Socialist Worker

Chaos from Dubai could spread to Britain

Issue No. 2180

Last year Gordon Brown visited Dubai and, with his usual level of insight, praised the country for helping mitigate the global financial crisis.

In reality, Dubai’s crisis will have an effect on jobs and companies here. The United Arab Emirates (UAE) holds at least £5.9 billion of investments in Britain, while British firms have holdings of £4.6 billion there.

The emirate’s companies own parts of Alton Towers, the London Eye, P&O and hotel chain Travelodge.

Dubai even owns a 20.56 percent stake in the London Stock Exchange itself.

During the current crisis more than £14 billion was wiped off the share value of Britain’s banks—many of which are now owned by the Labour government.

That is before even counting the at least £30 billion of loans to the UAE the banks have built up.

British bosses were at the heart of trying to cash in on the Dubai bubble. Over 30 percent of company bosses in the Dubai financial sector are British nationals.

The construction industry in Britain is now owed £250 million in unpaid bills from Dubai.

And the companies at the heart of the PFI scam projects for our schools and hospitals are up to their necks in the Dubai crisis.

Yet again ordinary people will feel the brunt of the reality of financial speculation.

Will Greece go bust in the crisis?

Is Greece the next Iceland? The financial press is speculating that because of its spiralling budget deficit it may have to call for an International Monetary Fund (IMF) bail out.

Greece looks likely to be an early casualty of the Dubai crash. Its banks are also in serious trouble over their massive investments in the Balkans, which have gone belly up.

The new centre-left government is set to unveil its first budget. The European Union and the IMF are demanding cuts.

But the same advisors also express fears that the country’s combative working class might take to the streets, just as in Iceland earlier this year, where the government was forced from office.

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Tue 1 Dec 2009, 18:34 GMT
Issue No. 2180
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