Western European News Digest
European Newspapers on 14th-Century Banking Collapse
Sept. 28 (EIRNS)The German daily Frankfurter Allgemeine Zeitung yesterday featured a lengthy historical article, detailing the 14th-Century collapse of the Lombard banking system, making the obvious comparison to the current global financial disintegration. Lyndon LaRouche has uniquely emphasized this parallel on many occasions.
Then on Sept. 30, the Scottish Daily Record, in an article titled "Financial Crisis and Scottish History," briefly quoted LaRouche associates Bill Jones and Marsha Freemanin Scotland at a conferenceas saying Americans massively reject Paulson's bailout of banks. "Throughout every corner of the United States, people are appalled utterly at the consequences of much fewer teachers, police officers, social provision, infrastructure repairs, etc., to rescue corrupt bankers." The Daily Record identifies the two only as "Democratic Party activists from the USA."
Then the Record continues: "There was a similar crisis to this in the 14th Century and it heralded in a dark age of warfare and disease.
"The investment banks of the Lombard banking system during the 14th century, led by the House of Bardi, looted all the kingdoms of Europe in the way the banks are trying to do now. Edward I of England was under the most pressure from them as a consequence of his long wars against France and Wales. The wool trade based on the Scottish border abbeys were a source of state revenue, and were keeping the Scottish monarchy afloat in what for our country has been defined by historians as a golden age of prosperity.
"It was all too tempting for Edward Plantagenet, deeply in debt to the international bankers. The rest we know. The rest is history. But it is an object lesson on where financial crises can lead."
Schiller Institute Testifies in Danish Parliament
COPENHAGEN, Oct. 2 (EIRNS)The Schiller Institute in Denmark testified before the Parliament Political-Economic Committee today, with seven MPs present, from four non-government coalition parties. Tom Gillesberg spoke, and afterwards, appealed to the MPs to recognize that the current financial crisis is not like the 1930s, but, rather like the collapse of Europe that occurred after the 14th-Century collapse of the Bardi and Peruzzi banks. This led to the disintegration of the financial system and the society, and a new dark age, in which Europe's population was reduced by one-third. This is not just some people losing money; the Parliament has to deal with this, he said.
Gillesberg's written testimony was distributed to the press corps present.
Sarkozy Wants New Bretton Woods Summit
PARIS, Oct. 1 (EIRNS) The Oct. 4 preparatory meeting in Paris for a New Bretton Woods summit, aims at bringing together the heads of state and government of those EU members that belong to the G8. Besides French President Nicolas Sarkozy, German Chancellor Angela Merkel, British Prime Minister Gordon Brown, and Italian Prime Minister Silvio Berlusconi, the talks will include EU Commission President José Manuel Barroso, European Central Bank President Jean-Claude Trichet, and Jean-Claude Juncker, head of the Eurogroup, which is basically comprised of the financial decision-makers of the Eurozone.
A full G8 summit could take place, the French President hopes, between mid-November and mid-December, after the U.S., Japanese, and Canadian elections. Sarkozy proposes that it be held in the U.S.A., so that both the outgoing U.S. President and President-elect would be available.
Euro Banks' 'Assets' Dwarf Most Nations' GDP
Sept. 30 (EIRNS)The ratio of assets of some of Europe's largest banks, to the gross domestic product of the nations in which operate, is staggering, especially in the smaller countries. Many of these banks are in trouble, and their lenders of last resort are states whose GDP is many times less than the purported "assets" of the banks.
The Financial Times of London today presents some telling examples:
UBS, one of the largest banks in Europe with Eu1.426 trillion of assets, represents 484% of Switzerland's GDP, while Crédit Suisse, with Eu854 billion in assets, is 289.7%. In Belgium, Fortis, Europe's 20th-largest bank, with assets of Eu886.3 billion, is 254%% of Belgium's GDP; and Dexia has Eu604.6 billion, or 173% of Belgium's GDP. Both these banks were just bailed out.
In the Netherlands, ING, another among Europe's largest, at Eu1.370 trillion in assets, is 289% of GDP, and Rabobank, at Eu570 billion, is 120.6%. In Iceland (population 300,000), Kaupthing Bank has Eu53 billion in assets, which is 622.5% of GDP, and Landesbank with Eu31.9 billion is 374.3% of GDP. In Spain, Banco Santander, the Anglophile bank that everyone claims is in great shape, but in fact is on life support from the European Central Bank, has Eu912 billion in assets, for 131.8% of GDP. And Royal Bank of Scotland, Europe's largest, with Eu2 trillion in assets, is 126% of Britain's GDP. Many other large banks, such as Germany's Deutsche Bank, Italy's Unicredit, and France's BNP Paribas, are between 80% and 104% of the GDP of their respective countries.
Economists Push Mussolini 'Solution' for Europe
Oct. 3 (EIRNS)A group of economists led by Alberto Alesina is ringing the alarm bell: The European banking system is being "balkanized" through national reactions. In an open letter published in Il Sole 24 Ore on Sept. 27, they call for a European centralized bailout on the model of the Mussolini 1933 solution. The European intervention "must occur through ... the injection of public funds or through the mandatory conversion of debt into stock capital. It must be done at the European level (for instance, through the European Investment Bank). The current approach, with the bailout of one bank after another, will only lead to a balkanization of the European banking sector."
The list of economists who have signed the open letter had reached 100 as of Sept. 27, according to Tito Boeri, editor of site www.lavoce.it, an outlet owned by financier Carlo De Benedetti.
A similar idea is pushed by a board member of the European Central Bank, Lorenzo Bini Smaghi, in an article in Corriere della Sera today, titled, "States Should Enter the Banks' Capitals."
French Prime Minister Avoided Plane Crash
PARIS, Sept. 29 (EIRNS)Before landing at the Villacoublay military air base on Sept. 28, French Prime Minister François Fillon's Falcon 900 was suddenly confronted by a Cessna tourist plane flying at the same altitude. The Falcon 900 pilot succeeded avoiding a fatal collision by employing an emergency procedure. The distance between the two planes came as close as 60 meters. Both the Gendarmerie des Transports Aérien (GTA) and the Gendarmerie de l'Air (GA) opened inquiries.
Fillon had recently travelled to meet both Italian Prime Minister Silvio Berlusconi and Russian Prime Minister Vladimir Putin, to discuss the world monetary crisis. Last week, he had called for "national unity" in the face of a crisis so serious that it only happens once or twice each century.