SOUP KITCHENS AND TENT CITIES
Crisis Plunges US Middle Class into Poverty
By Gregor Peter Schmitz and Gabor Steingart
The financial crisis in the US has triggered a social crisis of historic dimensions. Soup kitchens are suddenly in great demand and tent cities are popping up in the shadow of glistening office towers. Even drug dealers are feeling the pinch.
Business is poor in the New York banking district around Wall Street these days, even for drug dealers. In the good old days, they used to supply America's moneyed elite with cocaine and crack. But now, with the good times gone, they spend their days in the Bowery Mission, a homeless shelter with a dining hall and a chapel.
Alvin, 47, is one of them. His customers are gone, as is the money he earned during better times. And when another dealer higher up the food chain decided he was entitled to a bigger cut of the profits, things became too dicey for Alvin. "I'm afraid," he says.
WORST DEPRESSION' SINCE 1930S
Optimism Dips As Economic Downward Spiral Continues
The German economy is sinking precipitously as a result of the global economic crisis, creating the worst downturn since the Great Depression. Politicians and labor leaders are concerned about social unrest, but the government remains firm in its conviction that its not time yet for a third stimulus package.
It's been a bad week for German Chancellor Angela Merkel. At the start of the week, she tried to cheer up her compatriots, saying the economy showed signs it may be bottoming out. Since then, though, it's been one negative economic development after the next.
The German economy is in a nose dive and is already in its worst slump in almost 80 years. Indeed Hans-Werner Sinn, the head of the respected Munich-based Ifo Institute economic think tank, is describing the current crisis as the "worst depression" since the global economic downturn of the 1930s.
Volkswagen Mulls Porsche Takeover
Volkswagen is reported to be pondering a takeover of the Porsche sports car business. Parent company Porsche Automobil Holding is struggling to service its debts and CEO Wendelin Wiedeking is reported to be losing the backing of the Piëch and Porsche families.
The Porsche-Volkswagen corporate saga continues with reports that Volkwagen is considering a bid for Porsche's automotive business, something that could completely change the balance of power between the two companies. Parent company Porsche Automobil Holding SE launched an audacious takeover of the much larger VW over three years ago, and it now owns just over 50 percent of the company. However, financial difficulties at Porsche, including massive debt, seem to have forced a rethink of the relationship between the two German carmakers.
Will Taxpayers Have to Bail Out EU Parliament Pension Fund?
The economic crisis has hit countless retirement funds, including that of members of the European parliament. They may take the controversial step this week to use taxpayers' money to top up the pension fund.
Despite denials from Brussels, EU taxpayers are to foot the bill for hefty and legally controversial pension supplements for many members of the European parliament. Their pension fund has run up a loss of €120 million ($156 million) as a result of risky share investments, according to an internal memo of the secretary-general of the European Parliament.