Letters and Editorials 5904 Views by Dr. Abdul Ruff

Euro Crisis: Is Capitalism Disintegrating?



Who says so? Can this monstrous capitalism sucking the blood of weak nations and masses die so easily? USA is eager to further advance its capitalist goals by imperialist wars.

Even as the NATO-UNSC terror syndicates fight the Muslim nations and inure Islam, consuming the corpses of Muslims in occupied Muslims nations in millions, looting resources of energy rich Mideast, Europe has already plunged back into recession, the US economy remains mired in slump, and economic growth in key “emerging economies” such as China, India and Brazil is slowing. It is only a question of time before the euro crisis takes a new turn for the worse. But it does not simple mean capitalism is on death bed. Of course, capitalism requires resources of socialism, Islam and others.

However, under the blows of the crisis, the capitalist integration of Europe that began more than fifty years ago is rapidly unravelling.

Capitalism concentrates on the power of the banks which could be used by multinationals. While the Brussels summit exposed a deep rift between British banking interests and the rest of Europe, it would be mistaken to conclude that the EU member states had any intention of reining in the power of the banks.

Britain does not want to share its economic advantages achieved through centuries of colonial operations around the world, oppressing peoples and looting their resources. As small economics face devastating problems in recent times, UK, and also some other developed nations of Europe, stay away from the crisis and tried not support any EU packages. In stead, UK has suggested extra taxes and austerity measures crippling the financial position of people further, especially the hardening the life of ordinary Europeans.

Finances of the City of London are the chief concern of UK. The banks and financial institutions concentrated in the City of London dominate the financial services markets in the EU and have long been a thorn in the side of European banking interests centred in Paris and Frankfurt. But according to a report by the Open Europe think tank, which advises the British banking sector, the EU was drawing up at least 49 new regulatory proposals that could have negative repercussions for the City of London.

EU politicians and policymakers generally felt constrained from imposing financial regulation on the UK, this has now ceased to be the case.” In particular, the report said that proposals for an EU-wide financial transaction tax, bans on short-selling, and the insistence by the European Central Bank that financial transactions in euros be conducted within the euro zone rather than London represented a fundamental challenge to the UK. Based on its findings, the report, however, advised the British prime minister to take exactly the stance adopted by Cameron in Brussels.

British lawmakers prefer retention of UK’s sovereignty and stay away from EU as a composite but utopian or mythical amalgam and seek not to wreak or weaken its economy or banking sector in any way. .

However, outwardly UK does not say it wants to be out of UK not does it insist on such austerity measures for Britons but let other nations like France and Germany to impose the measures on small nations.

There has been increasing speculation in western financial and political circles on the possible exit of certain member states from the euro zone as a result of the deepening sovereign debt crisis. This speculation has centred on several of the continent’s smallest and most indebted economies, such as Greece and Portugal.

The austerity measures being imposed in the weaker European countries—Greece, Portugal, Ireland, Spain, Italy—have already thrown them into recession and deepened their debt crises, and similar policies in France, Britain and other EU countries will now be intensified. These policies will fuel sharpening of inter-imperialist antagonisms.

Britain out of UK?

The EU summit held in Brussels on December 09 and 10 was dominated by a major confrontation which ended with the virtual exclusion of Britain from the future affairs of the EU. Now the year is drawing to a close with the de facto exclusion of Europe’s third biggest economy, UK, from any effective voice in the operation and organization of the EU.

At the summit, 26 of the 27 EU member states declared they would go ahead with plans put forward by France and Germany to enforce new austerity measures and budgetary targets across Europe.

Germany wants a more centralized mechanism to override national parliaments and enforce fiscal austerity across the EU, combined with a far more limited role for the European Central Bank. At the heart of the divisions at the Brussels summit are the diverging interests of British finance capital and European banking consortiums. Over the past two years, the call for private investors to take losses in the event of a sovereign debt bailout was a major plank of German financial policy. In the face of unrelenting pressure from the international banks and the credit rating agencies, including a threat earlier this week by Standard & Poor’s to downgrade most euro zone nations, Germany’s Angela Merkel dropped the demand.

One of the most significant features of the deal worked out in Brussels this week is the agreement forged by France and Germany to ensure that in future no private banks or bondholders would be called upon to suffer losses as a result of the bailout of a European economy.

The proposals pushed by the USA, the IMF-International Monetary Fund and many European governments for a massive boosting of the resources of the European Stability Mechanism—ESM and its transformation into a bank to flood the markets with cheap credit were also blocked by Germany.

UK opposed all this. UK terror PM Cameron sought to block the changes proposed by France and Germany after the two latter countries refused to agree to a protocol excluding the City of London from the effects of legislation being drawn up by the EU to regulate a number of financial practices. Justifying his stance, Cameron argued he had to pursue very doggedly in British “national” interest. Ahead of summit, UK’s current terror PM Cameron made clear that his main task at the Brussels summit was to preserve the sovereignty of the British financial markets. “It is absolutely vital that we safeguard it”.

The conflict inside the summit unfolded when UK, Sweden, the Czech Republic and Hungary—declared that they could not agree to the terms proposed by Berlin and Paris and would first have to consult their respective national parliaments.

Sweden, the Czech Republic and Hungary decided to close ranks with the 23 member states supporting the Sarkozy-Merkel plan, leaving Cameron isolated. In previous EU discussions, the UK terror PM had been able to rely on a degree of support in determining European policy from other non-euro countries such as Poland, Sweden and Denmark. Now the French-German initiative has effectively removed this political prop.

Cameron, saying he was working in the UK's interest, blocked changes to the EU's Lisbon Treaty, which were aimed at addressing the euro crisis and preventing a repeat in the future, at a summit in Brussels. He insisted the veto was in part to protect the City of London from excessive intervention by Europe, but Labour and the UK Independence Party have both argued that actually no additional safeguards were achieved. Many of his own MPs in the Commons will welcome his decision, but Labour and some Lib Dem MPs are set to criticize Cameron for isolating the UK. Labour leader Miliband accuses Cameron of failing in his objective of protecting the UK financial sector.

The main elements of the plan agreed by the 26 nations in Brussels include the granting of semi-dictatorial powers to the Brussels bureaucracy to dictate the fiscal and budgetary policies of individual EU nations, and the imposition of sanctions on those states that violate strict budget guidelines.

The deal still has to be agreed by a number of national parliaments, and the reaction of the financial markets suggests it has failed to bring a swift end to the euro crisis. Sharp differences remain among the countries that signed up to the Sarkozy-Merkel plan, including between France and Germany.

However, eventually, all are agreed—including Britain—on implementing the draconian austerity programs dictated by the international finance elite. On the issue of making the ordinary people pay for the crisis, there are no differences between London, Paris and Berlin.

Observation Euro crisis or EU crash?

Most stock markets rose in response to the summit, primarily because of the abandonment of calls for the banks to take a “haircut” on their European sovereign debt holdings.

The joke making the rounds is that by the afternoon the EU may no longer exist. That’s an exaggeration. But there are real fears that the euro currency would fall apart, triggering a crisis that could lead to the dismantling of the entire European project.

While the Brussels summit exposed a deep rift between British banking interests and the rest of Europe, it would be mistaken to conclude that the EU member states had any intention of reining in the power of the banks.

EU is facing a crashing situation now with euro and financial crisis rocking the EU members, but on Dec 08, the day of a crucial EU summit on solving the continent’s debt crisis, Croatia, Serbia and Montenegro, badly crawling to enter the EU ahead of Turkey, were also in Brussels pushing their bids to enter what increasingly looks like a crumbling house. The Croatians are the closest to achieving their EU dreams. Croatia’s prime minister signs an EU accession treaty. Croatia is also signing the treaty with a pen Pope Benedict.

Serbia’s officials will be in Brussels lobbying to remove new conditions set by Germany for its candidate status. Montenegrin representatives would try to get a fixed date for the start of its membership negotiations. But amid the EU’s turmoil, people in the Balkans are turning cold on Europe. Serb support for the EU has dropped to some 40 percent — the worst since pro-democracy forces ousted former Serbian autocrat Slobodan Milosevic in 2000. Kosor’s conservative party was defeated in recent elections by a center-left coalition. The incoming government is considering a three-month delay to a December referendum on joining the EU — a necessary step for membership — apparently because of dwindling popular support for joining the bloc. Under the treaty being signed, Croatia would be able to enter the EU in 2013.

Now, people are asking whether EU membership is really such a big prize. In Serbia, the nationalist opposition is using Europe’s troubles as fuel for their vehement opposition to EU membership. The hardliners are calling on the country’s pro-Western government to turn its back on the EU and embrace the country’s “traditional ally” — Russia.

"Great Britain isolated as never before," "Europe goes it alone without Britain", "Europe advances and leaves the UK alone in isolation" are the headlines in western media on the outcome of the EU summit. Cameron's vetoing of a deal to save the single currency sent shockwaves around Europe. The exclusion of Britain from new structures and decision-making bodies marks a nodal point in the disintegration of the EU itself.

French President Nicholas Sarkozy said the EU the summit as “historic.” Alluding to the 17 EU member states that use the common currency and the ten that do not, he hailed the creation of a “euro plus” block, excluding UK. Sarkozy told reporters that the British stance at the conference was “unacceptable.” He went on to scold Cameron for attempting to dictate terms for dealing with the euro crisis while at the same time refusing to join the euro zone.

A leader of an anti-EU group that plans protests to coincide with the Brussels summit said the EU is turning into a centralized and authoritarian creation led by Germany and France in which Croatia will lose its identity. His view reflects the growing perception that German Chancellor Angela Merkel and French President Nicolas Sarkozy are bullying poorer EU members into accepting their vision of Europe.

The new agreements are a veritable political and legal minefield. The final text of a deal is to be thrashed out in advance of a new summit planned for the spring of next year. EU-friendly governing parties have also plummeted in popularity, triggering speculation that the nationalists could return to power in elections next year.

Of course, it might be premature to write capitalism off now since it would be extremely difficult to end the poisonous tentacles of capitalism and imperialism and save humanity form their ill-influences.

Meanwhile, Cameron will fight his opponents in UK parliament and outside.

About the writer:

Dr. Abdul Ruff, Specialist on State Terrorism; Educationalist; Chancellor-Founder of Centor for International Affairs(CIA); Independent Analyst; Chronicler of Foreign occupations & Freedom movements(Palestine, Kashmir, Iraq, Afghanistan, Pakistan, Xinjiang, Chechnya, etc); Anti-Muslimism and anti-Islamism are more dangerous than "terrorism" Anti-Islamic forces & terrorists are using criminal elements for terrorizing the world and they in disguise are harming genuine interests of ordinary Muslims. Global media today, even in Muslim nations, are controlled by CIA & other anti-Islamic agencies. Former university Teacher; Website: abdulruff.wordpress.com.


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