the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Sep 17, 2012
On September 6, the European Central Bank (ECB) announced that from now on it is ready to buy up the debts of the European governments in financial difficulty, and that there is no limit on the amount of debt the ECB will take. This decision was made in an attempt to guarantee the big banks around the world that they will be reimbursed.
For these gentlemen of the ECB, there is no question of putting any constraints on the bankers, and certainly nothing that limits their profits. The Central Bank is going to flood them with public money in order to convince them to be “reasonable,” that is, not to raise interest rates on these loans beyond the already enormously high rates they have demanded.
The job of lending money to governments remains very well paid, given that these banks can continue to lend at 2, 3, even 4% interest for capital they borrow from the ECB at only one-half of one%!
This decision will force the populations of the various countries to pay dearly because each loan will have new austerity plans attached to it and will contain new attacks on the living conditions of workers.
This new attempt by the banking magicians, if it takes effect, will not succeed any more than did the previous attempts to calm the financial storm. Instead the economic crisis will take new forms. In trying to limit speculation on the debts of governments and on the Euro, the ECB will provide new capital to the financiers, which they will inevitably use to feed other forms of speculation – on other currencies, on raw materials, or on some new “derivative product” thought up in the sick imagination of yet another speculator.
Furthermore, this new creation “without limit” in the amount of euros, this monetary inflation in the proper sense of the term, initiated by the ECB itself, offers unlimited capital without any material backing in the real world, and will inevitably lead to an acceleration of rising prices. Given that wages and pensions are frozen, this decision will only lead to an acceleration in the decline of workers’ standard of living.
The initial reaction in the financial markets was to welcome the decision of the ECB, with two days of rising prices on the stock markets. Yet the financiers continue to pretend to be worried, using the excuse of a recent German court decision. But the German judges approved the ECB decision. They certainly were not going to take the only effective measure possible – to expropriate all the banks, all the financial institutions and their funds, without compensation and to put the creation and circulation of money under the control of the workers and the public.