ALLIANCE FO§ DEMOCRACY

Convulsions over debt control – Bank union and free trade agreement

In times of politically prevented national bankruptcy, the question applies for politicians of how the clan can survive. So far, policymakers have been quite happy to sell all kinds of measures as so-called rescue plans, all of which, step by step, were supposed to prevent the national bankruptcies long since pre-programmed because of the failed planning over the Euro. The supposed rescue has until today taken the form of rescue packages, minor currency reforms, interest rate reductions and the manipulation of interest rates, which affects savers and investors, but particularly pensioners and recipients of social support. The latest coup of the politicians is now to be the bank union, which is supported by three pillars. Joint bank supervision under the aegis of the European Central Bank (ECB), which is due to start in autumn 2014. In addition, there is to be a joint mechanism and financing fund for the winding up of foundering banks, which is supposed to be ready by 2016, and finally, the national deposit protection guarantee systems are to be harmonised. As certain as the plan may sound; so legally secure as it is supposed to be, according to all those responsible, who are faced with a complaint which the Berlin financial scientist Markus Kerber was trying to make against the bank union before the Constitutional Court, these funds are just as incapable of saving the Euro countries and the USA from their impending bankruptcy. Politicians and managers of high finance, who are today rather politicians than bankers, do not want to admit that they have failed, so another instrument will be found in order to sacrifice it to the evil of the times, the Euro and its disintegration: Trade.
The magic phrase is “Free trade agreement”, but this is no wizardry, but merely economic theory.
According to this idea, so-called free trade, i.e. foreign trade, which is free of anything which might restrict trade, such as customs regulations, import prohibitions or subsidies, will be protected by international treaties. The deal is: Several countries who sign this agreement determine customs and duties towards other countries, and can of course frame these as it suits them. Money and goods can accordingly be dispatched anywhere within the treaty zone, without incurring costs which reduce profits. Following the idea of the neo-classicist foreign trade theory, which is based on the model of the comparative cost advantages of David Ricardo, this should produce so-called welfare gains for all participating countries.
Countries such as Germany, Italy, Spain and the USA will find themselves reliant on these gains if the wheels of state continue to grind a little longer. Governments lie in wait for huge profits, which currently are even achieved realistically, although it is overlooked that this idea, as well as the introduction of the Euro, can only work in the long term or even at all under quite different circumstances.
In a theoretical system which says that all countries will always receive the same share of the profits, such equal profit shares are indeed possible. In practice however, many other factors also play a role, and it remains questionable when which members in the club of the treaty partners benefit, and when they lose out. Not every treaty partner can always have the same share of the profit on every market in the world. To this end, production factors such as raw materials, operating facilities (rights, licenses, property, buildings, plant, knowledge, theory), the person as a worker, manager or as a controller between the individual trace areas, must always be able to be relocated to where the greatest part can be traded. This is not feasible however, because although sectors of the economy work together, they are not interchangeable. Since this deficiency exists by its very nature, the whole system is dependent on the sector which is making profits. All the others however want to do the same. And so the scramble for profit is inevitable, which eliminates any control which otherwise applies in trade, or binds it to legal, environmental or hygienic structures. Anarchy on the markets of countries which are already slipping into bankruptcy – that bodes nothing good. In this situation of doubt, the actions for free trade, in addition to the rescue of the Euro by loan financing and bank union through winding up of banks, are only further actions which will add a juicy economic crisis to the imminent national bankruptcies.
While the country argues about chlorinated chicken and genetically modified products from the USA, which have been able to be imported into Germany by means of unrestricted trade, the danger is being overlooked that it will sooner or later be irrelevant where the chickens and foodstuffs mutations come from, because after the next world financial crisis, the financial hardships will be followed by food shortages. Then at the latest, many people will come to understand that money or gold are not edible, and that this is due in part to chlorinated chicken and genetically modified maize. In this respect, these are only the lesser evils, even if, as in the case of chicken, it is a germ-free sign of how close we have already come to the end. We can therefore conclude that the clucking of economy, politics and the press, which are fuelling the fear of American chicken and eating genetically modified foods, is nothing more than a diversionary tactic: To conceal from the world how close we are to the edge of the abyss.