Western European News Digest
Zepp LaRouche Calls For Lautenbach Plan To Fight Flood Catastrophe
In the wake of massive flooding in eastern Germany, which has dislocated at least 100,000 people and left tens of billions of dollars of damage in its wake, German Chancellor candidate Helga Zepp LaRouche issued a statement Aug. 15, calling for immediate abandonment of the budget criteria imposed on European Union member-states by the Maastricht Treaty, and, in place of that budget austerity, massive reconstruction efforts. (Zepp LaRouche's full statement was printed in the EIW Editorial in our Aug. 19 issue.)
In the two weeks since her statement, German Chancellor Gerhard Schroeder, and the opposition Christian Democrats, have taken certain measures to provide monies for reconstruction, and to relieve small firms of their debt burdens, if necessary, due to the flood damage.
However, the German government held back from directly challenging the European Union measures which have prevented major infrastructure investment. Schroeder has made statements asserting the priority of the social obligations of the Federal government, but rather than challenge Maastricht, he has simply cancelled some tax cuts, and postponed other expenditures, in order to provide funds for the emergency. This means that the efforts undertaken will be woefully inadequate to repair the damage or to put the already devastated German economy (with more than 10% unemployment) back on track.
A meeting of neighboring countries called by Schroeder and EU President Romano Prodi, came up with no significant initiatives. Yet farther south, in Italy, government ministers continue to insist that necessary capital investment in infrastructure occur outside the Maastricht criteriajust as Zepp LaRouche herself proposed.
Italy Minister: Change Policy To Allow Infrastructure Investment
Italian Deputy Finance Minister Vito Tanzi called for deficit financing for public investments in infrastructure. Tanzi said, in an interview with Bloomberg news wire Aug. 23, that Finance Minister Giulio Tremonti is holding informal talks with other ministers and the European Commission in order "to get people to accept more flexibility."
'The idea," Tanzi said, "is not to count as deficit spending investments on infrastructure that have clearly passed a test of profitability." Italian Prime Minister Silvio Berlusconi also "wants to free up money to spend on infrastructure projects such as a bridge connecting Sicily to the mainland."
"Union leaders in Italy have supported the idea," Bloomberg notes, along with "many members of Italy's government.
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