Judge: N.J. School Aid Cuts Unconstitutional. Christie: So What?
March 23 (LPAC)--A judge appointed by the New Jersey Supreme
Court has ruled that cutting $1.6 billion from state aid to local
schools is unconstitutional. Gov. Muammar Christie has declined
to say if he would obey a court order to restore the funding. He
told NJ101.5 radio's ``Ask the Governor'' program that the state
doesn't have the money to restore the cuts, even if the court
orders him to do so.
Superior Court Judge Peter Doyne ruled March 22 that state
aid cuts have prevented school districts from providing the
``thorough and efficient'' education mandated by the state's
constitution, especially for the state's poorer children.
Christie's education `crats argued before the judge that the
state still provides a ``thorough and efficient'' education with
austerity funding. Others disagree. Garfield Superintendent of
Schools Nicholas Perrapato, for example, said the cuts have
``pulled the rug out'' from poorer districts such as his own,
northjersey.com (the {The Bergen Record} online) reports.
Garfield's funding has been cut by $3 million. And it has laid
off nearly 100 staff, eliminated many programs, and increased
class sizes.
But the solution is not yet coming from those who think they
are defending education: ``It would also be unfortunate if people
felt the need to blame anybody for this,'' said New Jersey
Education Association spokesman Steve Wollmer. [FHB]
EUROPE
Portuguese Government Falls
March 23, 2011 (LPAC)--Portuguese Prime Minister Jose Socrates
said on Wednesday that he had submitted his resignation to the
President after Parliament had earlier rejected his minority
Socialist government's latest austerity measures in a vote.
The rejection "had taken away from the government all
conditions to govern," Socrates said in a televised statement.
He said his government would remain in power in a caretaker
capacity.
All opposition parties voted for a resolution to reject the
measure's austerity plan proposed by Socrates. Only the
Socialists, who have 97 seats in the 230-seat parliament, voted
in favor of the measures. [WFW]
Franco-German Trade Union Summit Denounces the Destruction of
Labor Rights and Austerity
March 23, 2011 (Nouvelle Solidarité) -- The winds of Wisconsin
are visibly blowing in some parts of Europe. An unprecedented
Franco-German summit took place yesterday in Paris among French
and German trade union leaders who signed a joint declaration
denouncing the "Pact for the Euro," formerly branded the
"Competitivity Pact." The meeting in Paris yesterday will be
followed with an identical one in Berlin tomorrow.
Annelie Butenbach of the German trade union federation DGB
sided with leaders of the major French union federations, (FO,
CGT, CFDT, etc.) to denounce the "Pact for the Euro" adopted by
French President Sarkozy and German Chancellor Merkel on March 11
as a mere "diktat of the markets."
With the pact, the 17 member states of the Eurozone
committed themselves to a measures to inscribe debt ceilings in
their constitutions, to reconsider (i.e., abolish) adjustment of
wages for inflation, to link retirement age to demographic
evolutions, and to make the labor markets "more flexible."
"Two countries [France and Germany], in the context of a
summit of 11 member states [of the Eurozone], are trying to
impose on all 27 [members of the EU] a model of economic and
social destruction," said Pascal Pavageau of Force Ouvrière (FO)
at the press conference preceding the summit. "This diktat of
financial markets, a pact of the wolves of finance, embodies the
germ of an extremely far-reaching social explosion," he said.
Pretty much in line with those fighting in Wisconsin, in the
joint declaration, German and French unionists rejected the "wage
freeze which threatens the rules of national collective
bargaining" and the "automatic adjustment of pensions to the
demographic evolution."
To constitutionally limit the debts of European countries
"is irresponsible," said Butenbach. "It limits the powers of
governments to act and invest, and it imposes social cuts." A
Merkel-Sarkozy pact is unnecessary. What we need is an increased
economic and social convergence to be undertaken with a program
of innovation to promote jobs and growth instead of austerity
plans.
To protest the pact, Brussels police sources indicate, at
least 10,000 people will demonstrate in Brussels tomorrow. Other
demonstrations are planned in London against the cuts in public
spending and a Europe-wide international demonstration in
Budapest is planned for April 9.
"The struggle is only starting," said Marcel Grignard,
number two of the French CFDT federation. CGT Secretary General
Bernard Thibault said that "the pact, if adopted in its essence,
will form a protective shield for employers" against any
legitimate demand from organized labor. [KAV]
Does German High Court Ruling Against Deutsche Bank Derivatives
Scam Set Legal Precedent in France, Europe?
PARIS, March 23, 2011 (Nouvelle Solidarité) -- "The Victory of
David against Goliath" headlines {Les Echos} in modest front-page
coverage of the legal victory of the German Mittelstand firm Ille
Paper Service against bank giant Deutsche Bank. The bank was
fined a half-million euros, yesterday, by the Federal Court of
Justice, Germany's highest court, based in Karlsruhe.
{Le Parisien} underlines that Deutsche was fined for the
motive of not having sufficiently informed its client about the
underlying risks of the loan, "an argument that could snowball."
Quoting the court ruling, the paper says the bank "failed in its
obligation of counsel ... in respect to a highly complex
product." Deutsche got the Ille firm hooked into a "spread
ladder swap" which "consists of swapping a long-term loan against
short-term loans, speculating on lower interest rates.
"Deutsche Bank has sold hundreds of such products to German
cities, such as Pforzheil or Hagen and to companies seeking to
lower the burden of their loans. Instead, they lost millions of
euros when the curves of the short-term interest rates revealed
themselves during the financial crisis.
"The decision of the Federal Court was very much awaited
while several cities and firms have pending suits against
Deutsche Bank and other financial corporations in similar cases.
Already now, Deutsche Bank is facing eight cases before the
Federal Court and 17 others before lower courts, admits the bank.
The amount of damages and interest claimed 'is very tiny,' says
the bank.
"But the claims would be only the tip of the iceberg as
compared to the extent of losses incurred by certain clients from
the credit derivatives, according to their lawyers. 'From my side
I think that the totality of losses reaches over a billion
euros,' stated Jochen Weck, the attorney for Ille Agence France
Presse (AFP). 'Deutsche Bank sold this type of product more than
700 times,' he added."
More important is the fact that the Federal Court "ruled
that there existed a 'conflict of interest', since [Deutsche
Bank] was making money while its client was losing money.
Deutsche Bank made EU80,000 at the expense of the Ille firm,"
said Weck. "It's a good ruling," attorney Klaus Nieding told AFP.
Nieding is representing 60 firms and communities that signed
similar contracts for a nominal value of EU160 million. "We are
also considering the possibility of reopening certain older
cases," he said.
The bankers are, of course, freaking out and calculating how
much money they risk losing if the ruling becomes a legal
precedent in all the pending cases that exist in Germany, France,
Italy and the United Kingdom and involve all major investment
banks, notably UBS, Dexia, JP Morgan, and "cash machine" number
one, Goldman Sachs. Udo Steffens, president of the Frankfurt
School of Finance, told AFP, "these cities want to make a profit,
they made bets and they lost? That's market economics. And now
they claim they didn't want to make bets."
{Les Echos} editorialist François Vidal wonders: "Can the
decision of a German Court, serve as 'case law' for the rest of
Europe? The answer is, of course, no. However, the ruling of the
highest court of Germany against Deutsche Bank radically turns
the tables in the extremely sensitive case of loans and
sophisticated derivatives sold by the banks to numerous
Mittelstand firms and local governments. All things taken into
account, the mechanisms involved are the same as those at work
with the U.S. subprimes. The desire to maximize short-term
profits at the expense of long-term risk taken by the borrowers,
and, for the cities and territorial departments, by the community
as a whole." [KAV]
