Trans-Atlantic Banks Don't Lend,
So Again Confiscation of Savings
Feb. 14, 2014 (EIRNS)This release was issued today by the Lyndon LaRouche Political Action Committee.
For the fourth time in less than three months, the Troika financial powers have let out a suggestion that chunks of Europeans' savings accounts be confiscated to deal with bank failures. This time, it is the failure of the insolvent and collapse-prone Eurozone banks to lend, one of the underlying reasons for the sinking trans-Atlantic economies. [See LaRouche PAC's Dodd-Frank Kills: How The U.S. Joined The International Bail-In Regime]
The universal banks' starvation of the EU economies of credit is becoming drastic. Not only is lending to businesses and householdsthe function of banks under a Glass-Steagall system if we restore itdown to the levels of the 2009 bank blowout, but it is now falling quite rapidly lower. The European Central Bank put out figures on Feb. 12 which showed total bank lending to businesses in the EU down in absolute terms by 3.9% in 2013 versus 2012. At the end of 2013, business loans fell by $23 billion in November, and $20 billion more in December. Lending to households fell $4.1 billion in November and another $5.2 in December. Taking various bank lending to non-financial companies in 2011 as equal to 100 in an index, some major countries' end-2013 lending levels are:
- Germany, 100;
- France, 98;
- Italy, 89; and
- Spain, 72.
A European Commission (EC) planning document, finding this yet another reason for "bailing in" the savings accounts/pensions of these same households and businesses, was "leaked" to Reuters which published it on Feb. 12. The document proposed that since the banks in the EU, "hampered by new capital standards and regulations"[!], were not lending, they EC might think of "mobilizing" private savings accounts, pension funds, etc. into an EU-wide fund to lend to small business.
An example of such "mobilization," by that name, was recently given in Poland, which is claimed to be enjoying that elusive EU prosperity Eastern Europeans are supposed to die for. The Polish government nationalized a group of private pension funds in October of last year and forced them to invest in government debt.
Once people's savings and pensions are thus "mobilized" into funds controlled by Troika bureaucrats, the chances of their being loaned to small business to aid them expanding, are very small indeed. As with all of the other "trial balloons" for taking savings across Europe, which have been coming quicker and quicker from the International Monetary Fund and EC, the lending target is insolvent major banks, or the debt of governments made insolvent by bailing those banks out.