Tag Archives: UK

WORLD ECONOMIC CRISIS: The Austerity Policy begins to Crack

The narrative of the great and the not so good in World Economics is well established.  Forget the lessons of the past, and take no notice of the specific circumstances of the hour, massive reductions in public spending is the name of the game.

The whole world economy has been following the same well worn path of tackling the deficit problem by cutting public spending and satisfying the markets.  Each austerity package has been followed by another, and then another.

Each Euro zone country that fails to reduce the deficit enough gets a bail out of sorts, at the last minute.

Yet the elephant in the room keeps trumpeting loudly.

GROWTH

The truth about the deficit is that without growth the deficit will remain or get progressively worse. Yet the austerity rhetoric has continued unabated.

Yet in the last few weeks, new noises are being made by those who have been the ones leading the Austerity approach.

The IMF and World Bank have both been making noises about the lack of growth.  As the bad economic news continues to grow with each passing week, in the US, the Euro Zone and in the world at large, the penny is beginning to drop.

Spooked by the recent turmoil in the markets, Christine Lagarde has intimated that austerity alone will not sort out the problems.

The markets will never be satisfied as the last months effective crash of share prices has shown.  The markets want both deficit reduction, cuts in public spending and growth.  This, sadly is not possible.

The spectre of a “double dip recession” is causing everyone to panic regardless of the economic realities.  Having had 9 months of economic stagnation, we are, as far as the general public is concerned, still in/or have gone back into recession.

We are staring a great recession or depression in the face.  A decade of stagnation.  Some economists are now suggesting the a Japanese style stagnation of two decades or more is now a real possibility.

The problem we face is that the rhetoric of austerity has altered and depressed consumer feeling throughout Europe and elsewhere, especially in the UK.  In addition, suppressed wages and the decline of standards of living over a protracted period of years is making everyone below the extreme higher incomes, less well off and gradually getting poorer.  Our high streets are turning into ghost towns.  Something last talked about in the early 1980’s.

In the UK, some departments within government are using rhetoric to justify policy options which the treasury would not dare to utter.  To justify interfering in the housing market and to build  a new high speed rail line.

The warnings from predictable circles like  Ed Balls, the shadow chancellor, now include others less used to such associations like Christine Lagarde, of the International Monetary Fund, John Cridland, director general of the CBI, and Bill Gross, head of the world’s largest bond fund, Pimco.

The head of the world bank Robert Zoellick, does not think current austerity measures and short term liquidity measures will be enough to save the Euro zone calling for what he calls “decision time”.  Namely, split the Euro zone, or fiscal union.

Meanwhile the UK’s growth forecasts have been downgraded err . . .. yep again.  When this government first came to power, forecasts were in the region of 2.7% annual growth for 2011.  The British Chambers of Commerce has downgraded its forecast from 1.9% in January of this year to 1.1% now. The Bank of England last month cut it’s growth forecast from 1.75% earlier in the year to 1.4% now.

Today the OECD announced its fear of the world economy grinding to a halt, and although maintained it’s support for cutting public expenditure and fiscal tightening, expressed a view that this should be eased at every opportunity.

What is apparent is that the Austerity machine along with the world economy is grinding to a halt.   Fiscal tightening will just slow growth further causing more difficulties.  Options though are now limited and world action is becoming fragmented as countries begin to focus on their own positions.

For George Osborne, the political game may well be slipping him by.  Clearly a calculation was made when the current government came to power that we would have cuts before a recovery took hold and a recovery to be acclaimed before going to the country at the next general election.  This is looking rather optimistic.

However, entrenched positions are backing him into a corner on fiscal tightening.  The talk of a plan B would no doubt spook the markets even more, and make his and David Cameron’s credibility suffer.  Perhaps they can save face by taking a “common sense” or “flexible” approach and doing more to support infrastructure projects and housing, and thus investing for the future.  A little loosening of the clenched fist of fiscal policy rather than reverting to a full blown “deficit denier”.

Maybe George Osborne knows something we do not, that he is holding back, waiting for the calamitous collapse of the Euro zone before altering course?

What is clear is that austerity alone will not sort out the world economic problems  and those with the unelected power are beginning to realise this.

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UK Governments Libyan Deceit

THE TRUTH WILL OUT – Is an often used phrase, and these days with electronic communications, social networking and the internet it is perhaps more apt than ever.

While David Cameron and Nicolas Sarkozy bask in the limelight of a job well done, and how they were so “brave”, Papers obtained from Human rights groups seem to show that the  UK security forces and the CIA colluded with the Libyan leadership and Muammar Gaddafi against the very opposition groups allied forces are now championing.

It is hardly startling news.  Hypocrisy apparently runs hand in hand with Politics, yet it is no wonder so many of the British public are cynical of military action and the motives behind them.

MI6 apparently provided intelligence about exiled opponents in the UK to their counterparts in Libya and the CIA even abducted “militants” and handed them over to the Libyan authorities to no doubt be imprisoned (if they were lucky), tortured, or killed.

From the information so far obtained it is less the official story of letting Libya in from the cold, as bending over backwards for his mild co-operation.  No doubt all in the name of the ridiculous “War On Terror”.

From Abdelbaset Ali al-Megrahi’s release to the sickening smiley handshakes and “fake tents” with Tony Blair to the current crop of damning revelations, the cynicism of the public will only grow deeper.

Yesterday, I watched the unveiling of the morning papers review on the Andrew Marr show where Deborah Haynes, Times Defence Editor, announced that these revelations were hardly surprising and “well that’s politics”.

It is amazing how the normalisation of disgraceful acts can justify almost anything these days as if we should throw up our arms in defeat.

Where the likes of Deborah Haynes gets it totally wrong, is that politics is not an end in itself, it is a facilitation of societies needs.  The fact is that the acts of politicians affect peoples lives.  What we are talking about in Libya, is not the gossip on Capital Hill or the Westminster village, but the torture and killing of innocent people.

The ramifications stretches across our foreign policy and the middle east, from Iraq to Libya.  Politicians play their games, supporting whatever they feel suits them at the time, building up dictators and selling them intelligence and arms and then when it all goes wrong to put our own men and women on the line to sort the mess out.

Deborah Haynes could not have been more wrong – it is not politics – it is people.

Wherever we turn we see deceit at the heart of government, never more so than with our foreign policy.  This is largely due to the lack of accountability and transparency.  Foreign policy and “security” always bring with it the cloud of secrecy that can be enforced.

Our security services can collude in torture and rendition; send our special forces to the middle east, far east and South America; and support despicable regimes in private while the rest of us are kept in the dark.

How many of us knew the SAS was training troops and fighting in South America in the 1970’s and 1980’s at the time or even now?  To no doubt help the fight against those evil regimes that were either elected democratically or opposition groups who do not have access to democratic institutions.

In the end our armed forces often end up picking up the pieces of the ill thought out politicians game plan when it all goes wrong.  The rest of us become yet more cynical and our reputation in the world continues to nose dive.

Will we ever, ever learn?

UK ECONOMY IN STAGNATION – British Chamber of Commerce predicts 0.3% growth

Recession what Recession? The private sector will pick up the slack and the Conservative Party has all the answers in these “difficult times.”

As the proof of the pudding is being tasted around the country it looks less and less like we managed to avoid a slump and more like we could be heading for a decade of stagnation.

Today we have the British Chambers of Commerce predicting that the UK economy only grew by 0.3% from March until June.  Others are predicting we shrank by 0.2% (citigroup) in the same period.  A third of finance directors believe we are heading for a double dip recession according to Deloitte.

Economic figures other than the overall rate of unemployment have been dire over the past 9 months.  If the expected low or nonexistent growth in the UK economy comes to pass it will mean that the UK economy has not grown for 9 months.

In terms of the deficit this is a disaster, as without growth the deficit will remain or, as is the case at the moment, increase.

This news is being kept off the front pages at the moment due to the News International Scandal and Cameron’s difficulties, but nothing will hide the mess of Osborne’s economic policy as the summer continues with consumers becoming shrinking violets.

Whether we go into a double dip recession is irrelevant, as whatever the technicalities of the economic figures show, the UK economy is stagnating. However, IF we go into a technical double dip it will be a massive psychological blow to the government and confidence will be further reduced as a result and of course Ed Balls will be able to go further onto the attack.

How long will we accept that it is all Labour’s fault??

Are we heading for a “GREAT RECESSION”, akin to the great depressions of our past?

Each day that passes, the narrative of politics and economics never ceases to become more interesting.  And so these interesting times continue with yet more bad news for our economy.

I remember some time ago, soon after the crisis of Autumn 2008, having a conversation with a friend who stated quite confidently that the only companies going to the wall were badly run businesses.  How house prices (one of his main concerns) would recover and there was plenty of money in our economy.

The conversation followed the belief that this would be a short blip on the economic landscape, and times would return to normal fairly quickly.  Indeed, within a few months the same person, along with various media publications were stating that the banking crisis was either “over”, or nearly “over”.

Several years down the line – 3 1/2 years since the queues outside of Northern Rock – if we look back we can see a timeline which is significantly longer than we were led to believe.

Today, no one knows how long the banking crisis will last, or indeed where it will lead next.

It seems like every week new news is broadcast casting doubt on any economic recovery with commentators always pointing to the fact that “technically” we are no longer in recession.  This however denies the seriousness with which the world economy is stumbling from one economic shock to another affecting the standards of living of billions of people.

We Avoided Going From A Recession To A Slump 

As we know, Gordon Brown “saved the world”, from the worst effects of the banking crisis, and we are constantly reminded how this action prevented a recession from turning into a slump or depression. (Please note the hint of sarcasm before people start giving me abuse!)

My reading of the action taken by world leaders at the time, including Gordon Brown, is that their action was decisive and needed to prevent a collapse of the capitalist system as we know it.  I am glad that Gordon Brown was actually in power at the time, the thought of George Osborne et al being in power, staring into the headlights fills me with horror.

However the structural problems have still not been dealt with and the terms behind the bailouts were poorly thought out.  Like the snooker player planning a centenary break, our esteemed leaders were only thinking as far as the next black.

The idea that we prevented a slump in my opinion is looking less and less like fact and more like propagandist rhetoric.

The more economic indicators are released across the world, the more the economic crisis continues, and for some gets worse and not better.

If I were living in Spain today would I be thinking that this is the normal “economic cycle” or recession, or would I be thinking that this was far more serious?

Spain has 22% unemployment and 45% youth unemployment – a country in debt – and had negative economic growth for 6 consecutive quarters and in the last 5 quarters has not grown more than 0.3% in any quarter. The economy is stagnant at best with now the prospect of enormous cuts in public expenditure, sucking enormous amounts of money out of the economy.

If you were living in Spain would this have been a recession or would you see this as a depression?  The prospects for the population over the next decade in terms of standards of living and general employment is bleak at best.

Spain is by no means the most badly effected economy in the world following the financial crisis, yet these figures give pause for thought after the recent elections and demonstrations there.

Spain though is possibly the most pivotal country within the Euro zone, the country that will have the most effect on the outcome of the Euro’s fate.

Whereas bail outs can be discussed and organised for Greece, Ireland, Portugal and maybe even Italy, to talk of bail outs for Spain would be a bridge too far.

The European Union is the largest economy in the world, a homogeneous trading area, overtaking the USA in GDP in the last decade with over 15 trillion dollars and over 20% of the worlds market share.  The US and EU account for over 40% of the GDP of the planet, so despite the rise in the growth of China and India, the old engine rooms of the world economy are still incredibly important.

Although the rise of these developing economies can aid world economic growth, the fact that these countries “make things” and sell them back to markets in the developed world means that if the developed economies are on their knees then the developing world will grow less as well.

In addition to this there is a massive discrepancy with debt and surplus as China saves too much and collects the debt of the largest single country economy in the world, the US.

The World Economy shrank for the first time in post war history by 2.031% in 2009 showing just how bad the economic crisis has been and how the words of Alistair Darling were so prophetic back in 2008, that this is the worst economic crisis in 60 years. 

Neo-Liberal Philososphy

The crisis appears to be worst where the neo-liberal philosophy was strongest and where the financial markets and economies are at their most mature.

Like 1929, the crisis originated in the US, but due to the spreading of the same ideology across the world by the IMF and World Bank and the ever increasing “Globalisation”, it exposed many interwoven economies and affected those in developing countries who are least able to cope with the fall out.

I remember seeing an interesting debate on the current affairs programme “Newsnight”, before the catastrophic events of 2008, when it was argued that the globalisation and capitalist ideology of the past 25 years had reduced world hunger down to approximately 650 million, that is people who actually go hungry everyday.  Within 6 months of that interview, the amount of the people who go hungry in the world increased back up to 950 million or so.  25 years to decrease it by a third and 6 months to push it up 50%, back to the levels it was previously.  An excellent achievement!

The above graph shows the trend of those who are undernourished courtesy of the worldhunger.org website. Indeed this graph shows that the figures often banded about are actually worse than originally thought.  This graph shows that currently around 13.1% of the worlds population go hungry/are undernourished everyday, 1 in 7 people on the planet.

Globalisation has in fact created more vulnerability in the world economy and the well being of people than before.  Where as many countries were cushioned somewhat from economic strife in one area of the world, the interconnectedness now exposes everyone rather than spreading the risk.

Like the Sub-Prime housing market that started this mess, the spreading of risk added to the problems, hiding them in accounts, products and market values that no one could value or  understand.

The scandal that is the IMF, World Bank and WTO

There appears to be irony in every aspect of life these days, as the two institutions that were becoming almost irrelevant to the developing world prior to the credit crisis are now centre stage “saving” the developed economies of the western world.

Prior to the crisis, the IMF and World Bank were being side lined in trade agreements and loan agreements as developing countries would no longer accept opening up their markets to foreign companies to asset strip them, or deregulating fledgling financial sectors so that speculators could decimate their economies; or sell off their education and health services to the private sector in return for loans so that private companies could make money out of the poorest people on earth while allowing millions to go without education and health provision.  In short the “penny” had dropped.

The WTO constantly struggle to impose its will on developing countries now as deal after deal is scuppered by those who know the harm they do.

These organisations, dominated by the interests of western economies and especially the US, seek to open up markets for the benefit of developed countries with the spin that they will allow “inward investment” and open up markets for developing countries.

Yet the very same US and European Union constantly employ trade restrictions and in some cases the most restrictive practices in the world to prevent damage to their interests.  The US protects its Agriculture sector, steel industry, car industry and airline industry to just name a few.

Irony again rears its head as the IMF prior to the 2007 beginnings of the financial crisis recommended that all countries should follow the US and UK in their approach to light touch regulation in the financial markets.  Praising the US and UK and endorsing their economic policies.  This incidentally is the same IMF that every world leader mentions when justifying their austerity measures, including our own George Osborne.

The IMF was WRONG in 2007 over light touch regulation and DID NOT SEE the crisis coming.  The IMF was WRONG in the way it spread the ideology of neo-liberalism around the world and the WORLD BANK was WRONG in insisting in the liberation of fledgling markets and the privatisation of health and education institutions in developing countries.

Most of these criticisms are barely within the discourse of economics in the mainstream media or political parties.  Both the Labour Party and Liberal Democrats appear to be wedded to the same discourse.

The Effect of Cutting Public Expenditure

As we all know in the UK, we have a deficit that needs to be reduced.  As discussed here in the Truth About The Uk Deficit, the reason for the deficit is largely due to the reduction in tax take rather than simply “over spending” as the chart below shows:

Although outlays were higher at the time of the crisis than tax take by around 2.7% to 3.1% of GDP depending on how you measure it, this was within tolerance limits.  The reason for the decline in tax take and the ever increasing deficit is due to the lack of credit available in the economy and the realisation that much of the wealth created on Banks accounts were not real.  As credit reduced and money was effectively taken out of the economy the recession ensued and people were able to make less money and thus pay less tax.

If we are to bridge this gap we HAVE TO GROW.  If the economy does not grow the deficit will get bigger no matter how many cuts we inflict on our public expenditure.

Over the next 4 years the European Union is embarking on large cuts to public expenditure.  So to are other countries in the world economy like the US.  This will have the effect of deflating the economies in those countries effected, which in turn effect the countries they trade with as they will be able to buy less products, therefore importing less.

This is not a short term problem.  Japan has had mounting debts now for decades and has stuttering growth.

The current rounds of austerity will be affecting the next 4 years, even though most discussions appear to be focussed on the next 2 years.  Effectively the Euro zone average of anywhere between 1.86% to 2.4% of GDP depending on how you measure it (economic statistics are never straight forward!) as the Full fact shows here.

Note this diagram only projects cuts in the first 2 years and the cuts in the UK will be far more in the 2 years after this.

The US is cutting even quicker and plans to decrease the deficit by $4,000 billion or 2.2% of GDP by 2015.

If the 2 economic areas of the world cut between 2% and 2.5% of GDP how will this affect the economy of the areas affected or the world economy?

Nobody really knows is the true answer, the same as no one really knows what will happen next with the banking crisis.

The UK Position

The UK position is perilous at best.  Over the past two days we have had yet more bad news for George Osborne and his plans for growth and reducing the deficit.

Yesterday it was shown that the deficit is increasing under George Osbornes leadership rather than decreasing, and yet growth is also on the wane. Every month we get a further downgrading of growth expectations, today was the turn of the OECD who have down graded to 1.4% this year.  This is after the UK economy has not grown for 6 months and recent figures showing not only consumer confidence is low but that consumer spending is decreasing and is technically in recession after declining for the second quarter in a row by 0.6% in the last quarter, the lowest since the technical recession in 2009.

The “good” news for the UK economy is that the great “re-balancing” of the economy is happening with the stuttering recovery being led by exports.

Many, including the OECD today are calling for the rising of interest rates steadily to counter inflation.  Inflation is not home grown as the depressed wages show, but rather due to commodity markets and increased costs of raw materials.  However, it is argued that increasing interest rates to a more “realistic” level will strengthen the pound and therefore help counter inflation.

Yet it is the weakness of the pound which is helping our exporters, making them more competitive.  If they lose that competitive advantage will that not damage the fragile recovery?  Is this not the classic sign of what happens when you have an effective devaluation?

Further Shocks Will Knock Us Off Course 

We have many more shocks to the economy over the next few years, and which ever way we look at the economic figures they look bad.

Over the next 4 years both the EU and US will go through massive public expenditure cuts and with it probably massive unemployment to go with it.  This will suck out money from the economy causes more stress for consumers and businesses.  If interest rates increase, this will again add costs to businesses, put pressure on households making it harder to pay mortgages that has been the saving grace for many people over the past few years.

This will increase the value of the pound and probably reduce our exporting capacity further having a negative affect on the economy.

Further shock will come as the debts of Greece are most probably going to have to be “re-structured” and Italy may well be the next domino to fall in the Euro zone”.

Speculators have now gravitated to the commodity markets causing further hardship to the real economy and will add to inflationary pressures, putting more pressures on interest rates.

Food riots due to rising prices are likely yet again, while the natural disasters, sadly effecting many areas of the world (including our own, with crop yields looking to be significantly lower this year due to drought), will cause more hardship.

Then we have the prospect of Peak Oil on the horizon.  This is more worrying as it will affect every part of modern life, and is inescapable. No planning has been put into effect by European and western governments generally, it is a forgotten problem, put on the back burner, always something that politicians can come to later.

So are we heading for a Great Recession? Some commentators have already dubbed it as such, but basically without meaning.  If you were living in Spain, Ireland, Greece, Portugal or Italy I would say they already think so.

Other than the odd anomaly like Germany, who seem to be well placed to profit from an export led recovery, with the help of a deflated Euro caused by the southern European countries in crisis, the recovery will likely be in two spheres. The developing countries growing somewhat while the developed countries stutter and stumble trying to get back to normality.

The neo-liberal model is still with us, it has not been challenged economically or politically and continues to hold sway.  Banking reform, though essential still appears to be on the back burner, while those benefiting from high commodity prices like Australia make hay while the sun shines.

This is NOT about economic cycles in a text book, rather an ideology of madness that has taken over undemocratic institutions like the IMF, WTO, World Bank and the Banking Industry that have a disproportionate amount of power in an increasingly interdependent world.

A crisis of democracy is likely to follow, as seen with the recent protests throughout Europe.  This is just the beginning of austerity Europe, and the chances of a “Great Recession” or a “Slump” seem to be closer every day.

The NO to AV campaign have it: The end of constitutional reform for a generation

So the official result is nearly in, but the NO VOTE has already now officially passed the 50% mark.  The Yes to AV camp had given up and gone home some hours ago, and the first gloating has begun in the largely right wing press.

The Spectator was one of the first off the mark and the inane commentary has begun.  Narrow mindedness and self preservation of the 2 main parties has won out and many are now saying openly that thankfully that will be the end of constitutional reform for a generation.

It is likely that I will be dead by the time real constitutional reform comes to the fore, which it surely will one day, it is just that in Britain we are always the last to drag our traditions kicking and screaming into the modern world.

The Alternative Vote was never the best system, everyone knew it, but we also knew that it was always the only reform any of the major players could consider stomaching. But they were able to fight off the challenge to their unfair advantages built into our system.

Nick Clegg made a massive gamble in his coalition agreement and sold his soul for AV.  In the end, much of the public could not stomach what he gave up for this.

The No campaign acted disgracefully and it will be hard for many to be able to look on some figures within that campaign in the same light.  Baroness Warsi playing at extremism was an absolute disgrace.  As was the way the Tories stabbed Nick Clegg in the back with the no campaign and the targeting of him personally.

The lies told over funding and people having more than one vote; and it helping extremism will go down in the political pages of history showing just how to run a cynical and negative campaign. If you repeat a lie often enough people believe it.

In the end, the vote for AV gave the chance for those who like FPTP; those that wanted PR; those that could not forgive Nick Clegg; and those wanting to put strain on the coalition, to all campaign for a no vote.

The Conservative Party, BNP and Communists, and the old guard of the Labour Party won out.

If this is the end of our constitutional reform, it is a sad end to the progress of pluralism seen over the past 15 years.  With the partial reform of the House of Lords, devolution and mayoral elections, the benefits of local democracy and a more proportional system can be seen, as with the Scottish elections tonight.

A country should never stand still in a false belief that the past is best.  We should be looking forward to see how we can improve.  A better more accountable and transparent political system will always improve the quality of govenorship   even if those clinging onto power do not think so.

HAS FRANCE BECOME THE NEW FASCIST FACE OF EUROPE?

As from today it is illegal to wear the full face veil in France.  The French have now enacted the law that prevents women from being seen in public wearing the veil, otherwise called the Burqa or Hijab, covering the face for cultural reasons.

The state has been generous enough to allow people to wear these items in the privacy of their own homes or as a passenger in a car.  Some reports have stated that they would not be able to “drive” the car, and they won’t be arrested for getting into the car.  How tolerant.

I sometimes feel I am walking into a 3D Monty Python sketch, in short you really couldn’t make it up.

Personally, I do not care for these pieces of clothing.  They seem backward looking and repressive in nature, but really that is not the point.  To ban a piece of clothing because somehow it is not deemed French enough just seems ridiculous.

Having read a piece in the Telegraph by William Langley which I personally felt was quite shocking, what was worse however was the almost unanimous points of view expressed in the comments.

I will no doubt be roundly set upon for writing this piece, and branded one of the PC brigade, but the intolerance, arrogance and nationalistic nature shown by this law and those that support it sounds like a throwback to a bygone era.

I applaud the French for separating their state from religion and for keeping religion out of their education system, a secular society in my view can only be a good thing, but is this really to do with being a secular society?

I could understand the need to insist on people not covering their faces in airports or banks for security reasons.  Having a reasonable and proportional response to genuine practical difficulties would be a sensible action by any society.  However, to completely ban a cultural item of clothing, however distasteful we may deem it is surely simply an act of intolerance and nothing to do with any real problem at hand.

The press are alive with talk of the need for Sarkozy to appease the rising right wing for his electoral success.  Is this a good enough reason to ban the veil?

The rhetoric we continually hear over the Muslim faith in some quarters is alarming.  We are told that Islam is intolerant and seeks to usurp other religions.  To dominate societies in which it breeds.  But is this not exactly what all religions do?

Certainly, Christianity has been one of the most intolerant and reprehensible religions in the past, wanting to spread it’s word and replace other faiths at will.  It’s history is littered with genocide and torture.

Other religions have an arrogance that their religion is the right one and everyone should see the “light”, and follow their prescription of faith and life.

Should we then ban all religions?

Or perhaps we should just ban certain aspects of life we disagree with and ensure that people only practice these hideous ways of life in a private residence.  We could outlaw homosexuality again, but allow it in blacked out cars or private homes, just so long as you don’t have a gay “lifestyle” in public.  Would that make us feel more British or French?

It just seems ridiculous to me that a society should ban an article of clothing from all public places however disagreeable we may find it culturally.

We all make mistakes in life, and modify or change our beliefs.  I profoundly disagree with women being subservient to men or feeling that they have to hide their face or bodies because men will not be able to control themselves if they do.  It is insulting to men and women. But in the end, it is a matter of choice and personal beliefs.

The narrative which is being written by this type of law is more divisive and unhealthy.  It will not deal with the underlying problems of French society which is divided socially and culturally because of a multitude of reasons.  Ghettoisation of communities is a problem in many European countries, including the UK.  In France it is particularly prevalent.  Banning the Burqa will not address the problems of inequality and discrimination, and may well add to it.

Europe appears to be heading toward a confrontation with Islam, largely due to fear and maybe a realisation that the future may well be toward the east and no longer with the west in so many ways.  Culturally, economically and politically.

The banning of the veil is a retrograde step that is fascistic in nature, discriminatory and unhelpful.  Those calling on the ban here in the UK are fighting the wrong battles within our society and are going to cause more and not less intolerance.

In the end this policy is intolerant, authoritarian and right wing; it panders to the worst of human nature, that is fear of something they do not understand.  Just because we do not like something does not mean we have to ban it.  To make matters worse it is of course unenforceable.

EURO ZONE CRISIS HITS PORTUGAL: Another Domino Falls

(see also article on Bank of England and Euro Interest rate change)

Update – 08/04/2011

Today European finance ministers meet in Hungary to decide the package to bail out Portugal.  The formal request for help has now been received.

The problems though are getting more complex as people realise the divisive nature of this crisis.  There are those who are calling for Osborne to be far more robust in defending the UK in its financial exposure to bailing out those in the Euro zone.  While those negotiating the package have to make a political calculation that any incoming Portuguese government will accept the terms and will not come back to renegotiate it.

This is highly complicated, as there are those who are now questioning the whole Euro zone project with the historical perspective showing how monetary policy over the past decade has not been consistent with the integration of countries economic positions and fiscal arrangements.

As explained by Stephanie Flanders interest rates were far too low for Ireland and the southern Euro countries, yet at the same time those countries not benefiting from a boom borrowed massively.

Political integration, which has halted, is also causing concern as the Euro zone pulls in different directions, as a central economic policy is inconsistent with national sovereign democratic states.

Democracy itself is being challenged as states have to go cap in hand to the European Central Bank and the IMF to accept financial help and fiscal arrangements and conditions in return for this help.  Something developing countries were loath to do prior to the credit crunch, because of the devastating nature of IMF terms and conditions caused to their countries when they were forced to privatise education and health systems and deregulate financial markets.  How the worm turns.

ORIGINAL ARTICLE

The acting Prime Minister of Portugal has confirmed this evening that a further bail out will be sought to save the economy and plug the gap in the finances.

The Euro zone countries will now bail out Portugal as it struggles to deal with the interest rates to pay back existing loans.

Jose Socrates who was unable to get through Parliament  the austerity measures needed to deal with their deficit, has now formally requested help from the EU. Another bail out beckons as Portugal heads for an emergency General Election in July.

Another Domino falls as Portugal becomes the 3rd country after Greece and Ireland to reach for a bail out.  It is reported that Portugal will need 80 billion Euros for the bail out and the IMF will also be involved.

The next Domino is the big one.  If Spain gets into trouble it will be too big to bail out and will have catastrophic affects on the Euro Zone and the whole European economy.

The UK is reeling at the moment from bad news after bad news economically as growth forecasts are continually down graded and confidence in business, retail and the public dips still further.  The news that the UK will be liable for yet more bail out loans to the tune of maybe £4.4 billion will not go down well with the public who seems to be still bailing out the banks 3 years on from the initial crisis.

At the moment most economic analysts are not forecasting that Spain will ask for a bail out, yet many are putting pressure on the European Central Bank and the Euro by continually speculating that the Euro is failing as a currency and concept.

As they say, watch this space as the domino effect continues.

Other Posts ECONOMICS:

George Osborne’s Project Merlin
Truth about the UK Deficit
Bankers Prove Our Capitalism Has Gone Wrong
Bankers do it again and again
Fred Goodwin