Article: Will "Onshela" save Europe?

Blaming the eurozone abyss on the irresponsible acts of selected European nations, on their mounting public debt, and even their pensioners, is perverse. The real cause is the ferocious deregulation of the financial system and the worshipping of the God of monetarism. The absolute majority of European political leaders do not have a clue about basic economics. They have been at the mercy of technocrats who could not give a damn about the social and political consequences of their actions.

But now the technocrats are finally freaking out because if Greece, for instance, nationalizes its banks, the Spanish and French financial systems will go bust, and Germany's will be in deep trouble. Once more this is a graphic illustration of how countries across Europe are -- in the public as well as the private sector -- totally dependent on the financial system of other countries.

The Masters of the Universe in Europe are actually the Institute of International Finance (IIF) [2] a lobby representing the 450 largest world banks. They get a privileged seat on every significant euro-summit. The proverbial EU and IMF "officials" actually ask the Masters how much a country -- as in Greece -- should pay to get itself out of trouble. Europe's commissioner for economic affairs, Olli Rehn, is a certified servant of the Masters. Obviously the EU leadership will never admit it is in fact controlled by a cartel of bankers.

One currency, 17 debts

It's hard to believe Merkollande can find a way out of this financial labyrinth. We are facing the uber-surrealist situation of a single currency with 17 different public debts -- over which the frenzied "markets" can merrily speculate while individual states cannot fight back, for instance by devaluing their currency. It's this set-up that has plunged Greece into the abyss -- and may do the same with the euro.

Thomas Piketty, a professor of the Paris School of Economics, dreams that Hollande might become the European Roosevelt. That may be as unlikely as Prometheus getting rid of his burden. But at least Piketty identifies the problem; imagine if the Fed everyday had to choose between Texas debt or Wyoming debt -- it would never be able to conduct a sound monetary policy (not that it actually does...)

That explains why the European Central Bank cannot possibly be a factor of financial stability. Meanwhile, Europe is left wallowing in the mire of loaning buckets of euros to banks, hoping they will loan them back to individual states; or loaning the money to the IMF, hoping they will do the same.

Into this quagmire comes Hollande with an economic Hellfire missile; he says that instead of loaning at 1% so the banks make a killing loaning to individual states at a much higher rate, the ECB should deal directly with European nations. He wants the FTT -- now. And he wants the European Investment Bank to extend credit to companies. And he wants euro-bonuses to finance infrastructure works.

"Onshela" is bound to give him a firm "nein" on all this -- except, maybe, the FTT. Because this all implies that these debts are part of a common European debt. That would be, according to Hollande's vision, a conception of Europe true to its construction -- less technocratic, less hostage of the God of the market, less constrained by the dogmas of the financial system. Will Merkollande pull it off? Ask "Onshela."

Note:
1. See The High Cost of Germany's Economic Success, Der Spiegel, May 4, 2012.
2. - See here

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