Spain protests: Young protesters in Madrid and beyond have many different demands, but they are united in opposing the Spanish governmentThis article titled “Spain reveals pain over cuts and unemployment” was written by Giles Tremlett in Madrid, for guardian.co.uk on Saturday 21st May 2011 11.59 UTCThe arrival of the table, a battered piece of formica bashed on top of four rough, oversized legs raised a cry of joy. Never mind that anyone on a normal chair would barely be able to see over the top – here was another small triumph of the new Spanish revolution, the gathering of angry Spaniards of all colours, ages and persuasions that is sweeping across the country and beyond its borders.The table that arrived in Madrid’s Puerta del Sol square was part of the swirl of creative chaos, naive enthusiasm and pent-up frustration that has transformed it into a makeshift camp for thousand of protesters who call themselves los indignados, the indignant ones.Tents and mattresses, armchairs and sofas, a canteen, portaloos and solar panels have sprung up in a remarkable display of organisational prowess. And the mass of people jostling around, each pursuing their own dream or demand, or just watching others doing the same, seemed more like something transported from the Arab spring in North Africa than from Europe.As the protests continued to swell on Friday, with 60,000 people defying authorities to obey the campaign’s “Take over the square!” slogan in dozens of Spanish cities, and with copycat demonstrations across Europe, the question was whether this was the new May 1968 – a youth-led popular revolt against an establishment deemed to have failed an entire generation.Esther Gutierréz, an elfin 26-year-old, wandered through the crowd with a battered shopping cart full of fruit.“We’ve got so much food we don’t know what to do with it. People just bring it to us for free and it’s wonderful stuff,” she said. “We want real democracy. Not just freedom for bankers. You’re not from the Spanish press, are you? We don’t speak to them.”Cynical and ingenuous by turns, the Madrid protesters and those who last week refused to obey orders to budge from the occupied city squares have torn up the rule book of Spanish public politics. The heavyweights of old – political parties, trade unions and media commentators – are not wanted here.“I was sacked when the Madrid regional government closed down a women’s centre last year when it imposed cuts,” explained Beatriz García as she bashed a small frying pan with a wooden spoon. “The unions didn’t even bother to turn up.”The political parties were worse, she said. “There is no renovation. There is nothing new or different, just two parties who take it in turn to govern because our electoral laws favour them.”Just a week ago Spain was known for the passivity of its citizens as they put up with one of the most depressing eras in recent history. Despite unemployment hitting 21%, widespread spending cuts and a socialist government bound to obey the diktats of Germany’s chancellor, Angela Merkel, and the financial markets, they had refused to show their pain. Marches, sit-ins or riots were for the French – or British students. The real drama, anyway, was in North Africa. Spaniards stayed at home.All that changed this week as demonstrations organised via Facebook and Twitter became static protests in city squares, mushrooming into something that caught politicians, unions and the media by surprise.While journalists were following the dull routine of campaigning for Sunday’s municipal and regional elections, the steam was beginning to escape from a pressure cooker of discontent.Many Spaniards had told pollsters they were tired of the same, well-known political faces – especially those who are due to be re-elected despite being mired in corruption scandals. Politicians have rarely been held in such disregard, with the prime minister, José Luis Rodríguez Zapatero, and opposition leader, Mariano Rajoy, of the conservative People’s party, rating lowest. Rajoy seems set to take over after a general election next March.When police forcibly evicted the Madrid demonstrators on Tuesday morning, they came back in even greater numbers later that day. By Friday night authorities had lost the battle to impose rules banning public politics on the day before elections. Police could only look on. “Join us, police officers!” the demonstrators shouted.By the early hours of Friday, it was already elbow-room only in the Puerta del Sol – the square which prides itself on being Spain’s “kilometre zero”, the spot from which all other distances are measured.On the statue of King Carlos III, somebody had pinned a sign that read: “We are anti-idiots, not anti-politicians.” Other placards read: “We aren’t against the system, we want to change it”, “Democracy, a daily fight”, and “Take your money out of the bank!”“We’ve brought tents, food and even Trivial Pursuit to keep us entertained,” said Pablo Cantó, a fresh-faced 23-year-old journalism student. Like many younger protesters, and the movement as a whole, he had trouble expressing exactly why he was here. “We want change,” he said. “Things just can’t carry on as they are.”The heavy clouds of cannabis smoke suggested others had brought their own form of entertainment.“I’ve been protesting for decades,” said 60-year-old school teacher Rosa Marín. “I’m glad to see so many young people here. The questions is this: Is this another May 1968, or are they just here for the party?”A gang of drunken skinheads, mindlessly chanting football terrace slogans, were there for the latter.But a neat, disciplined circle of people intently debating social reform showed many were here in earnest. They took turns to stand up and make their proposals, the audience listening and using the sign language applause of the deaf – by shaking their hands above their heads – to show approval without drowning the speakers out.The proposals, due to make their way through a laborious process of committees, working parties and general assemblies, varied from calls for less spending on the military to helping businesses. “Because it is not just money for the owners. They are the ones who give people like us jobs,” said one young man.For some younger protesters, it was a political baptism. “I don’t know what will come out of this, but it is enough just to show everyone how upset we are,” explained Javier de Coca by phone from the protest camp in Barcelona’s Plaza de Catalunya, where there was a surprising absence of the nationalist or separatist symbols of protest movements in recent years.“It’s as if they’ve realised they have more serious problems to deal with,” said one protester. One of those problems is 45% youth unemployment.On a wall beside the tarpaulin-covered command centre in what some were calling Madrid’s “Republic of Sol” – home to a press office, an infirmary and a legal centre – a list of needs had been pinned up. Toilet paper and food were scratched off the list. Bookshelves, wood, rubber gloves and bottles of cooking gas were on it. Volunteers were needed for a creche.“We process the proposals and try to turn them into something that makes legal sense,” explained a volunteer at the legal centre.However, the open assemblies are painfully slow. Some last for hours, as everybody is given their turn to speak. After almost a week of protests, the demonstrators have failed to come up with a coherent set of demands.Electoral reform to end the two-party system and action to both punish corrupt politicians and limit their luxuries and privileges were the main areas of agreement.So is the Arab spring spreading to southern Europe? “You can’t really compare us to people who were risking their lives by protesting,” said 23-year-old computer engineer Jaime Viyuela. “But yes, you can say that we are inspired by the courage of the Arab spring.” guardian.co.uk © Guardian News & Media Limited 2010Published via the Guardian News Feed plugin for WordPress.Thanks for subscribing to Andy Roberts blogSpain reveals pain over cuts and unemploymentRelated posts:Zapatero says Spain safe from bailoutProtest march against coalition cuts expected to attract 300,000Anti-cuts campaigners plan to turn Trafalgar Square into Tahrir Square
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Spain reveals pain over cuts and unemployment
http://distributedresearch.net/blog/2011/05/21/spain-reveals-pain-over-cuts-and-unemployment
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May 21 2011, 8:54am | Comments »
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Ireland forced into new £21bn bailout by debt crisis
http://distributedresearch.net/blog/2011/04/01/ireland-forced-into-new-21bn-bailout-by-debt-crisis
Irish finance minister Michael Noonan said that Ireland had been left with an ‘appalling legacy’ as a result of the banking crisis.
This article titled “Ireland forced into new £21bn bailout by debt crisis” was written by Larry Elliott and Jill Treanor, for The Guardian on Thursday 31st March 2011 20.17 UTC Europe’s debt crisis deepened on Thursday night as Ireland was forced into another €24bn (£21bn) rescue of its banking system and jittery financial markets pushed Portugal closer to a bailout. In a furious attack on the previous government, the Irish finance minister Michael Noonan said the country had been left with “an appalling legacy: a legacy of debt, of unemployment, of emigration, of falling living standards and of low morale” as a result of the banking crisis. After stress tests to assess the vulnerability of the banks to a drastic worsening of the economy, Noonan announced that the government would take a majority stake in all the major lenders. These are to be radically reduced in size and focused on just two players. Ireland’s banks have been crippled by the bursting of a house price and commercial property bubble, created when they took advantage of the country’s membership of the single currency to lend recklessly on low interest rates. The collapse caused an economic crisis that has seen output shrink for three years in a row. “We are now in the third year of the banking crisis. The previous government failed to act. They ducked and dived and procrastinated as they lurched from one crisis to the next. They went through periods of denial and periods of self justification. They paved the road to disaster with good intentions,” Noonan said. “They never fixed the broken banks, however.” Ireland’s central bank governor, Patrick Honohan, said the country was saddled with “one of the costliest banking crises in history”. The total bill has now reached €70bn – equal to €17,000 for each citizen. Analysts said that while Ireland’s latest bank bailout had provided the country with breathing space, time was running out for Portugal, where the government admitted that it would miss its target for deficit reduction in 2010 and revised up its budget deficit figure from 7% of GDP to 8.6%. The poor figures triggered a fresh sell-off of Portuguese bonds and analysts said it would now be cheaper for the country to borrow from the International Monetary Fund and EU, as Ireland is doing, rather than access the international markets. Ireland pays 6% interest on its seven-year loans while bond investors want to charge Portugal 9% to borrow for just five years. As a result of the Irish and Greek bailouts, EU partners have now set up the European financial stability facility (EFSF) as a long-term provider of funds for troubled members of the eurozone. “The key question is when will Portugal need to access the EFSF because it has run out of money. Portugal faces two bond redemptions, one on 15 April (€4.3bn) and one on 15 June (€4.9bn). This week, a government official said that Portugal had sufficient reserves to cover both of these. It is hard to see how this can be the case,” said Emilie Gay from the research consultants Capital Economics. However, Portugal’s finance minister, Teixeira dos Santos, said: “The government is not irresponsible and will guarantee that there is the necessary financing so the country can live up to its responsibilities and honour commitments to its creditors.” Lisbon said the change in its deficit figures was the result of an accounting change demanded by Europe’s statistics agency but bond markets feared it was an effort to deceive investors about the true picture in the past. An auction of €1.5bn of bonds has been scheduled for Friday and will be a test for the market. As a result of the announcement in Dublin, all the Irish banks are now likely to be state-owned. Two new universal banks are expected to be created from existing institutions – Bank of Ireland will remain while Allied Irish Banks and building society EBS are to be merged. “We will also ensure that they are fully recapitalised so that the world looks at these core banks with confidence and they in turn help instil confidence in our economy,” said Noonan. The extra bailout cash is within the funding from the EU/IMF support announced last year. Noonan blamed the crisis on the decision made in September 2008 by the former Fianna Fáil government to guarantee the banking sector, and particularly Anglo Irish Bank, during the international banking crisis.
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April 1 2011, 9:41am | Comments »
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Inflation will drop to 1.5% as cuts hit spending, MPC member predicts
American academic Adam Posen calls on UK Chancellor George Osborne to embark on another round of quantitative easing (printing money) and insists the Bank of England should not raise interest rates
This article titled “Inflation will drop to 1.5% as cuts hit spending, MPC member predicts” was written by Larry Elliott, economics editor, for The Guardian on Sunday 27th March 2011 20.00 UTC The Bank of England’s leading dove has predicted that inflation will tumble to 1.5% by the middle of next year as George Osborne’s austerity drive and the underlying weakness of the economy stifle consumer spending. In an interview with the Guardian, Adam Posen admitted he had sleepless nights over his call for more money to be pumped into the economy and said he would not seek re-election to Threadneedle Street’s monetary policy committee if his view turned out to be wrong. Posen said: “If I have made the wrong call, not only will I switch my vote, I would not pursue a second term. They should have somebody who gets it right and not me. I am accountable for my performance. I’m holding my nerve because it is the right thing to do.” The American academic said he would be profoundly affected if it was proved that he had erred in voting repeatedly for bank rate to be pegged at 0.5% and for more money to be pumped into the economy through quantitative easing. “It would not just be terrible that I had messed up for other people but it is also my fundamental world view that I have been testing. “I would take it deeply and personally, which is why I have laid awake at night thinking about it.” But Posen said recent trends in the economy had left him convinced that inflation would fall back below the government’s 2% target in the second half of next year, as the temporary factors pushing up prices washed out of the system and the economy slowed down. This analysis, he said, chimed with the views expressed in recent speeches by the Bank’s governor, Mervyn King, and Charlie Bean, one of the two deputy governors. Three members of the MPC – Andrew Sentance, Martin Weale and Spencer Dale – voted for higher interest rates this month, but Posen challenged their view on four separate counts. He said so-called “core inflation”, which strips out the effects of fuel, food costs and taxes such as VAT, did not suggest that the economy was overheating; the recent strength in manufacturing only affected 13% of the UK’s total output and was not replicated in other parts of the economy; it was too simplistic to say that the economy was overheating if inflation was high; and it would only be costly to take a wait-and-see approach to raising interest rates if there was a risk of an inflationary spiral. “We could get inflation back to target really fast if we put the economy through the wringer,” he said. Posen added that the real debate inside the MPC was whether the increase in inflation to 4.4% would lead to consumers and businesses believing that there had been a permanent upward shift, and thus have knock-on effects on wages and prices. “I don’t see that as a material risk given all else that is going on, which is why I have been leaning the way I have.” He echoed King in calling a small increase in bank rate futile, as any rise would have to be reversed, damaging the Bank’s credibility. Posen said that whatever the merits of the government’s austerity plans, higher taxes and reductions in public spending would have a “meaningful” dampening effect on consumer spending and overall demand in the economy. “Household consumption is going to be pretty darn weak. It may even contract a little”. Consumers, he said, were unlikely to run down their savings in an attempt to maintain spending patterns, while the weakness of trade unions meant it would be hard for wage bargainers to push up pay settlements in response to higher inflation. “Wages will be the dog that doesn’t bark,” he said. Posen said he disliked the idea that interest rates had to be brought back to a more normal level after being cut to 0.5% in early 2009, the lowest level since the Bank was founded in 1694. “If I am a firefighter fighting a fire I don’t say I have pumped more water than I have ever pumped in my life so I must have pumped too much. You stop pumping when the fire is out.” Posen was also sceptical about some economists’ suggestion that the government’s deficit reduction plan could help growth by boosting confidence in financial markets, leading to a fall in long-term interest rates and higher investment.
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March 27 2011, 3:33pm | Comments »
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Portugal bailout fears rise as credit rating cut
http://distributedresearch.net/blog/2011/03/16/portugal-bailout-fears-rise-as-credit-rating-cut
Portugal is being lined up as the next victim for the IMF treatment. So far the only country that has managed to resist has been Iceland.
This article titled “Portugal bailout fears rise as credit rating cut” was written by Graeme Wearden, for guardian.co.uk on Wednesday 16th March 2011 10.11 UTC City analysts warned on Wednesday that Portugal is moving closer to the brink of seeking financial help, after Moody’s cut the country’s credit rating by two notches. The ratings agency concluded a review of Europe’s weaker economies by warning that Portugal’s growth prospects are poor, and questioning whether it can keep borrowing from the financial markets for much longer. The downgrade, from A1 to A3, leaves Portugal with Moody’s seventh highest credit rating, just four notches above “junk”. It brings Moody’s into line with the other ratings agencies, and piles more pressures on Portugal ahead of its next debt auction. Moody’s said that Portugal faces “subdued growth prospects and productivity gains” over the next few years until its structural reforms kick in. It also warned that the Lisbon government could fail to implement its austerity measures, which are opposed by other political parties, and might also have to pump more money into its banking system. It also maintained a negative outlook on Portugal’s sovereign debt, saying there is more chance of a further downgrade than an upgrade in the next two years. Portugal’s treasury secretary, Carlos Pina, said that Moody’s decision was “hasty”. Arturo de Frias, head of banks research at Evolution Securities, warned that Portugal’s banks are still relying on €42bn (£36.5bn) of lending from the European Central Bank. “The Portuguese government has given an April 30 deadline to the banks to strengthen their capital,” said de Frias. “It seems increasingly likely that they will fail to do so, and the government will eventually end up having to provide capital. This might trigger the sovereign bailout,” he added, Challenging path ahead Portugal is resisting pressure to seek a bailout from the European Financial Stability Fund (EFSF), insisting it can cut its deficit and reduce its borrowing needs independently. Last week it announced a new swathe of cutbacks and reforms in an effort to boost market confidence. It is scheduled to auction up to €1bn of 12-month debt on Wednesday morning. But the interest rates on Portugal’s debt remain at levels that are widely seen as unsustainable. The yield on five-year Portuguese bonds rose to almost 7.5% on Wednesday morning. “The cost of market funding is likely to remain high until the deficit has been reduced to a sustainable level and the prospects for economic growth have improved,” Moody’s warned. “If the government seeks funds from the EFSF rather than capital markets, Portugal would likely gain access to liquidity at lower cost than it currently faces in the capital markets and limit some of the potential increase in its debt servicing costs, but the path to regaining market access at favourable terms would remain challenging,” Moody’s cautioned. Portugal’s opposition parties have blasted the latest austerity package, and vowed to oppose it. Jane Foley, senior currency strategist at Rabobank, warned that this could thwart the Lisbon government’s efforts to avert the need for a bailout.
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March 16 2011, 6:01am | Comments »
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