Spanish Editor Argues, Start Planning for Debt Writeoffs Now

April 12, 2020 (EIRNS)—Carlos Sanchez, associate director of Spain’s El Confidencial daily, argued in his April 5 column that “We Will Have To Think about Cancelling Debts,” when the world emerges from the coronavirus crisis. Sanchez, a Keynesian, euroskeptic-light who has written about Glass-Steagall (and is familiar with LaRouche’s material), has written in recent weeks about the mounting Federal Reserve and central bank debt monetization and emissions.

Sanchez does not distinguish between debt issued to cover the speculative bubble and that issued to keep production and people alive, but he urges that decisions be taken, now, for future partial cancellation of those debts. Allied leaders did not wait for victory in World War II to plan for the post-war world, he pointed out, citing 1941 Atlantic Charter and 1944 Bretton Woods, among other examples of such forward planning.

“Debt and freedom are antagonistic concepts. No people can be free if they are mortgaged beyond their ability to pay,” he writes. European states, including Spain, are going to have to decide between “paying debts or sacrificing public investment and the well-being of its citizens.”

Nations have in the past “taken decisions without looking back and without seeking who is culpable,” he reminded, citing the 1953 London conference in which 25 nations agreed to forgive Germany’s debt as a precedent for today. He contrasts that decision, taken at the urging of those who then created the German Economic Miracle, to the Versailles Treaty which led to Hitler.

Past mistakes —such as the European Commission’s restrictions on fiscal policy which left little margin for national economic policies—should not be repeated.