On 21 December, the European Central Bank made its biggest loan in its history to the banks. In total, the ECB lent 523 banks Euros 500 billion, for 3 years at 1% interest rate. This is an exceptional degree of support from the ECB, which officially justified the move because of the need for banks to meet their next payment deadlines.
Faced with the threat of a serious banking crisis of the scale of 2008, the ECB plays its a priori role of lender of last resort by refinancing the banks. But, what is unacceptable, is that once again there are no strings attached.
Thus while the ECB intervenes, with the European Commission and IMF, in Greece or Portugal, the conditions are considerable: in order to “atone” for a supposed laxity in their public expenditure, governments must introduce aggressive adjustment plans. But when it’s about “saving” the banks…it’s Christmas early!
The banks have already been saved, without any conditions attached, by states and central banks in 2008-2009, at the start of the sub-prime crisis. Result: once their position improved. they started to speculate against public debt (Greece and Ireland in particular), to distribute dividends to their shareholders, and to give exorbitant bonuses to their top executives and traders.
The same scenario is be repeated in 2012: money lent to banks will be channelled into the markets at elevated rates following a purely financial logic, and it will not be used to loosen credit and financing for the productive sector. Even though this is what is needed to come out of recession and create jobs.
It is time to put finance at the service of society, for an ecological and social transition. This means a radical reform of the European Central Bank and of the banking system in order that they promote the general interest and are no longer dominated by the interests of high finance. We need to end Europe’s destructive cycle of generalised, unfair and ineffective austerity.
These are the proposals that are at the heart of the campaigns led by Attac for a citizen’s audit of public debt, for a disarming of finance and a transformation of the banking system.
Attac France (www.attac.fr)