Europe and its economic problems: news from Jan. 30, 2009

SUMMARY:

Latvia and Lithuania

Two of the "Baltic tigers" are getting a taste of conflict.

Latvia and Lithuania are experiencing unrest and protest due to perceived corruption among bureaucrats, huge government spending cuts, inflation, and tax hikes.

Add to this the cold temperatures throughout the Balkans and it is easy to see why things have become chaotic.

In Vilnius — capital of Lithuania — thousands of unruly people gathered outside of the parliament buildings chanting phrases such as "thieves, thieves!"

Lithuania decided to institute in market reforms back in 2000 — which was inspired by the International Monetary Fund (IMF),

However, the country remains in suffering due to the economic slump. This can be arguably be pinpointed on the attempt of rapid economic restructuring towards free market principles.

Latvia is managing though, having a $7.5 billion Euro stand-by loan from the IMF.

The government envisioned these measures, which are required to be implemented as part of the "IMF's loan package."

The Legacy of decades of Sachs' "Shock Therapy"

Harvard trained professor Jeffrey Sachs, describes the current state Latvia and Lithuania are experiencing as "shock therapy" or "shock doctrine."

Often, the revamping methods herald a period of economic growth within the country.

According to Michael Werbowski, author of this article, this region has grown so much in the past due to "bubble-like growth...fuelled by easy credit, investment from dubious sources, unbridled speculative and shady property deals."

But the countries are no longer growing because of the collapse of the global banking system.

The economic downturn and current financial state of the region has made many locals upset, causing many to smash in shop windows and public buildings in the Baltic capitals.

OTHER PROTESTS:

Synonymous to the "Baltic Tigers," Bulgaria was hit by its own band of protesters.

Last Thursday doctors, farmers, police officers, and other workers protested against the low pay and growing economic uncertainty.

Many participants in the protests blamed the socialist run government of Bulgaria for its lack of dealing with the global recession domestically.

"New Europe" on the Edge

According to Werbowski, there has been protests try to shape the image of the participants as "anarchists, leftist[s], [and] militants."

However, from his personal experience, he notes that many of the citizens in the Czech Republic who aren't protesting are upset with the situation.

Werbowski proceeded to discuss how many of his friends throughout Europe are fed up with the corrupt actions of the incompetent government leaders.

Britain the sick man of Europe?

And though, at this point it may seem I have discussed all the countries in unrest, there have been reports that England is experiencing problems too.

Citizens have held meetings to challenge the planned enlargement of Heathrow airport.

It is possible that the dissatisfaction is due to U.K. financial struggles.

Normally the government responds to discontentment by using force against people involved in the "meetings."

But because of the global economic mess, any government aggression could cause more citizens to become enraged.

The majority of the people protesting are middle-class.

The EU in state of paralysis

Overall, the European Union is in a state of unease after institutional framework for the union was rejected by Ireland.

Those in opposition are led by the Czech president Vaclav Klaus — an ardent force against any further integration of the 27-member union.

The EU overall seems to be losing its power even though it has expanded its membership to countries like Poland, Slovakia, and Hungary.

For example, the union has been unable to convince Russia to restore gas flows to the bloc. Also, there remains a dispute between Ukraine and Russia.


MY OPINION:

It saddens me to hear of all these people throughout Europe facing so much financial difficulty; it would be great if the United States could help out.

But the reality of the situation is that our country has too many financial and domestic problems to be concerned about.

The fact that Europe along with the U.S. being hit so hard by the recession is terrifying. I am beginning to think that America's days of being a superpower are through.

Hopefully the stimulus package will pass soon to potentially jumpstart our economy, which, in turn should affect Europe's economy positively.

Source:

World Press

Public image domain

Photo: Mantas Indrašius