Online at: http://politicalaffairs.net/article/articleview/7540/

Financial Crisis in Europe: Alternatives Demanded

By Combined Sources
Archives - Dates and Topics 2008 – online October 1 – 31, 2008 click here for related stories: economy

10-09-08, 10:29 am


Leaders of the Communist and Workers Parties of Belgium, Luxembourg, and Netherlands speak at a press conference on the need for alternatives to bailing out big banks.
LUXEMBOURG – At a news conference in Luxembourg, the communist parties from Belgium, the Netherlands, and Luxembourg this week called for a new financial institution that will serve the interests of the people, not maximum profits.

Because the very existence of thousands of businesses and jobs is at stake, as well as the savings of tens of thousands of people, the Communist parties of Belgium, the Netherlands and Luxembourg welcome the actions of European governments to support the financial integrity of Fortis Bank (Belgian-Dutch) and Dexia Bank (French-Belgian).

However, the so-called “partial nationalization” of the banks by purchasing their shares does not really mean their complete nationalization. It merely means the nationalization of the huge losses the two banks have incurred.

This was the core of the analysis presented by Ali Ruckert, president of the Communist Party of Luxembourg (KPL) at a news conference last Friday in Esch-sur-Alzette. “The governments in Brussels, the Hague and Luxembourg are now saying they want to get rid of these shares as soon as possible, and the EU is also saying they have to sell them. But it is our opinion that a new general sale must be prevented.”

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“Instead of throwing public money at private banks over and over again – as if to satisfy their craving for a drug, we are instead calling for a major redistribution of wealth, a redistribution of income and property,” said Jo Cottenier of the Workers’ Party of Belgium (PTB). This is the way we can ultimately achieve A fair re-evaluation of public and collective property.”

“We Communists,” said Cottenier, “are not only rejecting the current neo-liberal ideology, but also the quick-fix regulation of the financial markets, which is the limited aim of the social-democratic forces. by championing the slogan “People Before Profits,” the Workers’ Party of Belgium is orienting the struggle against the European Union itself, because it is the European Commission that is pushing the member states in the direction of more liberalization and privatization.

On behalf of the Communists of Luxembourg, Comrade Aloyse Bisdorff, member of the Executive Committee of the KPL, pointed out that the present crisis began as a mortgage crisis in the US and quickly developed into a worldwide financial crisis. Its full repercussions for the real economy will perhaps only be fully visible in the coming year, he said.

Following the Southeast Asia economic crisis and the crisis of the “New Economy,” this is already the third great crisis caused by free-market capitalism since its recent domination of the world. "While the governments try to save the capitalist system with the help of taxpayers’ money, they are at the same time creating the basis for a new crisis,” said Bisdorff.

As Wil van der Klift of the New Communist Party of the Netherlands (NCPN) noted, the world balance of power will be seriously changed, even if the current crisis can eventually be controlled. In van der Klift’s view, it was more than merely symbolic that the Chinese taikonauts were working in outer space just as the new crisis on Wall Street reached a culmination point.

“It was also at this point," noted van der Klift, "that the New Communist Party began to find it easier to establish contact with people.” “The Netherlanders,” he said, “had already rejected the EU constitution in the referendum of 2005, after they realized that the reality was far different from what the politicians and the media were telling them. Now we have such a such a situation once again. The people see that all this chitchat about a forthcoming end to the crisis is not true, and they are beginning to ask questions. Some are even questioning the capitalist system.”

The main demands of the three parties:

1) To set limits on shareholder profits in bailed-out banks

At their meeting, the parties worked out three principal common demands. First, the profits of shareholders in the Dexia and Fortis banks must be limited. In this way the pressure on business and workers will be eased. In order to prevent exploitation of the situation by shareholders, there must be a set limit on their profits. Any profit above this set limit must be subject to 100 percent taxation.

2) More rights for bank employees and trade unions

Secondly, the rights of working people and trade unions need to be enlarged and expanded. At the same time, the disproportionate influence of shareholders on the governing boards of financial institutions must be curtailed. It is not by no means enough to divulge only certain information about the activities and decisions of the boards of directors. Employees must be given a veto right when it comes to important decisions such as the working out of investment strategies, and the purchase or sale of enterprises or parts of them. This is the only way to prevent a handful of shareholders from making decisions that are opposed to the public interest.

3) To create a Benelux Bank* under public control

The national saving banks of Belgium, the Netherlands, and Luxembourg (along with their national credit and investment institutions), as well as the public shares of Fortis and Dexia, should all be concentrated into one, public Benelux Bank. The main task of this bank should not be to create maximum profits for the shareholders, but to support small and medium-sized enterprises, finance the construction of housing, create new industrial and public sector enterprises and jobs, and help businesses and institutions that are in financial distress.

The Benelux Bank should not be controlled by private shareholders or representatives appointed by the three states; rather, it must be controlled and guided by the national and local parliaments of the three countries, and by the trade unions and other public representatives. This is the only way to ensure that the bank will serve the public interest.

* Benelux (founded 1958) is an economic union that comprises Belgium, the Netherlands, and Luxembourg.


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