The ECB conducts in fact not only monetary policy, but also economic policy (for which it has no mandate) when it demands from governments „fiscal consolidation“ and „structural reforms“ – and that in a neoliberal sense, because it follows the rationality of privatization, social spending and wage cuts – with the general effect to preserve the „one percent's“ interests; their wealth, incomes and power positions. Much of it the ECB does in context of a global, ex-Eurozone competition – which has its own logic with the aim of keeping long-term competitiveness for the Eurozone.
However, these policies find themselves in a global downward spiral for the lowest social, ecological and wage standards. This policy doesn't find a solution for not only the Eurozone, but also globally, on how to stop this downward spiral, which leads to further depreciation of social and ecological standards, thus leading to ever more destruction of the social balance and the environment worldwide. In that sense, the ECB is acting in accordance to neoliberal anti-social and anti-environmental thinking and policies. It became most evident in the Troika-policies, which led to destructive social developments in many European countries.
Increasing global indebtedness and central bank liquidity flooding
It was not necessarily the ECB which started the expansionist monetary policy after the outbreak of the biggest financial crisis after the 1930s. But sooner or later also the Eurozone will have to devalue its currency in one way or the other, concerning exchange rates, in order to support its internationalized real economy.
Thus, it follows a methodology of many central banks and governments: to monetarize its debt by printing new cheap money. And those who benefit from that are the money-creating institutions – banks: another way for them to increase capital and counter their bad assets in their balance sheets.
You all know that this long-term low interest money printing will be a source of the next financial crisis; of the next asset price bubble. And who would deny that we already have price appreciations, not only in stock, but also in many commodity and real estate markets, which have already a negative social impact. Even the Bank of International Settlement (BIS) has pointed to this issue.
And instead of trying to raise further growth potentials – for which there are ever less human and natural resources on this planet that can be exploited without destroying the global social and natural basis completely (especiall not with neoliberal policies) – one should think about a massive global-scaled debt and wealth cut!
It would be sure a huge task to balance out all or most global debts and claims – but is it impossible? And what, if you don’t do this? Keep going on the way it is? Exploiting and destroying more and more of the planet’s life – even by another world war? Are there crazy people hoping to write-off all foreign debt and raise new growth potentials after a destructive war? If there are such people, they must be stopped under all circumstances. It is also you, your family, friends and children who will suffer from that. You would never want that.
Think about how to technically balance and cancel out most or even all the global debt and claims in a way that a just social balance can be regained within societies and amongst all planetary societies. Think also about if after that, we want to reset the same old capitalist monetary system, where money is primarily created as interest-bearing debt out of thin air by private banks, giving them their comparatively large power and „systemic relevancy“.
Aren’t there much better alternatives how to run an economy to meet the needs of the people and a sustainable environment? There are many alternative economic models out there, which guarantee much more social balance amongst people, ecologic sustainability and freedom of the individual.
Fiat-Money creation of private banks, role of central banks and alternatives to that
The EOCB and Occupy groups elsewhere have criticized the Fiat-money creation systematic by banks and the problem, that all the money (the standard currency) is issued as interest-bearing debt. (At this point it should be made clear once and for all that money/credits are not lent-out deposits, as it is widely believed – in fact, the fiat-created loans become deposits when transferred onto a bank account.) The almost unlimited money printing (reserve ratio of just 1% in the Eurozone) and leveraging practices enable banks to expand their balance sheets almost limitless, so that they become unreasonably huge in comparison to real economy enterprises, governmental budgets or state finances in general.
It is immoral to create money out of nothing and lending it out as it had been „earned“ with effort-giving by the banks, when in fact just some numbers were typed into a computer, then demanding relatively high interests on it, and in case the credit cannot be paid-back giving the banks the right to seize one's property. It is especially immoral and contradictory from a democracy-regulative point of view. Private banks are not democratically legitimized or controlled and are not oriented for the common welfare, but for private shareholders' profits – and they had been allowed to become so large, uncontrollable, diminishing the power of political institutions.
Why do these entities have such a fraudulent privilege. Printing money out of nothing, putting it into circulation and earn the seigniorage is – if not done by banks – a crime. Why do banks have such a huge source of power in our societies. Not even the states, the governments have these privileges. Besides problems that governments are not free from lobby corruption, you could at least argue that they are societal institutions, which are somewhat democratically legitimized and which have the legislative power – the primacy of politics – and that they should act in a way to limit this regulative, systemic power of banks.
It would be even in the interest of governments, if they would regulate the monetary system in a way that stops the Fiat-money creation of banks and reduces their relative power and enables the states (not necessarily the state's executive branch; the government) to issue money in a way, where there is no need to pay interest to private investors – and thus cancel out also the debt-burden, which arises out of the need that states need to pay interest when printing money via government bonds issuance. This would also solve in the long run the whole problem of sovereign debt and its increases.
There are already many alternative currency models discussed not only in protest movements, but also in political, regulative and scientific forums. On the state level, a concept of a full-reserve money model should solve many of the above mentioned problems. And an alternative state currency model must also change the role of a central bank. The central bank could be the sole money-creating institution. It could bring new money into circulation not via banks, but by itself or sub-branches, through public investments via governments, or even by per-capita grants (not loans) – and that with practically no interest.
The benefits would be: better inflation/deflation control by the central bank (since it controls all the circulating money); preventing extreme credit-cycles/volatility and thus financial crisis; lower interest rate levels – thus less economic growth and profit requirements; elimination of the „systemic relevancy“, the inappropriately large power banks; a great solution to the sovereign/public debts and their increases; a return of power to political institutions (governments) which are formally much better democratically legitimized than banks; more public money for social and environmental issues.
This suggestion has been made by the EOCB already almost three years ago. For further references please check for instance initiatives, papers and concepts like/of:
ü IMF working paper („The Chicago Plan revisited“)
ü Thomas Mayer (former Deutsche Bank chief economist, now professor at Goethe-University, lectures under „Order of Money“)
Alternatives for the common people
This above suggestion is just one in context of „revolutionary“ alternatives. They accept the role of institutions like central banks, governments and even banks. However, if these institutions and the legislator is unable to conduct a reform process that eliminates (besides other issues) the worst aspects of the monetary and banking systems, then the people are called up to conduct by their own societal changes, that leads to better; more socially balanced and environmentally sustainable socio-economic structures.
In fact, despite of many of such existing alternative economic models and their propagation, political and economic elites are unwilling to raise up these issues, because of whatever reasons – may it because of ignorance and unwillingness to understand that humanity is in desperate need to implement a post-capitalist economy, or may it be that the elite power institutions are corrupted that much, that they want to preserve their power and do not want to step into such a process.
The alternative models are based less or not on national/state level, but more on a local-regional level; ones that do not include existing political and economic institutions, but institutions and structures that would be set up by the people, who have stepped into a progressive revolutionary process „bottom-up“, by themselves.
These include models of barter trades; local-regional currencies that may have a demurrage and no interest rates; sectoral currencies that do not need money; open-source economy principles that reduces technology-suppressing patents and current paradigms of private property; agricultural and communal living models, that allow condition-free food and housing minimum standards, environmentally-friendly agriculture and manufacturing methods and a social environment that fosters the development of the individual's creativity, social participation, freedom and means to pursue happiness.
These models are oriented alongside principles of sufficiency (especially in regard of environmental aspects) and aims a maximum grade of subsistence – in order to become free of large governmental and corporate driven social and environmental exploiting structures, and make them as much as possible obsolete.
Message to the „1%“
This process, governments and corporations may try to prevent or even destroy in one way or the other, but they will not succeed in that in the long run. First of all, they have no moral arguments on their side, since they are in effect the responsible institutions for world-wide social and environmental deprivation and destruction. Secondly, they would need to impose ever more authoritative and fascist-like policies to prevent such an „uprising“ of the people. Who can agree to that from a humanistic point of view. And what do they – the people who run these institutions – win in the end: a socially and environmentally destroyed planet in which even they and their children cannot live a human life.
The message to them would be: Even you, the „1%“, cooperate in transforming the planet to a better, a human place for us all, the „100%“ – or we, the „99%“, will conduct the change without you. And you are always invited to join us in that process, because we also want a better world for you – it is in the end also in your interest. And with your cooperation we foster this transformation quicker than if you unnecessarily fight us.
Don't believe that letting loose your power grip and material wealth will deprive you from the meaning of your life. It is the opposite: joining the people on basis of human solidarity, justice and mental freedom from materialism will give you human freedom in the broadest sense and the positive recognition from the people. And you will be assured that also your children will have a human future on our planet. You'll be living much happier with that.
You, who read this – you are not primarily the functional role of your profession or company etc., but a human being and part of our world society. Change your priority of what is important in what you think and do: Think of the planet and the people first – it is much more important than what your boss, company, government wants from you. And try start to believe in the people's ability of forgiveness, friendship and universal love.