This morning’s key headlines from GenerationalDynamics.com:
- Police fire teargas at massive anti-austerity riots in Athens Greece
- Eurozone agreement forged in June appears near collapse
- Greece accuses Turkey of ramming in the Aegean Sea
- Japan vows no compromise on Senkaku Islands
- Egyptian Sunni and Shia activists come to blows in tv debate
Police fire teargas at massive anti-austerity riots in Athens Greece
More than 50,000 people marched to Syntagma Square in Athens Greece toprotest the new round of austerity measures that European leaders aredemanding in return for the next bailout. The rally was peaceful atfirst, but as it ended, dozens of black-clad youth threw stones,molotov cocktails and petrol bottles at riot police, who respondedwith several rounds of teargas. Greece has promised to implement anadditional 12 billion euros of new austerity cuts. These includecutting wages, pensions and welfare benefits. With Greece in itsfifth year of recession, analysts say patience is wearing thin leadingto a strong public backlash, with possible violence.Independent (Dublin)
Eurozone agreement forged in June appears near collapse
A much-ballyhooed deal that the eurozone leaders reached at the end ofJune ( “30-Jun-12 World View — Germany and Angela Merkel cave in to Italy and Spain”) has nowcollapsed, throwing the bailout dreams of Spain and Italy into chaos.
I summarized the terms of that deal, and it’s worth takinga moment to review those terms so that you can see the game-playinggoing on:
- Bailout money will be provided from the European Stability Mechanism (ESM), a bailout fund with much of the money coming from Germany.
- In previous bailouts, the money was loaned to the country, along with demands for austerity measures, such as raising the retirement age, privatizing public sector businesses, or cutting the number of public sector workers.
- The big change in the new agreement was that ESM would lend the bailout money to the countries’ banks, rather than to the countries. That way there are no nettlesome austerity requirements, and no increase in the countries’ debts.
- The banks could then use the money to buy the country’s bonds, thus pushing down bond yields (interest rates).
- With interest rates lower, the countries will be able to borrow even more money by selling more bonds.
- Thus, Germany will be indirectly purchasing other countries’ bonds, which Merkel had said would not happen in her lifetime.
This whole agreement was never more than a farce. It was being calleda “growth pact,” but it would not create one iota of growth. It wasstrongly favored by Spain and Italy because it would permit unlimitedprofligate behavior to continue, with expenses largely paid byGermany.
And so on Wednesday, four nations announced a re-interpretation of theJune deal. Germany, Finland, the Netherlands and Austria. They’veadded the following sentence to the deal: “The ESM can take direct responsibility of problemsthat occur under the new supervision, but legacy assets should beunder the responsibility of national authorities.”
In other words, the really huge legacy debts will still remain on thebooks of Spain and Italy. This means that the possibility of defaultremains for Spain and Italy, which means that bond yields (interestrates) will not fall, which means that they will be unable to sellthem as cheaply as they had hoped. Reuters
Greece accuses Turkey of ramming in the Aegean Sea
A Greek coast guard vessel and a Turkish patrol boat collided onWednesday in the eastern Aegean Sea. Greece’s Foreign Ministry isaccusing the Turkey of having brought about the collision on purposein order to challenge Greece’s territorial waters, and therefore theEuropean Union’s territorial waters. Although no one was armed, bothsides are said to have armed their weapons during the standoff.Kathimerini and Greece Foreign Ministry
Japan vows no compromise on Senkaku Islands
After China said on Tuesday that “Fascist” Japan must “abandonillusions” about retaining sovereignty over the Senkaku/Diaoyuislands, on Wednesday, Japan’s Prime Minister Yoshihiko Noda, speakingat the United Nations, made a statement that was equally firm, thoughnot as offensive:
“As for the Senkakus, they are an inherent part of ourterritory in light of history and also under international law.
There are no territorial issues as such. Therefore, there cannotbe any compromise that represents a retreat from thisposition.
I must say clearly to China that there is no excuse for violenceand strongly urge China to protect Japan’s citizens andbusiness.”
The reason that China and Japan are fighting over two insignificant,uninhabitable rocks in the middle of the East China Sea is because theowner of the islands gets with them control over a 200 mile ExclusiveEconomic Zone (EEZ) around the islands, and it’s believed that theregion around the islands contains trillions of dollars in oil and gasdeposits, as well as rich fishing waters. Reuters
Egyptian Sunni and Shia activists come to blows in tv debate
In an Egyptian TV show airing on September 9, the Egyptian Sunni WalidIsmail and Egyptian Shia activist Mahmoud Ahmad Mahmoud come to blows.Here are some excerpts:
Moderator: “Let’s just talk about one more thing,since we have only a few minutes left. Let’s talk about thecitizen and citizenship. Are Egyptian Shi’ites more loyal to Egyptor to Iran? In Lebanon, Hassan Nasrallah said: ‘I’m more loyal toIran than to Lebanon.’ Is it the same case with the Shi’ites inEgypt?”
Shi’ite activist Mahmoud Ahmad Mahmoud: “Things are much simplerthan that. There is this bunch of really stupid people, who arelike a woodworm gnawing away at the Egyptian people. I’m talkingabout the Wahhabis. They are the ones who are responsible foreverything – they are the ones who have driven a wedge betweenMuslims and Copts, and between Muslims and Muslims. Theythemselves are divided into different sects.
born a Shi’ite. My father has a Masters degree in Sunnijurisprudence…”
Sunni activist Walid Ismail: “He renounced you…”
Mahmoud Ahmad Mahmoud: “You are a liar.”
Walid Ismail: “He did, and so did your brothers.”
Mahmoud Ahmad Mahmoud: “You are a liar…”
Walid Ismail: “By God, they all renounced you…”
Mahmoud Ahmad Mahmoud: “Your wife is contacting Shi’ites, offeringto engage them in ‘pleasure marriage.'”
Walid Ismail: “That’s inappropriate…”
Mahmoud Ahmad Mahmoud: “Do you want me to provide recordings?”
Walid Ismail throws something at Mahmoud Ahmad Mahmoud, who jumpsout of his chair
Walid Ismail: “Shame on you! That was below the belt! You’re beinginsolent.”
Moderator: “That’s enough, Walid. [To Mahmoud Ahmad Mahmoud:] Howdare you mention his wife?! Shame on you!”
Mahmoud Ahmad Mahmoud: “I didn’t say anything like that.”
Moderator: “Show some respect! Shame on you!”
Mahmoud Ahmad Mahmoud: “I didn’t say anything like that.”
Moderator: “That’s it, Walid. I apologize… Dear viewers, let’stake a short break. We’ll return shortly.”