The website Public Service Europe has published an article Parliament’s power is being passed to the banks, written by one of our supporters, Gary Brooks and based on Positive Money’s research summarized in the report Banking vs Democracy.
PublicServiceEurope.com provides a key resource for Brussels and beyond for those wanting the inside track on European politics, public administration. management issues and key developments in the business world.
Here is a short extract:
Privatising the nation’s money supply as debt in this way is inherently unstable leading to the need for state bail-outs. The cost of these bail-outs diverts revenue from other government activities, compromising its ability to fulfil its democratically mandated objectives. It has also led to austerity and social unrest. Leaving the power to create money to the private sector creates a serious democratic deficit. A process that many would consider to be the sole prerogative of the state is in the hands of corporations, who have no accountability to the wider public and whose interests are completely at odds with those of society.
Politicians and policy-makers fail to appreciate the true cost of the banking sector because they only look at the positive side of the sector’s tax contribution to government finances. The crisis shows the direct cost to the public of bailing out the banks, but less attention is paid to the benefit banks gain from hidden subsidies such as government guarantees. This means that banks can borrow money at a lower interest rate. By giving up the power to create money the government forgoes an important source of revenue. This results in higher taxes, lower spending or a bigger national debt. Conversely, the banks benefit financially from the power to create money.
Read the whole article here.
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