UK - Eurozone Crisis Live

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Russia's economy under Vladimir Putin

Vladimir Putin was elected President of Russia on March 26, 2000, and was re-elected to a second term on March 14, 2004. On May 8, 2008, he was appointed Prime Minister by presidential executive order.

16 May 2000

President of Russia


Economic history of the Russian Federation 2000-2007

Russia posted gross domestic product growth of 6.4% in 1999, 10% in 2000, 5.1% in 2001, 4.7% in 2002, 7.3% in 2003, 7.2% in 2004, 6.4% in 2005, 8.2% in 2006 and 8.5% in 2007[9] with industrial sector posting high growth figures as well. :thumb:
Главная::Федеральная служба государственной статистики

Under the presidency of Vladimir Putin Russia's economy saw the nominal Gross Domestic Product (GDP) double, climbing from 22nd to 11th largest in the world.[/COLOR] The economy made real gains of an average 7% per year (2000: 10%, 2001: 5.1%, 2002: 4.7%, 2003: 7.3%, 2004: 7.2%, 2005: 6.4%, 2006: 8.2%, 2007: 8.5%, 2008: 5.6%), making it the 6th largest economy in the world in GDP(PPP). In 2007, Russia's GDP exceeded that of 1990, meaning it has overcome the devastating consequences of the Soviet era, 1998 financial crisis, and preceding recession in the 1990s.

During Putin's eight years in office, industry grew by 75%, investments increased by 125%,[10] and agricultural production and construction increased as well. Real incomes more than doubled and the average salary increased eightfold from $80 to $640.[11][12][13]:thumb: The volume of consumer credit between 2000–2006 increased 45 times,[14][15] and during that same time period, the middle class grew from 8 million to 55 million, an increase of 7 times. The number of people living below the poverty line also decreased from 30% in 2000 to 14% in 2008.[10][16][17]

Economic history of the Russian Federation - Wikipedia, the free encyclopedia


=> The Putin's Era of Russia is highlighted as below:

=> List of Countries by Government Debt To GDP (Russia at around 8.0% only)

=> the Chart Below puts Russian Per Capita Income in the same category of many Western European Countries like Italy, Spain etc., while they are heavily indebted too........

=> also we find Ruble value stabilized since 2000 itself, as below:

Year - US Dollar exchange

1995 - 4.55 Rubles
2000 - 28.13 Rubles
2005 - 28.27 Rubles
2009 - 30.20 Rubles

Economy of Russia - Wikipedia, the free encyclopedia

 

[hello_10]

Eurozone: three countries have debt-to-income ratios of more than 300%

Figures expose indebtedness of eurozone governments in relation to government revenues – UK is sixth with ratio of 212%

Ireland, Greece and Portugal are labouring under debt-to-income ratios of more than 300%, according to figures that expose the indebtedness of eurozone governments in relation to their government revenues.

The measure, intended to show governments' abilities to pay debts, shows Ireland's total debt in 2012 was €192bn (£163.1bn), or 340% of the government's income. Ireland came a narrow second in the table to fellow bail-out recipient Greece, which has amassed an even worse debt-to-revenue total of 351%. Portugal – which has also received aid from the troika of the International Monetary Fund, the European commission and the European Central Bank – came third with a debt-to-revenue ratio of 302%, while Britain was sixth last year on the list of 27 European Union member states, with a debt-to-revenue ratio of 212%, according to calculations based on European commission figures.

Debt figures are usually calculated as a ratio of a country's national income and expressed as a proportion of GDP. But national income figures reflect activity across the whole economy, in both the public and private sectors. governments must pay debts from tax receipts and other government income, not the income for the economy as a whole. Some analysts argue a government's debt-to-revenue ratio provides a clearer picture of its ability to fund annual debt payments once interest rates are taken into account.

The US is in even worse shape than Greece. Its $16tn (£10tn) debt is the equivalent of 105% of GDP, but more than 560% of government revenues. Washington's debt payments are cheap after a plunge in the interest it pays on government bonds, but with revenues of only 14% of GDP compared with about 40% across much of the EU, its ability to pay is weakened.

Ireland, which is often commended for its recovery from the banking crash, has seen a sharp rise in its debt-to-revenue ratio in the last four years. In 2009 the ratio was 187%. A year later it had jumped to 262% before reaching 340% in 2012. However, the country appears to be in better shape when debt-to-GDP figures are used. It ranks fourth, with a 117.6% ratio, after Greece, Italy and Portugal.

Greece's performance, by contrast, has improved. It has pushed through a huge clampdown on government spending and has seen its ratio fall from 402% in 2011 to 351% in 2012.

Some of Europe's strongest economies have jumped up the league table of indebted EU nations when the debt-to-revenue measure is used. Germany has a ratio of 181%, Malta's is 178%, while France has a ratio of 174%, all higher than countries that are often cited as troubled and at risk of default such as Slovenia (120%) and Hungary (168%).

The healthiest economies according to the debt-to-revenue measure are the Nordic nations, where Sweden enjoys a 75% ratio, Denmark a 82% ratio and Finland a 99% ratio in 2012. :thumb:

In the aftermath of the 2009 banking crash, the US investment bank Morgan Stanley argued that debt-to-government-revenue ratios should be included in any discussion of a possible sovereign debt default.

Analyst Arnaud Marès, who has since left the firm, said in August 2010: "Whatever the size of a government's liabilities, what matters ultimately is how they compare to the resources available to service them. One benefit of sovereignty is that governments can unilaterally increase their income by raising taxes, but they will only ever be able to acquire in this way a fraction of GDP.

"Debt/GDP therefore provides a flattering image of government finances. A better approach is to scale debt against actual government revenues. An even better approach would be to scale debt against the maximum level of revenues that governments can realistically obtain from using their tax-raising power to the full. This is a function of the people's tolerance for taxation and government interference. Seen from this angle, the US federal debt no longer compares quite so favourably with that of European governments."

In 2010, US debt to revenue was 365%

Eurozone: three countries have debt-to-income ratios of more than 300% | Business | The Guardian

 

[hello_10]

in fact, at Actual Total Revenue at $2,450.2 trillions and Debt at around $17.0trillions as below, we find Debt to Income ratio of US at around: 17.0/2.450.2 = 693% :ranger:

U.S. National Debt Clock : Real Time

US Federal Budget Revenue Estimate vs. Actual for FY2012 - Charts


with that, if we have a look on the current borrowing rate of US to cover the Budget Expenditure, which requires borrowing at least $3.0billion+ every day, then we find this ratio to grow by around 40%+ every year, with this rate

(the Budget Expenditure of US, which requires around 70% on Social Security+Medical+Defence+Interests only, and then the number of government expenditure also comes )

 

[hello_10]

double post

 

[hello_10]

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=> the 20 Countries with the highest public debt 2012 | Statistic


The 8 Mostly Indebted European Countries are as Below :thumb:

File:Eurozone Countries Public Debt to GDP Ratio 2010 vs. 2011.png - Wikipedia, the free encyclopedia


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[hello_10]

at the same time, see how this pig beg in India in behalf of his voters as below: similarly Mr B.Obama also try to bring job to US, whenever he visits India..

David Cameron delivers address at Infosys Bangalore: Full Text
July 28, 2010

The Tata Group is now the largest manufacturing employer in Britain. And more than 180 Indian companies have invested in our IT sector. :tup:

Indian companies employ 90,000 people in the UK. Many more jobs in Britain exist thanks to the activities of British companies in India. :tup: Now I want to see thousands more jobs created in Britain :agree:, and of course in India through trade in the months and years ahead :meeting:. That is the core purpose of my visit.

David Cameron delivers address at Infosys Bangalore: Full Text | NDTV.com

 

[hello_10]

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=> One in five are not paid enough to live on - Telegraph







How Immigration Has Impoverished Britain:

75% of Pakistani and Bangladeshi Children "Live in Poverty"

Claims that immigration is economically beneficial for Britain have been destroyed by news that three-quarters of Pakistani and Bangladeshi children in the UK are being brought up in families that are living on poverty-level income.

The report, issued by Millennium Cohort Study, which is tracking children born between 2000 and 2002, has found that 73 per cent of the Pakistani and Bangladeshi seven-year olds were in families estimated to be living on less than 60 per cent of the average national household income.

Just over half of the black children (51 percent) in the Millennium cohort were in such low-income families, compared with one in four white (26 percent) and Indian (25percent) children, said an official press release.

"Predictably, low income was strongly linked to joblessness among parents, say researchers at the Institute of Education, University of London, who collected information from almost 14,000 families in England, Scotland, Wales and Northern Ireland in 2008/9."

According to the report, among fathers, Pakistanis and Bangladeshis had the highest unemployment rate (15 percent) – well above the UK average of 6 per cent. Unemployment among black fathers was also high (11 percent) but Indians were less likely to be unemployed (4 percent) than whites (5.5 percent).

Almost two-thirds (64 percent) of white and Indian mothers had jobs, compared with half (52 percent) of black mothers and only 17 per cent of Pakistani and Bangladeshi mothers.

A much higher proportion of children in lone-parent families (63 percent) were living below the study's poverty line than those with married (16percent) or cohabiting (30 percent) parents.

"The incidence of income poverty for the Millennium cohort families has not changed appreciably over the first seven years of the children's lives," says Professor Heather Joshi, the study's director.

"Despite government efforts to eradicate child poverty almost three in 10 children are still in poor families at age 7. It's particularly disappointing that around one in five seven-year-olds is in severe poverty – on incomes below half the national average."

The findings appear in a report published today by the Institute of Education's Centre for Longitudinal Studies: Millennium Cohort Study, Fourth Survey: A User's Guide to Initial Findings. Copies of the report can be downloaded here.

British National Party

Super-rich Indians account for more than 20% of the wealth of ultra-high net worth (UHNW) individuals in Britain, a new list showed on Tuesday. As a national group, they are second only to expat Russians.

Indians account for 22% of Britain's ultra-rich club - Hindustan Times

New research indicates that more than 20% of British employees are earning less than a living wage.

Workers on the bottom rung of the earnings ladder received a leg up on Saturday, as the national minimum wage increased from £5.98 to £6.08.

Working for nothing – the truth about low pay in the UK | Society | The Observer

=> Almost 90% would 'consider moving abroad' for better financial prospects - Telegraph



further, stating condition of local British and comparing them with the living standard of Indians and Russians, who combined own around 44% of total High Net Wealth of Britain itself, we also have a report reporting the same deteriorating condition of British residents, as below

Income inequality growing faster in UK than any other rich country

Top 10% have incomes 12 times greater than bottom 10%, up from eight times greater in 1985, thinktank's study reveals

Income inequality among working-age people has risen faster in Britain than in any other rich nation since the mid-1970s, according to a report by the OECD.

The thinktank says the gap has come about due to the rise of a financial services elite who, through education and marriage, have concentrated wealth into the hands of a tiny minority.

Economists from the group, which is funded by developed-world taxpayers, say the annual average income in the UK of the top 10% in 2008 was just under £55,000, about 12 times higher than that of the bottom 10%, who had an average income of £4,700.

This is up from a ratio of eight to one in 1985 and significantly higher than the average income gap in developed nations of nine to one.

However, the report makes clear that even in countries viewed as "fairer" – such as Germany, Denmark and Sweden – this pay gap between rich and poor is expanding: from five to one in the 1980s to six to one today. In the rising powers of Brazil, Russia, India and China, the ratio is an alarming 50 to one.

The OECD warned about the rise of the top 1% in rich societies and the falling share of income going to poorer people.

This trend is especially pronounced in Britain, where the dramatic rise in inequality has been fuelled by the creation of a super-rich class. The share of the top 1% of income earners increased from 7.1% in 1970 to 14.3% in 2005.

Just prior to the global recession, the OECD says the very top of British society – the 0.1% of highest earners – accounted for a remarkable 5% of total pre-tax income, a level of wealth hoarding not seen since the second world war.

At the same time as accumulating great wealth, the rich have seen tax rates fall. The top marginal income tax rate dropped from 60% in the 1980s to 40% in the 2000s, before its recent increase to 50%.

The buildup of riches was partly economic: the higher-paid worked longer. Since the mid-1980s, annual hours of low-wage workers remained stable at around 1,050, while those of high-wage workers rose almost 10% to 2,450 hours.

But the concentration of resources in the highest rungs of Britain's society was also a social phenomenon. Unlike in many other nations, the earnings gap between the wives of rich and poor husbands in Britain has grown from £3,900 in 1987 to £10,200 in 2004.

Although the OECD figures stop just before the recession, experts say the trend continued into the downturn.

Paul Johnson of the Institute for Fiscal Studies said that in the UK "2009-10 incomes went up incredibly fast (at the top end) possibly because the new top rate of tax was coming in".

He pointed out that the growth in the City and bankers' bonuses had played a large part in creating this divide. "If you look at who is racing away, then half the top 1% of high earners work in financial services," he said.

He cited the research of Mark Stewart, a professor of economics at Warwick University, who has shown that "almost all the increase in inequality has come from financial services" in the past 12 years.

Such disparities, the thinktank said, could not be blamed on globalisation but a trend in labour and social policies in rich nations that had helped the wealthy.

Although spending on public services in Britain had gone up in the past decade, at the same time benefits to the poor were worth less and taxes were less redistributive.

The effect has been a dramatic weakening in the state's ability to spread wealth throughout society. From the mid-70s to mid-80s, the tax-benefit system offset more than 50% of the rise in income inequality. It now manages just 20%.

The OECD warned of sweeping consequences for rich societies – and pointed to the rash of occupations and protests, especially by young people, around the world. "Youths who see no future for themselves feel increasingly disenfranchised. They have now been joined by protesters who believe they are bearing the brunt of a crisis for which they have no responsibility, while people on higher incomes appeared to be spared," the OECD said.

It was a paradox, said the OECD, that such moves had not been grounded in popular support. Michael Förster, author of the OECD's Divided We Stand report, said: "In almost all countries apart from the US and Japan, more than 50% of people say that inequality is too high. In the UK, it is 65% so I think everyone agrees it is a problem."

To rebalance society "for the 99%", the authors call for a series of measures focusing on job creation, "increased redistributive effects" and "freely accessible and high-quality public services in education, health and family care".

When it was pointed out that British government plans would instead lead to public sector job cuts of 710,000, more child poverty and a hike in university fees, the OECD's authors said debt was an issue for governments but urged them "not to cut social investments".

Monika Queisser, the head of OECD's social policy division, said: "The OECD agreed that fiscal consolidation was important. We want to governments to see social expenditures as investment so we would want to see, say, early years [funding] rising."

Income inequality growing faster in UK than any other rich country, says OECD | Society | The Guardian

 

[hello_10]

now days this pig is worried about the "Sink or Swim" factor of Britain

Cameron urged Britain to "sink or swim," telling delegates that the UK faced an "hour of reckoning." He insisted that only "effort and aspiration" can stop the UK from becoming a second-tier economy, which, like many countries in Europe, would be tied down by "fat welfare systems" and "unreformed public services."

Cameron leans on cliches to avert British decline (Op-Ed) — RT News

 

[hello_10]

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=> the 20 Countries with the highest public debt 2012 | Statistic


The 8 Mostly Indebted European Countries are as Below :thumb:

File:Eurozone Countries Public Debt to GDP Ratio 2010 vs. 2011.png - Wikipedia, the free encyclopedia


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EU debt reaches all-time high of $11.4 trillion
July 23, 2013

Government debt in the euro zone reached an all-time high of 92.2 percent of GDP in the first financial quarter, despite large-scale efforts by leaders to dig their countries out of recession through austerity measures.

Eurozone debt, in total, has swelled to $11.4 trillion (8.75 trillion euro), jumping from 8.6 trillion euro from the previous quarter and 8.34 trillion euro in 2012.

Official Eurostat data shows the debt of the 17-nation block rose 1.6 percent since the previous quarter, and 4.0 percent year-on-year.

Hit hard by an 18-month recession, a continent-wide banking crisis, and sluggish trade demand, 5 countries in the eurozone have debt over 100 percent of their GDP.

Greece has 160.5 percent debt, and Italy, the block's fourth largest economy, is burdened by 130.3 percent in debt. Portugal has 127.2 percent and Belgium's debt climbed to 104.5 percent of GDP.

'Bail-out' states, those which have, or are currently receiving financial aid from the European Commission and International Monetary Fund to rebuild their economies, have some of the highest debt.

Greece, the first country to enter crisis and seek an EU bail out in 2009, has a debt of 160.5 percent of GDP, the highest in the EU, a 24 percent increase over the last year.

Cyprus, the most recent euro zone member to receive EU aid, has government debt 86.9 percent relative to GDP.

Debt in Ireland is 125.1 percent of GDP, a 18.3 percent jump year-on-year. Ireland has officially re-entered recession as economic growth shrank for a third consecutive quarter, as the country continues to be weighed down by their 64 billion euro bailout cost.

Germany, the EU's largest economy, and Estonia, one of the smallest, were the only two countries who managed to reduce their debt. Germany managed to trim debt to 81.2 percent relative to GDP, and Estonia has the lowest debt in the eurozone- 10.0 percent.

Low debt ratio's were also recorded in Bulgaria (18.0 percent) and Luxembourg (22.4 percent).
Austria and Germany were the only economies that didn't shrink in the first quarter. Europe's second largest economy, France, contracted by 0.2 percent.

Germany's Bundesbank forecasts the leading EU economy will show robust Q2 growth, according to a monthly report released on Monday.

Across the 27-country block, including non-euro currency states such as Britain and Poland, the collective debt stood at 85.9 percent relative to GDP, at 11.11 trillion euros, up from 10.67 in 2012.

Collectively, EU leaders decided to tighten the grips on austerity to keep economic growth under control, but the kickback has been painful- most euro countries have remained, or re-entered recession.

EU debt reaches all-time high of $11.4 trillion — RT Business

 

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IMF: Euro-zone companies face massive 'debt overhang'
April 17

Euro-zone companies face a massive "debt overhang" that could prolong the region's downturn and risk a return to a more acute crisis, the International Monetary Fund warned Wednesday in a sobering report on risks that may be accumulating in the world financial system.

The IMF estimated that as much as one-fifth of the corporate bonds and loans issued by major European corporations are "unsustainable" and will force the firms to default or scale back, cutting capital expenditures, eliminating shareholder dividends or taking other steps to conserve cash to make debt payments.

Either alternative could create problems — with defaults damaging the banks or others who have lent money or bought corporate bonds, and capital investment cuts or other spending reductions affecting the ailing economy.

The data were released ahead of IMF spring meetings, where the fate of the euro zone remains a central issue. The information presents a quandary. Although some corporations in Europe have taken on too much debt, small- and medium-size businesses are finding it hard to borrow, further impeding any economic rebound.

"The slump in Europe is worrisome," said IMF chief economist Olivier Blanchard, who suggested that European banks be allowed to bundle loans to small businesses into marketable securities to encourage them to lend.

The region has been consumed for three years in a crisis revolving around debt, and it is reeling from the subsequent "fiscal consolidation," as nations cut spending or raise taxes to stabilize finances.

The potential corporate debt crisis could unleash the same dynamic in the private sector, whose debts sometimes dwarf the size of the surrounding economy. The IMF, which studied a sample of Europe's largest firms, said the situation is probably worse than its survey indicated, because the companies were among the region's strongest.

Just like their government counterparts, euro-zone firms gorged on cheap money that the establishment of the currency union provided to countries such as Italy and Spain, and they are paying it back amid a recession.

"Firms in the euro area periphery have built a sizeable debt overhang during the credit boom, on the back of high profit expectations and easy credit conditions," the IMF said in its latest Global Financial Stability Report. Larger firms may skirt the problem by selling unneeded assets, "but further reductions in operating costs, dividends and capital expenditures may also be required, posing additional risks to growth."

The warning on corporate debt is only one of the problems the fund sees on the horizon for the world financial system, particularly Europe. Years into a crisis that early on identified the banking sector as a particular weakness, the euro zone has not adequately recapitalized its banks, forced them to restructure and shed weak loans, or finished work on what many consider a necessity: a banking union that would unify financial supervision and share the risks of bank failures.

In one startling statistic, the IMF said euro-zone banks were only about halfway through a process of "deleveraging" — or bringing their obligations more closely in line with their assets. The fund estimated that euro-zone financial institutions still need to cut $1.5 trillion from their books, an amount that may increasingly crimp local lending because some of the easier steps, such as pulling out of overseas operations, have been done.

In many ways, worldwide financial conditions have improved in recent months. U.S. banks in particular, the fund said, have rebounded from the crisis, the euro zone has skirted the acute risk of breakup, and emerging markets have absorbed a large influx of capital without serious problems.

But the IMF, which was criticized for not saying more in advance about the circumstances that led to the U.S. financial crisis in 2008, is now using an abundance of caution. :ranger:

Pension funds in the United States are undertaking a "gamble for resurrection" by trying to overcome shortfalls with ever-riskier investments. Pension funds without enough to pay expected future benefits have placed as much as 25 percent of their money in "alternative investments," such as hedge funds and other riskier but potentially higher-return vehicles, the IMF reported.

U.S. firms have issued record levels of bonds in the low-interest-rate environment, but the money raised "is increasingly geared toward less productive use," such as buying back company stock.

Central banks, looking at weak growth and high unemployment rates, may feel the need to keep interest rates low and money flowing. But the fund said financial regulators may have to be aggressive and perhaps start forcing financial institutions to set aside more money to cover potential losses.

"Tension is building between the ongoing need for extraordinary monetary policy accommodation and credit markets that are maturing more quickly than in typical cycles," the IMF wrote. "High unemployment and low inflation may justify an accommodative monetary policy stance. But other tools need to be employed to counteract undesirable excesses in credit."

In remarks on Wednesday at Johns Hopkins University, Treasury Secretary Jack Lew insisted that the world economy must do more to stimulate domestic spending and generate economic growth. And he said the United States cannot be the sole supporter of growth across the globe.

"There is now broad agreement that we cannot return to a pattern of global growth that is built on the U.S. being the world's importer of first and last resort," Lew said. "Looking ahead, the United States must raise national savings, and emerging and more rapidly growing parts of the world, like Asia, must increasingly rely on domestic demand."

IMF: Euro-zone companies face a massive ?debt overhang? - The Washington Post

Eurozone unemployment hits fresh high
1 July 2013

Jobless rate reached 12.1% across the region in May, with youth unemployment nearing 24%

The unemployment rate across the eurozone hit a fresh record in May, as the recession continued to affect workers around the region and young people again suffered most.

The eurozone jobless rate rose to 12.1% in May, up from 12.0% in April, according to EU statistics office Eurostat. The youth unemployment rate was almost double that, at 23.8%, as 3.5 million under-25s were unemployed in May. In Spain and Greece the youth unemployment rate was as high as one in two.

The rise in unemployment was driven by increased joblessness in countries at the heart of the crisis, including Spain, Italy and Ireland. As the eurozone languishes in its longest-ever recession, the number of people out of work across the currency bloc rose by 67,000 in May to 19.2 million.

Seventeen members of the eurozone have higher unemployment rates than a year ago, and 10 have lower rates.

Economists had forecast an even higher unemployment rate of 12.3% for May in a Reuters poll. They warned the unemployment crisis could well get worse before it gets better.

"An end to the eurozone labour market downturn is not yet imminent. Indeed, the employment expectations indices from the European commission's business survey are still at levels consistent with further increases in unemployment. However, with the recession across the eurozone petering out, the peak in unemployment should not be too far away either," said Martin van Vliet at ING Financial Markets.

There was very limited cause for optimism in Eurostat's slight downward revisions to its earlier data – it had previously estimated the eurozone jobless rate at 12.2%.

Once again, the lowest unemployment rates were recorded in Austria (4.7%), Germany (5.3%) and Luxembourg (5.7%), and the highest in Spain (26.9%) and Greece (26.8% in March 2013, the most recently available data).

Cyprus, which was dragged into a bailout crisis this year, suffered the biggest annual rise – from 11.4% in May 2012 to 16.3% this May. And Slovenia, which is fighting to avoid taking a bailout, has seen its jobless rate increase from 8.6% a year ago to 11.2%.

Eurozone unemployment hits fresh high | Business | theguardian.com

 

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The return of mass poverty to Europe

Almost one in four people in the European Union was threatened with poverty or social deprivation in 2010. This is the conclusion of an official report by the European Commission presented in December. According to the report, 115 million people, or 23 percent of the EU population, were designated as poor or socially deprived. The main causes are unemployment, old age and low wages, with more than 8 percent of all employees in Europe now belonging to the "working poor."

Single parents, immigrants and young people are worst affected. Among young people, unemployment is more than twice as high as among adults. Some 21.4 percent of all young people in the EU had no work in September 2011. Spain leads all other EU countries with a youth unemployment rate of 48 percent. In Greece, Italy, Ireland, Lithuania, Latvia and Slovakia youth unemployment is between 25 percent and 45 percent.

In countries such as Germany, the Netherlands and Austria, youth unemployment rates are lower only because training takes longer and many unemployed young people are "parked" in all sorts of schemes that exclude them from the official statistics. But even in these countries the chance of getting a decent-paying job is diminishing. Some 50 percent of all new employment contracts in the EU are temporary work contracts. For workers aged 20 to 24, the proportion is 60 percent.

The growth of poverty and social deprivation is not simply a result of the economic crisis, but rather the result of a deliberate policy on the part of European governments and the European Union. In spite of these alarming statistics, the authorities continue to slash social spending, increase the retirement age, eliminate public-sector jobs and expand the low-wage sector—all measures that expand and deepen poverty. With the decision at the last EU summit to include a "debt brake" in the constitutions of all EU member states, governments have deprived themselves of virtually any possibility of alleviating the social crisis through fiscal measures.
After the Second World War, when unemployment and poverty were widespread in Europe, even right-wing governments felt obliged to promise a better and more prosperous future. Today, all European governments have nothing to offer the working population apart from sacrifice and privation.

Every New Year's speech echoed this theme. Greek Prime Minister Lucas Papademos warned his countrymen, who have already been subject to brutal cuts, "We have to continue our efforts with determination so that the sacrifices we have made up to now won't be in vain."

French President Nicholas Sarkozy proclaimed: "This extraordinary crisis, without doubt the gravest since the Second World War, is not over "¦ you are ending the year more anxious for yourselves and your children."

German Chancellor Angela Merkel threatened: "Next year will no doubt be more difficult than 2011." And Italian President Giorgio Napolitano, an ex-Stalinist who spent decades in the Communist Party, called on the Italian population to make sacrifices in order to balance the national budget: "No one, no social group, can today avoid the commitment to contribute to the clean-up of public finances in order to prevent the financial collapse of Italy," he said.

The claim that the austerity measures are being used to shore up national treasuries is a blatant lie. Public finances are insolvent because they have been plundered by the same financial elite that now benefits from the austerity measures. Taxes on profits, property and high incomes have been repeatedly reduced. Many Eastern European countries, where poverty is particularly high, have introduced a flat tax of less than 20 percent. Three years ago, trillions in public funds were transferred to the vaults of the banks to cover their speculative losses.

The EU report documenting the growth of poverty also contains figures on the increasing gap between rich and poor. In Germany, the richest one percent of the population possesses 23 percent of all wealth and the richest tenth controls 60 percent. Half of the population possesses just 2 percent of all wealth. The report says: "A structure where the poor own less than 5 percent, the middle classes own 30-35 percent, and the rich own over 60 percent represents a typical pattern to be found in most European countries."

The financial elite that monopolises a huge proportion of social assets has lost every social inhibition. In the post-war period, with the memories of war crimes still fresh and socialist sentiments widespread, they were forced to make social concessions to preserve their rule. The existence of the Soviet Union also exerted a moderating effect. Despite the Stalinist degeneration, the nationalised property relations established by the Russian Revolution represented a possible alternative to the so-called free market.

In the course of the last twenty years the financial elite has lost all restraint and declared war on the working class. If democratic elections stand in its way, it sweeps them aside—as in Greece and Italy, where technocratic governments were installed that are responsible solely to the banks. Nor does the financial oligarchy shy away from the violent suppression of social resistance, as exemplified by the forcible eviction of Occupy protesters across the US and internationally.

Like the late 18th Century French aristocracy on the eve of the revolution, today's financial aristocracy is not prepared to yield even a small fraction of its privileges or wealth.

The financial elite is supported by representatives of the wealthy middle classes in the media, the established political parties, the trade unions and the ex-left milieu, who insist that there is no alternative to austerity and use every means to sabotage social opposition.

A typical representative of this species is the former German Green Party leader Joschka Fischer. In the New Year's Eve edition of the Süddeutsche Zeitung, the one-time radical squatter and later German foreign minister enthusiastically welcomed the latest austerity measures agreed by the EU and concluded with a hymn of praise to the financial markets. "And to whom do we owe all of this European progress?" he wrote. "To the wisdom of our leaders? Unfortunately not. It was almost exclusively due to the pressure of the much maligned markets!"

The return of mass poverty to Europe sets the stage for the return of revolution. The working class and the youth must prepare themselves for the inevitable confrontation with the financial elite by breaking with its political representatives in Social Democracy, the trade unions, the Left Party and other pseudo-left organizations, and undertaking the fight for a socialist program through the building of the Socialist Equality parties and the International Committee of the Fourth International across Europe. :ranger:

Peter Schwarz

The return of mass poverty to Europe - World Socialist Web Site

Unemployment, poverty, hunger & homelessness all on the increase in Europe
30 April 2013

More than 26 million men and women unemployed across Europe, more than a quarter of the workforce jobless in Spain and Greece. Youth unemployment rates around twice as high.

In Spain almost 240,000 people lost their jobs in the first three months of the year, according to the national statistics office.

Unemployment in the Eurozone as surged to a fresh record high, while inflation has fallen to a three-year low, in a desperate bid the European Central Bank look set will cut interest rates.

The unemployment rate in Greece is the highest among European Union countries, according to data released by Eurostat today, which showed that joblessness in the eurozone had reached record levels. The number of unemployed Spaniards has risen beyond 6m for the first time since records began. In France unemployment has set a new record, rising for the 23rd month to 3.2m in March, surpassing a previous peak in 1997. The total including all those seeking full-time work rose to 4.7m.

The Eurostat figures pointed to 27.2 percent for Greece and 26.7% for Spain workforce being unemployed.

Youth employment, defined as those under 25, hit 3.6 million in the eurozone. In Greece, 59.1% of under-25s were unemployed as of the end of January, while in Spain, 55.9% were unemployed.

Many countries have seen unemployment rise as austerity measures fail & following the financial crisis have led to cuts in government spending, which has involved public sector job losses.

The Eurostat data released related to figures recorded in March 2013 with regard to European Union - EU and eurozone countries, whereas in the case of Greece the figures related to January 2013.

Last week in Spain it was announced that unemployment had reached a record high - more than six million. The government forecast that the economy would shrink another 1.3% this year - worse than expected.

There are 1.9 out of 17m Spanish households in which no-one has a job, according to the latest unemployment figures. They receive state benefits of 426 euros (£358) a month and rely on food handouts from the International Committee of the Red Cross.

In the eurozone area the unemployment rate reached 12.1 percent in March, compared to 12 percent in February and 11 percent a year earlier, while in the European Union, comprised of 27 countries, the rate remained unaltered from February at 10.9 percent.

The highest unemployment rates in the European Union were recorded in Greece (27.2 percent in January 2013), followed by Spain (26.7 percent) and Portugal (17.5 percent).

The lowest rates were recorded in Austria (4.7 percent), Germany (5.4 percent), Luxembourg (5.7 percent) and The Netherlands (6.4 percent).

According to the data released, Greece's unemployment rate rose from 25.7 percent in December 2012 to 27.2 percent in January 2013. The January 2013 figures represented 23.9 percent of the male workforce and 31.4 percent of the female workforce.

You could be forgiven for thinking that it couldn't possibly be much worse – but you would be wrong.

A useful Eurostat overview (here), based on the 2012 results of the European Labour Force Survey shows, in addition, a worrying degree of and rising trend towards underemployment and hidden unemployment.

Let's start with the standard international definitions used by Eurostat according to which the unemployed are all those without work but actively seeking it and available for work in the short term. The unemployment rate is this number divided by the sum of the unemployed and the employed. There are other categories, though, that can sensibly added to this figure.

First of all there are the part-time workers who actually want, and would be able to work, longer hours. In fact more than a quarter (21.4%) of the 43 million part-timers in Europe want longer hours. That percentage is up from 18.5% in 2008.

It is also worth noting that in Germany, widely seen as having a robust labour market and, according to some, even suffering from labour shortages, there are 1.8 million workers in this category.

An additional 8.2 million are available for work but at the time of the survey are not actively seeking. These are known informally as "discouraged workers" who are assumed to recommence job search once labour market prospects pick up. Then there is another, smaller category of people who, conversely, are seeking work but are not immediately available (for example because they have a job offer that starts in the near future).

There are 2.3 million in this group, meaning that more than 11 million people are not in the unemployment statistics – they are considered to be "economically inactive" or out of the labour force – but can reasonably be counted in a broader measure of underemployment.

This is up from 9.7 million in 2008. Adding these two groups together, Eurostat calculates that there is an additional unused labour supply of 4.6% in the EU27 and 4.9% in the euro area. In Italy, where unemployment is already extremely high, these two groups represent almost three million people and more than 12% of the labour force.

Using these figures we can make a rough and ready calculation of the "real" rate of underemployment in Europe.

According to the European Labour Force Survey, average hours of part-timers are just under twenty per week, whereas full-timers work 41.5 hours a week.

It's guess work on how the working time preferences are distributed, but a reasonable starting point would seem to be to assume that those part-timers wanting longer hours have the same average hours as all part-timers and that they want to move to the average of full-timers. In other words we add somewhat more than half of the 9.2 million involuntarily part-time workers to the unemployed total.

We then add the people in the two sub-groups of the economically inactive both to the numerator (unemployed) and denominator (unemployed plus employed).

In summing up - the unemployment rate captures only about two-thirds of the extent of European underemployment. Or the unemployment problem is perhaps half as bad again as you already thought.

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Respect For the Unemployed & Benefit Claimants: Unemployment, poverty, hunger & homelessness all on the increase in Europe !

 

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Eurozone crisis has pushed millions into poverty
10 DECEMBER 2012

Crushed by an austerity squeeze and towering unemployment, millions of Europeans joined the ranks of the newly poor in 2012 in a crisis that showed no mercy for the old, women or children.

An arc of misery spread pitilessly across southern Europe's middle classes, engulfing bailed-out nations Greece and Portugal and tottering heavyweights such as the eurozone's number four economy, Spain, and number three, Italy.

"The black hole is getting bigger and bigger," fretted Mercedes Gonzalez, a 52-year-old Spaniard who has less than 800 euros ($1,000) a month to raise her unemployed family in the Madrid suburb of Fuenlabrada.

In July, she was still pocketing the monthly state aid of 426 euros for the long-term unemployed. But the benefit was slashed to 360 euros last month, she said, and in the meantime a September 1 rise in sales tax lifted the price of food and other regular bills.

"Things are really getting worse, we can't breathe already," said the energetic unemployed saleswoman whose voice betrayed weariness as she contemplated caring for herself, her carpenter husband and two of her three adult sons, all out of work.

Spain is displaying all the signs of a major social crisis, with one in four workers unemployed, an unprecedented austerity squeeze by the state, cuts to education and healthcare, and thousands of indebted families thrown out of their homes and into the streets.

In this country, where two home owners threatened with eviction recently committed suicide, as in other southern European nations such as Greece and Italy, the economic crisis is sowing implacable despair.

In Italy, the fate of an unemployed bricklayer who was being chased for unpaid taxes moved the entire country.

Giuseppe Campaniello set himself ablaze outside a tax office at the end of March and died after nine days of agony.

"You can't expect a self-employed bricklayer to pay taxes even for the months when he is not working. The state beats you up and Giuseppe paid the consequences," his 48-year-old widow said Tiziana Marrone from Bologna in central Italy told AFP.

"Giuseppe was not helped out. He felt he had his back to the wall. That morning he had to go to a criminal hearing for his taxes. It should have never got to that. We all make mistakes but he never stole from anybody!" she said.

"His was also a protest. Our laws drove him to it. It wasn't a suicide linked to the crisis, it was state-sanctioned murder," she said.

Marrone herself is now in a desperate situation as she has inherited her husband's massive debts and lives on an allowance of 450 euros a month. She is forced to rely on handouts from her pensioner mother to survive.

In Greece, the crisis delivered another fatal blow.

In April, a 77-year-old chemist shot himself in the head leaving a note that accused the government of stripping him of the resources to live.

In Greece, where the unemployment rate is the highest among industrialised nations at 25.4 percent in August, the crisis has hit people harder than any other nation in southern Europe: 31 percent of its inhabitants were at risk of poverty or social exclusion in 2011 compared to a European Union average of 24.2 percent.

George Tsouvalakis, a 31-year-old jobless carpenter, and his 30-year-old wife, Lia, are among a "lost generation" of thirty-somethings sacrificed by the crisis.

With their two-year-old daughter, Angelina, they are trying to leave the country but cannot afford the plane ticket. Their income fell from 2,500 euros a month before the crisis to between zero and 400 euros.

"We should not remain in the country anymore, that is what I see. But we don't have the financial capability to leave this country. That is our problem or else we would have already left," Lia said.

In Portugal, too, where 24.4 percent of the population is estimated to be at risk of poverty or exclusion, the crisis has mortgaged the futures of many young people.

After completing a master's degree in dramatic arts at the prestigious Coimbra University, 29-year-old Nilce Carvalho could not pick up her diploma because of the debts she had built up since the hard-up government slashed her grant from 400 euros to 98 euros.

To escape her debts, the young woman launched a public appeal on Facebook, overcoming "a kind of shame".

"There are lots of young qualified people in our country but there is just no work for us," Carvalho said.

Across southern Europe, humanitarian groups are confronting rampant poverty in all its guises.

"These are families in which every member of working age is out of work, people who lost their home because they were evicted, who are not used to turning to social protection networks," said Fernando Cuevas, spokesman for the Spanish Red Cross.

"Where is the middle class today in Spain?" asked David Polo, who looks after the homeless for Caritas in Burgos, a northern Spanish town. "It's breaking up. We are starting to see a polarisation of this class."

Humanitarian groups are especially worried about women and children.

The UN children's fund UNICEF estimated there were 2.2 million children living below the poverty line in Spain. In Portugal, the education ministry has sounded the alarm because in the space of just 20 days the number of pupils lacking food leapt from 10,000 to 13,000.

Even pensioners, some of them looking after entire families, are no longer safe: the right-leaning government in Spain has announced that the rise in retirement pensions will be less than had been expected in 2013, breaking an oft-repeated electoral promise.

And on Sunday, thousands of doctors and other health workers took to the streets of Madrid to decry government plans to privatise some health services.

Eurozone crisis has pushed millions into poverty - FRANCE 24

Poverty returns to Europe by leaps and bounds

The news about the economic situation in the EU reminds frontline reports. Head of Unilever in Western Europe, Ian Zeyderveld, from the pages of the Financial Times Deutschland said that poverty is returning to Europe. The main reason for the increasingly lower income of the residents of the Old World is a full-blown crisis in the euro area that is still far from complete.

Ian Zeyderveld has proposed a new strategy to remedy the rapidly declining profits of Unilever in Western Europe. He believes that product packaging should be made smaller to reduce its price. It works both in Asia and now in Europe. The Unilever is not alone in changing its marketing strategy in the crisis-stricken European countries.

Head of the Department on International Financial Issues at the Centre for European Economic Research, Professor Michael Schroeder said that the European crisis affects export-oriented producers more than others. As a result, market conditions weaken, unemployment rises, and living standards lower. According to the expert, this situation may last for three to four years. Numerous examples of the fall of the level of European citizens clearly illustrate his words.

In its study, the British Guardian newspaper found that 83 percent of teachers in the UK every day see hungry students. Over half of teachers say that in the last couple of years the number of hungry school children has increased, as many British families are suffering from reduced benefits, unemployment and recession. Almost half of the teachers admitted to feeding starving scholars, one in five even gives them money for lunch. Why is this happening?

The Center of the Modern Family in the UK conducted a study that demonstrated the effects of the fall of wages and cost of living for the Britons, and increased cost of goods and services related to child care. The crisis also hurts young Britons of 18-32 years old – according to the survey, one in five cannot pay their utility bills, and one in eight young resident of England skips lunch for the opportunity to feed their family.

But Britain is not the poorest country in Western Europe. The situation in not so wealthy economies of the region is much worse. The unemployment rate for people aged 16 to 24 years old in Italy is 28 percent, in Greece – 43 percent, and in Spain – 51 percent.

The Greek economy in the past year fell by 6 percent, the recession in the country has been ongoing for five years, and it is projected that this year the economy will fall by another 5 percent. About 20 percent of retail stores were shut down. The number of suicides in Greece over the last 12 months has increased by 40 percent, and the amount of debt of the Greek government, according to the IMF, is 160 percent of GDP.

In June of this year, the public debt of Italy, according to the local central bank, has reached a record $2 trillion euros, which is 123 percent of its GDP. Italian Prime Minister Mario Monti said that Italy does not need financial help from the EU, but only moral support, which is hard to believe.

The second largest economy in Europe after Germany, France, has also suffered from the crisis. According to the Statistics Bureau of France Insee, this is the third stagnant quarter in a row. Stagnation is, of course, not a recession, but the country's government has a lot to think about.

Perhaps one of a few countries that are more or less stable during the financial storms is Germany. According to the National Bureau of Statistics, the growth of the economy of Germany for the year 2012 was 0.5 percent. It had a positive impact on the growth of domestic consumption and export.

The opinion of the Europeans about the situation is worthy of note. In July of 2012, the results of the survey "Eurobarometer" that tracks the level of anxiety and concern among residents of the Old World were published. It turned out that 71 percent of the EU citizens consider the economic situation in the country poor.

30 percent of the residents of the EU assess their position in the labor market as unsatisfactory. 100 percent of Greek believes that the economy is in trouble. The same opinion on the state of the national economies was expressed by 99 percent of the population of Spain, 96 percent of Irish, 93 percent of Hungarians and 92 percent of Italians.

However, according to the same survey, there are optimistic countries, whose people consider the situation in their countries more than acceptable. Among them are 83 percent of Swedes, 77 percent of Germans, 66 percent of Austrians and 55 percent of Danes.

According to head of the Scientific Research of Mises Center Yaroslav Romanchuk, now there is a situation where we have two Europes – a happy one (mainly Germany and Scandinavia), and the rest – about 20 countries, and the difference between the two Europes is turning into an abyss. The consequence of this situation is growing nationalism, resentment, and envy.

The crisis also affected most affluent segments of the population of Europe. According to a research by Capgemini and Royal Bank of Canada, the wealth of millionaires not only in the EU, but in the entire world in recent years has declined. The exceptions are, perhaps, only the fat cats in the Middle East. Last year, the total wealth of the world's millionaires fell by 1.7 percent – the first such decline since 2008.

The number of the super-rich decreased by 2.5 percent. The report's authors say this is due to the fact that wealthy people abroad often invest their money in low liquidity and high risk assets – such as real estate

However, statistics shows an increase in the number of millionaires in Europe at 1.1 percent due to the fact that the wealthy people of the continent now prefer to invest in foreign assets. The largest number of wealthy people now lives in the Asia-Pacific region.

Chinese business advisor Andy Xie believes that the measures taken by the European leaders to improve the economic situation in the region cannot put an end to the crisis and are not radical and convincing enough. The expert sees the main cause of the crisis in their irresponsibility. The EU countries have broken the rules of their own game in terms of the budget deficits and mired in debt. Endless loans that were handed out in the past, sooner or later, would lead to a crisis.

The European leaders have asked the international community to support their nation, saying that otherwise the global economy will get worse. According to Xie, since Europe is the main trading partner of China, export-oriented Chinese firms are ruined. It is not just China – Europe is the main source of technological and industrial maintenance for Africa, and the crisis in Europe affects the situation in the most negative way.

Germany proposes to introduce austerity measures to cut all kinds of benefits and wages in the troubled areas of Europe, mainly in its south. However, these measures are becoming increasingly more ineffective and unpopular – unemployment is rising, the standard of living is falling, and the positive trend is not visible.

Andy Xie said that the inefficiency of today's economy of Europe is due to its lavish social costs, ineffective trade unions, as well as confusing laws that prevent the development of competition. If the countries of Europe eliminate these obstacles to their development, the situation may markedly improve.

The administration of the U.S. President has sent to Europe the U.S. Treasury representative Lyle Brainard to encourage the governments of several countries in the anti-crisis measures. In particular, it is expected that the Eurozone stabilization funds will be used – about 700 billion euros – to recapitalize banks and provide financial assistance directly to financial companies, not the countries.

Poverty returns to Europe by leaps and bounds � Set You Free News

 

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Germany, France haul euro zone out of recession
Aug 14, 2013

(Reuters) - The economies of Germany and France grew faster than expected in the second quarter, bettering a widely heralded expansion in the United States and pulling the euro zone out of a 1-1/2 year-long recession.

The increased pace was primarily driven by renewed business and consumer spending in the 17-country bloc's two largest economies. The euro zone economy was fragile overall, however, with some countries, notably Spain and Italy, still struggling.

European Economic and Monetary Affairs Commissioner Olli Rehn said the data released on Wednesday showing 0.3 percent euro zone growth for the three months to June meant a nascent recovery was on a more solid footing.

But he said there was no room for complacency and that maintaining pace depended on "avoid(ing) new political crises and detrimental market turbulence".

The euro zone has been in a debt crisis for more than 3-1/2 years.

Germany, the bloc's economic powerhouse, grew 0.7 percent, its largest expansion in more than a year, thanks largely to domestic private and public consumption.

France's economy expanded 0.5 percent, pulling out of a shallow recession to post its strongest quarterly growth since early 2011. The turnaround was driven by consumer spending and industrial output, although investment dropped again.

French and German growth compared with a second-quarter expansion of around 0.4 percent in the United States, considered one of the bright spots of the global recovery.

Improvement was noticeable elsewhere in the bloc. Bailed-out Portugal's GDP leapt 1.1 percent in the quarter, its strongest in almost three years, due to higher exports and the easing of a previous investment slump.

Austria and Finland also saw improved growth.

But recession continued in the Netherlands - an otherwise core euro zone economy - as well in the debt-laden periphery.

Cyprus's economy contracted by 1.4 percent in the second quarter. It was the first comprehensive snapshot of how the island fared from the upheaval accompanying an international bailout in March, conditional on the closure of a major bank and heavy losses on big deposits in a second lender.

"The return to modest rates of economic growth in the euro zone as a whole won't address the deep-seated economic and fiscal problems of the peripheral countries," researchers at Capital Economics wrote in a note.

Many analysts and economists believe the pace of growth currently being seen will ease in coming quarters and that a return to healthy sustained growth rates is unlikely to arrive before 2015.


UNEVEN, BUMPY RECOVERY AHEAD

The problem for the euro zone, as it has been for some years, is the indebted south.

The International Monetary Fund said earlier this month that Spain's reform programme, fiscal consolidation and crackdown on external imbalances were bearing fruit, but that urgent action was needed to create jobs and stimulate growth.

Spain reported last month that its economy shrank 0.1 percent in the second quarter, an improvement but still a contraction.

Greece is in its sixth year of a recession that looks likely to cut the economy's overall value by a quarter by the end of the year.

The scope and form of the austerity drive in the European Union is now changing, however.

Policymakers still say adjustments in excessive deficits and high debt are essential. But they now emphasise that any action taken must not choke growth and must help create jobs.

European Central Bank President Mario Draghi said this month that labour market conditions remained weak, though he expected the bloc to benefit from a gradual recovery in global demand.

"Overall, euro area economic activity should stabilise and recover at a slow pace. The risks surrounding the economic outlook for the euro area continue to be on the downside," Draghi said after the ECB's rate meeting on August 1.


BEYOND THE EURO ZONE

In emerging Europe, the Czech Republic exited recession in the second quarter while the European Union's other bigger eastern economies improved, although there was little sign of the optimism among consumers needed to drive a stronger upturn.

Headline numbers showed the Czechs firmly back in positive territory with growth of 0.7 percent compared with the first quarter. Hungary grew 0.1 percent and Poland 0.4 percent.

The pickup in emerging Europe is expected largely to have come from improvement in Germany and other larger euro zone countries to which the region's cheap and flexible businesses send much of their exports.

(Additional reporting by Reuters bureaus. Graphics by Vincent Flasseur; Editing by Jeremy Gaunt and Catherine Evans)

Germany, France haul euro zone out of recession | Reuters

 

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'Our generation is a lost cause': Spain's youth struggle to chart a life amid economic crisis

In a country where more than 55 percent of young people are unemployed, even an obsession with bolstering your resume is no guarantee of success.

Palomares-Romero, who has no income other than the 50 euros (about $66) a month her parents give her, had the bad luck of coming of age in a country – and continent – in crisis. The International Monetary Fund (IMF) recently forecast that the country would be stuck with 25 percent plus general unemployment for another five years. This is one of the highest rates in the entire industrialized world.

Once envied around the world for its high standard of living and booming economy, Spain is now suffering with a 26 percent overall unemployment rate – but the numbers skyrocket to more than double the national average when it comes to people under 25. Talk is rife of a lost generation unable to properly transition into adulthood.

 

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'Our generation is a lost cause': Spain's youth struggle to chart a life amid economic crisis

Greece is just a start, which is then followed by Italy, Spain, Portugal, Ireland, Britain, and this list going on..... EU28 is on a "two way" future, one side Germany, Netherlands etc are rising while on the other side half of the Euro-zone is getting bankrupted one by one......

considering Greece, once the future of whole Europe was discussed by Reuters as below too :ranger:

May 19, 2012

(Reuters) - In Athens, the homeless are on the streets in growing numbers, soup kitchens feed twice as many people as a year ago, and the poor are diving into garbage bins in search of scrap they can sell.

Greece is close to breaking point as it struggles with austerity targets set by creditors, but this is just a foretaste of the nightmare of unrest, hunger and even anarchy that could engulf the debt-crippled nation if it is forced out of the euro.

If the exact economic impact of such a move is hard to nail down - newly issued drachmas devalued by up to 70 percent, runaway inflation, a banking meltdown, a collapse in trade - the implications for ordinary Greeks crushed by the debt crisis are even harder to predict.

Without international bailout cash, salaries and pensions would go unpaid and violence, political extremism and uncontrolled emigration could quickly follow.

After voting inconclusively for parties that opposed foreign-imposed austerity, including the neo-Nazi Golden Dawn, Greeks head to the polls again in a month's time. This election is being portrayed internationally as a referendum on the single currency, even if Greeks do not yet see it that way.

A Greek exit from the 17-nation euro zone, or "Grexit" as some economists have called the once unthinkable eventuality, risks turning the nation into what would be close to a failed state on the edge of the European Union, one of the most prosperous societies the world has ever known.

Greece imports 40 percent of the food it consumes, nearly all of its oil and natural gas and much of its medicine. It has long been clear to some commentators that there could be trouble ahead.

Confronted with post-exit turmoil, foreign suppliers would simply put up the shutters until the situation becomes calmer, leading to acute shortages of basic commodities, which could fuel serious civil unrest, according to Bank of Greece Governor George Provopoulos.

Even if Greece did manage to import limited amounts of food and other basics, they would be cripplingly expensive.

Provopoulos warned as long ago as December that a return to the drachma would be "real hell", with Greeks forced to resort to barter during the transition period between the two currencies, "trading a kilo of olive oil for three kilos of flour".

"NIGHTMARE SCENARIO"

"There will be shortages in basic staples. Without fuel, the army and the police would not be able to move their vehicles. After a long period, things will return to a better balance. But during the first transitional phase we would be experiencing a nightmare scenario," Provopoulos said.

A former finance minister, Yiannos Papantoniou, saw trouble ahead nearly a year ago: "Greece would not be able to support 11 million people so there will be huge emigration flows," he told Reuters Insider television last July. "Disruptions, social disruptions will come. I would say a regime of total anarchy."

Last year 23,800 Greeks emigrated to Germany alone, 90 percent more than the previous year, German data show and Greeks are queuing up to learn German. :ranger:

Most economists agree the austerity measures Greece is labouring under offer it little hope of recovery near term, and some argue that if it leaves the euro, it could export its way back to health on the back of a vastly devalued currency.

But, barring tourism, it does not have businesses or industries that could drive such a recovery.

Even if freed of its debt-cutting targets, the fact the country runs a primary deficit - spending more than it takes in taxes - means it would have to continue austerity measures and, because it would be shut out of international markets, it would have no one to borrow from.

"Even if you strip interest payments, with a primary current account deficit at about 10 billion euros, it would mean economic life would grind to a halt," said Yannis Stournaras, head of Greek think tank IOBE.

"Greece would have a hard time to import oil, foods, medicines and other primary inputs. Imagine the navy, police, without fuel. Natural gas spigots would close. GDP would be hurt by a battered banking system. Public debt would increase."

Greece's recent history gives a taste of the political turmoil that could follow.

After German occupation in World War Two, the country plunged into bitter civil war during the 1940s. Political turbulence in the 1960s was capped by a colonels' coup d'etat in 1967, with democratic elections not held until seven years later.

Conditions are already hard for business people in Greece, with the country in its fifth year of recession.

"The first shortages have begun to appear," said Melina Ferousi, a businesswoman who imports paper and stationery items. "French and Spanish suppliers are still selling on credit but German ones are particularly strict and are refusing to do so."

Some German suppliers have said they could not extend credit to Greece even if they wanted to because their insurers are refusing to cover the merchandise.

Greek importers and exporters alike are finding it difficult to do business with foreigners, said Vassilis Korkidis, chairman of the retailers' union ESEE.

"It's not that they're not trusting their individual Greek business partners anymore, it's the Greek banks they no longer trust," Korkidis said.

But business people do not see an exit from the euro as solving anything. Greece imports practically all its machinery, tools and software, so companies would be unable to grow.

"If we return to the drachma, nobody will be able to do business abroad anymore," said Iraklis Megas, who imports animal food. "I'll have to shut down my company the next day and so will thousands of others."

How Greece would manage a transition from euro to drachma is unclear. A possible precedent is the split of Czechoslovakia into two countries with their own currencies in 1993.

All cross-border money transfers between them were halted and border controls were tightened. Stamps printed secretly in Britain were glued on 150 million banknotes, which were trucked around the country with the help of police and the army.

"DRACHMAGEDDON"

Greece would have to try something similar, with some suggesting euro notes might be stamped with a D for drachma, but there are doubts whether it could introduce a new currency in a short period of time.

"In my assessment, Greece does not have the strength of institutions to pull that one off in an orderly way. Instead, it's likely to be a slippery slope, which - through chaos and ruin - may then end the same way months or years down the road," said Erik Nielsen, global chief economist at Unicredit.

In the end, since the International Monetary Fund, the European Central Bank and euro zone governments are now left holding most of Greece's 250 billion euro debt mountain, they may decide it is best to try and keep things going rather than drop the curtain on Greece's euro dream and face heavy losses themselves.

That is the calculation being made by the SYRIZA party, which had until recently been surging ahead in opinion polls with its radical anti-austerity platform that European leaders say will lead to certain bankruptcy and an exit from the euro.

But a poll on Thursday showed a return in support for the establishment parties that negotiated the bailout, a sign the nightmare scenario of life outside the euro may be sinking in.

Some have even been able to see the funny side. "Drachmageddon", on Radio Arvyla TV in November, told how the drachma, kicked into outer space in 2001, crashed back to earth as a meteor and destroyed everything.

"The main reason we expect Greece to stay in the union is that as bad as things are now, it will be worse out," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

"It seems far too simple to think that a devaluation is all Greece needs."

Nightmare foretold if Greece heads for euro exit | Reuters

 

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Anger as UK slashes army numbers

THE British army will lose 17 major units in a sweeping restructuring to handle the loss of 20,000 soldiers under the government's austerity drive.

The UK's army is shrinking from 102,000 troops to 82,000 by the end of the decade - part of efforts to meet steep cuts to public spending ordered by Prime Minister David Cameron.

The military is handling an 8 per cent cut to its annual $60 billion defence budget, and has already announced plans to scrap a fleet of jets and an aircraft carrier. :ranger:

British Defence Secretary Philip Hammond said that with British troops withdrawing from Afghanistan at the end of 2014, the armed forces must rethink their structure after more than a decade of continual combat - including the simultaneous wars in Afghanistan and Iraq.

"After a decade of enduring operations, we need to transform the army and build a balanced, capable and adaptable force ready to face the future," Mr Hammond said.

He said four infantry battalions - each of which typically includes between 500 and 600 troops - will be scrapped under the plans, and a fifth relegated to performing ceremonial duties in Scotland.

Under the new plans, the army would be divided into three levels of readiness: rapid reaction forces to deploy quickly on operations as needed; adaptable forces at a lower level of readiness who would take over after reaction forces; and force troops, which are specialist support units such as intelligence and medical units.

With military families still reeling over the job cuts to get force numbers down to 82,000, anger boiled over at the loss of some historic battalions.

Stuart Parsons, mayor of the northern England town of Richmond, said the Conservative Party-led government should be embarrassed and "hang its head in shame" for deciding that his town's 2nd Battalion Yorkshire Regiment would lose its status, ending 300 years of military tradition.

Mr Hammond said that the loss of full-time soldiers would be offset by increases in part-time reservists, whose numbers will double to 30,000. However, the ex-head of the army, General Richard Dannatt, warned that relying on part-time soldiers could be risky.

"We all recognise that placing more emphasis on the reserves is a good idea in theory, but it has got to be made to work," he told BBC radio. "Let's hope that the next decade is rather more peaceful than the last decade, but I wouldn't bet on it."

Jim Murphy, an MP with the main opposition Labour Party, said the plans would leave Britain with its smallest army since the Boer Wars of the late 19th Century. He said the cuts come as NATO operations will be under increasing pressure, particularly as the United States shifts its military focus to the Asia-Pacific region.

The government has acknowledged a smaller army would no longer be able to deploy in the same numbers as during the 2003 US-led invasion of Iraq.

"Jobs and military capability have been lost and tradition and history have been sacrificed," said Murphy, the Labour Party's defence spokesman. "This isn't just a smaller army. It's also a less powerful army in a less influential nation."

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Shrinking Europe Military Spending Stirs Concern
April 22, 2013

BRUSSELS — Alarmed by years of cuts to military spending, the NATO secretary general, Anders Fogh Rasmussen, issued a dire public warning to European nations, noting that together they had slashed $45 billion, or the equivalent of Germany's entire military budget, endangering the alliance's viability, its mission and its relationship with the United States.

That was two years ago. Since then, with the Afghan war winding down and pressure from the European Union to limit budget deficits, Europe has only cut deeper.

Now, as President Obama wrestles with his own huge budget deficit and military costs, the responsibility for keeping NATO afloat has fallen disproportionately onto the United States, an especially untenable situation as priorities shift to Asia.

The United States finances nearly three-quarters of NATO's military spending, up from 63 percent in 2001. And yet among the alliance's 28 nations, experts note, only the United States, Britain and Greece are meeting NATO's own spending guidelines of 2 percent of gross domestic product. Even Britain and France — the two leading European nations willing to project military might — are slipping further. France says that by 2014 it may cut deeper still — to just 1.3 percent of G.D.P., down from 1.9 percent this year. By comparison, the United States spent 4.8 percent of its G.D.P. on the military in 2011.

In 2012, for the first time, military spending among Asian nations, in particular China, exceeded that of the Europeans.

"We are moving toward a Europe that is a combination of the unable and the unwilling," said Camille Grand, a French military expert who directs the Foundation for Strategic Research. "European countries are continuing to be free riders, instead of working seriously to see how to act together."

Increasingly, without United States assistance, military experts said, Europe's armed forces have trouble carrying out basic operations as its dwindling financial and political commitment has derailed multiple initiatives intended to make the continent more self-reliant.

NATO's deputy secretary general, Alexander R. Vershbow, a former senior Defense Department official, said that "the financial crisis has been corrosive to the alliance" and that relations between the European Union and NATO remained "dysfunctional."

Even as Britain and France have boasted of operations in Libya and Mali, those interventions have revealed Europe's weakness more than its strength. In Libya, the United States supplied intelligence, drones, fighter and refueling aircraft, ammunition stocks and missiles to destroy air defenses, and in Mali the French required American intelligence, drones, and refueling and transport aircraft. :ranger:

Senior American officials have warned that unless European countries spend more on defense, they risk "collective military irrelevance."

A senior American official said that Washington was eager for partnership in the Middle East and Asia, but that "Europe's decision to abdicate on defense spending increasingly means it can't take care of itself, and it can't be a valuable partner to us."

While the United States would like to be able to rely more on its European allies, many experts doubt that even the strongest among them, Britain and France, could carry out their part of another Libya operation now, and certainly not in a few years. Both are struggling to maintain their own nuclear deterrents as well as mobile, modern armed forces. The situation in Britain is so bad that American officials are quietly urging it to drop its expensive nuclear deterrent.

"Either they can be a nuclear power and nothing else or a real military partner," a senior American official said.

The challenge is particularly acute as NATO pulls its forces out of Afghanistan after a long, wearying and unsatisfying war, with results widely seen as fragile, even unsustainable. After Afghanistan, with Europeans looking inward and the Russian threat considered more rhetorical than real, some wonder once more about the real utility of NATO.

James M. Goldgeier, dean of the School of International Service at American University in Washington, thinks that NATO has some considerable soul-searching ahead if its European members become increasingly unwilling to operate abroad.

"If NATO isn't outward looking, it's got nothing to do," he said. "It can't go back to managing a threat from Russia, because it's not a real threat."

A decade of halting European efforts to create a Common Security and Defense Policy has yielded little. A NATO Response Force, agreed to in 2002, was supposed to be an all-terrain rapid reaction force, with rotating membership for land, air, naval and special forces, ready to go anywhere and do most anything with at least 13,000 troops. But it has never been used, except in part to add security to the 2004 Athens Olympic Games and the 2004 Afghan elections and to provide disaster relief.

The European Union had a 1999 goal of 60,000 troops available for battle in a "Eurocorps." That has been quietly abandoned, replaced by battle groups of 1,500 to 2,500 troops, also on a rotating basis among the many and differently equipped member states. The "lead" country is supposed to take the political risk and provide most of the troops and most of the money.

"Not every battle group has been what it's made out to be," said Tomas Valasek, a defense expert and president of the Central European Policy Institute in Bratislava, Slovakia, with diplomatic understatement. "Some are more ready than others."

But the will to participate has also declined. While the intent was to have two battle groups, a shortage of countries willing to participate has meant a quiet halving of ready forces to one battle group.

There is also a French-German brigade, formed in 1987, of some 5,000 men, which proudly marched down the Champs-Élysées on Bastille Day. But it, too, has remained unused. When the French wanted to use it for Mali, the Germans objected.

"It's given military cooperation a bad name," Mr. Valasek said. The brigade was supposed to be the foundation for the Eurocorps, the abandoned goal of 60,000 troops ready to deploy for two months, but the reality has been embarrassing.

The Germans also objected to fighting in Libya, and even the European Union's effort to come up with 550 military trainers to help reconstruct the Malian Army became a slow slog of negotiations and preparations; the first of those trainers has only now arrived.

There have been many discussions of how smaller European countries can share capabilities, the way the Baltic States do, and the Dutch and Belgians do for naval training and ship purchasing. There is an old debate about whether some countries will give up their own capabilities — air forces or navies, for example — so long as partners agree to protect them.

"The way forward is to permanently pool training, procurement, logistics and maintenance," Mr. Valasek said. "We won't find any more money any time soon." In the meantime, a lack of procurement means a steady decline as older weapons systems become obsolete.

Toomas Hendrik Ilves, the president of NATO member Estonia, said that "it's time for a serious rethink about security policy."

The United States "has made it clear that it won't continue to pay what is now 75 percent of all NATO military spending," he said. "That should be sufficient for the European members of NATO to understand that this can't work as now," especially with the rise of China.

A Western European ambassador to NATO said that "we need to think more about how to share the burden and rebalance it, both in decision-making and responsibility," especially with the pivot to Asia. France, he said, sees the pivot "as an opportunity, while the East Europeans see it as a threat." After Afghanistan, he said, "we need an adult conversation about rebalancing."

James B. Steinberg, a former deputy secretary of state and deputy national security adviser, now dean of the Maxwell School at Syracuse University, said that Washington could cope. "There's less strategic focus on the remaining security problems in Europe itself," which he described as mostly residual, including the Balkans and a post-Soviet equilibrium. That means Washington will not put more resources into Europe, especially as it concentrates on China.

But on broader strategic challenges, including China, Washington "likes the partnership with Europe for political legitimacy, which is not a function of its military capacity," he said. European political support allows the United States to take a broader position in East Asia that is not simply bilateral.

No one knows where the next crisis will emerge, Mr. Steinberg said, but it is useful to have NATO there, even acting as a limited coalition, as in Libya. If the United States represents 75 percent of NATO spending, "that's a modest price to pay when the next crisis comes along."

Whatever NATO's weaknesses, "if it were gone, it would be very, very hard to recreate."

http://www.nytimes.com/2013/04/23/w...ing-under-scrutiny.html?pagewanted=all&_r=0#h

 

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Prostitution and Poverty in the UK
AUGUST 20, 2013

Gregory Pichorowycz is a philosophy undergraduate at the University of Sheffield and Editor-at-Large of Canvas

In Britain, the recession has left many people struggling to make ends meet, but reports have shown that young people – young single mothers in particular, are feeling the worst of austerity, and many are turning to prostitution in pursuit of financial security.

Things are likely to get worse. In 2013-2014, a lone parent would receive on average £46.80 a year less in benefits due to governmental changes, while a couple with children would miss out on £52 a year. In 2014-2015, the projected figures are £260 less for single parents and £156 less for couples with children. In short, single parents – often the most financially vulnerable – are facing the harshest cuts in benefits.

This has led to an increase in prostitution, which has affected the industry's economy; many sex workers are reducing their charges (sometimes as much as 50 per cent) in order to beat competition from other sex workers. This contributes to a viscous circle; more single parents – usually women, enter prostitution out of financial desperation. Due to the increase in sex workers, they need to engage in the industry more to acquire the money they need. This in turn leads to a further increase in active sex workers and a further devaluation of prostitution ad infinitum.

One thing is clear – tough policing and stricter legislation is not the solution. Ukraine's capital – Kyiv has struggled with high prostitution levels since it gained independence in 1991, after the collapse of the Soviet Union. In 2005, it introduced more rigorous legislation to try to combat the problem, to little effect. The country co-hosted the Euro 2012 football tournament with Poland and prepared itself for the explosion in sex tourism. Kyiv alone has an estimated 50,000 sex workers, twice that of the whole of Holland, despite prostitution being illegal in Ukraine and legal in Holland. And some suspect that this figure is even higher, with many young Ukrainian sex workers not wanting to come forward due to fear of shaming and imprisonment.

The only way to tackle the exploitation of young women is to tackle its root cause – poverty. To do otherwise would be like treating a disease with tissues instead of medicine. This can be achieved without reversing the entire austerity program (which no UK government is realistically likely to do).

Firstly, the government could take up Ed Miliband's living wage proposals. The introduction of this policy – providing tax incentives to companies who pay a living wage instead of a minimum wage to their employees ([£7.45 per hour outside London and £8.55 in London, compared to the £6.19 minimum wage) would save the taxpayer £2.2bn, according to the thinktank Resolution Foundation. It would also help to minimise in-work poverty, which would help single parents make ends meet without turning to prostitution.

Another step would be to reintroduce the Education Maintenance Allowance (EMA), as many of the hardest hit are young people – this includes students. The Women's National Commission (a UK women's issues pressure group) claim the shocking statistic that "50-75% of women in prostitution entered before they were 18" and that many of these had been absent from education throughout this time. Reconsidering the £9,000 tuition fee would also help to reduce the number of students turning to the sex industry out of fear of mountainous debts.

Of course, this article does not intend to argue for or against sex work as a career choice. There is a persuasive case made by libertarians and some sex-positive feminists that willing engagement in prostitution is a matter of personal liberty for those involved and not the concern of third parties. Without divulging into a philosophical discussion about such liberties, it is worth mentioning the statistic that in a study on feminism and psychology, 92 per cent of sex workers said that they wanted to leave prostitution "immediately". In a different study, 74 per cent of women cited "poverty", paying "household expenses" and supporting children as a "primary motivator" for involvement in the industry. It should be clear by now that the vast majority of European sex workers are exploited out of economic desperation and are not pursuing a career that they necessarily consider legitimate, empowering or advisable – whatever one's position on such political theory.

"She was too ignorant as yet to know that the chances of her finding work unaided were practically nil; but the next four days gradually enlightened her", read the pages of A Clergyman's Daughter – George Orwell's understated and second novel. The book is an exploration of poverty in the 1930s, in which the protagonist, Dorothy, is swept away by the cruel realities of homeless men and women, some of whom become sex workers for mild reprieve.

She is bailed out by a rich relative while being "on the very verge of becoming one" – a prostitute. Unfortunately – even in the 21st century, not everybody is that lucky.

This entry was posted in Social Justice and tagged austerity, EMA, Living Wage, poverty, Prostitution. Bookmark the permalink.

Prostitution and Poverty in the UK | Left Foot Forward

 

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