European Stability Mechanism now a plunder-fund for Europe’s bankers

21 June 2013

European Stability Mechanism now a plunder-fund for Europe’s bankers

Finance ministers from the seventeen Eurozone countries this evening decided that the ESM emergency fund could be used to give financial support directly to banks, making the fund, to which the Netherlands contributes €40 billion, a plunder-fund for European banking.

SP Member of Parliament Arnold Merkies, commenting on the decision, said: 'First of all the Dutch people had to cough up to save Dutch banks and those of other EU member states. Now they have to fork out again to cover losses incurred by banks in other Eurozone countries. This is completely unacceptable!’

Many European banks have hidden losses, and the persistent economic malaise means that they have had to write off increasing amounts of debt. At the same time they have had to enhance their buffers – the amount of money they can call on if needed – to ensure that in the future they will fall less readily into bankruptcy. According to Merkies there is a risk that banks will make heavy demands on the emergency fund. ‘Next year banks will be tested to see whether they have adequate capital and it will emerge that many do not,’ he explains. ‘Although we’re demanding that banks should be financially sound, so we don’t have to rescue them anymore, they will soon be able to cool as you please pass the bill on to the Dutch people. Parliament must, therefore, not vote to approve this.’

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