Posts tagged ‘Austerity’

June 6, 2011

European Union’s own public expenditure goes up by a staggering 5% in 2012 whilst it orders member states to put theirs in reverse

[Tammy Jones, UK Financial News Contributor]

In a gesture, breathtaking by its sheer slime-oozing texture, MailOnline reports that UK Tax Minister, George Osborne, joined the ranks of the EU slithering elite which are bringing the economy of Britain to a shuddering halt, by pronouncing that the government’s austerity measures imposed by the IMF and the EU in return for the country’s bailout loans are: ‘essential’ for Britain’s recovery.

The Tax Minister’s pronouncement spawns from the emptiness of the IMF and EU’s failure to produce any model for austerity measures (which essentially entail a dramatic cessation in public spending) ever bringing back any country in Europe from ruin to prosperity, coupled with the PIGS countries clear inability to not only sustain any kind of prolonged public expenditure cuts, but now clearly to pay back their bailouts.

And in a dramatic failure to lead from the front on public expenditure cuts, whilst the EU Commissioners are so busy championing ‘austerity measures’ to member states, they are in shopping mode with member states’ taxpayer’s contributions as the EU’s own public spending/ administration costs are set to go up by 5% in 2012.

As such, the clear-cut strategy for the EU Commissioners seems to be:-

a) transfer public spending from member states to the EU (which has never been audited)
b) EU Commissioners will then control and eventually dominate all member states
c) member states, via economic and political union, become ‘prefectures’/ ‘regions’ of the European Union.

March 24, 2011

Portugal in bailout fever as Socrates resigns, Britain to contribute

Channel 4 News: Following Portugal‘s prime minister Jose Socrates‘s resignation after his austerity plan was rejected, analysts are predicting harsh times ahead for the country and also its EU partners, especially the UK.

That is because Socrates had warned the financial-crisis-ridden country that tough time would prevail for it if parliament rejected his austerity budget aimed to stop the country going for a ‘bailout’.

BBC News: In the UK, in the meantime, MP Bill Cash said that the UK would probably have to contribute up to 4bn EUR to bailout the country out of its severe debt situation and government sources have confirmed that the UK would indeed be bound to contribute to Portugal’s rescue under EU law.

MPs are protesting that whilst British residents are reeling from harsh austerity measures that have been imposed by the government as part of an austerity measure to reduce the country’s debt, it is not fair for the country to be forced to bailout other nations.  They are demanding that Britain should extricate itself from EU law that requires it, notwithstanding its own internal financial crisis, to provide bailout cash to other nations.

Mr. Cash said: ‘ (the EU mechanism)…involves the UK underwriting approximately 8bn euros to eurozone countries until 2013″. He is reported to be urging the government to renegotiate Britain’s position at the upcoming summit of EU leaders.

[Financial Crisis Contributor]

March 16, 2011

EU commits millions to foreign countries in grants whilst imposing ‘austerity’ measures for member states

The European Union’s current policy of giving millions in grants to foreign countries whilst at the same time imposing stringent austerity measures on all member states due to the financial crisis, is in trouble it seems.

Whilst the EU was imposing severe austerity measures for public spending cuts, etc., on member states including UK, Ireland and Greece, as recent as January 26, 2011,  the Caribbean island of Jamaica benefited from the EU’s  EUR28.87million grant to assist the country’s budgetary shortcomings.  Additionally, at the start of 2010, with the global financial crisis well in its course, the EU approved EUR230 million in grants to African and Caribbean countries, the funds being a portion of the  EUR 500 million grants plan the EU had agreed last August as part of a general aid package for the region.  “Developing countries were hit hard by the crisis due to their poor resilience to external shocks. This has left funding gaps in many … governments’ budgets,” EU Commissioner for Development and Humanitarian Aid Karel de Gucht said in a statement. The 3rd Africa-EU Summit held in November 2010, which interestingly enough was held in Libya, reported that aid programs that had been signed between the EU and Africa for the period 2008-2010 were up to EUR1.5 billion.

Whilst EU citizens are not denying that the countries in receipt of these cash injections are deserving,  they are complaining and angry over their packaging as grants, not loans, which will never be paid back when EU member states have to repay ‘bail out’ packages dished out to them by the EU to stave off their economic collapse.  Furthermore, as the conditions surrounding the ‘bail-outs’ loans given by the EU to its troubled member states which require them to dramatically cut public expenditure, some countries, like Latvia and Bulgaria, may not even be able to afford to pay social and retirement benefits to their citizens.

In Ireland and Greece, both hit hard by the financial crises and which had to be ‘bailed-out’ by the EU, austerity measures are leading to civil unrest with politicians saying that they are untenable by their severity.   This month, the  Greek EU commissioner, Maria Damanaki, criticised her own institution for the austerity measures saying that they could lead to:  “social degradation” and demanded an alternative program. She said: “We have been too shy with the growth and job part of our resolve. While no one could deny the need for fiscal consolidation, one could have aimed at a better balance between austerity and growth.”

As for Ireland, the UK Telegraph reports that exit polls from Ireland’s 2011 general election held on Friday indicates that the governing party, Fianna Fail (FF), which has been in charge of Ireland for more than 60 years is on its way out. Many are seeing this as the public’s punishment of the government for  its maladministration of the economy in the financial crisis and its poor negotiation of the country’s ‘bail-out’ deal with the EU.

In 2010, Ireland had to accept a £72 billion EU-IMF funds injection to solve the massive public debts that have arisen when it had attempted to save severely troubled Irish banks.  Whilst the bail-out had been essentially for the purpose of saving the Eurozone, its repayment will have a dramatic effect on the living standards of the Irish people.  Analysts are saying that the repayment will take up 85 per cent of Ireland’s income tax income by 2012 and this has angered Irish voters.  Repayments will cost an average Irish family around £3,900 a year in extra taxes. Also, part and parcel of the bail-out’s imposed austerity plan will be a reduction in the country’s minimum wage, savage cuts to public services and more than 90,000 jobs lost. Currently unemployment in Ireland is running at around 14 percent.

[Finance & Economy Contributor]