WESTERN EUROPEAN NEWS DIGEST
Floods Ravage Europe, China
By evening Aug. 16, estimates were that 4.2 million Germans had been affected by the floods sweeping Central Europe, with at least 90 reported dead. Some 100,000 were evacuated, including 30,000 from Dresden, where the Elbe River rose to at least 30 feet (9.2 meters), far above the 1845 record of 8.77 meters in 1845.
Torrential rains have also hit Russia, Austria, and Romania.
Another 200,000 people remain displaced in and around Prague, the gloriously beautiful capital of the Czech Republic, a universal scientific/cultural treasure. Out of a population of 1.2 million, 98 are reported dead, 50,000 have been ordered to leave their homes in the Old Town, and another 200,000 evacuated nationwide.
Meanwhile, floods and landslides across China have left at least 200 dead. Nearly 1,000 have already died this year in China due to floods. The Civil Affairs Bureau reported that 38 million are affected in the Hunan region, with at least 108 dead. Another 520,000 are affected in Jiangxi. Rescue teams and the Army are out in full force to aid citizens.
Even as the drought in North America is destroying much of the U.S. and Canadian grain crops, the floods are causing huge damage to European harvests. As of Aug. 16, due to chaotic weather throughout Germany, over half of the grain could still not be harvested, which means poorer quality. Already, some of the wheat has totally rotted, or is only good for feed. All over the country, yields are down, quality low, and prices depressedeven though the harvest will be 10-20% smaller than last year.
The German Farmers Union calculates damage to the grain harvest to be 1.5 billion euros. Added to that, losses in quality, the cost for drying grain, and high damage to potato and vegetable crops, are expected to cost another 1 billion euros. Agriculture Minister Renate Kuenast offered a ridiculous 10 million euros in aid for flood victims.
(See the EIW Editorial: "This Week You Need To Know," for the full text of German Chancellor candidate Helga Zepp-LaRouche's emergency statement on the floods in Europe.)
German Chancellor Rediscovers Principles of General Welfare
During a visit to the Krupp Mannesmann Iron Works in Duisburg two weeks ago, Gerhard Schroeder surprisingly said that the acute crisis on the stock markets has reaffirmed the necessity of having a functioning social welfare state. He said those who have believed in making money by speculation, have made a big mistake. Referencing the crisis on Germany's New Market in particular (which trades "New Economy" stocks), Schroeder warned against portraying the future of the economy as lying only in the services sector. Services are possible only on the basis of a functioning industrial base, he said.
Then, Aug. 14, before visiting flood-affected Saxonia, Schroeder made the flood a special issue at the top of the Cabinet meeting's agenda, saying that overcoming the damage, is a "task of the nation as a whole," an "emergency situation requiring prompt assistance and the commitment of common sense."
The Cabinet authorized a special program through the state-owned Kreditanstalt für Wiederaufbau bank (KfW), consisting of flood protection and related immediate aid in the range of 375 million euros; another 100 million for a special emergency credit facility at low interest rates; and a fund of 25 million for instant creation of jobs in the regions most affected by the floods, involving up to 5,000 jobless in eastern Germany. This aid program is twice the size of what was passed after the Oder flood of July 1997, and more aid is promised, if needed.
The way Schroeder is acting on some particular challenges, in stark contrast to the general incompetence in economics with which he is performing otherwise, reflects the impact which the BueSo electoral campaign is having on the German policy debate, on issues such as general welfare versus speculation.
Hartz Commission Presents Final Document on Jobs Creation Program
On August 16, the German government's Hartz Commission released its 346-page report on new ways to combat mass unemployment in Germany. While the report contains no important new elements beyond those already put out in recent weeks, its central concept is that of "job floaters," a new financial instrument to promote job creation:
A small or medium-sized company that fully employs a formerly unemployed person and fulfills certain minimum standards for creditworthiness, will receive a 100,000-euro credit, out of which 50% will increase the core capital of the company and the other 50% is free for investments. The credits will ultimately be granted by the Kreditanstalt für Wiederaufbau, but will be channelled through the commercial banking system, just as in the usual KfW programs for Mittelstand (small and medium-sized industrial) companies. The KfW itself will refinance the credits by issuing bonds on the capital markets. In this way, the "job floater" concept induces small and medium-sized companies to create more jobs and at the same time provides the financial resources for investments.
However, obviously, in order to avoid massive protests from the camp of the economic liberals, the report doesn't explicitly put out a figure for the total dimension of the "job floater" program. It presents instead a low-key calculation example, that the creation of 100,000 new jobs would require 10 billion euro of KfW credits, and later notes that in case of success, the program could help create two million jobs in three yearsand, if all the jobs were financed by job floaters, "of course this would imply a dimension of 200 billion euros."
Without going into any detail, the report emphasizes certain classes of "priority" investment projects, such as infrastructure projects in eastern Germany and other economically hard-hit regions in Germany. While the final report of the Commission does not in itself represent a program for an overall mobilization to fight mass unemployment in Germany, it opens up new financial options.
In Krakow, Pope Warns of Dangers of Euthanasia, Other Crimes
Addressing over 2 million people in the city of Krakow in his native Poland, Pope John Paul II issued a somber warning against the evils that result when man "puts himself in God's place," referring to euthanasia, genetic manipulation, and the like. "He claims for himself the Creator's right to interfere in the mystery of human life. He wishes to determine human life through genetic manipulation and establish the limit of death," the Pope said. "Rejecting divine law and moral principles, he openly atatcks the family," he continued. "The 'mystery of iniquity' continues to mark the reality of the world."
While the Reuters correspondent wrote admiringly that "the Pope showed that age and a string of health problems had not dimmed his spirit," AP appeared to be lending credence to efforts to get him to retire. The AP reporter wrote that the Pontiff "tired visibly" during the three-hour Mass and his voice "grew more fragile and his hands more shaky." The AP writer never referred to the jokes the Pope made with the crowd, which Reuters described him as delivering "with the wit and the timing of an actor."
According to the Aug. 19 Washington Post, many of those present participated in tears, believing that the Pope's visit to Krakow was the farewell Polish visit of his pontificate.
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