|The News Line: Editorial
Saturday, 8 September 2012
Draghi proposes Central Bank dictatorship – while the German bankers warn of hyper-inflation
SPANISH 10-year bond yields fell yesterday to 5.77%, below 6% for the first time since May, while yields on the equivalent Italian bonds fell to 5.19%.
This was the momentary reaction to the European Central Bank (ECB) president Mario Draghi unveiling a multi-billion ‘unlimited’ debt bond-buying plan, aimed at easing the eurozone’s debt crisis.
It will hand out loans on request provided that conditions are accepted that will end the sovereignty of the individual euro nation states that apply for the aid, by imposing on them Greek-style medicine of savage cuts, the ministers to carry it out, and the dictatorship of the ECB to make it happen.
The deal will be policed by the ECB, to see that its savage Greek-style medicine is administered. This medicine will see labour laws scrapped, complete deregulation, the eight-hour day and the five-day week abolished, pensions and wages slashed, strikes banned in the public sector, along with slashed redundancy payments and the privatisation of the state-owned industries – the Greek package to pauperise the working class, the middle class and the youth to keep bankrupt capitalism going.
It goes without saying that these kinds of measures will be challenged everywhere, in every country.
In this situation the national government, with its appointed ministers, will play the role of the Quislings of the ECB, and take any and all measures that are needed to force the masses to accept this Greek-style medicine.
That this is the recipe for the ending of bourgeois democracy all over the EU is obvious. Mass resistance by workers and youth and even parliamentary parties will be met by military-police state measures.
The German Bundesbank has made it clear that it is opposed to ‘unlimited’ purchases of debt, considering that this door will open the way to unlimited inflation. Its statement said: ‘In the most recent discussions, as before, Bundesbank President Jens Weidmann reiterated his frequently substantiated critical stance towards the purchase of government bonds by the Eurosystem.
‘He regards such purchases as being tantamount to financing governments by printing banknotes.
Monetary policy risks being subjugated to fiscal policy. The intervention purchases must not be permitted to jeopardise the capability of monetary policy to safeguard price stability in the euro area.
‘If the adopted bond-purchasing programme leads to member states postponing the necessary reforms, this will further undermine confidence in the political leaders’ crisis-resolution capability.
This underscores the crucial importance of ensuring both credibility in the promised conditionality and the resolute determination to immediately terminate intervention purchases if the underlying conditionality is no longer assured.’
The Bundesbank wants EU debtor governments to be forced to fight it out with their working classes now, and that this must not be postponed in any way, so that German capitalism will not be dragged down with them.
It stressed this when it stated: ‘The announced interventions in the government bond market carry the additional danger that the central bank may ultimately redistribute considerable risks among various countries’ taxpayers. Such risk-sharing, however, can be legitimately authorised solely by democratically elected parliaments and governments.’
The Bundesbank wants to see the weaker states broken at the wheel rather than risk hyper-inflation.
Here we have the Bundesbank at war with the ECB, as the EU disintegrates both financially and politically.
For the working class of Europe there is only one way out of this gigantic crisis of the capitalist system.
This is to fight every attack on its living standards and rights and to mobilise all over Europe to carry out the socialist revolution to replace bankrupt European capitalism with the Socialist United States of Europe, which will be a huge stepping stone to the World Socialist Republic.
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