In this issue:

'No Reason To Panic,' Says Eddie George, as British Housing Bubble About To Burst

'Behind-the-Scenes Diplomatic Furore' in London, Washington

Opposition to Iraq War Erupts in British Cabinet

The Return of 'Cheriegate'

Italy: Food Price Inflation Was 30-50% in 2002

Germany, France To Coordinate Iraq Policy at UN

From Volume 2, Issue Number 1 of Electronic Intelligence Weekly, Published Jan. 6, 2003

WESTERN EUROPEAN NEWS DIGEST

'No Reason To Panic,' Says Eddie George, as British Housing Bubble About To Burst

In public statements on Jan. 3, Bank of England Governor Eddie George described the rate of increases in British housing prices as "clearly unsustainable." This year the rates will certainly come down, said George; however, contrary to fears spreading in the country, he insisted there will be no collapse of the housing market, and no "sharp crash in house prices." He added that due to "remarkably strong" employment, "it was not easy to see why there should be a crash."

In respect to the overall British economy, George tried to play down recent alarming reports coming from the retail sector and industry. People "should not place too much weight on particular surveys," like the Chamber of British Industry (CBI) survey on poor Christmas sales, as these figures are always subject to "short-term fluctuations."

On Jan. 2, the Times of London prominently ran an editorial by Andrew Oswald, Professor of Economics at Warwick University, urging British house owners to sell their property before the inevitable crash. Under the headline "Your Boom Is Nigh: The Great Housing Catastrophe," Oswald stated, "The crash will probably start something like this: In the spring of this year it will begin to be generally recognized that house prices have stopped rising. Purchasers will cease to be enthusiastic. Many with buy-to-let properties will begin to sell. House prices will shudder. Then, by late summer, I see confidence in housing ebbing more substantially. Prices, even outside slowing London, will crumble. Headlines will appear: house prices fell 4% last year, 8% last year, perhaps 12%. Panic will thus set in."

'Behind-the-Scenes Diplomatic Furore' in London, Washington

What the London Mail on Sunday of Dec. 29 described as a "behind-the-scenes diplomatic furore" has broken out in London and Washington: Prince Charles has been told to abandon his plans for a February-March 2003 trip to the U.S., because leading figures in the Bush Administration are angered by his opposition to a war in Iraq.

The trip was reportedly cancelled on the advice of British diplomats, the paper says in its lead article, under the headline "Bush to Charles: We Don't Want You in USA." It quotes an unnamed "senior Whitehall official" to the effect that "A week-long tour was in the diary for February or March 2003. But the Prince has been politely informed his views on the current [Iraq] crisis might not go down well."

According to the Mail on Sunday, Prince Charles privately "believes an attack on Iraq would lead to a devastating and permanent rift between the West and the Islamic world. Charles believes his views mirror those of the British people—a majority of whom oppose war on Iraq."

EIR is trying to confirm this story.

Opposition to Iraq War Erupts in British Cabinet

Opposition to an Iraq war has erupted from within British Prime Minister Tony Blair's Cabinet, as International Development Secretary Clare Short declared Dec. 28: "An all-out war that causes devastating suffering to the people of Iraq would be wrong." The Mail on Sunday asserts that her comments "embarrassed Downing Street."

Short, interviewed by the Sunday Times of London Dec. 29, said that while she used to dismiss talk of a "clash of civilizations" as ludicrous, now "you can see it coming true before our eyes." She claimed that some people, centered in the U.S. war party, "yearn for having two sides again, and a war of civilizations, so they know what to do." This, she charged, is hurtling the world toward "madness," and toward potential "meltdown," the latter only preventable by "making the world more just."

She also said she saw growing pressure to stop what would appear to be "inexorable" steps toward conflict: "If you listen to the Pope, the Archbishop of Canterbury, European powers, African governments, Asian governments, they don't want it." A war could involve disastrous scenarios that "must be avoided at all costs," she insisted. The UN inspections must be given a chance: "We don't have to lose our patience in two weeks, and destroy everything."

The Return of 'Cheriegate'

After Britain's "Cheriegate" scandal had lain dormant for some time (that's the scandal involving Tony Blair's wife Cherie, her use of a convicted felon and conman as an intermediary in real-estate-buying schemes, and her subsequent lying about it), the Dec. 29 issue of the Mail on Sunday, the Tory-leaning paper which started the scandal, has revived it.

The latest salvo reports on charges by the conman, Peter Foster (who has run afoul of the law in his native Australia, in the U.S., and in Britain), that the Blairs are corrupt, and that Cherie knew all along who and what he was, when she used his services to buy an apartment in Bristol. Foster said that Downing Street "lied. It's as simple as that."

Beyond this, he revealed that he has written 300,000 words of his autobiography, hinting that "the final chapters dealing with the Cheriegate scandal could be damaging to the Blairs." Foster told the Mail that "I think Downing Street is nervous."

Another Mail on Sunday article, by Peter Dobbie, asserted that, as the days go by, it is increasingly unclear who will be a "safer bet" to be in power one year from now, Blair or Saddam Hussein. Dobbie says Blair will be further dragged down by Cherie's problems, but Blair's own difficulties go far beyond that, largely centering on discontent with support for an Iraq war.

Over New Year's, in a BBC poll of 15,000, respondents were asked for whom they would vote, to join a "Hall of Shame"? The winner was Cherie Blair, with 31% voting her in. In another question, which asked respondents whom they would most like to see deported from the UK, the second-highest total went to Sheikh Abu Hamza, the leading al Qaeda-related cleric in Great Britain. The highest total went to Cherie Blair.

Meantime, the latest polls in Britain show Tony Blair's approval ratings dropping to their lowest level since he came to power in May 1997—below 40%.

Italy: Food Price Inflation Was 30-50% in 2002

According to a year-end report by Eurispes, a center-left thinktank in Italy, the inflation in Italian food prices was 30% to 50% in 2002. According to the report, prices for vegetables, sausages, drinks, and frozen foods have risen an average of 29%. Eurispes uses methods different from Istat, the Italian public statistics agency, but applying Istat methods, Eurispes arrived at a figure of 13% for the same group of items, still a remarkable increase.

Single items increased as follows: vegetables, 50.8%; drinks, 32.9%; canned food, 30.9%; sausages, 27.5%; frozen foods, 23.6%. The price of carbohydrates (pasta, rice, bread), a most popular consumption item among Italians, increased 20%; coffee by 37%; mineral water by 48%. Generally, Eurispes calculated that Italians spent 343 euros more per capita on food in 2002 than a year earlier.

Germany, France To Coordinate Iraq Policy at UN

German Chancellor Gerhard Schroeder and French President Jacques Chirac have agreed to coordinate policy on Iraq, at the United Nations. During a phone conversation the two agreed that their governments would consult on the issue and political moves, at the United Nations Security Council. France chairs the body in January, and Germany in February, the crucial two months ahead.

Pope John Uses New Year's Message To Call for Peace

"The tragic and long-lasting tension in which the Middle Eastern region finds itself, makes more urgent the search for a positive solution to the fratricidal and senseless conflict that has been bloodying it for too long," Pope John Paul II declared in his New Year's message. "Today, as in the past, despite serious and repeated attempts to upset the peace and harmony of peoples living together, peace is possible and necessary." The Pope delivered his New Year message in St. Peter's Basilica. He repeated his call for world leaders to secure Mideast peace later on New Year's Day, in his weekly Angelus address before another audience of thousands of worshippers in St. Peter's Square. The Pope warned the world leaders that they would be held accountable if they failed to defuse the crises.

He has urged that the Iraq situation be peacefully resolved through the UN Security Council.

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