England's White Dragon

England's White Dragon
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Monday, 24 January 2011

Euro a very clear warning to the British Government?


As the European crisis erodes support for government in Political, the same trouble that shook the Irish and Portuguese governments over the weekend are warning signs for the rest of the European governments and this British government facing voters who are angry about all the cutbacks, said Sir Michael Black-Feather English first minister this Monday.

The turmoil will make it harder for countries to move forward with recovery from the crisis said Sir Michael.

Sir Michael went on to say; "Markets want to see a clear commitment to fiscal tightening, and any political instability or social opposition can delay measures being implemented," many new and old investors are nervous about political uncertainty in debt-stressed Eurozone countries, including Belgium where political squabbling has left the country without a government for the past seven months. (Sir Michael was just recently rejected by the British Government for a position as a Senior Policy Advisers in the British Cabinet Office because of his very hard line views, in keep England safe and out the euro predators claws)

After months of strikes over unpopular austerity measures, the governing Socialist Party's candidate in Portugal's presidential election lost heavily Sunday, collecting just 20 per cent of the vote behind 53 per cent for an incumbent backed by the main opposition Social Democratic Party. Both parties remain committed to budget cutbacks despite public dissatisfaction.

The Irish ex-prime minister, who is blamed for his country's slide toward bankruptcy after a construction bubble burst, suffered a major setback when the Green Party withdrew from his coalition government. The Sunday pull-out is almost certain to move up the date of a national election and Ireland must now pass a critical tax-raising bill before parliament is dissolved this month in order to reassure international investors that Ireland is serious tackling its deficit.

The setbacks in Portugal and Ireland likely herald more protest votes against European governments as austerity plans begin to bite and stretch over years of financial readjustment, Portugal and Ireland have been forced to adopt austerity measures including pay cuts, tax hikes and reduced welfare entitlements as like the British government passing its mistakes back to England’s tax payers as normal.

"It's very obvious we're going to get a lot of backlash against governments because of what's happened," Rossi said in a telephone interview with the London Times. "I think this build-up of anti-austerity votes will continue."

Attention is turning to upcoming state elections in Germany, Europe's paymaster, where the troubled coalition government may need to stump up more rescue money to protect the 17-nation euro currency.

Seven of the country's 16 states hold elections this year, providing a series of tests from February through September.

Polls suggest that Chancellor Angela Merkel's centre-right coalition can expect a rough ride due largely to local issues, annoyance with the government about unpopular decisions such as extending the life of nuclear power stations, and the unpopularity of the junior coalition partner, the Free Democrats.

Still, her government will be eager to avoid annoying voters uneasy about sinking billions more into rescue packages without securing tangible reform in return.

In addition, Germany's highest court is expected to consider in coming months complaints filed against the bailout of Greece, and creation of a euro rescue fund.

"Merkel faces pressure on two sides  from the population, which views with little sympathy what from my point of view is to some extent inevitable, because something has to be done to save the euro and also from potential decisions by the Federal Constitutional Court," said Gerd Langguth to the London Times, a politics professor at the University of Bonn.

France, another other major European power, doesn't face presidential and legislative elections until next year. But President Nicolas Sarkozy is already treading carefully as 61 per cent of French have a negative opinion of him, according to a survey by polling agency BVA.

The most acute political problems are likely to emerge in the bloc's financially weakest members.

Ireland's Fianna Fail party, which has won the most seats in parliament in every election since 1932, is expected to suffer a crushing defeat next month after the country slid to the brink of bankruptcy and, like Greece, needed a bailout last year.

The government in Portugal doesn't face a general election until 2013. But right-of-centre opposition parties have warned they may call for a vote of no-confidence in Parliament if the government's policies fail and it resorts to a bailout. Meanwhile, an austerity package devised to avoid a financial rescue has amplified public grievances.

Luisa Diogo, a 55-year-old Lisbon high-school teacher whose pay has been cut 6 per cent, voiced widely felt rage against perceived government mismanagement.

"The government can't be let off the hook. They're obviously to blame," she said.

In Romania, more than 5,000 retired military officers marched Monday through Bucharest to protest pension cuts, part of government efforts to save money.

Like Greece and Ireland, Portugal is one of the Eurozone’s smaller members and can be rescued without placing unbearable pressure on Europe's bailout fund.

A more worrying problem is Spain, the Eurozone’s fourth-largest economy. Trouble there would considerably increase Europe's financial tensions.

Prime Minister Jose Rodrigo Zapatero's popularity has plunged as Spain's unemployment hit nearly 20 per cent with grim growth prospects, and the opposition centre-right Popular Party is expected to make big gains in regional and municipal elections in May. General elections are scheduled for 2012, but polls show if they were held now that the Popular Party would win.

Greece has some breathing space because George Papandreou's Socialists, elected in 2009, don't face a ballot until October 2013.

"It's one of the governments that actually don’t face elections in the next three years, which is always nice when you are trying to do lots of unpopular things," Fitch Ratings managing director David Riley said.

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