Greece is not alone

A mounting debt crisis. Restructuring and repayment. Calls for concessions from creditors. 

It sounds like Greece but as eyes have been watering over the disintegrating economic crisis there, a similar situation has been developing in Puerto Rico.

The Caribbean island is heading along the same path as the Hellenic Republic, with what legislators see as an unserviceable mountain of debt. Like Greece, it needs extra funds to be able to pay off interest, sort out its wage bills and shore up the banks.

But there is one key difference: Greece has been able to go to international institutions – the so-called ‘troika’ of the European Commission, European Central Bank and International Monetary Fund – for loans. As an unincorporated US territory, Puerto Rico cannot just head off looking for global financial aid. And Washington has also been holding firm over approving a federal bailout.

Something has to give. Will DC relent? Will lenders take a hit on the money they are owed?

Greek prime minister Alexis Tsipras has been in combative mood over the last few months, backed up by steely minsters trying to play hardball against a rising number of missed due dates for debt repayments and increasingly gnarly European and IMF creditors.

Puerto Rico’s governor seems set for a similar face-off as it is unlikely the people who have been lending the US commonwealth money will willingly accept reductions on their repayments. The fight would be over an attempt by Alejandro Garcia Padilla to restructure the island’s $73bn debt that could see creditors ending up repaid less than they are owed.

There are other similarities. The two cases suffer from being out on the fringe, geographically and politically. Greece has been characterised negatively as a work-shy Mediterranean siesta state, that needs a cultural shift to organise its economy, a political shift to end austerity, and pan-European support and agreement to help it remain in the eurozone.

Puerto Rico is also a margin nation. It is not a sovereign state, but nor does it have full US statehood. On the international scene it sends a team to the Olympic Games but does not send an ambassador to the United Nations.

Greece has been setting unwanted records recently, joining the three dubiously managed countries of Somalia, Sudan and Zimbabwe in still having outstanding debts to the International Monetary Fund.

Puerto Rico cannot become a member of that particular basement club but it has a pretty parlous economic state of affairs. It seems unlikely to be able to declare bankruptcy or deal with its debts in a way that pleases all sides. San Juan might have to hope for a bailout from above, and if that sounds familiar, it is because that is how the whole Greek crisis began – an island nation seeing the tides of debt lapping at the feet of its people.

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Building the foundations

Domestic success for the BRICS countries backs up their global posturing

Following on from a recent update post about where Brazil, Russia, India, China and South Africa are on the world stage at the moment, (see ‘A fortress made of BRICS‘– 08/06/11), it is worth taking a moment to look at the foundations of their international acclaim.

This week, the Brazilian Department of Work and Business released encouraging figures showing that the economy added 252,067 net payroll jobs in May. Despite some financial woes at the start of her presidency, Dilma Rousseff is clearly focused to try to continue the boom at home that her predecessor, Luiz Inacio Lula da Silva, kick-started.

India has become a hotbed for foreign firms basing themselves in the country or outsourcing many of their operations there. This expansion of the boundaries of domestic business, be it through Indian or overseas companies, allows India to move out itself. A report by US congressman Jim McDermott last year showed how Indian firms created nearly 60,000 jobs in the States between 2004-09 in deals worth $26.5 billion.

There is no doubt that a shift in the global circles of dominance is underway. Commentators in the US believe that, despite the lack of credible Republican candidates, Barack Obama may still lose next year’s election because of one main issue: domestic economic problems. The eurozone is also worryingly wobbly. Greece has to match China’s growth just to get itself out of what is fast becoming a deepening hole from which the only exit seems to be through a door marked ‘Drachma this way’. In contrast, as the Chinese deputy bank governor said in March, his country has the ‘market depth, liquidity and safety’ to see the Chinese yuan replace the US dollar as the major world reserve currency.

It is a cycle which allows an non-stop wheel of development for the BRICS countries. Their success at home breeds success abroad and the rising powers feel confident to challenge established countries on the world stage. By ensuring domestic growth, they can back up their international vision with internal achievements.

Friday prayers can wait

Is the European Union stalling over policy towards the Islamic world?

Recent events in Tunisia, Algeria and Egypt have not gone totally unnoticed in Europe but there was a significant delay in releasing official reaction to the unrest which began in December. These events were occurring just across the sea, indeed the Italian island of Pantelleria lies only 45 miles or so from the Tunisian coast. And the EU is the largest trading partner for the Maghreb. Why was there no coherent policy announcement?

European ministers are dedicated at the moment to sorting out the financial crisis and trying to ensure that neither Spain nor Portugal goes the way of Greece and Ireland. Reacting to the downfall of the government in Tunisia raised confusion over how the bloc feels and eventually no clear response was issued. Whether or not to give Turkey a membership card has been relegated from the to-do list.

David Cameron has let it be known that the UK Government will be batting for the Turks but as Conservative Baroness Warsi, the UK’s first female Muslim Cabinet member, will say in a speech on Thursday 20 January, Britain has to get its national attitude towards Muslims right first before it can think about lecturing others on equality.

And this is part of the wider problem – there has never truly been a coherent, union-wide policy on this issue. Take burqas for example: should members be banning them or not? And as this blog noted last month, (‘Snow boots for Islamic fundamentalists’, 31 December 2010′), Islamic terror plots have been on the rise in Scandinavia and earlier this week a Somali man went on trial for the attempted murder of Kurt Westergaard, a cartoonist who published drawings of the Prophet Muhammad with a bomb for a turban. Should members be allowing the publication of such pictures?

Switzerland, surrounded by EU member-states, drew gasps of breath in 2009 when its parliament approved a ban on the building of minarets. There is also rising antipathy in Germany towards Muslims and Turkish inclusion in the EU. The majority of the country’s four million Muslims have Turkish ancestry and president Christian Wulff faced a particularly tough time on a state visit to Turkey last year. The EU talks at length about a common agricultural policy, a common defence policy and a common economic policy and 2011 should be the year when major steps are taken to discussing a common policy to all the issues surrounding the place of Islam in Europe.

Reporting the dead: Part One

The Press Emblem Campaign (PEC) has published its end-of-year report and it does not make easy reading for journalists. This is the first part of a two-part blogpost analysing the data.

In 2010, 105 journalists were killed. Since 2006, 529 have died. The risky countries are not surprising. However, there are different reasons for the dangers faced by reporters and cameramen out on the roads.

There are two main sets of figures the PEC has released: this blogpost will look at this year’s figures and the next blogpost will analyse the global total of journalists’ deaths since 2006.

  • 2010 – Death toll: 105

a) The five most deadly countries in the last year

1 = Mexico and Pakistan 14 dead in both

With more than 3,000 people killed in Ciudad Juarez, a northern border town, this year alone, it is no great shock that the ‘war on drugs’ has claimed journalists’ lives in Mexico. The reporting of drugs deals and violence is often accompanied by death threats and in September the newspaper ‘El Diario de Juarez’ published a frank editorial to the gangs titled ‘What do you want from us?’ and agreed to print what the gangs wanted after one of its photographers was shot dead.

More than 3,000 died in violence in Pakistan last year. Militancy, tribal wars, US drone strikes and the Pakistani armed forces’ battles against Taliban insurgents have contributed to the rising deaths. Journalists covering the militancy have been shot as political, religious and international tensions grow.

3. Honduras 9

Since the 2009 coup, which installed Porfirio Lobo as the new premier, politically-motivated murders have been on the rise. In addition, the contagion of Mexico’s ‘war on drugs’ has spread to the country and that has caused further problems for journalists in the field.

4. Iraq 8

US combat operations ceased in Iraq this year but thousands of troops are still in the country training troops and aiding stabilisation policies. The insurgency has claimed 8 journalists’ lives this year alone.

5. The Philippines 6

Religious conflict in the mainly-Muslim south and the ferocious and deadly politics, where ethnicity, party allegiances, family ties and religion meet in a lethal mix, have created an unstable environment in which to report.

b) The deadliest nations in the rest of the world

Africa (14): Nigeria 4, Somalia 3, Angola 2, Uganda 2, Cameroon 1, DRC 1, Rwanda 1

Asia (16): Indonesia 3, Nepal 3, Afghanistan 2, Thailand 2, India 2, Bangladesh 1, Yemen 1, Israel/Gaza 1, Lebanon 1

Europe (11): Russia 5, Belarus 1, Bulgaria 1, Cyprus 1, Greece 1, Ukraine 1, Turkey 1

Latin America (13): Colombia 4, Brazil 4, Venezuela 2, Argentina 1, Ecuador 1, Guatemala 1

Policing the protests

As this blog noted at the start of October, (see ‘Europeans having to swallow some tough medicine – 09/10/10’) an autumn of strikes and public protests was just beginning in Europe. Italy, the UK and Greece have borne the full force of mass demonstrations and France and Spain have suffered large-scale strikes.

On Wednesday 22 December, more protests went ahead in Rome with demonstrators campaigning against cuts to the education budget. There have been nationwide demonstrations across Italy since November in response to the new education bill.

Students are up in arms, as they have been in Britain.The recent student demonstrations across the Channel were a reaction to the coalition government’s decision to raise the upper-limit of tuition fees which universities can charge from £3,000 to £9,000. Greece has also seen widespread protests; reactions to the economic austerity measures announced by Athens.

But eyebrows have been raised over the way that the police have managed the protests. Tear gas has been used in Greece to disperse the protestors and the UK has employed water cannon before in Northern Ireland. The tactic of ‘kettling’ was controversial. The police have a hard enough job to do already, but over-zealous baton-wielding has sparked a number of inquiries. In Italy there has been fierce parliamentary debate over the idea of preventative arrests of possible trouble-makers.

With Spain and Portugal not entirely economically secure yet, and after a year of intense pressure for the eurozone, internal departments in governments across the continent will have to investigate their chosen methods of dealing with protestors. As education budget cuts, austerity measures, pension reforms and the effects of weak currencies bite, strikes and widespread demonstrations will continue. Many of the campaigners have declared war on their respective governments; the police must be ready and prepared to uphold the peace.