European news in brief

Submitted by Matthew on 16 May, 2012 - 8:10

Angela Merkel’s Christian Democratic Union had its vote drop by 8% in provincial elections on 13 May in Germany’s most populous state, Nordrhein-Westfalen.

The SPD (equivalent of the Labour Party) gained 5%, and the SPD/Green coalition in Nordrhein-Westfalen now has a majority where before the election it was a minority government.

The maverick Pirate Party went up from 2% to 8%, and, maybe in part as a result, the leftish party Die Linke went down from 6% to 3%.

This result will increase the pressure on Merkel to modify the EU’s hard-neoliberal policy by adding in some “growth initiatives”.

Spain nationalises bank

On 10 May the Spanish government nationalised Bankia, a conglomerate bank formed in 2010 by merging a large number of smaller banks which had suffered from the crash of property prices, and the going-bad of many property loans, in Spain.

Since the extent by which Spanish government bonds trade at lower prices than bonds of the same face-value issued by Germany or other financially-stronger states has grown to its biggest-ever, bigger even than before the last EU “rescue” measures in late 2011.

Many economists think it likely that Spain will fall into a similar spiral to Greece: harsh cuts will depress the whole economy, thus depress government tax revenues, and thus make the government’s debt problem and lack of creditworthiness even worse.

Add new comment

This website uses cookies, you can find out more and set your preferences here.
By continuing to use this website, you agree to our Privacy Policy and Terms & Conditions.