Fernando Fuster-Fabra's Blog

EUROPE’S UNION IN THE CROSSROADS: DO OR DIE | November 15, 2011

Problems cannot be solved by the same level of thinking that created them.

–       Albert Einstein

 

 

 

 

Spanish version:  http://wp.me/pRlnf-4D

 

The G-20 Summit of world leaders was held in Cannes a few days ago. As expected, no decisions were taken to resolve the economic crisis that affects the stability of a great number of countries. Not a word was said about establishing restrictions to speculative abuses that crop up based on ratings of agencies prone to cause alarm with their presumptions. Assisting the summit were the principal European leaders representing the EU as well as Germany, France, Italy and United Kingdom as full-pledged members, with Spain and The Netherlands as guests.

Just a few miles away, in Brussels, the Greek crisis with a call for referendum warning and the forthcoming Italian tempest had been left unsolved. Today, the Greek crisis remains unsolved although Greece’s elected Prime Minister (Papandreou) has had to step down and a new one (Papademos) appointed in his place without any elections.  Something similar went on in Italy just a few hours ago, with the forced resignation of Berlusconi after the approval of the demanded reforms and the appointment of Monti to replace him.

Two new figures, not elected by their respective citizens, assume their respective tasks; technocrats, as they are called, but without analysing their close links to the financial structures that, in my opinion, have been the root of this entire regrettable situation. Lukas Papademos was Vice-President of the ECB from 2002 till 2008 when Jean Claude Trichet was President whilst Mario Monti not only was a European Commissioner but also a consultant of the notorious American bank, Goldman Sachs.

Furthermore, in November, the turnover at the ECB has also taken place, with an Italian, Mario Draghi, taking over the chair occupied by Trichet from 2003 till late October. He is another figure related to the bank (Goldman Sachs) that caused more than a single financial quake, amongst which it is worth mentioning its advisory role to the Greek Government in the times of the conservative, Kostas Karamanlis, precisely when the state accounts were falsified in the reports to Brussels.

The irony of this entire circus is that a legitimately elected Papandreou was forced out of office for calling a referendum to approve his proposals but no one has said a word about prosecuting neither Karamanlis nor Goldman Sachs por having intentionally lied, causing the domino effect on the weaker Eurozone economies.

Thus, not only has a chance been lost in Cannes to set up global regulating and supervisory measure of the larger banking entities as well as the rating agencies but also it has allowed a slow transfer of previous bank executives and personalities linked to these entities to occupy relevant posts in the hierarchical big-shots of the EU and in the government of its member states.

Likewise, the American stance has taken a 360 degree change from Pittsburgh to Cannes. With elections in 2012, Obama does not wish to risk any confrontation with potential donors for his campaign funds, amongst which we may mention the larger U.S. banks and the powerful Jewish lobby. He abandons Europe to its fate, above all because he does not share the curt German stance in some questions of procedure and timing. Not even the goodwill efforts of the French President and proud father of a baby girl served to ease the tense atmosphere. Furthermore, Obama is aware that in spite of the Euro crisis, the currency has a strong quotation, benefitting the U.S. Dollar and facilitating its exports to the Old Continent while decreasing European countries competitiveness in world trade.

What seems to have gone unnoticed in all this week of European tension after the Cannes summit is that Munich  prosecutors ordered a search in the Deutsche Bank offices in relation to the famous ‘Kirch affaire’. In spite of the death of communications magnate, Leo Kirch, the lawsuit against Deutsche Bank continues its course, with outgoing CEO, Josef Ackerman, in the midst of the storm. The matter must have been of such importance that Ackerman announced his decision not to seek the appointment to the bank’s presidency, a rather difficult manoeuvre after the German banking law reforms in 2009. Said reforms establish a two-year grace period before a former CEO can aspire to the presidential post of a bank, with the only exception that 25% of the stockholders so demanded.

Angela Merkel has covered many inside details of the decisions taken in relation with the German banking system between 2005 and 2011, as well as her personal pact with Gerhard Schröder, with regards such a vital issue as energy, disguised under the so-called ‘grand coalition’. Few are conscious of the of Merkel’s stubborn tenacity that has brought her from that membership in the communist youth movement in her younger years in the extinguished GDR to become ‘my girl’ for conservative, Helmut Kohl. Her rise to power came by pure chance after a scandal caused the downfall of Kohl’s chosen successor, Wolfgang Schäuble, actually the Economic Minister in Merkel’s cabinet.

Perhaps that is the reason that one has given due importance to the very recent announcement of the inauguration of start-up of Operation Nord Stream, the gas pipeline agreed upon between Russia and German, with the blessing of France, The Netherlands and United Kingdom. Said pipeline will go from Vyborg in Russia to Greifswald in Germany in a submarine line across the Baltic Sea. In Russia’s behalf the participations is headed by state-owned Gazprom as natural gas supplier and Nord Stream AG, a German enterprise has been set up to handle constructions and operations. It is interesting to observe that former Prime Minister Schröeder has been involved in the Nord Stream project and with Gazprom since December, 2005, roughly a month after stepping down in favour of Angela Merkel.   

What makes this affair even uglier is the fact that the powerful EU members will share the spoils of Russian gas without sharing a bit with other Baltic member states, namely – Poland, Estonia, Lithuania and Latvia – nor seem to have offered a gas link to the Scandinavian states for the moment. Nevertheless, said gas will indeed go across the English Channel to the United Kingdom.

This project is contrary to the interest of the pan-European Nabucco project which had set the goal of constructing a gas pipeline from Erzurum in Turkey to Baumgarten in Austria, precisely with the intention of breaking EU dependence on Russian gas supply. The problems generated with Gazprom gas supply through Ukraine have left Central Europe and Italy without a reliable supply in more than one occasion whilst Turkey had offered its facilities in a sign of goodwill in its bid to join the EU. Germany has again vetoed a state that has been accumulating more merits to join the EU than some who already are in.

With partners who demand from the south sacrifices but will not share the favourable agreements with other non-EU states, it is no wonder that the Union of 27, each day, is turning into a more difficult endeavour.  In addition, those who impose the terms & conditions interpret the Stability & Growth Pact in such a manner as to oblige members to apply solutions thought out in conventional terms, in precisely the same line as those that created the problem.

Whilst our present-century ‘Medea’ is bossing around in Europe, the route travelled will be the wrong one and the estrangement amongst members each day larger.  How much must we wait before Merkel is sent into exile?     

Fernando Fuster-Fabra

Barcelona, Spain     


5 Comments »

  1. I intend to investigate an assumption that major German and British investment banks and financiers who are the main creditors and lenders for many European countries in the last twenty years deliberately created the current European sovereign debt disasters to gain control over certain countries.

    The reason behind this accusation is very logical and clear. To protect investors, normal creditors in any situation shall definitely refrain from lending to any already heavily indebted entity or state.
    The questions posed here to readers are:

    1- Do you have any idea why these investment banks and financiers provided bad debts?

    2- Do you know the names and ownerships of the major investors and creditors to each European country in crisis?

    3- Why the EU institutions did not warn and intervene before approving the loans to heavily indebted countries?

    4- Why the EU is suddenly very vigorous in dealing with debt default and bankruptcy while they were watching the clear problems in the making?

    5- What made elected governments exceed any reasonable debt ceiling and overspend beyond their capacity?

    6- Why the essential financial and economic prerequisites of the EU were relaxed and allowed heavily indebted countries to gain membership?

    7- How far the EU and the financial markets are legally allowed to topple democratically elected governments and appoint unelected rulers?

    8- What are the invisible relationships between the EU institutions and those investment banks and financiers?

    9- Why the credit rating system was not applied to states that exceeded reasonable Debt/GDP ratio?

    10- Why very rich countries like the USA, Germany, Luxembourg, Belgium, Switzerland, Austria, Sweden, Denmark, Finland, Norway, France, and the UK are the top indebted countries without interference?

    I appreciate any information and comments on these questions to let everybody know the truth behind the unholy alliance between bankers; bureaucrats; and senior officials in any country.

    http://tariganter.wordpress.com/2011/11/15/financiers%E2%80%99-reich-is-buying-some-european-countries/

    Comment by Tarig Anter — November 15, 2011 @ 8:37 pm

    • Basically, the issue is ethics …. or rather the lack of it in the financial world. Every since J.P. Morgan Banking ‘invented’ CDS’s (credit default swaps)in the late ’90s, the stock exchange and public debt circulating in the secondary market have been exposed to speculative rumours. Rating agencies with lack of scruples have played a double game in connivance with banking and financial entities acting as intermediaries. There was, however, a golden rule – ‘hands off to the AAA rating of the USA, United Kingdom and Germany.

      If you go backwards and review my posts, who may find most of the answers to your questions. Unfortunately other posts are in a Spanish blog and also in books published in Spanish.

      Here are some links to older posts to get you started :-

      http://wp.me/pv6EY-4N
      http://wp.me/pv6EY-4T
      http://wp.me/pv6EY-4Z
      http://wp.me/pv6EY-5N
      http://wp.me/pv6EY-6Y

      Post in this blog date back to April, 2009 where you can see some other matters dealt with in relations to your enquiries. Please feel free to contact me again and follow my new posts or on Facebook.

      Comment by Fernando Fuster-Fabra — November 16, 2011 @ 12:02 am

  2. Thanks for the links. I will read them and feedback. If you have further information like who exactly are the creditors and how much it will be great.
    Yesterday for the first time the EuroNews TV stated in a news bulletin that the new PM of Greece and Italy and other EU officials are Golden Sachs associates and ex-employees.

    Comment by Tarig Anter — November 16, 2011 @ 6:43 am

  3. great article. I didnt know about that pipeline plan but it confirms ideas I had about russia and the EU. I dont think France and Germany will let the Eurozone die but if they do, I think the Eurozone will restart with Russia a player.
    http://www.associatedcontent.com/article/9152137/about_ecopolitics_nov_14th_2011.html?cat=3

    Comment by ch4wordpress — November 17, 2011 @ 3:13 am


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