'Eastern Europe Turned Nasty'

The world economic crisis has hit Eastern Europe full force with it simmering social and political tensions coming to the surface.
In Latvia 10,000 people protested against the rampant corruption and incompetence of those in the highest public offices. The demonstrations have been followed by scenes of violence, with over 100 arrested.

In the Bulgarian capital Sofia, approximately 2,000 demonstrated against the government. Anger with the grand coalition under Prime Minister Sergei Stanishev has been strengthened by the acute gas crisis; this Balkan state is entirely dependent on Russian supplies of gas via Ukraine. When supplies were cut off last week, Bulgarians suffered under the icy temperatures.

Violent protests have broken out in Lithuania. Protests also took place in five other Lithuanian cities, as well as the capital, with more than 20,000 taking part.

In Lithuania anger was directed against the conservative government of Andrius Kubilius. His party, the Homeland Union-Lithuanian Christian Democrats, which governs in a four-party coalition, recently agreed measures to deal with the financial and economic crisis that are entirely at the expense of the general population. The government wants to cut expenditure in the public sector and on social security by 12 to 15 percent, at the same time raising taxes while cutting subsidies for medicine and heating.
Any end to this series of protests is not in sight, and observers are predicting similar protests for Estonia, where the government of Andrus Ansip is rapidly losing support, and also in Romania.

Last week thousands of workers at the Renault subsidiary Dacia in the southern Romanian city of Pitesti demonstrated in defence of their jobs. The workers demanded that the continual production breaks be lifted and that their jobs be guaranteed. Last year, Pitesti had seen strikes for higher wages lasting for weeks. Meanwhile, Dacia management are planning a fourth production break from January 26 for two weeks, due to "dramatically falling" demand. Only on Monday Dacia terminated a one-month interruption of work.

Management are considering sacking a quarter of the workforce due to the collapse of demand in January. This was confirmed in the press by Dacia general manager Francois Fourmont. If the "plan to deal with the consequences of the crisis" does not bear fruit by the spring, he said, some 3,000 to 4,000 of Dacia's 13,000 workers will be dismissed.

Dacia's suppliers have already been hard hit. Cable manufacturer Leoni is closing its plant in Pitesti, one of its four factories in Romania, making about 220 workers there redundant. The management have justified this by saying that production exceeds demand. Workers at the Nokia factory, opened only last year in Klausenburg, are facing dismissals. According to trade union sources, Nokia has already sacked about 600 workers.

Anger here is also being directed ever more directly against the government in Bucharest. Shortly before the end of the year, the government trebled the "eco-tax" on imported used cars, with the aim of protecting the domestic automobile industry. But many drivers protested against the measure by mounting road blockades.

The struggle between the population and the political elite will inevitably increase because of the mounting economic crisis. The governments in Hungary, Bulgaria and Romania have already announced they will implement further austerity measures to stabilize the state finances. All political parties, whether nominally calling themselves socialist or right-wing reformist, are agreed that the burden of the crisis must be placed upon the general population.

Eastern Europe—"source of the fire-storm"
Over the recent past, the economies in the former Eastern bloc countries have experienced a rapid growth, reaching double-digits in some places. Following the "high-altitude flight," however, instead of the "soft landing" experts had hoped for, an abrupt crash is predicted.

After the collapse of the Soviet Union and the Stalinist regimes in Eastern Europe in the early 1990s, local industries were largely shut down or sold off at bargain basement prices to foreign investors. Transnational corporations such as Volkswagen, Renault and Nokia tried to reduce their costs by developing factories in the low-wage countries of Eastern Europe. They were supported by a corrupt, compliant elite that mainly stemmed from the old Stalinist cadres, which provided a crucial element to removing all political obstacles to exploitation.

Economic success depended entirely on the supply of capital from abroad. The sudden drying up of these capital flows as a result of the international financial crisis caused massive problems for the Eastern Europe states. Only international support has enabled a complete collapse to be avoided, so far.

Last year Hungary was saved from bankruptcy by a cash infusion from the IMF. And now Latvia has also been granted a credit package. Poland and Estonia, whose economies face imminent failure, have been assured a total of $400 million. The failure of any Eastern European state would inevitably have dramatic consequences for the entire region.

The situation of Ukraine is particularly precarious. According to some observers, state bankruptcy threatens the country. "Market data points to a payments failure," Die Welt quotes strategist Tom Fallon at La Française des Placements in Paris. The country's currency, the hrywnja, has lost 30 percent of its value in the past three months, recalling the collapse of the Asian currency markets during the Asian crisis of 1997.

The country's indebtedness is crushing. According to financial press agency Bloomberg, Ukraine has debts of $105 billion on the international credit markets, a massive amount for a country whose annual economic output is approximately $140 billion. In December industrial production fell by over 26 percent. The price of the country's most important export product, steel, has fallen by 56 percent since the summer. At the stock market in Kiev, brokers are speculating on a huge shock. The main stock index has lost 85 percent in value in less than a year.

Under the headline, "The Next Source of the Fire-storm is Eastern Europe," Financial Times Deutschland pointed to the consequences for Western Europe. If European Union members such as Hungary or Estonia get into a predicament, FTD writes, this will also affect the state budgets, banks and investors in the other EU countries.

"A dramatic meltdown of wealth," reports FTD, and points to the example of the Griffin Eastern Europe Fund, which has lost 63 percent in value within one year. "The Julius Bär Black Sea Fund, which invests in stock markets around the Black Sea, has even managed to destroy 80 percent of investors' capital in 12 months."

According to the article, Eastern Europe business presently ranks among the greatest risks for Western banks. The banks' commitment in these countries amounts to some $1,500 billion. Financial institutions from Austria, Italy, France, Sweden and Greece are particularly affected. Austrian banks alone have outstanding credits of €224 billion in Eastern Europe, corresponding to 78 percent of Austria's entire economic output.

'The Return of Yosser Hughes'

Remember Boys From the Blackstuff? The television series by Liverpool playwright Alan Bleasdale, set in 1982, at a time of economic recession and anxiety about unemployment, it chronicled the disparate and sometimes dissolute attempts of five former members of a tarmac gang to find work in a city (Liverpool) hit hard by mounting unemployment and depression during the Thatcher years.

Yosser Hughes was the fictional character who comes to mind from Alan Bleasdale's television creation. The character played by Bernard Hill. Yosser a man in his mid thirties with his trade-mark distinctive bushy moustache, he’s always appears unkempt and unshaven. He has a wife Maureen, an aggressive, unloving women frequently berates him and had an affair with another man, the likely father of their three children .

When the boys were swindled out of their savings in Middlesbrough, Yosser reacted particularly badly, showing the first signs of the nervous breakdown that would characterise his behaviour.

Yossers catchphrase was; 'Gissa Job' along with the informed head butt, if you were unfortunate enough to cross his path, this made Yosser an unforgettable persona, but has he returned?

As the economic crisis and world recession deepens, thousands of job losses are being announced in Britain on an almost daily basis. While most of these losses have been in the retail sector, they are now spreading to manufacturing, particularly in the auto industry. Today its being reported that Steel manufacturer Corus is preparing to axe more than 2,500 UK jobs this week.
The cuts, which amount to 10 per cent of the company's UK workforce, are a fresh blow to the manufacturing sector, which has already been hammered by the recession.
NINETY-three jobs are to go at Scunthorpe's Corus steelworks.
In a statement released this morning, Corus has announced proposals to restructure its engineering services and review its support functions in Scunthorpe.
Corus' statement said: "A number of proposed changes have been announced today by Corus across the group to help it reduce costs and survive the unprecedented economic storm.
"At the same time, Corus will continue to improve the efficiency of its plants and align its production levels to anticipated demand.
"The proposals also include plans to keep the Bloom and Billet Mill open in Scunthorpe so it can supply steel to the Thrybergh Bar Mill in Rotherham.
"In Scunthorpe, the restructure of the company's engineering business would lead to the loss of 93 jobs. Sean Lyons, Corus Scunthorpe site director, said: "I know this will be distressing news for those adversely affected by today's restructuring announcement, and we will do everything we can to minimise the impact and to help them find another job.

In this evenings; Scunthorpe Evening Telegraph a steelworker made the following comment: “People seem to forget that this means 93 families badly affected by what is going on here. Most will have children and mortgages and this will have a terrible effect. There is nothing out there on the jobs market except minimum wage jobs through agencies, mainly in call centres. Our thoughts should go out to them all.”

Earlier this month, Nissan announced that it was shedding 1,200 jobs at its plant in Sunderland, northeast England. The firm had already halted production of two of its models at the plant and sent workers home early before Christmas as a result of a massive drop in demand for new cars.

Further losses in the industry were announced on January 14 when Jaguar Land Rover said it was shedding 450 staff. The company employs 15,000 workers in the UK and was bought by Tata from Ford last year in a £1.7 billion deal. The company intends to cut 300 managers and 150 salaried agency staff from its payroll.

Honda has also said that it will stop production at its Swindon plant for two months, between April and May. It had already stated that the plant would be closed during February and March, making it the longest continuous suspension of production at a UK plant. Workers are to get full pay until the end of March, after which salaries are expected to be reduced to 65 percent of present levels.

These measures have immediately hit the main suppliers to the manufacturing plants, where most workers in the motor industry are employed.

Despite the relatively small number of mainly overseas companies that now constitute high-volume car production; they still constitute a sizable proportion of what remains of British manufacturing. According to the autoindustry.co.uk web site, in 2005 there were 210,000 workers directly employed in auto manufacturing in the UK car industry. As a percentage of total manufacturing, this represented 6.5 percent.

The Unite trade union has stated that up to 70,000 jobs are at risk in auto manufacturing and associated supply firms. More than 800,000 workers are employed in the motor trade as a whole.

An article in the Daily Mirror newspaper stated, “Sales of new motors are down 27 percent and falling and the wave of job losses threatens to grow into an unemployment tsunami.”

The first of these job losses in the auto supply industry were announced on the same day as those at Nissan. The diesel engine maker Cummins reported that it had entered into consultation with trade unions regarding a further 130 redundancies at its factory in the town of Darlington, also in the northeast. Cummins is one of the largest employers in Darlington and the latest job losses mean that the workforce has been cut by a third in six months.

The crisis in the auto industry is symptomatic of the general precipitous decline in UK manufacturing that is now under way. This month the Office for National Statistics (ONS) revealed that UK manufacturing output fell in November at its fastest pace since 1981. The ONS figures showed that output fell 7.4 percent from a year earlier—the biggest drop since June 1981. On a monthly basis, the fall was 2.9 percent, the ONS said—the largest since the summer of 2002 and four times that forecast by a group of economists polled by Reuters.

The Sunderland plant was the most productive car operation in Europe. It is Britain’s single biggest carmaker and exporter, producing one in five UK-made cars. In June 2008 Sunderland turned out its 5 millionth car.

Just a year ago some 800 jobs were created at the Sunderland plant in response to growing demand for its new Qashqai model. Until December, sales figures remained steady compared with 2007. In 2008, Nissan sold 66,336 new cars in the UK—only 0.14 percent fewer than in 2007.

Sales for December 2008 then fell drastically by 26.68 percent compared with the same month in 2007. This collapse mirrored the average decline in sales of 21.2 percent across the auto industry.

In an attempt to offset the fall in demand for its vehicles, Nissan imposed a number of measures at its Sunderland plant. It implemented a period of short-time working as well as a number of fully paid non-operation days. The plant closed five days earlier than normal for the Christmas shutdown. Prior to the holiday it also froze production of its Note and Micra models for two weeks, as well as production of its Qashqai model for three consecutive Fridays. Sales of the Qashqai model had been the main factor in the plant achieving its record production year in 2008. Last year the plant produced 32,000 more cars than in 2007.

The decline of Nissan in the UK has its own particular significance. The Nissan plant opened in 1986 to much fanfare following the decimation of the traditional coal and steel industries in the northeast at the hands of the Conservative Party government of Prime Minister Margaret Thatcher. Based on management/employee cooperation, it was described as nothing short of an “economic miracle.”


A January 10 article in the Independent newspaper, entitled “The wheels come off Maggie’s revolution,” commented, “For the Northeast, one of Britain’s worst-hit areas of unemployment, to be chosen as the site of the giant Japanese company’s British car plant was hailed as a modern miracle. It stood for high technology, the latest working practices and a new model of cooperative trade unionism, everything lauded as necessary to the new Britain by the then prime minister Margaret Thatcher who opened the plant in 1986.”

This “new model of cooperative trade unionism” was premised on the basis that the interests of the workforce and the company were identical and that the class struggle was over. On this basis the trade unions—at Nissan and everywhere else—policed the workforce and carried out to the letter the dictates of management. The trade union bureaucracy worked as an arm of management and was critical in implementing speed-up, productivity increases, wage cuts, job losses and every other attack demanded by transnational corporations such as Nissan.

This pro-business agenda is most clearly seen in the response of the trade unions today to the job losses at Nissan. The trade unions immediately agreed to sit down with Nissan in a “consultation period” to implement its programme of “voluntary redundancies.” Ruling out any struggle against the job losses, the unions have instead raised the flag of economic nationalism and called for the government to introduce protectionist measures to defend the car industry and the British economy.

Remaking America

CHINA’S Prime Minister, Wen Jiabao, begins a week-long visit to Europe on Tuesday January 27th. His “trip of confidence” will take in Germany, Spain and Britain and is intended to reassure Europe that China is keen to help in tackling the world’s economic and financial ills. But relations with America are set to sour. Timothy Geithner, America’s incoming treasury secretary, has accused China of “manipulating” its currency to keep Chinese exports cheap.

This is probably what Barack Obama ment when he declared in his inaugural address, “we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.”

"The “U.K. is finished"

Jan. 20 The pound dropped to a record low versus the yen and the weakest level since 2002 against the dollar on concern the government will have to rescue more banks as the economy slips into its worst recession since World War II.

Jim Rogers, chairman of Singapore-based Rogers Holdings, said the “U.K. is finished” and investors should sell the currency. Commonwealth Bank of Australia said there was a high risk of a cut to the country’s credit rating outlook and lowered its pound forecast. Prime Minister Gordon Brown authorized a 100 billion pound ($142 billion) bailout for banks.

“I would urge you to sell any sterling you might have,” said Rogers. “It’s finished. I hate to say it, but I would not put any money in the U.K.” Rogers correctly predicted the start of the commodities rally in 1999.

The pound slid to 127.44 yen, the weakest since at least 1971, as of 2:23 p.m. in Tokyo from 130.71 yen yesterday in London, according to data compiled by Bloomberg. It declined 2 percent to $1.4133, the lowest since March 2002, and last traded at $1.4185. The currency slid 1.1 percent to 91.58 pence per euro.

Rogers said the currency will fall below its record low of $1.0520 reached in February 1985.

Yesterday’s package to stabilize the financial sector comes after October’s 50 billion pound bank recapitalization program, which includes a 250 billion pound bank credit line.

Commonwealth Bank of Australia, the nation’s biggest bank, lowered its forecast for the pound to $1.50 by the end of June from a previous estimate of $1.60.

U.K. debt may now be greater than forecast due to the additional bank bailout plans announced by the government since the publication of the government’s pre-budget report on Nov. 24, wrote Sydney-based Richard Grace, chief currency strategist at Commonwealth Bank in a research report today.

source: Bloomberg Press

The Obama Inauguration

Barack Obama inauguration

So this is the big Day at last it’s arrived;and as I write what seems to me to be
on the other side of the world,the first Black American, the 44th President of the USA is preparing to slide in as his predecessor George W Bush slides out. Up to two million will gather in Washington to witness the spectacle of this event whilst around the world many billions will watch on televisions with images beamed around the planet live, and who knows this event may even be observed in other parts of the sola system and beyond.

President-elect Obama has assembled a cabinet drawn from the upper echelons of American society and the right wing of the Democratic Party. The right-wing character of the Obama nominees have been described by the American media under the approving labels of "centrist," "moderate," and—most of all—"pragmatic." This terminology signifies that the incoming Obama team consists entirely of individuals who pass muster with the corporate financial aristocracy.

The New York Times reported on Monday that Obama has repeatedly discussed his cabinet selections with his defeated Republican opponent, Senator John McCain, and that McCain has told colleagues "that many of these appointments he would have made himself."

The inauguration of Barack Obama has become the occasion for a tidal wave of media-orchestrated delusions and stupidities designed to overwhelm and chloroform public consciousness. The junior senator from Illinois is being compared, and is comparing himself, to everyone from Abraham Lincoln to Franklin Delano Roosevelt to Martin Luther King, Jr. An observer of the wall-to-wall coverage of the events leading up to Obama's swearing in as president might think he was witnessing nothing less than the second coming.

Happy New Year - Is it?

This is my first piece for the blog in 2009, and it’s very hard to think of any really good reasons for wishing readers a Happy New Year albeit somewhat belated; as I ought to, and normally do.
Some how I have a feeling way down deep in side of me, that for many millions around the world, struggle will have a whole new meaning before to long, as the unstable crises of capitalism in our world rips into the aperture of life. Thousands of jobs are going every week as Britain descends into a full-blown recession. The cull is affecting every sector, from banking and retail to engineering and construction.

Unemployment is likely to rise above 3 million in the current recession, Bank of England's labour market expert, David Blanchflower, has warned.

Gaza
No one could have missed the first three weeks of violence and needles bloodshed perpetuated between Hamas in Gaza and the armed forces of Israel. I was viewing video of the last London demonstration on the Stop the War Coalition(STW)website, a strange name for an organisation that has given a platform to speakers who side with the Hamas leaders and their wish to wage a war, a war where the innocence on both sides are the real victims, more than 320 children have thus far been killed, and more than 1,500 wounded, since the onset of the violence. More than half the population of Gaza happen to be innocent children which should be something of great concern.

The morgues of Gaza's hospitals are over-flowing. The bodies in their blood-soaked white shrouds cover the entire floor space of the Shifa hospital morgue it has been reported. Some are intact, most horribly deformed, limbs twisted into unnatural positions, chest cavities exposed, heads blown off, skulls crushed in. Family members claim a brother, husband, father, mother, wife, child. Many of those who wait their turn have lost numerous family members and loved ones.

There is no such thing as a just war, or has there ever been in the whole history of humanity, if anyone has an opposing view then please feel free to comment. Coming back to the London Demonstration, which was sadly marred and blemished with outbreaks of violence between the police and some participants, hardly helps matters, having said that; I’m not at all surprised it occurred, after having attended the demonstration last summer held in Parliament Square when the so called Coalition, organised a Central London protest against the visit of George W Bush to Downing Street, and meeting with Gordon Brown. This was not a big turnout event, probably only a few thousand strong but I sensed confrontation was a brewing in the air, and right enough their indeed was one, with the Respect MP Galloway, in the thick of it! A few days latter The Mail on Sunday and Galloway identified one ‘protester’ as a police ‘agent provocateur’. Since then nothing has been heard with regard to this allegation, probably because this was only an attempt by Galloway to reposition him-self following the split within his Respect Party, which involved other STW leaders. One final point is how can anyone give support to Hamas and at the same time draw comparisons’ (as platform speakers did) with South African apartheid, what replaced it?
The Socialist Party position is this: Peace is always better than war. Because wars are never fought in the interests of ordinary people. And because in wars it is always ordinary people who suffer. So, irrespective of the issues involved or the terms agreed, Socialists can only welcome the ending of any war in any part of the world. Stop the killing is our permanent policy.

As Socialists we re-affirm that all peoples should seek their emancipation, not as members of nations or religions or ethnic groups, but as human beings, as members of the human race. They should unite to abolish the division of the world into so-called nation-states and to establish a World Cooperative Commonwealth of which we will all be free and equal members - citizens of the world, not subjects of nation-states.

Happy New Year?