British Establishment Freaks Out
Over Tremonti Proposal!
What Does All This Mean
for the U.S. Election Campaign?
July 4, 2008 (EIRNS)The London Daily Telegraph's Ambrose Evans-Pritchard writes today that Italian Finance Minister Giulio Tremonti's proposal to apply Article 81 of the European Treaty (the anti-trust provision of the current law, not the Lisbon Treaty) against speculators, if accepted, will badly hurt the City of London's financial power. Pritchard reports that Sarkozy supports Tremonti's proposal.
Evans-Pritchard calls Article 81 "an obscure article," and says that "Giulio Tremonti, Italy's Finance Minister, has called for a united European front to tackle alleged abuses, describing speculators as the 'plague of the 21st Century' ... he has the backing of French President Nicolas Sarkozy." To complete the picture, Evans-Pritchard mentions that the Social Democratic Party in Germany is "agitating for action against asset-stripping 'locusts.'"
Evans-Pritchard is worried because "Article 81 decisions can in theory be pushed through by qualified majority vote, overriding a veto by the British and Irish governments. Any such attempt to restrict the futures and derivatives markets would have a major impact on the City of London and Dublin's financial industry. It is far from clear whether Britain could muster a blocking alliance in the current anti-market climate."
Lyndon LaRouche remarked that Evans-Pritchard need not worry; a lot of things will have major negative impact on the City of London's financial industry; it's hard to find anything that won't. Evans-Pritchard has not yet realized what his situation is.
Indeed, Tremonti scored a victory when the spokesman of the Anti-Trust Commissioner, Jonathan Todd, said that Article 81 "can be clearly used against all forms of collusion." "I cannot say whether there is evidence of collusion among speculators, but if there were evidence, the article could be implemented." Some media emphasize the "evidence" question, meaning that first you must find the evidence and that that is pretty difficult. Also, the inertia of the British-dominated EU Commission does not promise a breakthrough on this front.
Nevertheless, "Tremonti has thrown a stone in the water," comments the financial daily Il Sole 24 Ore today. "If Tremonti succeeds in troubling the waters, maybe starting from Europe, it will be a step forward in a world overwhelmed by the globalization shocks, that seem to paralyze everyone's ability for leadership and action, including the large international institutions."
Back to Evans-Pritchard, he fears that Nellie Kroes, the EU Commmissioner for "Services," who is a Dutch "Thatcherite," is "almost certain to be replaced next year by somebody who reflects the new mood."
The new mood is typified by Tony Robinson, Evans-Pritchard says, chief spokesman for the Socialist Group in the European Parliament, who "said the capitalist system had disgraced itself and must now face much stricter regulation. 'There is a groundswell of opinion building up for action at a European level. Our group wants a ban on all investment funds speculating on food. We support a properly functioning market, but what we have seen in this crisis is a most distasteful morality where decisions are driven by greed. Hedge funds have used debt to take over companies and strip out their assets. This must stop,' he said."
As for extending the application of an anti-speculation move outside of the EU, Evans-Pritchard says that "EU lawyers believe they can gain leverage over exchanges outside the EU, using the sort of regulatory muscle that halted the internal U.S. merger between GE and Honeywell in 2001. While the two American giants could have ignored the EU ruling, they chose to abide by it to avoid huge fines and to preserve their business in Europe."
This all represents something which, floating back into the US election campaign, will have significant effects, LaRouche added.