Let's not forget. We shouldn't listen too much to the banks. The definition of the new financial rules is making progress at a global and, especially, European level. Obviously, the banks and other financial actors are stepping up their efforts to protect their privileges and freedom of action. This is understandable and even useful because the legislator must have all appropriate information at its disposal and the banks have the right to indicate any difficulties that certain measures involve, including the right to flag up difficulties that might restrict their activity in favour of the economy. The overall objective, however, should never be forgotten.
Demands for regulation are the result of the shameful way in which the financial community abused its freedom of action. Several elements indicate how this very same community is quite prepared to resume its old habits in the areas of: - speculation;- the use of opaque instruments that are incompatible with transparency and damaging to the real economy; - and ludicrous pay and bonus schemes. The legislators must listen to the banks and take into account some of what they say but they should not be taken in by the latter's complaints. They have had their freedom of action and we know only too well to what extent they have benefited from it. Certain specific taxes that are planned will have a price to pay for those subject to them but the harshest rules regarding the own resources will affect the freedom of action and the bank balances of certain banking bodies. And so what?
For the time being, the determination to take action has not waned and neither have the positions taken by the president of the United States of America or the G20. This organisation has just requested the IMF to pursue the study of two specific taxes, and has confirmed the commitment to define new rules on the scale and quality of banks' own funds before the end of the year. The director-general of the IMF has underlined the demand for the financial authorities to harmonise new rules for rating agencies and hedge funds, or at least make them compatible between themselves, which has not been the case so far.
An undeniable link. In this context, the EU is pushing forward in its legislative work and the European Parliament is fully playing its role. Admittedly current affairs once again bring us face to face with the Greek saga. This is logical but on the condition that we remain aware of the undeniable link between rescuing a eurozone country on the edge of bankruptcy and the definition of new rules that will make similar slippage in the future impossible. The polemic is sharp and rumours are intensifying, even those regarding the possibility of Germany leaving the euro (if the risk persists that other member states do not respect the rules) and setting up a new single currency with a limited number of participant countries, offering those countries excluded from this venture the chance to devalue their currencies (as invoked by certain economists).
I believe that, in the event of such hypotheses and risks transpiring, three reminders are called for:
1. Germany's discipline is useful to all of us. Obviously, it is legitimate to criticise the position taken by Germany and its lack of flexibility with regard to Greece, but we should not forget that the discipline displayed by Germany and the toughness of the new standards it set itself with regard to budgetary deficits are exactly the right factors that will enable other eurozone countries to obtain funding on the markets at rates that are close to 3%. Neither should we forget that common economic governance will enable other member states and not just Germany to criticise the lack of discipline displayed by other countries. It will also allow them to put forward their positions and remind Germany that countries deprived of resources would also have to reduce their imports of German products.
2. Usurers from hell. In the past, usury (lending money at excessively high rates) was a mortal sin. Dante put the usurers in hell and subjected them to tough punishment. The usurer whom he meets in Canticle XVII belonged to the Scrovegni family from Padua, the same family that had ordered frescoes from Giotto for a chapel that today is world-famous. This has also been the “Soros tactic” - earning billions to the detriment of other currencies but obtaining financial forgiveness by way of charitable works. It would not be a bad thing to partially return to the Middle Ages with, of course, less cruel punishment for the guilty.
3. The euro and dollar, let's not dramatise things. It is not serious if, in the current situation, the value of the euro undergoes a number of somersaults in its relationship to the dollar. These fluctuations are only dramatic for the professional speculators and could actually even prove opportune if they facilitate European exports and moderate the cost of basic products much needed by Europe. The financial markets, as is their wont, respond on a daily basis, but let's not turn this into a daily drama. (F.R./transl.fl)