No More Cuts – Austerity Isn’t working
No Sell-off of State Assets
In a dramatic further deepening of the euro crisis, ratings agency Moody’s last night downgraded Italy’s government bond rating from Aa2 to A2. This is a big reduction of three levels, Moodys warned that an uncertain market environment and risk of further deterioration in investor sentiment could constrain the country’s access to public debt markets.
Italy has an enormous debt of over €1.9 trillion, which comes to around 120% of the country’s output. Most commentators agree Italy is too big to save and an Italian debt default would mean the end of the eurozone.
The European Central Bank is expected on Thursday to make emergency credit available to banks – the last time the ECB made such a move was in 2008 in the immediate aftermath of the collapse of Lehman Brothers. Banks have become reluctant to lend to one another due to exposure to Greek debt. Should Greece become insolvent, banks fear they would never be repaid for loans to other banks.
One of the solutions being proposed by the EU is to leverage the European Financial Stability Facility of €440 Bn using the same schemes that led to the US sub-prime mortgage disaster (read more here).
EU leaders are using scare tactics to prepare the ground for a further transfer of wealth from workers and taxpayers to big banks claiming that we need to recapitalise the banks to the tune of hundreds of billions of euro.
It seems there is endless money available for bankers but only cutbacks and austerity for workers.
Meanwhile Greece is moving closer to default. The crisis in Greece is proof that the EU-IMF austerity program is not working - in fact its making things worse. The EU-IMF-ECB 'troika' are using the crisis to demand more sacrifices from workers and a massive programme of sell-offs of state assets in Greece and Ireland. This would see the biggest transfer of wealth from public to private in over 100 years.
We need to stop this economic madness. Further bank bailouts are not the answer. We cannot let the hooligans who run the banks continue to wield such power. The bank assets are the collective resources of society, they should be under democratic control. We are witnessing what a disaster it is to leave the investment of those resources to the market.
Only mass protest by ordinary people can stop this madness.
The "Occupy Wall Street" protests in New York and across the USA are the latest example of the global uprising against the madness of the market and the banks. Thousands are marching in New York today against the banks and a system that defends the wealth of elites but devastating the lives and incomes of the rest of the 99% of the population. The Occupy Wall Street movement started from a few hundred activists and inspired millions. We can do the same in Ireland.
Join the European day of action on Saturday 15th October, march from Parnell Square, Dublin 1pm.
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