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  • Anti-austerity strikes sweep southern Europe

    Anti-austerity strikes sweep southern Europe

    6 hr ago| By Feliciano Tisera and Daniel Alvarenga
    The countries-wide demonstrations are unlikely to budge governments to change their cost-cutting efforts.

    MADRID/LISBON - Police and protesters clashed in Spain, Italy and Portugal on Wednesday as millions of workers went on strike in organized labor's biggest Europe-wide challenge to austerity policies since the euro zone debt crisis erupted three years ago.

    Hundreds of flights were cancelled, schools were shut, factories were at a standstill and trains barely ran in Spain and Portugal where unions held their first joint general strike. Stoppages in Belgium interrupted international rail services.

    Workers also protested in Greece and France against austerity policies that have taken a heavy economic toll and aggravated mass unemployment.

    But the demonstrations organized by the European Trade Union Confederation seemed unlikely to force hard-pressed governments to change their cost-cutting strategies.

    In Spain, 118 people were arrested - including two allegedly with material to make explosives - after confrontations at picket lines and damage to storefronts. Riot police fired rubber bullets at protesters in central Madrid in one brief clash. Some 74 people were hurt.

    "In austerity, there is only depression and unemployment," Fernando Toxo, head of Spain's biggest union, Comisiones Obreras told tens of thousands of demonstrators in central Madrid.

    Even non-union workers jointed protests and marches.

    "This isn't about politics or unions. This is social and economic. If we have to shut down the country we'll shut it down," said 24-year-old Mariluz Gordillo, a non-unionized phone operator at El Corte Ingles department store in Madrid.

    In Rome, scuffles broke out between police in riot gear and demonstrators who threw stones, bottles and fireworks at police. About 60 demonstrators were detained. Protesters occupied Pisa's mediaeval Leaning Tower for an hour, hanging a banner reading "Rise up. We are not paying for your crisis".

    Police charged into hundreds of protesters outside Parliament in Lisbon, with Portuguese television showing live footage of people being beaten. At least two people were seen being detained by police, who said they had charged in response to a barrage of stones from protesters.

    DEEPENING RECESSION

    In Portugal and Greece - both rescued with European funds and under strict austerity programs - the economic downturn sharpened in the third quarter, data showed on Wednesday.

    Portuguese unemployment jumped to a record 15.8 percent while in neighboring Spain, one in four of the workforce is jobless.

    Greece's economic output shrank 7.2 percent on an annual basis in the third quarter as the debt-laden country staggers towards its sixth year of depression.

    Close to 26 million people are unemployed in the European Union while governments take aim at spending on treasured universal health care and public schools.

    "Things have to change... Money has ended up with all the power and people none. How could this happen?" said Esteban Quesada, 58, a hardware store owner in Barcelona who closed his shop to join the protests in Spain's second city.

    Throughout southern Europe governments are trying to put public finances back on track after years of overspending. Portugal and Greece have cut pensions and, with Spain, have slashed public sector wages as well as spending on hospitals and schools. Italy and France are also under pressure to control their budget deficits.

    EU Economic and Monetary Affairs Commissioner Olli Rehn praised Spain on Wednesday for making progress in trimming its budget but acknowledged many Spaniards are struggling.

    In Spain, most of the savings have been gobbled up by higher interest payments on the national debt, swollen by the cost of rescuing banks after a real estate bubble burst in 2008.

    Germany's central bank, the Bundesbank, said in a report on Wednesday that the euro zone debt crisis is still the number one risk to German banks and insurers, and the situation had not improved from last year.

    Promises from the European Central Bank to support sovereign bond prices for countries that seek aid have brought some relief to Spain and Italy in the capital markets. On Wednesday Italy sold 3-year bonds at the lowest borrowing cost in two years.

    SPAIN TO STAY THE COURSE

    While several southern European countries have seen bursts of violence, a coordinated and effective regional protest against austerity has yet to force a significant policy shift.

    Spanish Economy Minister Luis de Guindos told reporters on Wednesday the government would stay the course with spending cuts to meet ambitious deficit cutting targets, despite the strike.

    Union leaders in Spain said more than 9 million workers had joined the general strike - the second this year.

    The government said participation was much lower and played down the impact, saying many services were functioning normally. Stores opened normally in many parts of the country, though some had protesters outside.

    About 5 million people, or 22 percent of the workforce, are union members in Spain. In Portugal about a quarter of the 5.5 million strong workforce is unionized.

    Passions were inflamed when a Spanish woman jumped to her death last week as bailiffs tried to evict her from her home. Spaniards are furious at banks being rescued with public money while ordinary people suffer.

    In Portugal, which took an EU bailout last year, public and political opposition to austerity is growing, threatening to derail measures sought by Prime Minister Pedro Passos Coelho.

    Passos Coelho's policies were held up this week as a model by German Chancellor Angela Merkel, who is despised in much of southern Europe for taking a hard line on the conditions attached to EU aid.

    Inspectors from the "troika" of the International Monetary Fund, ECB and European Commission - who monitor implementation of the conditions - also drew the protesters' anger. In Lisbon, thousands filled a square in front of the Portuguese parliament shouting "This debt is not ours" and "Out IMF, out troika".

    "I'm on strike because those who work are basically being blackmailed into sacrificing more and more in the name of debt reduction, which is a big lie," said Daniel Santos de Jesus, 43, who teaches architecture at the Lisbon Technical University.

    Big demonstrations took place in Madrid, Lisbon, Barcelona and other cities through the evening on Wednesday.

    GLUED UP

    Protesters jammed cash machines with glue and coins, and plastered anti-government stickers on shop windows around Spain. Power consumption dropped almost 13 percent with factories idled.

    More than 600 flights were cancelled in Spain alone, mainly by Iberia and budget carrier Vueling. Portugal's TAP cancelled about 45 percent of flights.

    In Greece, which saw a two-day strike last week as parliament voted to approve new cuts, hundreds of strikers rallied peacefully in central Athens, holding aloft giant Italian, Portuguese and Spanish flags and banners proclaiming "Enough is enough."

    In France, five trade unions organized marches in more than 100 cities but did not call for a strike. Left-wing critics of Socialist President Francois Hollande said he has failed to address the concerns of French workers who have the same fears as their counterparts in southern Europe.

    "It's an unconditional surrender," hard left leader Jean-Luc Melenchon said on France 2 television.

    (Additional reporting by Miguel Pereira and Andrei Khalip in Lisbon, Blanca Rodriguez, Carlos Ruano and Borja Gonzalez in Madrid, Ben Deighton in Brussels, Braden Phillips in Barcelona, Philip Pullella and Naomi O'Leary in Rome and Karolina Tagaris in Athens.)
    Anti-austerity strikes sweep southern Europe

    Well, at least their carbon footprint is down...

    :pop:
    "Only Nixon can go to China." -- Old Vulcan proverb.

  • #2
    Not likely to be the last. According to The Telegraph the protests (and some turned into fights) happened in 26 cities. The eurozone yesterday went in recession; Dutch economy shrank by 1.1pc in the third quarter, Finland’s economy has shrunk by 1pc over the last year. France and Germany seem likely to report 4th quarter falls even before French 2% GDP cuts come in next year.

    Desmond Supple from Nomura says; "Recession comes as no surprise and it is going to get worse next year, Europe has imposed dusted-off policies from the 1930s and they are driving peripheral countries towards depression."

    Guess what they think the answer is? "Mario Draghi, the European Central Bank’s president, warned Europe’s leaders not to sit on their hands thinking that the ECB has solved the crisis for them with its €1 trillion (£805bn) lending blitz to banks and its pledge to backstop Spain and Italy – once these countries request a rescue and give up fiscal sovereignty.

    “We have been able to steady the course. We have gained precious time, but this is not infinite,” he said. The comments were seen as warning to Spain to stop dragging its feet over a bail-out. Belgium’s ECB governor, Luc Coene, was explicit, saying Spain must trigger the mechanism “urgently”."
    1930s medicine pushes Europe back into double-dip recession - Telegraph

    Yep once again the answer is MORE of the same insanity! Spain must accept a bailout and become another confirmed member of the growing 'troika Empire'. It is debatable whether or not Spain is already 'troika'd' due the German, Dutch and Finnish rejection of the Spanish bank bailout terms where it was at first 'understood' that Government was not liable for the 60bn euros and then Germany and the other two (the three remaining AAA listed countries) said that the Spanish Government was liable. Well since they are the only ones who can borrow cheaply to lend to Spain I suppose it's their call.

    If Spain does 'trigger the mechanism' in theory the ECB will buy 'unlimited' amounts of Spanish debt but in return Spain will told what it can and cannot spend by the 'troika'. It will in effect become a second Greece and we have seen what marvels 'troika management' have accomplished there. Greece was supposed to grow this year but now the economy is (optimistically) expected to shrink by 6% (more likely 6.5 -7%).

    The other interesting thing with Spain of course is the Catalan problem and I am not sure enough consideration has been given to this. They vote on 25th November - 9 days. The Catalans are effectively voting on independance. Artur Mas, the President of Catalonia said when he called the elections "The time has come to exercise the right to self-determination". If they win the elections they have promised a vote on independence but this is specifically not allowed in the Spanish constitution and Colonel Francisco Alaman has said "Independence for Catalonia? Over my dead body. Spain is not Yugoslavia or Belgium. Even if the lion is sleeping, don’t provoke the lion, because he will show the ferocity proven over centuries." Catalonia it should be noted is Spains most wealthy and prosperous region; it would not be like Scotland leaving the UK where arguably England would profit ecomonicaly.

    If Catalonia is allowed to leave what then for Legia Nord in Italy and perhaps Bavaria in Germany? I mean arguably all 'nation - states' (and Germany and Italy are relatively new ones) are 'artificial'. Before 'England' Kent was a Kingdom as was Wessex etc...

    This is clearly an unforseen result of the pseudo 'European' attack on the nation state embodied by the EU. Since we are ALL now 'European' then you are no longer 'British', 'Spanish', 'Italian' or 'German'. Pan Europeanism as an idea - and pushed by the EU - is specifically creating these instabilities. I say it is 'unforseen' but it may well have been forseen for all I know... the old addage of divide and conquer may well be being applied.

    It was predicted that the Greek economy would grow 2% this year... that by 2010 the euro would make an 'economic powerhouse'... that the first Greek bailout would be the limit... that the Portuguese bailout would be the last. Now these same people are telling Spain to accept a bailout! When will they accept that they were wrong? They will not... They ignore democratic rejection through the ballot box and ignore protest in streets. Well I'd have prefered it if those responsible had been tried in Courts for criminal mismanagement or some such but as they will not accept a peaceful end to the misery and tensions which they have directly caused they are doomed to die by lynch mobs as did Mussolini and his ilk of whom the current lot are merely imitators. Iustum Necare Reges Impios.

    PS The Economist; "Unless Mr Hollande shows that he is genuinely committed to changing the path his country has been on for the past 30 years, France will lose the faith of investors—and of Germany. As several euro-zone countries have found, sentiment in the markets can shift quickly. The crisis could hit as early as next year. Previous European currency upheavals have often started elsewhere only to finish by engulfing France—and this time, too, France rather than Italy or Spain could be where the euro’s fate is decided. Mr Hollande does not have long to defuse the time-bomb at the heart of Europe."

    The problem here as Mrs Merkel noted earlier this year "Europe must discuss the growing differences in economic strength between France and Germany," http://www.telegraph.co.uk/finance/f...h-economy.html

    The real heart of the arguement is paraphrased here by Jeremy Warner (http://www.telegraph.co.uk/finance/f...-must-pay.html) when he says "The solution lies not in asking debtors to borrow more to support demand - this will only make the problem even worse - but in creditors adjusting their economic models to allow deficit countries a fighting chance of a return to growth." You cannot lend to a creditor who is buying from you while telling him to stop eating but as Warner concludes "Will it happen? Pigs might fly." That is Europe heading for violent revolutions and war.
    Last edited by snapper; 16 Nov 12,, 17:42.

    Comment


    • #3
      I agree with pretty much everything you wrote. We have our own insanity here, both with our federal government and our various state government, especially California and Illinois (surprise surprise).

      California has higher than average unemployment numbers, the toughest environmental standards, and one of the highest tax rates. What did we do in this election? We voted to increase taxes and toughen our environmental standards. On top of that, voters just handed democrats absolute control of both houses of the state legislature. Now they can increase taxes at will (tax measures need 2/3 of each house to pass).

      Both American and European ruling class are unwilling to tackle the unsustainable welfare costs. Everything from government pension to handouts to the poor to college loans. Someone, someday, will have to pay for all this crap. Unfortunately decades of government welfare have bred a generation of lazy bums who expect to work for 20 years and earn enough to last a lifetime.

      Real world don't work this way!
      "Only Nixon can go to China." -- Old Vulcan proverb.

      Comment


      • #4
        In a way I m quite happy about some features of the austerity that ought to stop the grow of the italian pubblic debt which is now out of control, on the other hand the austerity seems to increase the unemployment rate pretty drastically and generate riots and trouble. Anyway the fault of the huge italian debt is due to our politicians, not to Germany. It s the pay-back time and after 9 years of Berlusconi we are drowning in the poop.

        Comment


        • #5
          You obviously agree with Mr Barroso who said yesterday "I know many parts of our societies attribute the current difficulties to European Union level and this is not fair because it was not the European Union that created the problems." He is plainly lying - that's part of his job description and to be expected - you may be more genuinely mistaken so let me take some time to explain this austerity drive to you.

          Yes Italy has a deficit - so does nearly every country in the world, the UK, USA and Japan included. Having a deficit sadly has become normal in the western world and while this is not entirely 'healthy' it's not an enormous problem as long your keep earning; the banks (or lenders) will not cut the strings. What makes the eurozone different from the UK or US is that when austerity is imposed and the economy starts shrinking - you stop earning - the currency doesn't devalue as it's pegged to the German economy. In Britain the £ devalues and this can be encouraged with 'quantitative easing' (printing money) and this makes what we sell cheaper - it kick-starts our earning again. Because Italy, Greece, Spain etc are locked in this political currency union no devaluation can happen so when austerity is imposed by some unelected technocrat EU apparatchik it merely starts a recessionary cycle a la Greece. The more Government spending is cut the less the tax receipts and so the need to make more cuts. To some extent Barroso is correct that the EU didn't cause the problem, although many would argue that too is a lie, but it is certainly the case that the euro, which is a purely politically motivated currency, is certainly preventing any normal solution to the problems of southern Europe.

          Comment


          • #6
            So effectively the Euro is undervalued for Germany and over valued for southern Europe, hence a healthy surplus for Germany and massive debt for southern Europe? Why don't they just float the Euro?
            In the realm of spirit, seek clarity; in the material world, seek utility.

            Leibniz

            Comment


            • #7
              Pari: The euro does 'float' but not at a level that reflects the needs and strengths of individual nations. Because if it's 'collective - ness' it reflects and deals with Greece in the same way as Germany. When they say that productivity is 30% lower in Greece than in Germany (although in truth some of this is inefficiency in tax collection) what they really mean is that Greece needs to devalue 30% to achieve parity. The euro, this politically motivated ideal designed to stop another Franco - German conflict, prevents this and as the richer nations, for whom the euro is too low, do not want to pay out to the nations for whom the euro is valued too high, austerity and blame is the only answer... to continue Mr Barroso's comment: "The cause of the difficulties some countries are facing is excessive public debt created by national governments and irresponsible financial behaviour."

              The 'one value for all' formula that is the euro simply does not reflect the truth so they have to force the facts to fit the model.

              Comment


              • #8
                What is also ignored is the amount of overhead (rules/regulations distort markets)

                Greece has the highest cost milk in Europe (or close to it)
                Bosnia/Serbia/Macedonia lowest cost milk in Europe.

                Basically a 100% difference if you take wholesale prices. In retail this matters even more since more margin is piled up. This creates a severe ability in people to feed themselves properly as their incomes decline. You also need permits to expand fields for cows in greece and other absurd crap.
                Price of milk makes Greeks' blood boil | Reuters
                At the other end of the dairy chain stand Greek shoppers, who wonder why they have to pay around 1.50 euros for a liter of fresh milk.
                Croatian Dairy Farmers Dump Milk in Protest :: Balkan Insight
                2 kuna is 35 cents... and Croatia will close off the border to Bosnian milk which is cheaper this year I think due to Eu entry. Ergo the difference for end users in Balkans is about 100% if you figure it costs $1 dollar in Bosnia/Croatia/Serbia while $2 in Greece.

                Now imagine this across the whole spectrum of food items in every country that joins EU due to subsidy distortions just on food alone... You figure at least 50-100% parity after two or three years to the MAXIMUM possible price that rich countries pay while having the MINIMUM wages due to inefficient competition. It also makes no sense to start these businesses in areas where beuracratic malaise is growing leaps and bounds because your start up costs may be higher while your input costs may be lower.

                Once people on the ground begin to ignore all these stupid rules and start either beating or killing off the officials whom attempt to enforce this you get a semi-civil war environment. Where the locals begin to separate in their identity from the country and see it as a parasite on their ability and will to survive. You get enough of this and top-down macro not only backfires buck you get blowback in the form of mobs running around trying to lynch someone they will invest with fault for their misery. Later part is most likely to happen in big cities I fathom.
                Originally from Sochi, Russia.

                Comment


                • #9
                  Originally posted by snapper View Post
                  You obviously agree with Mr Barroso who said yesterday "I know many parts of our societies attribute the current difficulties to European Union level and this is not fair because it was not the European Union that created the problems." He is plainly lying - that's part of his job description and to be expected - you may be more genuinely mistaken so let me take some time to explain this austerity drive to you.

                  Yes Italy has a deficit - so does nearly every country in the world, the UK, USA and Japan included. Having a deficit sadly has become normal in the western world and while this is not entirely 'healthy' it's not an enormous problem as long your keep earning; the banks (or lenders) will not cut the strings. What makes the eurozone different from the UK or US is that when austerity is imposed and the economy starts shrinking - you stop earning - the currency doesn't devalue as it's pegged to the German economy. In Britain the £ devalues and this can be encouraged with 'quantitative easing' (printing money) and this makes what we sell cheaper - it kick-starts our earning again. Because Italy, Greece, Spain etc are locked in this political currency union no devaluation can happen so when austerity is imposed by some unelected technocrat EU apparatchik it merely starts a recessionary cycle a la Greece. The more Government spending is cut the less the tax receipts and so the need to make more cuts. To some extent Barroso is correct that the EU didn't cause the problem, although many would argue that too is a lie, but it is certainly the case that the euro, which is a purely politically motivated currency, is certainly preventing any normal solution to the problems of southern Europe.
                  What you say is true and I knew it. But I would like to focus on a different point. Before the 2001 Italy was growing as fast as Germany and even more in some fields and, even with all our problems, our economy which is made 80% by small-medium companies was extremely strong and competitive. There was a big issue in the background: a giant and growing debt that has been hidden more times with the devaluation of the Lira in order to avoid of facing it. When the Euro came we couldn`t hide it anymore and the Government of Berlusconi didn t care of spend even a small amount of time on the issue because there were all the companies of him to help and the laws against revenue fraud to sabotage. We had a big opportunity: face our problem and solve it, but we failed. I still remember than even people took advantage of the Euro to earn more money. Example: Pizza Margherita the day before the Euro was 4000 lire (2 euro), the day after 4 euro (8000 lire) thus all prices doubled. The cost of life start increasing dramatically, whereas the wages and salary were stuck.

                  Anyway a part of the country resisted and fought back making us for example the first exporter and producer of Spumante, wine, and kiwi fruits in the world. This healthy part just asked Berlusconi to leave it alone and do not increase the fiscal pressure, but he did in order to save and help his companies and other non-strategic and parasitic companies as Alitalia and FIAT.

                  So, to sum up, I totally agree with you on the fault of the EU, but I just wanted to add the fault of our Govs and our italian habits.

                  p.s: sorry if I made grammar mistakes, but I m not a native speaker.

                  Comment


                  • #10
                    My point is that if Italy were allowed to devalue and return to growth the Italian Government would be able to borrow more freely again and austerity, while perhaps still needed, would not feel so bad as tax receipts would increase due to growth, unemployment would fall etc...

                    Comment


                    • #11
                      The big issue is that if we get out of the Euro (I hate this currency!) and come back to Lira with devaluation we shall see a Weimar number 2 cause we have to buy energy and resources from abroad and even if the export may fly high, the poverty might strike back stronger and merciless. We shall see people going buying bread rolls using trucks of bills and coins. Unfortunately, and a lot of economist say so, Italy is trapped in the Eurozone and the only "weapon" that we can use is to try to force the EU to build a real European Central Bank not private like the current one, that can buy and guarantee the public debts of the nations, like the American one.

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