We had a server outage, and we're rebuilding the site. Most of the site features won't work. Thank you for your patience.
imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
latest news
best of news




A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List


IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Europe in Crisis

by Stephen Lendman Monday, Jun. 18, 2012 at 4:16 AM

class war

Europe in Crisis

by Stephen Lendman

Four and a half years after crisis conditions erupted, nothing's been done to resolve them. The smartest guys around haven't fixed things.

On June 14, rumors circulated about coordinated central bank intervention. European banks are especially troubled. Recapitalizing them hasn't worked.

Expecting more of the same to accomplish what hasn't so far worked is another way of defining failure.

Along with talk of more stimulus, Egan-Jones Ratings, an independent NRSRO (Nationally Recognized Statistical Rating Organization), downgraded French sovereign debt from A- to BBB+ with a negative outlook. Doing so shows core European weakness.

Dutch banks were also downgraded. So were Spanish ones and sovereign Spanish and Cyprus debt. Both countries approach junk status.

Germany shows weakness. Its 10-year sovereign debt jumped over 30 basis points from recent lows. It's troubled by having to fund more bailouts or face euro dissolution issues. It's also pressured by having to shore up the ECB in case it's threatened.

The average Eurozone country has a 500% debt/GDP ratio. Expects more defaults, write-downs, and frantic steps to shore up sovereign debt.

Spanish bonds touched 7% before settling slightly lower. Liquidity isn't the problem. Markets are awash with it. At issue is sovereign and banking sector solvency.

Multiple intervention rounds solved nothing. Neither will more of the same. Structural problems remain unresolved. More time alone is bought. It doesn't come cheap. The price is greater debt, higher service costs, and eventual crisis conditions too grave to fix.

Bad policies don't change basic economic fundamentals. Non-performing European bank loans are increasing. Italy may be the next Spain. Its sovereign yields top 6%. More on what's bad there getting worse below.

Economic growth forecasts are increasing. Europe's recession deepens. Next year looks worse, not better. Synchronized global slowing is occurring with ammunition running out to address it.

Five years ago, OECD countries sovereign debt/GDP ratios were 70%. Today it's 106% and rising. Governments are less able to stimulate growth. Failing to assures greater trouble. Rising debt + higher service costs + falling growth = eventual house of cards collapse.

Germany is Europe's backstop. Bailouts are wearing thin. Over two-thirds of Germans want Greece out of the Eurozone. They're tired of paying for its problems.

People thought the ECB would be Europe's Bundesbank proxy. They were also told Maastricht had no bailout provision. In fact, "risk mutualization" was part of the treaty. Two trillion euros were created to deal with crisis conditions. German taxpayers bore one-third of the cost. At issue is for how much longer?

If it's unable or balks, what then? On the eve of Greece's election, it's unclear who'll win. Will a third run-off be needed? Does it matter either way?

Whatever the outcome, Greece is bankrupt. Its debt is impossible to repay. Increasing it makes things worse. Ordinary people face harder than ever hard times, not relief no matter who's president or controls parliament.

They have three choices - starve, leave, or rebel.

Greece must choose between austerity or default and restructuring, whether in or outside the Eurozone. Leaving is no minor matter. Global economies will manage. Adjustments will be made. They'll take time.

Lorenzo Bini-Smaghi calls Grexit a political and economic nightmare. Leaving the euro, he believes, requires also exiting the EU. Greece could also be sued. He sees a lose-lose situation. Either choice assures trouble.

Citigroup economist Michael Saunders believes Grexit is virtually certain. Perhaps by New Year's day 2013 it'll come.

He "assume(s) that Greece will leave EMU in early 2013, followed by a sharp currency devaluation" and economic contraction. He also thinks contagion will be limited, June 17 election results will be inconclusive, and the Troika will ride to the rescue.

Leaving may be another Lehman moment. Expect painful readjustments, geopolitical tensions, market turmoil, trade frictions, greater crisis, and eventual stability provided counterproductive policies are reversed.

Nothing so far suggests it. Austerity exacerbates hard times. Jobs are destroyed, not created. People are running out of money and patience. Continental unraveling is increasing.

Suicides are rising. Garbage isn't collected. Other public services are eroding. Vital ones like healthcare and education are affected. Greece faces collapse. Spain is close behind.

Public heath crises loom. Serious illnesses aren't treated. Lifesaving drugs are in short supply. Hospitals aren't operating properly. An Athens one said basic items are running out. They include cotton wool, catheters, gloves and examining table paper covering.

Greece was ordered to cut healthcare spending from 10 - 6% of GDP. Imagine any country reducing medical spending by 40%. Imagine desperate people needing care unable to get it. Imagine disease and death tolls rising. Imagine public anger exploding.

Italy potentially is Europe's biggest problem. If it goes, so does the continent. It's troubled. It's too big to bail out. No one's sure how much times remains to shore up its economy and other EU ones. George Soros and IMF head Christine Lagarde say less than three months.

Italian debt auctions aren't encouraging. One year paper went for 3.972%. A month ago it was 2.34%. Longer dated debt yields are rising. Italy is where Spain was weeks ago.

Appointed Prime Minister Mario (three card) Monte's tax increases are backfiring. Value-added receipts are down. Economic conditions are troubled.

Harvard Professor Alberto Alesina said:

"This government has raised taxes too much. It would be much, much better to lower spending."

How that will help when stimulus is needed he didn't explain. Economic deterioration is increasing. Q I results show 0.8% contraction after slipping 0.7% in Q IV, 2011.

Italy is Europe's third biggest economy after Germany and France.

It's in serious trouble. It's problems are severe. Its sovereign debt burden is huge. It's currently at around 120% of GDP and rising. It's about two trillion euros. When economic growth is needed, it's declining.

Its industrial production dropped for nearly two years. It's about one-fourth lower than when 2008 crisis conditions erupted.

Unemployment is growing. It approaches 10%. For youths it exceeds 30%. Business confidence is down. Consumer confidence is at record lows.

According to Bloomberg, Spain and Italy "appealed to European policy makers to step up their response to the financial crisis after a 100 billion euro (5 billion) lifeline for Spanish banks failed to calm markets."

Societe Generale chief European economist James Nixon calls Italy the "next domino" to fall. "The southern European economies are effectively in free-fall and market appetite for southern European debt is rapidly drying up. I can’t see anything to turn that dynamic around," he said.

At the same time, Germany's parliament hasn't approved the European Stability Mechanism (ESM) bailout fund. Internal wrangling continues.

ESM is supposed to be operating by July 1. German approval is required. Chancellor Angela Merkel wants two issues passed together. Opposition Social Democrats (SPD) and Greens want a financial transaction tax, as well as measures to stimulate growth.

A June 21 meeting is planned. Unresolved issues separate both sides. Some SPD members threaten to delay the bill until fall. Eurozone countries have until yearend to ratify it.

Parliamentary elections are over a year away, but political posturing affects policy.

Germany also prioritizes fiscal/political union ahead of resolving other problems. It wants European countries bound under one size fits all rules it controls. They include austerity and debt reduction. These measures haven't worked and won't now.

With Germany calling the shots, Gordian knot diplomacy remains unresolved.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

His new book is titled "How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War"


Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.


Report this post as:

Local News

Woolsey Fire: Worst News of 2018? J01 12:18AM

Oppose Environmentally-Harmful Development D10 4:03AM

Oppose Environmentally-Harmful Development D10 3:58AM

OUR HOUSE Grief Support Center Presents Night for Hope O30 5:38PM

Marshall Tuck’s racist dog whistle O27 5:01AM

Marshall Tuck’s ethnocentrism contradicts Californian values O27 4:32AM

Contra Costa-Hawkins O25 3:48AM

Debunking Some Anti-Prop 10 Propaganda O12 6:56AM

Why Should California Choose De Leon Over Feinstein? O10 9:55PM

Change Links September 2018 posted S02 10:22PM

More Scandals Rock Southern California Nuke Plant San Onofre A30 11:09PM

Site Outage Friday A30 3:49PM

Change Links August 2018 A14 1:56AM

Setback for Developer of SC Farm Land A12 11:09PM

More problems at Shutdown San Onofre Nuke J29 10:40PM

Change Links 2018 July posted J09 8:27PM

More Pix: "Families Belong Together," Pasadena J02 7:16PM

"Families Belong Together" March, Pasadena J02 7:08PM

Short Report on the Families Belong Together Protest in Los Angeles J30 11:26PM

Summer 2018 National Immigrant Solidarity Network News Alert! J11 6:58AM

Watch the Debate: Excluded Candidates for Governor of California M31 5:20AM

Change Links June 2018 posted M28 7:41AM

More Local News...

Other/Breaking News


PR Debt Cancel, Judge Reviews Cofina Debt J16 9:04PM

Réseautage, fragmentation du capital J16 4:20PM

Paraphysique de manipulation mentale et sociale J15 9:51AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

Markets as a Fetish, Globalization, and Dissent Management J14 1:03PM

State Debts - The Primal German Fear J13 5:09PM

Sans liberté, sans égalité, sans fraternité J13 8:09AM

From Progressive Neoliberalism to Trump - and Beyond J12 9:22PM

Copper Cures Cancer J11 1:42PM

Steven Taylor, Investor who Evicts J11 9:24AM

Du sectarisme, des sectes, des clans J11 8:10AM

“Animaniacs in Concert!” Starring Voice Legend Rob Paulsen J10 6:34PM

Patrick Kilpatrick discusses and signs Dying for Living J09 11:51PM

SexActs vs Sexuality USA 2018 Invitations to Power Marriages without Affection J09 8:36PM

Changer de mentalité, changer de société J09 9:17AM

Teacher Strike? Time for Labor Studies J09 6:26AM

December 2018 Honduras Coup Update J08 10:12PM

Paraphysique de la désespérance J07 9:38AM

The Unification Church with Rev Moon is in La and Orange Counnties J07 9:07AM

Time to Start Imagineering a Post-Ayatollah Iran J05 10:00PM

L'écomorphisme, du culturel et du temporel J05 10:33AM

Sexual Harassment Charges of Men Suing Women who are accused of Harassing Men are now 10% J05 4:08AM

Stases psychiques et stases sexuelles J04 11:34AM

Paraphysique de la sous-vie J02 9:01AM

Paraphysique de la biomasse mondialisée J01 9:45AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy