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The battle between Germany–the largest economy in the eurozone–and the ECB has been brewing for months. Germany is adamantly opposed to any pooling of debts and, thus, will not support eurobonds, fiscal transfers or allowing the ECB to act as lender of last resort.
While the German position is principled, it is also impractical. Europe is in crisis, a slow-motion bank run is rapidly turning into a full-blown panic. Policymakers will have to be flexible if they want to avert another Lehman-type meltdown.
In contrast, the ECB position is not only unprincipled but also calculating and cynical. Everyone who’s followed events, knew that the emergency fund (EFSF) would never be ready in time to address the firestorm in the bond markets. That meant that yields would continue to rise (which they did) until the ECB provided some form of backstop. But the ECB delayed its intervention until it had toppled Prime Minister Silvio Berlusconi and inserted its own agent (Mario Monti) to carry out its diktats. In other words, ECB chief, Mario Draghi, deliberately manipulated bond purchases to effect regime change before thumbing his nose at Germany and doing exactly what he planned to do from the very beginning. For those who still doubt this, take a look at this article by Reuters on Friday:
“The European Central Bank is ready to show some flexibility in its response to the euro zone debt crisis, despite vocal resistance from a German-led group of ECB policymakers to the bank unleashing the overwhelming firepower it can muster….
ECB officials beyond the German-led group are ready to use the bank’s controversial bond-buying program to help lower government borrowing costs if they reach unsustainable levels, as Italy is experiencing….
ECB officials have welcomed the appointment of Mario Monti as Italy’s new prime minister and look forward to his administration delivering austerity measures to restore confidence in Italy’s strained public finances….
Marko Kranjec, chief of Slovenia’s central bank and, like Weidmann, a member of the ECB’s 23-member Governing Council, told Reuters on Saturday Italy’s austerity reforms go in the right direction and the ECB was willing to support sovereign borrowers as long as it does not put price stability at risk.
Just consider the proposal for the European Stability Mechanism. The ESM is supposed to create a permanent facility that can provide loans to countries that are in distress due to rising yields on sovereign bonds. But the ESM’s real purpose is to establish a supra-national fiscal authority whose directors and staff share absolute “immunity from every form of judicial process.” The ESM is essentially a stealth government with unreviewable power to implement the policies of unelected banksters and bureaucrats.
The ESM creates the legal basis for an EU dictatorship. If the treaty is ratified, the ESM will be able to draw from a pool of $700,000 billion euros to purchase sovereign bonds of struggling countries. But that’s just the beginning, because according to Article 10: “the Board of Governors may decide to change the authorized capital and amend Article 8 accordingly”. In other words, the fund’s managers are free to increase the amount of the fund whenever they like and the individual states are “irrevocably and unconditionally” required to provide the money.
How’s that for democracy?
But what if a country is either unable or unwilling to pay extra money to the ESM?
Well, then, under Article 27, (titled) “Legal Status, privileges and immunities”…”The ESM …shall have full legal capacity to …institute legal proceedings.” So, the ESM has the right to sue the countries for damages for failure to meet the terms of the contract.
On the other hand, neither the ESM nor any of its managers or staff can be sued regardless of the offense. They have complete immunity from action taken by executive, judicial, or legislative branches of government. The treaty essentially repeals all civil and criminal statutes for anyone connected to the fund. Take a look:
Article 27–The ESM, its property, funding and assets shall enjoy immunity from every form of judicial process.
Article 27 (again): The property, funding and assets of the ESM shall…be immune from search, requisition, confiscation, expropriation, or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action.
Article 30: Immunities of persons: 1–Governors, alternate governors, directors, alternate directors, the Manging Director and staff members shall be immune from legal process with respect to acts performed by them …and shall enjoy inviolability in respect to their official papers and documents.
No one working for the ESM can be held accountable for anything regardless of how egregious the crime may be. And all personal and official documentation can be withheld from public review. No transparency whatsoever, complete secrecy.
Naturally, bankers, politicians, and other elites are trying to rush this anti-democratic abomination through the ratification process before the public figures out what’s really in it. They’re promoting the ESM as an essential tool for dealing with potential crises in the future. But, don’t believe it. The fatcats are just setting up for another round of looting.
Originally posted by surrealist
reply to post by weirdguy
Is Germany going to tolerate this? And France? And Spain? And whoever else who hasn't already had their democratically elected government replaced with a technocratic bankster regime? [...]
According to the comments in the German version of the Video here and the reactions I hear in "real life" alot of Germans are finally waking up... and they are mad about this.