Western European News Digest

Hungary Tells IMF: No More Budget Cuts!

July 19 (EIRNS)—The government of Hungary, a small nation of 10 million, is putting up resistance to the EU and IMF: Finance Minister Gyorgy Matolcsy yesterday rejected EU-IMF demands for new budget cuts, saying that the new government of Prime Minister Viktor Orban was elected because it promised not to continue the austerity policy of the previous government. There will, therefore, be no more budget cuts that hit the broad population, Matolcsy said, reiterating his views today in a television interview. Instead, the government will raise an additional EU700 million per fiscal year, through a bank levy.

The IMF instantly broke off talks with Budapest, and blocked the last tranche of $5.5 billion of a $20 billion standby loan negotiated two years ago by the previous government. Orban said that Hungary may be able to get along without that loan anyway, and on July 22, the national parliament is expected to pass the bank levy, since the government controls two-thirds of the seats.

Slovakia Declares End to Budget Cuts

July 21 (EIRNS)—Following Hungary's announcement, Iveta Radicova, the new Prime Minister of Slovakia, today categorically ruled out drastic budget cuts resembling those of the previous governments. She said the Slovakian people already went through that, with a lot of suffering, in the 1990s and at the beginning of the millennium, cutting their living standards by 10% to stabilize the banking system. "This will not happen again ... the population cannot be made the victim of irresponsible governments again and again."

Instead of budget cuts that hit the average citizens and undermine the state's role in the creation of new jobs, revenues for the state should be raised where there is crime and corruption in the economy, she said. In Slovakia's relations with its neighboring nations, "the really burning issues," like economic cooperation, and flood relief for the regions bordering on the Danube River, shall have priority, and politicians should not get distracted by other issues, she added.

Cameron Introduces Communitarian Fascism as Model for U.S., Europe

July 19 (EIRNS)—Once again, as during the two Harold Wilson governments of 1964-70 and 1974-76, Britain is burning down its own house for the purpose of providing an example to its neighbors. Then, it was Wilson's Schumpeterian "creative destruction" of the British economy, which was designed to be imitated in the U.S.—as it was, first by Richard Nixon, and then, much more disastrously, by the Trilateral Commission-controlled Jimmy Carter. Now, it is the communitarian fascism, also called "distributism," of the early 20th-Century Englishmen G.K. Chesterton and Hilaire Belloc, mothered into Prime Minister David Cameron's new Tory government by the Fabian Society.

Her Majesty's government has just launched its plan for implementing "fascism with a democratic face" throughout Great Britain. But beware: It is also coming to the United States. Cameron announced this as his "Big Society" policy at a conference in Liverpool, where he declared, "The Big Society is about liberation—the biggest, most dramatic redistribution of power from elites in Whitehall to the man in the street." He outlined a plan for local control, on the communitarian fascist model, of services which have hitherto been controlled by local, city, and national governments, including schools, fire departments, transportation, museums, etc.

While Cameron denied that his plan was aimed at cutting services, few believe him. Dave Prentis, the General Secretary of Unison, which represents public sector workers, told the Guardian, "Make no mistake, this plan is all about saving money, and it will cost even more jobs and lead to more service cuts. The government is simply washing its hands of providing decent public services and using volunteers as a cut price alternative."

Paris and Berlin Move Against EU Members Rejecting Maastricht

PARIS, July 22 (EIRNS)—At yesterday's meeting of the French Council of Ministers, with the unusual participation of German Finance Minister Wolfgang Schäuble, despite continuing disagreements, the two countries decided to address "A Franco-German Paper" of joint proposals to EU Council President Herman Van Rompuy, who heads the EU Commission's Task Force on Economic Governance. Both countries propose the following sanctions for member countries that do not abide by the EU's Maastricht Treaty, which limits state indebtedness to 3% of GDP: 1) paying a fine to a European fund; 2) reduced access to European funds, 3) eliminating the voting rights of the non-complying states. The text is very weak, however. Since there is no agreement on reopening negotiations on the treaties, this would be adopted as a "temporary political proposal" with no juridical standing, but which would be added to the EU treaties at the first opportunity. Otherwise, for diplomatic reasons, the two decided to launch a comparative study of their own fiscal policies.

Proposed New FDR-Style Agency in Italy

July 21 (EIRNS)—Nino Novacco, chairman emeritus of Svimez, the think tank that monitors and promotes the development of Italy's Mezzogiorno region, has called for a new agency in an FDR style to plan and finance regional development for Southern Italy.

The proposal is part of the yearly report by Svimez, presented yesterday in Rome before state and government authorities, politicians, and media. In presenting the report, Novacco said that Svimez has proposed "a specific Agency for the Development of Mezzogiorno's Territory," modelled on "the positive aspects" of the Cassa per il Mezzogiorno experience in the 1950-75 period, "inspired by the American authorities of Roosevelt's years, after the Great Crisis (Tennessee Valley Authority, Columbia River, and afterwards, the Appalachian Commission)."

Sarkozy's Austerity Compared to Laval's

PARIS, July 20 (EIRNS)—Although French President Nicolas Sarkozy denies that his government's plan to cut EU100 billion by 2013 is an austerity plan, French media have started to evoke the specter of Pierre Laval, the French Prime Minister who ran a deflationary policy in 1935, and became the main figure of the Nazi-backed Vichy regime. The daily Le Parisien, for example, put the issue on its front page, noting that Laval "imposed deflationary policies" and "reduced the army budget while Hitler was remilitarizing."

Greek Journalist Gunned Down in Athens

July 19 (EIRNS)—Greece is becoming a major target of a strategy of tension that parallels the destruction of the country through the European Union-mandated brutal austerity policy. At least three gunmen in Athens gunned down a leading left-wing Greek investigative journalist, Socratis Giolas. The murder follows an attempt on the life of the Security Minister on June 24, when a parcel bomb addressed to the minister killed his security chief.

The gunmen who killed Fiolas were dressed as police officers; they lured him out of his house by claiming his car was stolen, and then pumped 20 shots into his body. Police claim that the bullets match those of two weapons used by the Greek terrorist Sect of Revolutionaries in the murder of an anti-terrorist police officer on June 17, 2009.

Former MI5 Head: 'Backhanded' Support for Kelly

July 22 (EIRNS)—The former head of Britain's MI5, Lady Manningham-Buller, gave testimony on June 20 before the Chilcot Committee investigating the origins of the Iraq War. Lyndon LaRouche characterized her testimony as "backhanded support to David Kelly," the British weapons expert who was found dead, shortly after criticizing the Tony Blair government for "sexing up" a report on Saddam Hussein's alleged weapons of mass destruction to justify the invasion of Iraq.

Lady Manningham-Buller, who led MI5 from 2002 to 2007, said that the wars in Iraq and Afghanistan had greatly increased the terrorist threat to Britain itself, and that intelligence available before the Iraq War had not been sufficient to justify the invasion of that country.