Posted in Finance

Euroland’s Utopian foundations shaken by its central bank shirking its duties

European_Central_Bank_-_building_under_construction_-_Frankfurt_-_Germany_-_14The late-night decision on 4 February by the European Central Bank to reject Greek bank collateral for monetary policy operations will, I confidently predict, precipitate not just a run on Greek banks; not just greater price instability across the Eurozone – but ultimately, the collapse of the fantastic machinery that is the ‘self-regulating’ economy of the Eurozone.

As is well known, the primary duty of the ECB is to promote price stability. Subject to price stability it has a duty to promote the union’s Treaty objectives that include:

balanced economic growth… full employment, social progress and solidarity amongst member states.

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Why are US, France & Belgium starting prosecution against HSBC but not the UK?

tax cheatsThe evidence of wrongdoing published this week against HSBC Suisse is so overwhelming that formal investigation prior to prosecution might seem a foregone conclusion. It is indeed already happening in the US, France, Belgium, Spain, even Argentina. But not in the UK, even though HSBC is a British bank. So why the reluctance of the UK authorities to prosecute even when the charge of criminal activity is so blatant, namely that HSBC’s Swiss bank not only co-operated with wealthy clients seeking tax evasion, but proactively marketed illegal tax evasion schemes to a passive clientele? Several excuses have been put forward by the Establishment to exculpate itself from either crass incompetence or indeed brazen collusion with wrongdoing on a huge scale. But none of them stands up to scrutiny. Continue reading →

With ballooning debt and oversized banks, another financial crash isn’t far off

Banking trade screensIn election Britain this last week has been consumed with business and finance, mainly the hedge funds, lambasting Labour for being ‘anti-business’, as though massive indulgence in tax avoidance and continued insistence on de-regulation of finance were the conditional requirements of a successful global economy. Actually they are the forerunners of the next financial collapse which may be sooner than many people anticipate. Consider the evidence. Continue reading →

Tsipras versus Cameron: people versus bankers

Cameron and TsiprasDavid Cameron became the first elected politician in Europe to criticise the election of the Syriza government in Greece and was quickly followed by George Osborne. This might seem odd as Britain is outside the Eurozone and has limited direct influence over its policies. But the urgent and unrestrained nature of the criticism is very revealing about what is at stake in the anti-austerity struggle and specifically the very different roles being played by the British and Greek governments.

The Syriza government represents the popular will to end austerity. Only the parties of the left increased their vote in the recent election, and that was overwhelmingly to Syriza’s benefit with a rise of 9.4%. But entirely new parties and even parties of the traditional right adopted similar anti-austerity rhetoric in an effort to shore up their vote. The election showed the Greek popular majority wants to end austerity. Continue reading →

Democracy versus capitalism – how Greece should survive

Greek demonstrationIt is difficult for us to comprehend what the Greek people have been subjected to. After the 2008 crash UK unemployment rose to 8%; in Greece it is still 26% with youth unemployment at over 50%. UK GDP fell by 9%; Greek GDP collapsed by 25%. What is remarkable is not the momentous Syriza victory a week ago, but rather that it didn’t happen earlier.

The idea that now the Syriza demand for some easing of the crushing weight of Greek debt at 177% of GDP could be dismissed out of hand by those whose policies have manifestly failed in pushing the whole eurozone into deflation seems inconceivable. But clearly the Germans are determined to take that line, and insist that because the Greeks borrowed the money they are duty bound to pay it back whatever the cost. This self-righteousness however is not tenable. Continue reading →