Economic Dictatorship Ahead? The Eurozone Is Finished!
February 21, 2010 • 12:11PM

by Helga Zepp-LaRouche

The author is the chairwoman of the Civil Rights Solidarity Movement (BueSo), a German political party. Her article was translated from German and will appear in the Feb. 26, 2010 issue of Executive Intelligence Review.

Germany is in existential danger, in more ways than one. The French media report that Chancellor Angela Merkel (CDU), apparently for the first time, at the EU summit on Feb. 11 in Brussels, abandoned her previous resistance to the establishment of a European economic government. This means that in the future, the Council of Europe, supported by 30,000 green bureaucrats from the EU Commission—and thus, of course, a body that is not accountable to the voters—is supposed to determine economic policy in Germany. This move toward an oligarchic dictatorship, which was foreseen in the Lisbon Treaty, will do absolutely nothing to change the fact that the financial system and thus, the Eurozone itself, are flying apart in all directions, because Spain and Great Britain are even more bankrupt than Greece.

Secondly, the CDU (Christian Democratic Union) in the state of North Rhine-Westphalia (N.R.W.) is openly heading toward an alliance with the Greens, which—even without a financial crash—would drive Germany, as an industrial nation, even further into ruin, and drastically reduce the living standards of the population. That is, if it is not stopped.

- The 'Tragedy' Is Not Greek -

It is quite likely that the planned European economic government would be enthroned on a corpse. For a "Greek tragedy threatens Britons," as the Financial Times Deutschland writes, while Jim Rogers, co-founder of the Quantum Fund, says, "I would advise you to sell any sterling you might have. It's finished," and Bill Cross of the Pimco investment fund warned against any investment in Great Britain, "because British gilts [government bonds] are resting on a bed of nitroglycerin."

The figures speak for themselves: In January, the British government was unable to borrow on the financial markets, and had a budget deficit of £4.3 billion instead of the expected £2.8 billion surplus; income tax revenues tumbled by 19.8% compared to the previous year; net debt rose to 59.9% of GDP, and the budget deficit to 12.8%—higher than in Greece.

But the worst is yet to come for Great Britain, because Spain, with which the City of London is closely intertwined, is a much larger financial bomb than Greece. The Union Bank of Switzerland (UBS) recently published a comprehensive 68-page report, warning its customers that the Spanish banks are covering up their losses, especially in the mortgage market and commercial real estate. The Spanish real estate market, according to the bank, was overvalued by more than 30%, and NPL (non-performing loans) were probably on a scale of 30-40%, which was concealed by all sorts of restructuring.

The Financial Times wrote on Feb. 18 that people should be much more worried about Spain than about Greece, because Spain's debts are so massive that even Germany and France combined could not save it. And the guru of a one-world currency, Robert Mundell, told Bloomberg that Italy is the biggest problem of the Eurozone.

While the media initially tried to focus on the relatively small crisis in Greece, and the EU desperately tried to make it a bloody example of austerity policies, still the magnitude of the crisis can no longer be swept under the rug: In fact, we are dealing here with the collapse of the international debt bubble whose center is the British Empire—i.e., the conglomerate of investment banks, hedge funds, and financial institutions that, since the crisis broke out in late July 2007, have insisted, again and again, on "rescue packages," at the taxpayers' expense.

This conglomerate is "too big to save." Because the attempt to "save" all the countries that are threatened with state bankruptcy—which have meanwhile mutated from "PIIGS"1Bankers' jargon for Portugal, Ireland, Italy, Greece, and Spain—ed. to "STUPID" (Spain, Turkey, United Kingdom, Portugal, Italy, and Dubai; and we would have to add a whole series of other countries)—could only lead to a massive hyperinflationary policy, opening the monetary floodgates. Such a depreciation of the currency would have incalculable social consequences for the so-called little people, who are already furious at the fat bonuses given to the bankers.

If the collapse of Germany and other European states is to be prevented, then the entire banking system needs to be immediately placed under a Glass-Steagall standard, and the financial instruments and debts that cannot be refinanced should be instantly cancelled. The Eurosystem, with its rules established by the Lisbon Treaty, must be dissolved, and Europe must revert to its sovereign nation-states.

Germany has every right to revoke the Eurodiktat imposed upon it by Margaret Thatcher, Francois Mitterrand, and George Bush, Sr., and, like any country, under international law, can repudiate an international treaty if it is contrary to its fundamental interests. And steps must be taken immediately to return to the deutschemark. The difficulties that would have to be overcome to do that are a piece of cake, compared to the problems Germany would face as paymaster for the bankrupt Eurozone.

- Elections in North Rhine-Westphalia -

Until the election in North Rhine-Westphalia in May, Chancellor Merkel and the CDU are, above all, trying to downplay the true extent of the disaster, and draconian cost-cutting measures will be announced right after the election—but this will be difficult to pull off, given that time is running out, and taking into account the dynamic of the collapse. This dynamic includes not only the member-states of the Eurozone, but, not least, the German municipalities. The massive breakdown of local business tax revenues has brought many cities and towns to the brink of ruin, and is forcing the closure of day-care centers, swimming pools, libraries, etc.—accomplishments that took decades to build. And that also means a huge cut in the citizens' quality of life.

Given this overall situation, it is really a bit much to see how shamelessly the CDU (popularly identified with the color black) in North Rhine-Westphalia is heading for an alliance with the Greens. While a large proportion of FDP (Free Democratic Party) voters now clearly realizes that it was perhaps not so smart to vote for the FDP, Mrs. Merkel has given Environment Minister Norbert Roettgen (CDU) a free hand, with his statements about getting out of nuclear power as soon as possible, paving the way for a black-green coalition in N.R.W..

Voters in North Rhine-Westphalia are well advised, before the election, to imagine very clearly what this means, in a federal state that has already become the biggest victim of the cultural paradigm shift: that N.R.W. has been transformed from a region with a great density of ultra-modern industry and infrastructure, into an area in which the most modern steel mills were shut down, and today, what were formerly factories are now museums, and casinos, banks, and insurance companies will dominate the skyline of the cities. Instead of building the Transrapid maglev train, in conjunction with the CargoCap,2See "CargoCap: A New Way To Transport Freight," EIR, Oct. 12, 2007. large parts of N.R.W. were declared Emissions Zones,3Feinstaubzone. Emissions Zones are restricted to vehicles that have a special green environmental sticker, signifying low emissions—ed. and the traffic jams on the highways are getting longer and longer.

Black-green: a nightmare for North Rhine-Westphalia!

Footnotes

1Bankers' jargon for Portugal, Ireland, Italy, Greece, and Spain—ed.
2See "CargoCap: A New Way To Transport Freight," EIR, Oct. 12, 2007.
3Feinstaubzone. Emissions Zones are restricted to vehicles that have a special green environmental sticker, signifying low emissions—ed.