Ireland Renews Fears of European Debt Crisis

Pressure is mounting on Ireland to accept a European bailout in order to restore confidence with investors in the solvency of other eurozone members deep in red ink. With its budget deficit expected to reach 30 percent this year, fear of a meltdown similar to Greece’s this spring is mounting.

When Greece was faced with bankruptcy last April, European leaders agreed to an unprecedented rescue effort to save not only Greece from sovereign default but safeguard the future of the euro itself. With a €750 billion stabilization package, the European Commission, individual member states as well as the International Monetary Fund sought to restore confidence in the common currency. Read more “Ireland Renews Fears of European Debt Crisis”

Unions March Against Austerity in Europe

Throughout Europe people are taking to the streets to protest announced austerity measures. With conservatives in power in most of the eurozone countries, students are organizing demonstrations and unions have launched strikes against plans to cut welfare spending and raise the retirement age.

After spending billions of euros on stimulus measures and the nationalization of major financial firms, all of the eurozone is bracing for spending cuts. Despite American calls to continue deficit spending lest austerity imperil the global recovery, European governments are committed to restoring balance to their budgets. Read more “Unions March Against Austerity in Europe”

Fear of Change Propels Populists to Power

Throughout Europe, fringe movements have been able to maneuver themselves into the political spectrum, rallying anti-immigration forces and a renewed sense of nationalism with considerable electoral success. While the world is globalizing and Europe becoming one, millions of people, from Finland to Italy, want to have no part of multiculturalism and change. Read more “Fear of Change Propels Populists to Power”

Europe Braces for Spending Cuts

Euros
Countries across Europe are bracing for deep public spending cuts

While the Greek debt crisis and subsequent decline of the euro continue to worry investors around the world, the people of Europe are preparing for severe austerity measures, and not just in the troubled south.

With hundreds of billions of euros pledged to stabilize the common currency, European leaders are forced to make major cutbacks at home.

The new Conservative-Liberal Democratic coalition ruling Britain unveiled its financial plans on Tuesday. Shortly after Queen Elizabeth II opened Parliament, Chancellor of the Exchequer George Osborne and his Chief Secretary to the Treasury David Laws announced a reduction in public spending of £6 billion to be enacted this year.

Nearly all departments of government in the United Kingdom will be affected by the spending cuts except education. According to The Blue Nation, not included in the £6 billion savings are those set to be made in the departments for health, international development and defense as they are to be reinvested in the “frontlines” of those services.

The money saved will be allocated almost entirely to reducing Britain’s deficit. Business leaders were quick to support the measures while further encouragement came from growth figures also released on Tuesday. The British economy was able to boast a modest growth rate of 0.3 percent compared to last quarter.

The German government announced heavy spending cuts on Monday. Starting next year, Germany will have to cut at least €10 billion each year until 2016 to bring its public finances back under control. Chancellor Angela Merkel is reportedly considered to raise taxes in order to bring down the deficit — in spite of her campaign promise not to.

The Dutch are already among the most heavily taxed people of Europe yet they, too, will be confronted with spending cuts in health care and social services. The retirement age is set to be raised with two years, from 65 to 67, while several political parties have proposed to drop out of the Joint Strike Fighter program in order to save billions of euros.

Italy, finally, joined the ranks of other South European economies as Portugal and Spain in announcing multibillion euro spending cuts. The Berlusconi government is preparing to cut so much as €25 billion both in 2011 and 2012 according to plans leaked to Italian media. Gianni Letta, the prime minister’s lieutenant, spoke of the need to make “heavy sacrifices” lest Italy follow down the path paved by Greece.

In order to rein in spending, government will freeze salaries in Italy while refraining from hiring additional public servants. Financial support for provincial and local governments will be cut with almost €6 billion and measures to fight tax evasion are expected to be announced soon.

The situation is complicated by politics in many of the aforementioned countries. While the British just elected a new Parliament, the necessary spending cuts have become part of election campaigns in Germany and the Netherlands. Angela Merkel’s ruling coalition was robbed of its upper house majority earlier this month after losing a local election in Germany’s most industrious of states. The Dutch are likely to elect a center-right government once again two weeks from now to deal with the cutbacks while the Italians may also head for the polls ahead of schedule as Silvio Berlusconi’s governments appears on the brink of collapse.

Saving the Euro

Bending the rules of euro management, European leaders and finance ministers agreed to an unprecedented effort to guarantee the stability of the eurozone with loans adding up to nearly $1 trillion (or €750 billion) this weekend.

In spite of the multibillion euro rescue package previously pledged to Greece, investors continued to worry about the unsound fiscal policies of other eurozone members, including Ireland, Italy, Portugal and Spain. The value of the euro sharply decreased in recent days while protests in the streets of Athens last week shed further doubt upon the country’s chance to recover — and pay back its loans. Read more “Saving the Euro”

Berlusconi Government on Brink of Collapse

Throughout it all — the sex scandals, the gaffs, the numerous allegations of corruption, mafia connections, you name it — Italian prime minister Silvio Berlusconi’s popularity remained incredibly strong. While the rest of Europe raised its eyebrows in ever growing bewilderment, the Italian people appeared to approve of their leader in spite of his many missteps or crimes. But now even his political allies have had enough.

Berlusconi’s coalition is struggling with internal dissent. Gianfranco Fini, the head of the Italian parliament and number two in the ruling party Il Popolo della Libertà (“The People of Freedom”) as well as Umberto Bossi of the Lega Nord (“Northern League”) which seeks autonomy from the poorer south of Italy, have confronted the prime minister in recent days.

The internal feud became public drama during a live television broadcast in which Fini criticized Berlusconi’s leadership and announced the formation of yet another party which will be added to Italy’s already splintered political landscape. Berlusconi, obviously caught off guard, chided Fini for exposing the governing party to public mockery and instigated a yelling match not too unbecoming of Italian politicos.

With the political right temporarily fragmented between Berlusconi’s and Fini’s supporters and the left without unified leadership, Italy faces uncertainty amid troubling economic prospects.

Berlusconi previously announced that he wouldn’t seek another term. Without the support of his political friends, running could only result in embarrassment anyway. Bossi lacks a powerful base to run on and suffers from poor health which leaves Fini the only viable contender on the right.

City of Venice Flooded

The ancient Italian city of Venice has slowly been sinking for many years. Early Wednesday morning, an unusually high tide flooded most of the city once again, forcing its denizens to wade through knee-high waters or make use of the improvised, elevated boardwalks set up in St Mark’s Square and other public spaces.

The waters reached a peak of almost 1.5 meters above sea level Wednesday, flooding about 60 percent of the city’s streets according to authorities. The level came close to last year’s record 1.6 meters; Venice’s worst flooding in over two decades. Responsible are the strong southern wind and rain combined with the lagoon city’s periodic tidal phenomenon.

A system of movable barriers that is supposed to protect the city from high tides is under construction but not expected to be operational anytime before 2014.

Venice is not the only place in northern Italy that has fallen victim to bad weathers this season. Lasting snowstorms and cold have forced airports and public transportation to largely shut down throughout the region all the while wreaking havoc on traffic in the different cities.