Video- ‘Eurozone economic system in chaos’

Anti austerity protests in Italy and Greece have once again mounted, as the new governments in Rome and Athens struggle to save their debts-riddled countries.

In Italy, thousands of students poured into the streets of several cities to protest the austerity measures recently unveiled by the country’s new prime minister.

Meanwhile, hundreds of public sector workers in Greece once again went on strike to protest harsh austerity measures, including more planned salary and pension cuts and job losses.

Press TV has conducted an interview with Ian Williams, from Foreign Policy in Focus, to share his opinion on this issue.

Following is the text of the interview:

Press TV: Ian Williams, what do you think about our guest there saying the system is at fault, generally speaking there, that that needs an overhaul. What part of the system? I could name about five or six points that I have highlighted I wish I get to if we can, what do you think?

Williams: The true biggest point is that the Euro in itself isn’t a bad idea but the way it was implemented. I think Gordon Brown, who is the British shadow chancellor and then Prime Minister refused to join because of the way it was set up and I think he was quite prescient.

I mean you are marrying different concepts of government. You had a very strong German banking system that didn’t believe in support in the government. It is all based on the idea that bankers know best, they know best than the elected politicians, which is arguable and they know better than the people. And what they all seem to know is that you should allow free liquidity funds the slush around the world and more and more as we have seen the free markets will determine everything.

So the free markets like the Lemmings, they panicked and they have been panicking one by one. And we have all of these systemic pressures, of derivatives, the credits switch, sometimes are virtuous because they allow companies and firms to hedge but other time it is straightforward gambling. People are short in the currencies in the hope of making lots of money out of them.

And you noticed how out of kilter this is, even the European economy, the real one where people actually make and buy and sell things, isn’t doing so badly but the financial part of it is catastrophic and that is because the system is chaotic. The system is designed for make lots of money for some people who don’t make anything. They make money. They don’t make anything else. They don’t mean make the money; they take the money from those of us who have made things.

So yes, there are lots of things wrong with it and it is very difficult to say how should we getting back to first principles, we can do much about it.

Press TV: Central banks are outlawing bankruptcy for every large institution and government, and as we saw in the meeting in Brussels of finance ministers, they have decided to pay more to bail out some of these institutions: Isn’t this undermining the entire global monetary system?

Williams: Because it is so interconnected, as I said before the free flow of capital which is one of the shibboleths of bank style economics allows vast tidal waves of money to flood in and out, speculative money.

You know, this was not about bailing out Greece. It was about bailing out the bankers who lent the money to Greece and sending the bill to the Greeks. There was no stipulation about the rich Greeks who had to pay taxes in future which they avoided doing for years.

In fact there is even no stipulation when you talk about austerity measures, about cancelling the arms, the major arms purchases the Greeks had made from France and Germany and I believe they are buying aid frigates for example. No one mentions that austerity means attacking poor people.

So we have this old Washington consensus that caused so much distress in the third world, 20 years ago being resurrected and applied in Europe. It is quite clear the cutting back expenditure the way they are is going to crash those economies. It is not going to make Greece in a better position to pay its debts.

It is a punitive theological measure and the people are paying for this, the poor are working people in Greece, aren’t the ones who didn’t pay the taxes, they are not the ones who have invested in banks and by the way they are the ones who their money is still stuck in Greece when Greece pulls out of the Euro because I am fairly sure that most of the people in Greece have already taken their money and deposited it in banks outside Greece in anticipation of Greece coming out of the Euro.

Press TV: Like which banks do you think they have gone to? Which countries?

Williams: They would have gone to France, Germany, America and Switzerland. They would have gone anywhere out there was going to stay, that wasn’t going to be devalued on a good scale, like coming out of the Euro.

Press TV: Let me get a final thought, as we have a few seconds left, from Ian Williams in about 30 seconds or less please.

Williams: I think the big one to watch is France. France is very vulnerable. If Italy goes then the French financial system is going to be rocked to its foundations and I think clever money were already be shorting on France and that is sovereign debts and that would really imperil the whole European project which is based upon Franco-German collaboration at least.