Spreading the cloak of silence over 1.2 trillion Euro

It seemed during the past months as if some politicians and the EU Commission had lost their initial drive with regard to regulating the financial markets. Many had hoped that the current crisis would pass quickly and with it the anger of the population against the financial markets. The banks are once again making fantastic profits and the bank managers are once more pleased with their usual bonuses worth billions. That this could not be achieved without the Member States putting together an unprecedented aid package for the banks at the expense of the taxpayers, has been confirmed by a new Report of the Commission. According to this report, the Member States have supported the financial institutes with unimaginable 1,235 billion Euro since 2008. And further 3,000 billion are available on demand.

Back to the beginning: once again the old neoliberal recipes?

The generosity of the Member States and the European Central Bank has once again resulted in a flourishing banking landscape, albeit at the expense of the budgets of the Member States. For over 20 years, the Member States have bowed to neoliberal recipes and made considerable efforts to cut costs, often at the expense of employees and the quality of public services. Even the Commission admits that the support of the financial institutes during the crisis has destroyed these cost-cutting efforts at a single blow. And now everything is supposed to start again - using the old recipes: saving, privatising, “flexibilizing” labour markets, reducing pensions.

Democracy against financial markets

The crisis in Greece and the wild speculative attacks of the so-called "markets" in the entire Euro area again made the politicians realise that "Business as usual" is not an option. The question is whether governments are still in a position to set limits to the financial markets, thus to be able to fulfil their democratic mandate. Hence, the Commission tries a new start with regard to regulating the financial markets prior to the important meeting of the world’s 20 largest economies in Toronto at the end of June, to prevent it from sinking internationally into insignificance.

26 new Commission proposals over the next 9 months

This week, the responsible Commissioner for the Internal Market, Michel Barnier, together with Commission President Manuel Barroso presented in Brussels the work plan of the Commission for the coming months. The Commission once again vows to be ambitious. All still outstanding regulation proposals - a staggering 26 in total - shall be presented within the next 9 months. The intention is to negotiate all these draft regulations with the Member States and the European Parliament before the end of 2011 and to transpose these into national law by the end of 2012.

Who evaluates rating agencies?

One building site after another. Last year, the Commission adopted a Regulation on Credit Rating Agencies, which has not even been implemented by the Member States. Nevertheless, yesterday already Barnier presented the first amendments to this Regulation. In future, the European offshoots of the rating agencies will be supervised by the new European Security and Markets Authority, which will also be granted far-reaching powers to scrutinize the work of the agencies. And there will be more changes. Barnier announced that one was also thinking about setting up a European rating agency. About time that the Commission wakes up; after all, the financial crisis and the Euro crisis have exposed the often absurd behaviour of the rating agencies, which aggravated the crisis.

Do managers voluntarily limit their own salaries and bonuses?

Building site: manager remuneration. Over the past year, the Commission presented two legally non-binding Communications on Manager Remuneration in Listed Companies and Financial Institutions. AK and the trade unions criticised right from the start - as they did before the crisis - that appeals to the voluntariness of companies to stem the bonus culture and the risk-taking behaviour of managers are not successful. This week, the Commission presented two reports, in which it examines the experiences with non-binding rules so far made by the Member States. Barroso’s comment on the matter: "I have to say: the results are disappointing". It would be welcome if the Commission would accept at last that the time of voluntary codes of conduct should be a thing of the past.

Barroso: If Germany is for the financial transaction tax, I will support it too

Building site: financial transaction tax. Feared and vehemently fought against by the financial industry, many politicians did not dare to support it publicly. A laudable exception is the Austrian Federal Government, which adopted a relevant governmental resolution. In particular Germany blocked the introduction of a financial transaction tax for a long time; however, being under pressure from public opinion, she seems to rethink the issue. And now that Germany will go along with it, Barroso - two years after the outbreak of the crisis - is suddenly also able to imagine a financial transaction tax. A more than sensible instrument, which would reduce the enormous volume of the often machine controlled daily speculations, which are completely useless for the real economy and dangerous for the stability of the financial markets; at the same time it would generate an important income for the government coffers, which, due to the transactions of the speculators gone wrong, are currently pretty empty.