3rd June 2010
EU Crashes Into the Financial Markets
Mark Hanson
There is a dire need for tighter and more common sense regulation of the financial markets. The so-called Credit Crunch, largely caused by the provision of financial products using the sub-prime, or potentially defaulting, markets, had, and still has, a profound effect on the stability of world finances. The reckless abandon with which lenders chased sky high profits left them falling flat on their faces, and with them the whole western economic system.
The governments cannot, however, wash their hands of this. They stood by, and were even declaring the final solution to boom and bust, a notable claim made by Gordon Brown who proudly announced that the days of boom and bust were gone forever.
Now the EU, ever eager to power grab in every possible area, has made moves to set up its own credit ratings agency, tightly regulate the current agencies, and dictate on the management of banks.
These are, perhaps, wise moves which, if taken by individual governments according to their national differences and priorities, would be of great benefit. David Cameron's government in the UK has already started to make some major moves in these areas, and the US is looking into the way the banks operate there.
But in this globalised and monolithic monster called the New World Order, the European Union is fiercely positioning itself to be the seat of power. Not content with diktats that cover day-to-day life and the free market, it is now pursuing an agenda to wrest control of finance from EU and even non-EU members.
For those nations that are within the Eurozone, these developments will probably be extremely welcome. The European Central Bank already wields are large degree of control over European economies. Yet for other nations, such as the UK, the moves signal an attempt to move more powers from the UK authorities into the hands of EU bureaucrats.
The US will also seek to prevent these moves, seeing them as a threat to its own powers of financial regulation as a real alternative to US dominance presents itself.
Currently the plans are for regulation and transparency, but in a notable remark, EU financial services commissioner Michel Barnier said. "But they are only a first step. We are looking at this market in more detail."
These moves are widely seen as preparatory for the G20 summit of world leaders at the end of this month, and the EU has made a strong indication that it is hoping to provide a “united front”. The dissent of some nations, most likely to feature Britain heavily, would cause difficulty, and it may prove to be a defining moment for the new UK coalition Government as it makes its decision whether to remain loyal to its own agenda or submit to the monolithic EU.
