AGGRESSOR : in plain English a country or organisation(s) that begins hostilities provoking reaction
(In the text below I will try to develop and share some of the thoughts and ideas generated by the podium presentations and the discussion that followed during the ULA meeting in Dublin’s Wynns Hotel last Tuesday night).
It is becoming abundantly clear that there is no political will within the leadership echelons of the European Union (E.U.) to confront the markets and to resolve the crisis of the sovereign debt. Some explanations on this lamentable attitude of the leaders focused on their sheer incompetence. But this explanation does not suffice, especially after the recent financial coup d’Etats in Greece and in Italy, that put a brutal end to some prevalent conceptions of bourgeois/parliamentary democracy. It is now evident that these attitudes are not only a matter of mediocrity and incompetence, but also of active political complicity with the markets.
What do I mean by “the markets”? These are a body of investment banks, insurance companies, pension funds and speculative funds that buy and sell essentially four products: foreign exchange currency, bonds of all sorts, State debt and a variety of other products known as ‘derivatives’. .
To have an idea of the colossal force of these markets, let us compare two figures: The real economy of every State ub the world creates, every year, wealth estimated at 45,000 billion Euros. At the same time, in the financial sphere, the “markets” mobilize a capital volume estimated at 3.5 millions of billion Euros. That is to say 75 times more than what is produced by the real economy.
It must be evident, therefore, that: no national, even powerful economy (like Italy, for example, the world’s eighth must powerful economy), can withstand the assault of the markets when they decide to attack in a co-ordinated fashion. As they have been doing for over a year now against some European States labelled in an insulting manner as PIIGS : Portugal, Ireland, Italy, Greece, Spain.
These “markets”, however, are not some exotic forces from some distant horizons attacking our kind local and national economies – resembling some of those ‘terrorist’ networks we have heard so much about. No, in their majority, these “attackers” are our very own European banks (the very same organisations that were saved in 2008 with taxpayers’ and citizens’ money). In other words, it is not American, Chinese, Japanese or Arab or Iranian funds that attack massively certain countries of the Euro zone. It is, in a few words, an internal aggression.
The attack is led by European banks, by European insurance companies and European pension funds that ‘manage’ the savings of European citizens. It is this cabal that owns the bulk of the European sovereign debt . In the name of theoretically defending the interests of their customers, these financial moguls speculate and increase the interest rates that States must pay when they get into debt. To a point that they drove several countries (Ireland, Greece, Portugal) to bankruptcy. Resulting in turn in a situation where citizens are forced to bear measures of barbaric austerity framed by governments that believe such measures will appease the “market” vultures, that is to say their own banks…
Furthermore, these establishments are able to borrow funds from the European Central Bank (ECB) at a rate of 1.25%, and then lend to States like, for example, Italy or Spain, at interest rates as high as 7%. Coupled to this abomination is the scandal of the influence of the three major rating agencies (Fitch Ratings, Moody’s and Standard & Poor’s) for whom the confidence ‘rating’ that they attribute to a State depends on the interest rate that this State will pay to obtain credit from the markets. The weaker the rating, the higher the interst to be paid and conversely the lower the confidence rating (see the discussion re : the imminent downgrading of France’s AAA rating).
These organisations (private businesses of whom the shareholders are often their own customers) made some crucial organic errors, particularly re the subprime lending, of those famous real estate loans to developers which were at the origin of the current global financial crisis. They continue nevertheless to play a dreadful and perverse role. The various austerity plans applied in Europe, translate themselves into a general impoverishment, which reduces economic activity and consequently the perspectives of growth. On the basis of that reality, the rating agencies review downwards the grade of each State which now must concentrate more financial efforts for the payment of its debt. And it will not be able to do that without reducing again its expenditures and increasing direct and indirect taxes. Which will impair and weaken growth. And then, again, the agencies will go to work and lower the rating…
This infernal cycle of economic and financial war, for that’s what it is, explains why the position of Greece has declined so drastically as its government(s) multiplied expenditure cuts and imposed brutal austerity measures more and more. And the situation is getting worse by the day. Young people are leaving, there is internal flight from the cities to the countryside, people are starving in the streets and suicides, especially of men betwwen the ages of 30-45 have shot through the ceiling.
And it is through this infernal process that the markets finally got what they wanted; i.e. that their own representatives move directly into power without having to subject themselves to elections. Both Lucas Papademos, the new Prime Minister of Greece, and Mario Monti, president of the Italian Council of Ministers, are bankers. Both of them worked for the American bank Goldman Sachs, specialized in the judicious placement of its cadres into principal posts of political strength. Equally, both of them are members of the influential Trilateral Commission. Do I hear the word ‘conspiracy’ thrown about?
The objective of these representatives of the markets, benignly referred to as ‘technocrats’, is to impose privatisations, reductions of rights, further sacrifices by the working people and more austerity in a context and framework of what I call “limited democracy” without taking into consideration the social cost. Measures that other elected politicians did not dare put into place fearing that their popularity would disintegrate.
The European Union is probably the last territory in the world where the brutality of capitalism is balanced somewhat and controlled by public political forms of social protection. What we call the Welfare State. The markets do not tolerate it any more and they want to demolish it in a true context of “décivilisation”. Such is the strategic mission of the technocrats that attained power in these financial coup d’Etats. And there is more to come.
I do not believe that these technocrats will succeed in pulling Europe back from the dramatic edge of the precipice on which it now totters If the solution were technical, the crisis would have been over a long time ago. They will throw more measures on us, they will go through the shananigans of threats and Treaties. But what will happen when the citizens finally conceptualise that their sacrifices have been in vain and that the recession continues and becomes a depression? How violent will the protests be? How will order be maintained in the economy, in the minds of the people and in the streets? Will we witness a triple alliance of economic power, media strength and military/repressive might? Will the European democracies transform themselves into authoritarian regimes?
(to continue - with further references to some of the points made by the SP and SWP speakers during the ULA Meeting mentioned above)
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