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American fearmaker
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Discussion Starter · #1 ·
Here's an interesting news article coming out of Belgium about their government trying to prop up or bail out the Fortis Corporation over there. This bail out actually led to the fall of a government and involves accusations of tampering. I'll bet that this is only the start of more things to come.

LONDON (Reuters) – Japan approved extra funding and Germany pledged new measures on Saturday to confront a financial crisis that has toppled banks, wrecked world growth and now played a part in the demise of Belgium's government.

Tokyo has joined governments worldwide in pledging hundreds of billions of dollars of fiscal stimulus to lessen the impact of the crisis on their economies, many of which, Japan's included, are already in recession.

Its extra 4.79 trillion yen ($54 billion) budget, approved by cabinet on Saturday, will help finance two already-unveiled spending packages totaling 10 trillion yen.

Chancellor Angela Merkel said Germany would take "a further step" in January to boost its economy, having previously limited herself to saying government leaders would meet in the new year to review the situation.

In neighboring Belgium, King Albert consulted political leaders after the government collapsed following its botched attempt to bail out financial group Fortis.

Prime Minister Yves Leterme tendered his government's resignation on Friday after a report by the Supreme Court found signs of political meddling to sway a court ruling on the future of the bank, a victim of the credit crunch.

The king, who under the constitution must decide whether to accept the resignation, held successive talks with the heads of the five ruling-coalition parties until 2 a.m. on Saturday.

Consultations were to continue later in the day. Belgian media said there was little chance of Leterme staying in power.

Leterme denied accusations he had sought to influence an appeal court which last week upheld a challenge by shareholders to a state-led carve-up of the bank, but acknowledged that the Supreme Court's findings made his position untenable.

The global economy's lifeblood -- credit -- remains severely constrained despite authorities spending trillions of dollars to keep money markets functioning, propping up banks and producing economic stimulus packages.

The boss of Britain's Barclays bank said people and firms would find it tough to get credit for up to two years yet.

"I think that we will see the process of reduced borrowing play out over at least the course of the next 12 months maybe, maybe 24 months," John Varley told BBC Television's Panorama program.


China expanded its pledge to help neighbors ride out the crisis, saying it was willing to meet requests for assistance from Taiwan.

Ties between China and Taiwan, separated since the end of the Chinese civil war in 1949, have been warming since Taiwanese president Ma Ying-jeou took office in May.

"If ... Taiwan asks for measures to ease its economic difficulties, the mainland is willing to do its utmost to provide aid," said Jia Qinglin, the fourth most senior leader of China's ruling Communist Party.

The financial crisis, sparked by a 2007 U.S. housing market meltdown and huge bank losses that ensued, has pushed much of the world into recession and even curbed China's fast growth.

In her weekly podcast, Merkel said Berlin would do everything possible next year to keep the economy -- already in recession -- on a sound footing, after passing a stimulus package two weeks ago that was criticized as insufficient.

"We'll take a further step in January," she said, confirming for the first time concrete measures were on the way.

On Friday, she said the government would pursue new plans focusing on infrastructure projects, such as schools and roads. But she has ruled out tax cuts before September elections.

Analysts said Japan's measures could also be inadequate, given they are unlikely to be implemented until April.

"The problem is that it is taking more than five months for Prime Minister Aso to carry out his economic measures at a time when economic conditions are rapidly changing at home and abroad," said Takahide Kiuchi, economist at Nomura Securities.

Tokyo's move caps a dramatic week when it and the United States cut interest rates virtually to zero and Washington threw a $17.4 billion lifeline to its crippled auto firms to stave off collapse of the industry and save hundreds of thousands of jobs.

But General Motors and Chrysler LLC are not out of the woods yet. Washington set a deadline of March 31 for the companies to prove they can restructure enough to ensure their survival or have the loans called back.

(Editing by Jon Boyle)
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