Al-Jazeerah: Cross-Cultural Understanding
Opinion Editorials, April 2012
The European Stabilization Mechanism:
Or How the Goldman Vampire Squid Just Captured Europe
By Ellen BrownAl-Jazeerah, CCUN, April 23, 2012
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
By December 2011, European Central Bank president
Mario Draghi, former vice president of Goldman Sachs Europe, was able to
500 billion Euro bailout
for European banks without asking anyone’s permission.
And in 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.
The ESM 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
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 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 2012.
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.
why 700 billion? [Probable
answer: it simply mimicked the $700 billion the U.S. Congress bought into in
2008.] . . . .
[Article 9]: “. . . 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?
. . . .
[Article 10]: “The Board of Governors may decide
to change the authorized capital and amend Article 8 . . . accordingly.”
. . . 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 court?
[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 powerful treaty!
“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.”
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?
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
The Goldman Squid Captures the ECB
Last November, without fanfare and barely noticed
in the press, former Goldman exec Mario Draghi replaced
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.
French 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
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 havens.
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 solution:
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
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. OK. But 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 have
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
is the people—or it should be.
A democratically elected government represents
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
Then the ECB could issue credit directly to its
Alternatively, Eurozone 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
in Canada through 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
Credit should be a public utility, dispensed
and managed for the benefit of the people.
Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://WebofDebt.com and http://EllenBrown.com.
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