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= =    **Europe's Economic Crisis & the Struggles of the ECB **  **Overview** Europe is currently in a highly fragile, highly volatile economic situation as a result of the global economic recession and the failure of the eurozone countries to stabilize and prevent the fluctuations of the, what many agree, previously over-valued euro currency. Most recently, the European Central Bank’s “bailout” plan of €750 billion to stabilize the European economy, particularly that of Greece, has failed to quell uneasiness amongst believers that the EU might go through some sort of collapse. In the United States, the actions of the Fed have served to absorb much of the pressure from the recession; the European Central Bank, on the other hand, operates differently and prides itself on not becoming involved in the economies of member nations. The ECB's bailout plan, in the vein of the similar plan undertaken in the United States, is significant because it represents a substantial involvement by the ECB in the economics of the region. Rather than continuing its overseer role, the ECB is becoming more and more active within the economies of fledgling member nations, including Greece, Spain, and Portugal. This activity comes at the expense of more successful countries like France and Germany. As the situation unfolds the rest of the world pays close attention to the actions of the ECB and the fluctuations of the euro
 * The Fall of the Euro** 

__**Example 1 - Mainstream Media **__ = Euro Falls to Lowest Since Lehman as Breakup Concern Increases = Email | [| Print] | [|A] [|A] [|A] By Ben Levisohn May 15 (Bloomberg) -- The euro fell to its lowest level since the collapse of Lehman Brothers Holdings Inc. on concern that the 16-nation currency may be headed for disintegration.

The shared currency fell for a fourth week versus the dollar and a third week versus the yen, the longest losing streaks since February, as German Chancellor [|Angela Merkel] said that Europe is in a “very, very serious situation” despite a rescue package for the region’s most indebted nations. European Central Bank Governing Council member [|Axel Weber] speaks on financial-market regulation next week in Berlin.

“We went through a massive liquidation trade in Europe and risk-taking positions were wiped out across the board,” said [|Sebastien Galy], a currency strategist at BN Paribas SA in New York. “The markets are trying to figure out what the consequences are for growth. There are massive uncertainties and that will keep the downward pressure on the euro.” The euro fell 3.1 percent to $1.2358 this week, from $1.2755 on May 7. It traded as low as $1.2354 yesterday, the weakest since October 2008. The [|common currency] dropped 2.1 percent to 114.38 yen, from 116.81 last week. The dollar traded at 92.47 yen after gaining 1 percent last week, the first weekly gain since the five days ended April 23. ‘A Sham, A Chimera’

European policy makers last week unveiled a loan package worth almost $1 trillion and a program of bond purchases in an effort to contain a sovereign-debt crisis that has threatened to shatter confidence in the euro. ECB President [|Jean-Claude Trichet] said the move wasn’t supported by all 22 of the bank’s Governing Council members. The ECB said it will intervene in government and private bond markets “to ensure depth and liquidity in those market segments which are dysfunctional,” and central banks in Germany, Italy and France began buying government bonds yesterday. The ECB restarted a dollar-swap line with the Federal Reserve.

By resorting to what some economists have called the “nuclear option,” the ECB may open itself to the charge it’s undermining its independence by helping governments plug budget holes. “The ECB’s supposed ‘independence’ has now been shown to be nothing more than a sham, a chimera, a will-o’-the-wisp,” [|Dennis Gartman], a Suffolk, Virginia-based economist and hedge- fund manager, said in his daily Gartman Letter on May 10. “In the end the ECB and the euro will be punished for this decision to stand down from what had previously been considered sacred.”

Success Not Guaranteed

The greenback rose against Australia’s dollar and Norway’s krone, as oil and commodities retreated, damping demand for currencies linked to growth. The Aussie fell 0.2 percent to 88.64 U.S. cents and the krone declined 0.4 percent to 6.2465 per dollar on speculation investors reversed carry trades that had profited from Australia’s 4.5 percent central bank rate and Norway’s 2.115 one-month deposit rate.

The [|benchmark rate] of zero to 0.25 percent in the U.S. makes the dollar a popular funding currency for such trades. Such strategies lose money as the funding currency gains because it costs more to repay the loan. Crude oil for June delivery fell 4.1 percent last week and the Reuters/Jeffries CRB Index of 19 commodities fell 2.8 percent yesterday. Norway is the world’s sixth largest oil exporter. Australia is the world’s biggest iron ore exporter. Gold for immediate delivery yesterday reached an all-time high of $1,249.40 an ounce in New York as investors sought to hedge against Europe’s debt crisis.

Merkel, speaking yesterday at a panel discussion by Phoenix television, said that success is not yet guaranteed. Asked about disagreements with European Union partners, she said that “some arguments are worth it,” without elaborating.

‘The Euro Is Doomed’

The German chancellor’s comments followed a report from El Pais that French President [|Nicolas Sarkozy] threatened to pull out of the euro unless Merkel agreed to back the European Union’s bailout plan at a meeting last weekend in Brussels, citing comments Spain’s Prime Minister [|Jose Luis Rodriguez Zapatero] made at a meeting of socialist politicians. The Madrid- based newspaper didn’t say how it obtained the information. Aides to Sarkozy, Merkel and Zapatero all denied the report. “The euro is doomed,” said [|Andrew Wilkinson], senior market analyst at Interactive Brokers Group LLC in Greenwich, Connecticut. “It’s like a clown without its makeup. The strains among the partners are becoming clear and it’s becoming harder to see global growth not being threatened by this.”

‘Head Through Parity’

The euro has lost 9 percent this year, according to Bloomberg Correlation-Weighted Indices. The dollar has gained 7.2 percent and the yen has advanced 7.9 percent. The euro “can easily head through parity” with the U.S. dollar under a “hard landing” recovery scenario from the European deficit crisis, according to Royal Bank of Scotland Group Plc. The forecast for the shared currency was reduced to $1.14 for the middle of next year, [|Alan Ruskin], head of foreign- exchange strategy at RBS Securities in Stamford, Connecticut, wrote in a note on May 13. The euro could test the key level of $1.1650 by year-end, he said.

The pound slid 1.8 percent to $1.4536, its third weekly decline versus the dollar, amid speculation that the U.K.’s governing coalition may collapse by year-end. The U.K.’s Prime Minister [|David Cameron] and his coalition partner, [|Nick Clegg], will “have a major problem keeping the left wing of the Liberal Democrats and the right wing” of the Conservatives in line, and a new election may be called before year-end, former Bank of England member [|David Blanchflower] wrote in a Bloomberg News column on May 13.

The pound has dropped 2.8 percent against the dollar since May 11, when the Conservatives and Liberal Democrats formed a coalition government five days after elections failed to provide a clear winner.

To contact the reporters on this story: [|Ben Levisohn] in New York at blevisohn@bloomberg.net. //Last Updated: May 15, 2010 00:01 EDT//


 * Analysis **Link To Bloomberg Article
 *  Article from Bloomberg, globally respected, mainstream source of financial and business news
 * Operates like Thomson Reuters, provides news stories to major publications including //The Economist// and //The New York Times//
 * Fact-based, littered with statistics and information on recent trends in the European markets
 * Filled with quotes and comments, both from major political figures (Merkel, Sarkozy, Zapatero) and from experts
 * Relies heavily on the views of others; the writer's voice is almost nonexistent
 * <span style="background-color: #ffffff; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 110%;">The quotations and statistics selected definitely paint the picture that "the euro is doomed" but material presented without writer bias
 * <span style="background-color: #ffffff; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 110%;">Bloomberg publishes similar updates daily, even every few hours
 * <span style="background-color: #ffffff; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 110%;">Meant to deliver pure news/data, not to express the views of the writer or even include the views of the writer at all

__**<span style="background-color: #008000; color: #ffffff; display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 140%; text-align: center;">Example 1 - Citizen Media **__ = [|Get a Grip: Austerity Does Not Produce Prosperity] =

Austerity has suddenly become the universally prescribed cure for the fallout from the financial collapse. If widely adopted, it will prove worse than the disease.

The price of the rescues of Greece, Spain and Portugal will be brutal deflation. The International Monetary Fund, which supposedly learned from its earlier mistakes of imposing austerity on already damaged economies, is back in cold-bath mode, demanding higher taxes and dramatically reduced spending as its pound of flesh.

The European Central Bank and key leaders of the E.U. are promoting economic pain as the price of relief. Here at home, President Obama has sworn off serious new outlays for jobs or aid to the states, and is using his fiscal commission to pursue a bipartisan consensus on spending cuts and higher taxes.

The nations of the European Union are being treated as the object lesson in the costs of profligacy. This is supposedly what happens when you provide decent social benefits to regular people. In fact, most of Europe had reasonably well-disciplined budgets until a made-on-Wall-Street economic crisis took down their economies.

The budget deficit here and overseas does need to return to a more moderate level -- after we get an economic recovery. But the problem with the austerity treatment during a recession is that if everyone tightens their belts at once, there is nobody to buy the products; the economy shrinks and repayment of debt is even more arduous. As John Maynard Keynes famously wrote, "The patient does not need rest. He needs exercise."

You don't have to be a Keynesian to recognize that the economics of belt-tightening is a fool's errand in a recession.

With the exception of a few smaller nations, the large deficits in the OECD countries are not the result of fiscal profligacy, but of revenue losses caused by the downturn. And in the case of Greece, supposedly the poster child for profligacy, the new Socialist Papandreou government is having to clean up after the fiscal finagling of its conservative predecessor. Greece certainly needs tax reform to make sure that so many of its very wealthy do not hide their assets. It does not need general austerity.

The US has been spared this phase of the crisis so far, because the Federal Reserve has been willing to be buyer of last resort of all manner of securities, including government debt. This remedy is far from ideal, and it needs to be wound down as soon as recovery comes, as well as combined with structural reforms. But the Fed rescue certainly beats a total collapse

In Europe, by contrast, this rescue act is far more difficult politically and institutionally. Sovereignty is divided along nations pursuing their own self-interests, a fledgling E.U. and a central bank that lacks either the Fed's full powers, its history, or its self-confidence.

But Europe had better come through this test as a more unified and politically effective system or we will all suffer. This is no time for skeptics of the Euro or the E.U. to be gloating.

In fact, the Germans and the French have put their self-interest aside, and have pushed for a rescue plan that prevents default on government bonds and benefits Europe's less affluent nations. With aid to Greece monumentally unpopular, German Chancellor Angela Merkel was willing to lose a key state election in order to prevent a Euro collapse This statesmanship is admirable -- but the austerity demands are not.

The current global economic crisis, now entering a new phase as a crisis of sovereign debt, has only one rough precedent. The last time major nations (such as Germany, its European creditors, and much of Latin America) faced insolvency, the combination of financial collapse and deflation helped create depression, dictatorship, and then World War II.

In the US, we finally ended the Great Depression with massive wartime borrowing and public outlay. We ended the war with a debt-to-GDP ratio of more than 120 percent, more than double today's ratio. In Britain, debt-to-GDP peaked at about 250 percent. But all of the war spending recapitalized industry, re-employed and trained jobless workers; and after the war pent up consumer demand powered a record boom and rising revenues paid down the debt.

There was plenty of wartime sacrifice, but it was shared. Citizens bought war bonds and used ration books. There were wage and price controls. Surtaxes on high incomes were over 90 percent. Interest rates were administered through a deal between the Treasury and the Fed, and the war debt was financed with cheap money. Inflation rose slightly after the war, but was manageable. And thanks to the deferred demand and careful economic management of the war years, peacetime conversion brought not a recession but a boom.

Today's situation is different. The origin of all the debt is not a war but a financial collapse. The new round of financial panic is the result of still fearful markets, a still fragile banking system, and deficits caused mainly by reduced output, not overspending.

In this context, it is insane to think that we can recover from a financial panic and an economic recession by inducing a worse recession in the name of fiscal soundness. For now, while the real economy heals, there is no substitute for aggressive central bank intervention to restore markets in sovereign debt. The right grand bargain is tough financial reform and limits on Wall Street--so that this crisis is never repeated. The wrong grand bargain is austerity for everyone else.

//Robert Kuttner's new book is "A Presidency in Peril." He is co-editor of The American Prospect and a senior fellow at Demos.//

//<span style="color: #ff0000; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">"... it is insane to think that we can recover from a financial panic and an economic recession by inducing a worse recession in the name of fiscal soundness..." //
 * <span style="background-color: #008000; color: #ffffff; display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 140%; text-align: center;">Analysis **<span style="display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; text-align: center;">Link to Huffington Post Article

//<span style="color: #ff0000; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">" ...Europe had better come through this test as a more unified and politically effective system or we will all suffer..." ////<span style="background-color: #ffffff; color: #ff0000; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">

"The patient does not need rest. He needs exercise." - Keynes //
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Article from //The Huffington Post//, a well known citizen-media, online news source
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Author, Robert Kuttner, co-founder of //The American Prospect//, "an authoritative magazine of liberal ideas"
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Apparent liberal spin, ECB involvement in markets/economies is not a fiscally conservative, laissez-faire policy
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Placed under the European Union subsection, not billed as an op-ed
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Appears very opinionated, reflects the views of the writer, Robert Kuttner
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Kuttner lays out his own views and backs them up by comparing the EU to the United States
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Presence of statistics but the overall article is driven by the writer, not the supporting material
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">There is a clear thesis and argument, not just a straight regurgitation of the news itself
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Kuttner expresses his view that the ECB needs to intervene on a large scale, as the Fed has in the United States, but he recognizes the difficulty of doing this as the ECB lacks "the Fed's full powers, its history, [and] its self-confidence".

__**<span style="background-color: #008000; color: #ffffff; display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 140%; text-align: center;">Example 2 - Mainstream Media <span style="display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; text-align: center;">Link to Youtube Video **__ media type="youtube" key="_ZUOABPsqj4" height="385" width="480"

//<span style="color: #ff0000; display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; text-align: center;">"I can't imagine you'd approve of this"
 * <span style="background-color: #008000; color: #ffffff; display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 140%; text-align: center;">Analysis **

"Americans will suffer, eventually the whole world will suffer"

"All we're doing is perpetuating a very, very bad system and it's not the solution at all" //
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Ron Paul reacting to ECB bailout plan on Varney & Co., a show on the Fox Business Channel, conservatively leaning
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Point of view is apparently conservative, but the issue is not extremely political so right-wing view is expressed only through Paul
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Paul is commenting on American involvement in the $1 trillion bailout plan approved by the EU & ECB, some of which is coming in the form of assistance from the United States government
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">The show sets out to promote discussion, brings on prominent political figure to talk about the issue
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Ron Paul feels strongly about the bailout and is against any proposed American support that would mean tax-payers are funding pensions for Greeks in a failed European economy
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Inflation because of raised taxes, Americans "suffering" because of these taxes that are going to help Europe
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Paul believes paper currencies are going to collapse
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Phone interview overlaid with visuals that aid the discussion, not video of Paul or prepared news clip

__**<span style="background-color: #008000; color: #ffffff; display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 140%; text-align: center;">Example 2 - Citizen Media **__

European Social Welfare State Model Running Out of Time and Money
//Europe’s debt crisis is sounding a warning that the European social welfare state must be downsized if it is to survive. But European voters are unlikely to relinquish their entitlements without a fight.// May 21, 2010 - by [|Soeren Kern]

European leaders are facing an uphill battle to restore confidence in the euro, after a €750 billion ($1 trillion) “shock and awe” [|financial rescue package] failed to quell market fears that the sovereign debt crisis in Greece may spread across the European Union and possibly unravel Europe’s single currency. Although European stocks and bonds briefly rallied after the bailout fund was announced on May 10, European markets have since erased those gains and the euro, which has become a key indicator of confidence in Europe’s economy, has fallen to a four-year low against the U.S. dollar.

A close examination of the EU bailout fund shows that it is actually only a short-term fix — it merely uses new debt to pay off old debt and does not change the fact that all European countries will remain top-heavy with unsustainable debt. [|German Chancellor Angela Merkel] admits that the EU rescue plan will do nothing more than buy time and put off a painful day of reckoning. But fears are mounting that European authorities are running out of options to prevent a full-scale financial meltdown.

Europe’s debt crisis is now calling into question the economic viability of the European social welfare state itself. Indeed, the biggest unintended consequence of the crisis is that it has proved the economic foundation of Europe’s much-vaunted social model to be far more unstable than previously imagined.

All across the continent, countries large and small are straining under the weight of debt caused by comprehensive “cradle-to-grave” social welfare. At least four trends, some of which are unique to Europe, are conspiring to bring down the edifice of the European social welfare model. They are demographics, chronic unemployment, cultural idiosyncrasies, and profligate politicians.

What follows is a tiny selection of sundry data that sheds some light on why European public finances are in so much trouble: //Demographics:// The birth rates in many European countries have fallen to below replacement levels at a time when life expectancy is increasing and populations are aging. As a result, ever-diminishing pools of workers are bearing the growing financial burden for swelling ranks of retirees, who in many cases collect pensions and draw on state health care until well into their 90s.

In Germany, for example, which is the largest country in the EU, the total population is forecast to drop 20 percent from about 82 million currently to approximately 65 million in 2060, according to the [|German Federal Statistics Office]. At the same time, the average age of the German population is set to increase. Within the next five decades, for example, 34 percent of the population will be older than 65, up from 20 percent today. Hence the number of pensioners that will have to be supported by working-age people in Germany will nearly double by 2060. While 100 workers provide the pensions for 34 retired people today, they will have to generate income for 67 pensioners in 2060.

In Greece, which has one of the lowest fertility rates of any country in Europe, the 65-and-over population has soared from just 11 percent in 1970 to 24 percent today, and is projected to grow to one-third of the population by 2050, according to the [|Hellenic Statistical Authority]. By contrast, Greece’s working age population has reached its peak and is projected to decline 20 percent over the next 40 years. At the same time, Greece has one of the highest longevity rates in Europe — with an average life expectancy of 77.1 years for men and 81.9 for women.

In Spain, meanwhile, the government is trying to boost the country’s stubbornly low birth rate (which has been below the population replacement level for nearly two decades) by means of a €2,500 “[|baby check]” that is designed to bribe couples into having children.

//Chronic Unemployment//: In most European countries, chronic unemployment and early retirement are two sides of the same coin. Early retirement essentially is a labor policy that artificially drives down the unemployment rate. The downside of early retirement is that it reduces the tax base while it increases the burden on the social security system, especially in the context of increased longevity.

In Spain, [|the government spent twice as much as it took in during 2009], with unemployment benefits (the unemployment rate is stuck at 20 percent, which translates into more than 5 million Spaniards on the dole) constituting the largest single component of government expenditures.

In France, where the budget deficit as a percentage of GDP is exceeded only by Greece, Spain, and Ireland, state coffers are being [|depleted by high unemployment, coupled with early retirement and longer life expectancy]. The country’s pension system will lose €10.7 billion in 2010, up from €8.2 billion in 2009 and €5.6 billion in 2008. The shortfall will rise to €14.5 billion in 2013 and €50 billion in 2020, according to the [|Labor Ministry].

In Greece, the average retirement age is 61, although workers in many professions classified as “arduous and unhealthy” (such as hairdressers, who may be exposed to chemicals in hair dyes and hair perms) can retire as early as 50.

In Italy, which is the fourth most indebted country in the world, only 50 percent of males over the age of 54 are still active in the workforce. In Austria, public servants and those in the semi-public sector, such as postal and railway workers, can retire at age 52.

//Cultural Idiosyncrasies//: The European social welfare state is also under strain thanks to myriad European cultural idiosyncrasies, such as 35-hour workweeks, six-week paid vacations, bloated public sectors, and widespread tax evasion.

In Greece, the shadow economy (which is made up of untaxed trade in goods and services) is 25 percent of gross domestic product. The Federation of Greek Industries estimates that the government may be losing as much as __[|€25 billion a year to tax evasion]__.

In Spain, the [|shadow economy is equivalent to 23 percent of GDP], and is growing faster than the real economy, which contracted by 3.6 percent in 2009. Overall, Spaniards avoid paying taxes on income of €240 billion annually, which deprives the government of as much as €25 billion a year in tax revenue. In Italy and Portugal, the shadow economies are around one-fifth of GDP. (By way of comparison, in the United States, the shadow economy is around 7 percent of GDP.)

In Sweden, more than 30 percent of the labor force is employed either by the government or by public sector companies. In France, Spain, and the Netherlands, [|over 20 percent of the labor force works in the public sector]. Spain [|has 3.1 million bureaucrats], or 25 percent more than the number of workers employed by private industry.

In Sweden, where the tax rate is nearly 60 percent, parents are entitled to a total of [|__480 days paid leave per child__], with both mothers and fathers entitled and encouraged to share the leave. The leave can be taken at any time until the child reaches the age of seven. //Profligate Politicians//: Europe is run by an unwritten social contract by which voters defer questions of public policy to the elites, in exchange for bread and circuses in the form of “cradle-to-grave” social welfare entitlements. This has institutionalized a weak political class that specializes in bribing voters with never-ending amounts of borrowed cash.

In Spain, for example, Spanish Prime Minister José Luis Rodríguez Zapatero’s 2008 [|__r__][|eelection promises totalled €22 billion], or a whopping 2.1 percent of Spain’s GDP. For the 1.7 million Spaniards eligible to vote for the first time, for example, Zapatero promised rent subsidies, and for the under-30s he promised to build 150,000 low-cost homes. In a bid for the female vote, he proposed that working women should pay less tax than men. And for low wage earners, he promised to exempt them from paying income tax altogether.

Zapatero also promised to raise pensions and the minimum wage, to create 300,000 new child care slots, to increase autonomy for the region of Catalonia, to financially compensate companies that adapt their working hours to those of schools, to provide new fathers with one month of paternity leave, and to plant 45 million new trees (at one for each Spaniard, the Socialists will have to plant 30,821.9 trees every single day for the next four years). Another €3.5 billion will go towards the post-modern-sounding “[|Liberty, Coexistence and Rights in a Globalized World].”

In Britain, the [|national debt] will reach more than £900 billion ($1.3 trillion) in 2010, which is equivalent to nearly 60 percent of the country’s entire annual economic output — the biggest proportion for more than 30 years. The national debt will soar to £1.1 trillion in 2011, and will comprise 80 percent of GDP in 2014. The interest on the national debt will cost almost £45 billion in 2010, which is more than Britain spends on defense.

At the same time, the British government is expected to hand out more than £180 billion in welfare payments in 2010, which is more than it will collect in income tax. Housing benefits alone cost British taxpayers £15 billion every year. Fraud, waste, and abuse are rampant. In one case, a family was paid nearly £200,000 of [|__public money to live in a seven-bedroom house in one of Britain’s most expensive areas__]. In another case, taxpayers have been accommodating a single mother of seven children from Afghanistan, in a [|seven-bedroom, £1.2 million house] at a cost of £12,458 a month in rent. Elsewhere, [|a single mother of six is living in a £2 million London house] at a cost of £7,000 a month courtesy of the British taxpayer.

As Europe teeters on the brink of financial meltdown, suddenly there is a grudging realization among some quarters that the European social welfare state must somehow be downsized if it is to survive. But there is a great gulf between rulers and the ruled over how to proceed. Weaned on decades of socialist largesse, [|workers across Europe are taking to the streets] to prevent governments and private companies from imposing austerity measures. Any changes to the status quo will come at the cost of social unrest.

The European social welfare state increasingly resembles a giant Ponzi scheme that is running out of cash. But former Conservative British Prime Minister Margaret Thatcher warned it would be so. In [|__prescient remarks__], Thatcher once said: “Socialist governments traditionally do make a financial mess. They always run out of other people’s money.” // [|Soeren Kern] is Senior Analyst for Transatlantic Relations at the Madrid-based [|Grupo de Estudios Estratégicos / Strategic Studies Group]. //

<span style="display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; text-align: center;">Link to Pajamas Media Article **
 * <span style="background-color: #008000; color: #ffffff; display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 140%; text-align: center;">Analysis
 * Article from Pajamas Media, a website that falls under the umbrella of citizen media
 * Well written, well researched, presents the information factually and with many supporting examples and statistics
 * The writer is slightly more present than the writer of the Bloomberg article but the overall voice is similar; to present the facts as clearly as possible without the distortions of the writer's own opinions and thoughts
 * Some of these thoughts creep in through word choice (fear, uphill battle, etc), but it does not take away from the article
 * Agrees with the Bloomberg article (and every other article I could find) that Europe is in bad shape
 * The structure of most European national governments and the low-birth rates/early retirements of European society make for a killer combination, especially in the face of a global economic recession
 * Examples of many different European countries are given and illustrate well both the demographic, social, and economic situations of the EU member nations
 * Debts are soaring out of control and the ECB is trying to combat the recession in the face of countries already facing massive problems


 * <span style="background-color: #008000; color: #ffffff; display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 140%; text-align: center;">Comparative Analysis **

By examining a variety of news sources covering the same topic I have established that there is no great advantage or disadvantage in the type of news outlet you receive your news from, that is the mainstream media versus the citizen media. Instead, the differences lie in the individual media outlets themselves and the manner in which the news is presented. Whether it be Fox Business being broadcast on television or a recently updated Bloomberg article on the euro and ECB interactions with the Federal Reserve, the general message may be the same. The manner in which the information is presented, however, is drastically different.

Print media is very successful at conveying raw data/statistics, examples, and other facts, because of the ease with which they can be presented. Mainstream Example 1 from Bloomberg.com and Citizen Example 2 are strikingly similar in their presentation. Both have a plethora of examples to back up a variety of quotations and statements that do not necessarily reflect the views of the author. In fact, the writer is almost nonexistent in both cases, for the article feels like a regurgitation of the news compiled in an easily accessible and functional format. There is no disadvantage to receiving the news form a supposedly non-mainstream source and, depending on the story, the information may even prove more useful because the reporter is not working within the same strict guidelines as the reporter at the major news outlet.

The non-print media is a completely different form of presenting information and often does so less effectively and highly inefficiently. As the Fox Business interview with Senator Ron Paul illustrates, television is made for drama and excitement and it is difficult to simply present a smattering of facts and statistics as in a print article. More interesting material needs to be projected in order to attract and maintain viewers and therefore attract and maintain advertisers that fuel the stations profits. The Ron Paul interview is interesting in that the viewer is able to hear first hand the opinions of a significant political figure, but the view is very one-sided and the clip does not feature a speaker in opposition to Senator Paul. As evidenced by some of the language in the interview, both the interviewer and Sen. Paul do not approve of the concept of funding a European economic bailout with U.S. tax-payer dollars.

Other print media may also present the information in a less factual manner, as is the case of the //Huffington Post// piece. Rather than follow suit with the Bloomberg and Pajamas Media articles, the //Huffington Post// article has a definite viewpoint expressed by the writer. This is true not only of the citizen media, but also of any major, mainstream media source. One striking detail, however, is the fact that the //Huffington Post// article is not labeled as being opinion/ op-ed. Rather, it is included on the main page of the European Union subsection. This is troublesome because of the clear views of the writer being expressed within the article. Kuttner feels very strongly that the ECB needs to operate similarly to the Fed and that austerity and punishment of EU nations is the wrong answer. This is his individual opinion and it manifests itself in the story, a dangerous occurrence if one considers the lack of an op-ed label on the story itself.

Overall, both the mainstream media and the citizen media contain excellent sources of news, while also containing some absolute garbage. The realization is that the manner in which this news is presented determines its effectiveness. A piece in print is far more effective at regurgitating factual information to a reader than a television interview that is focused on maintaining a viewing audience. Though these visual media definitely bring something to the table, for raw news on a topic such as the European debt crisis, print media is the way to go because of its ability to clearly and concisely present the data. Perhaps, for a more political topic this may not hold true, but it certainly does for the financial theme of the European crisis, as there is not much room for argument that Europe is in good condition.

<span style="display: block; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 80%; text-align: center;">European Central Bank Headquarters --- Frankfurt, Germany