Mission & Name
US Foreign Policy (Dr. El-Najjar's Articles)
Ground Zero for the Austerity-Driven Asset Grab
By Ellen Brown
Al-Jazeerah, CCUN, November 5, 2013
The Irish have a long history of being tyrannized, exploited,
and oppressed—from the forced conversion to Christianity in the Dark Ages,
to slave trading of the natives in the 15th and 16th centuries, to the
mid-nineteenth century “potato famine” that was
holocaust. The British got Ireland’s food exports, while at least one
million Irish died from starvation and related diseases, and another million
or more emigrated.
Today, Ireland is under a different sort of
tyranny, one imposed by the banks and the troika—the EU, ECB and IMF. The
oppressors have demanded austerity and more austerity, forcing the public to
pick up the tab for bills incurred by profligate private bankers.
The official unemployment rate is 13.5%—up from 5% in 2006—and this figure
does not take into account the mass emigration of Ireland’s young people in
search of better opportunities abroad. Job loss and a flood of foreclosures
are leading to suicides. A raft of new taxes and charges has been sold as
necessary to reduce the deficit, but they are simply a backdoor bailout of
At first, the Irish accepted the media explanation:
these draconian measures were necessary to “balance the budget” and were in
their best interests. But after five years of belt-tightening in which
unemployment and living conditions have not improved, the people are slowly
waking up. They are realizing that their assets are being grabbed simply to
pay for the mistakes of the financial sector.
Five years of
austerity has not restored confidence in Ireland’s banks. In fact the banks
themselves are packing up and leaving. On October 31st,
RTE.ie reported that Danske Bank Ireland was closing its personal and
business banking, only days after ACCBank announced it was handing back its
banking license; and Ulster Bank’s future in Ireland remains unclear.
The field is ripe for some publicly-owned banks. Banks that have a
mandate to serve the people, return the profits to the people, and refrain
from speculating. Banks guaranteed by the state because they are the state,
without resort to bailouts or bail-ins. Banks that aren’t going anywhere,
because they are locally owned by the people themselves.
Guarantee That Bankrupted Ireland
Ireland was the first European
country to watch its entire banking system fail. Unlike the
Icelanders, who refused to bail out their bankrupt banks, in September 2008
the Irish government gave a blanket guarantee to all Irish banks, covering
all their loans, deposits, bonds and other liabilities.
time, no one was aware of the huge scale of the banks’ liabilities, or just
how far the Irish property market would fall.
Within two years, the
state bank guarantee had bankrupted Ireland. The international money
markets would no longer lend to the Irish government.
bailout, the Irish budget was in surplus. By 2011, its deficit was 32% of
the country’s GDP, the highest by far in the Eurozone. At that rate,
bank losses would take every penny of Irish taxes for at least the next
“This debt would probably be manageable,”
Morgan Kelly, Professor of Economics at University College Dublin, “had
the Irish government not casually committed itself to absorb all the
gambling losses of its banking system.”
To avoid collapse, the
government had to sign up for an €85 billion bailout from the EU-IMF and
enter a four year program of economic austerity, monitored every three
months by an EU/IMF team sent to Dublin.
Public assets have also
been put on the auction block.
Assets currently under consideration include parts of Ireland’s power
and gas companies and its 25% stake in the airline Aer Lingus.
one time, Ireland could have followed the lead of Iceland and refused to
bail out its bondholders or to bow to the demands for austerity. But that
was before the Irish government used ECB money to pay off the foreign
bondholders of Irish banks. Now its debt is to the troika, and the troika
are tightening the screws. In September 2013, they demanded another
3.1 billion euro reduction in spending.
Some ministers, however,
are resisting such cuts, which they say are politically undeliverable.
In The Irish Times on October 31, 2013,
a former IMF official warned that the austerity imposed on Ireland is
self-defeating. Ashoka Mody, former IMF chief of mission to Ireland, said it
had become “orthodoxy that the only way to establish market credibility” was
to pursue austerity policies. But five years of crisis and two recent years
of no growth needed “deep thinking” on whether this was the right course of
action. He said there was “not one single historical instance” where
austerity policies have led to an exit from a heavy debt burden.
Austerity has not fixed Ireland’s debt problems. Belying the rosy picture
painted by the media, in September 2013 Antonio Garcia Pascual, chief
euro-zone economist at Barclays Investment Bank, warned
that Ireland may soon need a second bailout.
According to John Spain, writing in Irish Central in September 2013:
The anger among ordinary Irish people about all this has been immense.
. . . There has been great pressure here for answers. . . . Why is the
ordinary Irish taxpayer left carrying the can for all the debts piled up by
banks, developers and speculators? How come no one has been jailed for what
happened? . . . [D]espite all the public anger, there has been no public
inquiry into the disaster.
Bail-in by Super-tax or Economic
In many ways, Ireland is ground zero for the
austerity-driven asset grab now sweeping the world. All Eurozone countries
are mired in debt. The problem is systemic.
In October 2013, an IMF
report discussed balancing the books of the Eurozone governments through a
super-tax of 10% on all households in the Eurozone with positive net wealth.
That would mean the confiscation of 10% of private savings to feed the
insatiable banking casino.
The authors said the proposal was only
theoretical, but that it appeared to be “an efficient solution” for the debt
problem. For a group of 15 European countries, the measure would bring the
debt ratio to “acceptable” levels, i.e. comparable to levels before the 2008
A review posted on Gold Silver Worlds observed:
right away debunks the myth that politicians and main stream media try to
sell, i.e. the crisis is contained and the positive economic outlook for
. . . Prepare yourself, the reality is that more bail-ins,
confiscation and financial repression is coming, contrary to what the good
news propaganda tries to tell.
A more sustainable solution was
proposed by Dr Fadhel Kaboub, Assistant Professor of Economics at Denison
University in Ohio. In a letter posted in The Financial Times titled “What
the Eurozone Needs Is Functional Finance,” he wrote:
eurozone’s obsession with “sound finance” is the root cause of today’s
sovereign debt crisis. Austerity measures are not only incapable of solving
the sovereign debt problem, but also a major obstacle to increasing
aggregate demand in the eurozone. The Maastricht treaty’s “no bail-out, no
exit, no default” clauses essentially amount to a joint economic suicide
pact for the eurozone countries.
. . . Unfortunately, the
likelihood of a swift political solution to amend the EU treaty is highly
improbable. Therefore, the most likely and least painful scenario for [the
insolvent countries] is an exit from the eurozone combined with partial
default and devaluation of a new national currency. . . .
takeaway lesson is that financial sovereignty and adequate policy
co-ordination between fiscal and monetary authorities are the prerequisites
for economic prosperity.
Standing Up to Goliath
could fix its budget problems by leaving the Eurozone, repudiating its
blanket bank guarantee as “odious” (obtained by fraud and under duress), and
issuing its own national currency. The currency could then be used to fund
infrastructure and restore social services, putting the Irish back to work.
Short of leaving the Eurozone, Ireland could reduce its interest burden
and expand local credit by forming publicly-owned banks, on
the model of the Bank of North Dakota. The newly-formed
Public Banking Forum of
Ireland is pursuing that option. In Wales, which has also been exploited
for its coal, mobilizing for a public bank is being organized by the
Arian Cymru ‘BERW’ (Banking and
Economic Regeneration Wales).
Irish writer Barry Fitzgerald, author of
Building Cities of Gold, casts the challenge to his homeland in
The Irish are mobilising and they are awakening.
They hold the DNA memory of vastly ancient times, when all men and women
obeyed the Golden rule of honouring themselves, one another and the planet.
They recognize the value of this harmony as it relates to banking. They
instantly intuit that public banking free from the soiled hands of usurious
debt tyranny is part of the natural order.
In many ways they could
lead the way in this unfolding, as their small country is so easily
traversed to mobilise local communities. They possess vast potential
renewable energy generation and indeed could easily use a combination of
public banking and bond issuance backed by the people to gain energy
independence in a very short time.
When the indomitable Irish spirit
is awakened, organized and mobilized, the country could become the poster
child not for austerity, but for economic prosperity through financial