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Spain's Rajoy confronts reality

The Spanish Prime Minister is backing a few steps away from his deficit reduction plan
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A massive demonstration last week in Valencia Spain. It was in response to police violence against an earlier demonstration by students protesting austerity cuts to education, and youth unemployment. (JOSE JORDAN/AFP/Getty Images)

Mariano Rajoy was sworn in as Spanish Prime Minister just before Christmas and pledged to meet EU imposed budget targets for 2012/13 of reducing his country's deficit to 4.4 percent of GDP this year from an estimated 6 percent in 2011/12

Then he saw the books.

Then the EU's economists forecast a recession throughout the euro zone including a prediction that Spain's economy would shrink by more than 1 percent in 2012.


EU lifts more Zimbabwe sanctions, but bans on Mugabe continue

However, while the travel ban against Justice Minister Patrick Chinamasa and Foreign Minister Simbarashe Mumbengegwi will be suspended so they can travel to Brussels for talks, asset freezes against them will continue.

Warsaw - I'm in Warsaw on assignment and came across a very interesting interview in the current edition of the Warsaw Business Journal.  It's with Tadeusz Mazowiecki, the first post-Communist Prime Minister of Poland and current adviser to Polish President Bronislaw Komorowski.

Here are some of the key points:

"There is a financial crisis in the euro zone. This has had a psychological effect on Poles, but I do not think it has had a fundamental influence on our attitude towards the European Union, which remains positive. There is a deep-rooted social awareness that the future of Poland is linked with the European Union, and the young generation does not remember the time when we fought for our membership of the EU, and treats it as a natural thing."


Euro zone debt crisis: War?

Hyperbole sweeps the pundits, obscuring the situation

Sometimes commentators can get swept up in events but the euro zone debt crisis really is bringing out the worst in pundits. Is what's happening in the euro zone really a kind of warfare?

Here is Edwin Truman, of the Peterson Institute for International Economics, in yesterday's New York Times:

"FOR the third time in a century, a bitter conflict fuelled by historic grievances has erupted in Europe, with the United States looking from afar and hoping not to get involved. Of course, this is not being fought on the battlefields but in the arcane arenas of international finance. But as in World War I … "

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Athens' firemen continue to douse down flames following last night's riots in protest against further massive austerity cuts (ANGELOS TZORTZINIS/AFP/Getty Images)

The Greek parliament voted to bite down harder on the austerity bullet and passed a further 3.3 billion euros ($4.4 billion) cuts to government spending. The headline measures were a 22 percent reduction in the minimum wage and another 15,000 government employees being laid off,

On top of that euro zone finance ministers are saying the Greek government must find another 325 million euros in savings if it is to receive an EU funded 130 billion euro bail-out ($172 billion).

No wonder there were violent demonstrations last night.


Greek debt crisis: have Greek leaders or haven't Greek leaders agreed a deal?

Will the rest of the EU or won't the rest of the EU accept it?
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GREECE, ATHENS-FEBRUARY 10:Demonstators during protests against planned reforms by Greece's coalition government in Athens, February 10, 2012 during a 48 hours general strike.(Photo by Milos Bicanski / Getty Images) (Milos Bicanski/AFP/Getty Images)

In Greek mythology Hercules was set 12 impossible labors by the Goddess Hera, journalists have been set one impossible task by the Greek government: trying to summarize what is happening in the Greek debt crisis.

Late last night, following a marathon meeting (sorry, those Greek allusions can't be avoided) Prime Minister Lucas Papademos and the leaders of the three political parties in the country's coalition government agreed to a package of further austerity measures meant to insure Greece gets another bail-out from the EU. The bail-out is worth 130 billion euros ($ 171.4 billion).

The country's Finance Minister Evangelos Venizelos set off for Brussels to meet with his euro zone counterparts to present the plan and presumably get their approval.

He didn't get far on his journey before the plan came under attack both inside Greece and outside.

One of the political leaders in the room when the deal was agreed, Georgios Karatzaferis of LAOS, said he would not vote for it.

The Greek newspaper eKathimerini quotes the LAOS leader saying, "The creditors are asking for 40 years of submission. Greece will not give itself up." Karatzaferis added, "Greece can survive outside the EU but cannot survive under a German boot."


EU regulators block giant financial exchange merger

Brussels — German exchange complains of “black day for Europe” as EU blocks its $10 billion linkup with NYSE Euronext.

Unemployment soars in euro zone, plummets in Germany

Berlin — Divergences between the European economies revealed by contrasting unemployment figures.

Nearly half of under-25s are unemployed in Spain and Greece

Brussels — They call them Europe's lost generation: nearly 5.5 million young people unemployed across the continent.

It's Europe, they do summits differently here

Leaders agree fiscal compact - details left for later
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The EU's Big Three: French President Nicolas Sarkozy, German Chancellor Angela Merkel and Italian Prime Minister Mario Monti at eysterday's summit in Brussels. (PHILIPPE WOJAZER/AFP/Getty Images)

EU leaders met in Brussels yesterday. By their standards things went well. Contentious pre-summit issues were kicked aside - in this case, Germany did not push for the right to install a budget czar in Greece. Agreement was reached on a new fiscal compact for the euro zone, although the details of what was agreed were left for later. A lot of money was pledged, enough to make a person wonder where it will come from given how indebted many European governments are.

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