Global Economic News

German Banker Lashes Out Against Big Private Banks

March 3 (EIRNS)—At a Frankfurt press conference, on March 1, held by the Hesse-Thuringia Savings Banks Group, its managing director Gerhard Grandke used unusually harsh words to accuse the big private banks, like Deutsche Bank, of blackmailing the government, and thereby, the taxpayer, and preventing an in-depth reform of the banking system. Some banks are just too big, their balance sheets are growing to almost the size of the total GDP for the nation, and they have to be cut down to an acceptable size, Grandke said. He added that, rather than calling these banks "too big to fail," one should call them "too big to be rescued." Had Germany not had its considerable savings banks sector, the financial crisis would have had much worse effects, he said; therefore, there is no reason to continue the ill-advised debate about a privatization of the savings banks.

German Revolt Against Biofuels

March 4 (EIRNS)—On Feb. 25, gasoline stations in Germany started the much-propagandized introduction of the new fuel E-10, a mixture of normal gasoline and biofuel (ethanol). But that turned out to be a total flop, because drivers boycotted it in most cases and took super-grade gasoline, instead.

Not only do the gasoline stations have to sit on their E-10 now, which hardly anybody wants, but since they had a critical, directly related undersupply of super-grade gasoline, drivers took super-plus instead, paying the higher price. Thus, a drastic undersupply of both categories has emerged since then.

On March 3, the state government of North Rhine-Westphalia, Germany's biggest and most populous state, decreed a halt to the E-10 tanking.

As for the motives of drivers who refused to tank up with E-10, they are numerous. First, E-10 consists of aggressive substances that can destroy the tank, the filters, the valves—and insurance companies do not compensate for damage if the driver uses the wrong fuel. Moreover, biofuels are aggressive enough to ruin the asphalt, as has occurred numerous times in highway and interstate road accidents: Specialized teams outside the fire brigade then have to be called in, to work several hours to remove the contaminated asphalt and soil, which usually keeps the highway blocked for several hours.

EU Plan for Assault on Working People Due Out March 11

March 4 (EIRNS)—The European Commission will be presenting its plan for an assault on working people at the March 11 Eurozone heads of governments summit. Drafted by the aides to European Commissioner President José Manuel Barroso and European Council President Herman van Rompuy, it is entitled the "Enhanced Economic Policy Coordination in the Euro Area, Main Features." It is the European Commission taking the Franco-German proposal for a so-called "competitive pact" and transforming that into a policy paper acceptable to the European Commission.

While the document stipulates that these policies have to be implemented through appropriate legislation and reform on the national level, all of it will be coordinated at the EU level. "Each year, concrete commitments will be undertaken by heads of state governments." Each state performance will be "benchmarked against the best performers."

While the policy paper talks of harmonizing taxes and the so-called debt brake, two pages of the three-and-a-half-page document are devoted to cutting wages, dismantling collective bargaining, and cutting pensions.

Under the title "foster competitiveness" they call for ending collective bargaining, writing, "Review of the wage setting arrangements to enhance decentralization in the bargaining process and improve the indexation mechanism." and "ensure wage restraint in the public sector."

Under the guise of increasing "productivity" the call for "opening of shelter sectors by measures taken at national level ... to remove unjustified restriction on professional services such as quotas and closed shops."

Under "foster employment" they call for "labor market reforms, to promote 'flexicurity,'" i.e., eliminating job security. And under "sustainability of pensions and social benefits" they call for increasing the minimum age, "reducing early retirement schemes and using targeted incentives to employ older workers and promote lifelong learning."

The words on financial reform are buried at the end: that member-states "will commit to putting in place national legislation for banking resolution. In full respect of the acquis." "Acquis" is the term used by the EU referring to the full body of EU legislation; thus any "banking resolution" law has to conform to the EU's neo-liberal laws.