticket to Australia than a lifetime of debt peonage, regressive bankruptcy laws and boss-dictated contracts approved by trade union chiefs who draw six digit salaries’.

The Basque country’s revolt against centralized rule from Madrid is partly based on the fact that it is one of Spain’s most productive, technologically advanced and socially progressive regions. Basque unemployment is less then that of the rest of Spain. Higher levels of education, a comprehensive regional health system, especially in rural areas and a widespread network of local elected assembles, combined with the unique linguistic and cultural heritages, has advanced the Basque Nation toward greater political autonomy. For many this marks the Basques as a political ‘vanguard’ in the struggle to break with the neo-liberal dictates of the EU and the decrepit regime in Madrid.

Conclusion: Political Perspectives

If current austerity policies and emigration trends continue, Ireland will become a ‘hollowed out country’ of historical monuments, tourist-filled bars and ancient churches, devoid of its most ambitious, best trained and innovative workers: a de-industrialized tax-haven, the Cayman Island of the North Atlantic. No country of its size and dimensions can remain a viable state faced with the current and continuing levels of out-migration of its young workers. Ireland will be remembered for its postcards and tax holidays. Yet there is hope as the left republicans of the Sein Fein, socialists, communists and anti-imperialist activists, join the unemployed and underpaid workers in forming new grassroots networks. At some point the revolving doors of Irish politicos in and out of office may finally come to a halt. Unemployed and educated angry young people may decide to stay home, stand their ground and turn their energies toward a popular rebellion. One consequential socialist leader summed it up: “Deep pessimism and the influence of bankrupt social democracy and imperialist ideology within the labor movement are very strong. As you know we can’t start a journey other than from where we are”. The determination and conviction of Irish trade union militants is indeed a reason to hope and believe that current flight will turn into a future fight.

In the case of the Basque country, the rising class and national mass struggle, linked to the legacy of powerful co-operatives and solidarity based worker assemblies, provides hope that the current reactionary regime in Madrid can be defeated. The ruling neo-fascist junta (the ruling party still honors the Franco dictatorship and military) is increasingly discredited and has to resort to greater repression. With regard to the militant Basque movements, the regime has taken violent provocative measures: criminalizing legal mass protests, arresting independence fighters on trumped up charges and forcefully banning the public display of the photos of political prisoners (called ‘terrorists’ by Madrid). It is clear the government is increasingly worried by the strength of the general strikes, the rising electoral power of the pro-independence left and has been trying to provoke a ‘violent response’ as a pretext to ban the press, party and program of the EH Bildu-Sortu and LAB.

My sense is that Madrid will not succeed. Spain as a centralized state is disintegrating: the neo-liberal policies have destroyed the economic links, shattered the social bond and opened the door for the advance of mass social movements. The bi-party system is crumbling and the class-collaborationist policies of the traditional trade union confederations are being challenged by a new generation of autonomous movements.

READ THE BIO AND MORE ARTICLES 
BY JAMES PETRAS ON AXIS OF LOGIC

© Copyright 2013 by AxisofLogic.com

This material is available for republication as long as reprints include verbatim copy of the article in its entirety, respecting its integrity. Reprints must cite the author and Axis of Logic as the original source including a “live link” to the article. Thank you!

via Ireland and the Basque Country: Massive Flight (Emigration) or General Strike? | Featured |Axisoflogic.com.

Anti Austerity news


Spaniards hold antiausterity demos
Press TV
Deteriorating economic situation in Europe has created growing discontent among the European public, with many nations across the continent grappling with teetering economies. The European financial crisis began in early 2008. Insolvency now threatens 


Press TV
 

Rallies in Belfast call for G8 leaders to abandon austerity and help world’s 
Irish Times
Rallies in Belfast call for G8 leaders to abandon austerity and help world’s starving. Peaceful protests as city prepares to host ObamasAnti-G8 protesters during a rally in Belfast city centre ahead of the G8 summit of world leaders. Photograph: Paul 

Spaniards hold antiausterity demos
Press TV
Deteriorating economic situation in Europe has created growing discontent among the European public, with many nations across the continent grappling with teetering economies. The European financial crisis began in early 2008. Insolvency now threatens 


Irish Times

 

Cuts to healthcare spending putting Spaniards’ lives at risk, report finds


Austerity kills is the message of a study published by the ‘British Medical Journal

Austerity measures could mean the dismantling of a large part of the Spanish health system and significantly damage the health of the population, according to a study published in the British Medical Journal on Thursday.

The authors of the report warn that if the trend does not change, there is a risk that Spain will experience a spiral of health problems that could mean an increase in infectious diseases such as tuberculosis and HIV.

One part of the research consisted of interviewing 34 doctors and nurses in Catalonia. The majority said they felt “shocked, numbed and disillusioned” about the cuts, and some expressed fears that the austerity measures would “kill people,” the researchers said.

The report highlighted that healthcare and social services cuts of almost 14 percent at the national level and of 10 percent at the regional level in 2012 had coincided with an increase in demand for care, especially on the part of senior citizens, the disabled and the mentally ill.

Researchers also identified an increase in cases of depression, alcoholism-related diseases and suicides in Spain since the crisis began.

“If no corrective measures are implemented, this could worsen with the risk of increases in HIV and tuberculosis, as we have seen in Greece, where healthcare services have had severe cuts, as well as the risk of a rise in drug resistance and spread of disease,” said Helena Legido-Quigley, a lecturer in global health at the London School of Hygiene & Tropical Medicine, who worked on the study.

The report also noted that Spain had one of the lowest healthcare budgets in the European Union as a proportion of GDP.

via Cuts to healthcare spending putting Spaniards’ lives at risk, report finds | In English | EL PAÍS.

Blood test could spot Alzheimer’s


A blood test that could spot early signs of Alzheimer’s is being perfected by scientists.

Sufferers of the neurodegenerative disease, which causes progressive loss of memory, have higher levels of certain types of amino acids called peptides in their blood, according to research.

The particular group of peptides, called beta amyloid (A), are found naturally in the body, and a build-up in the brain over a period of years causes memory complaints and other symptoms associated with the disease.

And now scientists in Spain believe their test to measure very small amounts of beta amyloid (A) brings them closer to a “reliable, minimally invasive biomarker for Alzheimer’s disease“.

Professor Manuel Sarasa, the chief scientific officer and founder of Araclon Biotech, and his team have been perfecting blood tests “ABtest40” and “ABtest42” to measure tiny amounts of the peptides.

He said: “The study has shown that our tests for A in blood find a high level of association between the peptide levels and the disease when comparing healthy people and people with mild cognitive impairment.”

“By measuring three different levels in blood, free in plasma, bound to plasma components and bound to blood cells, for two of the most significant peptides, A40 and A42, then comparing the ratios of those levels to established diagnoses methods, we have been able to consistently show a relationship between A levels and the disease.”

“This means that we, and by ‘we’ I mean Alzheimer’s’ researchers in general, are that much closer to having a reliable, minimally invasive biomarker for Alzheimer’s disease.”

He added: “The importance of this is that studies could recruit earlier and at much less expense.

“Interventional therapies can be tested in earlier stages of the disease and once an effective therapy is found, this type of test will be well suited to population screening in the public health sector.”

The results of the research are being published in the Journal of Alzheimer’s Disease in July.

via Blood test could spot Alzheimer’s.

Why Europe can’t just “fix” youth unemployment


Our problems are not due to a lack of innovative ideas; they are due to an excess of financial power concentrated in the hands of an elite of bankers.

For years already, the youth of Europe’s heavily indebted periphery has been facing mass unemployment. In Greece and Spain, a respective 59 and 56 percent of young people are now out of work, while youth unemployment in the EU as a whole currently stands at a troubling 24 percent, up from 22.5 percent last year. The “lucky” ones are those waiting tables with PhD degrees in their back pockets. Those who were forced to leave their families and friends behind to join the generational exodus to Germany or Angola don’t even show up in the statistics.

In recent weeks, European leaders somewhat belatedly seem to have become mightily interested in the issue. Italy’s new Prime Minister Enrico Letta called youth unemployment the most serious problem facing his country and called for an EU plan to “combat” it. German Chancellor Angela Merkel, flag-bearer of the European austerity movement, similarly considers youth unemployment to be “Europe’s biggest challenge.” Meanwhile, a new campaign by Big Think somewhat naively asks “what’s causing youth unemployment and what can fix it?”

Apart from the obvious hypocrisy of these concerns — coming from the lips of the same officials whose unrelenting insistence on austerity, neoliberal reforms and full debt repayment largely caused the unemployment crisis to begin with — this newfound sympathy for our generation’s plight hinges on a dangerous assumption that serves to ideologically re-construct youth unemployment as a “problem” that can somehow be “solved” with a magic fix or a continental master plan — without addressing the underlying causes of austerity, depression, and a fundamentally unsustainable debt load, let alone the internal contradictions of the eurozone and globalized financial capitalism more generally.

It should be clear to any intelligent person by now that youth unemployment is not a problem in the ordinary sense of the word; it is a symptom of a much more deep-seated disease that’s breaking down our society from within. Other symptoms include the rise of neo-Nazism and xenophobic violence in Greece; the wave of suicides across Southern Europe; the 400.000 families that have been evicted from their homes in Spain; the thousands of starving horses that have been abandoned by their owners in Ireland; the UK students who had their tuition fees tripled and now face the prospect of either dropping out, studying abroad, or accruing massive student debts; the eurozone record levels of mortgage debt held by Dutch households, etc., etc. — not to mention the thorough discrediting of democratic institutions and the massive riots that have rocked major European capitals like London, Athens, Madrid, Lisbon and Rome.

But European leaders seem blind to the metastasis of misery that has crept into the social fabric of our continent. Wouldn’t it be great, they now seem to tell us, if we could have crippling austerity, an increasing debt load, a devastating social crisis, starving pensioners, the return of fascism, a wave of suicides and mass deprivation — but without the youth unemployment? I’m not buying this story, and I don’t think any of us should. The attempt to cast the current crisis in generational terms serves to drive a wedge between us and our unemployed, indebted and/or retired (grand)parents. It serves to co-opt the youth in the ongoing wave of neoliberal reforms, making us believe it is in our best interest to crack down on the labor rights, jobs and pensions of our parents so we ourselves can better compete for the increasingly precarious jobs of the future.

The real reason European leaders are suddenly so concerned about youth unemployment — while they remain unmoved by the plight of Greek AIDS patients, for instance, who now can’t get their anti-retroviral drugs — is simply that they are terrified by the prospect of social unrest. As the New York Times reported today, “it is clear that policy makers are seriously worried that millions of frustrated young job seekers pose as much of a threat to the euro zone as excessive government debt or weak banks.” German Finance Minister Wolfgang Schäuble literally admitted that “We will have to speed up in fighting youth unemployment, because otherwise we will lose the support, in a democratic way, in some populations of the European Union.” What they fear, in other words, is a continent-wide youth uprising. At its worst, their plans to “fix” youth unemployment serve to distract us from the obvious class dimension at play, promoting the illusion that the social crisis we face is just a series of economic problems that can be fixed without radical changes to the political status quo.

The inconvenient truth is that unemployment is an integral element of the neoliberal policy response to the crisis pursued by the European Union and the IMF. This, in itself, is nothing new. IMF austerity programs in the developing world have long involved dramatic reductions in wages and rises in unemployment. Careful quantitative analysis of the Latin American debt crisis of the 1980s has shown that “the most consistent and statistically significant impact of Fund programs in Latin America … was the reduction in labor share of income.” Even official IMF studies recognize that its austerity programs “boost unemployment and lower paychecks.” Most importantly, the authors of a 2011 IMF report, Painful Medicine, conclude that austerity causes not just short-term but “particularly long-term unemployment.”

In other words, asking for austerity measures without youth unemployment is like insisting on the medieval practice of blood-letting without the blood-loss. It is not only brutal, but also practically impossible. Austerity and unemployment are like Siamese twins, conjoined at the hip, designed to strengthen and reinforce one another. As long as the EU and IMF keep imposing these highly destructive adjustment measures, unemployment will keep on rising. The only genuine “solution” to unemployment, therefore, would be to break free from the shackles of austerity and to default on the foreign debt. This is the reformist vision pursued by SYRIZA in Greece, and despite the lack of revolutionary imagination of this quasi-Keynesian approach, there is certainly something to be said for it from a humanitarian point of view.

At the same time, I have now written some 50,000 words on this question — why not default? – for my PhD thesis, showing precisely why the option of default is often so elusive. In a word, default would greatly harm the interests of foreign private creditors, who just happen to control virtually all the critical resources in the global economy, giving them a disproportionate ability to block the type of solutions that would favor the unemployed. So to get to the phase where we can even realistically start considering genuine “solutions” to the “problem” of youth unemployment, we first have to confront the financial power structures that obstruct the pursuit of such solutions to begin with. This requires much more than a continental master plan to combat youth unemployment. It requires a radical break with the status quo.

Our problems, in short, are not due to a lack of innovative ideas; they are due to an excess of financial power concentrated within the hands of a tiny elite of bankers. This means we have to dramatically reformulate our question. Rather than asking what innovative ideas can solve the problem of youth employment, we should be asking what type of strategies could upend the structural power of international creditors. This leads us away from economics and back into the realm of revolutionary theory and praxis. How could Europe’s downtrodden youth ever possibly conceive of shaking the global financial order? It is to this impossible question that I will turn in my next post.

via Why Europe can’t just “fix” youth unemployment | ROAR Magazine.

Europe’s New Dismal Jobless Numbers


The euro zone has registered yet another record high unemployment rate of 12.2%, European statistics agency Eurostat reports on Friday.

Earlier in the day, Italy, the third-largest economy in the currency bloc, reported a first quarter jobless rate of 12.8%, the highest in the 36 years this data has been collected, Meanwhile youth unemployment rose to a staggering 40.5%, also an all-time record high, reports Il Sole 24 Ore.

Here is a breakdown of the alarming numbers:

-More than 26 million people unemployed in the 27-member European Union.

-More than 19 million unemployed in the 17-country euro zone.

-Euro zone average: 12.2%

-European Union average: 11%

Highest rates:

Greece: 27% in February 2013

Spain: 26.8%

Portugal: 17.8%

Lowest rates:

Austria: 4.9%

Germany: 5.4%

Luxemburg: 5.6%

In comparison, the United States was 7.5% down from 7.6% in the previous month and 8.1% in April 2012.

Youth unemployment:

-Euro zone youth unemployment: 24.4% up from 24.2% in January 2013.

-European Union under-25 unemployment: 23.5% down from 23.6% in January 2013.

Euro area inflation expected to be on the rise:

via Europe’s New Dismal Jobless Numbers – All News Is Global |.

Occupy Exercises Its International Muscle — and Monsanto to Feel It on May 25


images (1)I had to go to Spain to get the true grasp of Occupy’s potential for galvanizing action!

My contact, we’ll call him “Vlad,” is an expatriate of Brooklyn now living in Madrid with his wife, Nikki, and their very young daughter. An activist long pre-Zuccotti, but a major Occupier there, he is now part of a web of ingenious tech experts who are collectively serving as a Communication Nexus for the upcoming, world-wide Monsanto protest to take place May 25.

Monsanto is just the tip of the spear and the present focus of outrage over corporation ownership of the most essential of human needs — their food. Monsanto is the “poster child” in the way that it has demonstrated unwelcome international as well as local sway over governments that are supposed to protect its citizens.

This, fueled by recent revelations of beyond-cozy relationships between this poster child for a “biotech corporatocracy” and the U.S. federal government has caught the attention — and ire — of activists everywhere. It is the Monsanto Protection Act rider slipped into law which launched what will become known as the March Against Monsanto.

What started between six weeks and two months ago on Facebook as a “good idea,” Vlad reports, has coalesced into a one-day protest that will simultaneously span six continents, 36 countries, all 50 states in the U.S. plus the District of Columbia, and take place in at least 350 cities. All of this is reported on daily and hourly in some 250 (at last count) Facebook pages and scores of websites tasked with coordinating as many as four hundred thousand of marchers.

This is where Occupy, uniquely proven as a non-hierarchical and self-coordinated system, comes in to serve as “Command Un-Central” to link these disparate groups and individuals and to help direct information flow.

“Any kind of centralization is a weakness. If all this information had to be aggregated and dispensed by one person or one location, it would assuredly fail,” Vlad asserts as one of a loosely-affiliated covey of some 200 tech-savvy volunteers.

Will this be picked up by mainstream media — or go unnoticed?

Occupiers see MSM and its influence or effect on either Occupy or this day of action to be minimal. As Vlad describes it, “At first in Zuccotti Park they tried to ignore us. That was a mistake, because it gave us an opportunity to define ourselves rather than be defined.” The march against Monsanto “will be a strengthening of that self-definition.”

Whatever is said or written about the May 25 event through corporate-controlled media — positive or negative — will be offset or corrected by citizen journalists who are putting their own “feet on the street” to document what really happens and not just what is being reported on.

In short, an exponentially-growing population of citizens will have access to facts and field reports and not just carefully edited talking points intersticed between commercials.

“This will give us — again — the opportunity to occupy public space and discuss our (collective) future,” Vlad declares. “Just Google Monsanto Strike May 25,” he directs, and then provides two of his own key sites to visit: http://www.MonsantoMarch.org which provides a map — a sea of red and blue dots — signifying participating cities, and FB site (MarchAgainstMonsanto) which claims over 81,000 members and provides a spreadsheet of local and international events.

Whither goest thou, Occupy?

One of the many charges leveled against the Occupy movement was that it lacked a central theme or “demand.” Given the number of wrongs that Occupiers have railed against over time, this is an understandable but irrelevant question. Occupy questions it all: fracking, women’s rights, workers rights, indigenous issues, immigration, free speech, corporate personhood, Hurricane Sandy, banking evils, and on and on.

What will be demonstrated in at least this one occasion is that Occupy is non pareil in its ability to awaken, inform and inspire the citizenry to mobilize anywhere and everywhere against specific illegal — even immoral — corporate and governmental actions. Monsanto is the flashpoint.

It is this March Against Monsanto action which will confirm Occupy’s political and social relevance beyond Zuccotti Park. On this one day, especially, it intends to be a very, very large and powerful megaphone likely to answer the questions about Monsanto voiced by a blogger:

Why do they need to be protected from the law? Why are they putting themselves above the law? And who are these politicians that are willing to just do what they are told to do because of the money they are receiving from these huge companies?

I suspect that a number of my readers may show and be seen as part of that answer.

Been to Occupy Wall Street?

If you’ve been to an Occupy Wall Street event anywhere in the country, we’d like to hear from you. Send OfftheBus your photos, links to videos or first-hand accounts of what you’ve seen for possible inclusion in The Huffington Posts’s coverage.

via Jerry Ashton: Occupy Exercises Its International Muscle — and Monsanto to Feel It on May 25.

via Jerry Ashton: Occupy Exercises Its International Muscle — and Monsanto to Feel It on May 25.

Viva Espana Get Your Pesetas Out Now Hombres  


BARCELONA – Spain – What would Picasso have thought about the euro? Maybe what is going to transpire soon in the country of bullfighting tapas eating Spaniards will be reminiscent of Picasso’s greatest piece Guernica.

“If you are a British expat, get your money out yesterday, if you are Spanish, get your money out sooner than yesterday, if you have a property in Spain, try and sell it, although I’m afraid you may be mierda out of luck with that idea, how can you sell something that is pretty much worthless now and will be even more worthless soon when the debt maelstrom hits?” an insider from the Spanish Finance Ministry told a Spanish business journal.

What happened in Cyprus is destined to happen in Spain soon therefore it seems the wheel of misfortune turns its weary cycle over the troublesome euro waters daily, churning away leaving frothing sewage water in its cumbersome wake.

spain_bank_run_cyprus_contagion_830783746

As the Eurogroup President, Jeroen Dijsselbloem said, that “if necessary the uninsured deposit holders” will be gored by the bull’s horns and thus there is the rub, there is no chivalry left in Espana as Don Quixote has been kicked firmly in the cojones by his trusty squire’s donkey; Picasso would surely have crafted a diabolical sculpture of a deformed woman to represent the broken euro and Salvador Dali would have simply shat in a purple bucket standing on top of a lobster, as for Gaudi, his representation of the euro would be a pile of ceramic rubble.

“Spain is the big one for the euro. When Spain’s banks need to be recapitalised again, you can simply kiss your bank deposit goodbye. Especially with Spain’s unemployment currently at 26.7% things are definitely not getting better for people. There may very well be real bloodshed when the country’s economy collapses completely under its soon to be massive 110% gross debt of GDP,” an economist said from the UK.

via Viva Espana Get Your Pesetas Out Now Hombres  .

via Viva Espana Get Your Pesetas Out Now Hombres  .

Spanish court refuses extradition request against HSBC whistleblower Falciani


Spain’s High Court has turned down Switzerland’s request to extradite Hervé Falciani, the former HSBC Private Bank employee whose tax-evasion whistleblowing activities have become a cause célèbre. The French–Italian computer expert, who in 2008 made off with files detailing 130,000 of the Geneva-based bank’s clients, will not be required to return to Switzerland to face four charges relating to his data grab.

The court ruled that the principle of “double incrimination” is not satisfied in this case, meaning that the offenses of which Falciani is accused are not listed as such in Spanish criminal law. The Monaco-born IT expert was arrested in Switzerland – where he is accused of financial espionage, violation of the bank secrecy law, revealing commercial secrets and stealing clients’ private data – but he left the country, finally being arrested again in Spain last July.

The High Court in Madrid also considered that the information Falciani had facilitated to the tax authorities in France, Spain, Germany, Italy and the United States was related to criminal activities that are “in no way eligible for legitimate protection.”

Falciani, who had been released on bail for by the Spanish courts before his April 15 extradition hearing, is now free to travel outside Spain. Had the court ruled in favor of the Swiss request, the Spanish government would have had the last word on the extradition process.

Information released by the former bank employee has allowed the Spanish state to recover more than 300 million euros of lost taxes between 2010 and 2011, with further related investigations still in progress.

via Spanish court refuses extradition request against HSBC whistleblower Falciani | In English | EL PAÍS.

via Spanish court refuses extradition request against HSBC whistleblower Falciani | In English | EL PAÍS.

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