The Slog
Evidence of
attempts at online news blackout grows
by John Ward
Lisbon’s
constitutional court having blocked the country’s planned austerity programme,
the euro project now faces a war for survival on myriad fronts: Portugal,
Italy, bond market confidence, capital flight, and media coverage. It’s hard to
see a way back for EMU now.
Portuguese Prime Minister Pedro Passos Coelho held an
extraordinary cabinet meeting on Saturday following the Constitutional Court’s
rejection of four out of nine of the budget’s austerity measures, which the
government says are necessary to meet the terms of a eurozone and International
Monetary Fund bailout. With opposition parties calling for the government to
resign, Coelho was still locked in emergency talks with the country’s President
in the early hours of Monday morning.
And despite rumours in Italy last Friday that its
President would facilitate an emergency technocrat regime under Mario Monti,
sources there are now insisting that there is no possibility of such a move.
Meanwhile, yet more evidence of capital flight is emerging from
both media articles and Slog sources on the ground. “Capital flight was enough
to devalue the Euro by a half percent per day last week until it stabilised at
$1.28,” says one Slogger, “We think there was [European] central bank
intervention by overt money printing on a massive scale.”
“Projected post-Cyprus eurozone capital flight is at a
moving rate $2 trillion per year, or $200 billion per month” says another.
The Financial Times notes that demand for $100
bills has jumped ‘as nervous Europeans stuff them under the mattress, providing
vivid proof that the world still loves the dollar, and confirming the benefit
to the US of the currency’s status as a global reserve…The surge in demand for
US cash suggests that the world is worried about future of the euro.’
But although Mario Draghi talked with a vague
desperation last week of “thinking 360 degrees on the non-standard measures”,
no capital controls have been imposed. My view remains that this was a fatal
mistake. However, to ensure that no euro-doubters need be in any doubt at all,
EU economic affairs commissioner Olli Rehn announced in a television
interview last Saturday that The Cyprus Approach will be formalised via an EU
directive.
Talking out of several orifices at once, Rehn asserted
that ““Cyprus was a special case … but the upcoming directive assumes that
investor and depositor liability will be carried out in case of a bank
restructuring or a wind-down,” during an interview with Finland’s national broadcaster
YLE. To clarify a little less still, he added “There is a very clear hierarchy,
at first the shareholders, then possibly the unprotected investments and
deposits.”. He did not expand upon exactly what kind of ‘protection’ might be
recognised by those tunnelling into the bank vaults.
But however one tries to put Olli’s statement into
words, the European Commission is currently drafting a directive on bank
safety which would incorporate the issue of investor liability in member
states’ legislation. This is the now infamously euphemistic Open Bank
Reconciliation (OBR) template within which, having already had all our tax
monies to rescue them, investment bankers will now get our savings as well.
Obligatory organ donations may well follow shortly.
There are already some bizarre signs of online media
removing all material found offensive by the Looters: this extraordinary notice
went up at the NBC site shortly after the post appeared yesterday:
The Eunatics are in a corner. Anything could happen
now – and probably will. Stay tuned.
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