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Europe Faces Financial "Tsunami"

Posted by Admin on February 9, 2010

Europe Faces Financial “Tsunami” and Will Become Ungovernable

February 6, 2010 (LPAC)—City of London mouthpiece Ambrose Evans-Pritchard quoted one Julian Callow from Barclay’s Capital as calling for the European Union to invoke treaty powers under Article 122, which has already been done in Greece, to “halt the contagion…. If not contained, this could result in a ‘Lehman-style tsunami’ spreading across much of the EU.” The bankers’ dictatorship being imposed on Greece, Portugal, and Spain threatens to make those countries ungovernable.

In Greece, a two-day strike by tax and customs officers, and ongoing farmers road blockades, threaten to create a fuel shortage. Public workers union leader Argyris Sakellaropoulos said, “We have already made sacrifices, and will accept no more cuts.” Next Wednesday, Feb. 10, the public sector unions will stage a one-day strike. The nation’s largest trade union federation, GSEE, has called for a general strike on Feb. 24.

Now the people are preparing for action in Spain and Portugal.

In reaction to budget cuts, an increase in the retirement age, and wage freezes announced by the Spanish government, the unions yesterday threatened massive protests, according to the EU Observer.

Portugal appears to be ready to explode. After the opposition introduced a bill in the Portuguese Parliament to increase funding in the regions—something the government said it will block—rumors flew around that Prime Minister Jose Socrates announced he would resign, sending credit default swaps on Portuguese debt swaps surging 28% to 222. Portugal’s debt is expected to go from 76% to 85% of GDP by the end of the year. Socrates’ center left government is a minority government. While defending the government’s austerity policies, Portuguese Finance Minister Teixeira dos Santos declared that Greece and Portugal are victims of the “animal spirits” of the financial markets. The government expects pay off some of the debt by selling national assets and will push through privatizations that they expect to yield EU960 million.

Business Week reports that the moves have drawn sharp criticism from the public sector trade unions, which are traditionally the country’s most vocal and militant protesters. The United Front of civil service unions described the cuts as “scandalous,” and warned that strikes were likely. The country still has an active Communist Party and the Left Bloc, who are opposing the cuts in Parliament. The latter received 10% of the vote in the last election, and has 16 members in Parliament.

Portugal is a country of 10 million, with 10% unemployment.

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