Tag Archives: Troika

Banks & IMF Are Out of Control

As a species we are fallible and we recognise this in our attempts to construct laws and regulations which address human weaknesses and flaws. They are by no means complete and human fallibility continues to wreak havoc, more so when those same laws and regulations are removed or neutered by vested interest.

My regular readers will know that one of my hobby horses is the continued abuse of Greece by the Troika, something that is killing innocent Greek people through deprivation and despair. At the heart of this destruction is the IMF and its policy of ‘austerity’ that obligates countries indebted to it to cut social support programmes and hand over sovereign assets at discounted values.

“The organization’s objectives stated in the Articles of Agreement are to promote international monetary cooperation, international trade, high employment, exchange-rate stability, sustainable economic growth, and making resources available to member countries in financial difficulty.”

Further on from this, the frightening scope of its powers are clearly laid out.

Whilst the Fund can “make contracts, acquire and dispose of immovable and movable property and institute legal proceedings” from which nobody is immune, the Fund and its employees “are immune from every form of judicial process” and its assets “free from restrictions, controls and moratoria of any nature.” This includes freedom from any form of personal taxation for all 2400 employees!

With this unprecedented level of unaccountability, the Fund can do whatever it likes. In the case of Greece, it has done precisely this without seeming care or concern, in what has now been described as the ‘immolation’ of Greece. (Merriam-Webster’s dictionary defines immolation as “to kill as a sacrificial victim”, which is the stand I have personally taken over the whole violation of this country.)

This lack of accountability has now been firmly placed in the spotlight, (with similar brutality), after its own internal watchdog, the Independent Evaluation Office (IEO) submitted a report  to the board, (to whom they are solely accountable), which has roundly condemned how the Fund is being run.

Its top level staff have misled and misinformed their own board into becoming the champions of the euro project and which has led to catastrophic misjudgements on Greece. They have also failed to grasp the basic concepts of money theory that ensured they completely ignored the warning signs of an impending crisis within the EU, a ‘serious scientific and professional failure’.

EU insiders have used the fund to rescue their own pet project, with an unprecedented 80% of all available funding being used to bail out Greece, Portugal and Ireland. An ethos of misleading seniors was also extended to the IEO, in its investigations of the activities of “ad-hoc task forces”, where decisions and provision of information remained elusive.

Heads have turned to its managing director Christine Lagarde, who is now to stand trial in France over corruption charges and who has responded to this report with a statement that offers ‘qualified’ acceptance of its contents. Something I interpret as “I hear you” and no more.

This arrogance, by the boss and her organisation, has led to an era of negative interest rates that is devastating savings and the future of pension schemes, whilst ruining the banking system in its wake. Their policies continue without any recovery, or hint of recovery in sight. Here lies the true cancer created by the inbuilt lack of accountability written into the Fund’s Articles of Agreement.

It goes to the very heart of why we need regulations and accountability to guard against the horrific abuses that can occur when human fallibility is not held in check. Millions of people’s lives have been ruined by the mismanagement of this powerful organisation and its independence must surely now be put in question.

And all of this at a time when the European Banking Authority has just conducted a ‘stress test’ across the European banking sector and nobody has failed, nor has anyone passed, as there are no criteria for such assessments.

Instead a rescue package has been put together to stop Italy’s Banca Monte dei Paschi di Siena collapsing and Deutsche Bank, defined by the IMF as “the world’s most systemically risky bank” is being ‘scrutinised’.

Of the 123 lenders covered in the last stress test in 2014 less than half have been covered this time and none of Portugal or Greek banks have been included. Neither will the results of 56 other banks that have taken the tests be published.

Like the IMF, lack of accountability and secrecy reign and beg two questions. Firstly, what was the point of these tests, other than giving the appearance that some form of regulation is being carried out. Secondly, what is the true extent of the fragility of these banks, given the millions of people are dependent upon them for running their personal and business finances.

This last point is even more significant when you consider that the world banking system is a carefully controlled cartel that is not open to competition. Cartels and monopolies offer the very worst of attributes of human fallibility in the unaccountable power and control they provide and a complete immunisation from healthy regulation and governance.

Thatcher and Reagan opened up the financial markets to unlimited growth and power, which has accelerated exponentially in the last 40 years and is now bringing the world to its knees, with an impending financial collapse that will make 1929 and 2008 seem but hiccups.

Only today the man convicted of the UBS £1.4 billion fraud, the biggest in British history, said that “major banks have done little to tackle the culture which allowed him to carry out his crimes”.

Indeed, the Financial Conduct Authority dropped a long-running enquiry into the culture of banking at the beginning of the year, with suggestions that former chancellor George Osborne had exercised pressure on the industry following last year’s surprise election win.

Never has there been the need for the re-emergence of democratically supported political power to bring these financial monoliths back under control. We need regulations that have teeth and can break the conglomerates up and return us to a banking sector that supports the needs of Society and not the needs of the few.

I worry that we hear nothing about the regulation of the financial sector from those seeking political office, either at home or abroad. It was strong leadership that gave them their power and it is that self-same strong leadership that can take it away again now.

Until the next time

 

Thinking from his Book: Global Magna Carta. Returning Power to the 99% . . . If They Want It! By J T Coombes

Is Our Referendum Rigged!

Well the great day is nearly upon us and 36 hours later we will know what decision the British people have arrived at . . . or will we?

Whilst the democratic track record of the EU was good in the early days of the Common Market, some would say, it has since become increasingly questionable. I would venture that 40 years on and it has now deteriorated to a point where it is virtually non-existent!

In 1973 the then Prime Minister, Ted Heath, signed us up to membership of the Common Market on the message that ‘closer ties with Europe could only benefit trade’. The year before, Ireland and Denmark had joined but Norway decided not to. Then, there was no fuss but a simple acceptance of the democratic decision of the people.

During those days, support for the Common Market was good, with good connectivity by voters demonstrated in high turnouts ranging from 65% to 87.6% (The latter was Sweden against the Euro). The exception was Greenland who, having joined in 1973, 6 years later rejected membership and in 1984 the country left the communities.

Since those days, we now know that Heath was ‘economical with the truth’ in what he told us about the simple “trading association” with the other members, in the certain knowledge that much wider control was on the agenda with Brussels.

Voter turnout has declined over the years, substantially with some countries like Italy which in 1979 stood at 86.5% and in 2014 managed just 57.2%. All members, new and old have followed a similar pattern of falling turnouts, with the exception of the UK whose (already low) numbers grew slightly from 32.35% to 35.60% over the same timeframe. (Source UK Political Info)

It was not in Europe but in America that the whole process by which democracy functions in this 21st century has been brought into question. We are talking here the re-election of George W Bush in 2004, by a very narrow margin over his opponent John Kerry.

Whilst at the time Kerry played with a straight bat and conceded the election to Bush, a year later the powerful and non-partisan Government Accountability Office confirmed the then ‘conspiracy theories’ that Bush had no right to be in the White House.

Voter fraud had occurred in a number of areas of the process and included mal-functioning voting machines, individual votes were altered to support another candidate and the falsification of election results by uncertified voting system software. The whole event received no mainstream media coverage whatsoever.

What is particularly worrying for me is that the same team that manipulated Bush into power have since been used by our Tory party and may well be behind the dubious results of last year’s election, where just 24% of the electorate provided a majority government which, on those numbers, is not representative of the people over whom they hold sway.

If we now move into Europe, we have had wholesale abuse of the referendum aspects of the EU treaties by Brussels, initially demonstrated by two ‘no’ votes by Ireland to (2002) Nice and (2009) Lisbon Treaty ratification.

These negative votes threatened their required unanimous membership adoptions and went to second referendums to get the results Brussels was seeking. Whilst not fraud in the true sense of the word, after 30 years, pressure was now being put on member states to comply with Brussels dictates.

If we now move on to 2011 we have the first Greek referendum, which asked the Greek people to accept the terms of the Troika for a haircut of debt. This was in direct opposition to what the Troika wanted and Prime Minister George Papandreou acceded to their request by withdrawing the referendum and subsequently resigned.

Just 4 years later and the newly elected Syriza government flew in the face of Troika demands and actually held a referendum for the people to decide on accepting, or not, the bailout terms requiring more ‘austerity’ measures. The people overwhelmingly chose not to accept the terms and this wholly legitimate act of democracy was simply ignored by the lenders, as well as the European Commission.

That all three members of the Troika were themselves unelected, points to their contempt for this democratic process and their application of even more onerous terms upon the new government and its people as a punishment.

In 2016 an unelected European Commission announced it was ignoring the two thirds Dutch majority vote and would be railroading through visa free travel to 45 million Ukrainians.

Brussels has also recently ignored another respected democratic process, when over a million people signed a petition to halt the odious TTIP trade agreement. With the pending referendum, Brussels has not sought favour with the electorate over this issue, by discussing it or even mooting possible amendments. Rather it has simply gone very quiet, suggesting that once the referendum is over negotiations will be resumed with added vigour and continued contempt for the wishes of the people.

More and more political commentators are voicing the opinion that the EU is teetering on the brink of both financial and political collapse because of incompetence and arrogance. America has much to lose if the EU fails, in both trading terms but more importantly as a strategic base for its growing stance against Russia and China.

I also think it significant that Switzerland has, this week, withdrawn its dormant 1992 EU application as, according to one headline, ‘only a “few lunatics” now want to be involved in the bloc’!

Hannes Germann of the Swiss People’s Party compared the symbolic nature of the vote to Iceland’s decision to drop its own application in 2015. “Iceland had the courage to withdraw their application for membership and no volcano erupted,” he joked. Was this directed at the British people . . . who knows but the timing must be significant, in my opinion.

Given the considerable pressure now being placed upon the British people to vote ‘Remain’ by no less than the US President, the Governor of the Bank of England and the Managing Director of the IMF, none of whom have been elected by us and none of whom are British citizens, it is does not take rocket science to work out that a lot is at stake for their particular vested interests.

Given also the narrowness of the vote between ‘Remain’ and ‘Leave’, just like that of the Bush re-election, let us hope that, in the event of a win for ‘Remain’ we do not hear in a years’ time from our own Electoral Commission that it did not represent the will of the people. Let us also hope that we are not too taken into an illegal war by people we have not elected to power.

We have already given away a lot of our sovereign power to Brussels as an act of trust and I question tonight whether that trust has been honestly repaid over the last four decades.

Whatever the outcome, we will have to take responsibility for our individual actions and therefore can only vote with our conscience, whether it be to ‘Remain’ or ‘Leave’ and I offer you my respect for what we are all facing at this time.

Until the next time

 

Thinking from his Book: Global Magna Carta. Returning Power to the 99% . . . If They Want It! By J T Coombes