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The EU Should Issue Perpetual Bonds
The disruption in the European Union caused by the COVID-19 pandemic should be temporary, but only if EU leaders take the extraordinary measures needed to avoid long-term damage. Fortunately, there is an easy, fast and low-cost way to finance the proposed €1 trillion European Recovery
Why would Sovereign Nations be required to pay interest to the ECB?
Meet The Fuggers.
Finacialised capitalist Alchemy, the ECB and The Commission further choose to sacrifice national Governments to Market discipline and certain ruin at the hands of Private Bankers with the power to create money secured against the commonwealth and commons of its own Citizens. With National Governments forced to borrow in open markets without any legal recourse to the ECB as a lender of last resort. Latterly the Five presidents report seeks to justify More Europe in ´´Completing Europe’s Economic and Monetary Union´´
in the Five presidents report Mr Junker , ´´President´Ís that President No1 or President No 5, A or E , Mr Junker Then,, Or, Our Cher Jean Claude.
tells us that;
Responsible national fiscal policies are therefore
essential. They must perform a double function:
guaranteeing that public debt is sustainable and
ensuring that fiscal automatic stabilisers can operate to
cushion country-specific economic shocks. If this is not
the case, downturns are likely to last longer in individual
countries, which in turn affects the whole euro area.
But this is not enough. It is important to ensure also
that the sum of national budget balances leads to an
appropriate fiscal stance(5) at the level of the euro area
as a whole. This is key to avoiding pro-cyclical fiscal
policies at all times.
(5). The concept of fiscal stance reflects changes to the fiscal balance in order to influence aggregate economic demand and output. Under the Stability and Growth Pact,
the fiscal stance is measured on the basis of the structural fiscal balance, i.e. the fiscal balance corrected for the effects of the economic cycle and net of one-off and
other temporary measures. Generally speaking, a fiscal deficit (surplus) would suggest an expansionary (contractionary) fiscal stance
4.2. A fiscal stabilisation
function for the euro area
There are many ways for a currency union to progress
towards a Fiscal Union. Yet, while the degree to which
currency unions have common budgetary instruments
differs, all mature Monetary Unions have put in place
a common macroeconomic stabilisation function to
better deal with shocks that cannot be managed at the
national level alone.
This would be a natural development for the euro area
in the longer term (Stage 2) and under the conditions
explained above, i.e. as the culmination of a process of
convergence and further pooling of decision-making
on national budgets. The objective of automatic
stabilisation at the euro area level would not be to
actively fine-tune the economic cycle at euro area
level. Instead, it should improve the cushioning of large
macroeconomic shocks and thereby make EMU overall
more resilient. The exact design of such euro area
stabilisers requires more in-depth work. This should be
one of the tasks of the proposed expert group.
The Bank of England seems to have let the UK government know the ECB has perhaps not been so forthcoming with the ´´FIVE´´presidents.
At this point for you dear reader and the `Five Presidentees´, I would like to effect the Introduction of a Brilliant Finance Scholar, If only the Technocrats would seek out real experts rather than Cronies in considering such important matters.
INTRODUCING PROFESSOR RICHARD WERNER.
Richard Werner @ProfessorWerner First empirical test in 5000 years of banking on whether each individual bank can create money out of nothing is out
If you skipped the links and took me at my word here’s a bit more of Schumpeter to tee up our shot.
“Something like a certificate of future output or the award of purchasing power on the basis of promises of the entrepreneur actually exists. That is the service that the banker performs for the entrepreneur and to obtain which the entrepreneur approaches the banker. … (The banker) would not be an intermediary, but manufacturer of credit, i.e. he would create himself the purchasing power that he lends to the entrepreneur …. One could say, without committing a major sin, that the banker creates money.” 14
Schumpeter (1912, p. 197, emphasis in original)
“[C]redit is essentially the creation of purchasing power for the purpose of transferring it to the entrepreneur, but not simply the transfer of existing purchasing power. … By credit, entrepreneurs are given access to the social stream of goods before they have acquired the normal claim to it. And this function constitutes the keystone of the modern credit structure.”
Schumpeter (1954, p. 107)
And finally Professor Werner in his own words.
´´Among the many different monetary system designs tried over the past 5000 years, very few have met the requirement for a fair, effective, accountable, stable, sustainable and democratic creation and allocation of money. The view of the author, based on more than twenty-three years of research on this topic, is that it is the safest bet to ensure that the awesome power to create money is returned directly to those to whom it belongs: ordinary people, not technocrats. This can be ensured by the introduction of a network of small, not-for-profit local banks across the nation. Most countries do not currently possess such a system. However, it is at the heart of the successful German economic performance in the past 200 years. It is the very Raiffeisen, Volksbank or Sparkasse banks – the smaller the better – that were helpful in the implementation of this empirical study that should serve as the role model for future policies concerning our monetary system. In addition, one can complement such local public bank money with money issued by local authorities that is accepted to pay local taxes, namely a local public money that has not come about by creating debt, but that is created for services rendered to local authorities or the community. Both forms of local money creation together would create a decentralised and more accountable monetary system that should perform better (based on the empirical evidence from Germany) than the unholy alliance of central banks and big banks, which have done much to create unsustainable asset bubbles and banking crises (Werner, 2013a and Werner, 2013b).
The Euro Crisis has been subject to an egregious sort of Historical Revisionism.
Readers here will benefit from reading this excellent report from Corporate watch.
The EU is made up of a web of institutions; the main ones are the Commission, the Parliament and the Council of Ministers. It is grounded legally in a series of Treaties.
Setting up the euro zone was a lengthy process, that was from the beginning a corporate-led vision. The common currency imposed a single monetary policy (e.g. decisions about interest rates) decided centrally, but fiscal policies (e.g. decisions about taxes) decided nationally.
Monetary policy for all countries is decided by the European Central Bank (ECB), which is prohibited from lending directly to governments. Instead, governments borrow by issuing bonds bought and traded in financial markets.
Restrictions were put in place regarding targets for the size of debts (at 60% of GDP) and deficits (at 3% of GDP). These targets were enshrined in the Maastricht Treaty and further entrenched through the Stability and Growth Pact. No euro zone country ever fully complied with these targets, however, only some were berated about breaking them.
The crisis led to the creation of the Troika – comprised of the Commission, the ECB and the International Monetary Fund (IMF) – three institutions that are unaccountable, opaque and fundamentally undemocratic. They dictate the bailouts and the conditions that must be implemented in order for the recipients to receive the money.
“The Troika acts like a governor and visits it’s colonies in the south of Europe and tells them what to do.” Derk Jan Eppink, a conservative Belgian MEP
Mr Soros makes an interesting appearance in this 2010 Film Inside Job,
The Music had already stopped long before COvid 19, the fed started Bailing out Wall Street last Autumn. Now its the ECB’s turn to do their bit for the Ailisng Deutsche Bank.
While everyone is endlessly told about the world-ending dangers of Brexit, I wonder if we should be paying a little more attention to “Deutsche-it”. If the UK leaves the EU the EU will survive. But what happens when – and surely it’s no longer if – but when Deutsche Bank, Germany’s biggest and only truly global bank has to be rescued? What will the fallout from that be?