The Supreme Leader is Rising – Sept.14.2001
By Gary Morton
   At a debate today in Toronto a Canadian chap of Iraqi background said," I can't see into Osama bin Laden's mind, and I'm not trying to justify the terrorism."
   He did feel that he understood the motivations of the other fellows that attacked New York. And like others in that debate and on the web he had fairly solid arguments on mass death in Iraq due to the sanctions. That line of thought goes on to the persecution Palestinians have felt and the many Arab and Moslem nations that have been bombed and invaded.
    Posts from people like Chomsky and Chossudovsky have a similar feeling. They tend to see the terrorists as representatives of persecuted and terrorized peoples, fighting an American-based global economic power and war machine. There is the idea that if we would address their grievances and bring about economic justice, the motivations for terror would begin to dissipate.
   I agree that economic justice is needed and that oppression must be addressed. But I also think it is a separate issue from the larger part of the terror happening now.
   The minds of Osama bin Laden and other extremists in his underground world are not fixed on economic justice or a fair shake for the persecuted. They have a dream of a new Earth, based on their twisting of the articles of faith.
   In their view of ultimate destiny a Supreme Leader will rise from the ashes and rubble of a flattened world. Religious justice will come to every person and if the Taliban are an example … a worldwide dark age worse than any seen before will be created.
    In the West we tend to see everything in terms of economics and social justice. Most of the population is blind to the plight of the persecuted, even those suffering in our own nations. Yet we have many intelligent people who do see the problems and that there is some justification for other nations to rise against us.
   Unfortunately they don't seem to be able to see that this new terrorism is a holy war launched by extremists.
   Right now we watch the news and wonder who these terrorists really are … and I'm wondering who their Messiah really is?
   Soon George Bush will do exactly what the terrorists want and have us in the middle of a world war … and in the days that follow we'll all see the Messiah.
   War is their demand and we appear to be submitting to it.
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Terror Networks and the Web of  Media Lies -  Sept.13.2001
By Gary Morton
   Terrorists nearly perfected their art with the fanatical attack on the World Trade Center in New York City … and following close behind in mastering the exploitation of terror is our media.
   Generally I don't watch TV, but turned it on the evening of the catastrophe. To my amazement the Toronto station had commentator after commentator inset in a continuously playing video of the tragedy. As people spoke we got to see the inferno, helpless people screaming and jumping and the horrific collapse over and over. It got to the point where it was more like sick exploitation than news.
   Radio wasn't much better. By Tuesday CFRB was boasting of its coverage with a plug for the station. I suppose their next self-congratulatory radio ad will have the line "CFRB, The Station People Tune into for World War Three Coverage".
   Of course the daily papers informed us of the need for revenge … and in headlines. The Toronto Sun was probably the nuttiest, having the headline BASTARDS over a photo of the catastrophe.
    My take on it is that these people are monsters, terrorists or mass murderers. Once I called a nasty neighbour a bastard, and he hadn't killed one person.
   Another theme in the media was columnists and commentators using the event to further their personal political views or propaganda. In the National Post Diane Francis concluded that this attack of terror points to the need for more Globalization.
   It probably points to the opposite. Central institutions of global control are big sitting ducks for terrorists. Nation states with local government, their own currency and so forth make for a stable world.
   The way it is now a gang of terrorists with four planes nearly took the planet into darkness. Only a day earlier people like President Bush thought we could handle things like small nuclear attacks. The new facts are that we can't withstand nuclear attacks, biological attacks or disasters that could occur through out of control genetic engineering or climate change. We are much weaker than we thought so we better think about disarming, ending sales of nuclear reactors and controlling genetic modification.
   Think of the food supply. If everything were to shut down we'd find ourselves with a lot of genetically modified crops that die off within six generations without large scale human management. People in the Third World would survive but we'd all starve to death here.
   In Canada the attack came as a quick blow to the latest policies of the liberal government. All of their talk about a completely open border has gone down with the rubble of the Trade Center. News that some of the terrorists used Canada as their springboard into the USA must have the liberals choking. And Canada is also on the victim list now with 500 Canadians on the death list in New York.
   What about our response? Most people wanted revenge, like we need a really big bad guy to fight. George Bush was quick to paint it as a war between good and evil. He believes America will prevail.
   Perhaps the West will prevail, but in what way? Will we pledge to end our own acts of state terror?
   Can we truthfully say that we are the good guys? I feel that if George Bush is the leader of the forces of good, there must be a talent drought of great proportions in heaven.
   I'm not particularly knocking Bush, because one thing that struck me was that we don't seem to have moral leadership of any kind in the West. There were weak statements from the Pope and politicians … and most of the coverage was talk from people in the celebrity classes. Sports and film stars speaking on their personal view of the horror.
   In the alternative press some writers gave into temptation and blamed the USA. Though that isn't fully valid. There isn't any justification for killing thousands of innocent people in a very frightening and cruel way and suicide mission training isn't done in the USA.
   If the terrorists had the devil's luck that success may prove to be their undoing. Usually terrorists are quick to claim credit for their deeds. This time they didn't because even they knew they had gone too far.
   Currently the focus is on Osama bin Laden and his al Qaeda (The Base), terrorist network based mainly in Afghanistan. That network has trained thousands in the art of terror. Mostly men from Islamic groups and governments. They make up a worldwide front for jihad and it is thought that the dozens of terrorists that pulled off the four hijackings are part of that effort.
   Now America wants to stamp out terrorism, but Americans aren't mentioning that the group is largely their creation. Osama bin Laden led the American sponsored Mujahedin guerrillas that battled the Soviets in Afghanistan. Now thanks to itself America has one of its own worst enemies in the Taliban.
   Not only that but if Al Qaeda is a huge world terror network, it isn't the only big one. The other one has always been run by the good old USA through the School of the Americas and the CIA.
   The lesson seems to be that if we sponsor terror and create terror groups, we are in the end going to be their victims.
   So let's stop doing it.
   No one won in this latest attack. There is death, incredible grief and little else.
   If Al Qaeda staged the attack it wasn't a victory for them. They hit the Trade Center early in the morning, when most of the big wheelers, dealers and businessmen weren't even at work. Most of the agents of the Great Satan as they call it must have still been asleep at home. The people that got tormented and killed were clerks and secretaries and other innocuous sorts at the morning coffee machines and water coolers.
   They certainly didn't deserve that sort of death … and there are people dying like flies all over the world every day and they don't deserve it either.
   We got to see it this time because it happened in America, and shadowy men on suicide missions flew the planes. We should probably also be forced to see it when corporations and intelligence agencies and governments do it, and then maybe we'd really be inspired to change the world.
   The war for social justice has always been a war against terrorism … so in one sense not much has changed. Except that some people are scared now and want to surrender the battle and our ideals to vague and meaningless statements about peace. They are forgetting  that we have to fight for peace. It doesn't fall easily like bombs out of the sky.
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Stop the Attacks on Anti-Globalisation Activists  in Indonesia - Mon, 11 Jun 2001
From: "Ontario Chairperson" <chair@istar.ca>

* We just found out this morning that all of the foreign delegates except one have been released without charges (the delegate from Pakistan was deported).
International solidarity is still necessary to stop the brutal repression of Indonesian activists.
A full report of events will be available later this week on
http://www3.sympatico.ca/sworker

A report back meeting is also planned for Saturday, June 16 at 7:30 pm - for more info on the report back meeting people can contact 416-924-9042.
Erin George

Stop the Attacks on Anti-Globalisation Activists  in Indonesia
3:05pm, Sunday June 10, 2001
By Paul Kellogg

JAKARTA -- It is now 48 hours since the police/militia raid on a peaceful anti-globalization conference in Jakarta, Indonesia. Ninety conference participants, including more than 30 foreign nationals (one of whom was a four-year old girl), were surrounded for two hours by an unknown number of police. Forty were visible within and without the conference centre, all armed, several with rifles drawn and pointed. Many more were in the surrounding buildings and fields. One estimate put the number involved in the raid at 300

The Asia-Pacific Peoples' Solidarity Conference was mid-way through the second day of its scheduled four days of deliberations. After a two-hour stand-off, the foreign nationals -- myself included -- were ushered at gunpoint into waiting police vehicles.

Perhaps our story has been told in the Western media by now. What will no doubt not have not been told is the story of the violent assault on the conference organizers (members of INCREASE, Indonesia Center for Reform and Social Emancipation), an assault in which several were injured, some
seriously.

We foreign nationals have many connections, embassies, access to the media, solidarity organizations abroad, etc. Our Indonesian hosts have none of that. They are carrying on the fight against globalization in extremely difficult circumstances.

This is my first opportunity to use the Internet since being released from police custody, and I am unsure how long I will continue to have access. So it is the story of this attack, the untold story, that I will tell first.

Approximately two hours after the 32 foreign nationals had been removed to Jakarta Central Police Station, some 50 members of a right-wing "Islamic" militia -- Angkatan Muda Ka'bah, affiliated to the United Development Party -- armed with swords and machetes, descended on the unarmed INCREASE members. The police did not intervene at any point to stop the attack.

Here is an account of the raid by an INCREASE organizer. (The interview was conducted in Bahasa Indonesian and translated)

"Police arranged things so that the civilian groups there [the armed right-wing militia] could be used to break up the meeting.

"There are many indications that police facilitated the attack. Most obviously, the police and civilian groups, wearing military fatigues,  arrived together at 3pm., so it was clear from the beginning that police and civilian groups were cooperating to ensure that the meeting failed.

"The attack began with the sound of sirens, and screams of 'The Communists Must Disband, The Communists Must Disband.'

"We knew at once it was one of the right-wing Islamic groups. They have used this chant many times before. Meetings and conferences of all sorts are labelled as 'communist' and attacked.

"When we tried to leave the room [where the conference had been taking place] they came after us swinging swords and other sharp weapons.

"The situation became out of control. The comrades had to go out the door, windows were broken, and quite a few were injured by broken glass and barbed wire.

"After that they were scattered all over the grounds [of the Sawangan Golf Inn in West Java].

"Several were injured. One was operated on yesterday. An artery in his neck was severed.

"After chasing every one away, they took materials from the auditorium.

At 6pm June 9, immediately upon being released from police custody, I had a chance to talk to Dita Sari, well-known union militant in Indonesia, about the attack.

"Two hours after you left, at the hour of 7:15, 30 to 50 men, who called themselves Alliance of the Islamic Youth, attacked us.

"They had knives, swords and some other sharp things, and they came into our conference room, just like the police had done, but this time they destroyed some material. They took a camera. They took a hand phone, and also they hit Indonesian [conference] participants with knives and with sticks. So some were bleeding and some were hurt. One had an artery in the neck nearly severed. Another had a portion of skin and flesh on their wrist ripped away.

I asked Dita what this attack revealed about the state of politics in Indonesia.

"As we can see, and have seen in the last few days, essentially, fundamentally nothing has changed since Suharto went down. The method may be different, but the essence, this violent repression is still there.

"Even though it is carried out in a different way, the repression against those who are considered a political enemy, is continuing. So this is part of the political challenge that we face."
-------------------

Partial Victory over Queen's Park Ban - January 30, 2001
Toronto Action for Social Change
PO Box 73620, 509 St. Clair Ave. West
Toronto, ON M6C 1C0
(416) 651-5800; tasc@web.ca

Banned Queen's Park Activists Receive Split Decision:
Trespass Charges end in Acquittal, but ban against attending at Queen's Park remains in effect

   What was supposed to be the end of a two-and-a-half-year struggle to lift a permanent ban against going to the Ontario legislature (Queen's Park) was instead a split decision at Toronto Old City Hall Court today.

    Five members of Toronto Action for Social Change-Matthew Behrens, mandy hiscocks, Father Robert Holmes, Donald Johnston and Sandra Lang-were acquitted of trespassing charges they received after publicly violating the ban, but the ban itself remains in place.

   The five were handed permanent bans from the legislative grounds on Oct. 1, 1998, after they splashed water-soluble stage blood on the outside walls of the legislature to protest the devastating 21.6% cut to social assistance, and the subsequent deaths of the homeless on the streets directly linked to those cuts.

    Finding no recourse with Speaker of the House Chris Stockwell, who issued the ban, the five were joined by some 50 others in publicly defying the ban on Martin Luther King Day, 1999. A month later, the five were charged individually at their homes with trespassing.

   In today's verdict, Justice of the Peace J.P. Quon said he was powerless to lift the ban against the five.     Nevertheless, his decision was noteworthy for chastising the Harris government's use of the ban, which has been in effect for over 2 years against the five.

   "It would be untenable for the government to use the law of trespass to quell the voices of dissent and the freedom of expression on state-owned property," Quon said.  "The government should not wantonly use the law of trespass to evict legitimate peaceful protesters or stop their voices. This form of expression, expressing dissatisfaction with a government policy and publicizing a particular political view while on state-owned property is a value cherished in a democratic society and is protected by section 2(b)[of the Charter of Rights and Freedoms]."

   As a result of today's verdict, NDP MPPs Tony Martin and Shelley Martel, who attended court, informed TASC that leader Howard Hampton would be addressing a letter to House Speaker Gary Carr asking that the ban be lifted once and for all (see text of letter below). Carr is out of the country until next week, and in a CBC interview, Queen's Park Sergeant-at-Arms Dennis Clark said he had "serious concerns" about the verdict.

   It is also unclear whether the TASC members still face arrest if they return to Queen's Park.

        The court decision produced mixed emotions for TASC members. While it was good to see that the court agreed that the Charter of Rights' sections on peaceful assembly and freedom of expression should over-ride the permanent ban, Quon found that the October 1, 1998 demonstration which precipitated the ban was marked by what he termed "violent expression" because it involved the pouring of a small amount of water soluble stage blood on the outside walls of the legislature. Such expression, he believes, is of a nature not protected by the Charter of Rights and =46reedoms.

   "The question to be asked is whether pouring blood onto a public building is incompatible with the building's function of providing government services. In my opinion, it is incompatible. It affects the public's perception of law and order and is an affront to the idea public buildings are maintained for the public benefit."

   By Quon's definition, though, the whole Tory caucus should be removed from the premises and prohibited from re-entry, as their policies of housing, environmental, and education and health care cuts are wholly incompatible with the provision of government services. Indeed, that was the focus of the October 1 protest to begin with.

   Quon found that the subsequent ban was justified as a reasonable limitation on freedom of expression because he perceived the blood pouring as an act of defacement or "vandalism," even though there was no allegation or proof of lasting damage, and the fake blood was easily enough washed away.

   Indeed, TASC has a history of organizing numerous expressive demonstrations in which activities that might be perceived as "defacement" or "vandalism" took place, yet in those instances acquittals were registered. "We poured blood on the steps of the legislature in 1996, we planted two sets of vegetable gardens later that year, we attempted to evict Mike Harris and transform Queen's Park into a child care centre in 1997," said TASC's Behrens. "In two cases, criminal mischief charges were laid, and in a third the trespass charge was applied; in all three instances acquittals were won. So the perceptions of alleged 'vandalism' on the part of Queen's Park security and the Metro police differ widely from those of the courts, who have found such activity well within the limits of tolerance in a democratic society."

        However, in a positive light, Quon found that "the government interest in maintaining law and order and preventing former mischiefmakers from being on their property, does not outweigh the individuals' interest in legitimate peaceful expression on the public areas of public property. Since the defendants' expressive activity is constitutionally protected, the Trespass to Property Act must yield to the Charter and consequently, the charges against the defendants cannot stand."

   Quon notes that current ban "becomes dormant during a period when expressive activity on the public areas of public property falls within section 2(b) [which accounts for freedom of thought, belief, opinion and expression]. The ban is still alive but ineffective when the section 2(b) protection comes into play. This is a window of opportunity in which the defendants may enter the grounds at Queen's Park. As long as the defendants' expressive activities at Queen's Park come within the protection of section 2(b), any future charges under the Trespass to Property Act would fail. The Speaker's ban would not be saved by section 1 [the Charter's notation that those freedoms are "subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society."] in any situation where the expressive activity is peaceful. However, if the defendants become involved in non-expressive activity [sic], such as defacing public property, while at Queen's Park the Speaker's ban would still apply and trespass charges would not be nullified by section 2(b). The window of opportunity would then close."

   Quon notes that "because of the special nature of public property vis-a-vis members of the public, it would be excessive for the Speaker to issue an indefinite prohibition against the defendants from entering the public areas of Queen's Park, especially when the main activity conducted by the defendants has been to participate in political demonstrations, which are prime facie protected by section 2 of the Charter...Although the ban remains intact, it would be ineffectual in a Trespass to Property Act charge, as long as the defendants in any future entry onto Queen's Park for political demonstrations behave nonviolently and do not deface public property while there."

        Quon does not believe that the government is acting in prior restraint mode by requiring the five to sign documents stating they would not engage in a range of particular activities.  TASC members refused to sign any such document and thereby surrender to a partisan government the right to define what constitutes "acceptable" protest.

   "If we were to sign something like that, then it becomes government-sanctioned protest, like in the former USSR or in China or Iraq, and what would be the point of that?" asks hiscocks.  "The whole point is to have the freedom to express views which may not be popular with the government."

   The defendants noted that their case represents only a small part of a much larger picture in Harris's Ontario, where the rights of vulnerable people especially are violated on a daily basis, even drawing stinging criticism from the United Nations. In a context where peaceful dissent is becoming increasingly criminalized, the ban remains a criminal sanction used to stifle public protest.

   TASC members are likely to test whether the ban's application has changed in any manner within the month.

(the following letter was sent to Speaker Gary Carr by Ontario New Democratic Party Leader Howard Hampton this afternoon)

January 30, 2001

Hon. Gary Carr Speaker of the Legislative Assembly Room 180 Legislative Building, Queen=EDs Park M7A 1A2

Dear Mr. Speaker,

Given today's Ontario Court decision, I am calling on you to lift the permanent ban from the Legislative grounds imposed by your predecessor on five Ontario citizens.

Former speaker Chris Stockwell imposed the ban on Oct. 1, 1998 against Matthew Behrens; Amanda Hiscocks; Robert Holmes; Donald Johnston and Sandra Lang. On. Jan. 18, 1999 they defied the ban and appeared at Queen's Park during a peaceful protest against government policies and were charged with trespassing.

Today, the court dismissed those charges. Further Justice R. Quon strongly denounced the heavy-handed use of trespassing laws to subdue legitimate protests.

"The government should not wantonly use the law of trespass to evict legitimate, peaceful protesters or stop their voices," Justice Quon said. "This form of expression, expressing dissatisfaction with a government policy and publicizing a particular political view while on state-owned property is a value cherished in a democratic society."

Justice Quon was also critical of your predecessor's role in this matter. He said the Speaker "does not have an absolute right to exclude persons form the public areas of the public property."  Further, Judge Quon said "an indefinite prohibition is excessive when a relatively simple mechanism does not exist for the banned person to contest the prohibition or to have it reviewed."

However, Justice Quon has no authority to overturn the ban. Therefore, instead of forcing these citizens to appeal to a higher court, I am calling on you to respect today's decision and quickly lift the ban.

I believe this is an important issue of fairness and justice and trust you will act accordingly.

Sincerely,

Howard Hampton, Leader Ontario NDP

Contact Toronto Action for Social Change
PO Box 73620, 509 St. Clair Ave. West
Toronto, ON M6C 1C0
(416) 651-5800; tasc@web.ca
============
|

Human beings, not animals - Brazil?s prison crisis - Amnesty International - 23 JUNE 1999

   We committed a crime and we are paying our debt to society. But no one deserves to be treated like this -- like animals. A Brazilian prisoner.
   Criminal suspects and ordinary prisoners are forgotten victims of human rights violations in Brazil, a new Amnesty International report says. Packed into dark, airless, vermin-infested cells, they are exposed to life-threatening diseases, and live in constant fear of assault at the hands of other inmates or of being beaten or tortured by prison officers and police.
   The report, No one here sleeps safely -- human rights violations against detainees, which is being launched in São Paulo today, is the result of two years of research by Amnesty International and it shows a prison system in crisis.
   Some170,000 ordinary prisoners are currently incarcerated in Brazil, in more than 500 prisons, thousands of police stations, and municipal jails. Every year, scores of deaths occur as a result of violence on the part of police and prison officers, denial of medical care, and negligence by the authorities in preventing violence between detainees. The vast majority of these deaths in custody go uninvestigated and undocumented.
  In Brazil?s police stations, torture -- as a means of extracting confessions -- is widespread. Beatings and intimidation are also employed in prisons and police stations as a means of controlling an ever-growing number of detainees. Weekly riots and violent incidents suggest that the authorities are simply losing control of certain establishments.
   The Amnesty International report offers a number of recommendations for reform in eight key areas, which could bring Brazils penal system into line with international standards. These recommendations -- some of which could be easily implemented at little or no cost - include effective inspection and complaints procedures, appropriate training and clear policy guidelines.
Amnesty International <amnesty@oil.ca>
ENDS.../

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

 The Myth of the European Monetary Union

 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

by Alain Parguez
Economic Reform, July 1999
 

Readers of Economic Reform are aware of the crusade for a North American Monetary Union conducted by many Canadian economists of distinction and by souverainistes. From the Fraser Institute to the Finance Minister of Quebec these gentlemen never tire of invoking the miracle of the European Monetary Union, for the sake of which the member states of the Union have renounced their monetary sovereignty to embrace a new common currency the euro.

However, even in Europe the true content of the Treaties leading to the euro -- the Treaty of Maastricht (1992) and the Treaty of Amsterdam (1997) -- has been kept from the public. Very few people realise that the euro was planned to impose an economic and social order enslaving Europeans to the worst aspect of the ideology of austerity, and raising the rentier to supreme power.

The EMU is the ultimate achievement of a plan that can be deemed Central Bank Doctrine. It was drafted in the 1920s by advisers of the Governors of the Banque de France, the Reichsbank and the Bank of England, above all by Jacques Rueff who in 1958 became chief economic adviser of General de Gaulle. Rueff and his followers wished to imposed the supreme rule of the central banks over Europe to maintain the gold standard through monetary, fiscal and wage deflation. The rule of the united central bankers required monetary union, which was thus the protection of the last resort against unsound money-addicted democracies.

The Treaties of Maastricht and Amsterdam have thus realised a plan drawn up eighty years ago! Some time was needed to unravel the whole post-Second War welfare state, the impact of Keynesian ideas, even in their "bastard" version, and democracy itself. This time was required for the rentier class allied to the large trans-European corporations to become the "dominant power," to quote the life-long opponent of Rueff, the celebrated Economist François Perroux. The mastermind of the EMU was French president François Mitterand, for whom the so-called Socialist Party merely served as a tool.

As provided by the European Treaties, the whole EMU is under the control of an absolutist central bank. The European Central Bank (ECB) is independent of any level of institutional power. Never has it to explain its policies; it rules over Europe in full secrecy. Its one mission is to enforce both a permanent zero-expected inflation and to impose a perfect flexibility of prices and especially of the wage-rate. It means that the ECB must convince wealth-holders that there will never be inflation even in the remotest future. Because of this, institutions controlling financial investments will prefer to hold euros rather than dollars, and the euro will become the world's dominant currency.

The European currency is treated as a purely financial acquisition. The sole constituency of the ECB is what is deemed financial markets which is the "politically correct" code-word for European Banks. Europe, especially France and Germany, has the most concentrated and powerful banking sector in the world, and one of the greediest ones.

Never has any European government or the competitiveness-obsessed European Commission raised the least objection to banks merging. The Central Bank is therefore obliged to convince the ruling banks to invest in Europe. This then is the Euro Paradox: How can the ECB control the currency to attain zero-expected inflation when it is obliged to get the support of the all-powerful profit-seeking banks?

According to the European Treaties it can impose reserve requirements, and such reserves have indeed been imposed. It can also prescribe ratios of equity to deposits. But this kind of equity ratio is ineffective since banks control the value of their equity by creating money to finance mergers and other speculative acquisitions. Having need of the banks' support, the ECB raises no objections to the obvious fact that most of the newly created money helps increase the banks' value and wealth artificially. In such a context, the 2% rate of required reserves means nothing both because financial credits are not counted in the determination of the reserves, and because being the faithful supporters of the banks, the ECB is de facto their slave.

What then remains of the ECB's ability to get zero-expected inflation? According to the so-called "Growth and Stability Pact" enshrined in the Treaty of Amsterdam, the ECB has to enforce enough deflation of aggregate demand to arrive at what could be called the "zero-expected inflation rate of unemployment: the NEIRU. This is much worse than the old NAIRU (the non-accelerating inflation rate of unemployment), since it is the rate of unemployment that convinces banks that they have no reason for expecting future inflation. The whole EMU is rooted in the absolute necessity of high unemployment to keep banks happy. Enough NEIRU would impose wage deflation and what is known as the "culture of stability" among bankers fearing unions and social laws as their adversaries.

The Central Bank has to convince bankers of the need for higher profit rates obtained by increasing the stringency of credit-worthiness rules on non-financial loans, and increasing real interest rates charged to small firms and households. It could do so by increasing rates charged on borrowed reserves and exempting loans financing speculation from reserve requirements. Equity controls are nothing but another way to raise their profits by deflating productive expenditures. Such a policy will easily get the support of the banks. It is no big deal calling the resulting high interest rates the "natural" or "equilibrium" rates.

There is another rule helping the Central Bank impose deflation. By the Treaty of Maastricht and its official interpretation by the European Commission, the Central Bank is forbidden to create directly or indirectly money that might finance state outlays. This means that the state can never finance its outlays by asking its former national central bank, now become a local branch of the ECB, to create money at zero interest. Instead it must ask private banks to grant it the credits at whatever rate is their pleasure. The ECB is even forbidden to buy state bonds through open-market operations, because this would be a way of financing state spending.

This prohibition is tantamount to the absolute privatisation of money which enslaves member states to the almighty private banks. It will be a cornucopia for the banks since it will generate gigantic revenues without increased risks -- states cannot go bankrupt. The portion of interest payments in state spending will be increased and member states will be obliged to cut productive spending or increase taxation in view of the constraints imposed on deficits and public debt. And since banks are adverse to non-euro-market expenditures, will impose either dramatic credit-worthiness rules, thus lower social spending, or charge higher interest rates than is charged to the private sector.

To enforce the control of the banks over the state and suppress any possibility of escaping deflation, the European Treaties impose a strict set of constraints over fiscal policy. These are codified in the Growth and Stability Pact: 1) all member states must target a fiscal surplus, the amount of which is fixed by the European Commission and the ECB; 2) surpluses are to be dedicated to reducing the public debt, the maximum level of which is set at 60% of the GDP. Not the least limit is, of course, imposed on private debt; 3) the burden of taxes is to be shifted from corporations to households.

While the US Congress has rejected the balanced budget amendment, members of the EMU have de facto amended the constitution to get a permanent surplus. Squeezed between the surplus norm and the enormous increase in interest payments to the banks, all member states will be obliged to savagely slash social and infrastructural spending while over-taxing average households.

Such is the blessed example of the EMU: the supremacy of banks under the umbrella of a sovereign Central Bank, the demise of any degree of freedom for member states and of democracy itself. Some Canadian newspapers have interpreted the European elections as a right-wing turn. That is a joke. An overwhelming majority of the electorate did not vote because the people have begun understanding that Europe has not been shaped in their interest but for the triumph of greed and speculation. It is true that a majority of voters supported the so-called "conservative parties."

But who were the staunchest supporters of the EMU but the so-called Social-democratic leadership in the UK, Germany and France? In France a majority of the right-wing leadership opposed the EMU, whatever their motives. We must never forget that the self-proclaimed Socialist Party under François Mitterand engineered the EMU, thereby achieving the dream of the right-wing financial oligarchy in the 1920s and 30s.

If a lesson is to be learned from the EMU, it is how the dominant powers of banks can be implanted at the expense of growth, employment and welfare.

Alain Parguez

Université de Franche Comte and the University of Ottawa

===============
Copyright (C) 1999 COMER. May be reproduced with proper acknowledgement.

"Economic Reform" is the monthly journal of the Committee on Monetary and Economic Reform (COMER), a Canada-based publishing think-tank. Annual subscription, 12 issues, is $30.

COMER Publications,Suite 107,245 Carlaw Avenue,Toronto ON M4M 2S6

 Telephone (416) 466-2642 - Fax 466-5827

===============
Paul Martin Unveils New Bank Rules (Unemployed can open accounts) - June/99 - New rules for financial services have been proposed by Finance Minister Paul Martin.
Included in the package:

  • A 30-person agency in the finance department to create better consumer protection and provide educational programs.
  • An independent bank ombudsman to deal with consumer complaints but without enforcement powers.
  • Banks must provide four months' notice of branch closures.
  • Large financial institutions must submit annual reports on their small business lending, employment, charitable donations and other contributions to society.
  • Tougher rules to prevent coercive tied-selling, the practice of forcing consumers to do more business with a bank in order to receive a loan or other service.
  • Banks will be required to provide no-frills accounts, at a cost of $3 or $4 a month, to all and cannot block the unemployed from opening accounts.
  • Banks will not be allowed to sell insurance through their branches or lease autos.
  • A holding company structure for financial companies that will give them more strategic flexibility and reduced regulatory burdens.
  • The types of companies that can use the national system for handling financial transactions will be expanded, allowing insurance companies, money market mutual funds and securities dealers to offer chequing accounts.
  • Bank mergers will not be ruled out if they are proven to be in the public interest.
  • New rules to allow credit unions to form a national co-op bank and strengthen their ability to compete with bigger institutions.
  • Martin will also move to ease the entry of foreign banking interests into Canada.

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