Global Economic News
Resistance Developing to German Nuclear Shutdown
June 24 (EIRNS)After the initial shock over the sudden, dictatorial government nuclear exit in Germany, pockets of resistance are developing, with factory council members, employees, and families mobilizing. People are starting to realize that they have to stand up as citizens, if they do not want everything that generations have worked for, to suddenly be thrown onto the garbage pile, because of the arbitrary and despotic decisions by the self-appointed oligarchical political class.
On June 22, the factory council chairman of the Bavarian nuclear power plant Gundremmingen, representing more than 800 employees, wrote a spirited "Open Letter to Bavarian Minister President Horst Seehofer" (CSU), protesting the nuclear exit and the consequent deindustrialization policy. They remind Seehofer, who completely switched sides, like Chancellor Angela Merkel, in no uncertain terms, that nuclear energy was key in transforming Bavaria from an agrarian state into Germany's leading industrial center.
After reviewing the excellent safety conditions in the German plants, and the costs of the exit, including daily electricity imports, the letter states forcefully: "Now this is simply a matter of deindustrializing Bavaria and all of Germany." It continues: "You, as Bavarian Minister President, are bound to the welfare of the population of the Free State of Bavaria. If you do not act responsibly on the issue of nuclear energy, you will go down in the history books as grave-digger of Bavarian industry, and as a companion of a red-green Bavarian government. Commit yourself to a reason-founded, thoughtful and fact-based policy! Calculations based on party politics cannot suspend the laws of the market and of physics!..."
Bank of England Governor: No More Euro Bailouts, Please
June 24 (EIRNS)In sharp contrast to the European Central Bank, Bank of England Governor Mervyn King warned against any more bailouts for Europe, because they can only buy time, and never solve the problem. He warned that Europe is not suffering from a liquidity crisis, but is insolvent, i.e., bankrupt.
"Right through this crisis from the very beginning ... an awful lot of people wanted to believe that it was a crisis of liquidity," King said. "It wasn't, it isn't. And until we accept that, we will never find an answer to it. It was a crisis based on solvency ... Initially financial institutions and now sovereigns." Although he did not mention Mr. "Just One More Bailout" Dominique Strauss-Kahn, he warned, "Providing liquidity can only be used to buy time. Simply the belief, 'Oh we can just lend a bit more,' will never be an answer to a problem which is essentially one about solvency."
While British banks have little direct exposure to sovereign debt in the Eurozone, he said, nonetheless the Eurozone debt crisis poses the biggest threat to the U.K. banking system. The report itself points out that the exposure of British banks is not with sovereign debt, but with private debt. For instance, claims of British banks on the non-bank private sector in Spain and Ireland account for 50% of their core Tier 1 capital. So any financial crisis in these countries hits the City of London. The same holds for France and Germany, where claims by British banks account for 130% of their own core Tier 1 capital.
The report also warns that derivatives and other "exotic" financial instruments are something that authorities need to monitor closely.