Debt is the Hidden Issue in These Elections

26 May 2019 by UndebtedWorld

The citizens of the European Union are called to vote this week for the European Parliament. It is not a real parliament, and it lacks prospects for becoming one, since all important decisions are taken by the unelected heads of the European Commission and the European Central Bank, dubbed “the worst-run Central Bank in the world”.

These elections capture however the general mood of exasperation with current policies. Conservative and extreme Right parties will rise, reflecting widespread scepticism as to the economic course of the EU and its lack of benefits for the common people. The mainstream Left unfortunately neglects these issues, and it will pay the price.

The conservatives generally blame the weak and scapegoat the refugees, the immigrants, the women, and the poor, while promising to save the middle class from the onslaught of big capital. They create false hopes of easy reform, and they never denounce the exploitation inherent in today’s system. History shows however that small owners manage to resist financial stranglehold only when they make common cause with workers and the poor, and they are not afraid to fight.

The economy looks ever more frail. In all, the Eurozone’s nominal GDP GDP
Gross Domestic Product
Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another.
stagnates, shrinking 12% in its six largest economies in 2008-2017. The European Union remains indifferent to the peoples’ needs, while it caters for every whim of the corporations. Even so, Quantitative Easing and other crony capitalist schemes promoted by the ECB ECB
European Central Bank
The European Central Bank is a European institution based in Frankfurt, founded in 1998, to which the countries of the Eurozone have transferred their monetary powers. Its official role is to ensure price stability by combating inflation within that Zone. Its three decision-making organs (the Executive Board, the Governing Council and the General Council) are composed of governors of the central banks of the member states and/or recognized specialists. According to its statutes, it is politically ‘independent’ but it is directly influenced by the world of finance.
, such as the Private-Public Partnerships (PPPs) or the new Targeted Long-term Refinancing Operations (TLTRO-III) cannot save the day.

Donald Trump declares bluntly “I don’t care about Europe”, showing that US considers our continent as little more than a collection of vassal states. In all countries inequality rises, corporations rule, and oligarchs impose their will. Liberal France exhibits an abhorrent authoritarianism against the Yellow Vests. Italy chases the refugees and the Roma. Workers’ rights and incomes are eroded everywhere, with women workers hit particularly hard. Even in successful countries, such as Germany, real wages remain below their 1990 level.


Exploitation today is often effected through debt. Public and private debt are crucial mechanisms for the ongoing transfer of wealth and power from the poor to the rich, from the weak to the strong, from the many to the few. Public discussion so far neglects this issue, even though financial expropriation’s explosive potential is well known to insiders and to the mainstream parties.

Public debt in today’s European Union totals 13 trillion euro, reaching 80% of its GDP. This average masks huge variations between the European periphery and the core. For example, Greece owes 335 billion euro or 181% of its GDP, Italy 2.3 trillion (132%), and Portugal 225 billion (122%). On the other hand German public debt at 2 trillion is 61% of the GDP, and tax haven Tax haven A territory characterized by the following five independent criteria:
(a) opacity (via bank secrecy or another mechanism such as trusts);
(b) low taxes, sometimes as low as zero for non-residents;
(c) easy regulations permitting the creation of front companies and no necessity for these companies to have a real activity on the territory;
(d) lack of cooperation with the inland revenue, customs and/or judicial departments of other countries;
(e) weak or non-existent financial regulation. Switzerland, the City of London and Luxembourg receive the majority of the capital placed in tax havens. Others exist, of course, such as the Cayman Islands, the Channel Islands, Hong Kong and other exotic locations.
Luxemburg’s 12 billion is only 21%.

Public debt is a political choice, not a law of nature. In today’s Europe it is used to subsidise corporations, not the vanishing social state. Instead of covering their needs by taxing the rich, states beg them for loans, get gleefully indebted to them, and promptly pay huge interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. to them. Falling further down into the debt trap, states transfer huge resources from the periphery to the centre, and from poor to rich. This gigantic public debt entails the destruction of democratic institutions, turning citizens into debt peons, and stealing our children’s lives.

In 2010 the Troika Troika Troika: IMF, European Commission and European Central Bank, which together impose austerity measures through the conditions tied to loans to countries in difficulty.

appointed itself as saviour of Greece from its excessive debt, which then stood at 109%. The European Commission, the European Central Bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

and the International Monetary Fund IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
imposed draconian austerity and the liquidation of public property. The Greeks’ sacrifices did not save them, but led to destitution and debt slavery. Parliamentary government became an empty form and a far Right criminal organisation, modelled on Hitler’s Nazis, surged. No European or national institution took responsibility for the debacle. But the peoples of Europe took heed.

The rest of Europe is but one debt crisis away from the fate of Greece. And the global financial bubble is guaranteed to bring this crisis forward, sooner rather than later.

Fiscal pressure leads to revolts or even cataclysmic change - it ushered to the French, the Russian, and the Chinese revolutions. But the debt crisis is not insoluble in itself. States have always the sovereign right to abolish debt, as Iceland did recently. This does not hurt the economy, but gives it a boost. It simply means that the rich will not foreclose for themselves bigger and bigger parts of future production.

We call on all European citizens, within or without the European Union, to check parties’ policies on debt. Parties lacking a clear policy on this issue either do not recognise its seriousness or simply side with the financial oligarchy.

The only responsible way to vote is to support parties promoting debt justice. This includes the abolition of odious public debt, and the resolution of non commercial private debt in favour of the many and poor debtors, instead of the few and rich creditors.

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