Over 1 300 gather in Freiburg to propose way out of financial chaos
Press Release
European Attac Network
Freiburg, Germany, 12th of August 2011
More than 1 300 activists from all over the world gathered at the Attac
European Network Academy in Freiburg, Germany, between the 8-14th of
August, to pursue alternatives to the turmoil-ridden global economic
system. The dire situation of the world's financial markets is subject
to substantial criticism by the participants.
'Attac is not here to say "we told you so" – even though we did tell
you, and for years. We have concrete proposals for how to put people and
the planet before outrageous profits for the few. These proposals will
work, if given a chance," said Susan George, honorary president of Attac
France.
'For more than a decade politicians have ignored our claims for
democratic control over the financial markets, and even as discussions
on the need for more regulation are taking place right now, the actual
implementation of an Financial Transaction Tax and other regulatory
tools is still far away. Despite beautiful speeches and world-embracing
declarations at the G20 and other internationally influent fora, too
little regulation has been put in place and even that little is coming
far too late,' said Hugo Braun, one of the German organizers of the event.
Panic has returned to the financial markets. Given that the debt levels
of USA and the EU countries have been common knowledge for a long time,
the crash is proving once more the irrationality of the financial
markets after the downgrading of the USA public debt. Rumors on the
possible downgrading of French government bonds have further worsened
the speculative trading.
'We call on all people: Get up from your tv and computer screens and
join the movement that is building alternatives to the crisis and acting
for a better world!. This is the best way to ensure that everyone can
live a good life on an ecologically and socially sustainable basis,'
concludes Benedikte Hansen, leader of Attac Norway.
Attac demands:
• Immediate introduction of a financial transactions tax to curb
speculation;
• Immediate banning of all speculators and speculative instruments that
threathen the economy and societies, including short selling and credit
default swaps.
• No to bail-outs for banks without conditions. Banks that can't survive
on their own need to be taken over by public authorities and put under
democratic control in order to serve the needs of the people and not the
profits of private shareholders;
• All financial institutions that are considered too big to fail must be
divided into smaller entities;
• No to austerity measures and yes to new sources of state income.
Public services and investment must be restored, not reduced. Any fiscal
measures that are implemented must be aimed at redistributing wealth and
generating public revenues;
• All public debt must be audited by a citizen-led impartial body.
Illegitimate debt must be cancelled;
• The European Central Bank must be subjected to democratic control. Its
mandate must be revised so as to permit direct financing of the member
states of the Eurozone.
For more information:
http://www.ena2011.eu
http://www.attac.org/
Media contact:
* Susan George, Honorary President of Attac France, susangeorge@free.fr.
* Hugo Braun, Attac Germany, +49171 54 22 515
* Benedikte Hansen, Attac Norway, +47915 87 423
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The government offers no
The government offers no exchange outside of its rebalancing mechanisms, discourages private exchange Lisinopril dosage and attempts to prevent a distressed exchange market from developing by preventing the distress that provokes a demand for it
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A system by which any Euro
A system by which any Euro Zone country may introduce a supplementary national currency to alleviate pressure on the Euro.
First an assurance must be declared that the status of the Euro within the country will remain unchanged:
That the Euro will still be legal tender acceptable for full payment of all goods and services.
That there will never be any forced conversion of Euro accounts into any new currency.
That Euro obligations, public and private, must be met with Euros.
With these assurances in place the intention can be announced that a new supplementary national currency will be issued to compensate for the loss of Euros in circulation. The new currency is declared to be of equal value 1:1 (or a convenient ratio such as 10:1 or 100:1) to the Euro within the country and of no value outside of the country. The intention is that the new currency circulates serving a portion of the internal economy and thus reduces the need to circulate Euros. There is no intention to devalue the new currency, that is not how it works.
The new currency must be issued at no cost to the nation and in such a way that all have an equal interest in its acceptance. It is also important that there is very little reason for anyone to seek to exchange national currency for Euros in the market and this requires careful control over the amount and manner of issue.
This can be achieved safely if the new currency is issued only in sufficient quantity to offset the inevitable loss of Euros that we are all braced to accept. If we are facing the need for say a 15% reduction in current wages and salaries to keep the country solvent then all wages should be paid 85% in Euros and 15% in the new supplementary currency. Although this creates a bit more work for accountants, it involves no new intrusion on the public because wages and salaries are already fully monitored for taxation purposes. The government will have to offer employers new currency in exchange for Euros so they can meet their new currency obligations but as the new currency circulates employers will prefer to meet those obligations with the new currency in their revenue and keep the Euros for other purposes.
It can be safely assumed that earners of these wages and salaries will carefully devote the Euros (85% of what they were receiving) to meeting their existing Euro obligations and will seek to spend their new currency in the shops buying mostly small things (it is only 15% of their earnings). There is also no doubt that the public will have no problem holding shops to their legal obligation to accept the new currency.
So far so good, people get new currency in their wages and salaries and then spend it straight away on small things in the shops. The problem now is that the shops are receiving all of their income in the new currency. This leaves them nothing with which to pay their Euro obligations and they may not find it so easy at first to insist that their suppliers accept the new currency. This is both unfair and unworkable and will create a distressed market for Euros in exchange for the new currency, damaging its integrity and reputation.
A rebalancing mechanism must be provided by government as a service to retailers and other businesses to reconvert up to 85% of their revenue from new currency back to Euros so that their income matches those of earners. This does mean that 85% of the new currency issued will at first be returned to the government with the obligation to exchange them back to Euros leaving only 15% of 15% = 2.5% of earnings permanently in circulation and only reducing the Euro circulation by 2.5% of earnings. This is OK, some economic activity has been stimulated and a small amount of Euro dependency has been permanently eliminated. As the new currency becomes established shops and businesses will start to find it easier to spend their excess new currency rather than seek to convert it to Euros and this will increase its permanence in the economy and eventually approach the 10-15% reduction in Euro use that was intended.
As a currency that is supplementary to the Euro the new currency must have clearly defined limitations but as national currency it must have the full trust of the nation.
Limitations that new currency must respect:
It is not the Euro and has no validity in other Euro countries.
It is not exchangeable for Euros. The government offers no exchange outside of its rebalancing mechanisms, discourages private exchange and attempts to prevent a distressed exchange market from developing by preventing the distress that provokes a demand for it,
It cannot be used to pay off existing Euro obligations.
It may be necessary to permit refusal of it as full payment for some categories of transaction which are heavily loaded with unbreakable chains of Euro obligations. This may include housing (because of existing chains of mortgage obligations) and more appropriately wholly imported goods.
Strengths that the new currency must have
It is the property of the nation. It is not borrowed, it does not have to be paid back and no interest is being paid for its use.
It is issued as state backed credit in wages and salaries that can be fully converted on demand to new currency banknotes and coins. Initially most of this credit will be turned into notes and coins and immediately spent.
It is subject to stricter accounting than the Euro. Demand deposits may not be lent out and lending on time deposits must be subject to strict maturity matching. There must be no duplication of access to the new currency such as occurs with fractional reserve banking.
It declares its own value with respect to the Euro within the country where it is used and has no interest in how it is valued outside of the country where its use is not intended. There is a convenience in parity but should the Euro fluctuate, it is not necessary that the new currency should follow it, it may be better to set a new value ratio.
There is very little to lose and a lot to gain with this system. It is not hostile to the Euro, it simply relieves it of a burden that it is unwilling to bear whilst allowing a country to maintain the health of its internal economy. The new currency makes no claim on the wealth of other countries.
An issue rate of 10-15% of earnings is probably about right. Any more and people and businesses will not be able to meet their Euro obligations and any less may not have enough impact. This rate, although cautious and replete with rebalancing mechanisms that can reduce its permanent effect to 2.5% of income, will make the new currency highly visible within the country. Few Euro banknotes and coins will be seen and new currency banknotes will take their place as people rush to make all small purchases out of their new currency income. Euros payments will tend to be larger commitments that are paid by credit transfer.
This much will get us out of trouble for now and produce a more civilised environment within the Euro Zone that will be more conducive to proper debate about the future of the Euro.
Some Euro countries are
Some Euro countries are already being forced to reduce their use of the Euro that they have embraced as their currency because they are no longer considered economically strong enough to be borrowing so much. Meanwhile the nations of the Euro zone are a long way from the kind of unity needed to reform the Euro.
Some of these countries are now in a desperate situation and we need to consider the kind of unilateral decisions they may need to make to safeguard the health and dignity of their people.
A country facing a shortage of Euros to support its internal economy should consider introducing a supplementary national currency to participate in its internal economy and reduce the need for Euros.
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