By Miguel Urbano Rodrigues | Global Research

Portugal is bombarded daily with the prime minister’s discourse. It is an unmistakable discourse, unlike any known speech. I cannot find adequate words to describe it.

Hypocritical? Irrational? These are insufficient to express the style, purpose and content of his pompous harangues. It is a mad, neo-fascist discourse, which turns reality on its head and offends people’s intelligence.

In the last few days, tirelessly, Prime Minister Pedro Passos has traveled the country to glorify his administration. The central theme of these harangues is a justification of what his government has been doing.

He calls attention to the people’s gratitude. He has no doubts about the approval of the Portuguese for his policy (a word he uses and abuses to the point of perversion) that imposes “sacrifices” on them. He knows that he demanded much of them, but what comforts him is the certainty that they accept the harsh laws and decrees designed to satisfy the “greater interests of the nation.”

He feels proud of the wise measures taken by his ministerial team that convey an unprecedented but humanistic concept of solidarity, misinterpreted by people who refuse to understand that reducing wages will in the end bring about an indirect sort of solidarity.

He thinks of himself now as a revolutionary reformer and that history will judge his strategy as one that brought justice.

What pains him is the total lack of understanding among the opposition parties, those incapable of realizing that his government is ensuring the welfare state, combating unemployment, demanding much from the powerful, protecting the poorest – this opposition is so blind they fail to see the growth of the economy and the admiration the major powers of the European Community and the IMF for the results of his diligence in fulfilling the demands of the “memorandum” signed with the troika.

The judgment of the Constitutional Court, which ruled that three measures enforced in the state budget were unconstitutional, aroused the indignation of the prime minister, his government and its parliamentary majority.

Passos and his people did not limit themselves this time to expressing disagreement with the decisions of that sovereign body. They unleashed an unprecedented campaign against the court, with an insulting tone.

The Prime Minister set the tone by questioning the competence of the constitutional judges, suggesting basic changes in the appointment process.

The arrogant letter to the president of the Constitutional Court demanding a clarification of the judgment is a shameful document that accurately reflects the level of political degradation to which the scum ensconced in power has sunk.

The remarks pronounced in Parliament by the representatives of the Social Democratic Party (PSD) and the CDS in an attempt to justify the submission of this defiant letter illuminate the incompatibility of the menagerie of Passos & Portas* with the universal principles of constitutional law.

The gesture should have raised widespread repudiation by the media. But it did not.

Authoritative TV channels and newspapers promoted debates and roundtables in which many commentators – spokespeople for the ideology of the ruling class — took the opportunity to criticize the Constitutional Court.

Some did not even hesitate to express understanding for the insane speech of the prime minister, who is the defender of the interests of big business, ally of imperialism and enemy of the workers.

The response of the victims of the brutal tax policy, of the unemployed, of the retired workers whose pensions were stolen, will be given in factories, schools, in the service industries and in all workplaces.

The people, as the subject of history, will intensify the fight against a government whose policy, in a different context, reminds us increasingly of Salazar. It falls to the CGTP union confederation and the Communists to give leadership to this patriotic struggle.


Crowds take to the streets in response to the government’s planned cuts of pensions and salaries.

Thousands of Portugese took the streets of Portugal’s two most populated cities to demonstrate against planned cuts of pensions and salaries.

Saturday’s demonstrations are a response to the government’s decision to extend austerity measures in the 2014 budget.

In Lisbon, hundreds of buses slowly crossed the April 25th bridge in a protest organised by Portugal’s main labor group, the General Confederation of Portuguese Workers. In the northern city of Porto, thousands gathered in the main square shouting anti-austerity slogans.

Portugal, currently engaged in an international aid programme, is focusing next year’s fiscal efforts on spending cuts, reducing state pensions and cutting public workers’ wages.

Unemployed teacher Sofia took part in the protest to ask for government resignation.

“I’m here to fight for more work and better wages and against this government’s austerity measures, so I want them to leave together with the Troika,” Sofia said referring to the trio of European Commission, International Monetary Fund and European Central Bank in charge of handling bailouts of distressed euro zone countries.

The budget includes wage cuts for public sector workers ranging from 2.5 percent to 12 percent on monthly salaries of over 600 euros. Pension cuts should bring savings of 728 million euros.

“I am a retired civil servant and I’m suffering from the cuts. I worked and studied to earn more than 2,500 euros without any government help and now they are cutting my pension,” pensioner Maria Barreto said.

The country’s 78-billion-euro bailout formally ends in mid-2014 when Portugal should return to financing itself normally in bond markets, which it stopped doing in 2011 when its debt crisis first hit.

Seeking a better future Ricardo Pereira travelled from Torres Novas to Lisbon: “I’m here to fight for a better future for me and for the next generation and against this government’s austerity measures.”

The budget aims to slash the budget deficit to 4 percent of GDP next year from 5.9 percent in 2013. It may still face challenges from the Constitutional Court that has previously rejected some government austerity measures.



by Dennis Small

Other than gas ovens, one of the most efficient ways of destroying a nation and killing off its population is to induce skyrocketing youth unemployment. It destroys the future potential of the productive economy. It leads to soaring drug addiction, worsening health conditions, and explosive criminal activity, including epidemics of deranged homicides/suicides. It is the perfect circumstance for terrorist recruitment. And above all, it leads to the rampant cultural pessimism which has always been fascism’s breeding ground, and the underpinning of any successful depopulation policy — such as that promoted by the British Empire from Thomas Malthus, to Bertrand Russell, to Prince Philip and Queen Elizabeth themselves.

In Europe today, youth unemployment (ages 16-24) has surpassed 50% of the labor force in both Greece and Spain — two of the leading victims of the policies dictated by the infamous Troika (the European Central Bank, the European Commission, and the International Monetary Fund). In fact, the youth unemployment rate has overall more than doubled in Cyprus and the five so-called PIIGS countries (Portugal, Ireland, Italy, Greece, and Spain) between 2008 and 2012. For example, Greece’s youth unemployment had more than doubled, from 22.1% in 2008 to 55.3% at the end of 2012. Spain’s had also doubled, from 24.6% in 2008 to 53.2% at the end of 2012 (and further soared to 57% in the first quarter of 2013). Ireland’s had more than doubled, from 13.3% to 30.4%. This is the period of the British Empire’s “solution” to the 2008 financial meltdown: hyperinflationary bailouts for their banks, coupled with fascist austerity for the population, as enforced by puppets such as Barack Obama, Tony Blair, and the like.

Maps comparing European youth unemployment in 2008 and 2012, present an even more sensuous picture.
In 2008, “only” six European nations had youth unemployment rates of 20% or greater: Spain, Greece, Croatia, Italy, Portugal, and Sweden. None was higher than 25%. But by the end of 2012, the number of nations with youth unemployment above 20% had tripled, to 19. Of these, four had youth unemployment rates between 30-40% (Portugal, Italy, Slovakia, Ireland); and three exceeded 40% youth workforce unemployed (Greece, Spain, Croatia).

The tide of economic fascism is clearly, once again, sweeping Europe.

But the United States has fared no better. America on Barack Obama’s watch has seen the real youth unemployment rate soar by nearly 50%, from an estimated 23.8% in 2008, to 34.6% in the first quarter of 2013. (We have calculated real unemployment by taking notoriously- understated official unemployment, plus forced-to-work-parttime, plus discouraged/left-the-workforce).
Back in 2008, there were “only” three states with real youth unemployment rates of 30% or higher: Michigan (34%), Rhode Island (31%), and California (30%). But by the first quarter of 2013, the tide of despair had spread to 60% of the states of the union: 30 states plus the District of Columbia had real youth unemployment rates of 30% or higher. Of these, five exceed 40% (Nevada 42.6%; Illinois 41.7%, Mississippi 41.2%, California 41.2%, and North Carolina 40.4%); and another 11 have rates in the range of 35-40%.

Should we not do as Franklin Roosevelt did, and stop the tide of fascism with Glass-Steagall and related economic policy measures… before it is too late?


by Reggie Middleton | ZeroHedge

This is likely to be the biggest financial story of the month, a story that’s bigger than Cyprus, and a story that you’re not going to see in American mainstream media – not by a long shot. Let’s take this from the top, for BoomBustBloggers were warned weeks in advanced. On Wednesday, 27 March 2013 I published EU Bank Depositors: Your Mattress Is Starting To Look Awfully Attractive – Bank Risk, Reward & Compensation wherein I explained that the situation of extreme loss faced by Cyprus bank depositors, savers and bondholders will not be a unique story – as excerpted:

The deposit accounts that you were getting just a few hundred basis points for have developed:

  1. Liquidity risks: The capital controls that weren’t supposed to happen (see No Capital Controls In The EMU? Liar Liar Pants On Fire), happened! See Cyprus Banks Set To Reopen, To Serve As Glorified ATMs With A €300 Cash Withdrawal Limit
  2. Credit risks: Your so-called safe investments will suffer up to a 40% haircut! Mainstream Media Says Cyprus Salvaged By EU Deal, I Say Cyprus Is Sacrificed By Said Deal – Thrown Into Depression
  3. and Market risks: Demand depositors have forcibly purchased highly speculative synthetic call options with their haircuts that are unlikely to compensate anyone for anything!

The little app below calculates what return you should expect to receive to take on the risk of a potential 40% haircut. The second tab offers what recent Cyprus bank rates were. Do you see a disparity???

It’s not just Cyprus either. The problems that plagued Cyprus banks plague banks in much larger nations within, and around the EU. From Ovebanked, Underfunded, and Overly Optimistic: The New Face of Sovereign Europe you see institutions that are literally too big to be handled safely…

The Banks Are Bigger Than Many of the Sovereigns



Now, the “Overbanked” article was posted back in 2010. That’s right, I warned about the two Irish banks listed in the chart above THREE YEARS ago, You’ve had plenty of time to mover your money out! Speaking of those Irish banks, I warned the Irish again a few weeks ago as well – with specificity – in Global Banking Crisis – How & Why YOU Will Get “Cyprus’d” As This Bank Scrambled For Capital!!! Here, I focused on Anglo Irish, already nationalized and being wound down. I warned that there will be unhappy returns, if there would be any, just like Cyprus – as excerpted:

First Off Let’s Make Bank Collapse Real…

To begin with, let’s make this Cyprus thing real, by showing a live example of what happens when to a real small business that had the gall to bank with Laikie Bank, from the Bitcoin forum I excerpt a post that puts things into perspective, re: bank account confiscation:



Later that weekend in the Irish media… As If On Cue, BoomBustBlog Shenanigan Research Gets Real In Ireland

Anglo Irish Bank/IBRC bondholders will actually get some of their money back!

As if on cue, a day after my expose on Anglo Irish Bank and its shenanigans (see Global Banking Crisis – How & Why YOU Will Get “Cyprus’d” As This Bank Scrambled For Capital!!!), The Irish Business Post announces senior bondholders will get wiped out. That’s right, a 100% loss! Zilch! Zero! Nada! Now, that’s investing. That’s getting “Cyprus’d”, plus some!!! From IBRC senior bondholders to be burned



Of course, the story doesn’t end with the bondholders. Exactly as anticipated in the articles mentioned above, and as published in the Irish mainstream media over the weekend…



As you can see, this is actually MUCH WORSE than the deal the Cypriots got. These Irish pensioners are facing a total wipeout – 100% LOSS!!!

If you’re not disenfranchised, yet, hold on… It get’s worse, much worse. The Irish Examiner published this today…

ECB gags State on IBRC liquidation

The ECB has gagged the Government from releasing any information in relation to the liquidation of the former Anglo Irish bank, IBRC. A senior official in the Department of Finance told the Irish Examiner they were under strict instructions from the ECB not to release any details to the public. “What they [ECB] have said from an early stage is that if there is any release, at all, then all negotiations are off. They do not want to discuss this in any forum, other than that of a member state and the ECB council,” he said.  The department has received about 16 freedom of information requests in relation to the IBRC liquidation and is now considering adopting a policy position that would allow it to refuse all applications for the release of information. 

Sinn Féin finance spokesman Pearse Doherty said the decision to liquidate IBRC was one of the biggest ever made by the State and he was concerned certain firms may have used insider information to secure payments. “The minister has refused several requests from me for information pertaining to the weeks and months before the event, specifically concerning whether certain sources in the know used confidential information to fast-track invoices in anticipation of liquidation.

So there you have it. Unless you’ve been hearing a lot about Irish bank collapse lately, it seems if you don’t hear it from Reggie Middleton and BoomBustBlog, you’re probably not going to hear it at all – so says the powers that be.

It’s not just Anglo Irish Bank, either. I’ve warned about several other Irish banks. Here’s another one I feel likely to give Irish savers a nasty surprise…



You see, the banks can get away with this fleecing because the common person doesn’t get a hold of my information and analysis very often, at least not until it’s too late. But…… Guess what happened in the Irish mainstream media over the weekend, in the Irish Sun, the most popular rag on the most popular day….


Subscribers, can download ALL documents supporting shenanigans by these banks (click here to subscribe):



By Reggie Middleton

Since I’m not a securities attorney, let’s get a basic understanding of where I’m basing my allegation – after all, I could definitely be wrong as a layman. From Wikipedia:

Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of securities laws.[1] Offers of risky investment opportunities to unsophisticated investors who are unable to evaluate risk adequately and cannot afford loss of capital is a central problem.[2][3]

Securities fraud can also include outright theft from investors (embezzlement by stockbrokers), stock manipulation, misstatements on a public company’s financial reports, and lying to corporate auditors.

Characteristics of victims and perpetrators

Any investor can become a victim, but persons aged fifty years or older are most often victimized, whether as direct purchasers in securities or indirect purchasers through pension funds. Not only do investors lose but so can creditors, taxing authorities, and employees.

Potential perpetrators of securities fraud within a publicly traded firm include any dishonest official within the company who has access to the payroll or financial reports that can be manipulated to:

    1. overstate assets
    2. overstate revenues
    3. understate costs
    4. understate liabilities

Enron Corporation[27] exemplifies all four tendencies, and its failure demonstrates the extreme dangers of a culture of corruption within a publicly traded corporation. The rarity of such spectacular failures of a corporation from securities fraud attests to the general reliability of most executives and boards of large corporations.

So, with that layman’s understanding of what securities fraud is (along with my emphasis added), let’s move on.

The Bank of Ireland

In the 2008 Annual Accounts (Irish version of Annual Report) of Bank of Ireland (see attached, page 178) it states the bank gave a first floating charge in favor of the Central Bank of Ireland (an arm of the European Central Bank) and the Financial Services Authority of Ireland over the Banks ‘right, title, interest, benefit, present and future, in and to certain segregated securities listed in an Eligible Securities schedule.’

Fact: The BoI 2008 Irish accounts (~annual report) refer to the charges in their Disclosure Section (see attached page from 2008 accounts) where they describe the charge as being over ‘certain segregated securities.’



By Reggie Middleton

US retail investors and financial media tend to be a little… well… US-centric. They tend to ignore a lot of international happenings even though these events can, and often do, have a direct impact on the immediate US financial situation. I have ranted, raved, preached and prognosticated on the interconnectedness, and the inherent risks therein, of the global banking system. From my highly analytical ravings on Bear Stearns (pre-bust Is this the Breaking of the Bear?) to my more free form rants on Lehman (pre-bust Is Lehman really a lemming in disguise?), I think I have proven that being the lone voice in the investment wilderness is not necessarily an indicator of that voice being wrong. See Who is Reggie Middleton? for more on that topic. For now, let’s continue where we left off in “Ireland, You May Very Well Be Bust & I Make No Apologies For What I’m About To Show You” wherein I’m about to clearly demonstrate how contagion easily traipsed through geographic borders from Ireland to the UK to the US, and how this big bank seemingly omitted the evidence of such.

Note to professional and institutional subscribers:  Please download the supporting documents for this report from BoomBustBlog’s subscription archive and depository –  Ulster Bank/RBS Supporting Charge Documents. This file contains several hundred pages of documentation to support the assertions and allegations contained in this report (click here to subscribe).

Ulster Bank Limited
Founded BelfastUnited Kingdom of Great Britain and Ireland (1836) as the Ulster Banking Company
Headquarters Dublin, Republic of Ireland
Website for RoI for NI

Ulster Bank Ireland Ltd, has charges registered (see Supporting Charge Documents) with the Irish Companies Registration Office (CRO). The bank gave a first floating charge in favour of the Central Bank of Ireland (an arm of the European Central Bank) and the Financial Services Authority of Ireland encompassing “all its right, title, interest and benefit, present and future, in and to each of the securities of such a class or description as may from time to time be designated by the European Central Bank as eligible for sale and/or purchase, as the case may be, by the Bank under its standard form for the time being of Master Repurchase Agreement, which specification may be made by reference to particular classes of repurchase transactions, and which are included in the schedule of Eligible Securities provided to the Bank from time to time.”.

These charges were registered with the CRO on 15th February 2008, yet there is no mention whatsoever of these charges in the Banks 2008 Annual Accounts (see attached).

Ulster Bank is a 100% Owned Subsidiary of the UK (now taxpayer owned) Institution – The Royal Bank of Scotland (RBS)

This affects US investors as well and this piece should be well read by anyone in the US, UK or Ireland who has lost money investing in RBS/Ulster Bank Group.

rbs share price historyrbs share price history

In 2008, RBS traded ADR’s in the U.S. under the symbol .NYSE:RBS. These ADR’s were traded OTC. This gives the SEC jurisdiction over the companies US securities. 

What happened behind closed doors?

Ulster Bank gave a first floating charge in favor of the Central Bank of Ireland (an arm of the European Central Bank) and the Financial Services Authority of Ireland. U.S. investors would have had to rely on the contents of The Royal Bank of Scotland’s 2008 Annual Accounts which apparently (in my opinion) concealed the existence of the CRO registered charges to the Bank of Ireland.

Ulster Bank RBS charge doc 2 Page 1Ulster Bank RBS charge doc 2 Page 1Ulster Bank RBS charge doc 2 Page 1 copyUlster Bank RBS charge doc 2 Page 1 copyUlster Bank RBS charge doc Page 1Ulster Bank RBS charge doc Page 1Ulster Bank RBS charge Doc to Pfizer International Bank Page 1Ulster Bank RBS charge Doc to Pfizer International Bank Page 1

I also attach charge documents that Ulster Bank entered into with Pfizer International Bank. I cannot find these charges in any disclosures.

If you look at the attached charge documents from Ulster Bank to the Central Bank you will see that the wording is different when compared to the charge documents of the other Irish Banks. It specifically states that a first floating charge was created by the Deed of Floating Charge over Eligible Securities for Liabilities Arising in Target2-Ireland. Having said that I can see no mention of these charges in the Annual Accounts for 2008. On page 72 (28) of the Annual Accounts it gives the only details that I can find of charges registered. It states that A registered charge exists over the assets of the Group, securing all borrowings and other obligations in whatever form that relate to the Group’s use of the Euroclear system, that are outstanding to Morgan Guaranty Brussels and to any other office of Morgan Guaranty Trust Company of New York. This looks as if it could be a double encumbrance of certain assets for the charge to the Central Bank of Ireland features very similar, all-encompassing language for Ulster Bank, which is a fully owned subsidiary of RBS. Although I’m not an international banking attorney, my layman’s eye sees double counting of collateral barring a clause that somehow excludes that covered by the charge over Ulster Bank.

There are also two charge documents for Ulster Bank to Pfizer International Bank. One is for 2009 and the other for 2010. I can see no mention of these in the 2009 and 2010 Annual Accounts.

These charge documents are also not apparent in the recent bank ‘stress testing’ conducted by the European Banking Authority, at least not in the summary results that the EBA have made available, reference RBS Stress Test.

I cannot see how the charge documents are disclosed in the RBS annual accounts (annual report). I see it mentions that the Bank provides collateral in the form of securities in repurchase agreements (footnote page 41). On page 60 it states the Group engages in securitization transactions of its residential loans which are generally transferred to a special purpose entity. This likely relates to the cashflows and not the principal. The charge documents relate to the principal (the actual loan). The registered charge (page 72) exists over the assets of the Group, securing all borrowings and other obligations whatsoever that relate to the Group’s use of the Euroclear system (privately owned by J.P.Morgan,

The charge documents are not covered in the Ulster Bank Annual Accounts or the SEC Group RBS Annual Report. I think that this is a serious misrepresentation of the Accounts/Annual Report. The charge is a floating charge over Secured Obligations (Repo Agreements) which means all present and future liabilities of Ulster Bank (100% owned by RBS). As stated Target2 is only a payment system. The true reasons for the charge increasingly appear to be that of emergency funding, for it also appears as if Ulster Bank was bust. This information should have been included in the SEC Group RBS Annual Report, especially when ADR’s were being traded.

RBS Stress Tests

The afore-linked copy of the RBS Stress Test results do not make it possible to determine whether the charge documents were included in the Stress Test, however it is worth pointing out that the charges do not appear in the annual accounts, so one could assume that they were not included in the stress test. The information is based on data supplied by each bank, via its respective national supervisor. Accuracy of this data is primarily the responsibility of the participating bank and national supervisor. This information has been provided to the EBA in accordance with Article 35 of EU Regulation 1093/2010. The EBA bears no responsibility for errors/discrepancies that may arise in the tables.

A Short Traipse Through Recent History & The Expense That Ultimately Befalls The UK Taxpayer

In 2007 Ireland had significant cross border exposure to UK and US banks through derivatives and property products. As I warned in 2007, the real estate bubble in the the US/UK popped in 2008, sending pathogenic contagion straight through the Irish banking system. The entire banking system started collapsing. On February 15, 2008, Ireland took extraordinary measures (which we will explore in depth a little later on) to mitigate said collapse, measures that many a layperson would deem misleading, if not fraudulent. RBS (Royal Bank of Scotland, one of the largest financial institutions in the countries of Ireland and the UK) was effectively nationalized by the UK and a bad bank was formed to purchase bad debt/products from the Zombie Irish banks in exchange for government bonds, backed by a country that just simply couldn’t afford it.

It was the UK taxpayer that footed the bill for this nationalization – as per Wikipedia:

The bonus payments paid to RBS staff subsequent to the 2008 United Kingdom bank rescue package have led to controversy. Staff bonuses were nearly £1 billion in 2010, even though RBS reported losses of £1.1 billion for 2010. More than 100 senior bank executives were paid in excess of £1 million each in bonuses. Consequently, former CEO Fred Goodwin was stripped of his knighthood in mid-January, and newly appointed CEO Stephen Hester renounced his £1 million bonus after complaints over the bank’s performance.

82 percent of RBS’ shares are now owned by the UK government, which bought RBS stock for £42 billion, representing 50 pence per share. In 2011, the shares were worth 19 pence, representing a taxpayer book loss of £26 billion ($40B). Historically, the RBS stock price went from a high of over 700 pence in early 2007 (taking into account a 3 for 1 stock split that took place later that year) to around 20 pence in late 2011.

… the UK Government (HM Treasury), as of 31 March 2012, holds and manages an 82% stake through UK Financial Investments Limited(UKFI), whose voting rights are limited to 75% in order for the bank to retain its listing on the London Stock Exchange. In addition to its primary share listing on the LSE, the company is also listed on the New York Stock Exchange. The group is based in Edinburgh, Scotland. In 2009, after the financial collapse, it was briefly the world’s largest company by both assets (£1.9 trillion) and liabilities (£1.8 trillion).  In 2012, the UK government announced plans to bid for the rest of the RBS shares that it did not own, as it felt that “while the taxpayer owns over 82pc of the bank following a bailout in 2008, they bear 100pc of the bank’s huge liability risks”.

Part and parcel of the RBS problems was its purchase of Ulster Bank and its exposure to the Irish lending issues!

The app below allows the UK Taxpayer to calculate for themselves exactly what their individual contribution (pro rata) is to the government bailout of RBS.

I’ve taken the liberty of pre-populating the input fields for you, but if you don’t agree with the numbers then by all means insert your own!

Following my warning in February of 2008, Lehman filed bankruptcy in September sending an additional set of contagion shock through Ireland and its banking system, causing Ireland to issues bonds and further indebt itself to save its Zombie banks – again! This time through blanket bank guarantees backed by the full faith of the government.

In September of 2010, a large swath of said government guarantees for the banks were about to expire. Reference this excerpt from the book “Zombie Banks: How Broken Banks and Debtor Nations Are Crippling the Global Economy”:

In September 2010, some of Ireland’s government guarantees for bank debts were about to expire, which put U.S. Treasury officials on edge. If the guarantee wasn’t renewed, the banks would likely default on their bonds, triggering the next event in line: a slew of credit default swap (CDS) contracts on Irish banks’ debt. U.S. Treasury officials had reason to worry – the names backing those contracts were the largest U .S. banks, and they could end up paying billions in case of default. Any more weight on U.S. banks could be a tipping point to collapse. Treasury officials made inquiries to their counterparts at the Irish finance ministry asking about the course of action the country was planning to take and indicated their concern about possible default and its CDS repercussions. A year after having issued blanket guarantees on the banks’ liabilities the Irish government once again didn’t dare let the bank fail. Instead it ended up asking for financial assistance from the European Union (EU) and the International Monetary Fund (IIMF): the country had been pushed to the brink of collapse.



201294 r01o 09CV00300 Page 01201294 r01o 09CV00300 Page 01rbs litigationrbs litigation

Indications of capital shortfalls in the Ulster Bank arrangement:

RBS had paid a total of €9.13 billion to Ulster Bank in capital contributions, in order to safeguard the bank’s capital reserves after writing off billions in impaired loans to Irish borrowers. Feb. 2012

ULSTER BANK’S parent company, Royal Bank of Scotland (RBS), injected as much as £4 billion (€4.7 billion) into Ulster Bank last year, bringing its total investment in its Irish subsidiary to £10 billion (€11.8 billion) since 2008.

If you have believe that the information above actually identifies a gross misrepresentation of fact, omission or outright fraud, simply contact the SEC and let them know that Reggie Middleton suggested they look into it. You can actually use this form to convey my message

Those of you in Ireland who may not want to get “Cyprus’d”, ie. have your bank accounts fund another bailout, should contact the Office of the Director of Corporate Enforcement. Click this link, and tell them Reggie from NYC sent ‘ya. Seriously! The reason why Irish banks haven’t been reformed was because not enough light has been shown on the activities. See a valid attempt at such here. This is the time, for the tea leaves foretell the next bank collapse & bailout will be funded directly out of your bank accounts, reference Ireland, You May Very Well Be Bust & I Make No Apologies For What I’m About To Show You for those who don’t believe me. See Global Banking Crisis – How & Why YOU Will Get “Cyprus’d” for an example of a bank statement of a Cypriot who didn’t take the regulation of his bank seriously!!!

 And for those blokes in the UK, I suggest you drop a note to the Financial Conduct Authority. You can reach them via this link, tell them Reggie Middleton sent you. This was excerpted from their website (emphasis added):

We intervene when firms:

    • treat consumers unfairly
    • behave in ways that risk the integrity of the market

We supervise firms differently depending on their size and the nature of their business. This includes:

    • continuous conduct assessment for large firms and regular assessment for smaller firms
    • monitoring products and other issues to ensure firms play fair and don’t compromise consumer interests
    • responding quickly and decisively to events or problems that threaten the integrity of the industry
    • ensuring firms compensate consumers when necessary

Well, straight from the horse’s mouth. Have at ‘em. They should do the right thing, and EU media should pick up on this as well. You don”t want your 2,000+ pound/euro bank bailout investment to be handled solely by a blogger from NYC, do you?



European Union Coordinated Counter Terrorism Exercise in Dublin

By R. Teichmann | Global Research

The events of 9/11 in the US not only led to the attack on several sovereign nations but the government under George W. Bush established the so called “Homeland Security” and proceeded to implement plans to curtail civil rights. First the “Patriot Act” was passed, then the “Natinal Defence Authrorisation Act”.

The combination of these acts and presidential “Executive Orders” transformed the American society. Where previously at least some basic rights existed a basicly lawless society was created. The territory of the USA has been declared a battleground. Americans can now be killed on US soil without trial or due process. They can be held indefinitely without charge or without ever knowing why. The inalienable rights believed to be guaranteed by the Bill of Rights and the Constitution have proved to be illusions.

All of this was made possible by creating fear among the population through permanent media propaganda about a terrorist threat. Americans and people in the “western world” were and are made to believe that in order to have security and live in peace they have to give up their liberty. They were made to believe that it is not the foreign policy of their own governments that creates terrorism but enemies envying their freedom and prosperity.

Is Europe and Ireland now heading down the same road? In an article published last week the reported (emphasis added):

A NUMBER OF gardaí took part in a European Union Coordinated Counter Terrorism Exercise in Dublin this afternoon.

The operation included a simulated hostage rescue scenario that required sea-based, land-based and airborne elements.

Three other police forces from European jurisdictions attended the exercise at the ESB Generating Station at Pigeon House Road in Dublin 4.


Photo credit: Leon Farrell/ Photocall Ireland; source

The fear-based propaganda did not catch on so much in Europe where large portions of the populace do not believe in the goods of fighting wars for corporate interests in various regions of the world. The desire for peace after the experiences of 2 devastating world wars has been used cleverly to bring about the Europe we see today. The awarding of the Nobel Peace Prize to the EU was an attempt to keep the myth that Europe was build to maintain the peace alive a little longer.

In reality western  Europe, later the EU, was always dominated by the interests of the USA. During the cold war it was the beachhead against the USSR and after its breakdown it became the tool to expand the sphere of US/NATO domination to the nations of eastern Europe which  just won their freedom. Since World War 2 western Europe followed in the foootsteps of the US  in all major questions of war and peace.  In one way or another European nations were involved actively in all recent US/NATO led wars.

While recently Europe is engaging more actively in warfare (Libya, Mali) the economic situation inside the EU is anything but stable and the political situation is becoming more and more unstable as people across the EU begin to question the direction in which the EU is going. The currency system is on life support, unemployment  is generally rising, people across the EU become slowly but surely disillusioned about the “European Project”. It is in those times when external threats come in handy to deflect attention away from the problems and to create fear. This is the context in which the recent EU-wide anti terrorist drill on the 17th and 18th of April took place.  It was led by the Atlas Network.

Planned in 1996 the “Atlas Network”  was officially created in 2001 using the pretext of the 9/11 events. It is a network of specialist units of national police forces of all 27  European member states. It works under the supervision and is financed by the “Directorate General of Home Affairs” of the EU Commission. Neither the EU Commision nor the “Directorate” are democratically elected entities. As these units are answerable not to national goverments but to the “Directorate” they are removed from democratic control and thus morph into kind of “Federal Special Police”. The participation of foreign police units in the excercise in Dublin demonstrates that under this network these units can dispatched everywhere in the EU.

Interestingly it is the Boston Marathon Bombing which provides the pretext for holding the EU wide drills. Here is the Press Release of the EU Commission:

European Commission

Press release

Brussels, 17 April 2013

The ATLAS Network prepares for the biggest anti-terrorism exercise at EU level

EU commissionOn April 17 and 18, 2013, the EU Member States anti-terrorist police forces are uniting as part of the European sponsored ATLAS Network, which carries out the most complex preparation and crises response simulation so far at European level. The simulation involves simultaneous terrorist attacks in 9 different EU Member States (Austria, Belgium, Ireland, Italy, Latvia, Slovakia, Spain, Sweden and Romania).

EU Commissioner for Home Affairs, Cecilia Malmström said: “The fight against terrorism is one of the key challenges to our internal security. Terrorism does not recognise borders and maintaining public security is a complex challenge which requires the coordination of our efforts. I believe that the cooperation between police authorities in Europe is more necessary now than ever and I welcome the exercise of the ATLAS network.”

The ATLAS Network contributes to increasing the proficiency and expertise of special intervention units, by establishing common platforms for training and tactics, sharing equipment, and by establishing close cooperation in trans-border areas of Member States, in turn benefitting the public security.

Past terrorist attacks, carried out both by individuals and groups, both abroad and in Europe have shown great sophistication and coordination by the terrorist groups. The 2008 Mumbai coordinated attacks, the Al Qaeda 2012 attacks on the Algerian gas production plant, as well as the recent Boston marathon bombings highlight the need to increase protection against attacks on both critical infrastructures and other public areas in a national and cross-border context. In order to ensure equal protection for all citizens in the EU, the ATLAS Network exchanges best practices and procedures and undertakes joint training exercises. In order to prepare against terrorist attacks, real life simulations of terrorist acts are carried out by Atlas members of the anti-terrorist units from different Member States.

The 2013 practical exercise, named “Common Challenge” simulates terrorist attacks in 9 different EU Member States in different areas of public life. Simulated terrorist targets include attacks on power plants, schools, and several transport modes (shops, busses and trains). Therefore, the Atlas “Common Challenge 2013”, the largest of exercise of this kind, will help practice and draw lessons on how to further strengthen preparation and crises response. The European Commission’s Directorate-General for Home Affairs is responsible for the coordination of the simulation exercise, which is carried out jointly with the ATLAS Presidency held by the German Police Special units (GSG9).

The ATLAS Network is an example of the pro-active stance against terrorism and underlines the solidarity and cooperation between European Union Member States as set in Article 222 of the Lisbon Treaty, contributing to ensuring the protection of citizens and public security in EU.


The Atlas Network, created in 2001, is an association consisting of special police units of the 27 EU Member States working on countering terrorism and criminal acts. The Network is financed and supported by the European Commission, Directorate General for Home Affairs. The goal of Atlas Network is to improve cooperation among the police units and to enhance skills by training and exchange of best practices.



by Egon von Greyerz
Matterhorn Asset Management AG / Gold Switzerland

Today the UKIP leader and MEP Nigel Farage told the European Parliament that the Troika (European Commission, ECB and IMF) are common criminals stealing money from people’s bank accounts. He warns depositors to get their money out of the Eurozone. He calls the EU the New Communism having Power without Limits.

This is a powerful speech by Farage. Getting the money out of the Eurozone is of course not enough. Investors must get their money out of the banking system worldwide. See my recent piece “Get Your Assets out of the Banks – NOW”.

The situation in the banking system is critical not only in the EU but also in the USA, Japan and China. The headline in the Financial Times today is “Warning on “out of control” China debt”.

In a bankrupt financial system it is critical to preserve wealth by holding gold outside the system.




William F. Jasper
New American
April 24, 2013

U.S. Secretary of State John F. Kerry was in Brussels, Belgium, on April 22 to meet with European Union officials, including European Commission President Manuel Barroso, and to promote the administration’s new push for congressional approval of the Transatlantic Trade and Investment Partnership (TTIP). President Obama is calling upon Congress to provide him with Trade Promotion Authority (TPA), also known as “fast-track” to push the TTIP and the Trans-Pacific Partnership trade pact through Congress with little debate and no amendments.

The New American has been following and reporting on the efforts to conclude a TTIP and TPP for many years, throughout the Clinton and Bush administrations. One of the most important objections — though not the only one — regarding both of these efforts is that throughout the various iterations and proposal it is very apparent that the architects and proponents of the agreements are being thoroughly dishonest. They are publicly packaging and promoting the agreements as “trade agreements” when, in fact, they have been designed as evolving projects that will progressively “integrate” the economies and political systems of the signatory nations into a supranational regime modeled along the lines of the European Union.

Dennis Behreandt’s article  “Transatlantic Two-Step” of May 10, 2008, during President George W. Bush’s administration, is one of the many articles we have published that details the efforts of globalist elites in organizations such as the Council on Foreign Relations, the Transatlantic Policy Network, the Brookings Institution, the Carnegie Endowment for International Peace, and others,  to use the battering ram of trade agreements to smuggle political and economic integration schemes that are aimed at destroying national sovereignty.

Recently, the Council on Foreign Relations (CFR) held a panel discussion at Princeton University entitled “The G20: Prospects and Challenges for Global Governance.” (See video below.) There are many interesting and revealing comments made by the panel participants, but an admission by Eurasia Group President Ian Bremmer is especially noteworthy, in that it publicly confirms what critics of the European Union have been saying for decades, but which CFR globalists like Bremmer have usually denied. Bremmer admits that “there’s real subversion of sovereignty by the EU.”

The CFR panel included:

• Nicolas Berggruen, Chairman of the Berggruen Institute on Governance and coauthor of Intelligent Governance for the 21st Century: A Middle Way between West and East;

• Ian Bremmer, President, Eurasia Group;

• Stewart M. Patrick, Senior Fellow and Director of the International Institutions and Global Governance Program at the Council on Foreign Relations; and

• Anne-Marie Slaughter, Bert G. Kerstetter Professor of Politics and International Affairs at Princeton University

Professor Slaughter served as the presider of the CFR panel discussion. The context of the Bremmer quote was a venting of frustration by the panelists over the “ineffectiveness” of the G20 process. Professor Slaughter and Mr. Berggruen particularly argued that the G20 needed to be given actual powers that would enable it to do more to effect global governance. Unfortunately, from the panelists’ viewpoints, national sovereignty and national interests get in the way of this objective. This is where Mr. Bremmer commented (see the video at 18:30 minutes): “The EU is much more significant. There’s real subversion of sovereignty by the EU that works.”

It would appear that the panelists all favored this type of EU-style of sovereignty-subverting “governance.”

Secretary Kerry, of course, is also a member of the CFR, as is our top trade negotiator Michael Froman, a former Citigroup exec (and bailout beneficiary) who is now Assistant to the President of the United States and Deputy National Security Advisor for International Economic Affairs.

The Transatlantic Trade and Investment Partnership and Trans-Pacific Partnership would effect the same kind of “real subversion of sovereignty.”




By Chris Marsden
24 April 2013

The growing threat to democratic rights internationally was underscored by the fact that, just two days after the Boston bombing, the latter was being cited in a press release of the European Union (EU) Commission to justify a massive continent-wide anti-terrorism operation.

On April 17 and 18, anti-terrorist units of numerous EU member states organised in the ATLAS [Army Tactical Level Advanced Simulation] Network carried out what was described as “the most complex preparation and crises response simulation so far at European level.”

The operation involves simulated and simultaneous terrorist attacks in nine different EU member states—Austria, Belgium, Ireland, Italy, Latvia, Slovakia, Spain, Sweden and Romania.

Justifying the operation, an EU Commission press release said, “The 2008 Mumbai coordinated attacks, the Al Qaeda 2012 attacks on the Algerian gas production plant, as well as the recent Boston marathon bombings highlight the need to increase protection against attacks on both critical infrastructures and other public areas in a national and cross-border context.”

The exercise, code-named “Common Challenge,” simulated attacks on targets including power plants, schools, shops, busses and trains.

EU Counter Terrorism coordinator, Gilles de Kerchove, said of the April 17-18 operation, “This initiative is the largest anti-terrorism simulation exercise to take place in Europe, and is being carried out by the special intervention units of several Member States.

The scale of the operation was indicated by the best reported exercise, which took place in Kolarovo, Slovakia, involving police counter-terrorism units from Hungary, Romania, Slovenia, the Slovak Lynx commando and 5th Special Force Regiment.

The scenario for this particular exercise was inspired by the Beslan school hostage crisis in 2004. According to Military Photos, “The siege was going on for around 3 hours and there were 335 students and teachers taken as hostages. Several of students were psychically traumatised and had to be medically dismissed from [the] exercise.”

The small report, together with an extensive and important collection of photos, can be seen here.

In Norway, more than 100 officers from Norway, Sweden, Finland and Denmark trained to enter one of the Color Line ferries from police boats and helicopters, according to Aftenposten. Two Swedish police helicopters with snipers escorted during the operation, based on the potential hijacking of the ferry with 210 passengers and a crew of 40.

In Ireland, the Gardaí staged a simulated hostage rescue scenario on the River Liffey and at a decommissioned power station in Dublin, comprised of sea-based, land-based and airborne elements.

According to the Irish Independent, “Heavily armed members of the gardai’s special intervention squad, the Emergency Response Unit (ERU), are gearing up for a key role in preventing a cross-Border terrorist attack during the G8 world leaders’ summit in June.

“The ERU will be deployed in patrolling Border routes into Northern Ireland, including the network of waterways that could be used to launch attacks on politicians and top economists.”

The article explained, “The overall scenario, central to all exercises, deals with the threats posed by a fictional terrorist organisation, the Global Liberation and Revenge Army.”

ERU officers “are equipped with Heckler and Koch MP7 machine guns and Sig Sauer semi-automatic pistols and they also have access to Benelli 12-gauge shotguns and Heckler and Koch 33 rifles.”

The ATLAS Network was created in 2001, consisting of special police units of the 27 EU member states. The ATLAS presidency is held by the German Police Special units (GSG9). Germany played the leading role in the formation of ATLAS after September 11, 2001, but the organisation includes two French units, GIGN for airplane raids and RAID for raids on trains and busses, and Britain’s CO19 for raids in subways.

The implications of the type of operations undertaken under the ATLAS framework are indicated by the presence of Britain’s CO19 unit. Also in 2001, Britain launched Operation Kratos, setting a shoot-to-kill policy for the Metropolitan Police when dealing with suspected suicide bombers.

On July 22, 2005, in the aftermath of the July 7 London bombing, innocent Brazilian Jean Charles de Menezes was shot dead by plainclothes officers without warning while he was seated on a train at Stockwell tube station. Officers wrestled him to the ground and fired seven bullets into his head at point blank range.

There is a profound connection between the response of the US police and security services to the Boston bombing and an operation on the scale of that which took place throughout Europe two days later.

For over a decade now, every country has witnessed an assault on democratic rights and the passage of legislation in many cases providing the framework for a police-state regime. What that looks like was shown in Boston as an entire city was placed under lockdown. It was on display in Europe April 17-18 in the form of muscle-flexing by state forces in nine countries.

The choice of Ireland, Italy and Spain, three of the EU countries targeted for savage austerity measures, and impoverished eastern European countries such as Latvia, Slovakia and Romania, indicates the broader considerations animating the ruling class. All legal measures passed in the name of combating terrorism that strengthen the repressive powers of the state are available for use against the rising wave of social and political discontent among millions of workers as a result of the wholesale destruction of jobs and vital welfare provisions now underway.



At least one in four Paris apartments listed by realtor Agence Etoile can’t be sold, even with mortgage rates at record lows, as buyers and sellers fail to agree on price, the company’s director said.

“I have some inventory that’s too expensive and sellers don’t want to lower prices,” Christine Perrissel said in an interview. “Buyers are just much more selective.”

Across France, an economy that’s stalled for two years, joblessness at a 15-year high, property prices near record highs and new taxes have made households reluctant to borrow to buy homes. While Europe’s debt crisis prompted banks to tighten credit, since the start of this year they’ve offered more attractive terms to lure customers and meet lending targets, after borrowing plunged in 2012.

The average home-loan rate fell 0.8 percentage point from a year ago to a record low 3.34 percent in the first two months of the year. Still, new mortgages granted in the 12 months through February slid 27 percent from a year earlier to 98.4 billion euros ($129 billion), according to the Bank of France.

New home sales fell 18 percent in 2012 to 77,900. Existing home sales declined 12 percent to 709,000, with the drop worsening to 22 percent in the year to February. The average housing investment funded with loans represented 3.73 years of the buyer’s income in March, the lowest since January 2010, a study by lender Credit Logement SA and polling firm CSA shows.

Hollande Taxes

The data show that as rates fall, the market still hasn’t fully shaken off the gloom of 2012, when real estate purchases plunged as banks tightened mortgage lending and after former President Nicolas Sarkozy and his successor Francois Hollande, elected in May, added property taxes to cut the country’s deficit.

Hollande, the first Socialist president in France since 1995, has called on those “with the most to show patriotism” in tough times. He’s raised income taxes, those on capital gains from property, as well as wealth and inheritance levies. That prompted Gerard Depardieu, who played Obelix in films about one of France’s most beloved fictional characters, to move to Belgium.

“We’ve had a catastrophic start of the year in January and February with the tax squeeze,” said Marc Julien, founder and chief executive officer of Pierre Invest, a broker specializing in new properties for the Paris region, referring to the property taxes.

Sweetened Terms

March and April saw some improvement as banks and real estate companies offered sweetened terms, he said. Julien, who was at a property trade fair this month, said he’s giving up half his commission to pay for kitchens and waiving transaction fees for each contract signed at the event.

Still, 52 percent of banks said demand for housing loans dropped in March, when some lenders tightened requirements slightly, according to a Bank of France survey published on April 11. Some banks increased margins on the riskiest loans.

“Banks remain cautious in granting loans because of unemployment and the start of a price decline,” said Sandrine Allonier, head of economic studies at online credit broker Meilleurtaux.

French home prices, which surged 163 percent in the past 15 years, have slipped 2.9 percent from a peak in 2011, according to the national statistics office Insee.

Banks are still “competing strongly to lure the best borrowers,” Allonier said, adding that lenders may make it more attractive for such property buyers. “Banks still have room for maneuver and mortgage rates can fall lower,” she said.

More Liquidity

Liquidity at banks was bolstered after the European Central Bank plowed 1 trillion euros into the financial system through cheap three-year loans in December 2011 and February 2012.

The French 10-year government bond yield, a benchmark for home loans, fell to 1.704 percent at 12:57 p.m. in Paris, the lowest since Bloomberg began compiling data on the securities in 1990. The previous record of 1.709 percent was set on April 8, four days after ECB President Mario Draghi said policy makers “stand ready to act” to bolster the region’s flagging economy.

Banks “are making hefty margins at the moment, so they’re asking for more production as funding conditions are even more favorable,” Philippe Taboret, deputy CEO of Cafpi SA, France’s largest mortgage broker, said in an interview. “Each week, we’re hearing ‘we must lend, last year was a bad year.’”

The average term of home loans in March averaged 205 months, about 17 years, up from a seven-year low of 199 months in January, when rules were tightened on tax write-offs for investment properties and interest-free loans for first-time buyers, according to the CSA-Credit Logement study.

Purchasing Power

“Lowering rates and extending durations are ways to provide extra purchasing power,” Cafpi’s Taboret said. Lenders including Caisse d’Epargne and BNP Paribas SA (BNP) “are very willing to lend,” while Societe Generale SA (GLE) is more reticent, he said. Banks are coming up with one-off discount offers, while stopping short of a rate war, he said.

Joelle Rosello, a spokeswoman at Societe Generale, declined to comment. The bank’s lending unit didn’t have a stand at this year’s property fair. Caisse d’Epargne, which is offering 20- year fixed-rate mortgages at 2.95 percent, advertises its policy with a poster asking: “Who says the credit tap is closed?”

Banks are seeking long-term customers through their home loans, Meilleurtaux’s Allonier said. First-time home buyers may make renovations, buy insurance, cars and open up savings accounts, she said.

Best Clients

“The best clients, such as households with annual income over 60,000 euros and 15 percent down payments, can get an extra discount of up to 0.4 points and borrow at 2.7 percent over 20 years, ” Allonier said.

For first-time buyers earning less than 1,800 euros a months, banks “are a bit tougher,” Pierre Invest’s Julien said.

“Banks are now asking for at least a 10 percent down payment, and are unwilling to lend over more than 20 or 25 years, while they used to go over 30 years,” he said.

They’re more willing to lend to safer borrowers, Cafpi’s Taboret said.

“Markets are excluding the most fragile first-time home buyers as subsidies have been trimmed and amid unemployment concerns,” he said. “For good clients, banks won’t hesitate a second to fund even 100 percent of the property value, even over 30 years.”



Police fought running battles with protesters in central Paris last night after the French parliament approved legislation authorising same-sex couples to marry and to adopt children.

The vote, which made France the fourteenth country in the world to legalise gay marriage, was hailed by supporters as an epoch-defining commitment to equality. But it sparked fury among opponents.

As protest marches turned violent, stones, bottles and iron bars rained down on riot police units brought in to parliament.  They replied by firing teargas at the demonstrators.


Wealthy households would face new taxes on property and other assets under German plans to prop up the struggling eurozone.

Senior advisers to Chancellor Angela Merkel are pushing for better-off households to pay towards the cost of any future bail-outs for the weaker members of the single currency.

The proposals, from members of Germany’s council of economic experts, raise the prospect of taxes being imposed on property in a country like Spain if its government was forced to seek a bail-out.

The council, known as the “Five Wise Men”, is often used to test new policies that are later adopted officially.

The German suggestion is the latest sign that Berlin is intent on imposing even tougher rules on weaker southern euro members in exchange for using its economic might to support their finances.

As well as inflaming tensions between Germany and its smaller southern partners, the suggestion could also mean that Britons with holiday homes are dragged deeper into the eurozone crisis.

Around 400,000 Britons live or own homes in the south of Spain, which is suffering a deep recession that is hampering Madrid’s attempts to balance the public finances and stave off a bail-out.

Senior figures in Germany are now arguing that some richer home owners in countries like Spain, Portugal and Greece have so far avoided paying their fair share to rescue the euro, leaving Germany paying too much.

Taxes on property or other assets would mark a significant change in Europe’s approach to funding bail-outs for eurozone members. Until now, the cost of rescue packages for countries like Ireland, Greece and Portugal has fallen largely on people who invest money in either those countries’ bonds or – in the case of Cyprus – bank accounts.

Prof Peter Bofinger, an adviser to Mrs Merkel, said that levies on bank accounts are the wrong way of funding bail-outs, because rich people are able to shift their money out of the country.

“The resourceful rich just move their money to banks in northern Europe and avoid paying,” Prof Bofinger told Der Spiegel, a German magazine.

Instead of taxing cash, European Union governments should in future target property and other, less mobile assets, he said.

“For example, over the next 10 years, the rich should give up a portion of their assets,” Prof Bofinger said. Spain was last year forced to seek international help to prop up its banks. Despite recent signs of progress, some analysts believe the Spanish government itself could also have to seek a bail-out in order to pay its debts.

Spain is suffering from the bursting of a huge property bubble that has left many home owners struggling to sell houses for much less than the price they paid.

A “sovereign rescue” of Spain would dwarf any previous eurozone bail-out package, with Germany again likely to pay the lion’s share.

Mrs Merkel, who seeks re-election later this year, is coming under increasing pressure to drive an even harder bargain in Europe from German voters unhappy at footing the bill for what they see as southern profligacy.

Southern eurozone governments have argued that it is right for Germany to pay more because it is wealthier and because its economy has gained so much from the single currency.

But German economists are now challenging that argument. They say that new figures taking into account property values show that people in many southern countries are actually wealthier than their German counterparts.

Prof Lars Feld, another “wise man”, highlighted a recent study by the European Central Bank, which Germans say show that the people in bailed-out countries are often better-off than those in Germany. Less than half of Germans own their own home, lower than the rate in many southern eurozone members.

The ECB study found that the “median” wealth in Cyprus is €267,000 (£227,600), compared to just €51,000 in Germany.

The median or midpoint level – which strips out the distorting effect of the super-rich – was €183,000 for Spain, €172,000 for Italy, and €102,000 for Greece, and even €75,000 for Portugal.

Average wealth in Cyprus is €671,000, far higher than in the four AAA creditor states: Austria (€265,000), Germany (€195,000), Holland (€170,000), Finland (€161,000).

Prof Feld said the report showed that people in the crisis countries are richer than the Germans. “This shows that Germany has been right to take a tough line of euro rescue loans,” he said.

Alternative für Deutschland, a German eurosceptic party, is putting Mrs Merkel under increasing pressure in her response to the eurozone’s prolonged crisis.

Many members of the new party, which held its first conference on Sunday, want Germany to pull out of the euro and revert to the Deutschmark.


By Paul Mitchell
9 April 2013

Portuguese and European officials are demanding renewed social cuts amid a crisis unleashed by a ruling of Portugal’s constitutional court, declaring European Union (EU)-mandated budget cuts unconstitutional. These cuts were central to the governments’ €78 billion loan agreement with the “troika” (the European Commission, the International Monetary Fund, and the European Central Bank) in 2011.

The Court deemed unconstitutional four of the nine measures in the government’s 2013 budget: the suspension of civil servants’ holiday pay, a levy on unemployment and sickness benefits and cuts to pensions and teachers’ salaries.

The court ruled that these measures discriminated between the public and private sector. The measures account for about €1.3 billion of cuts planned this year, more than 20 per cent of the total, and will increase the budget deficit to about 6.4 percent of GDP, compared to the agreed 5.5 percent target.

The EU may delay the release of the latest tranche of its loan—around €2 billion—which is due following the troika’s recent, seventh review.

On Sunday, the European Commission demanded that Portugal’s Social Democrat—Popular Party (PSD/CDS-PP) government stick to the bailout terms: “Any departure from the programme’s objectives, or their re-negotiation, would in fact neutralise the efforts already made and achieved by Portuguese citizens.”

It demanded that the government “swiftly identify the measures necessary to adapt the 2013 budget in a way that respects the revised fiscal target as requested by the Portuguese Government and supported by the Troika in the 7th review of the programme.”

German Finance Minister Wolfgang Schäuble declared, “Portugal has made lots of progress in the last year to gain access to financial markets. But after this decision it will have to find new measures.”

Portuguese officials are also scrambling to organize new attacks on the working class. After the Court decision, Prime Minister Pedro Passos Coelho said there was a serious risk to Portugal complying with the bailout terms and its return to international bond markets by this September’s deadline. “In general terms, the judgment introduces uncertainty and unpredictability into a process [that is] already extremely demanding,” he complained.

He criticised the Court for making its decision ahead of a meeting of EU finance ministers in Dublin at the end of this week, “for which Portugal has struggled so much in order to get the agreement of the European partners…to extend the maturities of loans to the Republic, and essential to our successful exit in 2014 from the Programme of Economic and Financial Assistance.”

Passos Coelho said the only remaining option was to “intensify the restructuring of the state” and forcing through a “strong containment” of spending in health, education, and state-run companies. He declared, “I shall instruct ministries to implement necessary reductions in functional spending to offset what the court ruling prohibited. It will certainly be a very difficult process.”

Economist Eduardo Catroga, who advised the government on negotiations with the troika, denounced the Court for having a “very narrow conception of the equality principle”. He said the government could not raise taxes because “the country now lives in fiscal exhaustion” and that “additional measures and dialogue with partners and creditors to set a new goal for 2013” would be necessary.

The Portuguese court’s ruling underscores not only the politically criminal nature of the troika’s austerity programme, being faithfully implemented across Europe by political parties of all colorations, but also its anti-democratic and illegal character.

Basic constitutional safeguards and democratic processes have been torn up at the behest of the troika, in order to impose policies which seek to revert the living standards of tens of millions back to those that existed in the 1930s.

Last month’s “bailout” of Cyprus was carried out on the basis of a Memorandum of Understanding”, in which the troika completely disenfranchised the elected government. Decisions can no longer be taken by the Cypriot government without first being approved by the troika.

In Greece, the three party coalition government recently passed legislation ending the right to free public education; guaranteed up to that point in the country’s post-military junta 1975 constitution.

The insistence of the troika, in collaboration with the Passos Coelho regime, that Portugal impose further austerity, following that forced on the population of Cyprus, confirms that the financial aristocracy will stop at nothing to load the burden of the crisis of capitalism onto the backs of the working class.

This is the significance of recent comments of Maria Damanaki, an MP for Greece’s social democratic PASOK party and a representative of the European Commission, who said, “The strategy of the European Commission over the past year and a half or two has been to reduce the labour costs in all European countries in order to improve the competitiveness of European companies over the rivals from Eastern Europe and Asia”.

BNP Paribas analyst Ricardo Santos commented following the Court ruling, “Any negotiations on making Portugal’s adjustment programme more flexible will be extremely tough…The mood in Europe has changed and it will not be easy to gain more concessions.”

António José Seguro, leader of the opposition Socialist Party (PS), which has an eight-point lead in opinion polls, responded by calling for new elections. “This government no longer has any authority or credibility. It has reached the end,” said Seguro.

Expressing the PS’s own subservience to the troika (it negotiated the 2011 austerity bailout shortly before losing power), Seguro sent a letter to them explaining that the PS was proposing the no-confidence vote because the government was “blindly” carrying out cuts. He called for a new “domestic social consensus” around a stimulus package aimed at raising growth, the creation of Eurobonds, and a banking union. Knowing none of these are on the cards, Seguro’s protest amounted to a pleading for a renegotiation of Portugal’s debt.

The unions and the parliamentary pseudo-left parties, Communist Party (PCP) and Left Bloc (BE) are proposing virtually identical policies for renegotiating social cuts with the troika. The secretary general of the PS-aligned General Workers Union (UGT), João Proenca, complained that Passos Coelho “did not mention the need to renegotiate the memorandum of understanding with the ‘troika’…still does not recognize the country’s difficulties…[and] should also ask for a contribution from the troika.”

The leader of the PCP-influenced CGTP (General Confederation of Portuguese Labor) union, Arménio Carlos, merely proposed a few palliatives including taxing financial transactions and a renegotiation of public-private partnerships.

BE coordinator Catarina Martins called for new elections and a “Government of the Left” that would work with the troika at “a renegotiation of the debt and the conditions that will allow the country’s economic growth and overcome the crisis.”

Passos Coelho’s claim, after coming to power in 2011, that two “terrible years” of austerity would lead to economic growth has crashed spectacularly. Portugal is mired a much deeper and longer recession than predicted.

Public debt was 123.6 percent of GDP in 2012, exceeding €200 billion for the first time. Portugal’s global debt (comprising government, household, financial, and non-financial debt) reached 438.6 percent of GDP in 2012, one of the highest in the world.

The economy contracted by 6.4 percent last year, higher than the 5 percent target and is expected to contract 2.3 percent this year. Last week, credit ratings agency Moody’s kept Portugal on a Ba3 rating with a negative outlook. Unemployment hit 17.5 percent in February, the third highest in the eurozone, behind Greece and Spain.


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