How Europe is responding to the recession

[Jaga]

www.alternet.org/workplace/124836?page=1

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Greece: "There are many wellsprings of the serial protests rolling across Europe. In Athens, it was students and young people who suddenly mobilized to turn parts of the city into no-go areas. They were sick of the lack of jobs and prospects, the failings of the education system and seized with pessimism over their future.
"This week it was the farmers' turn, rolling their tractors out to block the motorways, main road and border crossings across the Balkans to try to obtain better procurement prices for their produce."

Latvia: "The old Baltic trading city had seen nothing like it since the happy days of kicking out the Russians and overthrowing communism two decades ago. More than 10,000 people converged on the 13th century cathedral to show the Latvian government what they thought of its efforts at containing the economic crisis. The peaceful protest morphed into a late-night rampage as a minority headed for the parliament, battled with riot police and trashed parts of the old city. The following day, there were similar scenes in Vilnius, the Lithuanian capital next door."
France: "Burned-out cars, masked youths, smashed shop windows and more than a million striking workers. The scenes from France are familiar, but not so familiar to President Nicolas Sarkozy, confronting the first big wave of industrial unrest of his time in the Elysée Palace.
"France, meanwhile, is moving into recession, and unemployment is going up. The latest jobless figures were to have been released yesterday, but were held back, apparently for fear of inflaming the protests."

...

Iceland: "Proud of its status as one of the world's most developed, most productive and most equal societies, Iceland is in the throes of what is, by its staid standards, a revolution.
"Riot police in Reykjavik, the coolest of capitals. Building bonfires in front of the world's oldest parliament. The yogurt flying at the free market men who have run the country for decades and brought it to its knees."

Britain (via the Times of London): "Wildcat strikes flared at more than 19 sites across the country in response to claims that British tradesmen were being barred from construction jobs by contractors using cheaper foreign workers."
Russia (via Al-Jazeera): "Thousands of protesters have rallied across Russia to criticize the government's economic policies and its response to the global financial crisis.
"Russian police forcefully broke up many of the anti-government protests on Saturday, arresting dozens of demonstrators."

...

[karl]

Gollies, I was not aware the whole world is rioting! But then, for why not?
But then rioters need equipment and supplies, for continuation of their activities. With this, creates an opportunity of commerce. It then is to the buisnessworld to serve this new found opportunity.

And as so goes, to the world of business smart enough to recognize an opportunity, so goes the spoils of return.

Yes, it is obvious of a recession, and Europe is not so different. For the economy may only climb so quickly and so far, then it must reach a point in time to become unstable and then drop. For this is what we are observing at present. And it would appear the rate of adjustment has not reached that level of adjustment as of present.

For it will be the weak businesses {service industry and manufacturing} that will fail in the first. Those of employees will in turn be released upon the labour market to seek opportunities else where. If the safety net that society places out with un-employment insurance and related assistance, these people hopefully will re-adjust into another business.

In as much as the Auto manufacturing, this is a direct relationship between inventories standing, and what is being consumed at the market level. If the public is not purchasing, then production must slow until standing inventories have caught up to demand.

For the most production expense {other then upgrade of production equipment and R and D} is the cost of steel and labour. For standing idle of labour, is a cost drain that is not sustainable for most any business.

The future is to those with insight and resources to withstand the currant and future slow down of the economy. The weak will fail and drop out, creating more room for the stronger of industry.

The end of the uprising economy must end sooner or later, and now the present is the sooner. It is now.


Karl

[Bob S]

;D ;D Good one Karl LOL. Those rioters will make economies grow by replenishing the supplies they need to carry on their riots; sort of like setting up an Ammo Kiosk in the Gaza Strip. LOL ;D ;D

[Jaga]

The crisis hts not only Europe and the US. It is all over the place. here is info about 20 thousands workers in Dubai send home to India:

20,000 Indian workers to be flown out of UAE

Tens of thousands of Indian construction workers are being flown out of the country by their employers on bulk-booked flights in March, it was reported on Sunday.

According to figures gleaned by the Indian Consulate in Dubai from Indian airlines, a total of 20,000 workers from several construction firms are leaving next month.

They are either being sent back home on long leave, or are being redeployed to work on projects in other Gulf countries, such as Qatar, according to a report in UAE daily Emirates Business.

www.arabianbusiness.com/545943-20000-indian-workers-to-be-flown-out-of-uae

[Jaga]

Kia, Kraft Suffer in East Europe as Exports Backfire

Feb. 16 (Bloomberg) -- Eastern Europe’s past is the Iron Curtain. The next year may resemble the Rust Belt.

Companies from Kia Motors Corp. and Kraft Foods Inc. to Bulgarian fertilizer producer Neochim AD are curtailing production or idling workers, throwing economies that tied their fortunes to western capitalism into a tailspin.

“Nobody thought it would be like this,” says Dusan Dvorak, the spokesman for Kia’s two-year-old plant in northeastern Slovakia, which has cut the hours for its 2,700 workers by 25 percent.

As Europe’s contraction engulfs former Soviet-bloc nations, governments are forced to shore up economies built on a now- teetering model: creating an eastern factory floor with cheap labor and land to feed western consumption. Leaders in the Czech Republic, Hungary and Poland are drawing up crisis plans. Angry workers have rioted in Bulgaria and the Baltic states.

“The question is to what extent the current model is sustainable,” says Rafal Kierzenkowski, an economist with the Paris-based Organization for Economic Cooperation and Development. “What we are observing is a kind of backfiring.”

Kia’s factory, which produces the South Korean automaker’s Cee’d model for export to the west, has abandoned its goal of producing 300,000 cars a year by the end of the decade. This year’s target is down to 170,000 cars from 240,000 as demand slumps.

“We don’t want to lay anyone off, but I don’t think anyone expected this,” Dvorak says. “Everybody was counting on high growth.”

Slumping Exports

Slovakia’s exports have slumped 40 percent since reaching a record high in October, dragging output down 16.8 percent in December, the steepest drop since the country’s independence in 1993.

Similar production cutbacks have come in Poland, Hungary and the Czech Republic, whose exports have all fallen more than 30 percent since September. Hungarian industrial production slumped 23.3 percent in December from a year earlier, the most in almost two decades, the nation’s statistics office said today.

Steelmaker ArcelorMittal, the region’s second-biggest employer, is cutting about 950 workers at its Czech operations through buyouts and layoffs.

Baltic Bust

Lithuania and its Baltic neighbors stand to suffer the steepest contractions among eastern European economies.

Lithuania’s central bank said on Feb. 5 that gross domestic product will shrink 4.9 percent this year, compared with an October forecast for GDP to grow 1.2 percent. Swedbank AB, the Baltics’ largest lender, forecasts a contraction of 10 percent this year for Latvia, compared with a 1 percent contraction in a forecast published on Nov. 20.

Among the victims of lower export demand is Lithuanian appliance maker AB Snaige, which said on Jan. 21 it will cut 300 jobs. Estonia’s Norma AS, which makes seatbelts for carmakers including Volvo and Saab, reported that fourth-quarter net income dropped 16 percent on a 15 percent dip in revenue from western Europe. It plans to reduce staff by 12 percent this year.

Less than a year ago, Neochim was reaping the benefits of expanded trade following Bulgaria’s 2007 entry into the European Union. The company reported a 5 percent gain in sales and a 71 percent increase in profit in last year’s first quarter.

Now, “the entire plant is closed,” says spokeswoman Milena Nikolova. The 58-year-old factory, founded by the former communist regime near the rugged border with Turkey, sent all of its 1,500 workers home for an indefinite unpaid furlough last month after demand in western Europe, the destination for most of Bulgaria’s goods, evaporated.

‘Dashed Expectations’

“Expectations had been aroused dramatically since the fall of communism,” Jim Rogers, chairman of Rogers Holdings, said in an interview last week in Singapore, where his investment firm is based. “There are going to be lots more dashed expectations.”

Rogers said he is shunning investment in eastern Europe on concerns the region’s economies will deteriorate further: “Eastern Europe is a mess.”

While executives and policy makers acknowledge slumping exports and output are part of the normal economic cycle that comes with free markets, few were prepared for the severity of the decline in a region that only months ago was projected to keep growing this year.

The International Monetary Fund forecast last month that economies in central and eastern Europe would shrink 0.4 percent this year after growing 3.2 percent in 2008. Only three months earlier, the IMF was expecting the region to grow 2.5 percent in 2009.

Production Cuts

“I don’t know if anybody’s crystal ball is working these days,” says Antonio Francavilla, chief executive officer for General Motors Poland, who was forced to eliminate one of three shifts this year because exports were “hit pretty hard. Where it will all end up, I don’t know.”

With the region now dependent on western Europe to purchase more than two-thirds of its exports, turning back isn’t an option, says Leszek Balcerowicz, a former Polish central banker and finance minister and one of the architects of the region’s trade-oriented economic reforms.

“The trade-opening process was one of the crucial reforms,” Balcerowicz said in a Feb. 10 interview in Warsaw. It is “absolutely fundamental” if “you want to catch up” with western economies.

Neil Shearing, emerging-Europe economist with Capital Economics Ltd. in London, predicts “there will be a push towards diversification” of industries and markets. “But a push toward protectionism, or any sort of self-sufficiency, would have a disastrous impact for these countries,” he says.

Patchwork Solutions

For now, policy makers are cobbling together a patchwork of measures to strengthen government finances and social services.

Czech leaders plan to reveal a package later this month that includes cutting social-security contributions and boosting credit availability for small businesses.

In Poland, the government drew up a $26 billion proposal to increase social-welfare spending and raise bank-guarantee limits and taxes on alcohol and imported cars.

The Lithuanian government responded to Jan. 16 riots in the capital, Vilnius, by opening talks with trade unions and small- business owners about job-protection measures as a way to head off any more violence by out-of-work citizens.

“I think social unrest will spread,” Shearing says. “It’s not difficult to feel some sympathy from the locals’ perspective. They were promised that closer integration with the West would bring an increase in standards of living, and now they have a large and deep recession.”

It’s a bitter realization for Angela Dumitru, a 46-year-old machine operator for Northfield, Illinois-based Kraft, the world’s second-largest foodmaker, which is shuttering its Romanian chocolate factory after about 14 years.

“When Kraft came, they said we are all family,” she said after pushing through a rusted turnstile at the factory. “I guess this family is growing apart.”

To contact the reporters on this story: James M. Gomez in Prague at [e-mail] Lovasz in London at [e-mail]

Last Updated: February 16, 2009 04:56 EST