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Outside View: Broken and broken

Portugal tip of iceberg as Euro leaders tackle debt woes
Brussels (AFP) March 23, 2011 - With crisis-hit Portugal on the brink of a government collapse, European leaders faced an uphill task Wednesday going into a summit meant to seal defences against a year-long debt crisis. Leaders from the 27 European Union states lock horns Thursday and Friday in Brussels amid divisions over military action in Libya and nuclear safety after Japan's quake and tsunami severely damaged a reactor. The debt crisis will take up most of their energies, with the summit supposed to deliver a comprehensive set of measures to remedy the problem just as Portugal, widely seen as the next in line for a bailout, heads into the unknown. Protesters have erected giant banners railing against austerity near EU headquarters as police brace for some 20,000 demonstrators echoing complaints in Portugal against stringent belt-tightening measures.

After Greece and Ireland were bailed out last year, debt-laden Portugal's main opposition party said it would vote against the government's austerity plan later Wednesday, a move that would guarantee its rejection. Socialist Prime Minister Jose Socrates has said he would resign in that event, risking that the markets would turn completely against Portugal, leaving it no option but to seek outside help. His plan, aimed at squeezing Portugal's public deficit to 4.6 percent of GDP this year, has been endorsed by eurozone partners, meaning they would demand similarly tough conditions if any request for emergency loans is lodged. Jean-Claude Juncker, the head of the Eurogroup of finance ministers from the shared currency area, said: "If that turns out to be the case, it would be under strict conditions."

Lisbon must repay nine billion euros ($12.9 billion) of debt by June 15 but current money market rates of nearly 7.5 percent are considered unsustainable, meaing it cannot realistically raise fresh funds to cover its obligations. A Portugal bailout would come at the worst possible time, not least because it would have to be sourced from the temporary European Financial Stability Facility, notionally worth 440 billion euros. Already tapped by Ireland, the amount the fund can currently lend, allowing for a required buffer, is around 200 billion euros. Diplomats told AFP that Finland has excluded any increase in EFSF guarantees on Friday before its April 17 elections.

As the pressure increases, German Chancellor Angela Merkel also wants to re-negotiate Berlin's contributions to a permanent European Stability Mechanism to replace the EFSF in 2013, which will be able to provide 500 billion euros in fresh funding to those countries in need. Slovakia and Estonia also have problems here but Germany carries the greatest clout having paid the most towards the Greek and Irish bailouts, which combined came to nearly 200 billion euros. Leaders are due to endorse a basic EU treaty change enabling the ESM's creation but battles also rage elsewhere. Ireland wants better terms on its bailout in line with those granted to Greece but eurozone partners are demanding Dublin first raise its low corporation tax levels.

France specifically wants a reference to a need for "pragmatic tax coordination" and alongside Spain, Austria and Greece, Paris also wants the goal of a Financial Transactions Tax identifed -- a measure Germany, Italy and Denmark oppose. A new 'pact' setting out economic benchmarks for EU states to match -- so that in practice their economic policies converge -- is also stirring trouble. Poland, Denmark, Lithuania, Latvia and Bulgaria are ready to sign up but current EU chair Hungary and the Czech Republic will not. Britain has already secured exemptions to a scheme forcing states to submit national budgets to peer review, wanting to focus instead on growth-enhancing measures, backed by the likes of the Netherlands and Poland.
by Harlan Ullman
Washington (UPI) Mar 23, 2011
The U.S. government is both broke and broken. Broke and broken are incestuously intertwined. The broke part is manifested in our inability to reconcile massive debts and deficits that, unchecked, will bankrupt the nation. The broken part is our system of governance that no longer works.

Certain Wall Street banks and other financial monoliths have been described as too big to fail. Our fiscal indiscipline can be seen as the opposite -- too small to fail. Virtually every line item in the federal budget has a strong constituency from National Public Radio to farm subsidies to preschool programs, let alone the third rails of American politics -- entitlements. Cutting any will produce pain, anguish and a political backlash even from the smallest program. Hence, whether too big or too small, failure isn't an option in our current system.

At the same time, the nation is threatened by the structure of our government and the perversion of our politics exacerbated by dangerous levels of polarization and partisanship. In the broadest sense, the constitutional foundations of checks and balances and divided government, created by the best minds of the late 18th century, appear crumbling under weight of the rigors, realities and onslaughts of the first decades of the 21st.

Meanwhile, politics have been grotesquely perverted from the object of governing to the unsavory quest of constant campaigning for office in which election and re-election have become the coins of the realm turning John Kennedy's inspirational query of asking what one can do for one's country on its head.

Last, the nation has become polarized by partisan excesses driven by ideology not intellect in which the four Gs -- guns, gays, God and gestation periods -- have become acid tests for too many elected offices.

Governments are, at best, imperfect. Our imperfections are reaching a new standard of ugliness buffeted by unprecedented numbers of tough and even intractable issues requiring political solutions.

Whether abroad -- Iraq, Afghanistan, Libya, natural disasters such as in Japan and Haiti, the Arab awakening, terror, India-Pakistan and fear of Chinese or Russian assertiveness -- or at home -- the economy, jobs, healthcare, immigration, education and erosion of the middle class -- the list of crises and potential crises is long indeed.

Perhaps our system of governance could once handle some of them. It cannot handle all of them and is overwhelmed, broke and broken.

What can be done? Changing the Constitution to a parliamentary model that combines the executive and legislature and yields authority to the majority party as in the United Kingdom is fanciful. Imposing term limits, balanced budget amendments and other gimmicks likewise are unworkable. Wishing away partisanship is delusional. Hoping for a new and universally acclaimed leader to arrive won't happen in anyone's lifetime. And waiting for a spectacular crisis to rally the nation such as another economic depression or second Pearl Harbor will prove to be calamitous if that event never occurs.

Cynics take the long view and suggest that the best revenge is living well, meaning as the Mad magazine poster child Alfred E. Neuman put it "What, me worry?" Yet, we need to replace cynicism with something more workable. Here are three ideas to that end.

First, make voting for president mandatory by at least showing up at the polls. Whether a vote is cast or not is up to each voter. The theory is that the only way to bring the system back into balance is to have so many Americans vote that money no longer can influence opinion because so much of it would be needed to affect not just a plurality of Americans as generally about only half of us vote but a near majority if 85 or 90 percent of Americans showed up on Election Day.

Australia and Switzerland have mandatory voting. It works. And if people complain about impositions, the next time you go to an airport, ask whether voting every four Novembers is as intrusive and unpleasant as the security checks required for flying.

Second, as the 21st Amendment repealed the 18th (prohibition), it is time to repeal the 22nd that limits presidents to two terms and permit a third term so that the nation doesn't have to endure so frequently the process of educating new presidents or once into a second term as a lame duck, the campaigns for a replacement starting so quickly.

Finally, amend Article I, Section 2 of the Constitution to lengthen terms in the House of Representatives to four years. This will alleviate the two-year pressures of running for office and give members greater opportunities to govern.

The nation has two choices. It can deny and defer these challenges and crises. Or it can confront them. If we choose the latter, we must repair our governance and politics. If not, we will remain broke and broken.

(Harlan Ullman is chairman of the Killowen Group, which advises leaders of government and business, and senior adviser at Washington's Atlantic Council.)

(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)



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