From Volume 5, Issue Number 18 of EIR Online, Published May 2, 2006

Western European News Digest

Senior Tory Breaks Ranks, Calls for Troop Withdrawal

Michael Ancram, the Tory Shadow Foreign Secretary, called for British troops to withdraw from Iraq, which Ancram said is now in "civil war," before they become "part of the problem," the Guardian reported April 21. Ancram added that his original decision to back the war in 2003 was a mistake.

Re-Election of Ruling Coalition is Record for Hungary

For the first time since 1989, the ruling government coalition in Hungary received a mandate for a second term. In a run-off election April 24, the ruling socialist center-left coalition MSZP and the liberal SZDSZ, which is headed by Socialist PM Ferenc Gyurczany, won 210 out of 386 seats in the parliament. The liberal conservative Fidesz, the party of Victor Orban, having failed to unify the opposition, was defeated.

The victory has garnered striking prominence in the financial press, and the financial community is now exerting pressure on Hungary to get in line and fulfill the "convergence criteria." Thus, the election results were placed as lead articles in the Swiss daily Neue Zuercher Zeitung, as well as in Financial Times. The NZZ underlined that Hungary, the EU country with the largest deficit, 6.1% of GDP, may not be able to join the Eurozone by 2010, and risks not fulfilling the Maastricht stability criteria. The FT, on the other hand, warns that Hungary's budget deficit this year will exceed 8%. To adopt the common currency, under the insane Maastrict criteria, Hungary would have to bring its deficit down to 3% of GDP or less by 2008.

U.S. Neo-Con Threatens Incoming Prodi Administration

Italian investigative journalist Maurizio Blondet reported April 24 on a recent article by self-professed "universal fascist" Michael Ledeen in the Wall Street Journal (April 13), in which Ledeen issues what Blondet calls an "implicit threat" from the neo-cons (American Enterprise Institute, the Jewish Institute for National Security Affairs, etc.): "Prodi must choose a Foreign Minister appreciated by the U.S. And this must be the first decision of Mr. Prodi, before any other nominees of his government."

Blondet identifies Ledeen as a collaborator of the Italian and Israeli secret services; and as a member of P2: "in short, a key man in the occult network of NATO in Europe," during the years of the strategy of tension in which right-left terrorism was deployed by this network to "keep Italy on the Atlantic track." JINSA is identified as "the semi-secret umbrella under which are brought together the Israeli military, the Pentagon, and the U.S. military-industrial complex, which has conducted a neocon coup d'etat and the subsequent wars of aggression against the potential enemies of Israel."

In sum, says Blondet, Ledeen "has the means to give concreteness to his threats."

Berlin 'Budget Consolidation' Is Wrong Approach

On April 26, the Governing Mayor of Berlin Klaus Wowereit and his Senator of Finances Thilo Sarrazin presented their "fiscal emergency" case in a legal action at the Constitutional Court of Germany, in Karlsruhe.

Their case there is that, because Berlin is no position whatsoever to balance its budget, and that because Berlin has to provide special functions as the capital of Germany, the other 15 states of Germany and the national government should subsidize Berlin. Their special argument is that Berlin has already proven that it is committed to brutal budget cuts, so that it has qualified for outside funding—in the range of 30 billion euros, to reduce its public debt of, presently, 62 billion.

It is worth noting that Wowereit, infamous for his policy "cut budgets until it hurts," actually said something true: namely, that because of World War II and the postwar partition of Germany, Berlin lost its industrial belt around the city, and with it, its historical function as the "center of industrial production in Germany." The argument is delphic, though, because neither Wowereit nor Sarrazin really want to reindustrialize the city, but want budget consolidation only in the framework of establishing a servicing sector economy for Berlin.

On behalf of the German government, assistant Finance Minister Barbara Hendricks repudiated the arguments of Wowereit and Sarrazin, on the grounds that 1) the government is not in a fiscal position to give any extra money to Berlin, and 2) charging that Berlin still has not privatized enough, has therefore not balanced the budget as much as it could have done. The scandalous position of Hendricks and her boss, Finance Minister Peer Steinbrueck, is aggressively shared by the three outspokenly neo-con CDU state governors of Hesse (Roland Koch), of Baden-Wuerttemberg (Guenther Oettinger) and of Saxony (Jochen Milbradt).

In fact, the solution to the Berlin problem is also the solution to the problem of the rest of Germany—namely, the exit from the Maastricht rules, a productive credit-policy approach, coupled with a national banking arrangement, and a moratorium on debt payments in the framework of a just debt reorganization.

Germany's Productive Mittelstand Starved for Capital

The VDI (Association of German engineers) has pointed out that many productive innovations cannot be realized by mittelstand (small and medium-sized entrepreneurial) firms, because they do not have enough capital of their own, and no access to private banking loans. In what is likely an understatement, the VDI speaks of EU8 billion of national productive output that could not be realized, in 2005, because of that shortage of loans.

In stark contrast to the private banks, public banks (state and savings banks) continue to grant loans to the mittelstand); that explains why private banks, hedge and equity funds want to dismantle the public banking sector, to gain control of the mittelstand for hostile takeovers. With loans to several tens of thousands of mittelstand firms, the savings banks are a source of survival.

One of the biggest enemies of the mittelstand is Commerzbank CEO Klaus Peter Mueller, at present also the president of the German Banking Association. Mueller is infamous for being a leading collaborator, among private bankers, of hedge and equity funds that are buying up mittelstand firms' debts in order to gain leverage against those firms.

Germany Runs Short of Machine-Building Engineers

In what still looks like a fairly underestimated figure, the VDI (German Association of Engineers) stated at a press conference during the first day of the Hanover Industrial Fair April 25 that firms, notably mittelstand firms, urgently need 16,000 engineers in the machine-building sector.

This undersupply is the more deplorable, as the potential of Germany's respective industrial sector is largely untapped, and this in a situation in which in laser applications machines produced in Germany have a 40% world market share already.

Swedish Expert: Iran Has Good Case for Nuclear Defense

"Why England and Not Iran?" is the title of an article by Swedish security policy specialist Gunnar Jervas in the Swedish daily, Svenska Dagbladet, April 25. He argues for Iran's right to nuclear development and if need be, a nuclear defense.

Jervas writes: "We have Israel, which has not hesitated, in time of peace, to bomb the Iraqi nuclear reactor in Osirak." Also, Iran's neighbor Pakistan could end up with an al-Qaeda-friendly government, and what would Iran then expect? Meanwhile, the U.S. is pushing for regime change in Iran, while giving Israel protection. That, he says, means that "Iran seems to have a real need for a nuclear deterrent policy"—but to outline a scenario of equal need for Great Britain would be very difficult.

Jervas concludes: "If Israel has to look forward to a balance of terror in the Mideast, it ought to be easier to establish a nuclear-weapons-free zone in the area."

Neo-Fascist Hooligans Arrested During Attempted Robbery

Five neo-fascists were arrested in Italy after a shootout downtown in Civitavecchia, on the outskirts of Rome April 24. Bank robberies are the typical means in Italy to give cover for financing terrorist operations, and was the modus operandi of both right- and left-wing terrorists in Italy during the Strategy of Tension years. This episode must be taken seriously in the context of warnings against potential neo-fascist terrorism in the coming World Cup soccer championship in Germany June 9-July 9.

The neo-fascists all belong to the "Roma" hooligan teams, which are dominated by organizations indirectly steered by Mussolini's ally Roberto Fiore's Forza Nuova. The arrested neo-fascists are all convicted felons, some of them for hooliganism.

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