EIR puts Glass-Steagall bank separation on the agenda at EU Economic and Finance minister meeting, Copenhagen, March 30, 2012

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The European Union Economic and Finance Ministers held an informal meeting in Copenhagen on March 30-31, 2012, where EIR put the need for a Franklin Roosevelt-style Glass-Steagall bank separation law on the agenda, at the evening press conference, and in interviews with several of the ministers.

Transcripts of the interviews, conducted by EIR correspondent Michelle Rasmussen, are found below the videos.

1. Evening press conference with EU Commissioners Olli Rehn (Economic Affairs) and
Janusz Lewandowski (Budget), European Central Bank executive
board member Jörg Asmussen, Danish Economic Minister Margrethe
Vestager, and the moderator, Danish EU diplomat Preben Aamann.
 

EIR's Glass-Steagall question starts at 1:16 minutes, which the speakers decided to leave unanswered:

 

 

 2. EIR's Glass-Steagall question to Italian Deputy Finance Minister Vittorio Grilli

 

3. EIR's Glass-Steagall question to Swedish Finance Minister Anders Borg

 

4. EIR's Glass-Steagall question to Danish Finance Minister Bjarne Corydon: EIR asks the second question on the audio file.

mp3   ipod m4a

 

5. EIR's question about referenda on the EU's Financial Pact to Danish Economic Minister Margrethe Vestager: starts at 1:06 minutes

 

 

 

EIR stellt EU-Finanzministern die Trennbanken-Frage i Neue Solidarität 11. april 2012, German translation of the article found below

Article including transcripts of the above questions and answers:

Glass-Steagall Put on the Agenda at the EU Economic and Finance Minister Meetingin Copenhagen

By Michelle Rasmussen

COPENHAGEN, April 2, 2012 -- Amidst the accelerating European-centered collapse of the international economic and financial system, the 27 European Union Economic and Finance Ministers held an informal meeting in Copenhagen on March 30-31, 2012, where EIR put the need for a Franklin Roosevelt-style Glass-Steagall (GS) bank separation law on the agenda.  French presidential candidate Jacques Cheminade’s call for a GS law, the GS law proposal in the Italian Senate, and the motion to investigate a GS law in the Swedish parliament, were directly brought up to several economic and financial ministers, EU commissioners, a European Central Bank board member, and the international press.

Video and audio coverage of EIR’s question at the evening press conference, and short interviews with four ministers, may be found at: http://schillerinstitut.dk/drupal/node/582

At packed Friday evening press conference, EIR was called on to ask one of the six questions, after a question about the minister’s decision to add virtual bailout money their “firewall”:  

EIR: I want to ask about a different kind of firewall. French presidential candidate Jacques Cheminade is calling for a Franklin Roosevelt-style Glass-Steagall bank separation, to stop the government bail out of the gigantic speculative bubbles, and other French candidates are also supporting bank separation. There is a law proposal in the Italian Senate for a Glass-Steagall bank separation, and it is also under discussion in the Swedish parliament. Would you consider Glass-Steagall, instead of brutal austerity, and hyperinflationary bail outs?

The question, grouped with two other questions, was simply ignored by EU commissioners Olli Rehn (economic affairs) and Janusz Lewandowski (budget), European Central Bank executive board member Jörg Asmussen, Danish Economic Minister Margrethe Vestager, and the moderator, Danish EU diplomat Preben Aamann.

Two journalists, from China and Italy, with whom EIR had discussed Glass-Steagall beforehand, came up and expressed their astonishment that the question was not answered.

Whereas the EU/ECB representatives may have ignored the question, it was sent live on the EU Danish presidency’s homepage http://eu2012.dk/en homepage, where it is also archived, and was heard by the international journalists.

(The press had expectedly awaited the press conference, as the noon press conference had been cancelled after Euro Group chairman Juncker had stormed out of the conference center, because he had been upstaged by the Austrian minister, who pre-announced the wall of money illusion.)

In addition to the press conference, several ministers came by the press center to answer questions. When Italian Deputy Minister Grilli’s spoke to the Italian journalists, EIR asked:

EIR: There is a resolution [actually, a law proposal-mr] in the Italian Senate for a Glass-Steagall bank separation, which is also being proposed by French presidential candidate Jacques Cheminade, and many others. What do you think about dividing up, so the government does not have to cover the speculative debt?

Italian Deputy Minister of Finance Grilli: Well right now, it is not in the forefront of the discussion in our government - a Glass Steagall kind of decision, right now.

EIR asked Swedish Finance Minister Anders Borg about the motion in the Swedish parliament when he came to the press center:

EIR: There is a discussion in the Swedish parliament -- two parliamentarians have proposed an investigation of a Glass-Steagall firewall, to divide up the commercial banks from the investment banks, so that the government would not have to cover the speculative investments. What do you think about taking this up?

Swedish Finance Minister Anders Borg: We have four major banks, and it's quite clear that all of them are systemic, so it would not be possible to improve the situation with such a division. They would remain, in a sense, still on the public balance sheet. What is most important for us, is that we would take over the banks, and dilute the shareholders, and take over the banks. And if you do that during a crisis, you normally can resell to the market with a decent profit for the taxpayers, but then, you must be ready to take over the bank.

EIR: But also for the other European countries - that much of the sovereign debt has been caused by bank bail outs.

Borg: Yes, but a much more efficient way to deal with it is to do what we did in the Swedish bank crisis, and just take over the banks. They're almost always close to worthless when they are in a crisis, so you can buy them very, very cheaply. We took over one bank for just a dollar, and that is a bank that is today worth many billions.”

Minister Borg’s Swedish model is no replacement for GS, because it means that the government is stuck with the losses of the banks surpassing the owners share. This is what happened when the U.K. nationalized RBS, Lloyds and Northern Rock, creating huge losses for the government.

While Danish Finance Minister Bjarne Corydon did not attended the EcoFin meeting, because the Danish Economy Minister did, he came by the press center to answer questions. EIR brought up GS, which became known in Denmark when the Friends of the Schiller Institute campaigned for it during the November parliamentary elections, with very visible GS posters up in the three largest cities.

EIR: There have also been proposals, instead of a massive firewall, as the head of the Bundesbank actually called it a “Tower of Babel,” but there have also been proposals for a Glass-Steagall division of the banks, where the governments would only have the responsibility of protecting the commercial banking, and the investment banking would be totally…

Corydon: [inaudible]

EIR: Yeah, and what do you think of this as an alternative to the idea of either hyperinflationary blowout or massive brutal austerity? … There’s another idea of firewall, between the commercial and the investment banking where the government does not get forced to have austerity and hyperinflationary bailout, but can actually then start concentrating on financing the productive economy.

Danish Finance Minister Bjarne Corydon: Yeah, but I am aware of these ideas. Of course they are interesting. But I have not been a part of the discussion today on these issues, and, though you might work on them, I think that firewalls of the kind of that we had today will still be necessary.

In addition to GS, EIR also asked a question about the possibility of EMS Pact referenda, which BüSo chairwoman Helga Zepp-LaRouche has called for, when Danish Economic Minister Margrethe Vestager, held a briefing at the press center.

EIR: There has been a discussion in Germany that the EMS Pact is not according to the constitution, in terms of giving away sovereignty of the parliament. Would you support, and is there going to be discussion about having referenda throughout the EU countries on the EMS Pact?

Danish Economic Minister Margrethe Vestager: Well that being a completely internal affair in each country, because each country has to act according to its constitution. I don't think that's a question for the EcoFin (the EU Economic and Finance Ministers).

Thus, while the 27 EU economic and finance ministers spent time rearranging the chairs on the deck of the Titanic, the first step of a real solution, a GS law to eliminate the speculative iceberg, was counterpoised at the meeting.