It was two years ago, in June 2010, when Michael Hudson warned about the collapse of the Eurozone, describing the oligarchy, and how power held by few amounts to neo-feudalism. Just like the last century, People and governments chose to ignore the warnings, greedily and foolishly believing that wealth could be theirs. The outcome in the last century was war, but then, this too is a war today , a financial war against working people.
Dr. Michael Hudson
And so we now witness Eurozone crumbling just as Hudson predicted. It was the plan of private banks that the European Central Bank would fail, in a war against labour, industry and governments. The eurozone sovereign debt emergency showed no signs of abating as the Spanish government desperately haggled over the terms of its expected bailout and the European Central Bank refused to ease monetary policy for the currency bloc, despite signs of stricken European economies sinking still deeper into recession.
Danger zone: How debt crisis is making itself felt
The current UK Government has inflicted on the ordinary people a 2.5% VAT, 1-2% NI increase, the harshest public sector cuts in 60 years, trebling of tuition fees, public sector pay freezes and pension raids, an increase in pension age and so on. (ONS)
Yet the bankers who caused the crash get from Osborne an abolition of the bonus tax, a reduction in business rates, a new law that allows them to avoid taxes on any foreign subsidiaries profits (Barclays and RBS have seven hundred of these tax avoiding vehicles and Barclays for example paid only 1% tax last year). See Guardian comment
Bankers carry on with business as usual and get an average pay increase of 20% last year and a £14 billion bonus. The public get a recession and the biggest drop in living standards in a century.
Thatcher’s policies meant that manufacturing industries in the UK declined. The focus on the financial sector leaves the UK vulnerable to collapse – just as Hudson predicted.
“For UK banks, the average annual subsidy for the top five banks (between 2007 and 2009) was over £50 billion – roughly equal to UK banks’ annual profits prior to the crisis. At the height of the crisis, the subsidy was larger still. For the sample of global banks, the average annual subsidy for the top five banks was just less than £ 60 billion per year. These are not small sums.”
In April, 2012 (6), Tax Research UKreported that the European parliament has officially adopted the policies of the Tax Justice network. The time for action to reclaim wealth stashed away in tax havens is well overdue and until this has been addressed no progress will be made.