The TV license notice came through the letterbox this morning. A couple of hours later I turned on the News at One today on RTE to hear a German economist get interviewed on the Eurozone crisis. The presenter posed the questions in a politely deferential and matter-of-fact style, lending the impression at times that the economist was a member of RTE’s wider network of impartial economic analysts.
As it turned out, he worked for Deutsche Bank, and while the conversation touched on what the economists’ ‘compatriots’ might think, and while it concerned itself with what ‘the markets’ were seeking, it did not see fit to ask what the economist’s colleagues at Deutsche Bank might think.
You’d think it would be rather relevant, given the determining role played by big German banks in the present crisis. So, I get a demand to pay for public service broadcasting, and then when I try and remind myself just what it is I might be paying for, RTE hits me up with an example of private German bank service broadcasting.
(image via)You might find this interesting. It is a piece by Juan Torres López, Carlos Martínez García, and Francisco Jurado, published originally in Spanish on Público.
The extraordinary rise in the Spanish risk premium and that of other countries even closer to the heart of Old Europe places us at the outer limit of what citizens ought not not to consent.
Nothing has changed in Spain in recent days -except new public debt auctions, of course- that could have given the idea to “the markets” that our economy’s situation is worse than a few weeks ago and that, as such, it justifies a rise in the interest rate that we should have to pay in order to fund ourselves. It is a matter, quite simply, of new casino operations betting against insurance, provoking themselves those results that best suit investors who, of course, have no concern regarding what goes on in the real economy, in people’s lives, but rather how to improve their betting positions in order to earn more money.
When the banks that had caused the crisis we are living through needed funding, governments and the European Central Bank did not hesitate to come to their aid, on some occasions because they said they were ‘too big to be allowed to fail’ and on others because there was a need to “save the financial system”. Multiple billions of euro have been spent on this; more than 800 billion in Germany and France alone.
However, when it was the states that needed funding, basically as an effect of the crisis that the banks had caused, albeit on a far smaller scale, instead of being treated with the same generous conditions that the banking sector received, they had to be placed in the hands of the banking sector itself. And thanks to this, not only did the banks raise their heads again, lending at rates five or six times higher than the money they got at 1% from the European Central Bank, but they also managed to put the governments against the ropes and demand new liberalising reforms from them as an indispensable condition for getting out of the crisis, when, in reality, it was the general application of this type of measures that caused it.
The governments, and the Spanish one in particular, have been telling the citizens that in order to put an end to this situation the markets must be kept contented and that to this end it is unavoidable to carry out the reforms that are demanded of them and which, in large part, have already been implemented: in the labour market and in pensions, privatisation of public enterprises, and, soon, of essential public services. But these prescriptions have proven to be a big lie, as is shown by the fact that neither do they produce the beneficial effects on the economy used to justify them, nor do they halt speculative attacks against our debt.
To try and confront this situation, which the president of the Junta de Andalucia describes as “financial terrorism”, by giving in to extortion, as the socialist government is doing, is something worse than simple naivety. The reforms it has carried out have only served to weaken even further the capacity for generating employment and investment in our economy and, by holding back recovery and growth in activity, they will end up making public debt even more expensive in the medium and long term, turning this dynamic into a vicious circle that ruins the states themselves, their essential public services, and, as a consequences, the entire citizenry.
The financial terrorism that it is destroying entire economies cannot be combatted through submission, but with firmness and decisiveness, by defending the economy that creates employment, wealth and welfare, and by clipping the wings of speculative capital.
Europe has the means to achieve this.
It must guarantee that states have adequate funding available through the European Central Bank, by negotiating conditions that allow it to generate revenues and not destroy its sources, as has been happening. It is an unacceptable ignominy that irresponsible banks are allowed to borrow at 1% and that the peoples should be obliged to do this at up to 10%, as is happening in certain cases.
Moreover, Europe should establish taxes on speculative financial transactions in order to disincentivise these as much as possible. And Europe also has the moral obligation to establish capital controls that prevent unscrupulous financiers from gambling with the future of monetary union, social and economic stability, and the welfare of its citizens.
But neither Spain nor the rest of the European countries can wait until all this is resolved in Brussels. The government and the political parties that support it will be wrong once again if they cut social rights again in the belief that this will reduce the voracious appetite of the markets. Things will get even worse for all of us, except the banking sector and big businesses.
In a real democracy, the people are the true bearers of national sovereignty, and as such, they must constitute themselves as protagonists in the political decisions that are taken, as actors and as their main beneficiaries. If we lived in that real democracy, and the citizens really knew what was happening, they would not consent to the type of terrorism that is being practiced, nor would they consent to the complicity of the governments. And this is why we believe that it is essential that social movements and political, union and citizen organisations of every type make the maximum effort to inform, to raise awareness and to mobilise all people who, independent of ideology or political position, are outraged and react against the injustice and the irrationality that is being imposed on us.