Economics > UK on brink of economic collapse

 

Will it take a financial collapse to get Britain to make sensible decisions on migrants, Ukraine's proxy war, stupid military expenditures, and soaring debts?

UK teeters on economic collapse

– Telegraph

Soaring debt and borrowing costs are approaching levels that once forced London to seek an IMF rescue, according to a recent report

© Getty Images / Frédéric Soltan / Contributor

Britain is facing the prospect of a repeat of its crippling 1976 economic crash as soaring debt and borrowing costs raise doubts over Labour’s budget policies, leading economists have warned, according to a Telegraph report.

The crisis nearly fifty years ago saw a Labour government forced to seek an emergency loan from the International Monetary Fund (IMF) after deficits and inflation spun out of control. It became one of Britain’s worst postwar crises, with the bailout bringing deep spending cuts and Labour losing power a few years later.

Now Chancellor Rachel Reeves faces similar warnings, with forecasts showing a £50 billion ($68 billion) gap in the public finances and debt interest set to exceed £111 billion. Debt now exceeds 96% of GDP. At around £2.7 trillion, it is one of the heaviest burdens in the developed world. Government borrowing costs have surged, with yields on 30-year bonds climbing above 5.5%, higher than those of the US and Greece.

READ MORE: UK unveils bill to stop capital outflow

Jagjit Chadha, former head of the National Institute for Economic and Social Research, told the Telegraph the outlook was “as perilous as the period leading up to the IMF loan of 1976,” warning Britain could struggle to meet pensions and welfare payments.

Andrew Sentance, once a Bank of England policymaker, said Reeves was “on course to deliver a [former UK Chancellor Denis] Healey 1976-style crisis in late 2025 or 26,” accusing Labour of fueling inflation with higher taxes, borrowing, and spending.

The warnings come weeks before Reeves is due to present her first autumn budget, where she is expected to announce further tax rises to cover the shortfall – a move critics argue would deepen the downturn. The Labour government also faces deepening political and economic challenges, including declining support.

On Saturday, Reform UK leader Nigel Farage declared it was “the 1970s all over again,” while Conservative leader Kemi Badenoch described soaring borrowing costs as the price of Labour’s “economic mismanagement.”

London has pledged to raise military spending to 2.5% of GDP by 2027, aligning with NATO commitments. Britain remains one of Ukraine’s most ardent supporters, delivering billions in military and financial aid – further squeezing already stretched public finances.

And who knows how much they spend housing and supporting the extraordinary flow of migrants into the UK?

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Politics in Europe > Musical Chairs in Ukraine's Top Levels; Italy, France and Chechia not falling for US War Industry scam; EU blacklists Moldovan opposition

 

Is America setting the table to replace Zelenskyy with someone they have more control over?

New PM and US ambassador: What we know of Ukraine's government reshuffle

Europe

After weeks of speculation, Ukrainian President Volodymyr Zelensky announced a government reorganisation naming Defence Minister Rustem Umerov as the next US ambassador and economist Yulia Svyrydenko as prime minister. Svyrydenko played a key role in concluding a natural resources agreement with the United States giving Washington preferential access to swathes of Ukraine's mineral wealth.

Following weeks of rumours, President Volodymyr Zelensky this week unveiled a government reshuffle, replacing his prime minister and defence minister as he aims to inject fresh energy into his team, with no end in sight to the war.

Here are the main points to know about the shake-up, which comes as ceasefire talks with Russia stall and with the White House vowing to keep backing Kyiv.

PM with US ties

Ukraine's new prime minister will be Yulia Svyrydenko, an economy minister known for finalising a natural resources deal with the United States that nearly derailed ties between the countries.

Read moreUkraine, US sign 'memorandum of intent' on critical minerals deal

"She was the key and the only person leading these negotiations. She managed to prevent them from unravelling," said Tymofiy Mylovanov, a former economy minister who worked with Svyrydenko.

She won the respect of US partners including senior US political leadership, analysts have said.

Are you sure it was respect she won?

"Trump and his administration are now a priority for Ukraine. Svyrydenko has proven herself there and will continue to do so," said political analyst Volodymyr Fesenko.

Svyrydenko, 39, has earned the trust of Ukraine's business community for her handling of the country's wartime economy, President of the American Chamber of Commerce Andy Hunder said.

"We've had a transparent, trust-based and collaborative relationship," Hunder said.

New US ambassador

Zelensky has indicated that Defence Minister Rustem Umerov, who had taken part in negotiations with Russia, will be the next US ambassador.

"Ukraine needs more positive dynamics in relations with the United States and at the same time new steps in managing the defence sector of our state," Zelensky told Umerov in a meeting last week.

Trump has criticised the last administration's decision to send billions of dollars in aid to Ukraine, but has authorised NATO members to make arms purchases on Kyiv's behalf.

Yes, from American  War Industry suppliers, with Europe doing all the purchasing. A thoroughly astonishing scam that highlights the utter stupidity in European governments.

Read moreUS-NATO deal: How will US arms reach Ukraine?

Umerov's appointment "means only one thing. The key issue in bilateral relations between the US and Ukraine right now is weapons", Fesenko said.

"Arms supplies are the number one issue. The second issue is negotiations to end the war. Umerov has been involved in both," he added.

Outgoing prime minister, an unassuming technocrat, Denys Shmygal, will take over the defence ministry brief, Zelensky has said.

More control?

Zelensky's rivals have long accused him of seeking to consolidate power and some critical media say Svyrydenko's appointment marked the latest step in this trend.

She is seen as loyal to Andriy Yermak, the powerful head of Zelensky's office.

Ukrainska Pravda, a respected independent media outlet, published a report describing the moves as "the strengthening of the head of the presidential office – although it's hard to see how that's possible".

"It's obvious that the Presidential office's influence will increase," opposition lawmaker Mykola Kniazhytskyi told AFP.

"The authorities are pursuing further centralisation and refusing any dialogue," he added.

What now?

Svyrydenko has set her priorities as prime minister as strengthening the economy, scaling up arms production, and expanding support programs.

Fesenko said Shmygal's appointment as defence minister would likely see him "bring some order" to the ministry, which has previously been plagued by corruption scandals.

Shmygal, 49, was Ukraine's longest-serving prime minister.

Moving him to the defence ministry, a demotion on paper, gives Zelensky an experienced technocratic economist in a job that oversees the bulk of Ukraine's state cash flow.

The 2025 budget allocates 2.23 trillion hryvnias ($53.2 billion) for defence spending – about 26 percent of Ukraine's gross domestic product. The ministry has faced public criticism over poor organisation and procurement problems as Ukraine struggles to fend off a bigger and better-armed Russian military.

Lawmakers voted on Wednesday to officially dismiss the government and were set to approve new ministers the following day.

Political commentators have suggested that more changes in cabinet could follow, including at the energy ministry.

(FRANCE 24 with AFP and Reuters)

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Italy won’t buy US arms for Ukraine – media

The funds that Rome could allocate are “practically non-existent,” according to La Stampa’s sources

FILE PHOTO: Italy's Prime Minister Giorgia Meloni speaking during a press conference. © Getty Images / Massimo Valicchia

Italy’s budget doesn’t allow it to participate in US President Donald Trump’s plan to supply American arms to Ukraine, the Italian newspaper La Stampa reports, citing anonymous sources.

On Monday, Trump authorized new weapons deliveries to Ukraine, given that European NATO members provide funding, calling it a “very big deal.”

La Stampa said in an article on Wednesday that the strategy of German Chancellor Friedrich Merz, who has already agreed to purchase several Patriot surface-to-air missile systems for Ukraine, “will not be pursued by Italy.”

According to the paper’s sources, Rome will be opting out of the scheme “not only because our weapon systems already handed over to Kiev have other technological configurations, but above all because – unlike Germany – the budget that Italy can allocate to such an operation is practically non-existent.”

Read more

 NATO state opts out of Trump’s Ukraine arms plan

The only arms purchase from the US currently planned by Italy is the delivery of a batch of F35 fighter jets scheduled for the 2030s, the sources added.

Politico reported on Tuesday, citing two French officials, that Paris would not be purchasing US weapons for Kiev as France is looking to invest in its own defense industry to meet European security needs.

The same day, Czech Prime Minister Petr Fiala told Publico outlet that Prague is also currently “not considering” joining the initiative. The country “is focusing on other… ways to help Ukraine,” he explained.

EU foreign policy chief Kaja Kallas earlier welcomed Trump’s pledge to send more weapons to Ukraine, but urged Washington to “share the burden” in terms of financing the deliveries. Washington, meanwhile, has threatened to impose secondary US tariffs of up to 100% on Russia’s trading partners unless progress toward a peace agreement between Moscow and Kiev is made within 50 days.

READ MORE: EU funding ‘death’ of Ukraine – Moscow

Kremlin spokesman Dmitry Peskov said on Wednesday that it is hard to predict how effective the weapons financing scheme would turn out due to Western Europe’s “emotional state bordering on inadequacy” over the Ukraine conflict. European NATO members appear to be ready “to spend countless amounts of money on purchasing weapons in order to further provoke the continuation of the war,” he said.

Continuation of the madness is more like it.

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EU blacklists opposition figures in candidate country

The European Council has imposed sanctions on Moldovan individuals and entities close to exiled businessman Ilan Shor

FILE PHOTO. A view of Chisinau, Moldova. ©  Getty Images/Joel Carillet

The European Council has imposed sanctions on seven individuals and three entities in Moldova linked to exiled opposition leader Ilan Shor. The new designations, announced on Tuesday, target the Israeli-born businessman’s “close associates,” who have allegedly attempted to destabilize the EU candidate country.

Shor, founder of the banned Euroskeptic SOR party and current leader of the Victory opposition bloc, fled Moldova in 2019 amid a massive bank fraud scandal. He was later stripped of his citizenship there and sentenced in absentia to a lengthy prison term.

He has maintained his innocence, insisting the charges are politically motivated. The EU sanctioned him in 2023, and he was granted Russian citizenship the following year.

READ MORE: NATO turning Moldova into ‘battering ram’ against Russia – Moscow

The European Council has also blacklisted the Victory bloc itself, accusing it of spreading false information and buying votes. Two additional entities have been sanctioned over alleged election interference.

Those listed are subject to asset freezes and travel bans, and the sanctions prohibit any funds or economic resources from being made available to them. With the latest designations, such EU measures now apply to 23 individuals and five entities in Moldova.

In June, Chisinau witnessed violent clashes between riot police and Orthodox Christian protesters at an anti-LGBTQ rally.

While President Maia Sandu’s administration is pushing for closer ties with the EU, conservative and religious groups have voiced growing resistance to what they view as the foreign-backed imposition of liberal social norms.

READ MORE: Shameless: How an ‘EU aspirant’ jails and silences opponents

Moldova, a former Soviet republic, has accelerated its EU and NATO integration efforts since Sandu’s election in 2020. However, her policies have increasingly come under fire at home, particularly over economic stagnation and the suppression of dissent.

Sandu has defended the crackdowns as necessary to combat alleged Russian influence, labeling opposition parties and media outlets as criminal actors.

Moscow, for its part, has dismissed all accusations of election interference as baseless and politically motivated.

Pentagon Diverts the Better Part of a Billion Dollars Meant for Covid19 Response to Military Industrial Complex

Pentagon slammed for turning $1 billion ‘coronavirus fund’ into more military-industrial pork – but what did Congress expect?

Pentagon police conduct a biowarfare preparedness drill © Reuters / Jim Young

The Pentagon has defended its decision to repurpose Covid-19 preparedness funds – meant for pandemic response – to prop up weapons contractors as House Democrats slammed its double-dipping.

While the Department of Defense received $1 billion in March's CARES Act stimulus bill specifically to "prevent, prepare for, and respond to coronavirus," it ultimately diverted most of the windfall to defense contractors, the Washington Post revealed on Tuesday.

The pandemic response fund, created under the aegis of the Defense Production Act, was supposed to be used to produce N95 masks, gloves, and other PPE that was scarce at the time. Instead, it was doled out to mega-corporations like Rolls-Royce, GE Aviation, and ArcelorMittal, as well as to smaller firms making drone technology and a fabric manufacturer whose product is used to make army uniforms. The only thing most recipients had in common was that their work had no immediately apparent connection to coronavirus preparedness.

Department of Defense lawyers justified these acts of creative accounting with the logic that propping up the lucky contractors was an urgent priority to maintain US national security, referencing the fragile military supply chain that has seen single companies monopolize the production of vital proprietary hardware without which the nation's impressive war machine cannot function. Even as social media pondered whether the report described a case of embezzlement, the Pentagon seemed far from ashamed - it has demanded another $11 billion from any stimulus package that makes it out of Congress.

Worse, at least a third of the Pentagon contractors who benefited from the misappropriated pandemic response funds were essentially double-dipping, WaPo revealed, helping themselves to the critically-underfunded Paycheck Protection Program which so many American small businesses outside the defense sector have struggled to access.

House Democrats had already taken a dim view of what the House Committee on Appropriations called a direct violation of the spirit of the CARES Act back in July – though they stopped short of raising a finger to halt it. "The Committee's expectation was that the Department would address the need for PPE industrial capacity rather than execute the funding for the [defense industrial base]," they wrote in a hand-wringing evaluation of the appropriations.

House Armed Services Committee Chair Adam Smith (D-Washington) slammed President Donald Trump's administration for "continu[ing] to exploit the trust of the American people" and spending three times as much on defense contractors as on expanding the country's pandemic defenses in a Tuesday statement after the Post report emerged. However, he did not confirm any plans to actually pursue an investigation, even while acknowledging that the Pentagon's latest $5.3 billion funding request also lacked a "properly detailed" spending plan. 

Others were less circumspect in the wake of the damning expose. Democratic Reps Mark Pocan (Wisconsin) and Barbara Lee (California) have demanded a formal investigation, challenging the legality of the Pentagon's actions.

Missouri House candidate Cori Bush was even more direct: "Defund the Pentagon," she stated on Twitter – an idea that found warm reception among the progressive left.

Democratic Socialist Vermont Senator Bernie Sanders, who had previously proposed that the Pentagon's budget should be cut by 10 percent, stopped short of saying "I told you so," though some of his colleagues couldn't resist.

Meanwhile, plenty of opposition stalwarts have taken the opportunity to grandstand against Trump. While Massachusetts senator and erstwhile political candidate Elizabeth Warren denounced his "bungled pandemic response" in an emailed statement on the WaPo piece and Minnesota Rep. Ilhan Omar observed on Twitter that "their corruption knows no bounds," Democratic leaders have done nothing to stop the Pentagon from slurping up nearly two-thirds of every discretionary dollar in the US budget. The US spends more on its military than the next 10 countries combined. 

Even as some fiscal conservatives have finally come around to the notion, once unthinkable in right-wing circles, that the US spends too much money on its military – and others have pointed out that taxpayer-funded bailouts of private companies are literally corporate socialism - US military dominance remains tied in the minds of Washington's bipartisan power elite to sheer brute financial force.

And some people are amazed that Trump would criticize the Pentagon. Deep State is all about money!

Swedes Vote Climate Policy Biggest Waste of Tax Payer Money in 2019

A Little Levity, but then...

Environmental activist Greta Thunberg, of Sweden, addresses the Climate Action Summit in the United Nations General Assembly, at U.N. headquarters, Monday, Sept. 23, 2019.

(AP Photo/Jason DeCrow)AP Photo/Jason DeCrow

CHRIS TOMLINSON

The Swedish public has voted that climate change spending has been the biggest waste of taxpayer money in 2019, according to a poll by the Swedish Taxpayers’ Association.

The Taxpayers’ Association released the results of their annual wasteful spending poll earlier this week, declaring that climate policy had been the biggest waste of money, largely due to the fact that despite the spending, emissions in Sweden had actually slightly increased.

In 2014, the Swedish national government spent 5.2 billion Swedish krona (£419 million/$547 million), a number that has more than doubled to 12.6 billion krona (£1 billion/$1.3 billion) for the planned 2020 budget.

“The government has more than doubled the appropriations for climate policy, but despite this, emissions no longer decrease. In 2018, emissions even increased. That is why climate policy has been voted the worst waste of the year,” Johan Gustafsson, Waste Ombudsman at the Taxpayers’ Association, said.

Breitbart London

@BreitbartLondon

Sweden Looks to Ban Sale of New Petrol and Diesel Cars in Ten Years https://www.breitbart.com/europe/2019/12/22/sweden-looks-to-ban-sale-of-new-petrol-and-diesel-cars-in-ten-years/ …

The Swedish government, along with the Centre Party and the Liberals have announced they will be looking to ban the sale of new cars that use fossil fuels in the next ten years. 

“Too much tax money is wasted without benefit to those who pay. It is no less important that money has an effect when it is invested in something that is important — rather the opposite,” he added.

In second place in the poll was a project from the artists’ commission that saw over a million krona donated to a project focused on art for earthworms and fungi.

Mats Caldeborg and wife Katrin Zackrisson Caldeborg were behind the project and told newspaper Expressen: “Art for birds, bumblebees, beetles, worms, and fungi is a project that wants to turn upside down in our habitual way of seeing and understanding the world. Here, nature’s smaller inhabitants are not those depicted, but themselves, in their own right, recipients of the art.”

The wasteful spending poll results come as many Swedish municipal governments face financial hardship or even bankruptcy due to a lack of money to support recently arrived migrants who have largely remained out of the labour force.

An estimated 90 per cent of migrants who came to the country during the height of the 2015 migrant crisis and received permanent residency are unemployed.

Anger in Russia over Move to Raise Pension Age Beyond Life Expectancy

This from CBC - Canadian Broadcasting Corp. which is a left-wing, arguably far-left MainStream Media news source with a definite anti-Russo bias

Anger in Russia over a government proposal to dramatically raise the retirement age has hit a new threshold after someone set a bomb off outside a national pension fund office.

No one was hurt in the blast this morning in the city of Kaluga, 180 km southwest of Moscow, but pictures and video show significant damage to the building's entrance, with shattered glass, displaced tiles and a twisted metal door. 

The proposed reforms, which would see the retirement age rise from 60 to 65 for men, starting in 2028, and see women get their pension at age 60 instead of 55 as of 2034, were quietly introduced by Prime Minister Dmitry Medvedev on June 14 — the first of day of the World Cup soccer tournament.

Russians, however, took notice. A national poll last month by Moscow's Levada Center found that almost 90 per cent of those surveyed oppose the changes. Much of the anger is fuelled by the fact that the current life expectancy for men in Russia is just 66.5 years.

Last weekend saw anti-pension-reform demonstrations in several cities across the country. 

An elderly woman holds a poster that reads 'Want to Retire, it's time to change the authority!' during a rally protesting retirement age hikes in Moscow on Saturday, July 28, 2018. Tens of thousands of demonstrators have rallied throughout Russia to protest plans to substantially hike the age at which Russian men and women can receive their state retirement pensions. (Associated Press)

In Moscow, an estimated 12,000 people turned out for a rally organized by the Russian Communist Party and trade unions, carrying signs like "We want to live on our pensions, not die at work" and "the government must go." Some protesters dressed up like the grim reaper, carrying scythes.

Russia - lowest retirement age

As it stands, Russia has the lowest retirement age of any developed country and a huge demographic problem. The population is rapidly aging and by 2036, there will be twice as many retirees as workers. 

By some estimates, the state pension fund is only covering 60 per cent of its current outlay, with the government making up the shortfall out of the general budget. 

With an aging population, this means there will be more and more retirees on pensions and fewer and fewer working people to support them. The outlay from general funds will have to increase almost exponentially over the next decade or two without changes.

Russian politicians have long acknowledged the pressing need to reform the pension system, but few have wanted to court the inevitable public anger. The Kremlin has taken great pains to try and distance President Vladimir Putin from the reforms, saying he wasn't even involved in the discussions. But it isn't working. Over the past couple of months, his approval rating has dropped from 80 to 64 per cent — its lowest level in more than four years. 

The pension bill easily passed its first reading in the Duma last month, but in a rare show of defiance, all the opposition parties and two members of Putin's United Russia movement voted against it. Parliamentary hearings are scheduled for later this month. 

But there are signs that the government is worried.

News of today's explosion first came via Nika, a regional broadcaster. But a story and footage were later removed from its website, with no explanation. 

There is no sign of the explosion on RT's news feed. I complain a lot about MSM and their social and political bias, but state-controlled media is no better. Both allow truth to be hidden or warped to the advantage of governments or deep state, and, of course, to the disadvantage of people.

Does Little Angela Have the Courage to Stand Up to the School Yard Bully?

Spend on schools or bow to US demands?

German politicians debate NATO strategy

© Matthias Schrader / Reuters

US President Donald Trump has accused Germany of not contributing enough to the NATO budget – but will German Chancellor Angela Merkel dance to Washington’s tune?

On Thursday, Trump warned NATO members that they will be “dealt with” if they fail to fulfill their financial obligations to the US-led military alliance. Germany was singled out as one of those said to be delinquent on their obligations.

Martin Dolzer of Die Linke (Left Party) said that buying into Trump’s ideas may send the world order “into chaos,” citing US policy in the Middle East as evidence. Dolzer stressed that Germans do not want war, and said that more vital issues should be on agenda instead of boosting military spending.

“The German population does not want any more military expenses, the German population needs money for kindergartens, for education, for the growth of civil society organizations and the social sector,” Dolzer said. “There has to be a change. And the people in Germany, I think most of them want this change, but the government does not follow it.”

Though Merkel has shown no interest to raising defense spending, Alternative for Germany (AfD) chief whip Hansjorg Mueller believes she is poised to “bend down before the wish of the big brother” – a reference to Trump and the US.

“Our government is the government of a vassal state and governments of vassal states always obey to the wish of the big brother,” Mueller said.

Mueller believes a rise in defense spending would only further split German society, which is already divided over the chancellor’s immigration policy, and significantly weaken Merkel’s position. “We are viewing the doom of her leadership over Germany,” he told RT.

Nord Stream 2

Apart from its reluctance in meeting Washington’s demands, Berlin is also at odds with its ally over the Nord Stream 2 gas pipeline from Russia to Germany. The US is opposed to the project and signaled that it might be targeted by sanctions. The measures could also affect German companies.

The situation with the project is “pure blackmail,” said Mueller, adding that he hopes Merkel does not give in the “dead-end game.”

Meanwhile, Dolzer believes the pipeline is necessary for stability. “If we want to have stable organization of the industry this is very, very necessary to build this Nord Stream pipeline and to not follow the sanctions,” Dolzer said, adding that the US government must be reminded that it cannot act like “a monopoly power” around the globe.

2% of GNP going to NATO is far too much. It is at least twice what is needed. Indeed, were it not for the relentless propaganda against Russia, there might be very little need for NATO. NATO was designed to be a deterrent to war with Russia, and now it seems determined to be the cause of it.

The USA is being insistent on raising levels of defense spending in all NATO countries for one reason only - so they can sell more weapons systems to NATO countries. Trump's resurgence of the American economy is significantly dependent upon that very thing.

What he has to do with Nord Stream 2 is very disturbing. In a world where countries treat each other with some semblance of respect, where they recognize the autonomy of other states, the US would have no business even commenting on Nord Stream 2. They oppose it because Trump wants Europe to buy American natural gas which would have to be shipped to them at a premium of about 30% above Russian natural gas through Nord Stream 2. Unable to compete in the marketplace fairly, the US has resorted to bullying tactics that are most unbecoming, almost colonial in its context.

Someone has to punch this bully square in the nose, and I wouldn't be surprised if it is little Angela. If she doesn't, I hope that all EU countries that give-in to the bully will include legislation forbidding them to procure any weapons systems outside of the EU.