by Ellen Brown
April 18, 2012
The Goldman Sachs coup that failed in
America has nearly succeeded in Europe - a permanent, irrevocable,
unchallengeable bailout for the banks underwritten by the taxpayers.
In September 2008, Henry Paulson, former CEO of Goldman Sachs, managed to
extort a $700 billion bank bailout from Congress.
But to pull it off, he had to fall on his knees
and threaten the collapse of the entire global financial system and the
imposition of martial law; and the bailout was a one-time affair. Paulson’s
plea for a
permanent bailout fund - the Troubled Asset Relief Program or
TARP - was opposed by Congress and ultimately rejected.
By December 2011, European Central Bank president Mario Draghi, former vice
president of Goldman Sachs Europe, was able to approve a
500 billion Euro
bailout for European banks without asking anyone’s permission.
January 2012, a permanent rescue funding program called the European
Stability Mechanism (ESM) was
passed in the dead of night with barely even a
mention in the press. The ESM imposes an open-ended debt on EU member
governments, putting taxpayers on the hook for whatever the ESM’s Eurocrat
The bankers’ coup has triumphed in Europe seemingly without a fight.
is cheered by Eurozone governments, their creditors, and “the market” alike,
because it means investors will keep buying sovereign debt. All is
sacrificed to the demands of the creditors, because where else can the money
be had to float the crippling debts of the Eurozone governments?
There is another alternative to debt slavery to the banks.
But first, a
closer look at the nefarious underbelly of the ESM and Goldman’s silent
takeover of the ECB...
The Dark Side of the ESM
The ESM is a permanent rescue facility slated to replace the temporary
European Financial Stability Facility and European Financial Stabilization
Mechanism as soon as Member States representing 90% of the capital
commitments have ratified it, something that is expected to happen in July
A December 2011 YouTube video titled “The shocking truth of the
pending EU collapse!”, originally posted in German, gives such a revealing
look at the ESM that it is worth quoting here at length:
The EU is planning a new treaty called the
European Stability Mechanism, or ESM: a treaty of debt... The
authorized capital stock shall be 700 billion euros.
Question: why 700 billion?
[Probable answer: it simply mimicked the
$700 billion the U.S. Congress bought into in 2008.]...
“...ESM Members hereby irrevocably and unconditionally
undertake to pay on demand any capital call made on them... within
seven days of receipt of such demand.”... If the ESM needs money, we
have seven days to pay... But what does “irrevocably and
unconditionally” mean? What if we have a new parliament, one that does
not want to transfer money to the ESM?...
“The Board of Governors may decide to change the
authorized capital and amend Article 8... accordingly.” Question:... 700 billion is just the beginning? The ESM can stock up the fund as
much as it wants to, any time it wants to? And we would then be required
under Article 9 to irrevocably and unconditionally pay up?
[Article 27, lines 2-3]:
“The ESM, its property, funding, and assets... shall enjoy immunity from every form of judicial process...”
Question: So the ESM program can sue us, but we can’t challenge it in
[Article 27, line 4]:
“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.” Question:... [T]his
means that neither our governments, nor our legislatures, nor any of our
democratic laws have any effect on the ESM organization? That’s a pretty
“Governors, alternate Governors, Directors, alternate
Directors, the Managing Director and staff members shall be immune from
legal process with respect to acts performed by them... and shall
enjoy inviolability in respect of their official papers and documents.”
Question: So anyone involved in the ESM is off the hook? They can’t be
held accountable for anything?... The treaty establishes a new
intergovernmental organization to which we are required to transfer
unlimited assets within seven days if it so requests, an organization
that can sue us but is immune from all forms of prosecution and whose
managers enjoy the same immunity. There are no independent reviewers and
no existing laws apply? Governments cannot take action against it?
Europe’s national budgets in the hands of one single unelected
intergovernmental organization? Is that the future of Europe? Is that
the new EU - a Europe devoid of sovereign democracies?
The Goldman Squid Captures
Last November, without fanfare and barely noticed in the press, former
Goldman exec Mario Draghi replaced Jean-Claude Trichet as head of the ECB.
Draghi wasted no time doing for the banks what the ECB has refused to do for
its member governments - lavish money on them at very cheap rates.
blogger Simon Thorpe
On the 21st of December, the ECB "lent" 489
billion Euros to European Banks at the extremely generous rate of just
1% over 3 years. I say "lent", but in reality, they just ran the
printing presses. The ECB doesn't have the money to lend. It's
Quantitative Easing again.
The money was gobbled up virtually instantaneously by a total of 523
banks. It's complete madness. The ECB hopes that the banks will do
something useful with it - like lending the money to the Greeks, who are
currently paying 18% to the bond markets to get money.
But there are
absolutely no strings attached. If the banks decide to pay bonuses with
the money, that's fine. Or they might just shift all the money to tax
At 18% interest,
debt doubles in just four
years. It is this onerous interest burden, not the debt itself, that is
crippling Greece and other debtor nations.
Thorpe proposes the obvious
Why not lend the money to the Greek
government directly? Or to the Portuguese government, currently having
to borrow money at 11.9%? Or the Hungarian government, currently paying
8.53%. Or the Irish government, currently paying 8.51%? Or the Italian
government, who are having to pay 7.06%?
The stock objection to that alternative is that
Article 123 of the Lisbon Treaty prevents the ECB from lending to
governments. But Thorpe reasons:
My understanding is that Article 123 is
there to prevent elected governments from abusing Central Banks by
ordering them to print money to finance excessive spending. That, we are
told, is why the ECB has to be independent from governments.
what we have now is a million times worse.
The ECB is now completely in
the hands of the banking sector. "We want half a billion of really cheap
money!!" they say. OK, no problem. Mario is here to fix that. And no
need to consult anyone. By the time the ECB makes the announcement, the
money has already disappeared.
At least if the ECB was working under the supervision of elected
governments, we would have some influence when we elect those
governments. But the bunch that now has their grubby hands on the
instruments of power are now totally out of control.
Goldman Sachs and the financial technocrats
taken over the European ship.
Democracy has gone out the window, all in the
name of keeping the central bank independent from the “abuses” of
Yet the government is the people - or it should be. A
democratically elected government represents the people. Europeans are being
hoodwinked into relinquishing their cherished democracy to a rogue band of
financial pirates, and the rest of the world is not far behind.
Rather than ratifying the draconian ESM treaty, Europeans would be better
advised to reverse article 123 of
the Lisbon treaty. Then the ECB could
issue credit directly to its member governments.
governments could re-establish their economic sovereignty by reviving their
publicly-owned central banks and using them to issue the credit of the
nation for the benefit of the nation, effectively interest-free. This is not
a new idea but has been used historically to very good effect, e.g. in
Australia through the Commonwealth Bank of Australia and in
the Bank of Canada.
Today the issuance of money and credit has become the private right of
vampire rentiers, who are using it to squeeze the lifeblood out of
economies. This right needs to be returned to sovereign governments.
Credit should be a public utility, dispensed and
managed for the benefit of the people.