Taming the financial giants
The topic of greening the economic and financial system is broad and daunting. However breaking it down into a few key questions can highlight the steps that we as Greens must urgently take to reign in the financial industry.
In the dismal reality of the deepening financial crisis in the European Union, exploiting the natural environment is seen by troubled member states as a quick-fix solution for rapid economic recovery. Following decades of massive spending on an unsustainable economic and development model, the EU’s policy response is essentially a recipe for a much deeper and longer-term environmental crisis.
Author of the famous slogan "We are the 99%" and linchpin of the "Occupy" movement, David Graeber is currently one of America’s most popular critical intellectuals. A self-described anarchist, this anthropologist has been combining political militancy with a prestigious academic career. Graeber was in Brussels last October at the invitation of the Committee for the Cancellation of Third World Debt to present the translation of his latest book: Debt, the First 5,000 years .
The ongoing crisis, caused by excessive global debt, saw only financial institutions being protected. For life to come before debt we need to build an alternative to this out-of-control financial system.
In Autumn 2013 the Green Party of England and Wales voted to adopt a motion that would remove the power of banks to create money, and return that power to a democratically accountable part of the state. But what is money? How do banks create it, effectively out of nothing? And why is reforming money and regulating finance so important for dealing with the big social and environmental issues we're facing today?
The analysis and publication by journalists of previously confidential data from known tax havens – widely known as “Offshore Leaks” - has excited media interest around the world. However, one important aspect was not addressed by the media: not only do tax havens lead to the loss of tax revenues and enable capital flight and money laundering, but they were also a major contributory factor to the financial crisis of 2007/2008 and continue to jeopardize the stability of the financial market
If we want to put finance on a leash with smart regulation, Greens must take the wind out of their opponent’s sails by having policies that simultaneously unleash finance and restore lending into the real economy and, above all, into a green industrial transformation.
The idea that the peripheral countries were the authors of their own destruction continues to exist at European level. However a closer examination of the facts shows this is not the case, and an urgent reprioritisation of EU policies is needed.
While progress towards a more resilient financial system has undoubtedly been achieved at EU level, it remains nonetheless much too incomplete. The challenge is all the more significant as our system, more than ever, remains dominated by banks that are too big or too interconnected to fail and therefore too dangerous to exist.
Thanks to the action of the Greens/EFA Group in the European Parliament some holes have been opened in the mainstream orthodoxy. But we are far from being protected from another systemic crisis. The financial sector continues to blackmail governments and traditional parties. Taxpayers are still paying for the mistakes of the banks. This is an interview with Philippe Lamberts, Green MEP and member of the Committee for Economic and Monetary Affairs, who along with his colleague Sven Giegold, is one of the main actors in the struggle against mainstream financial orthodoxy.
It is no secret that the lobbying might of financial institutions has shaped regulatory rules at national, European and global level. But did the disaster of the 2007 financial crisis change this? The honest answer is that the old institutions are still up to their old tricks, and a change in how we make policy is needed if we are to avoid a repeat of the crisis.
The lessons of the last crisis always seem to be forgotten, and the financial world continues to grow and pose a risk to economy and planet. We Greens must marshal all our energy and ideas to reign it in.
Over the past decades, markets have invested in damaging industries such as fossil fuels and financial speculation. This has contributed to unsustainable development, and may well be creating an enormous ‘carbon bubble’. However there are steps we can take to stop this bubble turning into another subprime-style crisis.