Spain edges rapidly to the bailout brink,. So what does King Juan Carlos do? He heads off on an African safari.
One of Spain’s largest corporations faces nationalization of its assets in Argentina, and the conservative goverbnment moves to strip Spain’s regional governments of autonomy.
Meanwhile, in Brussels, pressure mounts for the European Central Bank to bail out private banks, and the French president is calling for a new European stimulus program.
Italy edges nearer the brink, and in Britain, the poor are confronted with the the grim reality of major cuts to their health care.
In other words, the austerian agenda marches forward, leaving human tragedy in its wake.
Spain’s ‘What, me worry’ monarch takes a tumble
For Juan Carlos, it’s not “Let them eat cake,” but “Let me hunt elephants.”
From the BBC:
King Juan Carlos has apologised to the Spanish people for going on a hunting trip in Africa while his country was in the midst of an economic crisis.
His trip to Botswana, which was widely criticised, emerged after he was flown home for treatment for a fractured hip.
“I’m very sorry, I made a mistake. It won’t happen again,” he said, as he left San Jose hospital in Madrid.
It was widely reported that he had been hunting elephants, which the royal house has neither confirmed nor denied.
He broke his hip falling on a step and was flown home by private jet. He underwent hip replacement surgery on Saturday.
After news of his safari visit to Botswana was revealed, many Spanish newspapers published a photo of the king dating back to 2006, in which he is seen standing with a gun beside a dead elephant.
The king, 74, is honorary president of the Spanish branch of conservation group WWF and an online petition calling for his resignation had accumulated almost 85,000 signatures by the time he made his public apology.
Rajoy to move on regional autonomy
Globalism is all about destroying localism, and the good neocon that he is, Spain’s prime minister seems to be ready to move on regional autonomy.
From Giles Tremlett and Phillip Inman of The Guardian:
The conservative Spanish government of Mariano Rajoy expects to take direct financial control of at least one of the country’s ailing regional governments by May, according to sources in Madrid.
With some regional debt already downgraded to junk, senior officials said it would be the regional governments themselves that came to Madrid to beg for help to get through the year.
“It wouldn’t be surprising if this happened in May,” said a high-ranking official. “Some are paying interest rates that are impossible.”
International lenders are expected to welcome the plans after a series of warnings about the deteriorating state of the Spanish economy.
Government borrowing costs jumped above 6% on Monday as foreign investors expressed their growing fears for Rajoy’s administration and the prospect of a major default.
Note that last paragraph.
Betting on a Spanish bailout
For many, it’s a question of when, not if.
Economic experts watching Spain don’t know how much money will be needed or precisely when, but some are near certain that Madrid will eventually seek a multibillion euro bailout for its banks, and perhaps even for the state itself.
Prime Minister Mariano Rajoy has repeatedly said Spain doesn’t need or want an international bailout, and the European Union, which along with the IMF has already rescued Greece, Ireland and Portugal, also dismisses such talk.
But economists believe that Spanish banks will have to turn to the eurozone’s rescue fund, the European Financial Stability Facility (EFSF), for help in covering losses caused by a property market crash which has yet to end.
Likewise, investors are fretting about how Rajoy’s centre-right government can enforce deep austerity while reviving a recession-bound economy at the same time.
“They’re going to need EFSF money to recapitalise the banking sector,” said Carsten Brzeski, a senior economist at ING in Brussels. “I think we’ll only see a real end to the Spanish misery if the real estate market stabilises.”
The latest blow comes from Argentina
From Ben Chu of The Independent:
When it rains in Spain these days, it truly pours misery. Argentina announced on Monday that it is planning to nationalise an oil company, YPF, in which a Spanish firm, Repsol, has a majority stake. Coming at a time when the government in Madrid has just rammed through the most severe budget since the death of General Franco, this must feel like an economic insult for Spain on top of already intolerable injury.
The Spanish government has promised an “overwhelming” response to the threat to Repsol’s financial interests in Argentina and the country’s Prime Minister, Mariano Rajoy, is in South America to gather support from friendly governments such as Mexico and Colombia.
The Spanish company’s shares fell by as much as 9 per cent yesterday. European Commission President José Manuel Barroso weighed in, saying he expected Argentina to abide by agreements. “I am seriously disappointed about the announcement,” he said.
Madrid summoned Argentina’s ambassador, Carlos Bettini, as the dispute threatened to evolve into an all-out trade war. “With this hostility, there will be consequences… in the diplomatic field, in the industrial field and on energy,” Spain’s Industry Minister, José Manuel Soria, said.
But the bitter truth is that Spain is in no real position to win battles abroad. Preventing the roof from falling in at home over the coming months will be difficult enough. Spanish unemployment levels, which were painfully high even in the boom years of the last decade, are now comparable to those seen in America in the depths of the Great Depression. Some 23 per cent of Spaniards are out of work, and youth unemployment in Spain has reached an agonising 50 per cent.
As Spain goes, so goes Italy?
Yet another domino threatens to tumble, this time Italy, where bankster-installed Prime Minister Mario “Three-card” Monti doesn’t seem able to keep his moves as fast as the game requires.
GlobalPost’s Paul Ames writes that
if Spain’s attempt to heal itself with a shock-treatment of austerity fails, the EU may not be strong enough to prevent the infection from spreading to Italy, France and beyond.
“The big question is, can Europe ring-fence Spain, can they draw a line to stop this contagion happening? This is their biggest challenge,” says Carsten Brzeski, senior Brussels economist at the Dutch bank ING.
In the eye of the euro-debt storm late last year, Spain enjoyed a reprieve from the markets after Conservative Prime Minister Mariano Rajoy took office in December with a promise to knock the economy into shape and, more importantly, the European Central Bank’s (ECB) decision to give banks and governments a lifeline by pumping one trillion euros of cheap loans into the euro-zone economy.
Things started to go sour in March when the effect of the ECB’s liquidity injection began to fade and Rajoy announced he wouldn’t be able meet an EU-agreed budget deficit target of 4.4 percent this year, despite 27 billion euros ($35.5 billion) worth of budget cuts and tax hikes.
“Spain is suffering from a serious loss of confidence again,” blogged economist Luis Garicano. “The perspective of a new reformist government had made our creditors think Spain was on the way up, now after the budget and some strange events, confidence has gone again.”
Italian government sees more shrinkage
Things in Italy are going from bad to worse by traditional economic measures, with the economy set to contract further than expected.
From the BBC:
The Italian government has slashed its forecast for the economy in 2012.
It was previously predicting a 0.4% contraction in the economy, but has cut that to a 1.2% contraction.
The government has also admitted that it will not be able to meet its target of balancing the budget by 2013.
It now says that it will be able to balance the budget by 2015, which is still more optimistic than the IMF, which says Italy will not have a balanced budget until at least 2018.
The IMF expects the Italian economy to contract by 1.9% in 2012.
The government has raised its forecast for growth in 2013 from 0.3% to 0.5%.
The announcements followed a cabinet meeting to approve the new Economic and Financial Document.
The document predicts that Italy’s debt will increase from 120% of GDP in 2011 to 123.4% in 2012.
Austerity fires consume Italian artworks
With spending cuts cutting at the heart of Italy’s once-vibrant art world, one museum, with the consent of artists, has come up with a unique protest.
They’re burning the art.
From the BBC:
A museum in Italy has started burning its artworks in protest at budget cuts which it says have left cultural institutions out of pocket.
Antonio Manfredi, of the Casoria Contemporary Art Museum in Naples, set fire to the first painting on Tuesday.
“Our 1,000 artworks are headed for destruction anyway because of the government’s indifference,” he said.
The work was by French artist Severine Bourguignon, who was in favour of the protest and watched it online.
Mr Manfredi plans to burn three paintings a week from now on, in a protest he has dubbed “Art War”.
Artists from across Europe have lent their support, including Welsh sculptor John Brown, who torched one of his works, Manifesto, on Monday.
Push on to cut out the bankster wall
In yet another attack on national sovereignty, there’s a move afoot to eliminate national government power over banks through a mechanism that would eliminate the role of states in doling out EU bailout funds.
With an eye on the growing banking crisis in southern Europe, particularly in Spain, an increasing number of goverments as well as senior represenatives of the European Central Bank are pleading for the European Union’s temporary euro backstop fund to be used to provide financial institutions with direct assistance.
Sources familiar with the discussions told the Süddeutsche Zeitung that the parties would like to see the criteria used by the European Financial Stability Facility (EFSF) to allocate aid be relaxed to include financial institutions in the event they represent a greater problem than a country’s government finances. So far, this aid has been paid to governments, which in turn provided some forms of assistance to beleagured banks.
Such a move would enable the temporary euro-zone rescue fund, the European Financial Stability Facility (EFSF), to directly transfer money to these banks, bypassing national governments.
Süddeutsche reports that the primary supporter for the calls is the Spanish government of Prime Minister Mariano Rajoy, which is having increasing difficulty raising money on the markets to fill the country’s budget shortfall. Relaxing the rules could help ease the burden of the banking crisis his government faces and it would enable Spain’s comparably low debt-to-GDP ratio to remain constant. In addition, it would mean that his country wouldn’t be forced to implement strict savings and reform measures that are stipulated by the rescue fund in exchange for aid. As some observers have noted, austerity measures appear to be contributing to Spain’s slide into recession.
In other words, the power of banks and the EU increases, while the role of elected national governments is diminished, yet another step on Europe’s race to the globalist agenda.
Sarko demands growth
And no wonder. As the French economy struggles and French President Nicolas Sarkozy wages a desperate fight for reelection, there’s no surprise that Sarko is calling for a new European agenda to stimulate growth in struggling economies.
The only problem is that German Chancellor Angela Merkel, who was rebuffed in her plans to campaign for Sarko, is strongly opposed to any new growth plan. Given that Germany is the continent’s dominant economic power, her response isn’t surprising.
From Valentina Pop of euobserver:
With just a week to go until the presidential elections, French incumbent Nicolas Sarkozy on Sunday (15 April) said the European Central Bank should get a new mandate on reviving economic growth – a no-go area for Germany.
“On the question of the ECB’s role in boosting growth, we French are going to open the debate,” Sarkozy told supporters in central Paris during the biggest rally of his re-election campaign to date.
He said that there must be “no taboos” in discussing the rules of the eurozone, including a more growth-oriented role for the ECB: “We cannot have taboo subjects. We cannot have banned debates.”
The Frankfurt-based ECB was a political target for Sarkozy five years ago during the 2007 presidential election campaign. Since then he has regularly spoken out in favour of a more active role by the bank in saving ailing governments in the eurozone.
Health care austerity hits Britain’s neediest
Consider it a preview of things to come here in the U.S.
From Nigel Morris of The Independent:
Hundreds of thousands of elderly and disabled people face cuts to their support and assistance this year as councils struggle to find new savings of £1bn from social-care budgets, an investigation by The Independent has established.
As town halls cut spending on help for the vulnerable by up to 10 per cent, care homes are being shut, social workers made redundant and charges for day care increased.
There are also warnings that the measures could be counterproductive, as they will increase the strain on hospitals required to care for people not well enough to live at home without support. The economies are being forced through as the cumulative effects of austerity measures announced by the Chancellor mount.
The Association of Directors of Adult Social Services (Adass) calculates that budgets dropped in England by £1bn last year and forecasts another £1bn in cuts over the next two years.
The Independent carried out a survey of more than 30 authorities, establishing that they are planning to reduce care spending by an average of 3 per cent this year. As a result, many are having to make tough decisions on social care.
America’s poor have long been resorting to emergency rooms, and now Britain’s once-vaunted National health Service is creating the same sort of self-defeating barriers to care that have afflicted this country for years.