#austerity package

[ujjalnewsnish]

Crisis-hit Brazil unveils $17b Austerity Package

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Crisis-hit Brazil unveils $17b Austerity Package

Brazil announced a massive $17 billion austerity package Monday in a bid to boost its ailing economy amid a deepening crisis that already caused a downgrade of the country’s credit rating.

The package announced at a news conference by Planning Minister Nelson Barbosa includes freezing public sector salary raises and hiring, entirely eliminating 10 of 39 ministries, cutting 1,000 jobs and slashing housing and health-related social spending. “These are major corrections,” Finance Minister Joaquim Levy said.

Just a few years ago, Brazil was in carnival mode as one of the BRICS group of emerging giants, winner of hosting rights to both the 2014 World Cup and 2016 Summer Olympics.

But the government of Latin America’s largest country announced in August that the economy — the world’s seventh largest was officially in recession and that the contraction could extend through 2016, becoming the longest recession since 1931.

Last week’s shock downgrade of Brazil’s sovereign credit rating to junk status by Standard & Poor’s sent the government scrambling to prevent an exit of foreign capital and to balance the books in an economy already suffering from plummeting commodity prices and the effects of a huge corruption scandal.

With deep recession, the country’s first ever deficit budget, a corruption scandal of surreal proportions at state oil company Petrobras, and political paralysis, S&P didn’t have to look far to justify its cut.

Brazil’s score is now even lower than Russia’s, which faces powerful Western sanctions over the war in Ukraine. For the markets, news of the austerity measures was expected and not necessarily seen as being pro-growth.

Source: Afp,Brasília

[markcraig-blog]

Who Will Decide the Fate of Greece?

I remember living in Paris some two decades back and my friends (and everyone they knew) in France, Italy and Greece didn't have much good to say about the European Union. There had been protests in the 80's as once separate political entities lurched into something approximating  a political and economic union. No one loved what was happening except perhaps those at the top (the 1%) who would benefit most from the free flow of currency and harmonization of archaic national laws and practices. The common refrain I heard: the EU is no good; but it's surely better than more of the past. And the past in 1989 was still close enough (as it always is in Europe) with bullet holes and plaques marking the liberation of Paris from German occupation and the endless cemeteries holding the two million French (4.3% of the population) who died in World War I only twenty years before. Europe was a political swampland and a killing field in desperate need of a solution.

Fast forward to the present and the grudging optimism of this-is-the-only-doorway-with-a-future attitude is gone. Germany will happily remain in (and control) the Euro zone as long as they don't need to bail everyone out. France, Spain, Italy are increasingly confronting their own economic woes and trying to stabilize a present that is really a previous generation's vision of the future.

[caption id="attachment_4700" align="alignright" width="300" caption="Violence in Greece - February 10, 2012 (CNN)"][/caption]

And poor Greece, the hardest hit at the moment, fingernails clutching a crumbling precipice as the European Union and the International Monetary Fund broker an agreement that avoids the broken promises of last year's agreements and gets private lenders to take a fall for a new 130 billion euro ($172 billion) bailout. Unions are promising mass demonstrations, the unemployment rate in Greece is now at 20.9% and industrial output has declined 11.3% over the past year.

And the rescue package? More pain including pension cuts, a 20% cut in the minimum wage, and other restrictions. Perhaps worse from the perspective of someone on the streets in Athens or Rhodos - the government has to guarantee that the austerity measures will not be undone by upcoming elections. In other words, goodbye democracy.

And now it has been made clear that there is no deal until Greece holds up its end of the bargain. At this point, the alternative of a default looks better by the day:

Jean-Claude Juncker, who chairs the Eurogroup, set three conditions, saying the Greek parliament must ratify the package when it meets on Sunday and a further 325 million euros of spending reductions needed to be identified by next Wednesday, after which euro zone finance ministers would meet again.

"Thirdly, we would need to obtain strong political assurances from the leaders of the coalition parties on the implementation of the program," Juncker told a news conference after six hours of talks in Brussels. "Those elements needs to be in place before we can take decisions."

"In short, no disbursement before implementation."  (Reuters)

Those at the top of the political process - both in Greece and the EU - may think they hold the fate of Greece in their hands. It's a useful conceit, but the truth of the matter is that it may ultimately be up to the people in the streets. Watch carefully the next few days.

[hcworldservice]

Greece leaders agree austerity package. Greeks don't agree

The Greece's leaders agrees the new austerity package to receive new bailout package by EU countries. Greeks unions preps many strikes agianst this after the austerity package is approves by interim coaltion led by the PM Lucas Papademos. Greece so suffers more austerity measures than politicians failures.

[solchrom]

BBC: Markets dive in reaction to unfortunate outbreak of democracy in Greece

US and European markets have fallen following Monday's announcement of a Greek referendum on the latest aid package to solve its debt crisis.

Eurozone leaders agreed a 50% debt write-off for Greece last week as well as strengthening Europe's bailout fund.

But the Greek move has cast doubt on whether the deal can go ahead.

New York's Dow Jones ended the day 2.5% lower, after a mid-afternoon rally on hope that Greek MPs may block the referendum proved short-lived.

One of Mr Papandreou's MPs, Milena Apostolaki, resigned from the ruling Pasok parliamentary group on Tuesday, leaving the government with a two-seat majority in parliament.

Six other party members have called for Mr Papandreou to resign, according to the state news agency.

There are doubts whether the government will last long enough to hold the referendum, pencilled in for January.

A confidence vote is due to take place in the Greek parliament on Friday.

via bbc.co.uk

Let's not have any illusions here. It's hard to think that this represents anything more than the form of democracy. The substance is going to have a much harder time asserting itself.

The Greeks might want to brace themselves, because International Finance is gonna open a big-ass can of Shock Doctrine on them. But at least supranational corporatism's inherent incompatibility with popular sovereignty will be revealed.

Αλληλεγγύη.

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