European Union: Everybody’s mad at the bankers

It’s a summer of strikes all across Europe, said Sander Heijne and Elsbeth Stoker in the Netherlands’ De Volkskrant. From Greece to France, Portugal to Italy, cities are clogged with striking workers marching and carrying placards. The protests don’t at first appear to have much in common: Greeks are angry about the new austerity measures, the French are incensed that their retirement age will rise from 60—and nobody’s really sure what the Italians are complaining about. “But in spite of this apparent diversity, the demonstrators in different EU countries are all in agreement on one major point: They believe they are being forced to foot the bill for the banking crisis.” In the wake of the bank bailouts of the past year, just about every European government has slashed spending on welfare and other benefit programs. And the people are furious.

Europeans have every right to be angry—especially East Europeans, said Yugoslav scholar Predrag Matvejevic in Italy’s La Repubblica. The former communist countries bought into the myth that “unbridled capitalism” would bring wealth to everyone, and now their economies are tanking. What’s particularly galling is that “the crisis is forcing the dirt-poor to prop up those who possess the wealth.” European intellectuals used to agree with German playwright Bertolt Brecht, who wrote “that founding a bank is a worse crime than robbing one.” Now, though, most experts are “afraid of what would happen if a bank were to fail,” because the entire economy depends on these financial behemoths.

If you think Europeans are angry now, just wait till they realize how cozy the bureaucrats in Brussels are with the banks, said Grégoire Biseau and Jean Quatremer in France’s Libération. The financial oversight laws being drafted by EU officials come directly from a report drawn up for the European Commission by a panel of experts, “the majority of whom are bankers.” The seven-member panel includes former executives with the Bank of France, Lehman Brothers, Goldman Sachs, and Citigroup. Not surprisingly, these so-called reforms lack teeth and will do little to curb the banks’ recklessness. But the EU says it has to rely on the bankers to write the legislation, because the world of high finance is such a “terrifyingly technical domain.”

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It’s true that “Europe’s political leaders and their economic advisors are, for the most part, financially illiterate,” said Wolfgang Münchau in Britain’s Financial Times. That’s why the banking crisis could spell the end of the euro. The only thing that can save the common currency is if the EU commits itself to “a full-blown fiscal union,” complete with mechanisms to force member states to adhere to certain budgetary and financial policies. But of course, given the angry mood among striking European workers, there’s practically no chance that national leaders will agree to give up so much sovereignty. The great euro experiment will almost certainly fail, and the EU will revert to a group of nation states that are “dysfunctional and, as it transpires, insolvent.”