Support the Dominion
Support the Dominion
Today the IMF and Europe agreed to a €130 billion bailout package to Greece.
Greece has been under intense pressure recently. The economic crisis plunged Greece, like many other nations, into tough economic times.
As Greece has maintained consistently high levels of debt over many years, the downturns in their shipping and tourism economies have meant that they have required more and more debt in order to keep paying their bills.
However there has been a catch.
American debt-rating agencies (companies which essentially set out how much it will cost to take out a loan) recently said Greece might not pay back its debts.
Greek Prime-Minster George Papandreou has even stated that Greece is being 'attacked' on purpose.
Speaking in the Guardian he said, "This is an attack on the eurozone by certain other interests, political or financial, and often countries are being used as the weak link, if you like, of the eurozone. We are being targeted, particularly with an ulterior motive or agenda, and of course there is speculation in the world markets."
So few people are lending Greece money. This has made it impossible for Greece to get the loans it needs to keep running the country and pay back the loans it has already taken out.
And the 'shock' of the Greece financial situation is being used to destroy Greece's welfare state in what is being reported as "the most drastic overhaul of a European economy ever attempted."
A proposal by UK Prime Minister Gordon Brown for a global tax on financial transactions to fund bank bailouts has been rejected by Canadian Finance Minister Jim Flaherty, according to the CBC.
"That’s not something that we would want to do. We’re not in the business of raising taxes," said Flaherty.
A a global tax on financial transactions (also known as a Tobin Tax) was first proposed by economist James Tobin as a means of regulating out-of-control speculation in financial markets.
Brown's proposal was also rejected by the US.
Fours days before receiving a second bailout to the tune of $30 Billion, AIG issued a confidential internal memo regarding what could happen if the insurance company failed.
Doomsday scenarios included:
The meltdown of the economy is becoming so common and widespread it has been hard to keep track of everything that is going on. Briefly:
South of the border, thing are looking a little rough for the folks in the halls of power.
As previously reported, both the New York Times and CanWest Global have been facing steep economic challenges recently.
The Times has been thrown a lifeline by Carlos Slim Helu, the Mexican Communications Billionaire who's loaning them $250 million to help them cope with the $l.1 billion in debts they already have.
Things however, seem to have gotten a whole lot worse for CanWest. David Beers, editor-in-chief at the Tyee, managed to get an internal memo from CanWest about 'cost containment'.
It's seems everything is being cut at the chain including:
A freeze on all hiring,
A freeze on salaries,
A freeze on meals, catering and entertainment expenses,
Ceasing engagements with external consultants,
A freeze on conference/seminar attendance,
Equipment expense and capital purchase delays,
Limiting the use of mobile devices by 20-25%,
Reducing energy usage.
It seems the New York Times could no longer be in circulation as soon as May. According to The Atlantic:
Earnings reports released by the New York Times Company in October indicate that drastic measures will have to be taken over the next five months or the paper will default on some $400 million in debt. With more than $1billion in debt already on the books, only $46million in cash reserves as of October, and no clear way to tap into the capital markets (the company’s debt was recently reduced to junk status), the paper’s future doesn’t look good.
Things are not much better for Canwest, which Jen & Fitz report has a:
High debt load of $3.6 billion, falling ad revenues for Canadian newspapers and broadcasters, and precipitously falling value of Australian TV stations it might try to sell to raise cash.
Could be ripe timing for some other kind of alternative media giant to emerge...
The Rwandan New Times has an interesting article on how global economic problems are affecting African industry.
The continent’s tourism sector, remittances from abroad and Aid flows will dramatically fall as a result of the global crisis.
“African governments will have to reduce their expenditure because they are not going to get as much aid. Governments should prepare themselves by concentrating on domestic growth to sustain the economies because ultimately even the export market will be affected and there will be reduced sales,” said Betty Maina, Executive Director of the Kenya Association of Manufacturers.
Iceland is nearing economic collapse as its second largest bank has been nationalized by the government.
The most free-market of the Nordic countries, it seems as if Iceland has been too heavily involved in the credit markets for the last 15 years. The Guardian reports:
Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country's three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won't send any more money and supplies of foreign currency are running out.
In a telling turn of events, Iceland has had to get a loan from cash-rich Russia to help stave off collapse. The Prime Minister of Iceland has reportedly stated,
"We have been calling for aid from neighboring countries and have been turned down. In times of crisis, one has to look for new friends."
Nouriel Roubini, one of the economists who successfully predicted the subprime crisis years ago, has been allowing full access for the time being to his blog: RGE Monitor.
Roubini, once considered a perma-bear (a perpetual pessamist about the economy) has recently looked at banking crises historically to find the best way to prevent a total economic meltdown.
Surprise, surprise, he found that the US $700 billion plan may not be the best way to go. Instead, he suggests that the way Scandinavian countries (Norway, Sweden, Finland) dealt with previous crises, may be the better method.
To understand how this works on a more understandable level, Planet Money, a spin-off of the award winning radio show This American Life has been putting out some great radio about the credit crisis and solutions.
The Dominion is a monthly paper published by an incipient network of independent journalists in Canada. It aims to provide accurate, critical coverage that is accountable to its readers and the subjects it tackles. Taking its name from Canada's official status as both a colony and a colonial force, the Dominion examines politics, culture and daily life with a view to understanding the exercise of power.