Once again, despite all the misleading statements? The G-20 meeting was
useless. The summit gathered in Canada was supposed to address two major
topics: the regulation of the financial system and the reduction of the
public debt.
And in fact, on these subjects, no decision has been taken. First, on the
banks, no agreement has been reached on any subject, neither on banking
regulation, nor on banking tax regulation, or on banking reserves, or even
on their accounting practices.
Then, on deficit reduction, we only managed to repeat a commitment already
made separately by each country (to reduce by half the budget deficit) which
is very far from being sufficient and will not be followed through anyway.
We could not expect something better, the G-20 has no power; they cannot
impose any global rule; they do not even agree on the way to define concepts
or to make decisions. And as in any meeting not obeying the rules, it is the
strongest who prevail. And here, the strongest are the Americans and the
Chinese, who have agreed not be forced to be imposed anything whatsoever.
The Americans obtained to continue to make the dollar the main currency of
reference, to borrow from the whole world without ever having the intention
to reimburse anyone, and that nobody gets involved in their tax havens.
The Chinese have obtained that we criticize neither their exchange rate nor
their exporting policy, or the weakness of their domestic consumption. And
that we do not impose any monitoring on their financial markets and tax
havens.
The Europeans, divided and without a strategy, allowed themselves to be
given lessons of good management, allowed themselves to be told that the
Euro was very ill and allowed themselves to be imposed accounting rules for
their banks much more demanding than those Americans apply to theirs.
U.S. banks are thus the big winners of this fiasco for which they are
largely responsible: they will not be taxed and will keep the capitalistic
control of the clearing houses, where will have to be recorded the
derivative products and they will ensure alone the counterparty risk. They
will not even have to apply in the rest of the world, the new legislation
being debated in the American Congress, itself so full of exemptions that it
will allow banks to continue to speculate on stockholders’ equity on
derivatives products, on cross-currency interest swap and to monitor hedge
funds.
Everything happens as if Governments had decided not to master their
financial systems and resigned themselves to pass on the hand to the central
banks, obliged to supply all the necessary liquidity.
Nothing thus has changed since the first G-20. Day after day, democracy moves
back in front of the market. Day after day, a new financial crisis is under
way, which would come to ruin all the efforts made to reduce budget
deficits.
And after? What will we do? Well nothing, of course, but have the taxpayers
pay. We have seen revolutions occur for less than that.