|The News Line: Editorial
Saturday, 23 June 2012
NATIONALISE THE BANKING SYSTEM TO PUT AN END TO CAPITALISM
THE credit ratings agency Moody’s has downgraded 15 global banks and financial institutions.
The UK banks downgraded were Royal Bank of Scotland, Barclays, HSBC and Lloyds.
The other institutions that have been downgraded are Goldman Sachs, Morgan Stanley, JP Morgan Chase, Credit Suisse, UBS, BNP Paribas, Credit Agricole, Societe Generale, Deutsche Bank and Royal Bank of Canada, spelling out that there is a global banking crisis.
RBS estimated that the downgrade could mean it would need to find an extra £9bn in collateral for its debts. Meaning that interest rates, and with them mortgage rates, are going to rise, to the shock of millions of people.
The three-notch downgrade of Credit Suisse spelt out that in this banking crisis there is no Swiss safe haven.
The Bank of Spain claim that most banks were ‘comfortable’ evoked images of corpses in coffins.
Their attempt at soothing noises were made after an independent audit of Spain’s banks found that they will need up to 62bn euros (£50bn) in extra funding, on top of the 100bn euros that they are already due to receive to stop them completely collapsing.
The head of the International Monetary Fund (IMF), Christine Lagarde, said at the eurozone finance ministers meeting that eurozone countries must be forced to tie their economies much closer together.
She said: ‘The IMF believes that a determined and forceful move towards a complete European monetary union should be reaffirmed in order to restore faith in the system. Because as we see it at the moment, the viability of the European monetary system is questioned.’
This means a European Central Bank issuing eurobonds, and having a political regime that is determined and forceful.
Lagarde added that the IMF, the European Union and the ECB – the ‘troika’ overseeing Greece’s bailout – will send representatives to Greece on Monday to review the country’s progress in reforming its budget.
Greece, which is about to receive severe austerity medicine, plus surgery and even amputations, has meanwhile asked for an easing of the austerity terms.
Spain is now paying a record amount to borrow on the open markets, while the German economy is going into retreat.
RBS analysts commented: ‘European banks need surgery after the LTRO (Long Term Financing Operation) anaesthesia. Only a systematic restructuring approach can fix peripheral banks, which in Spain alone we estimate will need 134-180bn euros of capital over the next three years.’
In addition to this, RBS, as well as other analysts ,has said that a full European Stability Mechanism (ESM) is needed to stay afloat.
‘We expect ESM access to bail out Spanish banks is another red line that has to be crossed. Spain will probably seek a precautionary ESM credit line rather than full ESM access with heightened conditionality, but this is unrealistic in our view. A full ESM package size of 370bn euros to 455bn euros is needed to take Spain to the end of 2014.’
This is a recipe for dictatorship and civil war throughout Europe since, as Greece has shown, bourgeois democracy is not the vehicle for carrying out a massive destruction of living standards and productive forces that the capitalists’ crisis requires.
What is needed is military-police dictatorship to fight out a civil war against the working class of Europe.
Faced with this reality, the working class has no alternative but to organise a socialist revolution throughout Europe to put an end to bankrupt and historically outmoded capitalism and replace it with a socialist planned economy and the Socialist United States of Europe.
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