Policy Research in Macroeconomics

Whale of a Nerve! JP Morgan tell Europe’s States, your anti-fascist Constitutions are Unfit for Purpose

By Jeremy Smith

It’s Bilderberg weekend in Watford, so it’s fair game to run a piece on how right-wing bankers and their political agents are working to rebuild our world in their own image and interest…. But like all the best conspiracy tales, this one has the merit of truth… they are!

For some time, I’ve been following  the ongoing process of  promoting the “Creditors’ Constitution” for European countries. The Spanish government rushed through a Constitutional amendment in 2011 to give “absolute priority” to payments to their creditors, above all other interests (here’s the detail, but viewed from a pro-creditor perspective); and in early 2012, the Eurogroup of Finance Ministers pushed the Greek government into promising to do the same. The spate of “debt-brake” (and balanced budget) constitutional amendments in the last 2 years also tend in the same direction, prompted by the EU Stability etc. Treaty.

And now here we are given a new keynote message, which comes from the very same outfit who brought us “The London Whale, a Study in Banking Probity and Responsibility”.  Yes, JP Morgan. In summary, their new report tells us:

Europeans, your national Constitutions, born out of victory over fascism, are today unfit for purpose. They show a strong socialist influence, including protection of labour rights and the right to protest if you’re unhappy. They must be changed.

I think I have never seen bankers argue so crudely (in political terms) as J P Morgan do in their report, “The Euro Area Adjustment – About Half Way There”, Europe Economic Research, 28th May 2013.   And thanks to Leigh Phillips of EU Observer blog for drawing attention to it in his post, from which it can be downloaded.

Here are the relevant paragraphs from their “Research”:

In the early days of the crisis, it was thought that these national legacy problems were largely economic: over-levered sovereigns, banks and households, internal real exchange rate misalignments, and structural rigidities. But, over time it has become clear that there are also national legacy problems of a political nature. The constitutions and political settlements in the southern periphery, put in place in the aftermath of the fall of fascism, have a number of features which appear to be unsuited to further integration in the region. When German politicians and policymakers talk of a decade-long process of adjustment, they likely have in mind the need for both economic and political reform.

At the start of the crisis, it was generally assumed that the national legacy problems were economic in nature. But, as the crisis has evolved, it has become apparent that there are deep seated political problems in the periphery, which, in our view, need to change if EMU is going to function properly in the long run.

The political systems in the periphery were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left wing parties gained after the defeat of fascism. Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labor rights; consensus building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the crisis. “

There you have it, in its reactionary crudity. It’s a truly disgraceful document.

3 Responses

  1. I of course disagree totally with your wild claims. Fascism is a murderous,evil ideology as its history demonstrates.

  2. Fascism is an inspirational and motivating force.Antifascism is the opposite, it causes Chaos,
    Emmigration waves, demotivated workers and
    a low birth-rate as well as full Islamization
    as we can all see today …

  3. Great piece. It’s as though the bankers fail to make the connection, that if what makes life difficult for dictatorial fascism is what makes life difficult for bankers, then perhaps the aims of bankers and that of dictatorial fascism are not remotely dissimilar.

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