Most of today’s news comes from Spain, where there’s lots of Spailout talk at the same time that pressure of Catalonian independence is growing — and the government continues to impose ever-harsher lashes of austerity. And, as always, there’s a German who has a gripe. And with the government denying it needs the Spailout, it’s somewhat odd that bureaucrats are already in Madrid working out a new round of “reforms.”
The Portuguese government continues to push forward with harsher austerity measures with the public growing angrier, the Italian prime minister’s angry Fiat is moving a lot of production to Brazil [which is more willing to lay out taxpayer-funded concessions, Ireland says Mario Monti backs their bailout, Cyprus may quit the euro if conditions for its imminent bailout prove too harsh, Germany is rolling in tax revenues, the European military’s thinking More Europe, and the EU is losing lots of money to fraud.
A pathetic British apology and a remix
We begin with a moment of levity, after a preface, explained in this clip about an apology made by Britain’s number two for breaching [among others] his promise to university students not to raise their tuitions.
First, a clip from RT on the apology:
And next, the Alex Ross and James Herring apologetic remix that has Brits laughing:
Youth unemployment works its way North
The first signs of spreading contagion are usually felt by those on the margins, in this case, the young of Northern Europe, who are facing growing difficulties in finding work.
Once again, it’s hardly surprising, but noteworthy and yet one more sign of that the crisis, all that austerity aside, is growing deeper.
From Robin Emmott and Robert-Jan Bartunek of Reuters:
A quarter of 18-to-25 year olds in Antwerp are now jobless, up from 19 percent in 2008. In some parts of Brussels, the Belgian and European capital and the third-richest region in the European Union, youth joblessness is as high as 40 percent. In France, Britain and Sweden, as many as one in five young people are now out of work.
The rising pool of jobless youth is fuelling class and racial divisions, according to youth workers and some politicians. Many experts blame joblessness for outbursts of violence such as last year’s riots in Britain.
And today’s problem could have a big impact on Europe’s future. The continent’s labor force is set to decline by 50 million people over the next 50 years, according to the World Bank. Skilled, experienced new workers will be needed to support an ageing population.
“Young people are being marginalized with major economic consequences,” said Francois Robert, a social worker at the employment institute Bruxelles Formation. “The problems people are talking about in Greece and Spain are right outside the European Commission’s door in Brussels.”
And on to Spain. . .
Anti-austerian anger grows in Spain
With the prime minister avidly trying to beat Troika to the punch by enacting a raft of the usual misery-inflicting measures of his own in hopes of avoiding the usual memorandum when the times for the Spailout, Spaniards are growing increasing angered at the sale of sacrifices they’re been asked to make to pay off the banksters.
From Deutsche Presse-Agentur:
The Spanish government on Friday faced new protests against its austerity policies, with transport employees, students and trade unions staging work stoppages and rallies.
The work stoppages, prompted also by wage cuts and higher transport prices, disrupted underground and bus traffic in Madrid.
A number of rallies called by trade unions were scheduled to be held around the capital.
Meanwhile, in the north-eastern region of Catalonia, a wildcat strike by some railway employees caused delays in local train traffic.
Dozens of protesting university students and lecturers interrupted the inauguration ceremony of the academic year at the University of Valencia. In Murcia, a similar protest forced organizers to cancel the ceremony.
Catalonian secession movement grows
We begin with a video report from euronews:
And the stories, beginning with this threat of a unilateral declaration of independence, reported by ANSAmed:
Fiscal negotiations with Spain’s central government having failed, Catalonia may unilaterally declare statehood, Generalitat spokesperson Francesc Homs said in a radio interview quoted by La Vanguardia newspaper on Friday. “We can stay as we are, or we can open a new way, that will new for everyone”, he said, adding that this could mean either a referendum on secession or a parliamentary declaration of independence.
A secessionist referendum in the next four years “is a possibility, but not the only one”, Homs said. “But it could also be done by parliamentary decision after elections”.
Asked whether a national state would be declared, Homs answered, “For example. I always thought we’d see an independent Catalonia”.
The possibility of early elections, which could turn into a vote on independence, is to be debated in the Catalan Parliament on Tuesday.
More from El País:
Homs’ announcement comes on the back of a number of advisories issued by the Catalan nationalist CiU bloc and its leader, regional premier Artur Mas, who says that a process leading to eventual independence for the region is “unstoppable.” It also comes one day after a tense meeting was held between Prime Minister Mariano Rajoy and Mas, who has been demanding a new financing plan for his region.
While Rajoy told Mas on Thursday that there was “no margin for negotiation of a fiscal pact,” Deputy Prime Minister Soraya Saénz de Santamaría reiterated the Popular Party (PP) leader’s pledge that the central government will review the structure of regional financing this term.
“The prime minister made it clear that he wasn’t going to accept any type of proposals that are not backed by the Constitution,” she said following Friday’s Cabinet meeting.
And finally this, from Ambrose Evans-Pritchard of the London Telegraph:
Catalonia’s parliament will meet next week to “think deeply” about its next fateful step. “Catalonia will follow its path. We have no enemies but we will build our own project as a country,” said Mr Mas.
The newspaper Confidencial reported that his Convergència i Unió (CiU) party and coalition partners have asked the European Commission whether Spain can prevent Catalans exercising democratic self-determination, and whether a sovereign Catalonia could remain part of the EU’s single market and the euro.
The speed of events has caught almost everybody by surprise, including Mr Mas himself. His CiU has, until now, pursued a policy of calculated ambiguity over secession. Mr Mas has pivoted quickly, embracing what he calls the “popular outcry” as his own.
The antagonisms date back to the Franco era and, above all, to 1714 when Philip V abolished all Catalan institutions, and imposed Castilian laws and absolutism by right of conquest.
Merkel’s finance minister scoffs at a Spailout
Though the need of yet another major cash infusion seems certain for Spain, the Iron Chancellor’s minister of money says the country doesn’t need the full-bore bailout, just the bank cash already agreed to.
From Agence France-Presse:
A Spanish cry for a full sovereign bailout, seen as a racing certainty over the summer, faces newly-expressed opposition from Germany even as EU officials lay the groundwork should one be judged necessary in Madrid.
German Finance Minister Wolfgang Schaeuble said on Friday that Spain did not need a further aid programme on top of promised loans to recapitalise its banking sector, but that Madrid was suffering from a lack of confidence on the financial markets.
Schaeuble told members of the foreign press that he was “steadfast” in agreeing with the government in Madrid that “Spain is on the right path and needs no further programme”.
“What Spain needs is confidence in the financial markets and there Spain really has problems,” he said.
“It is hard to deny that Spain’s standing on the financial markets does not take the real economic data sufficiently into account,” he added.
More misery on the way for Spaniards
The retirement age hike is certain, and retirees may discover their modest monthly payments reduced if a proposal to end inflation indexing goes through.
But that’s austerity for you, targeting the old, the young, and the helpless.
To be fair, they propose a slow phase-on the retirement age hike — really slow — but we suspect that the Troikarchs will have their say on that, too.
From Julien Toyer of Reuters:
Spain is considering freezing pensions and speeding up a planned rise in the retirement age as it races to cut spending and meet conditions of an expected international sovereign aid package, sources with knowledge of the matter said.
The pension measures would save at least 4 billion euros a year as well as fulfill European Union policy recommendations issued in May which senior euro zone sources said were being used as a blueprint for the terms of a sovereign aid program.
The accelerated raising of the retirement age to 67 from 65, currently scheduled to take place over 15 years, is a done deal, the sources said. The elimination of an inflation-linked annual pension hike is still being considered.
>snip<
The accelerated raising of the retirement age to 67 from 65, currently scheduled to take place over 15 years, is a done deal, the sources said. The elimination of an inflation-linked annual pension hike is still being considered.
Lagarde says Spain needs a smaller bank infusion
The already-approved payout to fund Spain’s cash-short banks won’t be as large as originally expected, says the IMF boss.
But it’s still a hefty sum.
From the London Telegraph:
Spain needs less money for recapitalizing its banks than widely believed, International Monetary Fund managing director Christine Lagarde has said.
“The number is lower than what was feared initially by the European and by the Spaniards,” Ms Lagarde told the Wall Street Journal.
“The expectation is that it is going to be much closer to the IMF financial sector assessment forecast than the €100bn (£80bn) that was put on the table as a broad cushion for restructuring of the Spanish banking sector,” she said.
In June the IMF estimated the needs of the banks, which have dragged the government’s finances into deep difficulties, would be about €40bn, AFP reported.
Another sign of the impending Spailout
While the government’s busy denying it’ll need the larger amount of cash a full scale sovereign bailout, the Men in Black are busily beavering away with Spanish bureaucrats on formulating the substance of what amounts to nothing less than the usual bailout-accompanying memorandum.
From Agence France-Presse:
The EU said on Friday it is working with the Spanish government on a national reform programme due to be announced next week, but insisted that this did not mean it was preparing a sovereign bailout.
“This is something the Spanish government is planning, something the Spanish government is claiming full ownership of,” said Simon O’Connor, spokesman for EU Economic Affairs Commissioner Olli Rehn.
He spoke amid mounting speculation Madrid may seek a full rescue on top of EU aid already agreed for its banks, said to be politically possible only once “conditions” it would have to meet in that event are thrashed out.
“We are cooperating very closely with them,” O’Connor told a press briefing, adding that country-specific reform recommendations already drawn up by the Commission for all 27 EU states would serve as a template.
“Further decisive progress in taking forward the reform agenda is we believe the best way for Spain to re-establish confidence,” O’Connor said.
Portuguese government pushes on with austerity
And the people are growing angrier.
But it’s either austerity or 30 years of poverty, says the prime minister.
Given the recent threat of the military to intervene if the cut regime continues, things are looking increasingly shaky in Lisbon.
From Deutsche Presse-Agentur:
Portuguese Prime Minister Pedro Passos Coelho on Friday defied mounting criticism of his austerity policies, insisting that Lisbon could not backtrack on its agreements with the European Union and the International Monetary Fund.
Doing so would plunge the country into “bottomless poverty” for up to three decades, Passos Coelho told parliament. It could also force Portugal to seek a second financial rescue and even leave the euro, he warned.
Passos Coelho has adopted a programme of draconian spending cuts, liberal economic reforms and privatizations in agreement with the EU and IMF, which granted Lisbon a bailout worth 78 billion euros (101 billion dollars).
The austerity has worsened Portugal’s recession and increased unemployment, which is now running at more than 15 per cent.
Hundreds of thousands of demonstrators demanded a change of policy last weekend, and the main opposition Socialist Party withdrew its support from the austerity programme. Left-wing parties and several prominent personalities have urged the government to resign.
Passos Coelho has also come under criticism from the Catholic Church, employers’ representatives and even from members of his own conservative Social Democratic Party.
And on to Italy. . .
Monti angered over Fiat flight to Brazil
The famed Italian automaker is moving some of its production to Brazil, and the prime minister is angry.
But Fiat did what corporations usually do these days: They got the Brazilian government to cough up most of the cost for building their new plants, something not allowed under E.U. rules.
From Deutsche Presse-Agentur:
Italian Business Minister Corrado Passera on Friday appeared to question Fiat’s decision to expand production in Brazil, prompting the carmaker’s chief to justify the move by citing the lack of subsidies in Europe.
The remarks came one day before Fiat chief Sergio Marchionne was due to meet Prime Minister Mario Monti to explain his plans for the embattled carmaker, which has seen sales in Europe fall.
“It is not a given that you cannot make money with cars in Europe. There are clear success stories, important brands which are increasing their share of the market,” Passera was quoted Friday by the Corriere della Sera newspaper.
>snip<
Brazilian authorities covered 85 per cent of Fiat’s 2.3-billion-euro (3-billion-dollar) investment in a new plant, Marchionne said, adding that European Union rules forbid aid of that magnitude in Europe.
And on to Ireland. . .
Irish prime minister says Monti backs bank deal
Enda Kenny, the Toaiseach [prime minister] of Ireland had a tete a tete with his his Troika-installed Italian counterpart in Rome and emerged to said Monti gives his full support to the €64 billion bank restructuring deal the Troika approved three months ago.
Kenny’s busily inflicting his own Gaelic brand of austerity rigors, and getting the usual blowback for its victims.
From Lise Hand of the Irish Independent:
“Italy is very supportive of a follow-through to the council decision being made in respect of Ireland,” said Mr Kenny at the end of an hour-long meeting at the Palazzo Chigi.
However, the Taoiseach added that the original autumn deadline for a deal is unlikely to be met.
“Commissioner (Olli) Rehn said he would like to see it completed at the end of October, so would I, but being realistic I cannot see that objective being achieved,” he said. “But certainly I would hope that this could be concluded as quickly as possible”.
Commenting on today’s ESRI report which said that further cuts in public expenditure are required, Mr Kenny emphasised that December’s Budget “will be the most challenging of this government’s remit. That’s why I’ve asked every government minister to bring in their conclusions this week in regard to what can be squeezed as a maximum out of Croke Park,” he said.
More from The Irish Times:
Both leaders today “expressed satisfaction” with the European Central Bank’s bond-buying plan, and the German constitutional court’s decision to back Europe’s permanent bailout fund.
An Italian government statement also said: “President Monti has expressed strong appreciation for the progress made by Ireland in recent months that has allowed the return of the Irish Government on the borrowing market in July.”
Cyprus raises specter of a eurozone exit
They’d chose to abandon the currency if the inevitable memorandum imposes too much austerity.
From Reuters:
Cyprus may have to consider an exit from the euro zone if international lenders impose excessively painful austerity measures as a condition for a bailout, the head of its ruling party said on Friday.
Andros Kyprianou, whose AKEL party is the primary backer of the left-wing government led by President Demetris Christofias, told Cypriot online news site 24h.com.cy such a strategy could be considered if austerity becomes unbearable.
“If the troika insists on very painful measures to remain in the euro zone, should we dig our heels in and say we won’t leave the euro zone because this is important, and (that) we will remain, however painful the measures may be?” Kyprianou said in a video interview posted on the website.
His party is now trailing in opinion polls behind the right-wing Democratic Rally party.
In a second video clip, asked if his comments clearly implied Cyprus should consider leaving the euro zone, Kyprianou replied: “I am certainly leaving this open. I am not pre-judging what we will do, but what I am saying is these issues must be discussed very seriously if we want to serve the interests of the Cypriot people.”
Earlier reports that Russia might offer a bailout have dimmed, writes Adonis Pegasiou of the London School of Economics’ Hellenic Observatory:
Cyprus has been locked out of international markets for more than a year now and it is only thanks to a Russian loan that it managed to postpone a bailout request from the EU last summer. With the Russians being hesitant to renew their lending to the Cypriot government, President Christofias has been left with no option but to seek aid from the IMF and the EU. Nevertheless, he is still being accused by the opposition parties of trying to further delay the adoption of any measures, at least so until the presidential elections which are scheduled to take place in February 2013 – the burden of a possible ‘surrender’ to the IMF ‘neoliberal’ doctrine may prove unbearable for AKEL (Cyprus’s communist party currently backing the government).
Germany keeps hauling in the taxes
And the total has set another record.
We suspect they better enjoy iut while they can.
From Deutsche Welle:
Ongoing growth in Germany’s economy has washed a record sum of tax money into state coffers this year. Rising wages in the course of the year have led to the August tax revenue beating all expectations.
In August, German tax authorities reported 41.3 billion euros ($53.6 billion) more in tax revenue than in the same month a year ago – a rise by 12.8 percent, according to figures released by the Finance Ministry on Friday.
The August result added to rising tax income for the German state in the first eight months of 2012, which was 5.8 percent higher compared with the same period in 2011, beating a recent state tax estimate for a rise of about 4.0 percent.
From January through August, Germany’s central and regional governments earned a total of 352.6 billion euros in taxes.
European military starved for cash
Gee, when European NATO allies wage war on Libya and in Afghanistan, it’s hardly a surprise that countries are running short of the cash they need to keep up to date, given the spread of the economic crisis.
But what’s ominous is that the situation is being exploited to the advantage of the More Europe agenda, which seeks to strip nation state of sovereignty and consolidate it in the machinery of Brussels.
When the talk turns to even more centralization of military control — and with a very familiar designated threat, a certain chill runs down our spine.
From Hürriyet Daily News:
Many European Union countries will not be able to afford key parts of their armed forces, such as air forces, in a few years unless they spend more and cooperate more closely on defense, the top EU military officer said Sept. 19.
In a hard-hitting speech, Hakan Syren, a Swedish general who chairs the EU’s Military Committee, said rising costs, inefficiencies and budget cuts had brought European defense to a critical point. “The military capabilities of the EU states are on a steady downward slope,” Syren told a seminar in Brussels organized by Greek Cyprus, which currently holds the EU presidency. The downturn is mirrored slightly by trends in the United States, but comes in stark contrast to Russia and China.prime example,” said Syren.
The downturn in spending is mirrored slightly by trends in the United States, but comes in stark contrast to Russia, which increased defense spending by 9.3 percent in 2011, and China, which has increased such expenditures by a whopping 170 percent since 2002 and now has the second-best funded military in the world.
“Looking a few years into the future, it is simple mathematics to predict that many member states will be unable to sustain essential parts of their national forces, air forces being the prime example,” Syren said.
And to conclude, a reminder that some things never change.
Fraud hacks away at European Union funds
And we are shocked. Shocked.
From Nikolaj Nielsen of EUobserver:
EU funds fraud is considerably higher than the €600 million reported by member states in 2010.
“The extent of the illicit activities that lead to losses in the EU budget is really shocking […] we assume that the real figure is considerably higher,” EU justice commissioner Viviane Reding told euro deputies in the civil liberty committee on Thursday (20 September).
Last year’s EU budget amounted to €125.5 billion but a large amount is allegedly stolen primarily in the areas of EU agricultural and regional development programmes. Member states manage 80 percent of the EU budget with national authorities in charge of how it is spent and who and how to prosecute suspected fraudsters.
But patchy judicial systems and low recovery rates prompted the commission to table an anti-fraud directive in July that would provide for an EU response to the problem. Those who commit the crime, she noted, often simply go to member states where prosecution is extremely low or non-existent.
