In this issue:

Locusts Devastate Crops in West Africa

German Finance Minister Tries To Hide Fiscal Crisis

From Volume 3, Issue Number 42 of EIR Online, Published Oct. 19, 2004

World Economic News

Locusts Devastate Crops in West Africa

Swarms of locusts began devastating the crops and pasturelands of West Africa, during the year's copious rainy season, a UN agency reported October 4.

The desert locusts are moving into southwest Libya, southern Algeria, and the border areas of Morocco. The worst affected countries are Senegal, Mauritania, Niger, and Mali. Algeria has already noted the arrival of locusts in its southern desert province of Tamanrasset. Observers worry that the second wave could be more dangerous than the first, as 3.5 million hectares are already infested in the sub-Saharan region.

The Food and Agriculture Organization has spent about $200 million using crop dusters. But, now it has sent out a distress call to all nations, and as of Oct. 13, less than $20 million in cash has been delivered. The international community has promised $58 million so far, but FAO now says it needs $100 million.

According to one FAO analyst, the situation is still manageable. But the analyst pointed out, "The movement of swarms mainly to the north and northwest is already happening, and it is becoming increasingly difficult to stop the next stage." He also pointed out that if rains in countries like Morocco, Libya, and Algeria are plentiful, the current generation can give birth to a much larger group of offspring. The concern is that the swarms may multiply under such circumstances in two to three years, as happened in the last 1987-89 locust plague.

German Finance Minister Tries To Hide Fiscal Crisis

The week of Oct. 4, German Finance Minister Hans Eichel invoked the "economic imbalance" clause, which enables him to increase borrowings beyond the present level by several billion euros, a source in the Bundestag told EIR Oct. 12.

In line with the constitutional clause that obliges the state to always invest as much money as it spends for consumptive purposes (like paying debt), the "imbalance clause" goes into effect if the government can argue convincingly that for reasons outside of its own powers, a general imbalance of the economy has emerged that leaves the state with less tax revenue, and burdens it with increased expenses at the same time. The extra borrowings that Eichel can take, will be presented in an "added budget" proposal, likely in the range of several billion euros, for the current fiscal year, which then will also predetermine the volume of the budget for FY 2005—to be debated in the parliament in early November.

This is the third time that Eichel has resorted to this trick. The source, inside the parliamentary group of the opposition CDU (Christian Democrats), told this news service that Eichel is resorting to the budget trick, because it helps him to cover up certain ugly facts and disasters about which he wants no debate.

A debate on the real fiscal situation, which Eichel is sabotaging, would also expose what the government does know about the near future and what it expects to happen, but will not tell the public now.

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