Attali’s Christmas Gift: A Titanic Euro Crash
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Tags: AAA sovereign rating, Andrew Lillico, Arcambal, Augusto Pinochet, Business Insider, Cato Institute, Cobden Partners, Daniel Hannan, EBRD-European Bank for Reconstruction and Development, Eric Le Boucher, euro, Georgios Papandreou, Henry Blodget, Jacques Attali, La Vie Quercynoise, Mario Monti, Michael Hudson, Moody’s Investors Service, Nigel Farage, Silvio Berlusconi, Slate magazine, Wolfgang Streeck
Jacques Attali, French economist and writer says the euro could disappear within weeks indeed it might not survive beyond Christmas. His prediction comes as Eurocrats are excoriated in some quarters, for scurrilously damaging democracy by deposing elected national leaders.
His remarks preceded by a day a warning from Moody’s Investors Service that the credit standing of all European government bond ratings was now at risk (not that the three US ratings agencies have much market credibility left after appalling connivance in rating junk as prime assets during the sub-prime mortgage scam that is directly responsible for the current global crisis).
In an interview with 20 Minutes Jacques Attali, former chairman of the EBRD-European Bank for Reconstruction and Development, was highly pessimistic about the future of the single currency. The sovereign debt crisis may see an end to the euro within a month he warned. His remarks came in response to a question as to whether he was worried about the possible loss of France’s AAA sovereign rating. He said: “The issue is not the rating, the issue now is: will the euro still exist by Christmas? There is more than a one-in-two chance that the single currency will not survive.”
These dire predictions came hard on the heels of a series of half-baked measures and confused actions since the French-chaired G20 summit at Cannes in November that are wreaking financial and democratic havoc. So bad is the situation that democratic governments are under genuine threat of Brussels-engineered euro-coups d’etat, a concern highlighted by Wolfgang Streeck who, writing in New Left Review asks (in an article cited by Christopher Caldwell in the London Financial Times) : “Is a bail-out regime, or an austerity regime, compatible with democracy? The last prominent leader before Mario Monti, Italy’s new prime minister, to exercise power as an appointed senator was Augusto Pinochet.” This was a reference to the way that unelected Brussels technocrats forced out Italian premier Silvio Berlusconi and without any popular plebescite imposed a cabinet of technocrats to replace him – in a display, for the second time in weeks, of a shocking abuse of power — surely in contravention of European Treaties. Prior to their Italian job the same Eurocrats deposed Georgios Papandreou in Greece because he had the temerity to demand a referendum of his electorate on continued EU/banker-imposed austerity.
A UK MEP Daniel Hannan was highly critical of these developments in this recent lamps-are-going-out-all-over-Europe speech delivered in the European Parliament:
What essentially Attali, Streeck and Hannan are saying is that the money power exercised by the bankers, who fomented the current crisis through reckless and greedy lending to equally reckless borrowers – states and individuals — is determined not to take its proper dose of capitalist punishment i.e. losses and bankruptcies. Rather money power has captured political power elites so as to achieve the transfer of banking losses to the taxpayer, in a way that severely threatens the very roots of European democracy. (As Michael Hudson, Professor of Economics at the University of Missouri, Kansas City has been warning for months now).
Here is Daniel Hannan writing in Standpoint magazine (a conservative voice published in Britain) after the Eurocrats staged their Euro-coup in Greece and Italy: ”….the truth is that the EU, run by its 27-member politburo, is barely more democratic than the “German Democratic Republic” or the “Democratic Federation of Yugoslavia”. While its member nations are all, in themselves, parliamentary democracies, Brussels functionaries fear and resent public opinion, or “populism” as they call it in their peculiar argot”.
Or read this by Henry Blodget CEO and Editor-in-Chief of Business Insider (a leading online business news site published in the US) who notes crisply: “Capitalism without bankruptcy is like Catholicism without Hell.”
Blodget, a former top line Wall Street analyst, urges that the lenders be forced into bankruptcy in line with the normal expectations of capitalism.
He writes: “In the US housing market, as in the European sovereign debt market, borrowers borrowed too much and lenders loaned too much. Both sides had good intentions, but the good intentions didn’t work out. And now we’re in the age-old situation in which borrowers can’t pay. And, as always, both sides bear responsibility for this situation. No matter how popular it is to bash Wall Street, no one forced American consumers and European countries to borrow money. And no matter how popular it is to rail about deadbeats and the loss of personal responsibility, no one forced Wall Street to make all those dumb-ass loans. In a simple, fair, and just world, both sides would now pay the price. And the world would move on, quickly, and put this whole mess behind it. But instead, we just get denial, empty promises, can-kicking, finger-pointing, and endless bailouts. The reason we’re not getting the simple solution this time, of course, is that so many people borrowed so much and so many people loaned so much that, collectively, they have a lot of power to influence the solution. And, of course, like anyone else who has made a colossal, painful mistake, they’re slow to acknowledge that they made a mistake, and they’re doing everything they can to never have to acknowledge that …The simple, fair, and best solution to the global debt crisis is the same as it ever was: Acknowledge the problem; Restructure the debts; Move on.”
However ubiquitous and apparently all-powerful “markets” (in France interestingly, the preferred translation of the Anglo Saxon term “markets” is “speculators”) are currently calling the bluff of governments across Europe.
As Andrew Lillico a UK economist writing in The Telegraph (published in London) notes: “…most developed world states have seriously undermined their sovereign creditworthiness by entangling themselves with their banking sectors, accepting implicit or explicit responsibility for vast debts of their banks. Sovereign credit risk would diminish if they disentangled themselves (and justice would increase massively).”
Meanwhile some European voters clearly see it more starkly. As results in the recent Spanish general election saw the Socialists ousted, Radio France’s correspondent in Madrid speaking to two Spanish voters about the outcome quoted them as saying: “Democracy in Europe is dead, the banks are governing us all.”
Recent Headlines of Doom
Here is a sample of recent headlines which juxtaposed as they are here, should surely give a voter in the EU and indeed in any democracy, pause for thought, concern and anxiety if not outright anger.
From top to bottom the headlines come from:
The Independent newspaper, Britain
ABC – Australian Broadcasting Corporation, Australia
Economonitor Blog, USA
The Telegraph newspaper, Britain
New Left Review magazine, Britain
- Sidebar: In “The Coming Fiat Money Cataclysm – and After”, a paper prepared for the 29th Cato Institute Annual Monetary Conference in Washington in mid-November authors Kevin Dowd, Martin Hutchinson and Gordon Kerr offer some alternatives:
“States have claimed the right to manipulate money for thousands of years. The results have been disastrous, and this is particularly so with the repeated experiments with inconvertible or fiat paper currencies such those of medieval China, John Law and the assignats in 18th century France, the continentals of the Revolutionary War, the greenbacks of the Civil War and, most recently, in modern Zimbabwe. All such systems were created by states to finance their expenditures – typically to finance wars – and led to major economic disruption and ultimate failure, and all ended either with the collapse of the currency or a return to commodity money. Again and again, fiat monetary systems have shown themselves to be unmanageable and, hence, unsustainable.
“The same is happening with the current global fiat system that has prevailed since the collapse of the Bretton Woods system in the early 1970s. The underlying principle of this system is that central banks and governments could boost spending as they wished and ignore previous constraints against the over-issue of currency and deficit finance; implicitly, they could (and did) focus on the short-term and felt no compunctions whatever kicking the can down the road for other people to pick up. Since then loose monetary policies have led to the dollar losing over 83% of its purchasing power. A combination of artificially low interest rates, loose money and numerous incentives to take excessive risks – all caused, directly or indirectly by state meddling – have led to an escalating systemic solvency crisis characterized by damaging asset price bubbles, unrepayable debt levels, an insolvent financial system, hopelessly insolvent governments and rising inflation. Yet, instead of addressing these problems by the painful liquidations and cutbacks that are needed, current policies are driven by an ever more desperate attempt to postpone the day of reckoning. Consequently, interest rates are pushed ever lower and central banks embark on further monetary expansion and debt monetization. However, such policies serve only to worsen these problems and, unless reversed, will destroy the currency and much of the economy with it. In short, the United States and its main European counterparts are heading for hyperinflationary depressions”.
You can download the full paper here The coming fiat money cataclysm by kind permission of Gordon Kerr whose firm Cobden Partners, is embarked on a global effort to persuade central banks to return to the gold standard as the only long term solution to the current apocalypse.
Returning to an early theme in this report, do we save democracy or do we save bankers, here is a clearly angered Nigel Farage MEP, UKIP, Co-President of the EFD Group (Europe of Freedom and Democracy) taking up the cudgels in the European Parliament against euro-coups.
His speech is titled: “What gives you the right to dictate to the Greek and Italian people?”and here is a partial transcript: “…You are all in denial. By any objective measure the euro is a failure. And who exactly is responsible, who is in charge out of all you lot? The answer is none of you because none of you have been elected; none of you have any democratic legitimacy for the roles you currently hold within this crisis. And into this vacuum, albeit reluctantly, has stepped Angela Merkel. And we are now living in a German-dominated Europe – something that the European project was actually supposed to stop. Something that those who went before us actually paid a heavy price in blood to prevent. I don’t want to live in a German-dominated Europe and nor do the citizens of Europe…”.
His words found an important echo in France where writing in the online Slate magazine Eric Le Boucher asked “Where are the French voices on the issue of a Federal Europe? Answer ‘silent deafeningly silent’. Where are today’s French European activists? The Monnets, Schumans, Giscards, Mitterrands and Delors? The tireless European builders of the past, all seem to have faded away. Where was the applause in France for German Chancellor Merkel’s call to her parliamentarians: ‘The duty of our generation is to complete economic and monetary union and to build a political union in Europe, step by step [...] This is not less Europe, this means more Europe.’ Who spoke up in support of her? No-one, neither on the right nor on the left.”
Indeed and perhaps the French, at least many who live away from the political hothouse of Paris, are indirectly supplying the answer to his questions.
For reports appear regularly in little noticed regional papers, of commemorations, memorials, and other belated recognition of Nazi German atrocities committed during World War 11 in rural France particularly in the south-west.
One such ceremony recently took place in Arcambal 46090 (7 kms east of Cahors), where, 67 years after the event, the village gathered to unveil a memorial about the forced deportation of Jews from the area during the War and the loss of lives suffered by resistance fighters opposed to Nazi occupation. In its November 3 issue La Vie Quercynoise reported that the whole village downed tools at 1000 one morning to join Odete Levy, a survivor of deportation to Belsen, in unveiling a stone plaque on the site where she was seized on 28 June 1944.
The event reflected the struggle still seen in La France Profonde to reconcile the bitter divisions and family splits left by the Nazi occupation.
Arcambal surely suggests that despite the passing of generations, any European Federation dominated by a united Germany will unlikely sit easily with the grassroots, whatever Euro-elites and French politicians might like to think.
Story: Ken Pottinger
- Twilight of the Eurocrats (blogs.telegraph.co.uk)
- You can have the euro or you can have democracy – you can’t have both (blogs.telegraph.co.uk)
- Markets feel chill as France sneezes (smh.com.au)
- Papandreou’s Bold Decision To Hold A Referendum Puts Europe’s Parade Of Cowards To Shame (businessinsider.com)
- France asks regulators to investigate rating mistake by S (news.xinhuanet.com)
- Reckless Global Bankers Back in the Spotlight
- Fears EU Could Self-destruct Over Euro Crisis
- The Biggest Financial Crisis in 75 Years
- EU Leaders Fire Blanks at the Enemy
- Euro Crisis Be Afraid, Be Very Afraid
- Euro Discontent Marches on Brussels
- Euroland – Eclipse of Reason and Democracy