Manuel Ballbé

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The German speculative attack which is evicting Spain

By: Manuel Ballbé, Professor of law at the Autonomous University of Barcelona,  and Yaiza Cabedo, lawyer.

elpais-tilde     Published in El País, 29/11/2012

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Economists reiterate over and over again that the merkelian imposition of austerity is a mistake, but they still do not understand that it is a gruesome strategy of the Government and the German Banking for robbing from southern Europe in order to plug the huge German financial hole. This plundering is possible due to legal deregulation, which since 2000 has moved productive capitalism into a ‘casino market’ without administrative oversight, in which has been abolished the crime of insider trading and that works by unidentified betting. This private stock without transparency, located in New York and London, is in the hands of a cartel composed of six American megabanks and six Europeans, all broken and rescued by their Governments, i.e., by taxpayers.

This is the real origin of the crisis: a new capitalism Casino betting on toxic financial products -as subprime mortgages-, which is now speculating over the sovereign debt of the countries of the South. The cause of the crisis, therefore, is not the Spanish real estate bubble, or indebtedness- English and German debts were higher-, nor the fiscal indiscipline. The bubble has been about mortgage: toxic mortgages securitized and resold in the market. Precisely, Deutsche Bank was one of the more involved, as revealed by the American Senate. This Bank has sold products to their customers knowing that they would lose money, in North America (package “Gemstone VII”) and in Germany, where the Supreme Court sentenced the bank in 2011. German citizens were the first victims of the voracity of their banks.

Germany, moreover, is who promoted the bets against the debt of the South. Deutsche Bank was one of the architects of this new Market of sovereign debt – and its index price Markit – which triggered speculative attacks. Goldman Sachs advised Greece to hide its debt and thus managed to enter the euro, then, with this inside information, bet along with Deutsche Bank that Greece would collapse. Attacking countries of the South was the formula employed by German Government and its banks to recover from losses in gambling.

Such predatory rotation against the eurozone itself was motivated by the filtration of the confidential report by the German financial supervisor, the BaFIN (confirmed by another from Merrill Lynch), estimating at 800 billion the amount of toxic assets of the country in 2009. Such data would reveal that a speculative Germany had replaced its reputed industrial capitalism. Rather than prosecute those responsible, they started discrediting the South to divert the attention and subjugate them.

The German Bankias have been many: Hypo Real Estate was rescued with more than 100 billion euros and in 2009 was naturalized by 90%; the Industriebank (IKB), with 10 billion euros; the Landesbank (regional boxes), such as Baden-Württemberg, the West or the Sachsen, received about 150 billion euros; Dresdner Bank, second entity in the country, went bankrupt and was absorbed by the Commerzbank, which in turn received a bailout of 100 billion and a 25% is still in the hands of the Merkel Government. Commerzbank is illustrative, because last year returned part of the bailout to the Government, 14 billion euros. From where he drew such huge profits, if it is not betting in the casino with insider information provided by its own Government?

This is the key change in the new casino capitalism: the bailouts and nationalizations have transformed the German, British, Swiss and American Governments in co-bankers that now excuse the prolongation of speculative attacks because they need these banks to make quick profits and thus be able to return the money injected.

In addition to these bailouts, Germany – which opposes the ECB to help Spain – hides that Deutsche Bank received, only in 2008, 20,000 billion from the U.S. Federal Reserve along with 60 billion for Credit Suisse and UBS (Union of Swiss banks) to a giveaway rate of 0.01%.

How a speculative attack works is easier to understand, taking the paradigmatic case of the German media empire Kirch as an example. In 2001 directors of Deutsche Bank (Ackermann, and Baumann) spread false rumors that the group might not repay its debt and that would not get funding. (Does this remaind of  something?) They caused the greatest contemporary bankruptcy since the World War. In 2011 the German Justice clarified the matter and the Chairman Ackermann, intimate friend of Merkel, resigned and proposed a compensation of € 1 billion to silence the scandal. As you can see, before Greece, they were already trained in speculation against German companies.

Identical system is being used to discredit the South. How does Germany benefit from this attacking Spain?

  1. They generate rumours to rocket the interest that will pay Spain when borrowing money.
  2. They imposed privatisation of profitable companies (airports, AVE, lottery…) which, if the Spanish Government does not put up any resistance, will pass into the hands of the North at bargain prices.
  3. They cause credit suffocation to depreciate stock shares of multinational companies (Telefónica, Iberdrola, Repsol, Gas Natural…), so that German groups can take them over.
  4. And the most profitable: spread financial panic – which is a criminal offense-, in order to make the money fleeing out because of the fear of a “corralito”. Spain, in eight months of 2012, has suffered a capital evasion of 330 billion euros (to which we must add the equivalent in Greece and Italy), which will go to banks in Switzerland, Luxembourg, the Netherlands and Germany. The situation “has no precedents”, according to Bloomberg. Austerity (austericide) reports large benefits…

Under the guise of “(in)dependence”, Jens Weidmann, President of the German Central Bank, has contributed to this panic questioning each test favourable to Spain. It follows the line of its predecessor, Axel Weber, who in the same year in which left the Bundesbank (2011) was “rewarded” with the Presidency of UBS for harassing the South. UBS is one of the German Axis private banks that benefits from the deportation of billions coming from the South.

The scandal of the libor-euribor and Barclays is the last proof of the speculative and fraudulent practices of this cartel, which altered the price of lending money and with it, the cost of the mortgages of Europeans. Among the entities involved are Deutsche Bank, Credit Suisse and UBS along with Lloyds and Royal Bank of Scotland (RBS) – the Bankias of the English Government, nationalized by 40% and 80%-.

In return, our major banks, Santander, BBVA and La Caixa, are not involved in such practices. They have not needed a bailout and Santander is the best bank in the world according to Euromoney. They are, then, a tempting spoil of war.

The European Commission has not detected the Libor cartel, nor the speculative network on the hidden Greek debt, nor uncovers the banking club which controls the Casino market in London (all denounced by the American press). Neither investigates the Commission who are the beneficiaries of the speculative attack that is evicting the southern States. Will the EU and Commissioner Almunia continue turning a blind eye to this flagrant violation of free competition? What we do know is that his predecessor, Lord Brittan (designer of the casino market with Thatcher), got a job as Vice-Chairman of UBS. Another Vice President of the EU, Solbes, is now a Barclays Advisor.

The German Government, the great evictor, aims to continue absorbing capital from the South until 2013 elections. Spain has to resist to the draconian bailout and react to unmask this perverse austerity policy with protests and lawsuits. The European Court (case Sint Servatius, 2009) declared that restrictions to the free capital movement is justified if “it undermines the financial equilibrium of social policies”. Moreover, if such speculation undermines economic sovereignty and the stability of a state member. We are passively witnessing the destruction of the European single market and the imposition of a single euro-german market.

Thomas Mann already alerted us: instead of a Europeanization of Germany, an economic Germanization of Europe is being imposed on us.

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