|Debt Crisis & West|
|YOU may recall the Latin
American debt crisis of 1982,
the Asian debt crisis of 1997,
the Russian debt crisis of 1998
- and you´ll certainly remember
the US sub-prime debt crisis of 2008.
Now we have a European debt crisis
and, horror of horrors, a US government
That´s the word to keep hold of: debt.
Ignore the financiers´ jargon - bond
yields, credit default swaps, hedge
funds - which make finance sound like
quantum physics, a fearfully abstruse
subject beyond the grasp of ordinary
mortals. Financial crises occur when
people (or governments or companies)
can´t repay their debts. Or more precisely
when their creditors (or shareholders)
decide they aren´t likely to get
|US GRIPPED BY GREAT
|IN the wake of the hugely disappointing
budget deal and
the S&P´s debt downgrade,
maybe we need to hang a new
sign in the immigration arrival
halls at all US ports and airports. It
could simply read: "Welcome. You
are entering the United States of
America. Past performance is not
necessarily indicative of future
Because our country is now finding
itself in the worst kind of
decline - a slow decline, just slow
enough for us to keep deluding ourselves
that nothing really fundamental
needs to change if our
future is to match our past.
Our slow decline is a product of
two inter-related problems. First,
we´ve let our five basic pillars of
growth erode since the end of the
Cold War - education, infrastructure,
Opposition takes on Italian PM for yielding to ECB’s diktat
REUTERS ROME ITALY’S opposition accused Prime Minister Silvio Berlusconi on Monday of surrendering sovereignty to the European Central Bank after he pledged to speed up reforms in return for help in facing a dangerous debt crisis.
The ECB agreed on Sunday to buy Italian and Spanish bonds to calm markets after a huge selloff last week sent yields climbing to record levels for the euro zone’s third and fourth largest countries, threatening to unleash an uncontrollable situation.
Berlusconi had agreed late on Friday to bring forward the government’s target of balancing the budget by a year to 2013, following pressure from the ECB.
Antonio Di Pietro, head of the opposition Italy of Values party, said Berlusconi had been “dragged by the ear by the EU and international economic institutions” to the news conference where the measures were announced.
“Berlusconi should perform a service to his country for the first time and go,” he said. “Palazzo Merkel”, read an editorial headline in the left-leaning La Repubblica daily, referring to Berlusconi’s official residence, Palazzo Chigi, and German Chancellor Angela Merkel.
Behind the rhetoric, the criticism from opposition parties and unions reflect broad concern about the apparent deal between the ECB and the government, suggesting growing political resistance.
European sources said last week that the ECB had demanded Italy fast-track reforms and budget measures to reduce a large debt burden in return for the agreement to buy bonds.
The daily Corriere della Sera newspaper said that the ECB demands for accelerated reforms were contained in a letter President Jean-Claude Trichet and Bank of Italy Governor Mario Draghi had written to Berlusconi.
In an interview with the newspaper on Monday, Susanna Camusso, head of the CGIL, Italy’s largest union federation, demanded that Berlusconi declare “what conditions were imposed by the ECB for buying Italian bonds.”