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Telegraph Date: 17 November 2010 PressTVEurope's economic crisis has gone from emergency mode to that of panic. The latest country to be hit by the debt crisis is Ireland, which is in need of an emergency bailout package.
The latest crisis follows that of Greece and Spain prior, with experts believing that Portugal is the next in line. The ever-expanding economic problem is believed to have put the survival of the single currency, the euro, at risk.
Signaling a growing debt crisis in the 16-nation eurozone, the EU Council president, Herman Van Rompuy, warned that the European Union was in a "survival crisis" over the eurozone debt problems.
For further discussions on the issue, Press TV interviewed Max Keiser, a broadcaster and journalist, and Paolo Raffone, Secretary General of CIPI Foundation in Brussels.
Press TV: Are we looking at the end of the Eurozone and the single currency?
Keiser I think the EU's priority, first of all, should be to investigate what we just found out in the last couple of days that principals over there, the Irish-Anglo banks were hiding 450,000,000 dollars worth of debts illegally, off the balance sheet, committing fraud and why doesn't the EU want to first address the fact that there are some bankers who are breaking the law, committing embezzlement. These bankers should all be in jail. Unless the EU gets serious about prosecuting the financial fraud, accounting fraud and counterfeiting, they are going to see this crisis continue.
Press TV: Mr. Raffone, do you agree with that?
Raffone Certainly, the situation in Ireland is very worrisome, but it is not the only one. The problem of sovereign debt is not only in Ireland, it is also in Portugal, Spain, and maybe other countries. The imbalance has been the result of the policy that has been implemented around Europe over these years and it shows the limits of the operations.
Press TV: Six months after EU governments established a USD 1 trillion rescue fund with the International Monetary Fund (IMF) to backstop Greece and other troubled members of the sixteen nation euro currency area, cracks are once again emerging in the group's financial infrastructure. What's wrong with the EU economy?
Keiser First of all, let's keep in mind… the solution that the government is putting forward is that the people in Ireland should suffer some austerity measures to get the debt down. Now the debt was not created by the people of Ireland. The people of the Ireland are being asked to bail out the corrupt, embezzling, fraudulent chicanery of the bankers.
So, everything will return back to normal if we were going back to feudalism, if we were going back to aristocracy and lords or if were going back to having slave wages, and if you are going back to the way things were 300 years ago. If we are talking about capitalism, you need capital, and you need the rule of law and you need savings. None of that exists in Ireland because of the Kleptocracy. The politicians are indebted to the bankers and the IMF, the IMF is an extraordinary corrupt institution, run by terrorists, and the result is that people of Ireland and Greece are having to suck it up and pay for the sins of these hardened criminals.
When are they going to jail, when is the EU going to have a Nuremburg-like trial and put these financial terrorists in jail? Until that happens, the austerity will continue.
Press TV: There is also a lack of transparency, it appears that the banks have not been transparent, the governments have not been transparent in terms of the amount of debt that they have accrued. What is your idea on that, Mr. Raffone?
Raffone Certainly what is going on is showing a lack of transparency, things are happening behind closed doors, very little involvement of directly elected bodies like parliaments. Just a few days ago, we got the refusal of the EU parliament to review the budget that was approved by the governments of the EU for the next seven years. This is only one voice which is a drop in the ocean.
As for the austerity plans and what has been said of the financial situations and its impact, the governments are relatively silent. What we are witnessing is that people are being sucked of their future in the name of something which is unknown. There is more and more animosity in the people, they are worried and the risk is the break down of the social coherence of this continent.
Press TV: Max, let's take a look at Greece. It was supposed to be a one-time deal: once that line was crossed, other countries want a bailout, like Ireland. Was the Greek bailout a mistake?
Keiser It is the same story really, you have got corruption between the government and bankers and they are asking the people to bail out the bankers. The notion of productivity is interesting because all that means is that people are working more hours for less pay and I think the people in Ireland and Greece should take a page out of Iran's book in 1979, realize that in Ireland you have the Shah of Dublin and Sean Fitzpatrick who is lording it over on the people in a way that is untenable and stage a proper insurrection, that is the only way you are going to get your sovereignty back, your dignity back and your country back. Otherwise, continue to drink your Guinness, go to sleep and just shut up because nobody takes you seriously anymore.
Press TV: Aside from Eurozone, we are looking at other countries in Europe. Are these governments transparent about their debts?
Raffone No, I think all the debt, especially if it is sovereign debt, is not very transparent because it is the way the sovereign authority wants to show it and this is possible to see it historically, since the ancient times till today.
As for the private debt, the debt of the companies or banks and people, there are different degrees of transparency according to the legislations and the way these legislations are implemented.
The critical issue here is the mixture of some types of opaque type debts, which is the banks debts, and sovereign debts. If we look at what has happened over the past few years, since 2007, basically the crisis of the sovereign debt has been triggered by the crisis of the private debt of the banks. Otherwise, sovereign debt would have continued to amass their accounts in a way that would be trustable and believable. I would say that in general it isn't transparent, very little transparent.
Keiser The Euro has Germany and Germany is an exporting powerhouse and a job growth machine and there is nothing like that in the US anymore, so if I were to pick between the two currencies, I would pick the Euro.
The reason you see it [Euro] is stable even with the announcement in Portugal, Dublin and Greece, the euro was trading pretty well.
It is because if it were to split into two parts, you would still end up in one of those parts with Germany, so Germany is valuable and nothing like that exists in the US, nothing like that exists under the domain of dollar.
Press TV: Doesn't deficit reduction, at the cost of education, health, pensions and other building blocks of the European social model, mean deepening the recession?
Raffone I think there is a risk. Austerity programs should be used but they should be very limited in time. The situation where we are now is not a temporary crisis but something that is well entrenched in the system, so it is no more crisis but a system problem. So if we go with austerity programs now, we would certainly repress the demand and we will provoke social unrest in most parts of Europe. So I don't think austerity measures are the solution but solution should be systemic and should be taken all together. I don't beleive believe that the Euro may stay and the dollar may collapse, if the dollar collapses, the euro will follow and vice versa.
We are now in a globalized monetary system. Since the sovereign debt has been exported globally in the 1970s, it is no more possible to reason in terms of isolated monetary blocs.
PressTV: Well, how's the deflationary impact going to affect the world economy? What are we looking at Max?
Keiser: Well, only central banks see deflation. The rich people around the world see inflation and the poor people around the world see stagflation. That means the prices for stuff like food and energy are going up and their wages are going down. Economists at the central bank only see deflation because as has been pointed out on this show already, you got a bifurcation in this economy where you've got the interest of the banks and their dept, (the corporate dept) verses sovereign dept. And the banks have gotten the governments to side with them ahead of the people. And that's completely wrong.
That is not what you should see in representational government. The banks should be second to the people. As long as the central banks see deflation, then they are going to continue to print money to try to avoid deflation even though it means the rich people will continue to get richer, and the poor will continue to get poorer. The central bank policy is completely at the service of the most corrupt elements in society; the kleptocracy in Western Europe, the United States, Britain and around the world.
PressTV: Paulo Raffone, we were talking about bad politicians. So Max did refer to this fact of deceit, but how about your opinion? How will the Eurozone crisis end? What are some of the possible scenarios that you foresee?
Raffone: It is very unpredictable in a way, as it may be a clash or a sort of driven end. We have to see how fast the differences among the Eurozone member states will increase. Certainly the year 2012 is a very delicate turn because you have elections in France, in Germany, and Italy. Belgium has not yet a government. Holland doesn't have a government or is a minority government.
So all of the Eurozone is in a very fragile situation, and it's very easy that populist positions may prevail especially if austerity plans continue the way they've been announced. And people will get very tired and mistrust their government. In this case, a sort of protection is the nationalist type of reaction. This will be expected to grow among the people. If this happens, it will break apart the Euro because there will be some countries which just retire from the whole.
PressTV: Max, what do you think about the Eurozone being broken up?
Keiser: Well, I think Germany has an agenda here. You know that after World War II, you had East and West Germany created. The only way they were allowed to get back together would be if they were subsumed by the Euro, and this would defuse any tendency by Germany to reunite as a political military entity. I think this crisis is playing right into Germany's hands.
They are now a reunited country. If they can extricate themselves from the Euro and bring back Deutsche mark as a stand alone currency with the Bundesbank having a lot of gold, they will then become the Fourth Reich. Germany is ready to rise again. They are playing the rest of Europe and the rest of the world like a fiddle.
PressTV: On that note we are going to end it. I thank you very much Economist and Journalist from Paris, Max Keiser and Secretary General of CIPI Foundation, Paolo Raffone. Of course we want to thank you the viewer for watching us and don't forget you can see us on YouTube and of course our website Presstv.ir
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