Paris OECD Forum:
Make Money, Go for Global Green Financial Dictatorship
PARIS, June 4, 2008 (EIRNS)Over 600 experts, decision makers, elite bankers, CEOs, ambassadors, financial journalists, and elected officials participated in the two-day brainwashing session June 3-4 at the prestigious Paris OECD Forum 2008 on "Climate Change, Growth, Stability," paying each a EU1,000 euro registration fee.
The June 3 afternoon session was keynoted with a long triumphant speech on the "new phase" of globalization and free trade "integrating high oil and food prices" by the Jesuit-trained Francoist Rodrigo de Rato, former economics minister of Spain, former Managing Director of the IMF and now senior managing director of Lazard. Of course, de Rato blamed the "surges of nationalism," now even stronger in the North than in the South and called for a rapid conclusion of the WTO Doha Round.
EIR correspondent Karel Vereycken took the microphone and told the room: "Mr. de Rato, listening to your speech reminds me of the Marxist ideologues before the fall of the Wall. For them, everything that was good was the result of Marxism and everything that was bad was the fault of a conspiracy of evil capitalists. Let's face it: today, 37 nations are facing food riots as a result of globalization. Even better, the new study Growth and Development of the World Bank-connected experts including Robert Rubin of Citibank studied those 25 nations that achieved over 6% growth over the last 25 years. All of them succeeded because they did not follow the 'Washington Consensus' (deregulation, privatization, etc.). What do you have to say about that?"
While about one-quarter of the audience applauded, de Rato was very uneasy and stuttered, "I'm not here to dispute with you..." After the session, and over the next day, several people contacted Karel to thank him for his intervention. A Belgian member of parliament, the vice president of the Flemish Socialist Party, and actually one of the co-signers of the proposed Belgian legislation to ban speculation on food immediately gave his contact to get more info on all of this. A Pakistani UNESCO official liked a lot the fact that somebody spoke about the food crisis. Even a director of Transparency International told Karel that "at least somebody has the guts to speak up." Later, some members of the translation team also made contact etc.
Then there was an insane panel supposedly on the role that nuclear energy could play as a solution to climate change. While Luis Echavarri, the director general of the OECD's Nuclear Energy Agency (NEA) announced that the latest findings, published in the NEA's report that was released the same day, indicate uranium reserves have to be re-evaluated upwards, showing energy reserves for 250-300 years at current rates of consumption, Jean-Paul Poncelet of AREVA and others argued for facilitating the needed comeback for nuclear power.
Unfortunately, Helga Kromp-Kolb, professor of the Austrian Boku University spoiled this optimism with a long argument "proving" that nuclear power not only could not cope with the challenge required of reducing carbon emissions by 50% in the required time-frame (current uranium reserves evaluated at 100 years, materials became too expensive, the industrial base needs 15 years to be rebuilt, the lack of skilled personnel, etc.), but that such a choice is not desirable (terrorism, plutonium, etc.). "With climate change, we can't even know what will happen in 15 years, so what will happen to nuclear waste to be stored for 1 million years?"
This morning, the session was keynoted by the immoral Jean-Claude Trichet, head of the ECB, speaking to a packed room of 600. Trichet, who just returned from Barcelona, recognized that the financial turbulence had revealed "a serious weakness" of the system, "unsuspected" so far. But now, the mechanisms involved, which are very complex, "are clearly understood." "We are strongly convinced that a strong cooperation among central banks and regulating agencies is necessary." Time has come for more transparency, which is above all a moral question. Karel V. therefore told Trichet: "So far everybody has been very nice with you and I have no intention to be nasty. I'm only going to ask you some tough questions. Since you spoke about transparency and morality, how do you explain that the ECB accepts huge amounts of toxic assets as collateral for liquidity to such an extent that major banks in Spain have created a 'securities industry' for the sole purpose of obtaining such cash? Is it not immoral to ask nations to be more transparent and reform their systems, while accepting billions of toxic securities which everybody knows to be worthless?" Again, while many financial journalists were smiling, including the international editor of Les Echos who had introduced Trichet, the ECB president as his only answer, stumbled that "We didn't change the rules...everything was clear since the beginning...we continue applying the rules." Of course, that short non-answer was quite an answer and people got it.
The morning panel then took on "Climate Change and Finance" featuring among others a top executive of Credit Agricole's speculative outfit Calyon and the free-trade fanatic Economic Minister of Switzerland. All pleaded for a "market-based approach" to fight climate change by "globalizing the carbon market." James P. Leape, director general of WWF, bluntly told the audience that the reason to go into green markets is very simple: you can make a hell a lot of money! Leape said that business should be concerned with "being seen as part of the solution" rather than the problem. After all, the "risk to reputation" could turn out to be far more costly than financing alternative renewable energy systems. To reduce "risk to reputation," Leape called for companies to directly work with the WWF, which is already done by Allianz!
To succeed in such "a change in global finance," the panelists called on the OECD's free trade experts to elaborate "OECD standards" (not "regulation") for environment-friendly producers. When a Canadian elected official asked what would happen to countries not respecting such a "code," the panelists indicated that the globalized market would oblige them anyway to evolve, since their products would be hit by taxes and constraints, making them less competitive than those respecting such a "green" standard. Poorer nations would obviously be shot in the wings with such measures against carbon use, but the speakers denied any wish to "become the world's policemen" since markets would do the job.
In the next panel, on "Financial Market Turbulence," Robert Kuttner, co-editor of American Prospect, opened his speech by recalling the proposal of former Danish Prime Minister Nyrup Rasmussen, one of the "elder statemen" social democrat signers of the call, "Free Markets Cannot Ignore Social Morals." Rasmussen is also the "father of the Danish model of flexicurity" meaning flexible labor conditions can be organized only if strong positive labor conditions create the security for people's living conditions. Besides signing the call, Rasmussen apparently introduced proposed legislation in the European Parliament for a European super-regulatory agency. Kuttner told the audience, that when he spoke to his friends in the U.S. about this, "they think this is the second coming of Karl Marx." Kuttner also spoke on the necessity to impose regulations on over the counter derivatives and tax havens. According to Kuttner, former German Chancellor Helmut Schmidt already proposed legislation obliging any bank registered at the ECB to stop all trade with tax havens.
Australian Adrian Blundell-Wignall, Deputy Director of the OECD's directorate for Financial and Enterprise Affairs also gave an interesting insight in the history of the financial bubble and indicated that 2004 was key (rating agencies, securitization, and subprimes existed way before), since it was then that the Basel II agreements were cooked up to lower banking requirements. The securities bubble doubled rapidly.
The now aging Susan George, of ATTAC, also gave a sharp analysis attacking speculative operations of especially British banks that raked in 20% profits since 2004. She said that the mergers and acquisitions created the "too big to fail" mentality, inducing giant corporations to lose all sense of risk. After the rating agencies gave AAA ratings to CDOs and other insane packaged securities, the global hedge fund sector built up $2 trillion of their own capital capable with leverage to move the markets. Ironically, she quoted Martin Wolff of the Financial Times, who wrote that banks function like water. While water goes around obstacles, banks go around regulation. Therefore, she said, the world needs two types of interest rates, one for the real economy, another for speculation. But, she says, we should "use the financial crisis" to force through the green paradigm, and tax speculation to finance renewable energies.
During the question period, a former official of the Swiss Central Bank said that hedge funds were based in the U.S. and in Europe and not in tax havens. Karel then intervened and told the audience that out of the 9,000 hedge funds, at least 5,000 are based in the Cayman Islands, which is part of the British Empire. Simply applying current EU legislation on banking to the Cayman Islands would curb speculation drastically. A Swedish MEP chairman of the Finance Committee said that closer home, the Channel Islands of Guernsey and Jersey should be an immediate target. Karel then asked loudly what the speakers had to say "about Rasmussen's and Rocard's proposal, taken from Lyndon LaRouche to have a world conference to change the financial architecture of the world system, a 'new Bretton Woods.'"
While Kuttner and also Susan George welcomed the NBW proposal, Wignall said such a severe paradigm shift, what he called a "Kuhnian moment" (last straw), could only take place when things got even worse and the old paradigm died out. Since for Susan George, Bretton Woods means Keynes, she added that Keynes was right, including his proposal for a supranational currency, the Bancor. At the end poor Susan gave her address card to Karel but nearly dropped dead when he repeated he was a collaborator of LaRouche and Cheminade. Also, an interpreter came to Karel to give her address, telling him she was leaving tomorrow for Ireland to campaign against the Lisbon Treaty!
Unfortunately, Pascal Lamy couldn't make it to Paris, while he was scheduled to speak on the same panel as the WWF's James P. Leape. The OECD Forum 2008 forum was key to preparing the OECD ministers' meeting tomorrow in Paris with EU Trade Commissioner lunatic Peter Mandelson. Everything goes then to the Hokkaido G8 summit of July 7.