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Europe’s Debt Crisis Hits New Heights

A day after mass popular demonstrations, the governments of Spain and Greece specified billions of Euros in cuts to social programs yesterday. The Spanish government specified €40 billion in budget cuts and tax increases which includes a minimum 9% across the board cut for all government ministries, a third consecutive salary freeze for civil servants, a reversal of tax breaks for home buyers, and an increase in taxes on lottery prizes. In a rare gesture to seniors, pension payments will increase 1 percent for now.

Despite demonstrations on Wednesday that turned violent, the Greek government’s three-party coalition agreed that in order to stay in good favor with its creditors, and make its next payment of €31 billion, Greece has to raise taxes and cut social programs. The conservative-led coalition on Thursday agreed upon a €13.5 billion austerity program and are currently seeking authorization from both financiers and the Greek Parliament. Alexis Tsipras, head of Greece’s predominant left-wing opposition party Syriza which won a significant number of seats in the election, staunchly rejects all austerity measures. Tsipras proposed an international meeting to forgive Greek debt, saying “the solution we propose is a European conference on debt, as happened in 1953 for the Federal Republic of Germany.”

Meanwhile in Italy today, tens of thousands of union members marched in the capital, Rome, protesting austerity measures. Also joining them were workers at the Colloseum and Roman forum, forcing a closure of the two tourist landmarks. Prime Minister Mario Monti’s government approved healthcare and pension cuts, a continued freeze on wages of public workers, and an increase in taxes, in a bid to avoid a Greece-style debt crisis. Italian unemployment has hovered at 10%.

And, this morning in France, the Socialist government of Francois Hollande, elected earlier this year, announced a dramatic 75% tax increase on France’s super-wealthy and corporations. The tax hikes, which are temporary, will garner €30 billion, and accompany a €10 billion spending freeze. French businesses have denounced the tax hike, claiming it is “impeding investment and so will block innovation” (Huffington Post).

GUEST: Costas Panayotakis, associate professor of sociology at New York City College of Technology at the City University of New York and author of “Remaking Scarcity: From Capitalist Inefficiency to Economic Democracy.”