BANKS COUNT TEN TIMES MORE THAN EUROPE’S YOUTH
By
Roberto Savio via IDN
Youth
At the last summit of EUROPEAN heads of state in Brussels, the main theme was
youth unemployment, which has now reached 23% of EUROPEAN youth (although it
stands at 41% in SPAIN). Last year, the International Labour Organization
issued a dramatic report on 'Global Employment Trends for Youth 2012' in
which it spoke of a “lost generation”.
COMMON EURO PENSION FOR BABY BOOMER GENERATION (BORN BETWEEN
1958 AND 1963)
According
to projections, the generation currently seeking to enter the market place will
retire with a pension of just 480 euro – if it actually succeeds in entering
the market – because of temporary jobs without social contributions.
6BILLION DOLLARS SUPPORT FOR YOUTH UNEMPLOYMENT VERSUS 60
BILLION DOLLARS FOR SUPPORTING EUROPE’S BANKS
After
long discussions, EUROPE’S leaders decided to allocate 6 billion dollars of EUROPEAN
money, to fight youth unemployment. After much shorter discussion, they decided
to allocate up to 60 billion dollars to support EUROPE’S banks. This, on top of
the striking subsidies already received: the EUROPEAN Central Bank alone has
given one thousand billion dollars to
the banks at nominal cost.
BRITISH FINANCIAL SYSTEM NOW ACCOUNTS FOR 10% OF THE BRITISH
GROSS DOMESTIC PRODUCT (GDP)!
All
the efforts to create a EUROPEAN banking system under a central regulator are
now on hold until the GERMAN elections in September. A member of the GERMAN
delegation at the June summit is reported saying:”We know well what we are
supposed to do, to calm financial markets. But we are not elected by financial
markets, we are elected by GERMAN citizens.” (NYT | IHT online). And of course, no effort has
been made to explain to GERMANY’S citizens why it is in their interest to show
economic solidarity with the most fragile countries of EUROPE. Democracy, as it
is understood today, is based on leaders who follow popular feelings not on
leaders who feel their duty to push their electors towards a world of vision
and challenges.
The
summit was also obliged to accept the blackmail of BRITISH Prime Minister David
Cameron: either you maintain the subsidies that then Prime Minister Margaret
Thatcher obtained in 1973, when you insisted that we join EUROPE (which makes BRITAIN
a net recipient of EUROPEAN money), or we will block the EUROPEAN budget. This
is because the anti-EUROPE electorate in BRITAIN is growing and Cameron could
not afford to appear weak. But Cameron was one of the strongest proponents of
the subsidy for the banks, and no wonder: the financial system now accounts for
10% of the BRITISH gross domestic product (GDP)!
KEY WESTERN POWERS UNWILLINGNESS TO PLACE BANKS UNDER
CONTROL AND REACT TO THEIR STRINGS OF CRIMES
It
is a very curious situation, in which not only has EUROPE spent several hundred
billion dollars for its banks, it has even invited the International
Monetary Fund (whose controlling member is the UNITED STATES) to
join the EUROPEAN Institutions and manage the EUROPEAN crisis. And, in an
unprecedented sign of independence and resistance to the UNITED STATES, EUROPE has
rejected AMERICAN calls for reducing austerity and starting policies of growth
as Washington and Tokyo have been doing, so far with proven success.
Nevertheless,
what is common to the three most powerful players in the West (UNITED STATES,
EUROPE and JAPAN) has been their inability – and unwillingness – to place banks
under control and react to their strings of crimes.
Central
bankers from the entire world join in the Bank for International Settlements (BIS) based in
Basel. Now its Basel
Committee on Banking Supervision, headed by the governor of the SWEDISH
Central Bank, Stefan Ingves, has come up with a proposal that would finally
subject EUROPEAN banks to balance their capital with the volume of financial
operations deemed feasible.
‘REVOLUTIONARY’
PROPOSAL
This
‘revolutionary’ proposal calls a relationship of 3 percent, meaning that the
banks would need to hold about 1 euro in capital for every 33 euro in risk or
other financial exposures. Obviously, of course, if a bank sustains a loss
higher than 3%, it would require the state to eliminate the deficit in order to
save the institution. Well, even this bland proposal has been received with a
howl of protest from many banks, claiming that they would have great difficulty
in raising capital.
UNDER THE OLD CAPITALIST ECONOMY, NO ENTERPRISE WOULD RUN
WITHOUT CAPITAL ADEQUATE TO ITS NEED.
Today
we have a new branch of economy, which wants to play without capital, and expects
the state to bail it out if anything goes wrong. Here are some of the many wrongdoings
by banks.
On
April 28, 2002, then New York State Attorney General Eliot Spitzer, on behalf
of the U.S. Securities and Exchange Commission (SEC), won a lawsuit ordering 10
U.S. banks to pay 1.4 billion dollars in compensation and fines because of
fraudulent activities. One year later, the SEC discovered that 13 out of 15
financial institutions randomly investigated were guilty of fraud. In 2010,
Goldman Sachs agreed to a fine of 550 million dollars to avoid a trial for
fraud. In July last year, the U.S. Senate presented a 335-page report on the BRITISH
bank HSBC, the largest in EUROPE.
Over
the years it helped drug dealers and criminals recycle illicit money. For
example, the bank sent 60 billion dollars in cash by road or plane from the
accounts of MEXICAN drug dealers to its New York Branch. The fine was 1.9
billion dollars. In November 2012, SAC Capital was fined 600 million dollars,
and in the same month the second BRITISH bank, Standard Chartered, was fined
667 million dollars. In February this year, Barclays Bank announced that it had
set aside 1.165 billion euro to face fines for “illicit transactions” (the bank
is now under investigation for a very dubious capital increase of 8.4 billion
euro in 2008). And in March this year, Citigroup accepted a fine of 730 million
dollars for “selling investments based on junk to unsuspecting clients”. These
are just a few of the most clamorous cases, and there are many, many more,
involving even the JAPANESE bank Nomura.
CURRENT CRISIS TRIGGERED IN THE USA BY ITS 10 LARGEST BANKS
We
all know that the crisis in which we find ourselves (which, for the optimists,
will end in 2020 and for the pessimists in 2025) was triggered in the UNITED
STATES by the 10 largest banks which decided to sell derivatives based on junk
and certified by the Standard & Poor’s and Moody’s rating agencies. U.S.
taxpayers “donated” 750,000 million dollars to the banks, while the BRITISH did
the same for HSBC, Royal Bank of SCOTLAND, Barclays Bank and Northern Rock.
While this financial disaster was
happening, the ‘Big Five’ (Goldman Sachs, Merrill Lynch, Morgan Stanley, Lehman
Brothers and Bearn Sterns) paid their
executives 3 billion dollars between 2003 and 2007, And, in 2008, they
received 20 billion dollars in bonuses while their banks were losing 42 billion
dollars.
All
of this was certified by Standard & Poor’s and Moody’s, which control 75%
of the world market. Now Standard & Poor’s has been requested to pay 500
million dollars. But what about the million people who lost their job, the millions
of young people without a future? It’s always the same old story: if you steal
bread, you go to jail, but if you steal millions, nothing will happen to you …
and if you steal millions in a bank, even less reason to worry.
Meanwhile,
back at the summit table, the priority for survival is to allocate taxpayers’
money, even if all talk about youth unemployment. After all, what really
matters is that leaders will be re-elected.
No comments:
Post a Comment