On May 15th, in what can only be described as an act of coercion, an impoverished and effectively insolvent Greece acceded to the handover of a bond payment – €436 million – to private financial ‘vulture funds’. The Greeks had little choice. However, in acquiescing to this handover - facilitated by its paymasters,‘the Troika’ - impoverished Greeks protected reckless private wealth from the consequences of their risks. Namely: losses and bankruptcy, and the discipline of market forces.
This is a perverse distortion of free market capitalism because, as Professor Kunibert Raffer has argued: “the most basic precondition for the functioning of the market mechanism (is) that economic decisions must be accompanied by (co)responsibility: whoever takes economic decisions must also carry financial risks. If this link is severed – as it was in the Centrally Planned Economies of the former East – efficiency is severely disturbed…. At a time when riskless decision making by bureaucrats is abolished in the East, there is no reason why it should be preserved in the West.”
Today this new, distorted economic order is enforced, on behalf of private wealth (hedge funds, offshore ‘investment funds’ and private bankers) by unelected EU, IMF and ECB officials and elected EU politicians....
This economic order is the very antithesis of both democratic but also free market principles. However, it is at the heart of the neoclassical monetarist statutes of the European Union, the Eurozone and the ECB – and now the new EU Fiscal Compact....
This is the central purpose of neoliberal economics: to strip democratic states of sovereign economic power and transfer these powers to private markets....
As a consequence of what can only be described as a blatant financial "coup d’etat" financial vultures are not just circling and threatening Greece, Spain and Portugal. They now threaten Europe as a whole with the consequences of disintegration....Read it at OpenEconomy
An open letter to the leaders of Europe: abandon the Euro's 'gold fetters'
Ann Pettifor | Director, PRIME (Policy Research in Macroeconomics)
Ann Pettifor provides a more detailed analysis of the problems leading to the global financial crisis and Keynesian-based solutions in Ann Pettifor: speech notes for presentation to the Just Banking Conference, Edinburgh, 20th April, 2012. Important.
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