Reigning in Public !Debts or Challenging Democracies?

Ann Pettifor, PRIME (Policy Research in Macroeconomics) www.primeeconomics.org

Madariaga College of Europe Foundation Brussels 1st December, 2011

Private !Wealth needs Greece

• Greece does not need private wealth

Why should Greek & EU taxpayers shield private financial sector from risk?

Struggle between public & private interests

• Without taxpayer-backed bailouts (EFSE,ECB,IMF, the US FED), public guarantees, the privatisation of assets, private bankers face armageddon, as in 2008.

• Bankers challenging democracies - removing elected politicians

Imposing 'technocrats' Denying the people Voice

Total exposure of British private banks to Italian/Belgian/Greek public debt = $20bn (Bank for International Settlements, June, 2011)

Belgian private bank exposure to public debt of It/Gr/Ire = $19.47bn. (BIS June, 2011)

French private bank exposure to Italian/Greek/Irish public debt = $106bn (BIS, June, 2011)

Austerity marks final failure of existing arrangements between

private & public interests Financial liberalisation has failed

Next Steps

• Euro must be abandoned

• Not a currency of the peoples, but an ideal of private wealth

• Euro a perversion of greatest monies in history - which arose as a relation between people and the state

• Through development of central banks, domestic banks, state borrowing, paper currency, double-entry book-keeping and taxation, national monies have underpinned greatest societies in the world.

But Euro aimed at !interests of private!wealth • Divorced from nation states

• Statutes explicitly prohibit the support of state activity

• Through "swaps" "QE" etc.

• Its foundation in monetarist doctrine inhibits private economic activity, has led to financial monopolies

• Rather than encouraging convergence across EU, intensifies divergences

In 1931 Britain threw off the "fetters" of Gold

• Then as now the "Lords of Finance" demanded Austerity, and the impact of the Crash & Great Depression hammered the innocent.

• The UK, led by Keynes, threw off the equivalent of the Euro, and restrained the bankers - subordinating their interests to the broader interests of society

• Sterling was revived and protected from speculation

1934 Roosevelt freed the dollar

• Embarked on finest programme of public works expenditure in modern history

• Great public buildings erected, symphony orchestras established, writers - like John Steinbeck - sponsored, murals created, swimming pools built.

• In 1935 Socialist government in France did the same.

• Only the Fascist governments remained in thrall to Gold, and to private wealth