True Finns Leader Attacks "Brussels-Frankfurt Extortion Racket" in WSJ Opinion Peace

Monday, May 16, 2011

Timo Soini, the leader of the True Finns party, rides a scathing attack against the European Union (EU) and the European Central Bank, calling the institutions an extortion racket in a guest commentary for the Wall Street Journal (WSJ).
Soini says his party blocks a continuation of a failed policy of fighting debt with more debt and claims that Greece, Ireland and Portugal are already ruined.
Enjoy the full opinion piece which expresses the feelings of the majority of Europeans who do not want solidarity in debt. How much longer will it take until the official Europe acknowledges its Euro project has failed?

Why I Don't Support Europe's Bailouts

Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever more money back to our governments.

--- by Timo Soini ---
When I had the honor of leading the True Finn Party to electoral victory in April, we made a solemn promise to oppose the bailouts of euro-zone member states. Europe is suffering from the economic gangrene of insolvency—both public and private. Unless we amputate that which cannot be saved, we risk poisoning the whole body.
To understand the real nature and purpose of the bailouts, we first have to understand who really benefits from them.
At the risk of being accused of populism, we'll begin with the obvious: It is not the little guy who benefits. He is being milked and lied to in order to keep the insolvent system running. He is paid less and taxed more to provide the money needed to keep this Ponzi scheme going. Meanwhile, a symbiosis has developed between politicians and banks: Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever more money back to our governments.
In a true market economy, bad choices get penalized. Instead of accepting losses on unsound investments - which would have led to the probable collapse of some banks - it was decided to transfer the losses to taxpayers via loans, guarantees and opaque constructs such as the European Financial Stability Fund.
The money did not go to help indebted economies. It flowed through the European Central Bank and recipient states to the coffers of big banks and investment funds.
Further contrary to the official wisdom, the recipient states did not want such "help," not this way. The natural option for them was to admit insolvency and let failed private lenders, wherever they were based, eat their losses.
That was not to be. Ireland was forced to take the money. The same happened to Portugal.
Why did the Brussels-Frankfurt extortion racket force these countries to accept the money along with "recovery" plans that would inevitably fail? Because they needed to please the tax-guzzling banks, which might otherwise refuse to turn up at the next Spanish, Belgian, Italian or even French bond auction.
Unfortunately for this financial and political cartel, their plan isn't working. Already under this scheme, Greece, Ireland and Portugal are ruined. They will never be able to save and grow fast enough to pay back the debts with which Brussels has saddled them in the name of saving them.
Setting up the European Stability Mechanism is no solution. It would institutionalize the system of wealth transfers from private citizens to compromised politicians and failed bankers, creating a huge moral hazard and destroying what remains of Europe's competitive banking landscape.
Fortunately, it is not too late to stop the rot. For the banks, we need honest, serious stress tests. Stop the current politically inspired farce. Instead, have parallel assessments done by regulators and independent groups including stakeholders and academics. Trust, but verify.
Insolvent banks and financial institutions must be shut down, purging insolvency from the system. We must restore the market principle of freedom to fail.
If some banks are recapitalized with taxpayer money, taxpayers should get ownership stakes in return, and the entire board should be kicked out. But before any such taxpayer participation can be contemplated, it is essential to first apply big haircuts to bondholders.
For sovereign debt, the freedom to fail is again key. Significant restructuring is needed for genuine recovery. Yes, markets will punish defaulting states, but they are also quick to forgive. Current plans are destroying the real economies of Europe through elevated taxes and transfers of wealth from ordinary families to the coffers of insolvent states and banks. A restructuring that left a country's debt burden at a manageable level and encouraged a return to growth-oriented policies could lead to a swift return to international debt markets.
This is not just about economics. People feel betrayed. In Ireland, the incoming parties to the new government promised to hold senior bondholders responsible, but under pressure they succumbed, leaving their voters with a sense of disenfranchisement. The elites in Brussels have said that Finland must honor its commitments to its European partners, but Brussels is silent on whether national politicians should honor their commitments to their own voters.
I was raised to know that genocidal war must never again be visited on our continent and I came to understand the values and principles that originally motivated the establishment of what became the European Union. This Europe, this vision, was one that offered the people of Finland and all of Europe the gift of peace founded on democracy, freedom and justice. This is a Europe worth having, so it is with great distress that I see this project being put in jeopardy by a political elite who would sacrifice the interests of Europe's ordinary people in order to protect certain corporate interests.
The BBC offers a useful info graphic, comparing the PIG with the rest of Europe. It is not a rosy picture at all, considering that deficits in the EU have been growing similar to the development in Russia before its collapse in 1998.
UPDATE: A Bloomberg report confirms Soini's worries, saying a Portuguese austerity package could lead to a Greek-style recession.
Portugal may have followed Greece into recession even before implementing austerity measures demanded for its European Union bailout that are set to further choke the economic growth needed to tame the country’s debt.

Data to be released tomorrow may show the economy shrank 0.3 percent in the first quarter, economists surveyed by Bloomberg forecast, matching the contraction of the previous three months. The slump may deepen as the government starts executing the spending cuts and tax increases it agreed to in return for its 78 billion-euro aid package.
“With the adjustment measures, the outlook for Portugal in the next few months isn’t good, particularly in terms of consumption,” said Francisco Vidal, an economist at Intermoney Valores in Madrid. Portugal, Ireland and Greece will make up the lagging group of European nations from an economic standpoint, he said.

Constitution Thrashed: US President Can Now Declare Wars Without Asking Congress

Thursday, May 12, 2011

This must be the most overlooked attack on the US Constitution. A Bill from the Republican leadership, passed by Congress on Thursday shifts the power to declare war from Congress to the President.
The National Defense Authorization Act (NDAA) effectively enables the US President to declare unlimited worldwide war on terror, circumventing Congress and the Constitution, warns the American Civil Liberties Union (ACLU):

We Feed The World - And It Must Not Be Left to Speculators

Tuesday, May 10, 2011

One of the best decumentaries ever made on the craziness in the food industry.

Every day in Vienna the amount of unsold bread sent back to be disposed of is enough to supply Austria's second-largest city, Graz. Around 350,000 hectares of agricultural land, above all in Latin America, are dedicated to the cultivation of soybeans to feed Austria's livestock while one quarter of the local population starves. Every European eats ten kilograms a year of artificially irrigated greenhouse vegetables from southern Spain, with water shortages the result.

It's Official: Euro Crisis Will Last For Many Years To Come

Tuesday, May 03, 2011

4 years into the biggest financial crisis in history the EU's super watchdog ESRB (European Systemic Risk Board) has officially announced that the banking disaster will stay with us for many years to come. While the report concludes correctly that banks have to undergo stronger supervision and withdraw from risky gambling with structured assets and derivatives the past 4 years have shown that this will remain a wish forever.
From EUObserver:

Wikinvest Wire