From Volume 8, Issue 3 of EIR Online, Published Jan. 20, 2009

Western European News Digest

BüSo Hesse TV Ad: 'We Need a Pecora Commission!'

Jan. 16 (EIRNS)—Germany's Civil Rights Solidarity Movement (BüSo), the political movement chaired by Helga Zepp-LaRouche, had its final election spots on Hessian state radio and TV today. The TV spot, which features lead candidate Alexander Hartmann, calls for a Pecora Commission to investigate how bankers precipitated the financial collapse, as demanded by Zepp-LaRouche. It asks why Deutsche Bank chairman Josef Ackermann already in 2003 had demanded the government creation of a "bad bank," to accept the toxic waste of other banks. It also asks for an investigation into which persons have been responsible for those legal changes, that opened Germany to the asset-backed securities (ABS) and derivatives game. Moreover, the question is posed, whether the public banks were used as deposits for bad debts. "It cannot be expected, that the established parties wish such an investigation at all, but only in this way, the preconditions can be created to rebuild the real economy! Therefore, vote BüSo on Jan. 18 in the Hessian State Parliament!"

Hankel Endorses New Pecora Commission Call

Jan. 16 (EIRNS)— In an exclusive interview with Helga Zepp-LaRouche for the coming issue of the Neue Solidaritaet weekly and EIR, Prof. Wilhelm Hankel, a signer of the first LaRouche call for a New Bretton Woods nine years ago, endorses the call for a new Pecora Commission, insisting that under no circumstances should any persons who have been responsible for the financial-monetary mess, be seated on that commission.

Hankel denounces the idea of a "bad bank" as a bailout of the criminals, proposing instead that the speculators themselves clean up the mess by taking their foul paper off the banks' books, putting it into a special fund handled by the private banking sector, and depreciating it over 20 years. Only that approach would protect the real economy from the fictitious debt. Hankel adds that arrests of certain criminal bankers or investors, or at least legal cases to extract compensation payments for the damage caused by those criminals, should not be ruled out.

Hankel urges that real economic investments, which have been blocked in the past era of neo-liberalist monetarism, be resumed as a priority policy in the education and transport sectors, especially for trans-European transport projects, and there, he endorses the LaRouche proposal for upgrading the Siberian transport grid, which is crucial for the development of the Eurasian continent.

Hankel is a former chief economist of the German Reconstruction Finance Corp. (Kreditanstalt fuer Wiederaufbau), as well as a former head of the capital and loans department of the German Finance Ministry.

IMF Warns of 'Wildcat Fire' for Eastern Europe and Austria

Jan. 16 (EIRNS)—The International Monetary Fund, in an as-yet-unpublished report issued in Washington, warns of a "prairie fire," if Austrian banks have to withdraw from Eastern and South Eastern Europe, because of their own difficulties and those of the countries concerned. This would have "disastrous effects for the region and for Austria," the IMF says.

Austrian banking engagement in these countries is enormous: Almost one-quarter of all of its outstanding credits are located in Eastern and Southeastern Europe (then follow Germany and Italy). Austrian state intervention is already expected to make sure that banks do not withdraw money due to their own problems, once the situation in these countries (also Russia) becomes worse.

In Russia, Romania, Ukraine, and Poland currency values are falling, meaning higher rates of local defaults. High write-offs in these regions will become necessary, among others for Raiffeisen International, Erste Bank, and Bank Austria, whose stock values have already fallen sharply.

For the countries themselves, this all means a huge problem, since a national banking system de facto does not exist anymore after the privatization and deregulation orgies after 1990, which were forced through by the very IMF which is now warning about consequences which derive from its own policies.

Russia Okays Italian ENI To Lead Consortium

Jan. 17 (EIRNS)—The Russian government has entrusted the Italian energy company ENI to lead a consortium which will provide "technical gas" in a transition period, until Moscow and Kiev have reached an agreement over natural gas. The consortium, which will include E.on, Gaz de France, and others, shall provide up to 1.5 billion cubic meters to transit daily through the Ukrainian pipelines in order to keep them working. This proposal was announced at the meeting between German Chancellor Angela Merkel and Prime Minister Vladimir Putin in Berlin yesterday.

ENI's CEO Paolo Scaroni said that ENI was chosen, "not only because ENI is the largest gas operator in Europe and the main user of the Ukrainian pipelines, but also because it has been, for 50 years, the oldest partner of Gazprom." Scaroni is referring to the pioneering work in East-West cooperation led by ENI founder and Italian patriot Enrico Mattei in the 1950s and early '60s, still today a model for relations among nations.

German Economic Woes, Steinbrück Quotes Marx

Jan. 12 (EIRNS)—In a TV interview today, German Finance Minister Peer Steinbrück was asked why Germany was so "stingy" when it came to capital investments in industry. He replied that German investments are capital-intensive, so if we boost them, we will achieve the opposite of what we want to achieve, namely unemployment. This is the precise argument of Karl Marx: that capital-intensive, high-technology investments replace human labor with machines, creating unemployment, and that bourgeois factory owners thereby take money out of the hands of the proletariat.

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