Stefano Lepri interviewed Joseph Stiglitz for the Italian magazine Il Granello I gave Sabbia
European Union: the big finance prospers with the disaster that they have created themselves.
“There is an absurd paradox – enfervoriza Joseph Stigliz, Nobel Prize winner of Economy 2001 – an irony of your European history: Do not they realize? The governments have contracted many debts to save to the European financial system, the central banks keep the money-market rates low to help them to recover, not to favor the recovery. And: what does the big finance do? They use the low money-market rates to speculate against the indebted governments. They manage to keep on gaining money on the disaster that they have generated themselves”
What can happen now?
“Wait. This does not end here. The governments decree austerity measurements to reduce the indebtedness. The markets think that they are not sufficient and keep on speculating with his qualifications about the casualty. This way the governments turn out to be forced to add austerity measurements. The common people lose moreover, the big finance wins even more. Moral of the fable: prize-winning culprits, punished innocent persons”
How is it possible to remedy?
“Three points, first: nothing of money for the speculation. Both in the USA and in Europe, the banks need new norms. They must finance the productive companies, not the hedgefunds. It is necessary to prevent them from speculating”.
A word. If the government is who is going to direct the credit, there will run the risk that it is even worse distributed
“I do not believe it. In my opinion one can and it is necessary to intervene. Second: it is necessary to impose very high tax valuations to the capital gains. Nowadays to live turns out to be more profitable to speculate than to work. It must be again the other way round”.
And later?
“Third: in Europe you must support the governments in difficulties”
There runs the risk of rewarding the politicians who govern badly...
“Not. The test is Spain. At present it is in difficulties without having committed errors. The governmental balance was positive until last year; the central Bank supervised very well to the banks, so it is so it was quoted like a world example. What fault do they have? It is true that also they saw the bubble growing on the real estate market and stopped it. But it is the error that they all committed. It was in the spirit of the moment. It was inspired by the neoliberal ideology that has dominated per years.”
In Greece nevertheless there is miss. They even have falsified the accounts.
“Not the current government, but the precedent. They suffered the crisis of the commercial navigation, a very important sector for they and the fall of the tourism, in synthesis: Why must we force the people to realize more sacrifices if it is not guilty?”
The debt is. The States, sooner or later, will have to pay it.
“But: Why must we always give more facility to the markets? The markets do not behave rationally, we have seen it for the way in which the crisis took place. Then: Why should they be right on having asked the citizens of those countries for more sacrifices? And although they had it they behave in a too erratic way. And to end, here a speculative attack is in progress, it is not that if one behaves well they do not blame it but if they can leave you out, they leave you”
What can we do in Europe?
“They must construct solidarity mechanisms between the States. The Union should have more resources. A heap of money wears out in the common agricultural policy that is a waste while …”
It might invest in European qualifications, the Eurobonds
“Certainly. And also it is necessary to put imposed on the harmful activities. Especially to two: the finance and the emission of carbon dioxide. In the USA also”
Will it achieve Obama to be imposed to the banks?
“It will be a long battle. But the people have row great and the president knows it. The bankers have the whole population in his against”
The Congress is reluctant
“I hope that it should not be necessary to come to another crisis before it is possible to put to the finance under control. It would be really sad. Think about all the damage that they have caused. Do you know that according to the estimations of the CBO, Office of Balances of the Congress, the unemployment will begin to diminish only to half of the decade? These are things that the people keep on remembering for the long time.
Joseph Stiglitz was a Nobel Prize winner of Economy in 2001.
Translated for www.rebelion.org for Susana Merino
Il Granello di Sabbia, March, 2010
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