World Economic News
UN Warns of 'Silent Emergency' in Sanitation, Drinking Water
More than 2.6 billion peopleover 40% of the world's populationare still lacking access to basic sanitation, and more than 1 billion are still drinking unsafe water, the United Nations warned Aug. 26. Without urgent action now, waste and disease will spread, killing millions of children and leaving millions more on the brink of survival. Most of this toll will occur in rural Africa and Asia, according to a report released Aug. 26 by the World Health Organization and the UN Children's Fund (UNICEF).
"Around the world millions of children are being born into a silent emergency of simple needs," said UNICEF Executive Director Carol Bellamy. "The growing disparity between the haves and the have-nots in terms of access to basic services is killing around 4,000 children every day and underlies many more of the 10 million child deaths each year. We have to act to close this gap, or the death toll will certainly rise."
Rising Fuel Prices in UK Squeezing Shrinking Pensions
"Soaring fuel bills spell end to cheap energy" read the front-page banner headline of the London Times Aug. 25. Britain's largest gas and electricity supplier, British Gas, announced a 12.4% increase in gas prices and 9.4% increase in electricity prices for more than 18 million customers. British Gas blames the price hikes on record-high oil prices, while British gas reserves in the North and Irish Sea have been depleted. A consumer watchdog is quoted, warning of the eruption of "fuel poverty" in Britain. The Times notes that the price hike is hitting a population already facing "a 7% increase in water bills in 2005, rising mortgage interest rates and council tax bills."
Following the stock market crash, corporate pension schemes have lost much of their assets. Corporations reacted by cutting pension payments by 50% or more. The overall deficit of corporate pension schemes in Britain has exploded to 225 billion euros. Even worse is the situation for employees of corporations that go bankrupt.
Under British bankruptcy legislation, bank obligations have to be fulfilled first, followed by bond investors, and only then would pensions, which do not enjoy protection as in the USA, be paid.
German Public Deficit Hits Record High in Second Quarter
With tax and social security revenues of 464.1 billion euros and expenditures of 506.8 billion euros, the deficit of Federal, state, and municipal households rose to 42.7 billion euros from January to June, according to Handelsblatt Aug. 25. The deficit represents 4% of Germany's gross domestic product (GDP) in the first half year. Germany therefore has an excellent probability of crossing the 3% deficit limit of the Maastricht stability pact, again, in 2004. Any cut in infrastructure or social budgets would just further depress the economy, resulting in even higher tax income shortfalls. The Federal budget deficit had increased dramatically to 34 billion euros, compared to 26 billion euros in the same period one year ago. Finance Minister Eichel blames half of this shortfall on lower Bundesbank profits, the other half on falling tax income.
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