Occupy the EU, and merry christmas
Let’s look at a few, very few, trifling almost, pieces of evidence. As austerity cuts swept Europe, the numbers of the wealthy in Europe with more than US$1 million (€772,000) in cash rose from 2.6 million in 2008 to 3.2 million people in 2011. Together they were worth US$10.1 trillion (€7.8 trillion) in 2011.
Don’t look away yet. The five biggest banks in Europe made profits of €34 billion in 2011. Executive pay for the CEOs of the 100 largest companies on the London stock exchange rose by 49% in 2010, compared with 2.7% for the average employee.
Yes, I’m coming to the Occupy anthem, but first: there are between 15,000 and 30,000 estimated lobbyists in Brussels – more than in Washington. Some operate as “professional consultants” and under other titles and relatively few have registered with the EC voluntary lobbyist register. 68% of European lobby groups represent business interests. Trade unions make up 1-2%.
This is courtesy the very excellent and incendiary update to the EU Crisis Pocket Guide, first brought out by the Transnational Institute. [The update is in English, and the pocket guide is also available in Italian and in Spanish.)
TNI’s EU Crisis Pocket Guide tells us: how a private debt crisis was turned into a public debt crisis and an excuse for austerity; the way the rich and bankers benefited while the vast majority lost out; the devastating social consequences of austerity; the European Union’s response to the crisis: more austerity, more privatisation, less democracy; and contains ten alternatives put forward by civil society groups to put people and the environment before corporate greed.
Indeed, as Triple Crisis has warned, the GDP figures published in the Eurostat press release on the 15th of November 2012 for the Economic and Monetary Union (euro area) marked the confirmation of a double-dipped recession (with negative growth in quarters 2 and 3 of 2012). Gross domestic product was 0.6 per cent lower in the third quarter of 2012 compared with 12 months earlier. The return of recession is symbolic of the failure of the austerity programmes, which have been striking down economic activity throughout the EU and EMU. It should give rise to some thoughts as to why the austerity programmes are not working to bring down budget deficits without damaging economic activity.
But back to TNI and the Pocket Guide, which has said that in spite of the crippling costs of bailing out the banks, the EU still has not agreed, let alone put into operation, any major bank reforms. Four years on, only a few new rules to reduce some particularly risky practices by banks and financial markets, exposed by the financial crisis, have become operational.
What’s the remedy? There are a goodly number and here are but a few, as offered by the TNI’s very competent heads: (1) Bring the financial sector back under public control and do this by banning speculative financial instruments like Credit Default Swaps and food speculation, reintroduce rules that separate retail/utility banking from investment banking, impose size limits on banks so none can become “too big to fail”, stop new financial products unless proved safe and socially useful, ban hedge funds and other risky speculators who only make money from money, re-introduce controls on capital flows. (2) Tax the rich, the speculators and the polluters, impose tax on international financial transactions, increase taxes on the rich to at least the same as pre-1980 levels, end subsidies for fossil fuel industries, close down tax havens, establish a maximum pay ceiling and ban bonuses, introduce a Basic Income available to all.
For more background, there is the book, ‘Crisis in the Eurozone’ (Verso), and this has described the credit crunch, which led (coaxed or demanded) that governments around the world step in to bail out the banks. “The sequel to that debacle is the sovereign debt crisis, which has hit the eurozone hard. The hour has come to pay the piper, and ordinary citizens across Europe are growing to realize that socialism for the wealthy means punching a few new holes in their already-tightened belts.”
In this book, a leading member of the Research on Money and Finance group, Costas Lapavitsas argues that European austerity is counterproductive. The book shows that cutbacks in public spending will mean a longer, deeper recession, worsen the burden of debt, further imperil banks, and may soon spell the end of monetary union itself.