EU sovereign-debt crisis approaches “The Iberian

Peninsula”
EU Observer : “The sovereign debt crisis behemoth that had shaken Europe to its core
by the end of Monday appeared to be moving on southward to demand its latest victims
as investors appeared unconvinced that the Irish bail-out plan was working. Dublin also
announced it would hold elections early in the new year.”

Portuguese, Spanish and EU leaders, alarmed at the seemingly unquenchable

vengeance of this marketplace leviathan, insisted that the two Iberian nations were very
far from having to follow Ireland and Greece in asking for bail-outs.

The premium on Spanish bonds over their German counterparts, viewed as the ne plus
ultra of safety, climbed to 2.1 percentage points, up from 2.02 points on Friday, before
Ireland had officially applied for the EU-IMF financial rescue. Separately, premiums on
Portuguese debt rose to 4.6 percent. European stock markets slid, with Spain's Ibex
down 2.7 percent, Ireland off 1.4 percent, and Italy closing at 1.2
percent.

Portuguese Prime Minister Jose Socrates insisted that Lisbon

needed no help from any euro zone bail-out scheme, saying there
was "no connection" between the Irish situation and Portugal's own
debt problems.

"Portugal doesn't need anyone's help and will solve its own problems," he said,
stressing that his parliament, due to pass further austerity measures this week, and will
slash its budget deficit from 9.3 percent of GDP to 7.3 percent this year, and then in
2011 to 4.6 percent giving the country a "lower deficit than France, not to mention
Greece, Ireland, the UK, the US or Japan."

But market commentators, worried that state deficit figures jumped two percent in the
first nine months of this year, appeared unconvinced. Meanwhile, the country's two
union centrals were readying a general strike against austerity planned for Wednesday.

Not helping matters, on the weekend, centre-right opposition leader Peder Passos
Coelho accused the government of fudging the numbers when it came to the state of
public debt, saying that the true number is 122 percent of GDP, not 80 percent as
attested.

Spanish finance minister Elena Salgado for her part, drilled by a radio reporter on
whether Madrid will ultimately need help too, replied: "Absolutely not...Spain is doing
everything it has promised to do, with tangible results."

EU economics chief Olli Rehn sought to buttress the the standing of Portugal insisting
on the "very different" situation between Lisbon and Dublin, while the head of the
eurozone, Luxemburgish Prime Minister Jean-Claude Juncker described the market
vigilantism against Portugal and Spain as "not justified". Railing against the state of
affairs, Mr Rehn told MEPs on Monday: "Any talk of deconstruction of the European
project is irresponsible. All member states would have been in a much more difficult
situation without the European Union and its political shield."

"'The euro is, and continues to be, the corner stone of the European Union. It is not only
a technical monetary arrangement, but it is indeed the core political project of the
European Union."

"Therefore it is indeed essential that we will do our best, do our utmost, to protect and
reinforce this European construct." In Ireland, leader Brian Cowen attempted to quell
growing rage at his handling of the economy after his Green coalition partners called for
elections in January and backbenchers from his own Fianna Fail party began to call on
him to resign, announcing a general election early in the new year following passage of
a draconian EU-IMF troika-imposed four-year budget.

Irish media however are reporting that opposition leaders from Fine Gael and Labour -
expected to form a coalition following any vote - are demanding an election ahead of the
passing of the budget.

On Monday, the IMF demanded in a position paper that Dublin slash welfare payments
and cut the minimum wage. Separately, further details of the four-year austerity budget
are trickling out ahead of its presentation, expected sometime in the next 24 hours, with
efforts to ease the costs to business of electricity, broadband, legal fees and rubbish
collection.

Germany was also insisting that conditions on any loan also include a raising of
Ireland's ultra-low 12.5 percent corporation tax.

"The German government will not be making proposals" government spokesman

Steffen Seibert told reporters in Berlin.

"But it is clear that corporation tax should be one point among others when one
considers how to increase the 'receipts' part of the budget," he added.
Commissioner Rehn on Monday also suggested, speaking to Ireland's RTE broadcaster
that the bail-out "is likely unfortunately to imply tax increases."

“DUBLIN (Nov. 22) -- The Irish government stood on the brink of collapse Monday, a
day after being forced to accept a massive bailout from the European Union and the
International Monetary Fund.

Irish Prime Minister Brian Cowen said he would call an election for early next year, once
Ireland passes an emergency budget and finalizes the bailout.

The admission represented a huge political blow to Cowen, who only days ago was
denying even the need for a bailout to solve the problems brought on by Irish banks'
reckless speculation in overpriced real estate.”

But even with Ireland seeking aid, financial analysts say Spain and Portugal remain on
course for potential bailouts of their own. Spain is fighting Europe's highest
unemployment rate and Portugal is seen as doing too little to restructure an unusually
uncompetitive economy.

Not a pretty picture I may say so, for the future of The European Union.

  Mircea Halaciuga, Esq

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   Finante/Servicii financiare/Investitii