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ECONOMY

Berliner Zeitung - Germany | 20/10/2014

German train drivers' strike bad for employees

The German train drivers union GDL brought railway transport to a standstill with a strike on the weekend, just when school holidays were either starting or coming to an end in nine German states. Roughly two thirds of long-distance trains and many regional trains were out of operation. The union is hurting all Germany's employees with this action, the left-liberal daily Berliner Zeitung writes: "For years the German unions have more than fulfilled their obligations. Their demands for wage hikes have been as moderate as their strike actions. And the employers appreciated this. Now, however, it seems this conduct between the bargaining partners is at an end. The train drivers' union tried to paralyse the country over the weekend, not mainly to push through justified demands for higher pay and reduced working hours, but because it wants to outdo the competing union EVG. In so doing GDL disregarded German strike law. The right to power struggles between unions is not enshrined in the constitution. This strike has wreaked huge political and social damage - to the detriment of all employees." (20/10/2014)

La Repubblica - Italy | 19/10/2014

Italy entitled to higher deficit

Italy's government presented a so-called stability law on Thursday that foresees tax reductions and investments to the tune of 36 billion euros. Finally Rome is defending itself against Brussels' Stability Pact dictates, economist Tito Boeri applauds in the left-liberal daily La Repubblica: "One of these rules is not written in any contract but silently applied in the evaluation of national budget laws. A country is allowed to exceed the deficit limit for a year if its gross domestic product sinks or growth is four percent below its potential. With a growth prognosis of 0.1 percent for 2015, Italy is 3.9 percent below its growth potential [of four percent]. So because of just one decimal place Italy is having to argue that it faces extraordinary circumstances in order to pass its first expansive budget. Rules are inevitably stringent, and always seem idiotic to those who are forced to obey them." (19/10/2014)

Der Standard - Austria | 20/10/2014

Create new gas supply routes for the EU

According to an announcement by Ukrainian President Petro Poroshenko on Friday, Moscow and Kiev have agreed on a compromise in the gas dispute. This is good news but Europe still needs to reduce its dependence on Russian gas, the left-liberal daily Der Standard comments: "The EU can also breathe a sigh of relief given that several countries depend not just on Russian gas but also on the pipelines that run through Ukraine. However this reprieve is not without its price for Europe, which will effectively have to pay Ukraine's 4.5 billion dollars in debts to Gasprom. ... The only possible conclusion is that which Europe should have arrived at long ago: it must seek alternative gas routes and energy sources. ... But better late than never. So it must boost production in Europe and imports from North Africa or Norway. It must build liquid gas terminals and pull out of fossil energy. This will entail costs, but independence doesn't come for free." (20/10/2014)

The Malta Independent - Malta | 19/10/2014

German austerity dictates boost EU extremists

The austerity policy imposed by Berlin threatens to bring extremist parties to power in several states, as happened under the Weimar Republic, the liberal-conservative daily The Malta Indeendent warns: "Countries in distress, particularly Italy, Spain and Greece but now joined by France, seem to have had enough of dictating by the Merkel clique and are insisting that fiscal flexibility must accompany economic restructuring as otherwise they will never escape the deflationary trap that will ultimately lead to default and collapse. All these countries will, in the next few years, face election campaigns (in Greece it could be as early as next year) and an electorate hurt and poisoned by austerity without a sign of redemption may well make the same decision as the one made by the German electorate in ... 1933." (19/10/2014)

Népszabadság - Hungary | 19/10/2014

Russia can compensate for drop in oil prices

In view of the massive drop in oil prices, many Western media have voiced fears that Russia could end up in big trouble. The left-liberal daily Népszabadság is convinced that the country will have no problem compensating for the loss of revenues: "Thanks to the first six months of the year in which oil prices were high, Russia was able to accrue around 450 billion dollars [353 billion euros] in foreign currency reserves. ... Russia won't have any choice but to start using those reserves, on the one hand to strengthen the rouble and on the other to plug the holes in the budget. But there are other instruments too. It wouldn't be a problem for Russia to cut its military spending next year. ... Moreover the country can take out loans. However this wouldn't be very recommendable in the current situation. ... Russia is by no means in the kind of economic trouble the global press claims it is in." (19/10/2014)

Hospodářské noviny - Czech Republic | 17/10/2014

Europe unprepared for gas conflict

Although Europe could withstand six months without gas supplies from Russia some countries may have a hard time in the winter, EU Commissioner Günther Oettinger admitted on Thursday when presenting the results of a stress test. There has been little progress on the road to an Energy Union, the liberal business paper Hospodářské noviny laments: "What the study presented by Oettinger shows is clear to anyone with a basic understanding of Europe's dependence on Russian gas in percentage terms. Bulgaria, Finland and Estonia are facing a harsh winter. And some EU countries will only weather it by cutting production, with the budgetary repercussions that entails. In addition, the study lacks a paragraph on the Energy Union that's been promised us for years, one which purchases Russian gas at standard prices as [the designated EU Council President] Donald Tusk recently demanded. As Oettinger says: 'We're prepared for the worst possible scenario'. Yes, we are. As poorly prepared as ever, that is." (17/10/2014)

The Washington Post - U.S. | 15/10/2014

Global perspectives: Berlin paying price of unwise austerity policy

The German economy shrunk by 0.2 percent in the first half of the year. The Berlin government's stringent fiscal policy which has caused major damage in Europe's crisis-stricken states is to blame, the liberal daily The Washington Post criticises: "Now, the dummkopf fiscal policies of Merkel's government have begun to threaten even the German economy. Manufacturers need customers, exporters need the nations that import their goods to be solvent, and Germany - the world's most successful exporter - is finally running out of neighbors who can buy what it produces. ... Though Germany has been experiencing unprecedented prosperity, Merkel has also reduced domestic public investment, much to the dismay of German business leaders who complain of decaying roads and rails. Her commitment to austerity at home as well as abroad now adds to the threats to the German economy." (15/10/2014)

ABC - Spain | 16/10/2014

Paris and Rome endanger Eurozone economy

Widespread scepticism about the state of the economy caused share prices to plunge on Wednesday. The Spanish share index Ibex dropped by 3.59 percent. France and Italy in particular must take action and introduce economic reforms to prevent the looming recession in the Eurozone, the conservative daily ABC insists: "Apart from Germany, whose problems are a result of the tensions with Russia, and the chronic instability of Greece, the most worrying factor is the paralysis of France and Italy. Despite all the promises their governments still haven't approved effective measures against the crisis. Both countries - the second and third largest economies in the EU - must finally introduce the reforms and adjustment programmes that have helped countries like Spain to weather the recession and regain their competitiveness. At the same time the ECB must deploy all its economic stimulus resources to avoid the feared third recession." (16/10/2014)

Jornal de Negócios - Portugal | 16/10/2014

Lisbon talking up the budget

Five months after its exit from the bailout programme Portugal's government presented its draft budget for 2015 in parliament on Wednesday. But the draft's expectations that the deficit will drop to 2.7 percent of the GDP while the economy grows by 1.5 percent are overoptimistic election tactics, the liberal business daily Jornal de Negócios comments: "Any slip-up with the 2015 budget will increase the deficit, especially since the government has promised no more tax hikes than those already approved. And the economic growth of 1.5 percent that is supposed to result from the export plus of 4.7 percent seems hardly attainable given that the economies of our trade partners are faltering. Only one thing can explain so much optimism on the part of the government in these risky times: the parliamentary elections." (16/10/2014)

Il Fatto Quotidiano - Italy | 16/10/2014

ECB pushing limits of monetary policy

The European Court of Justice started an investigation on Tuesday into whether the ECB overstepped its powers with its promise of two years ago to buy unlimited numbers of government bonds from crisis states. The so called OMT bond-buying programme has not been availed of so far. All the bank's competences should be scrutinised in the investigation, the left-leaning daily Il Fatto Quotidano demands: "We have grown used to the idea that the ECB can and should do everything to fight the crisis. According to this notion, only the odd objection from Germany can prevent it from decisive intervention. This is not the case. There are certain legal provisions we tend to forget, and which [ECB chief] Mario Draghi has exhausted, if not violated. ... The (legitimate) doubts about the OMT bond-buying programme will increase if the ECB decides to combat deflation through 'quantitative easing'. So the trial in Luxembourg is an effective warning: monetary policy has already reached its limits." (16/10/2014)


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