Executive Intelligence Review
This article appears in the February 17, 2012 issue of Executive Intelligence Review.

Glass-Steagall Bill Sent to Italian Senate

by Andrew Spannaus

[PDF version of this article]

Feb. 12—The global push for a reorganization of the financial system starting with the protection of ordinary banking activities from the speculative casino on international markets, took an important step forward last week, when Sen. Oskar Peterlini introduced a bill into the Italian Senate calling for a strict separation between commercial banks and investment banks, with explicit reference to the Glass-Steagall Act of 1933. The stated goal of the bill, which was drafted together with this author, is intended both to help the Italian economy immediately, and to serve as an example for the rest of the world.

Peterlini is from the German-speaking area in northern Italy near the border with Austria, and represents the South Tyrol People's Party (Svp). He has a long history of introducing resolutions calling for serious reform of the global financial system in concert with Movisol, the LaRouche movement in Italy, starting in the early 2000s with campaigns for a New Bretton Woods, and a resolution on Glass-Steagall in 2010.

To date the bill, No. 3112 in the Italian Senate, has 11 co-signers, from Peterlini's group, which includes various small parties in Italy's autonomous regions, and also from other major parties such as the Democratic Party (Pd), the Northern League (Lega Nord), and Italy of Values (Italia dei Valori).

At a Moment of Crisis

The introduction of the bill is an important step forward that will jumpstart a public campaign in favor of the proposal, at a time when the situation in Italy is rapidly deteriorating. Last Summer, the ongoing European debt storm swept into Italy, leading to an acceleration of events involving drastic austerity measures demanded by the global financial markets (through their mouthpiece at the European Central Bank, ECB), and the replacement of the elected government of Silvio Berlusconi with a technocratic one led by the British financial empire's darling Mario Monti.

As yields on Italy's state debt soared, just as had happened in the cases of smaller European nations such as Greece, Ireland, and Spain, the Italian political class was blackmailed into accepting a cure that resembles precisely the disease which provoked the current economic disaster: budget cuts, tax hikes, privatization, and deregulation are being pushed through rapidly under the threat of financial warfare from the markets, and despite the obvious fact that such measures are already causing a reduction of GDP, that will only lead to calls for even more bloodletting.

In this situation, the Glass-Steagall Bill is of fundamental importance: It gives the lie to the false "structural reforms" imposed by the Monti government and the ECB, and can serve as a rallying point for those who find the courage to fight in the coming weeks and months.

An Increasingly Favorable Climate

The political climate for a Glass-Steagall break with the speculative system has been improving visibly over the past several weeks.

One significant inflection point was the nationwide publicity given to Movisol activist Claudio Giudici, head of the taxi drivers' union (Uritaxi) in Tuscany, who led a campaign against the Monti government's austerity measures. Giudici's bold initiatives won him an interview Jan. 12 on the national TV talk show Servizio Pubblico, where he raised the principles for an actual recovery, including Glass-Steagall, and the economic policies of Lyndon LaRouche. An estimated 1.7 million people watched this show.

A few days later, on Jan. 17, a nationally prominent journalist ran a documentary on the national Italian TV network Radiodue, which spotlighted an interview given by LaRouche to the same journalist in 2003, in which the American economist forecast the breakdown crisis.

Another key voice in Italy on the issue of Glass-Steagall and restoring economic sovereignty is that of former Economics Minister Giulio Tremonti, who, after being ousted to make way for the technocrats last November, has returned to the public scene with a new book (see review, EIR Feb. 10), and a campaign precisely for a Glass-Steagall reform of the financial system. Over the past two weeks, Tremonti has continued his public appearances and interventions in the media, thus focusing public attention on the real solution in a manner that few others could.

This included a Feb. 9 appearance on the same Servizio Pubblico which had featured Giudici, in which Tremonti hammered on the Franklin Roosevelt example, explaining clearly that the two actions to be taken to get out of the crisis must be

  1. banking separation after the Glass-Steagall model, and
  2. a New Deal-like program of state-financed infrastructure investments.

The high-level opposition has certainly noticed, as the past week saw a new attack on Tremonti from the free-market liberal faction of his own party, which is terrified that Tremonti's activism on behalf of national sovereignty over the economy, as opposed to ideologically driven petty politics, could represent a rallying point for the population. Peterlini's Glass-Steagall Bill represents a crucial step towards creating a national interest coalition that can break through the fear and cowardice in the institutions, and ensure that Italy will contribute to a global solution to the financial crisis, as is increasingly under discussion in Europe and the United States.

Below we provide the text of the Bill as introduced in the Senate, and a press release prepared by Peterlini for his constituency in South Tyrol.

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