PRESS RELEASE
European Court of Justice Supports Bail-In
July 19, 2016 (EIRNS)—In a surprising move, the Luxembourg-based European Court of Justice, the highest court of law in the rotten state of Euroland, ruled today that bail-in is legitimate. The ruling was unexpected, as the general attorney had argued against the bail-in last February, in a case brought by Slovenian depositors who had been deceived into buying junior bonds by their bank, which were then confiscated in a bail-in.
The ruling has implications for Italy, where families own €30 billion-worth of subordinate bonds and where the government was hoping for a favorable verdict to back its requests for suspending bail-in rules. The ruling left a door open by saying that the EU Commission can accept a bank rescue without bail-in in "exceptional circumstances."
The German government, however, is against this option and thinks that the Commission is too lax. In this context, the Bundesbank issued a proposal to exclude the Commission from future negotiations on bank bailouts, by replacing the Troika (EU Commission, International Monetary Fund, and European Central Bank) with the European Stability Mechanism (ESM), the bailout fund chaired by Klaus Regling and run by a board comprising Eurozone finance ministers. The ESM would become an "independent fiscal authority" over countries applying for bailout. The proposal will probably not be approved, but it indicates that Germany is stiffening its position of not allowing any exception to EU rules.
Lyndon LaRouche dismissed the decision out of hand, as having no legitimacy whatsoever. Neither bail-in or bail-out; the whole game is a swindle which must be cancelled, he said. New laws creating a new system have to be passed.
