Le Magazine du Trésorier - n°64 - 4ème trimestre 2008 - (Page 3)
redit lines are to the economy, what blood is to the human body. Maintaining proper functioning of credit granting mechanisms has become invaluable. Since September 2008, state governments have come to understand. The sovereign state, as was the case for the regimes under former kings, protects us from our enemies and from invaders and guarantees law and order within the country.The welfare state establishes economic and social solidarity in a country. But now the time has come for state governments to take on their role as Redeemers. National governments are called upon to fix the sins of globalization, by buying up bad loans from banks and injecting "powerful serums" in the form of billions of dollars or euros to heal the wounds caused by toxic financial products. In English, we speak of "debt redemption" when a third party (or the debtor himself) buys up debt.This current expression in economic terminology carries a religious connotation which is fully appropriate when we talk about banks and insurance companies.The Swiss, English, Irish, Belgian and French governments, in particular, have brought redemption to their financial organizations (USD 62bn debt of UBS bank in Switzerland; France has invested EUR 40bn in its banking system). This was the price to pay to "thin" the blood, that is, the credit business of the global economy.Without credit grants, there won't be any competition and thus the economy will be caught in a potentially dramatic downward spiral leaving serious recession in its wake. The Maastricht criteria are long forgotten now. Public debt will explode in 2008 and 2009.The ECB and its chairman must resort to drastic measures. Ultimately, shareholders and taxpayers will have to pay the bill. Most young people will have heard of 1929 and of the Bretton Woods agreements in 1944. Will they now discover the "Camp David Accords of 2008"? Who knows? It is the very idea of the State Government as the "master of the clocks" that resurfaces here. As the illustrious Richard Wagner already said at the end of the opera Parsifal "Redemption to the Redeemer." Hopefully, the top financiers in the world will have learnt the lesson in 2008. C F. Masquelier ATEL Chairman EDITORIAL 3 Looking at the Government as the REDEEMER ?
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Le Magazine du Trésorier - n°64 - 4ème trimestre 2008