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Torrid Times: Afghanistan, Syria, Recession And Debt …

  • May 28th, 2012
  • Posted by EUEditor

syriza-backers.jpgThings came together on world economic business, and a list of other problems, if not closer to solution for people on the streets, with a fresh round of high-level events – beginning in Maryland on 18 May.

TOP TALKS: OBAMA HOLLANDE

The G8 summit (Group of Eight large economies: Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, United States) at Camp David saw a clear re-statement of the dilemma with economic crisis in  Europe.

obama-hollande.jpgThe new French socialist party President, Francois Hollande, struck agreement with President Barack Obama (picture), on a key point: when times are hard you need some stimulus.

The American host said (20.5.12) that after meeting individually with Mr Hollande and other leaders from the European Union, he felt optimistic about settling the financial impasse, matching “fiscal consolidation” with measures also for jobs and growth.

“Europe has the capacity to meet its challenges … We are confident it has the ability to meet those challenges … and American fully supports them”, he said.

LEAVING AFGHANISTAN

The leaders there, and again at the contiguous meeting of NATO heads of government, at Chicago, 20-21.5.12, considered also the planned extraction of front-line armies from Afghanistan, and the crisis in Syria.

The Australian Prime Minister, Julia Gillard, signed on at Chicago to the program of support for Afghan forces taking over leadership and control of security operations by stages, province by province.

Main Australian forces were due to depart by the end of next year, a year ahead of the target set for ISAF overall – the International Security Assistance Force led by the NATO alliance.

The government would contribute A$300-million over three years to funds being built up to keep the Afghanistan army and police viable.

(Mr Hollande, committed by his election platform to speed up the exit of French soldiery to the end of this year, said that some alternative forms of support might remain. He would make a sudden visit to Afghanistan, arriving there on 25.5.12).

SYRIA – NEW MASSACRE

Alarm being expressed over the crisis in Syria, careering toward open civil war, almost foreshadowed news of the fresh massacre of the civilian population, at Houla, beginning on Friday (25.5.12).

The town near Homs was the scene of an attack by government troops on a protest, followed by retaliatory attacks on roadblocks, and then the use of artillery, accounting for most of the casualties – knives and shooting also used.

Over one hundred people were killed, one third of them children; making a mockery of the ceasefire proclaimed by the United Nations observer mission, and bringing on an urgent meeting of the Security Council.

UN observers told the Security Council as many as 116 had died. The Syrian government side said it did not do it. Separate lobbying resumed, directed at the governments of  China and Russia, coaxing them further off their insistence of “sovereign rights” for governments, towards a humanitarian view and  hardened sanctions.

EU MEETS – PRESSURE FROM THE BOTTOM

eu-money-symbol-coins1.jpgEuropean leaders by Friday had already re-crossed the sea and conferred at a summit in Brussels, 23-24.5.12; to see some re-shaping of alliances, and possibly of policy, on the handling of recessionary trends and the debt crisis.

Change had come from two sources, the voters in Greece who protested at the ballot box against  the austerity program, and the voters in France who had just installed Francois Hollande. (See EUAustralia Online, “Elections: France, Greece”, 7.5.12).
syrizasvg.png In Greece the leftist alliance, the Coalition of the Radical Left, SYRIZA, had polled barely 6% in 2007 elections, but with the crisis in country polled over 16% in the elections on 6 May this year, emerging as the second party, quadrupling its delegation to 52 out of the 300 parliamentary seats.

Its leader, Alexis Tsipras, affirmed a policy of no compromise on abandoning the hard austerity program mandated by the EU and International Monetary Fund, as the cost of support with the national debt; deadlock followed; Greece is returning to the polls on 17.6.12; SYRIZA emerged as the leader in new opinion polls, but is a case of movement politics, and there are signs that its wave of support may be slowing. Voters in  Greece are facing mean options and having to think very hard.
Mr Tsipras has declared a policy of wanting to keep Greece not only in the European Union but still in the Eurozone, using the Euro currency; while radically easing the vice-like squeeze of withdrawn government spending, and extra tax.

MERKEL – HOLLANDE

merkel-bxl-council-dec-06.jpgThat would be impossible in the eyes of the German government under Chancellor Angela Merkel (picture), the chief bank-roller of Europe in this era; the austerity plan would have to stay.

The heads of government at Brussels gave the same message to the Greeks; money would have to be paid back, and according to the agreed plan.

Yet, there is Mr Hollande to consider, back from seeing President Obama, with his idea for jobs promoting programs, and using Europe-wide solutions to cope with the pressure of debt.

All accounts began to represent a shift now in the shape of things, represented often enough as a contest between Dr Merkel, her centre-right government down in the polls, under pressure from constituents not patient with Greeks or debtors of any kind; and the French President pointing to a self-defeating factor of “austerity-on-austerity” -  tighten too hard and you can’t produce enough to keep on paying anyway.

The stand-off coalesced around the recurrent idea of issuing “Eurobonds”, risk-sharing packages issued jointly by the European states, for raising of money for state purposes; on one side seen as viable, on the other rejected as hiding junk in among the good Euros from Germany.

Ms Merkel told journalists the Eurobonds would “not be a good idea.”

SHIFT IN THE EU?

Yet the journalists were being told also, by the different national delegations, that most member states were starting to shift towards a “balance” –  tilting towards more “growth-and-jobs”, away from “austerity-on-austerity”.

It was in line with declarations coming from the EU at Brussels, both the European Commission and the European Council making it increasingly clear: continue reform of the financial system, and get back to the emphasis on promoting growth.

van-rompuy.jpgThe President of the European Council, Herman Van Rompuy (picture), told the leaders at a dinner on Thursday night:

“The discussion about growth is not new. We already have a growth strategy … However our ongoing work on growth has been overshadowed by our vital efforts to ensure financial security in  the Eurozone. But it is no less important. And there should be no misunderstanding: it is obvious that opposing ‘deficit reduction’ and ‘growth’ is a false debate. They are two sides of the same coin. Without sound finances there can be no sustainable growth, but without sound growth, the measures to bring out credit levels under control will be done in vain …”

Hard reality in the meantime kept knocking at the door, with this time the credit crisis of Europe bulging, as expected for some time, in Spain.

ILLS OF THE REAL ECONOMY

With the pain of recession fuelling public anger, and as the slogans say, indignation; joblessness is exceeding 20%, government help is not there, or being pulled out, and in the last week banks began to topple, demanding what government money there might be, to keep themselves, and the business of the country afloat. Bankia, the fourth-largest banking corporation, badly scorched by the property boom and its disastrous collapse, is wanting €15.2-billion (A$19.49-billion; xe.com, 28.5.12).

Ills of the “real economy” were visited on the volatile world of stocks and shares and the market for money; by the end of the week the Euro was trading well down.

Reference

European Council, Brussels, “Remarks by President of the European Council, Herman Van Rompuy …”, 24.5.12. EUCO 93/12, PRESSE 215, PR OPCF 78

Jim Muir, “Syria massacre in Houla condemned as outrage grows”, BBC, London, 27.5.12. www.bbc.co.uk, (27.5.12).

North Atlantic treaty Organisation (NATO), Summit meetings of Heads of State and Government, Chicago, USA: Official texts from the Chicago Summit 2012, 20.5.12. http://www.nato.int/cps/en/natolive/events_84074.htm, (27.5.12).

Reuters, London, “Syrian authorities deny carrying out Houla massacre”, 27.5.12. http://www.reuters.com/article/2012/05/27/us-syria-unrest-denial-idUSBRE84Q03520120527, (28.5.12).

UKPA, London, “Spanish bank crisis hits US markets”, 27..12.
http://www.google.com/hostednews/ukpress/article/ALeqM5gGctlKiG4s-CSiwFydmKBOLtYJoQ?docId=N0337901337979840799A, (28.5.12).
Pictures

Top – SYRIZA supporters, Athens – wikipedia

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