The turning point of the toxic asset crisis was the G-20 Summit in London on April 2009.
The G-20 members reached that Summit under pressure from the bank, which threatened with mass bankruptcies and claimed billionaire bailouts on both sides of the Atlantic. The financial sector fed the fear and got what it wanted, despite being directly responsible for that catastrophe.
After little over two years the European crisis is still on the skids, and the world waits for another G-20 Summit, this time at Cannes, to see whether the measures to reverse the trend are provided in this forum. The European leaders do not expect that much, just the support for emergency measures.
Developing and emerging countries demand from Europe measures to prevent the crisis from spreading to their economies, ordinary people call for investment in the recovery of employment and growth, and for the moment European leaders announce mere emergency measures: recapitalize the bank and the lenders of last resort (IMF and European Financial Stability Facility).
The European signal is disturbing: to opt for a super lender of last resort in order to pay creditors reveals that it continues to meet the conjuncture.
The way to the summit is once again marked by the financial sector pressure, held up by the usual lobbyists: the IMF, which foretells a perilous future and calls for a new public funds bailout, and the rating agencies, which stir things up by lowering the sovereign debt rating for Italy and Spain, cautioning they can do the same to France.
Tightening the rope, the three main agencies, Standard and Poor’s, Moddy’s and Fitch, have brought down the ratings on countless of large European banks, or have placed them on a negative watch status, among which the BNP Paribas, France’s largest bank.
Fitch announced, bluntly, that such reductions are the result of the political intention of the financial authorities of Germany, Switzerland and the U.K., to limit the implicit support to each country’s banks[i], as well as the significant exposure they have on debt securities of countries in the European periphery.
Quite a revelation and a warning.
The financial power lobby has no counterpart, unless governments resolve to stop it.
And governments should think about it. Firstly, bankers’ greed and speculation are at the heart of the crisis, and secondly because people have lost their patience.
Regular people are not responsible for this disaster, but it is they who pay for the consequences. Governments are the ones who make the decisions which control their economies and some of them, the most powerful, are the ones who take the choices that rule the global world.
It is governments that chose for a world without financial controls, which allowed their markets to become a roulette game where labour and welfare of people are gambled.
Regular people place their confidence and taxes on governments, not on the bank; and do not want their taxes to end up in the hands of speculators, they want their governments to invest in employment, productivity and growth.
And that is what they were asking on the day of the “15-O”, which brought together hundreds of thousands of people who occupied the squares of more than 900 cities in 82 countries.
The fight is on, and at first sight it seems uneven, the banking lobby has a millennial experience; it knows when, how and where to push. Regular people have just their anger and the social networks.
Despite the disparity, the result is unforeseeable.
Some popular demonstrations in the past have diluted almost as soon as they started, it is true, but others caused progressive changes; such as the N-30 which took place in Seattle in 1999, and the recent spring of Tahrir Square in Cairo, which in a few days overthrew a government of over 30 years.
By Raúl de Sagastizabal