Do the Chinese know something more than the dogma driven financial markets and economists?

 

Debt-ridden Greece gets vote of confidence from China

• Chinese sign multibillion euro contracts with Greece
• News come hours after Greek debt downgrade

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• Helena Smith Athens
• guardian.co.uk, Tuesday 15 June 2010 19.15 BST
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Greece's prime minister George Papandreou welcomes Chinese vice-premier Zhang Dejiang who brought good news to the debt-ridden country. Photograph: Louisa Gouliamaki/AFP/Getty Images

Greece's debt-ridden economy has received unexpected endorsement from China as the two countries announced multibillion euro accords to boost cooperation in fields as diverse as shipping, tourism and telecommunications.
The deals, which will see Greek olive oil being exported to China, were a welcome relief for a government smarting over Moody's move hours earlier to downgrade the nation's credit rating to junk.
As investors moved in the other direction, the world's pre-eminent emerging economy embraced Greece. Signing the agreements, China's vice premier Zhang Dejiang not only lauded Athens' efforts to resolve its worst debt crisis in years but gave the eurozone's weakest link a public vote of confidence, declaring it would soon come out of the woods.
"I am convinced that Greece can overcome its current economic difficulties," said the politician who arrived in Athens with 30 of the economic power's leading businessmen. "The Chinese government will encourage Chinese businesses to come to Greece to seek investment opportunities."
Greek officials said the fourteen deals amounted to the biggest single investment by China in Europe. China views Greece as a "perfect gateway" to the continent and Balkan peninsular where Chinese exports have proliferated in recent years.
Under the agreement, Cosco, one of the world's largest container terminal operators, will extend its reach with the construction of up to 15 dry bulk carriers in Greece. The company took over cargo management at Pireaus, the eastern Mediterranean's premier dockyard, on a 35-year concession worth $1bn (£680m) last year.
The Chinese construction company BCEGI also signed an accord, thought to be worth €100m (£830m), to develop a hotel and shopping mall complex in Pireaus.
Other deals include the exchange of know-how between China's Huawei Technologies and the Greek telecoms organization OTE and four agreements signed by food firms to export olive oil to China.
The Chinese are considering buying a stake in the loss-making railway network OSE, which the socialist government has pledged to privatise, as well as building an airport on the island of Crete, a logistics centre north of Athens and a marine theme park, according to Greek finance ministry officials.
"We have discussed other possible investments with them, notably in tourism and infrastructure," the deputy prime minister Theodoros Pangalos said after the signing ceremony.
The deals are all the more surprising because China's experience in Greece has not always been easy. Cosco's bid to take over the day-to-day administration of wharf services at the state-controlled port of Piraeus were initially met with fierce opposition from trade unions led by the ruling socialists. But since assuming power last October, prime minister George Papandreou has executed a U-turn as his government has desperately sought to attract foreign investment to shore up an economy close to bankruptcy.
The debt stricken country's economy has contracted visibly following a draconian austerity programme it has had to enforce as part of an unprecedented €110bn bailout from the International Monetary Fund and eurozone nations.
Cosco's chairman, Wei Jiafu, recently vilified in Greece, is now referred to affectionately by the local media as "Captain Wei." "We have a saying in China, 'construct the eagle's nest, and the eagle will come,'" he said during a visit to Greece last month. "We have constructed such a nest in your country to attract such Chinese eagles. This is our contribution to you."

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Why the Anglo American troops are bent on bringing democracy to Afghanistan?

 

Afghanistan's resources could make it the richest mining region on earth

By Kim Sengupta, Diplomatic Correspondent

Afghanistan, often dismissed in the West as an impoverished and failed state, is sitting on $1 trillion of untapped minerals, according to new calculations from surveys conducted jointly by the Pentagon and the US Geological Survey.


The sheer size of the deposits - including copper, gold, iron and cobalt as well as vast amounts of lithium, a key component in batteries of Western lifestyle staples such as laptops and BlackBerrys - holds out the possibility that Afghanistan, ravaged by decades of conflict, might become one of the most important and lucrative centres of mining in the world.


President Hamid Karzai's spokesman, Waheed Omar, said last night: "I think it's very, very big news for the people of Afghanistan and we hope it will bring the Afghan people together for a cause that will benefit everyone."


In Washington, Pentagon spokesman Colonel David Lapan, told reporters that the economic value of the deposits may be even higher. "There's ... an indication that even the £1 trn figure underestimates what the true potential might be," he said.


According to a Pentagon memo, seen by The New York Times, Afghanistan could become the "Saudi Arabia of lithium", with one location in Ghazni province showing the potential to compete with Bolivia, which, until now, held half the known world reserves.


Developing a mining industry would, of course, be a long-haul process. It would, though, be a massive boost to a country with a gross domestic product of only about $12bn and where the fledgling legitimate commercial sector has been fatally undermined by billions of dollars generated by the world's biggest opium crop.


"There is stunning potential here," General David Petraeus, the US commander in overall charge of the Afghan war, told the US newspaper. "There are lots of ifs, of course, but I think potentially it is hugely significant."


Stan Coats, former Principal Geologist at the British Geographical Survey, who carried out exploration work in Afghanistan for four years, also injected a note of caution. "Considerably more work needs to be carried out before it can be properly called an economic deposit that can be extracted at a profit," he told The Independent. "Much more ground exploration, including drilling, needs to be carried out to prove that these are viable deposits which can be worked."


But, he added, despite the worsening security situation, some regions were safe enough "so there is a lot of scope for further work".


The discovery of the minerals is likely to trigger a commercial form of the "Great Game" for access to energy resources. The Chinese have already won the right to develop the Aynak copper mine in Logar province in the north, and American and European companies have complained about allegedly underhand methods used by Beijing to get contracts.
The existence of the minerals will also raise questions about the real purpose of foreign involvement in the Afghan conflict. Just as many people in Iraq held that the US and British-led invasion of their country was in order to control the oil wealth, Afghans can often be heard griping that the West is after its "hidden" natural treasures. The fact US military officials were on the exploration teams, and the Pentagon was writing mineral memos might feed that cynicism and also motivate the Taliban into fighting more ferociously to keep control of potentially lucrative areas.


Western diplomats were also warning last night that the flow of money from the minerals is likely to fuel endemic corruption in a country where public figures, including Ahmed Wali Karzai, the President's brother, have been accused of making fortunes from the narcotics trade. The Ministry of Mines and Industry, which will control the production of lithium and other natural resources, has been repeatedly associated with malpractice.


Last year US officials accused the minister in charge at the time when the Aynak copper mine rights were given to the Chinese, Mohammed Ibrahim Adel, of taking a $30m bribe. He denied the charge but was sacked by President Karzai.


But last night Jawad Omar, a senior official at the ministry, insisted: "The natural resources of Afghanistan will play a magnificent role in Afghanistan's economic growth. The past five decades have shown that every time new research takes place, it shows our natural reserves are far more than what was previously found. This is a cause for rejoicing, nothing to worry about."


According to The New York Times, the US Geological Survey flew sorties to map Afghanistan's mineral resources in 2007, using an old British bomber equipped with instruments that offered a 3-D profile of deposits below the surface. It was when a Pentagon task force - charged with formulating business development programmes and helping the Afghan government develop relationships with international firms - came upon the geological data in 2009, that the process of calculating the economic values began.


"This really is part and parcel of General [Stanley] McChrystal's counter-insurgency strategy," Colonel Lapan said yesterday. "This is that whole economic arm that we talk about but gets very little attention."

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Mumbai's rail toll tops Bhopal

  S A Aiyar,  13 June 2010, 05:32 AM IST


An outpouring of anger and passion has greeted the conviction of seven former Union Carbide officials for negligence in the Bhopal gas disaster. This caused the immediate death of 3,787 people, and the ultimate death of 15,000 to 20,000 people whose lungs were corroded by the gas.

If this anger and passion results in greater safety and accountability, India will be a more humane and just country. The chances of this happening are zero. India remains basically callous and unaccountable. Tragedies greater than Bhopal are constantly ignored and dismissed as "chalta hai."

Consider Mumbai's suburban rail services. Activist Chetan Kothari used the Right to Information Act to get data on people killed in Mumbai by the Central and Western Railway, which run through the city. Answer: 20,706 people have been killed in the last five years. This is six times as high as Bhopal's 3,787 immediate fatalities and higher than even the long-term fatalities estimated at 15,000-20,000.

On average, over 10 people die every day! If Maoists or Islamist terrorists kill 10 people, that is regarded as sensational news. But if the Mumbai rail system kills the same number every day, it is not even considered news. 

The information obtained by Kothari pertains to just five years, and to just one tiny part of the railways.  Fatalities across the railways for the last two decades could run into lakhs or the equivalent of five or six Bhopals.

A similar RTI exercise is needed for people killed by state electricity boards through uninsulated, loose and dangling electric wires. One estimate of accidental electrocution deaths in the 1980s was more than 3,000 per year. It is probably higher today. Again, this amounts to several Bhopals over the years. Here again we see no public outrage, only "chalta hai".

The Times, the British newspaper, used the RTI to get a break-up of Mumbai fatalities. In 2008, 3,443 out of 4,357 fatalities occurred when trains mowed down people crossing the tracks. As many as 853 fell off or were thrown off moving trains. Another 41 were hit by trackside poles while hanging out of doors, and 21 were electrocuted by overhead wires while travelling on the roof.

Cynics will say this is different from Bhopal: those crossing the tracks and riding on roofs were breaking safety regulations and exposing themselves to danger. But in Bhopal too, the Union Carbide plant was located outside the town, and illegal shanty-towns came up around it, violating safety and urban laws. Does that lessen criticism of the gas leak?

Union Carbide was lambasted for not using the best technology available to avert risks and deaths. But do we castigate the railways for not investing in the best safety technologies, and creating barriers to stop people from crossing the tracks? Union Carbide was slated for negligence in a shutdown plant. But the railways continue to be negligent year after year in a running organization that runs down people.

Many of us howled for justice after Bhopal. Many demanded the arrest of Union Carbide chief Anderson. Those convicted last week included Keshub Mahindra, the non-executive chairman with a largely ceremonial position. How many of us have demanded even the dismissal, let alone conviction, of the railway staff, Railway Board members or railway minister for the continuing holocaust in Mumbai?  The non-executive head of the railways is, formally, the President of India. Has anybody demanded that Pratibha Patil be prosecuted for continuing railway deaths? 

Alas no. The public displays not the slightest concern about our dismal tradition of having unaccountable and unsackable government cadres, who remain in their jobs and get promotions despite the most outrageous negligence.

Let me cite a recent PTI report. "Negligence by railway staff caused nearly half of all train accidents in the country during the last five years, official data has revealed. Of the 1,034 train accidents that have happened during the period 2003-2008, 488 of them, which accounts for 47.2 per cent, have been attributed to negligence by the railway staff, joint director of the safety directorate of the ministry of railways J S Bindra said in reply to an RTI application."

There you have it, from the horse's mouth. Yet none of those yelling for the blood of Union Carbide staff are yelling for the blood of railway officials. And so railway negligence and deaths continue unabated.

NGOs and the media suffer from a terrible double standard. They will pounce on negligence by a multinational, and rightly so. But they act as though the public sector has a licence to kill. That is disgraceful.

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My own views - The BP Oil Spill - Classic case of Negative Externalities

By Girish Menon

BP's (British Petroleum) oil leak off the coast of Louisiana raises a great number of issues that are relevant from an economic point of view:

Firstly it is difficult to estimate what is the actual amount of oil leaking into the sea. Today BP says it is 40,000 barrels / day. So as a sceptic who does not believe company PR statements, it might be higher - how high one wonders.

Secondly, how does one measure the level of the negative externalities involved (Cost Benefit Analysis). The fishermen in a wide region have lost their livelihood, oil exploration on the coast has stopped - so oil workers from non BP firms have lost their jobs,the tourism industry in Florida has been affected. The damage to the ecological environment. The list goes on. Also how many years will it impact the environment is difficult to contemplate.

The ironic part of it was that until recently, BP not mindful of the externalities it has created was getting ready to pay £10 billion in dividend to shareholders. So, it goes to the basic point that BP's profits are high because its production costs never include the negative externalities it creates. And usually the public pays, for the profits of BP shareholders, with cuts in their services since the tax money may be used for cleaning up operations. A classic case of privatisation of profit and socialisation of cost. Similar to the bailout of banks some time ago.

Yet one of the causes of this accident could be inadequate regulation and the desire to cut costs. Health and safety regulation has often been criticised as increasing production costs of firms. Yet those who have blind faith in markets continue to insist on lesser regulation for these oligopolies.

The good thing is that the accident happened off the US coast and forced Obama to take notice. I say good because in 1984 there was the world's largest industrial tragedy in Bhopal, India caused by a now wound up US firm called Union Carbide. Those dead, in hundreds,were paid paltry compensation, the firm's owners have escaped and the place is as poisonous as ever. The Indian government has been bought over by the MNC, which was cheaper than paying for the externalities, and most managers of Union Carbide would die in their homes instead of going to jail for even one day.

So one could conclude that abnormal profits of most firms may include the negative externalities that they may have passed on to the tax payers of that country. Hence there is a greater need to redistribute this wealth.

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The oil firms' profits ignore the real costs

 

The energy industry has long dumped its damage and, like the banks, made scant provision against disaster. Time to pay up

George Monbiot

guardian.co.uk, Monday 7 June 2010 21.00 BST

Has BP ever made a profit? The question looks daft. The oil company posted profits of $26bn last year. There's no doubt that BP has been pumping money into the pockets of its shareholders. The question is whether this money is what the company says it is. BP calls it profit. I call it the provision the firm should be making against future liabilities.


Despite an angry letter from two US senators and a warning from Barack Obama about spending big money on their shareholders while nickel-and-diming coastal people, despite the fact that it has no idea what its total liabilities in the Gulf of Mexico will be, BP seems to be planning to pay a dividend this year. It's likely to amount to more than $10bn. As the two senators noted, by moving money "off the company's books and into investors' pockets", BP "will make it much more difficult to repay the US government and American communities".
Pollution has been defined as a resource in the wrong place. That's also a pretty good description of the company's profits. The great plumes of money that have been bursting out of the company's accounts every year are not BP's to give away. They consist, in part or in whole, of the externalised costs the company has failed to pay, and which the rest of society must carry.


Does this sound familiar? In the 10 years preceding the crash, the banks posted and disposed of stupendous profits. When their risky ventures failed, they discovered that they hadn't made sufficient provision against future costs, and had to go begging from the state. They had classified their annual surplus as profit and given it to their investors and staff long before it was safe to do so.


Last week the British government bumped into another consequence of failing to take future costs into account. Chris Huhne, the new secretary of state for energy and climate change, revealed that nuclear decommissioning liabilities will cost the government £4bn more than it was expecting to pay over the next three years. This will cancel out two-thirds of the vicious cuts the government has announced and swallow most of his department's budget. As Huhne pointed out: "It is a classic example of short-termism. I cannot think of a better example of a failure to take a decision in the short run costing the taxpayer a hell of a lot more in the long run."


The decommissioning costs imposed on society by nuclear power will be dwarfed by those that are imposed by the fossil fuel industry. They include, but are not confined to, the money that will have to be spent on adapting to climate change. The United Nations estimates this cost at $50bn–$170bn a year, but a report last year by British scientists suggested that this is around three times too low, as it counts only a small proportion of likely impacts.


The UN has hired the consultancy Trucost to estimate the costs dumped on the environment by the world's 3,000 biggest public companies. It doesn't report until October, but earlier this year the Guardian published the interim results. Trucost had estimated the damage these companies inflicted on the environment in 2008 at $2.2 trillion, equivalent to one third of their profits for that year. This too is likely to be an underestimate, as the draft report did not try to value the long-term costs of any issue except climate change. Nor did it count the wider social costs of environmental change.


A paper by the New Economics Foundation in 2006 used government estimates of the cost of carbon emissions to calculate the liabilities of Shell and BP. It found that while the two companies had just posted profits of £25bn, they had incurred costs in the same year of £46.5bn. The oil leaking into the Gulf of Mexico from the Deepwater Horizon well is scarcely more damaging, and its eventual impacts scarcely more expensive, than the oil that is captured by neighbouring rigs then processed and burnt as intended.


The total costs imposed by the oil companies, which include the loss of human lives and the extinction of species, cannot be accounted. But even if they could, you shouldn't expect the companies to carry them. They might be incapable of capping their leaks; they are adept at capping their liabilities. The Deepwater Horizon rig, which is owned by Transocean, is registered in the Marshall Islands. Most oil companies pull the same trick: they register their rigs and ships in small countries with weak governments and no international reach. These nations are, in other words, incapable of regulating them.


Flags of convenience signify more than the place of registration: they're an unmistakable sign that responsibilities are being offloaded. If powerful governments were serious about tackling pollution, the first thing they would do would be to force oil companies to register their property in the places where their major interests lie.


US lawyers are drooling over the prospect of what one of them called "the largest tort we've had in this country". Some financial analysts are predicting the death of BP, as the fines and compensation it will have to pay outweigh its earnings. I don't believe a word of it.
ExxonMobil was initially fined $5bn for the Exxon Valdez disaster, in 1989. But its record-breaking profits allowed it to pay record-breaking legal fees: after 19 years of argument it got the fine reduced to $507m. That's equivalent to the profit it made every 10 days last year. Yesterday, after 25 years of deliberations, an Indian court triumphantly convicted Union Carbide India Ltd of causing death by negligence through the Bhopal catastrophe. There was just one catch: Union Carbide India Ltd ceased to exist many years ago. It wound itself up to avoid this outcome, and its liabilities vanished in a puff of poisoned gas.


BP's insurers will take a hit, as will the pension funds which invested so heavily in it; but, though some people are proposing costs of $40bn or even $60bn, I will bet the price of a barrel of crude that the company is still in business 10 years from now. Everything else – the ecosystems it blights, the fishing and tourist industries, a habitable climate – might collapse around it, but BP, like the banks, will be deemed too big to fail. Other people will pick up the costs.


There is an alternative, but it is unlikely to materialise. Just as Norway has treated its oil money not as profit but as provision against a tougher future, so the governments in whose territories oil companies work should force them to pay into a decommissioning fund. The levy should reflect the costs that economists are able to calculate, plus a contingency for those we can't yet foresee.


This would outrage the oil firms, as it would render many of them unprofitable. But there's a simple answer to that: the money currently defined as profit is nothing of the kind.

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Irrational Optimism

A state-hating free marketeer ignores his own failed experiment to offer discredited theories riddled with blame-shifting and excruciating errors

George Monbiot

Brass neck doesn't begin to describe it. Matt Ridley used to make his living partly by writing state-bashing columns in the Daily Telegraph. The government, he complained, is "a self-seeking flea on the backs of the more productive people of this world … governments do not run countries, they parasitise them."(1) Taxes, bail-outs, regulations, subsidies, intervention of any kind, he argued, are an unwarranted restraint on market freedom.

Then he became chairman of Northern Rock, where he was able to put his free market principles into practice. Under his chairmanship, the bank pursued what the Treasury select committee later described as a "high-risk, reckless business strategy"(2). It was able to do so because the government agency which oversees the banks "systematically failed in its regulatory duty"(3).

On 16th August 2007, Dr Ridley rang an agent of the detested state to explore the possibility of a bail-out. The self-seeking fleas agreed to his request, and in September the government opened a support facility for the floundering bank. The taxpayer eventually bailed out Northern Rock to the tune of £27bn.

When news of the crisis leaked, it caused the first run on a bank in this country since 1878. The parasitic state had to intervene a second time: the run was halted only when the government guaranteed the depositors' money. Eventually the government was obliged to nationalise the bank. Investors, knowing that their money would now be safe as it was protected by the state, began to return.

While the crisis was made possible by a "substantial failure of regulation", MPs identified the directors of Northern Rock as "the principal authors of the difficulties that the company has faced". They singled Ridley out for having failed "to provide against the risks that [Northern Rock] was taking and to act as an effective restraining force on the strategy of the executive members."(4)

This, you might think, must have been a salutary experience. You would be wrong. Last week Dr Ridley published a new book called The Rational Optimist (5). He uses it as a platform to attack governments which, among other crimes, "bail out big corporations"(6). He lambasts intervention and state regulation, insisting that markets deliver the greatest possible benefits to society when left to their own devices. Has there ever been a clearer case of the triumph of faith over experience?

Free market fundamentalists, apparently unaware of Ridley's own experiment in market liberation, are currently filling cyberspace and the mainstream media with gasps of enthusiasm about his thesis. Ridley provides what he claims is a scientific justification for unregulated business. He maintains that rising consumption will keep enriching us for "centuries and millennia" to come(7), but only if governments don't impede innovation. He dismisses or denies the environmental consequences, laments our risk-aversion, and claims that the market system makes self-interest "thoroughly virtuous"(8). All will be well in the best of all possible worlds, as long as the "parasitic bureaucracy" keeps its nose out of our lives(9).

His book is elegantly written and cast in the language of evolution, but it's the same old cornutopian nonsense we've heard one hundred times before (cornutopians are people who envisage a utopia of limitless abundance(10)). In this case, however, it has already been spectacularly disproved by the author's experience.

The Rational Optimist is riddled with excruciating errors and distortions. Ridley claims, for example, that "every country that tried protectionism" after the Second World War suffered as a result. He cites South Korea and Taiwan as "countries that went the other way", and experienced miraculous growth(11). In reality, the governments of both nations subsidised key industries, actively promoted exports and used tariffs and laws to shut out competing imports. In both countries the state owned all the major commercial banks, allowing it to make decisions about investment(12,13,14).

He maintains that "Enron funded climate alarmism"(15). The reference he gives demonstrates nothing of the sort, nor can I find evidence for this claim elsewhere(16). He says that "no significant error has come to light" in Bjorn Lomborg's book The Sceptical Environmentalist (17). In fact it contains so many significant errors that an entire book - The Lomborg Deception by Howard Friel - was required to document them(18).

Ridley asserts that average temperature changes over "the last three decades" have been "relatively slow"(19). In reality the rise over this period has been the most rapid since instrumental records began(20). He maintains that "eleven of thirteen populations" of polar bears are "growing or steady"(21). There are in fact 19 populations of polar bears. Of those whose fluctuations have been measured, one is increasing, three are stable and eight are declining(22).

He uses blatant cherry-picking to create the impression that ecosystems are recovering: water snake numbers in Lake Erie, fish populations in the Thames, bird's eggs in Sweden(23). But as the Millennium Ecosystem Assessment shows, of 65 global indicators of human impacts on biodiversity, only one – the extent of temperate forests – is improving. Eighteen are stable, in all the other cases the impacts are increasing(24).

Northern Rock grew rapidly by externalising its costs, pursuing money-making schemes that would eventually be paid for by other people. Ridley encourages us to treat the planet the same way. He either ignores or glosses over the costs of ever-expanding trade and perpetual growth. His timing, as BP fails to contain the oil spill in the Gulf of Mexico, is unfortunate. Like the collapse of Northern Rock, the Deepwater Horizon disaster was made possible by weak regulation. Ridley would weaken it even further, leaving public protection to the invisible hand of the market.

He might not have been chastened by experience, but it would be wrong to claim that he has learnt nothing. On the contrary, he has developed a fine line in blame-shifting and post-rational justification. He mentions Northern Rock only once in his book, where he blames the crisis on "government housing and monetary policy."(25) It was the state wot made him do it. He asserts that while he wants to reduce the regulation of markets in goods and services, he has "always supported" the careful regulation of financial markets(26). He provides no evidence for this and I cannot find it in anything he wrote before the crisis.

Other than that, he claims, he can say nothing, due to the terms of his former employment at the bank. I suspect this constraint is overstated: it's unlikely that it forbids him from accepting his share of the blame.

It is only from the safety of the regulated economy, in which governments pick up the pieces when business screws up, that people like Dr Ridley can pursue their magical thinking. Had the state he despises not bailed out his bank and rescued its depositors' money, his head would probably be on a pike by now. Instead we see it on our television screens, instructing us to apply his irrational optimism more widely. And no one has yet been rude enough to use the word discredited.

Financial Markets a Bigger Terrorist Threat than Al Qaeda?

 

By Girish Menon

 

 

In 2004, after the Congress coalition won an unsurprising win over 'India Shining's' BJP, the stock market operators began pounding the Sensex and the incoming government's hand was forced to appoint Manmohan Singh and P Chidambaram to key positions in the Indian government. This calmed the stock markets and the Congress coalition was forced to dilute if not abandon it's more redistributive economic manifesto. This is one of the many instances when the interests of the financial markets assumed greater importance than the will of the majority.

 

We have in the last few years also witnessed government bail outs of banks all over the world. There was unprecedented hysteria stirred up all over the world and hitherto governments who were dogmatically opposed to nationalisation or subsidies were opening up their treasuries to bail out the stock market crooks and gamblers.

 

In Europe, governments who were forced to increase their spending to get their economies out of recession are now being warned by the same crooks and gamblers that if their books are not balanced their credit ratings would be lowered. Concerted attacks on stock markets and the Euro are the weapons used to get EU governments to impose economic policies that support financial markets and against the interest of the majority. The Greek example probably followed by the threat to Spain and Portugal are examples of governments being bullied by financial markets.

 

We as ordinary citizens have been repeatedly told that Islamic terrorists among others are undemocratically trying to undermine the mandate given to elected governments. Hence democratic governments need to use force to defeat them. However, especially in the last few years financial markets operators have been dictating government policy by threatening a collapse of the stock market or the currency. The owners and managers of financial market firms have no democratic mandate and yet seem to have a free run of the public purse. Tax money has been diverted from welfare programmes to prop up stock markets and currencies which are continuously being hammered. These government bailout expenditures may even be higher than government expenditure on 'fighting terrorists'.

 

Al Qaeda and the Taliban appear small fry as compared to the movers in the world of finance in their ability to make democratic governments implement anti democratic policies. So will I be wrong in concluding that financial market terrorists are a bigger threat to economies than Al Qaeda, Taliban et al?

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