PSI blog on the Financial Crisis

Green shoots of… casino capitalism

The European Trade Union Confederation (ETUC) issued a report warning about the early return of a ‘casino capitalism’ economy. The report, entitled ‘Green shoots….of casino capitalism’, sounds the alarm that financial markets are once again starting to speculate on a new commodity bubble, thereby driving oil and commodity prices upwards and the economy downwards. With the European Central Bank (ECB) expected to provide tomorrow hundreds of billions of euros to European banks on a one year loan, ETUC calls on the ECB and other central banks to put into place the necessary instruments to ensure banks use liquidity for productive investment and not for speculation.
ETUC General Secretary John Monks declared: ‘The positions of ETUC were always clear about that: we have asked for public money to support public investment, not “free lunches” for banks collaborating with speculators.’

Read the ETUC Discussion note 2009/03 on “Green shoots... of casino capitalism” here:  http://www.etuc.org/a/6302

China officials call for displacing dollar, in time

The financial crisis has laid bare defects in the dollar-led global economy and the world should look to displace the U.S. currency, even if that will take many years, Chinese officials said in comments published on Monday.

The push for fundamental, if gradual, reform of the international financial system comes just before the Group of Eight summit in Italy, where China's willingness to question the dollar's role could fuel debate.

The Special Drawing Right (SDR), a unit of account used by the International Monetary Fund, presents a viable alternative to the dollar as a global reserve currency, said Li Ruogu, chairman of the Export-Import Bank of China, a major state-run bank.

More here: http://www.reuters.com/article/ousiv/idUSTRE5650WO20090706?virtualBrandChannel=11569

CARICOM Heads establish regional taskforce headed by Jagdeo

The 30th Meeting of the Heads of the Caribbean Community (CARICOM) that concluded on 4 July at the Conference Centre, has agreed to and has established a regional task force to forcefully deal with addressing the current Global Economic Crisis. The task force will be headed by Guyana’s Head of State, Bharrat Jagdeo and will include Prime Minister of St Vincent and the Grenadines, Dr Ralph Gonsalves; Prime Minister of Trinidad and Tobago, Patrick Manning; and Jamaican Prime Minister, Bruce Golding among others.

Speaking with regional and local media operatives prior to the start of the 4 July session, Prime Minister Gonsalves said that the task force is aimed at superintending the response of the region to the economic crisis.

More here: http://www.guyanaobservernews.org/index.php?option=com_content&task=view&id=1114&Itemid=1

Crisis far from over: World Bank chief

World Bank President Robert Zoellick said on 30 June that financial markets are showing signs of stabilization, but warned that the global crisis was far from over in developing countries.
Speaking to reporters ahead of a meeting of finance ministers from Latin America, Zoellick said developing countries were only now feeling the full force of the global economic and financial crisis, which could quickly return to advanced economies where it began.

He said demand for World Bank financing was high and growing as credit markets remained shut to many developing market clients.

Full text here: http://finance.yahoo.com/news/Crisis-far-from-over-World-rb-3407469668.html?x=0&.v=2

G8: Trade Union Leaders Push on Employment

Representatives of the ITUC taking part in the G8 summit in Italy met on 9 July morning with Brazilian President Luiz Inázio Lula da Silva to discuss employment and economic recovery on the eve of the summit, which will be attended by President Lula and other national leaders from G8 and non-G8 countries. The meeting follows a series of discussions with ministers from the host government Italy, including Prime Minister Silvio Berlusconi.

The ITUC and its Global Unions partners are concerned that the crisis will deepen further, as unemployment rises steady around the world, and the risk of competitive wage deflation further depressing demand in the global economy.

More here: http://www.ituc-csi.org/spip.php?article4013

World Financial Crisis and AIDS Backlash Threaten Lives

On the eve of the G8 Summit in Italy, the International Treatment Preparedness Coalition (ITPC) calls on leaders of the world's richest countries to announce significant additional funds to ensure that AIDS treatment and prevention programs for millions of men, women and children do not become a casualty of the economic down-turn.

"Cutting funds for HIV programs would be a clear disaster for the four million people already on treatment, the seven million people who need treatment and millions more who need effective HIV prevention programmes," said Aditi Sharma, coordinator of the Treatment Monitoring and Advocacy Project of ITPC. "We call on the G8 to commit their fair share towards meeting the Universal Access target -- a first step would be to plug the $5 billion funding gap for the Global Fund to Fight AIDS, TB and Malaria."

Reacting to a new report from UNAIDS and the World Bank(1), which found that the global economic crisis has already disrupted AIDS treatment programmes in eight countries and is expected to impact programs in an additional 21 countries by the end of this year, activists from around the world called on all governments to ensure sustained funding for HIV programmes and put in place early warning systems that alert them to impending drug stock-outs and treatment interruptions.

"Let us be completely clear about what this report is saying," said Gregg Gonsalves, co-founder of ITPC. "People living with HIV/AIDS, who are now receiving treatment, are in danger of losing their drugs because of cutbacks and funding reallocations. Many of those people will die. We cannot allow AIDS backlash or the current economic situation to be used as excuses for failing to meet commitments."

More here: http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/07-07-2009/0005056008&EDATE=

Global financial crisis dims Africa's economic outlook

The global financial crisis has adversely affected Africa's economy in many ways with demand for African exports falling, investment inflow deterring and government revenues sharply decreasing. As prospects for African economies have deteriorated, many African countries, fortunately, have improved macroeconomic management through reforms over the past few years which have helped them beat the crisis.

Click here for more: http://news.xinhuanet.com/english/2009-06/30/content_11627443.htm

A tale of three recessions

The UK has now experienced four quarters of recession, according to the latest figures from the Office for National Statistics. The total decline in output in the UK has now reached 4.9% since the recession began in April 2008.

“The picture for jobs and growth is already bleaker than the last recession, and is looking more like the deep recession of the 1980s every day.” 
TUC General Secretary Brendan Barber

Read full text here: http://news.bbc.co.uk/2/hi/business/8127248.stm

Union drops funding for Labour

PSI UK affiliate Unison, one of Labour's biggest financial backers has warned Gordon Brown that it will pull vital election funding unless the embattled Prime Minister does more to help public sector workers. In the starkest warning yet that Mr Brown could face a funding crisis in the run up to the general election, the head of Unison said there would be no more "blank cheques" for Labour. The union gives around £1.5 million a year to the Labour party.

Dave Prentis, the general secretary of Unison, also started moves to suspend funding to local Labour parties who do not field candidates fully supportive of the public sector. He said hard-pressed members were tired of "feeding the hand that bites them" and demanded a halt to the privatisation of public services by ministers.

Mr Prentis told Unison's annual conference: "Our public finances have been plunged deep into the red as the Government has spent trillions protecting the economy from the reckless profiteering of the private banking sector.

"The very same Government says the solution is to hand larger and larger chunks of our public services over to private companies that will always put profit before public interest. Absolute lunacy."

Full text here: http://www.telegraph.co.uk/news/newstopics/politics/gordon-brown/5552252/Union-drops-funding-for-Labour.html

Economic crisis imminently threatens economic survival of poor countries

Ahead of G-8 summit, United Nations Millennium Campaign warns that developing countries will be forced to slash desperately-needed expenditures for the poor; Campaign calls on G-8 leaders to urgently provide financial resources to poor countries

 

The United Nations Millennium Campaign is warning that the ongoing economic crisis is likely to bring the economies of many developing countries to the brink of collapse and threatens the very survival of their citizens. According to the African Development Bank, countries like the Democratic Republic of the Congo and Kenya could run out of foreign reserves to purchase goods necessary for survival in a matter of weeks. At the same time, countries including Laos, Senegal, Uganda, Cape Verde and Sudan are cutting expenditures on poverty alleviation for desperately poor citizens. Experts predict that spending on core development, including the Millennium Development Goals, could decline by $200 billion as a result of the crisis.

 

Read full text here: http://www.endpoverty2015.org/global-partnership/news/economic-crisis-imminently-threatens-economic-survival-poor-countries/06/jul/09