Western European News Digest
Transrapid and Eurasian Land-Bridge: The Genie Is Out
Sept. 27 (EIRNS)With the signing in Munich of the contract for the first Transrapid maglev line in Germany, and one week after the Schiller Institute conference in Kiedrich, on the future of the Eurasian Land-Bridge, some major media are starting to recognize the primacy of the LaRouche movement's campaignnot only for the Transrapid, but also for the Land-Bridge policy.
N24, the all-news German television station, posted on their website yesterday an article which, while cynically peddling the bankers' line that the Transrapid is a "waste of money," reports that: there are people who want to build a European-wide, or even an Eurasian wide networkthe [LaRouche inspired] BueSo party! Lower Saxony governor Cristian Wulff (CDU) "wants to build the maglev line from the Baltic Sea through Poland, Germany, and Holland to Paris. It could be ready by 2050. Wulff owes us an answer to the question of costs or the meaningfulness of such a projecthe learned it from Bavaria. ... For many years, the Buergerrechtsbewegung Solidaritaetshort: BueSohas campaigned for a new 'Eurasian Land-Bridge.' The Transrapid should ride through North, Central, and South Asia up to the Far East, and establish the connection with Japan, Korea, China, India and Indochina. Mr. Steuber, Mr. Wulff: nicht kleckern, sondern klotzen!"which is a colorful German way to say "think big."
Debate Over Holding Snap Elections Begins in Britain
Sept. 27 (EIRNS)Last weekend's British Labour Party Conference in Bournemouth witnessed the beginning of a debate over whether to hold snap general elections in the United Kingdom, possibly as early as Nov. 1. Spurring the debate was a Yougov poll giving Labour an 11% lead, and forecasting the weakening of Tory Party leader David Cameron. Young Turks in the Cabinet, such as Schools Secretary Ed Balls, are said to be in favor of the earliest possible elections, while old-timers like Chancellor of the Exchequer Alaister Darling are in favor of holding off until there have been some genuine achievements. Already a 96-page "tool kit" has been prepared for Labour Party activists, but Prime Minister Gordon Brown has not yet seen the Queen on the matter.
Germany's State Banks Snookered into 'Guaranteeing Risk'
Sept. 27 (EIRNS)A prominent Wiesbaden economist told EIR yesterday that the losses of some of Germany's Landesbanks, such as Sachsen LB, Bayern LB, and West LB, occurred because the Landesbanks were snookered into "guaranteeing" AAA-rated risks in mortgages and other paper. To get this easy money for doing nothing, the Landesbanks had to put up no money, but merely sign a guarantee for various "pieces" of risk "cut up" for that purpose by traders from Goldman Sachs and others. In return, these bankswhich mainly financed small and medium businesses for export, and did not make big profitswere guaranteed a 2% commission on the amount guaranteed.
The Landesbanks, which are approximately half owned by the various German states, and the rest by savings banks, were not profitting from leveraged buyouts as Deutsche Bank and the other big banks were, the economist said. Sachsen LB signed a guarantee for an 18 billion euro mortgage obligation. When the mortgage securities defaulted, Sachsen had to pay. Baden-Wuertenberg LB took it over in August. West LB, based in Duesseldorf, in the state of North Rhine-Westphalia, also guaranteed a risky package, the economist said, and is now a candidate for takeover. The Bavarian-based Bayern LB was wary of this easy money, and lost only a few hundred million euros. The Baden-Wuerttenberg LB management was much more like the Swiss, with whom Baden-Wuerttenberg shares a border: They never took the bait. Thus, it is the Baden-Wuertenberg LB, and perhaps the half-fooled Bayern LB, which are now in a position to buy up the other Landesbanks, and become the second biggest bank in Germany after Deutsche Bank.
Hungary Bucks EU To Fight for Energy Production
Sept. 26 (EIRNS)Hungary will enact national legislation to protect its energy company, MOL, from a hostile takeover by Austria's OMV oil company, the Financial Times reports today. The legislation will be part of a broader law that would give the nation the right to veto acquisitions in what it calls "strategic industries," and flies directly in the face of EU free trade rules.
The Hungarian government's position "hasn't changed," a government spokesman told Bloomberg. Hungary "considers it important to have control over companies that have strategic importance for public supply," the Financial Times reported.
'Gameplan Is Set' for Further Crisis in Kosovo
Sept. 24 (EIRNS)As a European diplomat told the Sept. 24 International Herald Tribune, "The game plan is set," for jacking up tensions on the issue of Kosovo independence. "The talks end on Dec. 10. If there is no sense then that Serbia and Kosovo can agree on the province's future, then Kosovo will make a unilateral declaration of independence. The U.S. will recognize that independence, and the Europeans, as far as they can remain united, will follow, too," he said.
Russia has said it will veto any UN Security Council resolution approving independence for Kosovo. Greece and Cyprus also may oppose the Kosovo break. Greece, a close ally of Serbia, is concerned that its neighbor Macedonia could become unstable because the ethnic Albanians in the former Yugoslav republic might call for independence. Cyprus, divided between the Turkish north and the Greek south, fears the Kosovo example might be used by the Turkish Cypriots.
A bomb killed two people, when it ripped through shops in Pristina, the capital of Kosovo, today, in what the police said was probably a showdown between criminal gangs, Reuters reported. The incident also comes ahead of provincial elections in Kosovo, whose independence-seeking ethnic Albanians make up around 90% of its 2 million population.
Report British Obstruction of U.S. BAE Investigation
Sept. 21 (EIRNS)On Sept. 15, the London Guardian exposed more details supporting the claim that the British government has blocked the Serious Fraud Office (SFO) from complying with a request, made two months ago, from the U.S. Justice Department, for assistance in the U.S. investigation of defense supplier BAE Systems. Home Secretary Jacqui Smith has refused to pass on the request to the SFO, they say, thus preventing the latter from sharing its considerable BAE dossier with the DOJ's investigators.
The British Home Office continues to deny that it is obstructing the U.S. investigation. "As is normal with requests of this type, it is receiving due consideration," they said in a statement.
The same issue of the Guardian reports that the British organization Campaign Against Arms Trade (CAAT) announced that it is taking the SFO to court on Nov. 9, in an effort to force it to re-open its investigation of BAE. The British probe of BAE was shut down by former Prime Minister Tony Blair earlier this year.
Meanwhile, investigators from the Prevention of Corruption Bureau (PCB) of Tanzania are close to a decision to file criminal charges for alleged bribes made to Tanzanian government officials by BAE Systems in order to secure the sale of a £28 million radar system for the country's national airport. A Tanzanian decision on filing criminal charges could be made within three months.
German Weekly Compares Financial Crisis to 1929
Sept. 25 (EIRNS)"The Trillion-Dollar Issue," by Hans-Ulrich Joerges, in issue 39 of Germany's weekly Stern, is one of the rare instances in which major media are taking the systemic collapse seriously. Not only does Joerges compare the current financial crisis to 1929, but he points out the political outcome of the 1929 precedent: "It catapulted Hitler to power." Joerges says that we have seen only the "tip of the iceberg" of a paper pyramid of $3 trillion. He lashes out at the world of financiers and top managers, who have cashed billions while sinking the ship.
Politicians are "losing sleep" over the $3 trillion question, and have started issuing "moderate warnings" to the public. But more serious initiatives are required, such as "controls instead of liberalization of financial markets."
Joerges ignores the primacy of Germany's LaRouche movement, the BueSo, on this issue, and credits former Finance Minister Oskar Lafontaine with that proposal, adding the dangerous delusion that "Europe can economically decouple from the U.S. crisis" and a hope that French neo-con President Sarkozy could lead that effort.
Brits' Deposit Insurance Fund Full of Nothing But Promises
Sept. 25 (EIRNS)According to today's Independent, the British mechanism for bank deposit insurance has just £4.4 million ($9.0 million) in it!
This British fund is supposed to insure individual deposits of up to £35,000. The government announced that this fund would guarantee the deposits of the sinking British mortgage bank, Northern Rock, but £4.4 million would only cover a few dozen deposits. By contrast, the U.S. deposit insurance fund has $49 billion in it.