Mass Protests Across Eastern Europe as Economic Conditions Worsen

February 15, 2009

Mass protests over economic conditions have begun across Eastern Europe.  In Lithuania, protests  opposed to a government austerity plan collapsed into violence. The outburst follows similar incidents in Latvia and Bulgaria.
 Police used rubber bullets and tear gas to quell demonstrators in the Lithuanian capital, Vilnius, as economic hardship burst into street-level rage in another European country.

With dwindling budgets forcing unpopular spending cuts and tax hikes in many countries, the global financial crisis is steadily emerging as a political threat to governments. Demonstrations have begun in Lithuania, Latvia, Bulgaria and Iceland.

In Vilnius, Lithuania’s capital, a peaceful protest against a government austerity plan erupted into violence as thousands of demonstrators surged toward the parliament building, hurling eggs and rocks. At least 84 people were arrested and at least 14 injured, including four police officers.

Prime Minister Andrius Kubilius, who just took office last month, stated the following:

“We will only speak to those who unequivocally distance themselves from those who have staged riots, who sow chaos and who encroach upon the constitutional system,” Kubilius said in a statement released to news agencies. The  Prime Minister continued|: “The riot will not scare us.”

Lithuania’s economy is expected to enter a recession this year. The protests were called in response to the government’s attempts to curb the financial crisis, including widely unpopular tax hikes. “Thieves! Thieves!” some protesters shouted at the government Friday.

“The government has long neglected the social needs of the people, pensioners and others,” Algirdas Paleckis, leader of the Frontas radical left party, told Reuters news agency.

Lithuania’s northern neighbor on the Baltic Sea coast, is  Latvia. The largest party in its ruling coalition on Friday called for early parliamentary elections after a massive demonstration roiled the capital this week.

Once boasting the European Union’s fastest-growing economy, Latvia was forced to seek loans in 2008 from the EU and the International Monetary Fund (IMF). The government has dramatically cut social spending.

Festering anger boiled over in the capital, Riga, on Tuesday as a protest demanding early elections led to riots and looting. Youths dug cobblestones from the streets, smashed storefronts and destroyed police vehicles, news agencies reported. More than 100 people were detained in the worst violence to shake Latvia since the country gained its independence in the Soviet collapse.

Protesters also rioted outside Bulgaria’s parliament building this week as citizens of the EU’s poorest country railed against their government.



Broad Political Agreement on retention of key aspects of the National Development Plan

February 12, 2009


On February 6th,  Fine Gael leader Enda Kenny called on the Government to scrap the National Development Plan (NDP), claiming it is filled with “unachievable” political targets.

Speaking the following Saturday 7th February, on RTE, the Taoiseach Brian Cowan, stated that the NDP will not go ahead in all its facets, as it was based on a forecast of 4% economic growth annually. Mr Cowen said that targetted expenditure would see significant investment in higher education and research & development.

He said it would also target efforts to bring business ideas to fruition in order to develop what he called a “smart economy”, and so generate jobs.

Mr Cowen also said that the global economic crisis had shown that membership of the European Union was critical to Ireland’s fortunes and survival.  Mr Cowen also said that people were concerned at how quickly the change in Ireland’s economic fortunes had occurred. He said that in some cases things would get worse before they got better, but stated that Ireland could come through this if the ‘right decisions’ are made now.

In immediate response, on the same day, the Fine Gael Leader Enda Kenny stated that he welcomed the Taoiseach’s admission that there may have to be alternations to the National Development Plan.  Enda Kenny said that the focus of the plan must turn to labour intensive infrastruture projects.

It is unclear exactly what is meant by “labour intensive projects,” but it seems clear that the roads programme is intended to continue without pause or restraint. Just why Ireland needs an enormous roads network radiating out from Dublin instead of connecting existing cities (and their adjacent ports) by an interconnected roads and rail network remains unclear.



Anglo-Irish Nationalised: No decision about AIB & BOI

January 27, 2009


On January 15th, the Government took nationalised commercial lender Anglo Irish Bank. The move means the bank will now be fully owned by the taxpayer. The unprecedented decision was seen as a last-ditch attempt to rescue Anglo after a substantial number of depositors pulled their money out of it in the past number of months.

The Government will put an assessor into Anglo to establish what value, if any, can be put on the institution. There are no guarantees that existing shareholders in Anglo will receive anything following the assessment. The sudden move came after it emerged last month that the bank had concealed loans to its former chairman Sean FitzPatrick over a period of eight years. His loans stood at €87m last September.

The Government said the move, which marks the first time the Government has owned a bank since 2001, was taken to ensure the continued viability of Anglo-Irish Bank which has loans of about €100 billion on its balance sheet. It also added that a new board would be put in place apart from the newly appointed chairman Donal O’Connor.

“The funding position of the bank has weakened and unacceptable practices that took place within it have caused serious reputational damage to the bank at a time when overall market sentiment towards it was negative,” Mr Lenihan said.

He added that a planned €1.5bn recapitalisation of Anglo, which had been previously on the cards, was not now appropriate although he added that he remains fully committed to the funding proposals for Allied Irish Bank and Bank of Ireland.

Mr Lenihan would not be drawn on the cost of the move but he said it erased the need for the €440bn bank guarantee scheme to be utilised in the case of Anglo Irish Bank.

Anglo-Irish Bank, whose shares slumped to a year low of 12c just before Christmas from highs of €11, has been dogged by bad news for months and the institution, which is a commercial lender, has been long considered the most exposed to the troubled property sector.

Shares in other Irish financial institutions were hit hard amid worries the nationalization could indicate funding is becoming harder for the whole sector. The declines also came after ratings agency Fitch cut its ratings on the main Irish banks on the 15th January 2009.


On January 16th, shares in both Bank of Ireland were:


* UK:BKIR:  IRE:  3.38, +1.08,+47.0% dropped 11.1% and Allied Irish Banks (AIB):



* 2.65, +0.57, +27.4%)(UK:ALBK: slumped 22.7%.


It has been indicated since the bank guarantee that Bank of Ireland and Allied Irish Banks are also in line to receive capital injections of €2 billion




Mass Strikes in France

January 27, 2009

Nicolas Sarkozy now faces the first mass-protests over his handling of the financial crisis as unions prepare to paralyse France in a general strike uniting train-drivers, air traffic controllers, journalists, bank staff and even ski-lift operators.

Black Thursday” is the first general strike since the French president’s election in 2007. All the leading unions have joined forces to protest that the government’s stimulus plans should focus less on companies and more on workers’ job-protection and purchasing power.

The protests reflect a mood of social unrest that has been building for months. Unemployment had dropped in the first half of last year but it is now spiralling, particularly among the young, and is forecast to reach 10% in 2010. The recession is predicted to be worse than thought while flagging exports and consumer sales have greatly affected the manufacturing sector.

The strike will unite private and public sector workers from schools, hospitals national TV and radio to postal services, bank clerks and supermarket employees. High school pupils, university lecturers, lawyers and magistrates will also protest Sarkozy’s reforms and planned job cuts. Despite the predicted chaos, one poll found that 70% of French people either support or sympathise with the strikes.



Irish Whitefish Fleet to be downsized as EU Fishing Conference takes place in Luxembourg

June 23, 2008

The fuel crisis facing fishermen across Europe will dominate the agenda when EU fisheries ministers meet in Luxembourg later today.

Fisheries Commissioner Joe Borg is expected to outline details of a financial package agreed by the EC to help fishermen struggling due to these costs.

Ireland’s Agriculture Minister, Brendan Smith, has also promised to also seek new regulations to prevent the import of illegal and unregulated fish into the EU market.

Meanwhile, Junior Agriculture Minister Tony Killeen has approved grant aid of more than €41m for the decommissioning of a further 46 Irish fishing vessels.

Approved applicants will have until July 18th to accept the offer, which is the latest stage in the Government’s Whitefish Decommissioning Scheme.

Fishermen lodged 69 applications before the April deadline for the first phase of the scheme — with 46 of the vessels deemed to have met the criteria.

It had been anticipated as many as 75 of the older and larger whitefish vessels could be removed from the waters under the plan to make the struggling fishing sector more viable.

Under the scheme, some 46 boats over 18 metres in length and with a combined capacity of 7,590 gross tonnes — an average size of 165 gross tonnes a vessel — will be exited from the whitefish fleet over the coming weeks.

According to the Department of Agriculture and Fisheries, these vessels represent 68% of the overall removal target of 11,140 gross tonnes set for the schemes. These are in addition to the 27 whitefish boats which were “decommissioned” in 2005-2006.

The Department has given approved applicants until July 18th to accept the offer. If they do so they must surrender their licences by September 12th 2008.

The 2008 scheme, administered by Bord Iascaigh Mhara, was based on a recommendation from the Seafood Industry Strategy Review Group.