The bank scandal which exploded with the “death” of four credit institutions (Cari Ferrara, Cari Chieti, Popolare Marche e Popolare Etruria) proves once more the criminal and false nature of capitalist system, and it shows how much governments and bourgeois political parties are working to serve speculators. They also put in evidence how the devastating effects of 2007’s economic crisis remain until today.
The “unfailing plan” of the government
With the decree of November 22nd, the government thought they had closed a minor financial crisis, avoiding it to take bigger proportions. The creation of a “sick bank”, in which uncollectible debts would converge (8000 million Euros, now devalued to 1700), and a new “bridge-bank” to include the “healthy” part of the Bank (avoiding to use public funds) seemed a great solution, but this “unfailing plan” passed the proof of reality only for a few hours.
More than a hundred thousand small savers became deprived from their life savings, literally overnight. What was their fault? Having signed subordinated bonds, that is to say: bonds with higher profits than usual, but also with higher risk to not receive their investment back.
The bank preys its depositors
During days, the government’s, major parties and most important newspapers advertising described a situation in which retired people, employees and workers were “greedy speculators”, who knew the risks they were facing. However, it was soon found out the information given by the banks was false, and they did not explain the real risks of this kind of investments. Even bank employees, in many cases, did not know the features of the investments they were proposing. They were driven by the Direction Board, aiming achieve their selling goals to increase their profits, and to take benefits out of these unscrupulous transactions.
Part of their financial retribution is directly linked to the budget execution, talking about banks’ productivity and profitability. By the way (as it is not the aim of this article), this is responsibility of bureaucratic trade unions, which over the years have signed working contracts in which this variable part of the retribution has increased gradually.
When the anger struck in protests in front of broken banks, and the news got to the front pages of the newspapers, television and talk shows, the government tried to justify this in a clumsy, tentative way. In just a few days it went from evaluating the government’s action as “favorable to the market” and respectful of market-laws (see Minister Padoan’s statement) to the promise of “humanitarian help” to recover at least a part of the demands of those who lost their savings.
A clash among thieves
The government defended itself, together with the Bank of Italy, accusing “Europe” of not allowing them to fully protect small savers. The Bank of Italy indirectly accused the government of not its voice loud in Brussels, and described itself as the only one fighting EU’s bureaucracy.
The European Union, annoyed, replied by charging all responsibility over Italy. Summarizing, the struggle for power between Europe’s and Italy’s ruling classes can be explained in a framework in which everyone is determined to protect the interests of its national bourgeoisies, or a sector of it, at the expense of their competitors and, in all cases, of the lower classes.
We should also add, the flexibility Renzi is asking to Europeans Institutions to his own interests was denied to Greece last summer when, in perfect harmony with Paris, Berlin and Brussels, they imposed Greek proletariat and workers a memorandum relying over a criminal, anti-workers austerity.
Always aiming to stop the growing people’s anger, the government tried to explain once again -without success-, ‘for the first time in history, the losses caused by private mismanagement are not being socialized’. In reality, things are not at all as explained by Renzi, Padoan and the undersecretary Zanetti (the latest was elected by the government to face the accusations against the Executive Power on the media). The 3,700 million the government is asking to the banks to save these four institutions in complete crisis will be deducted from “fiscal effects” (taxes) guaranteeing the saving of around 1000 million (at the expense of State Budget). Also, by selling the “healthy part” of the banks, and through credits included on the “sick bank”, all of it will be recovered, even with a profit percentage (this is because, of course, non of the found of these operations will be used to pay the small investors who were tricked into this).
The next gaps
The dangers, undoubtedly, go far beyond this specific case. Another two banks can be victims of this crisis: Veneto Banca and Popolare di Vicenza.
These banks orbit the center right-wing, unlike the first four, orbiting the center left-wing (in Popolare Etruria, Minister Boschi’s father occupied this position during eight months, assuming it right after his daughter was nominated; another proof of the combination of bourgeois political power and capitalist finances). What nobody says is these two banks (hardly) passed the liability soundness, implemented at a European level during fall of 2014. Today, the value of their actions has strongly decreased due to liability difficulties.
In addition, some newsreader mentioned, if we take as a reference the credit evaluations of banks about to break (reduced in about 80%), there would be 200,000 millions, in all banks’ sheets, in bad loans. A major gap would open from the balance sheets of the Bank System, at the risk of a new Lehman Brothers, with its known consequence (it was the failure of this North American Bank which opened the global recession we live in, nowadays).
The only real solution
So far, a few financial tricks and the policy of the European Central Bank, currently providing money for free to the Old Continent Bank, are allowing to sweep the dust under the rug. However, this will not last long, especially if the economy does drive to a powerful recovery. Nevertheless, to the misfortune of those vigorously defending this social and political criminal system, predictions go the other way around. We are getting closer to a new disaster of global proportions.
The solution is not to create new and “more strict” rules to avoid cases like these to happen again, neither to give more power to national or continental ‘supervisors’, or even pretend for research commissions (unicameral or bicameral) to finally make justice.
The nationalization without compensation of banks, the abolishment of bank secrecy, the creation of centralized credit institution under workers control, the expropriation of big companies which got richer through bank frauds: these are the true solutions we need. No reform or any kind of “control” can put an end to the crimes perpetrated in the name of profits, under capitalism. This is why only workers’ government which comes to power through a socialist revolution can actually give a real solution.
Translation: Mariana Soléo
Originally published in http://www.partitodialternativacomunista.org/ on December 16th, 2015.
