GlobalPost, March 7, 2012
BERLIN, Germany — Europe is on the hunt for growth, but has little idea where to find it.
Many EU countries are being forced to follow a strict austerity path to slash their debts, but these measures seem to be sapping their ability to grow their economies and create jobs.
Some analysts warn that in the absence of measures to boost growth, more bailouts and debt write-downs could be in the cards.
The latest figures are certainly worrying.
The euro-zone economy contracted by 0.3 percent in the fourth quarter of 2011, the EU’s statistics office Eurostat confirmed on Tuesday, and unemployment reached an average of 10.7 percent in January, the highest since the euro was introduced in 1999.
That figure masks the huge discrepancies within the bloc. For example, while Spain’s unemployment is now at 22.9 percent, Austria’s is only 4 percent.
Most attention recently has focused on the drama in Greece, which has required a second bailout in two years to keep from defaulting on its debts.
The embattled country has been prescribed severe austerity in recent years to tackle its alarming public debt mountain, yet the medicine seems to be killing the patient. The Greek economy shrank by 6.8 percent in 2011. The bulk of the new 130 billion euro ($172 billion) bailout will go to lenders rather than being used for any measures to boost growth.
The Greeks are not alone. Ireland and Portugal, the other two recipients of bailouts from the troika of the European Central Bank, the European Union and the International Monetary Fund, have also had to sign up to reforms and punishing public-spending cuts as a condition for the funding. Continue reading
The Guardian, Nov. 18, 2011
Loss of sovereignty may be an abstract notion, but this week Irish people were confronted with what it means in reality. Revelations that draft proposals for the Irish December budget had been circulated in a German parliamentary committee were met with horror in Ireland. It has since emerged that they were sent to every finance minister in the EU.
Members of Irish opposition parties have been in uproar at the fact that parliamentarians in Berlin were privy to vital information, such as a proposed 2% hike in VAT. Meanwhile they and other elected members of the Dáil would have to wait with the rest of the population until budget day, 6 December, to learn where exactly the axe was to fall.
As a group of international experts arrived in Dublin on Thursday, the Irish government finally seemed to admit that it was unable to cope with its massive banking crisis alone. Whether the talks result in a bailout from the EU-IMF rescue fund remains to be seen. But the Irish insist they are holding onto their low corporate tax.
Is a bailout by any other name still a bailout? The Irish government may have finally admitted that it requires help with its ailing banking sector but ministers are continuing to deny that the arrival of international financial experts to Dublin this week heralded any loss of national sovereignty. The mood in the country is now one of disbelief that Ireland, once the famed Celtic Tiger economic powerhouse, could have sunk so low, so quickly. And that it could be on the cusp of handing over some control of its governance to outsiders.
On Friday, members of the troika from the International Monetary Fund, the European Union and the European Central Bank, who held an initial round of talks on Thursday, began pouring over the books to get a sense of just what kind of assistance Ireland requires. The question now seems to be if a contingency fund for its banking sector will suffice or if the Irish state will have to apply for support from the European Financial Stability Facility, the fund financed by the EU and the IMF, which was created in response to the Greek debt crisis. Also at stake is whether Ireland will have to cede its low corporate tax rate, something that has long irked its European partners, before it can obtain any aid.
After a week of denials by government figures, by Thursday night Irish Finance Minister Brian Lenihan was admitting that the Irish government was no longer in a position to deal with the massive debts incurred by the country’s financial institutions that seemed to be sucking the rest of Ireland’s finances into a black hole. Continue reading
The Irish government insists it does not require a bailout, even as a team of EU and IMF experts heads to Dublin for talks. Yet aid could also come from another quarter, in the form of Ireland’s neighbor Britain. Meanwhile, the German press is divided on whether Berlin shares some of the blame for Ireland’s woes.
On Tuesday, embattled Irish Finance Minister Brian Lenihan fended off pressure from other euro-zone member states to seek a bailout package from the stability fund established by the European Union and the International Monetary Fund earlier this year. Yet Dublin may not be able to hold out for much longer.
The imminent arrival of IMF and EU experts in Dublin for what are being described as “short and focused discussions” starting on Thursday could see Ireland eventually tap into the fund, though on Tuesday night, following a meeting of euro-zone foreign ministers in Brussels, Lenihan was still insisting that such a bailout was “not inevitable.”
Speaking to public broadcaster RTE on Wednesday morning, Lenihan said Ireland would accept EU support if the banking crisis was too big for the country to fix on its own. “Ireland is a small country and if the banking problems in the country are too big for this small country to manage, Europe is making it clear that they will help and help in every possible way to secure the system,” Lenihan said. Continue reading
It’s not often that sport becomes the stuff of diplomatic disputes. But two highly controversial World Cup qualifying matches have pushed football into the global headlines this week. Algeria and Egypt find themselves embroiled in a serious spat while the Irish government complained to Paris.
“Some people think football is a matter of life and death. …. I can assure them it is much more serious than that,” the legendary Liverpool manager Bill Shankly once famously said.’
That has become more than apparent this week as entire nations seethe with anger and resentment after two highly controversial qualifying matches for next year’s World Cup in South Africa. So intense are the feelings that the coverage of the games has leapt from the sports sections to become front page news. And governments in both Europe and North Africa have been quick to jump on the football bandwagon as a welcome respite from economic and political problems at home.
While the controversy over the match between Ireland and France was based on an incident on the pitch, with Thierry Henry’s blatant handball sending Les Bleus through, the spat between Egypt and Algeria has centered on violent incidents off the pitch. The huge outcry in Ireland has prompted the government to call for a replay of the game and the Irish Prime Minister Brian Cowen has even taken up the issue with French President Nicolas Sarkozy. Continue reading