finance | It's a Political World

Last Week in Europe… Some Deaths, A Song, and A Broken Promise to Ireland
March 4, 2013

In Greece, (via Ephilant on Politicalworld.org)

Out of sheer desperation and in order to try and warm their house a little and cook a warm meal, 5 students in Patras made this make-shift heating device and put it in their living room.

It consists of an old rusted barrel, cut in two, and used as a make-shift barbecue by people in their gardens.

When a friend called to the house and got no answer, knowing the women were inside, the friend called over the land lord and they used the spare key to gain access.

Two of the female students were found dead inside the house, two are in a coma in Patras university hospital, and one is conscious but critical in the same hospital. Carbon monoxide poisening. They didn’t even have the money to burn clean fuel in the drum, but burned rubbish found on the streets…

Why does something like this happen in 2013? It’s one of the little inconvenient side effects of bailing out international lenders and banks. Austerity in all its glory. The students, aged between 21 and 23 had no money to buy fuel, they could not pay their electricity bill and were reduced to 1 warm meal a week in the university canteen…

In Portugal

Over 200,000 protesters in Lisbon packed the vast imperial Praca do Comercio square, home to the Finance Ministry, and surrounding streets, chanting: “It’s time for the government to go!”. Many carried banners with slogans such as “Austerity kills” and “Screw the troika, power to the people!”, aimed at the so-called troika of lenders from the European Commission, European Central Bank and International Monetary Fund.”Grandola” – the signal-song of the 1974 “Carnation revolution” that overthrew the fascist dictatorship of Antonio Salazar after the army rebelled, reverberated through the crowds in Lisbon, which has a population of about 3 million.

In the past weeks, Government Ministers have repeatedly been drowned out by people singing this song.

And at the end of the week, some very bad news for Ireland, via the Telegraph, from an interview of Klaus Regling in Wirtschafts Woche magazine –

…It emerged that the eurozone bail-out fund (ESM) may not be used after all to recapitalise banks, even once the banking super-regulator is in place. Klaus Regling, the fund’s chief, said opposition from the creditor states may kill the idea altogether.

If so, this will breaches a summit accord in June by EU leaders to deploy the ESM directly to break the “vicious circle” between banks and sovereign states.

Klaus Regling “Das Euro-Retter” – Head of the ESM

Failure to implement the deal would be a blow for Ireland and Italy, leaving them shouldering the full burden left from a bank crisis that was partly caused by northern creditors. The International Monetary Fund said it is imperative that the EU upholds the specific pledge made to Ireland in the summit text.

Germany, Austria, Finland, and Holland have all all said they would not let the ESM cover “legacy assets” left from the bubble. They now seem to be resiling from the accord altogether.