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Issue #1552      20 June 2012

EU chiefs turn to panic measures

All across Europe there were signs that the financial crisis was accelerating as embattled governments tried desperately to appease the speculators that are wringing them dry.

The weekend elections in Greece have driven the speculators into a frenzy of fear over their cash in the event of a destabilisation of the monetary union.

The anti-democratic bankers’ government in Italy announced cuts and sell-offs worth €80 billion which it claimed would spur economic growth and lower debt but are likely to do exactly the reverse.

Unelected Premier Mario Monti’s Cabinet authorised a fire sale of government property.

It plans to raise €10bn through the sale of companies controlled by the Treasury and use the money to reduce public debt.

It is also cutting controls on bankrupt companies so they can relaunch themselves quickly.

In Spain the vultures were circling, with 10-year bond yields teetering on the edge of the seven percent which would drive the country towards a bailout.

The government was frantically signalling that its economy was secure, but working people are not convinced and the fight against austerity is growing fast.

Seven people were injured in clashes between striking miners and police.

Four police officers and three journalists were hurt when police tried to remove roadblocks of flaming tyres set up by miners in northern Spain, and were met with a barrage of missiles fired from homemade rocket launchers and slingshots. Police responded with rubber bullets and tear gas.

Miners are fighting cuts – including a reduction in mining subsidies from €300 million to €110 million which will devastate their industry.

In Cyprus a government spokesman warned that the nation faces a choice of EU bailout money or a loan from another country – said to be Russia – in order to have “flexibility to deal with the issue.”

But German Chancellor Angela Merkel remained unmoved, vowing to resist pressure.

“Germany will not be convinced by all the quick solutions like eurobonds, stability funds, European deposit insurance funds,” she insisted.

And against all the available evidence, European Central Bank head Mario Draghi kept up the pressure for a European superstate, warning EU leaders that they should not wait for help from the central bank and instead make political choices which he said “imply greater transfer of powers to a supra-national level.”

Morning Star   

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