Almost two decades have passed since I was first accused of scaremongering. With more energy than knowledge, I organised a lonely campaign against the EU’s Maastricht treaty in the part of Dublin where I grew up. Urging a “no” vote in a 1992 referendum, I stopped people in the streets to warn that the rigorous economic rules contained in that treaty would lead to severe cuts in social spending. It is probably superfluous to add that I was on the losing side.
Having lived in Brussels for 16 of the intervening years, I can claim a reasonable understanding of the Union’s politics. Now aged 40, I have less respect for the Union’s institutions than when I first tried to learn how they work. As I have always disliked the “Euro-sceptic” tag and its xenophobic connotations, it is a relief to have finally found a label that sums up my views. So it is with great pride, I declare myself an “indignado”.
Indignation seems to be the only proper response to a letter that appeared in The Lancet, a medical journal, earlier this month. Written by several academics specialising in health issues, it lamented how the economic crisis has led to a 40% reduction in the budgets for Greek hospitals. “Overall, the picture of health in Greece is concerning,” the academics stated. “It reminds us that, in an effort to finance debts, ordinary people are paying the ultimate price: losing access to care and preventive services, facing higher risks of HIV and sexually transmitted diseases, and in the worst cases losing their lives.”
Indignation also seems to be the only proper response to the pharmaceutical corporation Roche, which has announced it will stop delivering cancer medicines to hospitals in Greece and warned that it will take similar action against Spanish hospitals. These measures are being introduced or threatened to punish hospitals that cannot pay their bills. Terminally ill patients are being deprived of treatment because of a crisis they did not cause.
Merkel’s sadistic stance
And indignation seems to be the only proper response to Angela Merkel, who praised as “remarkable” an austerity programme introduced in Portugal earlier this year. Healthcare was one of the main targets in that programme, yet Merkel still demanded that more pain be inflicted on the Portuguese public (literally). José Manuel Barroso, who was prime minister of Portugal before taking up his plum post with the European Commission, argued that drastic cutbacks were “indispensable for confidence in the European economy”.
Last month, the same Barroso claimed that a “silent revolution” had been undertaken. He was referring to how a spineless European Parliament rushed through its approval of half-a-dozen sets of new economic rules (dubbed the “six pack” regulation). These rules give the Brussels authorities greater power to scrutinise the budgets of national governments belonging to the EU and to penalise those who spend more on public services (including health) than the Union’s “Stability and Growth Pact” allows. Rather than constituting a revolution, the Parliament’s decision can more accurately be called a coup, as the writer and activist Susan George has suggested.
Barroso is no revolutionary, unless you count his youthful dalliance with Maoism. He is a reactionary, implementing a system of apartheid. Determining access to healthcare based on wealth is just as immoral as determining access based on skin colour.
Indeed, the experience of South Africa is instructive. Because American and European governments pressurised the African National Congress to dispense neo-liberal prescriptions in the early 1990s, racial inequalities have persisted there. In 1993, the richest 23% of South Africans had access to 61% of total health spending.
Discrimination against the disadvantaged
A form of health apartheid risks being entrenched in Greece. Even though Greeks work longer hours than Germans, the average income in Greece is now lower than it was when the country entered the EU in 1980. Out of a population of 11 million, nearly 1 million are unemployed. Greek governments were certainly guilty of profligacy in certain areas, most notably on military expenditure, which is rightly being decreased. Yet both the Athens and the EU elite are discriminating against the disadvantaged and cosseting those who are already comfortable. The richest 20% of Greeks pay the least income tax. By contrast, one-third of Greek citizens were in danger of poverty even before the crisis started to bite; rises in value-added tax mean they are the ones footing higher bills.
The denial of essential medicines to Greek hospitals appears all the more cruel when you realise that 70% of Greece’s 300 billion euros debt is held by French and German banks.
An audit published last month by the University of Limerick estimated that Ireland’s debt stood at 371 billion euros at the end of March. Of that sum, 279 billion euros related to the covering of bank debt. The Limerick team concluded it was reasonable to assume that a large part of the almost 92 billion euros remaining (identified as “direct government debt”) could be attributed to the banking crisis.
Imagine this situation. You live in the same town as a multi-millionaire, whose playboy lifestyle lands him in trouble. Using some opaque formula, the local court decides that he is not liable for his debts. Instead, it decides you will help repay them by not having an operation your doctor regards as necessary to keep you alive. That would not be fair, would it?
So why should Greek cancer patients die to save German banks?
●First published by New Europe, 24 October 2011.
Showing posts with label Greece. Show all posts
Showing posts with label Greece. Show all posts
Monday, October 24, 2011
Wednesday, July 13, 2011
How Greece abandoned Palestine
When Andreas Papandreou died in 1996, The New York Times noted that he often left Western governments “befuddled or exasperated” as he took positions “diametrically opposed to theirs.” Citing examples of his “maverick” behavior, the paper’s obituary referred to how the Greek prime minister granted diplomatic status to the Palestine Liberation Organization in 1981, the year he first took office.
Like most political leaders, Papandreou was a man of contradictions. He professed to despise American imperialism, while allowing the United States retain military bases on Greek soil. Yet he deserves some posthumous acclaim for saluting the PLO when it was still a genuine resistance movement and for criticizing Israel more trenchantly than any of his counterparts in the then European Community.
In recent times, the current Greek premier George Papandreou has acted as if he wishes to totally negate his father’s legacy. No doubt, Greece’s refusal to allow the Freedom Flotilla II set sail for Gaza was partly the result of pressure -- and possibly even financial blackmail -- from the US and Israel. Nonetheless, it was not an isolated occurrence but the logical consequence of a process that was already underway.
In July 2010, Papandreou Junior visited Israel barely one month after the assault on the Mavi Marmara, in which nine Turkish peace activists were murdered by Israeli forces. As an immediate response to that massacre, Greece called a halt to a joint military training exercise then being undertaken with Israel off the island of Crete. But Papandreou had no qualms about going ahead with his trip to Israel as planned.
Israel was swift to reciprocate. In August last year, Benjamin Netanyahu became the first Israeli prime minister to visit Greece. Netanyahu reportedly used the occasion to recommend that the two countries be connected by a gas pipeline. It is not known whether the two men discussed how the Leviathan gas field – the source of the energy on Netanyahu’s radar screen at the time – is located off the Lebanese coast and how Israel’s exploitation of its reserves could spark a new conflict with Lebanon.
It is known, however, that both Israel and Greece continue to strengthen their military cooperation. Codenamed Minoas 2010, the operation that was stopped at the time of the Mavi Marmara bloodbath was, in fact, resumed in October last year. Apache and Black Hawk helicopters were used in the exercise, which tested out landing and take-off procedures in mountainous areas and under several different weather conditions. In December, Flight International stated that there had been at least four such exercises between Greece and Israel over the preceding few months.
Friction between Greece’s historic foe Turkey and Israel have almost certainly helped the Netanyahu-Papandreou relationship to blossom. Papandreou is surely an astute enough politician to have scented an opportunity for Greece to replace Turkey as Israel’s most valued ally in the Mediterranean. The similarities in the men’s backgrounds could well be another factor. Both were educated at highly regarded universities in the US (Papandreou in Harvard, Netanyahu in the Massachusetts Institute of Technology) and despite heading parties that are nominally different in ethos, both are heavily influenced by US politics and culture.
Perhaps more significantly, the recent intensification of relations has followed several years where the two countries have worked alongside each other under the umbrella of NATO. That US-dominated alliance has formed a ring around the entire Mediterranean. Almost every country bordering that sea is either a full member of NATO or has signed up to its Orwellian-titled Partnership for Peace.
Even though there appears to be no imminent prospect of Israel joining NATO, its ties to the alliance have grown exponentially over the past decade. An Israeli-NATO agreement on sharing intelligence was signed in April 2001. Five years later, Israel reached agreement on implementing an “individual cooperation program” with NATO. Updated in December 2008, the agreement paved the way for a high number of joint operations between it and the alliance. Greece has been involved too in most, if not all, of these operations. In 2007, for example, Greek warships took part in drills in Eilat, an Israeli port on the Red Sea.
Both Greece and Israel are also participating in Operation Active Endeavor, a NATO-coordinated exercise under which ships patrol the Mediterranean. That operation was, according to the official narrative, launched in response to the 11 September 2001 atrocities in the US. But in practice its remit has expanded beyond keeping a watch out for potential “terrorist” activity on the waves. In particular, it has been used as part of a repressive agenda of helping prevent foreigners who seek to flee poverty from reaching Europe.
In March, Active Endeavor’s scope was further broadened during preparations for the war against Libya. A 24-hour airborne surveillance system was put in place as part of the ongoing operation. Despite its severe economic problems, Greece has provided a number of warplanes and ships to that war effort, in which NATO has availed of at least seven Greek airfields.
Meanwhile, the solidity of Israel’s links to NATO were underscored shortly before Gabi Ashkenazi stepped down as head of the Israeli military in February. Ashkenazi, who oversaw Operation Cast Lead, which killed 1400 Palestinians in Gaza during December 2008 and January 2009, advised NATO strategists on what tactics should be used against Afghanistan and was treated to a farewell dinner in his honor at the Brussels residence of Giampaolo Di Paolo, chairman of NATO’s military committee.
On a proportionate basis, Greece is one of Europe’s largest spenders on the military, although this expenditure is being cut as part of a wider austerity drive that mainly affects vital public services. In 2009, Greece allocated 2.54% of its gross domestic product to military spending, the highest level in the European Union. Britain was next at 2.53%.
Greece is known to have concluded deals with several Israeli weapons makers, although it has not published comprehensive details on such deals. In February, Evangelos Venizelos, the Greek defense minister, confirmed that “precision-guided” weapon kits known as SPICES (Smart Precise Impact and Cost Effective). Elisra, a subsidiary of the leading Israeli arms manufacturer Elbit, has also supplied electronic warfare systems to the Greek air force over the past decade.
It is true that Greece has combined its ever-tightening embrace of Israel with calls for the blockade of Gaza to be lifted. But it is impossible to take those calls seriously now that the Athens government has assisted Israel in thwarting protest against the very same blockade. Andreas Papandreou’s championing of Palestinian rights might have had some moral weight in the early 1980s. Three decades on, his son George has become a craven accomplice in maintaining the Israeli occupation.
·First published by The Electronic Intifada (www.electronicintifada.net), 13 July 2011.
Like most political leaders, Papandreou was a man of contradictions. He professed to despise American imperialism, while allowing the United States retain military bases on Greek soil. Yet he deserves some posthumous acclaim for saluting the PLO when it was still a genuine resistance movement and for criticizing Israel more trenchantly than any of his counterparts in the then European Community.
In recent times, the current Greek premier George Papandreou has acted as if he wishes to totally negate his father’s legacy. No doubt, Greece’s refusal to allow the Freedom Flotilla II set sail for Gaza was partly the result of pressure -- and possibly even financial blackmail -- from the US and Israel. Nonetheless, it was not an isolated occurrence but the logical consequence of a process that was already underway.
In July 2010, Papandreou Junior visited Israel barely one month after the assault on the Mavi Marmara, in which nine Turkish peace activists were murdered by Israeli forces. As an immediate response to that massacre, Greece called a halt to a joint military training exercise then being undertaken with Israel off the island of Crete. But Papandreou had no qualms about going ahead with his trip to Israel as planned.
Israel was swift to reciprocate. In August last year, Benjamin Netanyahu became the first Israeli prime minister to visit Greece. Netanyahu reportedly used the occasion to recommend that the two countries be connected by a gas pipeline. It is not known whether the two men discussed how the Leviathan gas field – the source of the energy on Netanyahu’s radar screen at the time – is located off the Lebanese coast and how Israel’s exploitation of its reserves could spark a new conflict with Lebanon.
It is known, however, that both Israel and Greece continue to strengthen their military cooperation. Codenamed Minoas 2010, the operation that was stopped at the time of the Mavi Marmara bloodbath was, in fact, resumed in October last year. Apache and Black Hawk helicopters were used in the exercise, which tested out landing and take-off procedures in mountainous areas and under several different weather conditions. In December, Flight International stated that there had been at least four such exercises between Greece and Israel over the preceding few months.
Friction between Greece’s historic foe Turkey and Israel have almost certainly helped the Netanyahu-Papandreou relationship to blossom. Papandreou is surely an astute enough politician to have scented an opportunity for Greece to replace Turkey as Israel’s most valued ally in the Mediterranean. The similarities in the men’s backgrounds could well be another factor. Both were educated at highly regarded universities in the US (Papandreou in Harvard, Netanyahu in the Massachusetts Institute of Technology) and despite heading parties that are nominally different in ethos, both are heavily influenced by US politics and culture.
Perhaps more significantly, the recent intensification of relations has followed several years where the two countries have worked alongside each other under the umbrella of NATO. That US-dominated alliance has formed a ring around the entire Mediterranean. Almost every country bordering that sea is either a full member of NATO or has signed up to its Orwellian-titled Partnership for Peace.
Even though there appears to be no imminent prospect of Israel joining NATO, its ties to the alliance have grown exponentially over the past decade. An Israeli-NATO agreement on sharing intelligence was signed in April 2001. Five years later, Israel reached agreement on implementing an “individual cooperation program” with NATO. Updated in December 2008, the agreement paved the way for a high number of joint operations between it and the alliance. Greece has been involved too in most, if not all, of these operations. In 2007, for example, Greek warships took part in drills in Eilat, an Israeli port on the Red Sea.
Both Greece and Israel are also participating in Operation Active Endeavor, a NATO-coordinated exercise under which ships patrol the Mediterranean. That operation was, according to the official narrative, launched in response to the 11 September 2001 atrocities in the US. But in practice its remit has expanded beyond keeping a watch out for potential “terrorist” activity on the waves. In particular, it has been used as part of a repressive agenda of helping prevent foreigners who seek to flee poverty from reaching Europe.
In March, Active Endeavor’s scope was further broadened during preparations for the war against Libya. A 24-hour airborne surveillance system was put in place as part of the ongoing operation. Despite its severe economic problems, Greece has provided a number of warplanes and ships to that war effort, in which NATO has availed of at least seven Greek airfields.
Meanwhile, the solidity of Israel’s links to NATO were underscored shortly before Gabi Ashkenazi stepped down as head of the Israeli military in February. Ashkenazi, who oversaw Operation Cast Lead, which killed 1400 Palestinians in Gaza during December 2008 and January 2009, advised NATO strategists on what tactics should be used against Afghanistan and was treated to a farewell dinner in his honor at the Brussels residence of Giampaolo Di Paolo, chairman of NATO’s military committee.
On a proportionate basis, Greece is one of Europe’s largest spenders on the military, although this expenditure is being cut as part of a wider austerity drive that mainly affects vital public services. In 2009, Greece allocated 2.54% of its gross domestic product to military spending, the highest level in the European Union. Britain was next at 2.53%.
Greece is known to have concluded deals with several Israeli weapons makers, although it has not published comprehensive details on such deals. In February, Evangelos Venizelos, the Greek defense minister, confirmed that “precision-guided” weapon kits known as SPICES (Smart Precise Impact and Cost Effective). Elisra, a subsidiary of the leading Israeli arms manufacturer Elbit, has also supplied electronic warfare systems to the Greek air force over the past decade.
It is true that Greece has combined its ever-tightening embrace of Israel with calls for the blockade of Gaza to be lifted. But it is impossible to take those calls seriously now that the Athens government has assisted Israel in thwarting protest against the very same blockade. Andreas Papandreou’s championing of Palestinian rights might have had some moral weight in the early 1980s. Three decades on, his son George has become a craven accomplice in maintaining the Israeli occupation.
·First published by The Electronic Intifada (www.electronicintifada.net), 13 July 2011.
Monday, June 27, 2011
Financial mafia corrodes democracy
The only time I have been in Athens, I squandered an opportunity to visit the Acropolis. My excuse was feeble: a hangover. For years afterwards, I felt guilty about this snub to the fabled birthplace of democracy. Then I realised it was trivial compared to the very real affront to democracy being hurled at present-day Greece.
If the business press is to believed (and it generally is) shadowy outfits with strange names wield more power than George Papandreou, Angela Merkel and Nicolas Sarkozy combined. Last week the credit rating agency Fitch refused to accept a Franco-German plan that commercial banks should “voluntarily” roll over their loans to Greece. Do that and we will consider Greece to have defaulted on its debts, Fitch announced. One week earlier, Standard and Poor’s downgraded Greece’s rating by three notches, pushing up the cost of insuring Greek debt.
Moody’s, Fitch and S&P control 95% of the credit rating market. It is surely obscene that three private firms headquartered in the US can determine the fate of entire nations.
It is widely known that the trio has done immense harm. Yet – like certain mafia bosses of yore - they seem untouchable. Around this time last year José Manuel Barroso, the European Commission president, asked: “Is it normal to have only three relevant actors on such a sensitive issue, where there is a great possibility of conflict of interest?”
The situation is worse than Barroso hinted. When the global economic crisis erupted in 2008, there were many questions about how the agencies had given positive ratings to institutions engaged in reckless behaviour. The simple answer is that they were rewarded for deceit. In October that year, leading players in the agencies explained to an oversight committee in the US House of Representatives that banks were paying them to present a favourable picture. Bankers who devised highly risky collateralised debt obligations (CDOs) typically chose the agency with the lowest standards, encouraging a race to the bottom, Raymond McDaniel, a Moody’s executive said.
Frank Raiter, a former head of mortgage ratings at S&P, went further by suggesting that deliberate falsifications occurred and that information that would enable thorough assessments of creditworthiness was deliberately withheld. He recalled asking for loan level tapes - data about each individual loan - in a CDO known as Pinstripe. In response, he got a memo from Richard Gugliada, a managing director with the agency, saying: “Your request for loan level tapes is totally unreasonable. It is your responsibility to provide those credit estimates and your responsibility to devise some method for doing so.”
The rise of the ratings agencies is part of a wider corporate coup, which began in America but has had global ramifications. Although the Big Three were all set up in the early part of the twentieth century, it wasn’t until 1975 that they were given official status by the Securities and Exchange Commission (SEC). Thus began a process where an oligopoly was given a vast say in determining how the world’s economy is run.
Marc Ladreit de Lacharrière, the French billionaire who runs Fimalac – the parent company of Fitch – has called himself a “child of globalisation”. His fortune has been amassed thanks to the allergy to regulation that remains prevalent in Washington. In May, the SEC commissioner Mary Schapiro proposed that agencies should publish information revealing how they calculate creditworthiness. But her recommendations do nothing to address the conflict of interests that are at the root of the problem. And so banks will continue to pay the agencies and there will still be strong incentives to turn a blind eye to improprieties.
What should be done in Europe? Michel Barnier, the EU’s single market chief, has been signalling that he wants to put manners on the agencies. But the reforms he has introduced have so far been piecemeal. Forming the European Securities and Markets Authority (ESMA) to supervise the agencies has not deterred them from behaving belligerently towards economies in a parlous state. If anything, it might have prompted them to be even more aggressive in order to show that they are not cowed by pesky regulators. Jean-Claude Juncker, the Luxembourg prime minister who fancies himself as “Mr Euro”, wants Europe to have a credit ratings agency of its own to break the stranglehold of the Big Three.
Tinkering with a system that is inherently rotten won’t make much difference, however. The inspiring street protests against austerity in Greece and Spain show that there is a public appetite for serious reflection on why private interests dictate how the world is run.
Clearly, the ethics of mass indebtedness have to be seriously examined. The next few weeks will see the publication of a book called “Debt: The First 5,000 Years” by the anthropologist David Graeber. He argues that the idea of a mass cancellation of international debt should be entertained. “It would be salutary not just because it would relieve so much genuine human suffering but also because it would be our way of reminding ourselves that money is not ineffable, that paying one’s debts is not the essence of morality, that all these things are human arrangements and if democracy is to mean anything it is the ability to agree to do things in a different way.”
Restraining the rating agencies is a first and necessary step. The bigger challenge is for the public to reclaim our economies from a mafia.
·First published by New Europe (www.neurope.eu), 26 June – 2 July 2011
If the business press is to believed (and it generally is) shadowy outfits with strange names wield more power than George Papandreou, Angela Merkel and Nicolas Sarkozy combined. Last week the credit rating agency Fitch refused to accept a Franco-German plan that commercial banks should “voluntarily” roll over their loans to Greece. Do that and we will consider Greece to have defaulted on its debts, Fitch announced. One week earlier, Standard and Poor’s downgraded Greece’s rating by three notches, pushing up the cost of insuring Greek debt.
Moody’s, Fitch and S&P control 95% of the credit rating market. It is surely obscene that three private firms headquartered in the US can determine the fate of entire nations.
It is widely known that the trio has done immense harm. Yet – like certain mafia bosses of yore - they seem untouchable. Around this time last year José Manuel Barroso, the European Commission president, asked: “Is it normal to have only three relevant actors on such a sensitive issue, where there is a great possibility of conflict of interest?”
The situation is worse than Barroso hinted. When the global economic crisis erupted in 2008, there were many questions about how the agencies had given positive ratings to institutions engaged in reckless behaviour. The simple answer is that they were rewarded for deceit. In October that year, leading players in the agencies explained to an oversight committee in the US House of Representatives that banks were paying them to present a favourable picture. Bankers who devised highly risky collateralised debt obligations (CDOs) typically chose the agency with the lowest standards, encouraging a race to the bottom, Raymond McDaniel, a Moody’s executive said.
Frank Raiter, a former head of mortgage ratings at S&P, went further by suggesting that deliberate falsifications occurred and that information that would enable thorough assessments of creditworthiness was deliberately withheld. He recalled asking for loan level tapes - data about each individual loan - in a CDO known as Pinstripe. In response, he got a memo from Richard Gugliada, a managing director with the agency, saying: “Your request for loan level tapes is totally unreasonable. It is your responsibility to provide those credit estimates and your responsibility to devise some method for doing so.”
The rise of the ratings agencies is part of a wider corporate coup, which began in America but has had global ramifications. Although the Big Three were all set up in the early part of the twentieth century, it wasn’t until 1975 that they were given official status by the Securities and Exchange Commission (SEC). Thus began a process where an oligopoly was given a vast say in determining how the world’s economy is run.
Marc Ladreit de Lacharrière, the French billionaire who runs Fimalac – the parent company of Fitch – has called himself a “child of globalisation”. His fortune has been amassed thanks to the allergy to regulation that remains prevalent in Washington. In May, the SEC commissioner Mary Schapiro proposed that agencies should publish information revealing how they calculate creditworthiness. But her recommendations do nothing to address the conflict of interests that are at the root of the problem. And so banks will continue to pay the agencies and there will still be strong incentives to turn a blind eye to improprieties.
What should be done in Europe? Michel Barnier, the EU’s single market chief, has been signalling that he wants to put manners on the agencies. But the reforms he has introduced have so far been piecemeal. Forming the European Securities and Markets Authority (ESMA) to supervise the agencies has not deterred them from behaving belligerently towards economies in a parlous state. If anything, it might have prompted them to be even more aggressive in order to show that they are not cowed by pesky regulators. Jean-Claude Juncker, the Luxembourg prime minister who fancies himself as “Mr Euro”, wants Europe to have a credit ratings agency of its own to break the stranglehold of the Big Three.
Tinkering with a system that is inherently rotten won’t make much difference, however. The inspiring street protests against austerity in Greece and Spain show that there is a public appetite for serious reflection on why private interests dictate how the world is run.
Clearly, the ethics of mass indebtedness have to be seriously examined. The next few weeks will see the publication of a book called “Debt: The First 5,000 Years” by the anthropologist David Graeber. He argues that the idea of a mass cancellation of international debt should be entertained. “It would be salutary not just because it would relieve so much genuine human suffering but also because it would be our way of reminding ourselves that money is not ineffable, that paying one’s debts is not the essence of morality, that all these things are human arrangements and if democracy is to mean anything it is the ability to agree to do things in a different way.”
Restraining the rating agencies is a first and necessary step. The bigger challenge is for the public to reclaim our economies from a mafia.
·First published by New Europe (www.neurope.eu), 26 June – 2 July 2011
Monday, November 29, 2010
How the ECB wages class war
Dublin’s Kilmainham Jail is not somewhere you can easily forget. Even though I only recall visiting it twice, I have had a morbid fascination with this cold, dark place for most of my life. More particularly, I am obsessed with its Stonebreaker’s Yard, where the leaders of the 1916 Easter Rising against British rule were executed; James Connolly, a socialist visionary who demanded that all children be cherished equally, was so badly injured that he was carried before the firing squad on a stretcher.
When the centenary of the rising occurs in 2016, any celebrations by official Ireland will be a sham. Far from being independent, Ireland’s destiny is now in the hands of a foreign cabal which is callously indifferent to how the children Connolly wished to cherish are reduced to begging on the streets. (Merchants Quay Ireland, a charity, reported a 17% increase in the number of people using its homelessness services in the first six months of this year, compared to the same period in 2009).
One of the most disgusting things I read last week was a presentation given by Jean-Claude Trichet, head of the European Central Bank, to MEPs. Trichet had the gall to boast of the “achievements” made by his institution over the past 12 years at a time when he was forcing misery on Ireland.
It has become clear that Trichet strong-armed the Dublin government into “requesting” a bail-out from the European Union and the International Monetary Fund. Under its terms, Ireland’s budgets will be determined not by the needs of the Irish people but by the diktats of the ECB and IMF. The new rulers of my country are an unelected and unaccountable elite who use language to obfuscate, rather than illuminate.
Has Trichet spouted so much technocratic gobbledygook that he can no longer speak plainly? What kind of guy can praise cutbacks that will leave the poor even poorer as “confidence-inspiring policies”? Where is the morality in a man who warns that there will be a “lost decade” in Europe unless austerity becomes the norm? Is he happy that there will be a lost generation of unemployed people because of the medicine he has prescribed for millions?
And, of course, this enforced hardship is in no way confined to Ireland. Last week the ECB, IMF and European Commission also concluded a second “review mission” to Greece. It decided that in order to qualify for a €80 billion loan from the euro-zone and a further €30 billion from the IMF, Greece would have to spend less on health. You can be sure that the “missionaries” didn’t trek around inspecting cancer facilities in Thessaloniki before declaring health expenditure in Greece as “inefficient”. As it happens, Greece spends about €225 less per head of population on healthcare each year than the €2,300 average for members of the Organisation for Economic Cooperation and Development. But I doubt that the missionaries worried about the human consequences of applying the cut-throat logic of profit and loss to professions traditionally dedicated to caring and public service.
We journalists are gullible. One falsehood that we have swallowed is that French political figures have an aversion to the unbridled capitalism favoured in the US. This myth becomes untenable when one realises that Frenchmen are in charge of three of the most powerful economic groupings in the world: Trichet in the ECB, Pascal Lamy in the World Trade Organisation and Dominique Strauss-Kahn in the IMF. This inglorious triumvirate are as wedded to the Washington Consensus – that toxic doctrine under which deregulation and market liberalisation should be pursued no matter what the social costs – as any American. In the case of Trichet, he is even more zealous in defending neo-liberal orthodoxy than his nearest US counterpart. Whereas Ben Bernanke, the Republican who heads the Federal Reserve, is injecting $600 billion into the US economy as part of a second round of “quantitative easing” – and has emphasised that the money should be used for fiscal stimulus purposes – Trichet is parroting Margaret Thathcher’s line that “there is no alternative” to punishing the masses for a crime they never committed.
A second falsehood is that the ECB’s economists are simply giving technical advice. In truth, they are class warriors, intent on widening inequality. Indoctrinated in the Ecole nationale d’administration, Trichet hails from a highly privileged milieu. Though ostensibly established by Charles de Gaulle to “democratise” access to the civil service, the ENA serves the same purpose as Oxford and Cambridge in Britain. With few exceptions, its champagne-sipping alumni think they have an innate entitlement to shape the policies that everyone else must live with.
Next year Trichet’s term as ECB head will expire. The frontrunner in the race to success him is Axel Weber, president of the Bundesbank in Germany, although Weber may have damaged his chances by speaking out against the ECB’s decision to buy up government bonds in May.
Regardless of who leads it, the ECB will continue to lack democratic legitimacy. Almost unique among central banks, it is independent of political control and is under no obligation to address what effects its prescriptions may have on employment or poverty. The ECB does not serve Europe’s citizens; it takes decisions solely with the interests of the corporate class in mind. Maybe that explains why it is so contemptuous of the little people in our societies.
·First published by New Europe (www.neurope.eu), 28 November – 4 December 2010
When the centenary of the rising occurs in 2016, any celebrations by official Ireland will be a sham. Far from being independent, Ireland’s destiny is now in the hands of a foreign cabal which is callously indifferent to how the children Connolly wished to cherish are reduced to begging on the streets. (Merchants Quay Ireland, a charity, reported a 17% increase in the number of people using its homelessness services in the first six months of this year, compared to the same period in 2009).
One of the most disgusting things I read last week was a presentation given by Jean-Claude Trichet, head of the European Central Bank, to MEPs. Trichet had the gall to boast of the “achievements” made by his institution over the past 12 years at a time when he was forcing misery on Ireland.
It has become clear that Trichet strong-armed the Dublin government into “requesting” a bail-out from the European Union and the International Monetary Fund. Under its terms, Ireland’s budgets will be determined not by the needs of the Irish people but by the diktats of the ECB and IMF. The new rulers of my country are an unelected and unaccountable elite who use language to obfuscate, rather than illuminate.
Has Trichet spouted so much technocratic gobbledygook that he can no longer speak plainly? What kind of guy can praise cutbacks that will leave the poor even poorer as “confidence-inspiring policies”? Where is the morality in a man who warns that there will be a “lost decade” in Europe unless austerity becomes the norm? Is he happy that there will be a lost generation of unemployed people because of the medicine he has prescribed for millions?
And, of course, this enforced hardship is in no way confined to Ireland. Last week the ECB, IMF and European Commission also concluded a second “review mission” to Greece. It decided that in order to qualify for a €80 billion loan from the euro-zone and a further €30 billion from the IMF, Greece would have to spend less on health. You can be sure that the “missionaries” didn’t trek around inspecting cancer facilities in Thessaloniki before declaring health expenditure in Greece as “inefficient”. As it happens, Greece spends about €225 less per head of population on healthcare each year than the €2,300 average for members of the Organisation for Economic Cooperation and Development. But I doubt that the missionaries worried about the human consequences of applying the cut-throat logic of profit and loss to professions traditionally dedicated to caring and public service.
We journalists are gullible. One falsehood that we have swallowed is that French political figures have an aversion to the unbridled capitalism favoured in the US. This myth becomes untenable when one realises that Frenchmen are in charge of three of the most powerful economic groupings in the world: Trichet in the ECB, Pascal Lamy in the World Trade Organisation and Dominique Strauss-Kahn in the IMF. This inglorious triumvirate are as wedded to the Washington Consensus – that toxic doctrine under which deregulation and market liberalisation should be pursued no matter what the social costs – as any American. In the case of Trichet, he is even more zealous in defending neo-liberal orthodoxy than his nearest US counterpart. Whereas Ben Bernanke, the Republican who heads the Federal Reserve, is injecting $600 billion into the US economy as part of a second round of “quantitative easing” – and has emphasised that the money should be used for fiscal stimulus purposes – Trichet is parroting Margaret Thathcher’s line that “there is no alternative” to punishing the masses for a crime they never committed.
A second falsehood is that the ECB’s economists are simply giving technical advice. In truth, they are class warriors, intent on widening inequality. Indoctrinated in the Ecole nationale d’administration, Trichet hails from a highly privileged milieu. Though ostensibly established by Charles de Gaulle to “democratise” access to the civil service, the ENA serves the same purpose as Oxford and Cambridge in Britain. With few exceptions, its champagne-sipping alumni think they have an innate entitlement to shape the policies that everyone else must live with.
Next year Trichet’s term as ECB head will expire. The frontrunner in the race to success him is Axel Weber, president of the Bundesbank in Germany, although Weber may have damaged his chances by speaking out against the ECB’s decision to buy up government bonds in May.
Regardless of who leads it, the ECB will continue to lack democratic legitimacy. Almost unique among central banks, it is independent of political control and is under no obligation to address what effects its prescriptions may have on employment or poverty. The ECB does not serve Europe’s citizens; it takes decisions solely with the interests of the corporate class in mind. Maybe that explains why it is so contemptuous of the little people in our societies.
·First published by New Europe (www.neurope.eu), 28 November – 4 December 2010
Monday, September 13, 2010
Casino capitalism unthreatened by new EU rules
Imagine an amoral world, where parents encourage children to steal. On the way to school each morning, the richer kids would pilfer sandwiches or sweets from their poorer classmates. At playtime, the loot would be sold, the proceeds pocketed by the thieves.
Sounds crazy, doesn’t it? Well, it is no crazier than the financial system that Michel Barnier, the EU’s single market commissioner, is in charge of regulating. This Wednesday (September 15) the Frenchman will propose a new law on short-selling, that abstruse practice where a blackberry-hooked whizz-kid borrows shares and sells them based on the prediction that their value will drop, then buys them back once that fall has materialised, making a tidy profit.
The harmful effects of short-selling have long been apparent. Many Asian governments blamed the crisis that beset them in the 1990s on speculators who used the tactic to drive down the rates of local currencies far below their real economic values. A decade later, it was singled out as the major cause of the rapid fall in the prices of shares in Lehman Brothers and other massive banks. And more recently, it has been a contributory factor to Greece’s woes and the wider tremors in the euro-zone. Originally working in cahoots with the Athens government (before last year’s election), Goldman Sachs helped present a misleading picture of public accounts to make Greece attractive to lenders, then bet on the risk of the country defaulting. As Wall Street rogues reaped their winnings, Greece was forced to borrow at higher rates.
Earlier this year, Germany introduced a temporary ban on that even more extreme – and absurd – activity called naked short-selling, where a speculator gambles with shares he or she neither owns nor has borrowed. Barnier intimated that he was upset by the unilateral ban, yet expressed understanding for Berlin’s stance. His new proposal will offer national regulators greater leeway in restricting the practice but there is no prospect that it will be forbidden outright. And so a golden opportunity to heed the lessons of the financial crisis is being wasted.
Open Europe - the right-wing think tank that is a principal source on EU affairs for several British newspapers – regularly issues warnings about Barnier wanting to ruin the City of London. These warnings have now proven fanciful; the truth is that Barnier lacks sufficient guts to introduce stringent rules for the casino of European capitalism.
His cowardice is easily explained. While he may appear to be the antithesis of Charlie McCreevy, his predecessor as single market chief, both are essentially cut from the same ideological cloth. Barnier has not tested positive to the same allergy to regulation as McCreevy, yet is similarly willing to serve the interests of an unaccountable elite.
Gillian Tett, normally one of the most incisive commentators with The Financial Times, was wrong last month to say that the main lobby group for short-sellers, the International Swaps and Derivatives Association (ISDA), had become “distinctly toxic” in Brussels’ political circles. The truth is that it and other bands of speculators dominated the working group assembled by the European Commission to lay the groundwork for Barnier’s new proposals.
Evidently, the speculators held greater sway, too, during a sham “public consultation” that Barnier called on short-selling than the few more radical contributors to that exercise. John Chapman, a British diplomat-turned-journalist, has neatly summarised the flaws in Barnier’s thinking. By refusing to contemplate a ban on short-selling, Chapman’s submission to the exercise noted, the Commission is failing to land “a significant blow on the hedge fund industry, whose activities are the single most pernicious development of the past 30 years”.
Chapman traces the flourishing of hedge funds back to an initiative taken by Ronald Reagan in 1982. By modifying a US law then almost five decades old, Reagan ensured that funds for the use of millionaires did not have to be regulated. The greatest advantage of hedge funds may be their ability to short sell, says Chapman, who argues that the privileges granted to them by American and subsequently by Europe are largely unparalleled. “Millionaires are not allowed to be driven in super-charged limousines along public highways without limits or any constraints on knocking other cars out of the way,” he says.
In a related dossier, Barnier will also this week recommend new rules for the derivatives market. Estimated to be worth €427 trillion globally, the derivatives market is one that thrives on human misery. Derivatives were the main instruments of speculation on basic foodstuffs that caused prices of wheat and maize to jump by up to 90% in developing countries between 2007 and 2008, forcing the poor to eat less.
In January this year, Barnier described speculation on essential food in a world where one billion people suffer from hunger as “a scandal”. Yet his proposals on derivatives will not go far enough. The idea of insisting that as many derivatives as possible are traded through a regulated exchange has, for example, been ruled out. This omission is despite widespread recognition of how over-the-counter derivatives – those traded off-exchange – played “a key role in transforming a financial downturn into a global economic calamity,” according to Nobel laureate Joseph Stiglitz.
Loopholes of this nature are readily exploited by the market fundamentalists determined to maintain a free-for-all approach to global finance. For millions of others, they can mean the difference between sustenance and starvation.
•First published by New Europe, 12-18 September 2010 (www.neurope.eu)
Sounds crazy, doesn’t it? Well, it is no crazier than the financial system that Michel Barnier, the EU’s single market commissioner, is in charge of regulating. This Wednesday (September 15) the Frenchman will propose a new law on short-selling, that abstruse practice where a blackberry-hooked whizz-kid borrows shares and sells them based on the prediction that their value will drop, then buys them back once that fall has materialised, making a tidy profit.
The harmful effects of short-selling have long been apparent. Many Asian governments blamed the crisis that beset them in the 1990s on speculators who used the tactic to drive down the rates of local currencies far below their real economic values. A decade later, it was singled out as the major cause of the rapid fall in the prices of shares in Lehman Brothers and other massive banks. And more recently, it has been a contributory factor to Greece’s woes and the wider tremors in the euro-zone. Originally working in cahoots with the Athens government (before last year’s election), Goldman Sachs helped present a misleading picture of public accounts to make Greece attractive to lenders, then bet on the risk of the country defaulting. As Wall Street rogues reaped their winnings, Greece was forced to borrow at higher rates.
Earlier this year, Germany introduced a temporary ban on that even more extreme – and absurd – activity called naked short-selling, where a speculator gambles with shares he or she neither owns nor has borrowed. Barnier intimated that he was upset by the unilateral ban, yet expressed understanding for Berlin’s stance. His new proposal will offer national regulators greater leeway in restricting the practice but there is no prospect that it will be forbidden outright. And so a golden opportunity to heed the lessons of the financial crisis is being wasted.
Open Europe - the right-wing think tank that is a principal source on EU affairs for several British newspapers – regularly issues warnings about Barnier wanting to ruin the City of London. These warnings have now proven fanciful; the truth is that Barnier lacks sufficient guts to introduce stringent rules for the casino of European capitalism.
His cowardice is easily explained. While he may appear to be the antithesis of Charlie McCreevy, his predecessor as single market chief, both are essentially cut from the same ideological cloth. Barnier has not tested positive to the same allergy to regulation as McCreevy, yet is similarly willing to serve the interests of an unaccountable elite.
Gillian Tett, normally one of the most incisive commentators with The Financial Times, was wrong last month to say that the main lobby group for short-sellers, the International Swaps and Derivatives Association (ISDA), had become “distinctly toxic” in Brussels’ political circles. The truth is that it and other bands of speculators dominated the working group assembled by the European Commission to lay the groundwork for Barnier’s new proposals.
Evidently, the speculators held greater sway, too, during a sham “public consultation” that Barnier called on short-selling than the few more radical contributors to that exercise. John Chapman, a British diplomat-turned-journalist, has neatly summarised the flaws in Barnier’s thinking. By refusing to contemplate a ban on short-selling, Chapman’s submission to the exercise noted, the Commission is failing to land “a significant blow on the hedge fund industry, whose activities are the single most pernicious development of the past 30 years”.
Chapman traces the flourishing of hedge funds back to an initiative taken by Ronald Reagan in 1982. By modifying a US law then almost five decades old, Reagan ensured that funds for the use of millionaires did not have to be regulated. The greatest advantage of hedge funds may be their ability to short sell, says Chapman, who argues that the privileges granted to them by American and subsequently by Europe are largely unparalleled. “Millionaires are not allowed to be driven in super-charged limousines along public highways without limits or any constraints on knocking other cars out of the way,” he says.
In a related dossier, Barnier will also this week recommend new rules for the derivatives market. Estimated to be worth €427 trillion globally, the derivatives market is one that thrives on human misery. Derivatives were the main instruments of speculation on basic foodstuffs that caused prices of wheat and maize to jump by up to 90% in developing countries between 2007 and 2008, forcing the poor to eat less.
In January this year, Barnier described speculation on essential food in a world where one billion people suffer from hunger as “a scandal”. Yet his proposals on derivatives will not go far enough. The idea of insisting that as many derivatives as possible are traded through a regulated exchange has, for example, been ruled out. This omission is despite widespread recognition of how over-the-counter derivatives – those traded off-exchange – played “a key role in transforming a financial downturn into a global economic calamity,” according to Nobel laureate Joseph Stiglitz.
Loopholes of this nature are readily exploited by the market fundamentalists determined to maintain a free-for-all approach to global finance. For millions of others, they can mean the difference between sustenance and starvation.
•First published by New Europe, 12-18 September 2010 (www.neurope.eu)
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