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Economy: More Stress And Strain

  • February 6th, 2009
  • Posted by EUEditor

eu-flag-site.pngAnother week of economic strain has ended with the European Central Bank (ECB) again setting out prospects for a difficult 2009 – and holding off from any change in currently low-pitched interest rates.

The trouble in the economy was expressing itself also in strikes and demonstrations; while European law-makers considered a brace of projects which, crisis or not, would be bringing more aspects of life under one set of laws.


The President of the ECB, Jean-Claude Trichet, said on Thursday the Bank’s Council had decided against changing interest rates, following a range of reductions late last year — the key interest rate to remain at the 2% posted on 21.1.09.

He told a Frankfurt media conference foreign demand for Euro area exports had declined, and domestic factors, notably very low confidence and tight financing conditions, had adversely affected domestic demand.

Together with other available data, that indicated “very negative quarter-on-quarter real GDP growth”, together with continuing low inflation of around 2% — further supporting the low interest rate decision.

“Overall, the level of uncertainty remains exceptionally high”, he said.


Uncertainty has been demonstrated, literally, in the streets this week and last.

Greek farmers wanting state support in the face of falling prices have been blocking city streets, and national border crossings with their tractors.

Some were hurt fighting with police in Pireaus.

Strikes continued in England against the employment of foreign contractors on building sites.

The new employees were from within the European Union – Italy or Portugal – but had been brought in while local workers were facing redundancy.

In France public sector unions were claiming strong support in their campaign against job cuts proposed by the government of President Nicolas Sarkozy.

Close to one-quarter of the country’s public servants were reportedly off work for the “Black Thursday” strike on 31.1.09.

Crowds estimated in the range of 65000 to a quarter of a million turned out in Paris; groups of protestors here and there setting up street barricades, braving tear gas and baton charges by the police.


In Brussels the Czech Presidency has been working with the European Commission on proposals for uniform inheritance laws, promising to iron out complicated cross-border difficulties — for those who might have money to bequeath in difficult times.

Similar plans are mooted for a shared divorce law, for national governments which might want to join, following the failure of a project for the whole of the EU.

And the European Commission is at work on a system to tighten up on EU motorists who commit driving offences outside of their home country; encouraged by a large vote of support by the European Parliament in December.

The member states already exchange vehicle registration data, for security related work, and the plan is to give the traffic authorities access to it, along with the introduction of stiff, uniform fines.


A Madrid lawyer has contributed the latest chapter in the astounding story of Bernard Madoff, the American broker accused of defrauding investors of billions of dollars worldwide.

“Bernie” Madoff’s pyramid scheme failed spectacularly with the 2008 financial crisis, but now, lawyer Javier Cremades, representing victims, has estimated the amount of money lost to be far in excess of earlier estimates, already in the range of $US50-billion (A$76-billion;, 6.2.09).

He told Agence France Presse the figures were being put together through an international survey of law firms.


Jim Brunsden, “Presidency plans common rules on inheritance claims”, Euroepan Voice, Brussels, 22.1.09, p2.

Jim Brunsden, “Foreign motorists face tighter legislation”, European Voice, Brussels, 15.1.09, p18.

ECB, Introductory statement: Jean-Claude Trichet, President of the ECB, media release, Frankfurt, 5.2.09., (6.2.09)

ECB, Key Interest Rates, Frankfurt., (6.2.09)