D-Day: Dijsselmbloem Day: laughs, panic or both?

Quite aristocratically the guy, mostly unknown for non-Dutch until yesterday, has four names before his hard-to-spell surname. Jeroen René Victor Anton Dijsselmbloem (pictured) is the Finance Minister of the Kingdom of the Netherlands and acting chairman of the Eurogroup.

And he has a big mouth.

In an interview with Reuters published yesterday that will no doubt go into the history books of the near future, he declared that the nefarious "bail-in" of Cyprus by which banksters' loses go to savers instead than to banksters themselves is a model to follow elsewhere in Europe:

A rescue programme agreed for Cyprus on Monday represents a new template for resolving euro zone banking problems and other countries may have to restructure their banking sectors, the head of the region's finance ministers said.

This declaration has sent all stock markets into confusion, even if, after the Ecofin corrected him, they managed in most cases to avoid loses (Dow Jones lost yesterday 0.44% and Spain's IBEX more than one percentile point today).

European credibility is on the brink, although I must admit that this Jeroen guy has a point: banks must fall. But not this way: they must fall like any regular company in normal bankruptcy, letting the insurance pay the deposits under the €100,000, as is by law, and then the res publica may want to acquire the skeleton of the bank and refloat it as public service banking facility, whose profits would go to social services and other public expenses.

That might work. But the bankster rulers of Europe are not at all concerned about social stability or the cost for commoners. They only care about keeping their profits, and therefore their power, up. That's why banks are being bailed out by the public or by any means necessary in a decadent spiral of financier parasitic Capitalist swan song.

This madness, like the Ancien Régime of Louis XVI, can't keep going for long. A revolution is needed like fresh air in a coal mine.

All that is wrong in the Cyprus crisis

Pavlos Agios at In Defense of Marxism, explains from a socialist perspective the Cypriot financial crisis. Some most interesting excerpts:

On the partial defeat of Communist AKEL in the elections:

It was impossible for AKEL to enthuse voters with a programme that keeps Cyprus within the straight-jacket of capitalism, and particularly casino capitalism!

...

With the announcement of austerity measures as part of a package to re-negotiate the loan with Russia, many just lost faith in the ruling Communist Party. But it is also true that less than 25% of the voters that had supported AKEL in 2008 abandoned it. Many stayed at home not willing to vote for the “solutions” of the Cypriot right wing and not happy with the chauvinist position of the nationalist party (DIKO). 

...

The result in the second round of voting gave the right-wing DISY, led by Nicos Anastasiades, 57.48% of the vote. The level of abstention (18.42%) was the highest in the history of presidential elections in Cyprus. AKEL's candidate, Stavros Malas, got 42.67%.

On the banking crisis:

Over a year ago the government had to bail out the Laiki Bank (Popular Bank) with over €1.8bn due to the Bank’s greedy policy of buying Greek bonds cheaply that after a few months, and due to the Greek crisis, were worth nothing. The Government should have nationalised the bank paying no compensation and tackling the problem there and then. Accepting the rules of capitalism meant that they had to accept its dynamics and after that, cuts had to be made. So the government started to cut.

...

Under this – capitalist – system there is no other option. Many will now raise the issue of leaving the euro (and the Eurozone) as a solution but this policy, without the nationalisation of the banking and insurance system, is just calling for a huge reduction in wages, even bigger than that proposed by the Troika.

...

It seems, however, that none of these lessons have been learnt by the AKEL leadership. Although they correctly voted against the deal, they then advocated a referendum on the country’s euro membership. The solution is not a referendum! They should issue a call to take over the banks under workers’ control!

... full article at IDOM.

Cyprus rejects Eurogroup demolition plan

The Cypriot Parliament rejected with 36 votes against, 19 abstentions and not a single vote in favor the proposal to raise €5.8 billion of banking capital from depositors, via a special tax. This was the condition imposed by the Eurogroup (meeting of the finance ministers of the Eurozone, with regulatory capacity) to loan €17 billion (or is it just ten?) to the Cypriot banks, some of which are in apparent dire straits. 

In the end, after a very long weekend of meetings, protests, counter-proposals, etc., the bill gathered not one single vote. It is of course unclear how many of those who opposed, let alone abstained, would have voted in favor if they had any hope of victory but it seems that in the end nobody wanted to vote in favor of financial suicide. 

Let the banks fall therefore... as they must.

In a side note, it must be mentioned that at least €4.5 billion were moved out of the country even before the EU's conditions were formally stated. It seems that some depositors had way too good connections. 

Sources: Bloomberg, DWN[de].


Update (Mar 20):

This article at Cyprus.com is a very good analysis (from a purely capitalist viewpoint, it must be said) of why this Eurogroup attack against deposits was the equivalent to shooting Cyprus dead. It seems that the survival instinct of Cypriots, including MPs, so often so sheepish, has avoided the worst.

However the threat remains, and dissident (Neokeynesian) economist Y. Varoufakis warns that the next step is likely to be a bailout with conditions similar to Greece, i.e. hitting pensioners and taxpayers instead than account-holders.

This should never be the case, not even under theoretical free-market capitalist conditions: if a bank must fail, so be it. Smaller accounts are 100% insured (to avoid the worst) and the state can always retake the bank as public company for a small cost after due bankruptcy.

However Europe is not anymore a common sense place but a dictatorship of the banksters: they rule the Union and they rule the states and dictate the terms so they always win.

But even that is unsustainable in the short run: things will change one way or another. You can only squeeze a lemon so much, right?

Cyprus: bank run begins, who's next?

As the new conservative Cypriot government announced a 9.9% tax on deposits exceeding €100,000 and of 6.7% in all other deposits, tax destinied to bail out the rotten banks, citizens rushed to cash machines and bank offices to remove their deposits or at least as much as they can. The bill has not yet bee approved but the President's right-wing party can get majority with the help of the Center-Right DYKOS party. 

The plan was decided by the Eurozone meeting of Finance Ministers, aka Eurogroup, who are obviously out of their minds. In exchange for this self-defeating move, the Eurogroup agreed to a bail-out (for the private banks, not the citizens nor the state) of €17 billion, to which Russia and the IMF could add some €3.5 billions.

It is notable that nothing of this was imposed while Cyprus had a Communist President, probably because Brussels feared that Cyprus might run away "in the wrong direction", i.e. towards increased socialism and out of the Eurozone or the EU altogether.

Anyhow, considering that Cyprus financial system has been working until now as a tax heaven of sorts, this decision seems totally suicidal and ill-thought, being the only logical result that banks end up completely empty. 

Besides the logical worries about Cypriot citizens and Cypriot economy, the true question floating around is who's next?

Refs. Irish Times, Bloomberg, Business Insider, The Automatic Earth.

Various struggles from around Europe

I just got a swath of feeds from Contra Info (a Greek anarchist and internationalist blog in many languages) and, instead of writing a separate entry for each or commenting this one but not that one capriciously, I'll quickly mention all them in a single entry.

Large antifascist demo in Volos (Greece)

Volos (or rather the nearby site of Sesklo) is the cradle of  Neolithic Europe and also the homeland of the mythical sailor Jason. Today is one of the most dynamic cities of Greece with a vibrant working class of clear antifascist ideas.

This reality was experienced on Nov. 5th when a ridiculously tiny "pan-Thessalian" Nazi concentration of less than one hundred thugs was confronted by about a thousand antifascists ready for anything. 

However the few Nazis were protected by no less than four police buses, several anti-riot squads, all the motorcycle police of Greece and local police officers in plain clothes. 

In spite of police provocations the demo remained firm and could finally march through Jason Street to the University, where they held an assembly.

On Nov. 10th there was another smaller antifascist demo which also suffered the hostility of the police (in Greece every other police agent votes Nazi yet no purge is ever made among their ranks but rather fascism gets the implicit support of the bourgeois coalition governments).

LINK (incl. video)

Refugees in hunger strike in Berlin (Germany) harassed by police

It actually began in late October at Brandenburg Gate and those taking part in it, many dozens, have been systematically harassed by the German police corps which have sported racist attitudes and abused those arrested. 

Police hostility impeded the nonviolent resisters from camping and eventually from even sitting on the ground. No news have arrived since Oct 29th. 

LINK 1 (incl. video), LINK 2 (video)

Prisoners in preventive arrest begin hunger strike at Nicosia (Cyprus) in demand of the very basics

The unconvicted prisoners denounce that they are not even allowed free water (must buy it) and cannot use the prison yard at all. They also complain of not being allowed to watch TV, limited phone communications and inadequate food. 

LINK

Students arrested in Istanbul (Turkey)

High School students of anarchist affiliation were arrested at İsmail Erez Industrial Vocational High School for criticizing the education system they suffer in fliers. 

Many other students were beaten by police for boycotting the school canteen by organizing their own lunch box system. They were that way protesting price rises.

LINK