By Max Musson:
According to those who promote European union as an idealistic aim and those who promote the EU as the embodiment of that ideal, such a union is intended to be beneficial for all concerned – a state of affairs in which each member state is stronger and more secure because of the fraternal support provided by the others. However this does not seem to be working out too well for Greece in her hour of need.
This week we have seen the mask slip — the true face of the European Union (EU) has been exposed for all to see, and it has not been pretty, nor just, nor noble. We have seen the people of Greece humiliated through the thinly veiled, hostile imposition of punitive austerity measures in retribution for their temerity in rejecting previously proposed austerity measures and even considering the option of withdrawing altogether from the Eurozone.
This blow has hit the Greek people hard as they have been led to believe there are real alternatives to severe austerity and the left-wing government of Prime Minister Alexis Tsipras and his party, Syriza, pledged to defy the EU in demanding a just and tolerable solution to the country’s financial problems. As it is, Tsipras, emboldened by his people’s 61% rejection of the earlier bail-out proposals, tweaked the noses of the pompous Eurocrats only for his defiance to collapse at the eleventh hour in contrite supplication to the will of German Chancellor, Angela Merkel, and her Davros-like Finance Minister, Wolfgang Schaeuble.
As I have pointed out in an earlier article, the financial difficulties facing Greece at this time, may be marginally more the result of Greek profligacy than the financial difficulties faced by other European states, but the root cause of Greek indebtedness is twofold; the ubiquitous but corrupt system of Fractional Reserve Banking in which new money is ‘borrowed into existence’; and the fraudulent peddling of junk-bonds and their derivatives as ‘low-risk’ investments by US bankers, primarily at the behest of the American government in the decades leading up to the 2008-09 Credit Crisis.
If EU leaders were to act in what they proclaim is the ‘spirit of the European Union’ – a spirit of ‘ever closer union’ moving towards the formation of a federal European super-state, one would expect them to regard the debts of any one member state, as a component part of the total debt burden shouldered by all of the EU member states collectively, in the same way that our Westminster government has over the centuries since the formation of the United Kingdom, regarded debt incurred through public expenditure in Wales, or in Cornwall or Yorkshire, as part of a collective national debt owed by the United Kingdom as a whole and the responsibility of the United Kingdom as a whole. However, the EU has not reacted as if this is the case.
Instead, the member states of the EU have distanced themselves and failed to acknowledge any shared responsibility for the Greek debt and the Greeks are being forced to fend for themselves, despite not having control of their currency.
Morally and in consideration of the Greek people entering into monetary union with the other member states of the Eurozone; with a shared currency, the Euro; and with a border-less single market, the EU as a whole should regard themselves as ‘jointly and severally’ liable for any debts incurred and bail-out the Greeks without recrimination. This is how a political and economic union should work, but such a union should also be a fiscal union with a single taxation system and centralised control of public spending by the various member states.
When a nation forgoes control of its own currency, and enters into a federal arrangement with other nations, in which there is a ‘single market’ and in which there are no internal controls over the movement of goods, or capital, or people, it is rather like an individual giving away control of his or her own bank account and trying to manage their finances through a joint bank account together with a group of other people, each of which has the ability to deposit or withdraw money as they choose.
Unless one of the parties to this joint banking arrangement is nominated to act as the ‘Treasurer’ of the ‘partnership’ and administers the group’s finances as a whole, at some point it will inevitably be discovered that rather more money has been withdrawn and spent than planned and as a consequence the ‘partnership’ will be in danger of breaching its overdraft arrangements and of possibly not meeting its financial obligations.
This is why in English Commercial Law all ‘business partners’ are held ‘jointly and severally liable’ for the debts of a partnership, so there can be no wrangling over who is responsible. All of the partners involved in a partnership are legally responsible for their collective debts, even if those debts may have been incurred through the actions of just one partner.
Just as with a business partnership, the member states of the EU are ‘partners’ involved in a ‘joint enterprise’ – to create a single European state — and they have joint banking arrangements and should morally therefore be ‘jointly and severally liable’ for the debts collectively incurred by them, both individually and as a group.
This should be heralded as one of the primary and most fundamental tenets of a political and economic union such as the EU aspires to be, however the current problems experienced by Greece in her relationship with her European partners, demonstrate that such a state of affairs does not exist, and the reasons for this are twofold and are fundamentally issues of honesty:
Firstly, in order for the EU to function as a ‘partnership’ in which the ‘partners’, i.e. the member states of the union enjoy greater financial and economic security as a result of the pooling of their resources, there needs to be centralised control of taxation and of public spending throughout the union and this would require the EU to become a single state in every sense, with the concomitant loss of statehood and/or nationhood by all of the individual member states.
While a single currency has been established throughout the Eurozone, and the European Central Bank has been established to control the issuing of new money, none of the nations comprising the member states have so far been prepared to ‘go the whole hog’ — to surrender to the EU, full fiscal control, that is, control of taxation and public spending – and this is because the EU has been built upon deceit. It is an aspiring super-state that dare not speak its name.
The various peoples of Europe generally feel well disposed towards each other and are happy to enjoy the benefits of economic co-operation, but there is little desire for the kind of ‘ever closer’ political and economic union that our political elites desire, nor for the loss of national sovereignty that such a union would require.
Therefore, ever since the EU was formed, it has proceeded towards political and economic union through stealth, at each stage denying its ultimate objective, because that objective was not and never has been politically acceptable to the vast majority of the people of the member states concerned. This is why Edward Heath deliberately lied to the House of Commons and to the British people when he told us that membership of the ‘Common Market’, as the EU was then called, would not involve any loss of national sovereignty, and this is why successive Labour and Conservative administrations have systematically lied to us at every step and turn along the way, each time denying that the ultimate objective of the EU project would be a total loss of national sovereignty, a total loss of nationhood and our total absorption into a European super-state.
In order to maintain their pretence, the governments (the political elites) of the member states have so far retained fiscal control, control of taxation and their individual public spending, and this is why they cannot afford to respond as appropriate to the needs of the ailing Greek economy.
Having given away control of their currency, the Greeks have been unable to do what we British and the Americans did following the Credit Crisis, in order to lighten the debt burden we carry. They have been unable to employ Quantitative Easing (QE) — that is the printing of a quantity of new bank notes which are used to pay off a proportion of the national debt. The Greeks can only benefit from QE if the European Central Bank agrees to the printing of Euro bank notes which can be given to the Greeks to pay off some of their national debt, but the European Central Bank will not do this, because it would dangerous to do so without full fiscal control over the entire EU — control that the European Central Bank can only have if the EU assumes full nation status and dominion over all of the member states – something that is still politically unacceptable to the European electorate.
The second issue relating to honesty, or rather the lack of it, and serving as an impediment to the EU responding appropriately to the plight of the Greeks, is the failure of our political elites to address the issue of our corrupt fractional reserve banking system, which has been the primary source of the debt based financial problems faced by all of the member states of the EU as well as most of the nations of the rest of the world.
Our current banking system, which was established towards the end of World War II and in the early post-war period, in conferences held at Dumbarton Oaks and Bretton Woods, is one in which banks have the ability to create credit out of nothing in the form of ‘electronic money’ and in which governments are normally only allowed to expand the money supply in their respective countries by literally borrowing that money into existence. Through the Bank of International Settlements, set up following the Bretton Woods Conference, in which the US Dollar is regarded as the international ‘reserve currency’, the power to effectively control the banking systems of the world was granted to the US Federal Reserve, the US central bank which is a privately owned corporation, owned and controlled by a number of merchant banks, and which is constitutionally beyond US governmental control. The head of the Federal Reserve is therefore able to control the money supply of the world, and as we all know, ‘he who pays the piper, calls the tune’. An understanding of this is crucial to an understanding of international power politics.
Sadly very few politicians actually understand the flawed nature of our banking system, and those that do are all too often in thrall to the powerful moneyed interests that control the Federal Reserve. This fact was amply demonstrated on 11th June 2015, when UKIP MP Douglas Carswell very bravely raised the issue of fractional reserve banking on the BBc’s flagship politics programme, Question Time, only to have the matter ignored by the other pundits present, but not before the host, David Dimbleby admitted he had no idea what fractional reserve banking is!
If David Dimbleby, who has had the opportunity to question and speak at length with all of the major establishment politicians in Britain over several decades has not heard of fractional reserve banking before, this gives us a fairly strong indication that no-one has ever mentioned it before, almost certainly because they either know nothing about it, or because they don’t want the public to find out about it or gain an understanding of it.
Debt accumulated through our current banking system, which could be avoided entirely if new money was printed into existence in the form of bank notes rather than borrowed into existence in the form of electronic data entries, and the fact that the German finance minister and the heads of the European Central Bank have not been sympathetic to the plight of the Greek people, and the fact that the Greek Prime Minister made no headway at all in his attempts to have a proportion of Greek debt written off, demonstrates clearly a lack of appreciation of the iniquitous nature of our current banking system and shows that the European political elite are either ignorant of the flaws in our banking system or committed to concealing them. Whichever it is, they are either incompetent or they are crooks and it is deplorable that they have responded to the dire plight of the Greeks in the manner of a loan shark, offering nothing more than a ‘restructuring’ of the current debt arrangement in such a way that their victim will never have the opportunity to be debt free, as they struggle to make ends meet on the ‘never, never’!
Interestingly, the Greek people have not reacted meekly to the climb-down performed by Alexis Tsipras, many viewing the bail-out terms as a betrayal, and as soon as the terms were announced the Greek civil service unions announced a strike aimed at placing pressure upon the Greek government to once again stiffen its resolve against the austerity measures being proposed. It will be interesting to see whether the current Greek government survives or whether Tsipras will be forced to call a snap general election. Either way, the current situation must present a immense opportunity for Golden Dawn to capitalise on the widespread sense of betrayal and humiliation felt by the Greek people. Let us hope so because this crisis could provide that ‘SHTF’ moment that so many nationalists dream of and it could provide the historic opportunity for Golden Dawn to rise from the ashes of their mass arrests and wrest control of Greece from the feeble hands of Syriza. Let us hope so!
‘Greece is the word,
Greece is the word, is the word that you heard,
It’s got groove, it’s got meaning,
Greece is the time, is the place, is the motion,
Now, Greece is the way we are feeling’.
By Max Musson © 2015
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