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LaRouche's Policy Is Succeeding, Over Longstanding Opposition

Oct. 6, 2008 (EIRNS)—This release was issued today by the Lyndon LaRouche Political Action Committee (LPAC).

As underscored by the featuring of economist Lyndon LaRouche on Russian TV Rossiya's prime-time Sunday news round-up on Oct. 5, suddenly, LaRouche's policy for pulling together an emergency alternative to the ongoing world economic cataclysm, is succeeding—so far—against the long-standing opposition directed against it.

The most significant developments thus far, include the following.

At the same time as the Russian TV broadcast, LaRouche commented on Sept. 5, the whole European Maastricht system is disintegrating, with the deliberate break-up led by French President Nicolas Sarkozy and others. "There's a complete coincidence between what the Russian TV quoted from me," LaRouche said, "and the policy and the circumstances of the policy that has now essentially gone through in Europe, as the outlook of Europe, and that is coming out of the G-14 grouping."

The informal G-14 group of nations includes the G-8 major industrial powers (including Russia), and China, India, South Africa, Brazil, Mexico, and sometimes South Korea, Australia or Nigeria.

So the whole G-14, implicitly by this broadcast and by the things coming from France and so forth, is saying that the entire system is going through reorganization, and that it's going towards a Roosevelt-style system, a Roosevelt-style reform.

This is a G-14 pattern. They want a change in policy. The G-14, with a leading role taken by the President of France, Sarkozy, is going towards what it describes as a New Bretton Woods system, and is holding back and suspending the conditionalities of the Maastricht system. The ongoing breakdown of the financial system in Europe is not really a suffering by everybody in Europe; in some cases it comes in the form of a liberation. They are now saying: 'Screw the Maastricht agreement; we don't have time to waste on that b.s. Instead we are going to go ahead with certain emergency measures in the direction of Franklin Roosevelt's reforms.'

The Europeans are acting. They are acting their way: not my way, but their way. That's what is happening. There is an agreement that the present IMF system is implicitly dead—that we're going back to something like the Roosevelt system—and that is coming from sources such as the President of France. It involves not just Europe, it involves also the G-14.

It is in this context that the ongoing pattern of emergency actions being taken by the European government, has to be understood. LaRouche added. They are doing things which will not stem the crisis, but which will lead them in the direction of taking the FDR-style measures between nations that are required. We summarize the pattern of actions here:

  • Germany: After announcing a Federal guarantee for private bank deposits, in the amount of over 500 billion euros, on Oct. 4, Berlin is now considering taking sector-wide responsibility for its banking sector, and not simply carrying out case-by-case interventions in the financial collapse, as it had been doing up through this weekend. Over the weekend, the government pushed through an attempted rescue for Hypo Real Estate, the second largest in the country, involving government guarantees of 26.5 billion euros.

  • Spain: The government is prepared to unilaterally back up bank deposits if the EU fails to come up with a plan, said Pedro Solbes, the Economy Minister.

  • Italy: The government has intervened to shore up UniCredit. Also, the government is guaranteeing individual bank accounts.

  • United Kingdom: The government is looking at extending guarantees for private accounts; and at starting to take stakes in banks.

  • Ireland: The government announced its plan last week—the first in the EU—which gives guarantees for two years to deposits and debts of six banks owned in Ireland. The parliament passed it quickly.

  • Sweden: Swedish Finance Minister Anders Borg this morning announced the doubling of the deposit guarantee from 250,000 SEK to 500,000 SEK. Also today, the Swedish Central Bank announnced new emergency liquidity funds for banks.

  • Greece: The government last week announced that individual bank accounts will be backed.

  • Denmark: Early this morning, the government announced it will guarantee all bank deposits in the nation for an unlimited amount, as part of an arrangement with banks to create a $6.5 billion (35 billion Danish crown) liquidation fund.

  • Iceland: The government has made known it is drafting a sweeping plan for intervention. The Banking Minister said that a rescue plan is "well under way." Pension fund investments located abroad, for its 300,000 population, have asked to be repatriated, to bring cash home.