crisis, to see that it is also a colonisation of poorer,
weaker countries. The exporting of financial tricks
has become the calling card of US and UK banks
as they tricked the gullible Continentals to buy their
fake paper.
If a country has a law that protects its towns from those
rapacious bankers, then that country is aware that its
bankers are immoral pirates.
In this case, the towns of England have a
get out of jail free card
in the form of a law that protects them from London
banks and their tricks.
Unfortunately, lesser countries cannot be saved by this
Unfortunately, lesser countries cannot be saved by this
law, so the London banks are free to trick and enslave
any country they want/
Checkit:
Syriza,
Greece and Government debt cancellation.
Could it happen here in the UK?
Posted
on February 8, 2015 by joelbenjamin5 —
4 Comments ↓
As the
newly elected Syriza Government make overtures to the so-called Troika of the
ECB, EC and IMF on debt restructuring, one thing is increasingly clear.
Elites
in the UK and across Europe appear deeply uncomfortable the neoliberal logic of
the “free market” is being questioned by a democratically elected Government,
freely expressing the will of the long-suffering Greek people.
For
those who sat through the car-crash Emily Maitlis interview for BBC Newsnight –
accusing the Greek Finance Minister Yanis Varoufakis of “sabre rattling” for
daring to renegotiate Greek debt, the hostile tone that greets BBC guests bold
enough to question the ‘neoliberal consensus’ is quickly apparent.
London
remains, the most important financial centre on the planet. The City of London
effectively writes its own policy and regulation. Through The City UK, the
British Bankers Association and HSBC’s Rona Fairhead, it pulls the strings of
the BBC.
For
the most part, the three major UK political parties simply nod along with this
charade, collecting their cheques.
For
people watching events unfold from the UK, the notion a tiny sovereign nation
like Greece, tied to the fiscal straight-jacket of the EU, could take on the
ECB, The City of London, Deutsche Bank and Angela Merkel, oppose the ‘fiscal
water-boarding’ of austerity and win seems absurd.
As a
nation governed in the interests of the City of London, do the UK media ever
stop to question the legality and legitimacy of Greek bank debts? 90% of the
Greek “bailout” loans have gone straight to French and German banks!
Greek
Debt Bondage
For a
creditor nation such as the UK, the morality of “paying ones debts” runs
strong. Yet look carefully at our own financial history and you will find
precedents where the UK has defaulted on its debts – much like Greece seeks to
renegotiate now.
One of
the more outlandish, yet poorly known examples of UK default is a landmark 1989
legal battle between Hammersmith and Fulham Council vs the American banking
behemoth Goldman Sachs.
137
Councils including Hammersmith had been encouraged to enter into multiple
“interest rate swaps” – where the council exchanged floating interest rates
with a bank, for the “security” of a fixed rate. Or so they thought.
In the
fish hooks of the contracts, the bank would pay Hammersmith if interest rates
increased, while Hammersmith would pay the bank when rates fell.
Hammersmith,
the largest player in the interest rate swaps market had signed hundreds of
swaps contracts placing UK taxpayers on the hook for $9.5billion in potential
losses as interests rates moved against the council in favour of Goldman Sachs.
Terrified
council executives were quickly phoning the Audit Commission, Big Four
Accountants and City law firms for expert advice as to their options to
extricate themselves from a growing budgetary black hole.
This
sordid tale of local government incompetence, predatory bank lending and UK
Government legal chicanery, is craftily retold by Duncan Campbell Smith in
“Closing the Swaps Shop.”
UK
Government as the “lender of last resort” to councils via the Treasury Public
Works Loan Board (PWLB) took a keen interest in the case, as the debts mounted
and council defaults and Government bailouts to pay the banks became a
realistic proposition.
The
case was further complicated because some councils had “guessed right” with
their interest rate bets, and were profiting handsomely from the trades, whilst
others, such as Hammersmith taxpayers faced a potential bill of some 6.2
billion!
Ultimately,
the matter was decided in the UK High Courts, were QC’s scouring over the fine
print of the 1972 Local Government Act ruled that councils entering into
stand-alone swaps and derivatives contracts was “ultra-vires” or outside of the
councils legal powers. Whether the British courts would have reached the same
conclusions were it Greek and not British taxpayers on the hook remains a moot
point.
In the
Hammersmith case, UK High Courts ruled it was not council’s role to be
speculating upon interest rates, and taxpayers should not be held liable, much
to the anger of bankers in Wall Street and the City of London.
However
take a look at the “devils derivatives” deal handed down by Goldman Sachs to
bring Greece into the Eurozone and this is precisely what has happened there.
Far from having the offending contracts “invalidated” by the EU courts, Greek
taxpayers were left on the hook for the full amount of debt – largely owed to
German and French banks.
The
same story has played out in Italy,
Spain, Germany and France where London based banks have systematically mis-sold
swaps and derivatives contracts to bumbling and inept Government officials,
too lazy or corrupt to ask proper questions.
In the
Hammersmith and Fulham case, the interest
rate swaps contracts were invalidated, the British taxpayer and Government
spared. Currently however, UK taxpayers
are on the hook for £300 billion+ in PFI contracts and LOBO loans at
councils like Newham, which feature interest rate derivatives similar in nature
to those featured in the infamous Hammersmith deal.
Before
passing judgement on the “lazy Greeks” as characterised in the right-wing
British press, UK citizens would be well advised to survey our own back yard
for odious bank debt, and to revisit the Hammersmith test case and reflect upon
the likely implications had the full terms of billions of pounds in swaps
contracts been enforced by UK courts, with UK taxpayers ultimately liable.
