In this issue:

LaRouche Supporter Wins Big in Italian Provincial Vote

East German Social Democrats Sound Alarm Over Vote Loss

Former Mayor Speaks Out on Crisis in Germany's SPD

Debate on European Stability Pact

French Fin Min Opens Pandora's Box on EU Economic Restructuring

EU-U.S. Summit Aims To 'Revitalize' Trans-Atlantic Relations

Turkish Energy Minister: Nuclear Energy 'Absolutely Necessary'

New Labour To Slash 80,000 Civil Service Jobs

German Bundesbank Caught in New Scandal

From Volume 3, Issue Number 26 of Electronic Intelligence Weekly, Published June 29, 2004

Western European News Digest

LaRouche Supporter Wins Big in Italian Provincial Vote

Alberto Lorenzet, member of the LaRouche-affiliated Italian "Solidarity" movement, was one of the highest vote-getters in the June 12-13 elections for the Provincial Council of Belluno in northeast Italy. Lorenzet, who was a candidate for the center-right coalition, received the fifth-highest number of votes among candidates of the coalition, and will become a Provincial Counselor if his list wins the run-off election this coming weekend. The candidate's leaflet made explicit references to Lyndon LaRouche and the New Bretton Woods proposal to rebuild the world economy.

After a brief statement, the leaflet reads: "Member of the Civil Rights-Solidarity movement, which represents the scientist, economist, and U.S. Democratic Party Presidential candidate Lyndon LaRouche in Italy, and works for the promotion of an international economic system based on the economic system of Bretton Woods elaborated by U.S. President Franklin Delano Roosevelt at the end of the Second World War. I am running because I believe in the potential for industrial, artisan, and tourist development of our area. The Central Cadore region must look to the future and be part of the large national and European transport networks."

In mid-March, Lorenzet organized an invitation for members of the LaRouche movement to speak at an important conference on the crisis in the eyeglass production district in the Cadore area. The conference ended up being dominated by a fight between the arrogant free-trade economist Renato Brunetta and Andrew Spannaus and Liliana Gorini of the Solidarity Movement. Lorenzet openly associated himself with the anti-free-trade proposals, and organized several meetings with small businesses in the area to explain the perspective of the New Bretton Woods and the Eurasian Land-Bridge.

East German Social Democrats Sound Alarm Over Vote Loss

SPD leaders from all five eastern German states and Berlin have sent a letter to the national SPD headquarters and to Chancellor Schroeder, desperately calling for a policy change. The letter addresses the fact that the SPD emerged from the European Parliament elections in third place behind the Christian Democrats and the post-communist PDS, in the five eastern states of Saxony, Saxe-Anhalt, Thuringia, Brandenburg, Mecklenburg-Prepomerania, and behind the Christian Democrats and the Greens in Berlin.

The letter, however, reflects that the conceptual capabilities of the Social Democrats are rather limited and undeveloped, as they do not call for a complete shift away from the Agenda 2010, but only for modifications to create maneuvering room for investments and creation of jobs. Any emphasis on industrial investments is omitted.

Whereas these Social Democrats want to save the SPD, others on the left are preparing a party split. Between 500 and 600 SPD dissidents gathered in Berlin, over the June 26-27 weekend, to discuss the project of a new political party, likely to be established towards the end of this year.

Former Mayor Speaks Out on Crisis in Germany's SPD

In a full-page exclusive interview with the German daily Die Welt June 23, Hans Koschnick, a former Mayor of Bremen, former chief EU envoy to Mostar, and long-time member of the SPD, said that the paradigm of economic-social policies of the Social Democracy has reached a complete dead-end. It can already be ruled out that the SPD will be re-elected to government in the next national elections, Koschnick said.

A fundamental policy shift is required for the SPD, stopping the current "hand-to-mouth policies of short-termism, tactical maneuvering, thinking in day-to-day terms," Koschnick added. "The idea that the SPD can run after the hedonistic new middle class, as Schroeder did in 1998, has been a failure."

What is required, is a fundamentally new idea, a new vision of society, but the European elections have shown there was "no concept whatsoever, not the faintest approximation of an idea," Koschnick said. "The only parties that have a future, [are those that] have clear-cut values, a clear-cut message of how society has to be shaped in the future," he added, without spelling out such ideas.

Similar remarks were made two days earlier by Stephan Hilsberg, member of national parliament and a co-founder of the east German SPD after 1989. He said the challenge of creating new jobs for the East, after the post-1989 deindustrialization, has neither been met by the SPD, nor by the political elite of Germany as a whole.

Debate on European Stability Pact

In preparation for a debate which will take place in the Economic and Finance Ministers meeting of the European Commission at the end of the week of June 25-26, the EU Commission has started a renewed debate on the Maastricht Stability Pact.

Spaniard Joaquin Almunia, who is responsible for the Economy in the EU Commission, has laid out new conditions for the Pact. He said, according to El Mundo June 23, that the Pact should be more "flexible." He does not question the 3% deficit limit in the EU treaty, but in case countries do not fulfill the criteria, they will be granted one year's time for correction. If the country is in recession, one year may not be enough, Almunia said. This policy is, however, linked to the condition, that the country will have to speed up its reform policies.

An example was posted on France's Le Figaro website June 23. EU Energy Commissioner Loyola de Palacio put out an ultimatum to the French state-owned company EDF/Gas de France, demanding that the company change their Statut d'Epic (Establishment of Industrial and Commercial Character). It essentially means that the French state is told not to give state guarantees—because this would represent a distortion of competition. Some leading trade unions have called for a day of action this move.

French Fin Min Opens Pandora's Box on EU Economic Restructuring

In a full-page interview in the June 23 Financial Times, French Finance Minister Nicolas Sarkozy is presented as the man in Europe committed to bashing the Franco-German alliance, and establishing new supranational European structures. Quotes follow:

"I believe in the importance of the Franco-German axis, if only to prevent the dramas and wars of the past century.... But I think this dialogue should not be exclusive." He notes six countries—France, Germany, Britain, Spain, Italy, and Poland—which, he says, should work together.

"It is really good that we are 12 countries with a single currency, with, in theory, a single economic policy and a single central bank. But there is no single economic governance.

"I thus propose that as of now, we anticipate the application of the reform of the European constitution. Just as there will be a president of the Council of Ministers elected for two and a half years, I propose we give ourselves a president of the Eurogroup who is elected for two and a half years. This must be the embryo of a European economic government."

He goes on to say that he will propose for France that, in the event of any surpluses, 2/3 should go to pay off debt and the rest, for investments. He talks up the need for labor flexibility, and targets the 35-hour week.

Sarkozy has an eye on becoming the next President of France, in 2007. LaRouche associate Jacques Cheminade has just made known his intention to launch his campaign for the Presidency, now.

EU-U.S. Summit Aims To 'Revitalize' Trans-Atlantic Relations

The two day summit, to be held near Dublin, Ireland starting June 26 will focus on foreign relations. Participants include U.S. President Bush, Irish Prime Minister Ahern, EU Commission President Prodi, and EU High Representative Solana, at an extended afternoon meeting.

It cannot be ruled out that Robert Cooper, Solana's new liberal-imperialist guru, whom he borrowed from Blair, will sit in on some of the talks, as well. Southwest Asia, the fight against terrorism, and non-proliferation of WMD dominate the foreign policy agenda of the summit.

The European Union and the U.S. are going into the summit with notably different military doctrines. The EU security policy, passed a few months ago, opts against preemptive strikes and supports military intervention only as the last resort, diplomatic and other means failing. The original draft (influenced by Robert Cooper) was more open to the U.S. doctrine, but Chirac and Schroeder insisted it be reformulated to reflect a genuine European view, as distinct from the Bush Administration's view. The EU policy nevertheless stresses loyalty to NATO and to trans-Atlantic partnership.

Turkish Energy Minister: Nuclear Energy 'Absolutely Necessary'

In an interview on June 14 with Hurriyet reporter Yalcin Dogan, excerpted on June 18 by BBC, Turkish Energy Minister Hilmi Guler outlined Turkey's plans to go nuclear. "We will face a power shortage in 2020," the Minister explained. Any fossil energy resources would have to be imported. "Nuclear power plants are, therefore, absolutely necessary," he stated.

Minister Guler reported that he carries around a dossier in his briefcase of nuclear plants around the world, to help inform the Turkish government as to what kind of technology it may decide to use. A document titled, "Strategic Document on Energy" is being prepared, and the draft is almost complete, he stated. Prime Minister Recep Erdogan has been informed of the report's progress, and insists the project be launched as soon as possible.

New Labour To Slash 80,000 Civil Service Jobs

Chancellor of the Exchequer Gordon Brown is demanding that up to 80,000 civil service jobs be cut in the next three years and is delaying publication of his report on projected government spending until 2008, until government departments comply with his demands, the Times reported June 23.

Already in March, Brown had announced 40,000 civil service job cuts, at the Inland Revenue and Customs & Excise, and the Department for Work and Pensions. Most other government departments will also have to cut "administrative" costs by 2.5% a year for the next three years.

But the Treasury also asked all government departments to draw up plans for cutting double the number of jobs as announced in the Budget, to meet Brown's "savings" target.

German Bundesbank Caught in New Scandal

Only weeks after the series of scandals over personal financial misconduct which forced the resignation of Bundesbank governor Ernst Welteke, the rest of the bank's board of directors is making headlines with the "Villa Scandal." This involves 18 prestigious estates and residences in the Taunus region around Frankfurt, owned by the Bundesbank, which were rented by leading bank personnel at very preferential prices, in some cases even over several years.

Once a beacon of untouchability and of financial and monetary principles for many in former times, the bank has turned into a hotbed of irregularities, nepotism, and other affairs now. This new round of revelations comes in the context of fierce inter-institutional struggles over monetary and fiscal policies at the German and European level.

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