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EU leaders push for bloc-wide banking mechanism

Rainman05

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EU leaders push for bloc-wide banking mechanism | euronews, world news

European Union leaders are aiming to agree on a bloc-wide mechanism for dealing with failing banks by the end of the year.

Speaking at the close of an EU Summit in Brussels, European Commission President José Manuel Barroso said: “The European Commission will present its proposal for a single resolution mechanism in the next two weeks.”

“This will ensure effective European decision-making on banks in difficulties within the single supervisory mechanism. This is about making sure that it is the banks who pay for their own mistakes and not the citizens,” Barroso continued.

The announcement comes amid widespread anger from European taxpayers at the huge sums spent on saving commercial banks that are seen as having got themselves into trouble.

Between 2008 and 2011, the EU spent the equivalent of a third of its economic output to rescue failing banks.

THIS IS EURONEWS, WATCH THE VIDEO IN THE LINK.

Ok. So basically, The financial crisis caused the EU to spend about 5-6trillion Euros (7.8tril $) on the banks to rescue them. On top of that, you had the countless other bailouts to various countries, and some of the money that went in the bailout went to the banks... so yeah.
This figure is comparable to what the US spent
US Bank Bailout Cost Summary - Outlays and Guarantees

4.6tril $ in federal bailouts to banks among other bailouts to various companies and what naught. And then of course, the Federal Reserve which has 6-7tril $ in govt bonds.

This entire news is of course meant to increase the importance of the ESM. the ESM = The European Stability Mechanism which is a new European bank which was officially working since september last year and has officially came into status in january this year. This bank has extraordinary powers and secrecy attached to it so yeah... and it works with countries money. Not many people know about the ESM because it wasn't really much publicized but it is an awful awful institution.
This is a link to a topic I made about it some time ago.

http://www.debatepolitics.com/europe/136351-european-stability-mechanism.html
 

PeteEU

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Why on earth is it bad? Or it is just your anti-EU/Europe stance shinning through and that anything done by the EU is bad?
 

RabidAlpaca

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Why on earth is it bad? Or it is just your anti-EU/Europe stance shinning through and that anything done by the EU is bad?

Yeah, because being cloaked in secrecy and enforced by law should make us all giddy about how trustworthy they sound.

All they've done is create another mechanism to throw money at problems instead of fixing any actual problems. We're talking hundreds of billions. This is getting ridiculous.
 

NoC_T

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Alternatively, we might view such secrecy as no more than that confidentiality which is part and parcel of any bank, and which we actually desire. Only magnified as per it's greater scope. There's always the knee-jerk inclination to emphasise the negative, in relation to business and finance. But prudence may be overcaution.

Since the European project is one defined by conglomeration, at what point is overlap so surprising? Or did anyone believe they were just kidding around? I mean ffs, did anyone mistake the Euro for a bluff?

It's like the comical shock of 'appalled spectators' and 'international outrage' when military ventures actually entail death. Duh! Or maybe some of us expect an ice cube not to melt in the oven? Hmm?
 

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Yeah, because being cloaked in secrecy and enforced by law should make us all giddy about how trustworthy they sound.

How exactly is being cloaked in secrecy? And if so, is that any different than any other law or regulation?

All they've done is create another mechanism to throw money at problems instead of fixing any actual problems.

So you are against protecting peoples money?

We're talking hundreds of billions. This is getting ridiculous.

No what is ridiculous is that we had to bail out the private sector for their miss-management. What is ridiculous is multi-nationals not paying taxes. What is ridiculous is the whole financial industry was never punished at all for their miss-deeds.
 

Rainman05

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Why on earth is it bad? Or it is just your anti-EU/Europe stance shinning through and that anything done by the EU is bad?

To quote my observations on the treaty:

"See how little it is being written in regards to their duties and obligations with their money? Just to comply with the principles of sound financial and risk management... and there are full pages long articles that talk about their powers and the obligations of ESM members (which is most of the EU) but when it comes to these guys, blank. "

this pretty much says that the guys in charge can lose money and then ask for bailouts and the ESM members (this means the countries)have to do it without asking questions. At least the US Congress has the right to observe and regulate the Federal Reserve, here, ESM members can't even do that.

But here actual paragraphs regarding the most important 2 things: transparency and accountability:

ARTICLE 28
Internal Audit
An internal audit function shall be established according to international standards.

External audit
The accounts of the ESM shall be audited by independent external auditors approved by the Board
of Governors and responsible for certifying the annual financial statements. The external auditors
shall have full power to examine all books and accounts of the ESM and obtain full information
about its transactions
ARTICLE 30
Board of Auditors
1. The Board of Auditors shall consist of five members appointed by the Board of Governors for
their competence in auditing and financial matters and shall include two members from the supreme
audit institutions of the ESM Members - with a rotation between the latter - and one from the
European Court of Auditors.

2. The members of the Board of Auditors shall be independent. They shall neither seek nor take
instructions from the ESM governing bodies, the ESM Members or any other public or
private body.

GLARING CONTRADICTION, INDEPENDENT YET HAND PICKED BY THE BOARD OF GOVERNORS? HOW STUPID CAN YOU BE?
This means that any audit from outside the ESM needs to be approved by the ESM and handpicked by the people in charge of the ESM. There is no transparency what so ever.

And about accountability. Surely such a powerful organization, which can demand money from any ESM member country at will, needs to be accountable.
ARTICLE 32
Legal status, privileges and immunities
1. To enable the ESM to fulfil its purpose, the legal status and the privileges and immunities set
out in this Article shall be accorded to the ESM in the territory of each ESM Member. The ESM
shall endeavour to obtain recognition of its legal status and of its privileges and immunities in other
territories in which it performs functions or holds assets.
3. The ESM, its property, funding and assets, wherever located and by whomsoever held, shall
enjoy immunity from every form of judicial process except to the extent that the ESM expressly
waives its immunity for the purpose of any proceedings or by the terms of any contract, including
the documentation of the funding instruments.
4. The property, funding and assets of the ESM shall, wherever located and by whomsoever
held, be immune from search, requisition, confiscation, expropriation or any other form of seizure,
taking or foreclosure by executive, judicial, administrative or legislative action.

This means that you can't look in their files regardless, not even with a court order unless they agree to it. But wait, there's more.

ARTICLE 35
Immunities of persons
1. In the interest of the ESM, the Chairperson of the Board of Governors, Governors, alternate
Governors, Directors, alternate Directors, as well as the Managing Director and other staff members
shall be immune from legal proceedings with respect to acts performed by them in their official
capacity and shall enjoy inviolability in respect of their official papers and documents.
3. The Managing Director may waive any such immunity in respect of any member of the staff
of the ESM other than himself or herself.

These 2 points ensure that the people running the ESM can't ever be prosecuted. It also means that if there is a massive scandal about the ESM sometime in the future, the board of managers can withdraw immunity from someone. This means that if they want to sacrifice a pawn for public appearance they can. It's basically the perfect instrument. It cannot be touched judicially, it can't be audited, it can't be held accountable...

Jesus Christ man. How can you desire to have an institution that can demand money at will from you (the people) and not have to show anything in return. And to whom you can't do squat.
 

Rainman05

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How exactly is being cloaked in secrecy? And if so, is that any different than any other law or regulation?
I answered to that question in my above comment. Please respond.
 

PeteEU

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To quote my observations on the treaty:

Okay lets see..

But here actual paragraphs regarding the most important 2 things: transparency and accountability:

This means that any audit from outside the ESM needs to be approved by the ESM and handpicked by the people in charge of the ESM. There is no transparency what so ever.

Okay you need to learn to read legal documents. Article 29 clearly states that the Board of Governors shall appoint an external auditor .. you know a private company... you know like EVERY other company and bank on the planet... and that they have full power to examine all books and accounts and obtain full information about its transactions.

So there is plenty of transparency there. Or do you have a problem with private accounting companies that preform such audits every year for every company in the industrialized world? Do you want random people with no financial knowledge to audit them?

And how else would they get an external auditor... without hiring/appointing them?

And about accountability. Surely such a powerful organization, which can demand money from any ESM member country at will, needs to be accountable.

Demand money? What are you babbling about? Member nations will provide the finances needed according to the rules set in the treaty.

And accountable.. you do know who the Board of Governors are right? Elected politicians for the most part.. they are the finance Ministers... and if the UK had been a member, then it would have been George Osborne.

The quoted bit in red is directly false. The Board of Auditors is for the internal audit only.

This means that you can't look in their files regardless, not even with a court order unless they agree to it. But wait, there's more.

So you are telling me, you can as a citizen look at internal documents at government agencies and the National Bank... yea right. When you can get access to your Prime Ministers private internal documents or the Bank of England directors private internal documents, then come back to me and present them..

These 2 points ensure that the people running the ESM can't ever be prosecuted.

Funny how you "missed" point 2 in Article 35... You know the one that states that the Board of Governors can waive the immunity of any employee at any time. Funny also how you forgot to mention that the Managing Director serves at the privilege of the Board of Governors... so basically they can fire him at any time they see fit. Article 7 point 2.

Not to mention any immunity can be waived at any time by the Managing Director.

Having immunity from prosecution is quite normal in government. Now that does not mean that said people cant be prosecuted, it just means there has to be evidence that will stick before doing it, and that random people cant just sue the crap out of government and in this case the ESM. And they have only immunity from prosecution when in relevance to their job... if the Managing Director drives drunk, then he dont have immunity.

It also means that if there is a massive scandal about the ESM sometime in the future, the board of managers can withdraw immunity from someone. This means that if they want to sacrifice a pawn for public appearance they can.

Board of Managers? You mean the Board of Governors... the elected finance ministers of members states right? Sacrifice a pawn.. funny really funny. Since when have board of directors of any company or ogranisation been responsible for anything fraudulent if that fraud was done by an employee under them?

Are you seriously saying that the ESM Board of Governors, elected politicians/ministers in member state governments, should be held accountable, put on trial and thrown in jail, for any type of problem that might arise? You do know they have immunity right? :)

It's basically the perfect instrument. It cannot be touched judicially, it can't be audited, it can't be held accountable...

It can be audited, in fact it has to be externally audited according to the treaty.

Jesus Christ man. How can you desire to have an institution that can demand money at will from you (the people) and not have to show anything in return. And to whom you can't do squat.

You mean like GOVERNMENT anywhere on the planet?

And they cant demand money at will from me. No where in the treaty does it say they can demand money from me. Member governments provide funding to the ESM... it clearly states so in the treaty.

I know you hate the EU, but come on... you can do better than this. You do realize that every country on the planet has either directly or indirectly a similar system internally right? Now in the EU we are forced to go mega scale because of the bloated banking sectors, of which the UKs is by far the biggest problem in the short and long term.. thankfully they are not a member of it so when that implodes (which should be soon), then it wont be our problem.
 

Rainman05

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Okay you need to learn to read legal documents. Article 29 clearly states that the Board of Governors shall appoint an external auditor .. you know a private company... you know like EVERY other company and bank on the planet... and that they have full power to examine all books and accounts and obtain full information about its transactions.

So there is plenty of transparency there. Or do you have a problem with private accounting companies that preform such audits every year for every company in the industrialized world? Do you want random people with no financial knowledge to audit them?

And how else would they get an external auditor... without hiring/appointing them?

This is a bank that operates strictly with money from member countries. That means that it should be either the governmnets of member countries directly (in the EU council) or the EU Parliament to appoint the external auditor. Not the ESM.
Demand money? What are you babbling about? Member nations will provide the finances needed according to the rules set in the treaty.
Yes, it demands money from the member nations. And the ESM can arbitrarily change the amount of money each member nation has to give whenever it suits them.

And accountable.. you do know who the Board of Governors are right? Elected politicians for the most part.. they are the finance Ministers... and if the UK had been a member, then it would have been George Osborne.
I don't know who the board of governors currently is and it doesn't matter. It's the principle involved, not the individuals.

The quoted bit in red is directly false. The Board of Auditors is for the internal audit only.
No it's not. It's completely true.
So you are telling me, you can as a citizen look at internal documents at government agencies and the National Bank... yea right. When you can get access to your Prime Ministers private internal documents or the Bank of England directors private internal documents, then come back to me and present them..
Normally ,we have institutions that deal with reviewing public documents so that I don't have to. I have to go to work, pay my taxes and be informed (by the media and my elected representatives) on the comings and goings of the state, and it is the public people I put in government, the ones I elect, that need to have access to them and raise awareness. That's the theory. The ESM is perfectly able to skip all that since it's documents are sealed and nobody has access to them except the ESM.

Funny how you "missed" point 2 in Article 35... You know the one that states that the Board of Governors can waive the immunity of any employee at any time. Funny also how you forgot to mention that the Managing Director serves at the privilege of the Board of Governors... so basically they can fire him at any time they see fit. Article 7 point 2

Not to mention any immunity can be waived at any time by the Managing Director.
. Hey. I didn't miss anything. This is just a snip from the initial topic I made here
http://www.debatepolitics.com/europe/136351-european-stability-mechanism.html

Where I detailed all the points I have a problem with. And I already said that yes, the board can withdraw immunity from whomever they want. Most likely to use as a scapegoat if there ever is a public scandal.

Having immunity from prosecution is quite normal in government. Now that does not mean that said people cant be prosecuted, it just means there has to be evidence that will stick before doing it, and that random people cant just sue the crap out of government and in this case the ESM. And they have only immunity from prosecution when in relevance to their job... if the Managing Director drives drunk, then he dont have immunity.
That's what I am saying. They can't be prosecuted for things like criminal neglijence in office. They can screw up as much as they want, behave as stupid as they want and there is no penalty for them.

Board of Managers? You mean the Board of Governors... the elected finance ministers of members states right? Sacrifice a pawn.. funny really funny. Since when have board of directors of any company or ogranisation been responsible for anything fraudulent if that fraud was done by an employee under them?
I'm just calling it as I see it. You may find it laughable, but then again, you're pro-EU to the core and of course you'll never think anything bad can happen.

Are you seriously saying that the ESM Board of Governors, elected politicians/ministers in member state governments, should be held accountable, put on trial and thrown in jail, for any type of problem that might arise? You do know they have immunity right? :)
Depends from country to country. But those are ministers. There is no reason why a person from a bank should be immune from prosecution.

It can be audited, in fact it has to be externally audited according to the treaty.
By whomever they see fit. Come on, it's BS all the way.

You mean like GOVERNMENT anywhere on the planet?
And they cant demand money at will from me. No where in the treaty does it say they can demand money from me. Member governments provide funding to the ESM... it clearly states so in the treaty.

YOU ARE THE GOVERNMENT MONEY. You, as in, you the people. You, your siblings, your friends, the population. You provide money to the government which in turn gives it to the ESM. If the ESM decides to increase the amount of money in it's budget, you will have to bear the cost. It's taking your money, gives you nothing in return for it, not a drop of transparency or accountability. It's like a mafia, taking protection money and then at arbitrary moments it ups the fee. And yes, the treaty says that the ESM can modify its budget without any approval. The EU council doesn't need to approve it, the EU parliament doesn't. If the ESM decides to increase its budget, it will.
I know you hate the EU, but come on... you can do better than this. You do realize that every country on the planet has either directly or indirectly a similar system internally right? Now in the EU we are forced to go mega scale because of the bloated banking sectors, of which the UKs is by far the biggest problem in the short and long term.. thankfully they are not a member of it so when that implodes (which should be soon), then it wont be our problem.
Again, this is a bank, not a country. And it is a bank that takes your money and pisses on you afterwards.
 

PeteEU

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This is a bank that operates strictly with money from member countries. That means that it should be either the governmnets of member countries directly (in the EU council) or the EU Parliament to appoint the external auditor. Not the ESM.

The EU Council does appoint the auditor... since the EU Council ministers in question are the Finance Ministers of member countries, which are also the same people on the Board of Governors. But saying that.. why on earth should a British minister or EU parliament member have ANY say what so ever over the ESM? They are not even members, so giving the EU Council or parliament any influence is beyond crazy. Now had this ESM been for all EU members, then yes, they should have influence, but since it aint.. **** em.

Yes, it demands money from the member nations. And the ESM can arbitrarily change the amount of money each member nation has to give whenever it suits them.

No. Read the treaty again. No demands, it is a membership fee. This fee can be changed by the ESM Board of Governors yes, but so what? You do realize that is standard practice in any membership organisation right?

I don't know who the board of governors currently is and it doesn't matter. It's the principle involved, not the individuals.

It is the finance ministers of the members nations.. so one of the members is this guy..

Wolfgang Schäuble - Wikipedia, the free encyclopedia

And another is this guy

Pierre Moscovici - Wikipedia, the free encyclopedia

want the whole list?

The quoted bit in red is directly false. The Board of Auditors is for the internal audit only.
No it's not. It's completely true.

Hogwash, it is taken out of context, and implies something with is not true. The external auditors will audit the ESM and publish their findings. The internal Board of Auditors, which consists Finance ministers btw, will regularly audit the ESM many times a year and keep an eye on the finances. Again read the treaty text.

Normally ,we have institutions that deal with reviewing public documents so that I don't have to.

You do?.. name one that has access and reviews internal private documents of government institutions.

I have to go to work, pay my taxes and be informed (by the media and my elected representatives) on the comings and goings of the state, and it is the public people I put in government, the ones I elect, that need to have access to them and raise awareness. That's the theory. The ESM is perfectly able to skip all that since it's documents are sealed and nobody has access to them except the ESM.

And the external auditor.. funny how you forgot to mention that. Oh and like it or not, you do NOT have access to internal documents in any corporation or government agency. You can not demand the internal documents of the Bank of England for example or demand the private internal documents of your local elected official. How is this any different?

Funny how you "missed" point 2 in Article 35... You know the one that states that the Board of Governors can waive the immunity of any employee at any time. Funny also how you forgot to mention that the Managing Director serves at the privilege of the Board of Governors... so basically they can fire him at any time they see fit. Article 7 point 2

Not to mention any immunity can be waived at any time by the Managing Director.
. Hey. I didn't miss anything. This is just a snip from the initial topic I made here
http://www.debatepolitics.com/europe/136351-european-stability-mechanism.html

Where I detailed all the points I have a problem with. And I already said that yes, the board can withdraw immunity from whomever they want. Most likely to use as a scapegoat if there ever is a public scandal.

And you just dont get it do you? You have no idea what a board of anything does it seems... they do NOT RUN THE bloody thing day to day. They set policy and approve major changes and so on. Now if there is a public scandal involving this, then I have no doubt that the bosses of the Board of Governors will take action... you know, the national leaders of the member states... you have heard of them right? One is named Merkel..

That's what I am saying. They can't be prosecuted for things like criminal neglijence in office. They can screw up as much as they want, behave as stupid as they want and there is no penalty for them.

Do you know how hard it is to prosecute anyone for criminal negligence? Even with all the banks going belly up, and so on, there has yet to be a single banker to be charged, let alone be prosecuted for criminal negligence... simply because the statues do not exist in most countries. You have to do a Maddof to actually get charged these days. Look at Washington Mutual.. not one executive as far as I know has ever been charged, let alone convicted and the amount of fraud in that bank were catastrophic.

I'm just calling it as I see it. You may find it laughable, but then again, you're pro-EU to the core and of course you'll never think anything bad can happen.

And I am only pointing out the flaws in your arguments.

As for being pro-EU, that is not a correct description of what I am. I believe we are better off together as a community, than split into 27+ nations fighting over petty things and letting our citizens take the brunt of the pain. We did that for 2000+ years and it did not work. I believe we can do many things together as a community so that we all have better lives.

Now there are plenty of things in the EU that I do not agree with, including the whole moving of the parliament every 6 months, CAP spending and other things here and there, but as a whole the EEC/EU have benefited the citizens of Europe far far far more than it has hurt them.

Depends from country to country. But those are ministers. There is no reason why a person from a bank should be immune from prosecution.

I agree, but that is standard practice when you are talking about national bank type institutions. The Bank of England director is also immune, as is the US treasury Secretary, the Fed guy and so on.

By whomever they see fit. Come on, it's BS all the way.

Wtf .. come on. Do you even understand basic business? A company has its accounts audited every year, for taxes and for its shareholders. It hires aka CHOOSES a company to do that... KMPG, Ernst & Young, Deloitte and PriceWaterhouseCoopers most likely since they are the 4 big ones. Hell my old student dormitory used KMPG to audit its books back in the day..

Tell me.. who should audit this bank? The local butcher?

YOU ARE THE GOVERNMENT MONEY. You, as in, you the people. You, your siblings, your friends, the population. You provide money to the government which in turn gives it to the ESM. If the ESM decides to increase the amount of money in it's budget, you will have to bear the cost. It's taking your money, gives you nothing in return for it, not a drop of transparency or accountability. It's like a mafia, taking protection money and then at arbitrary moments it ups the fee. And yes, the treaty says that the ESM can modify its budget without any approval. The EU council doesn't need to approve it, the EU parliament doesn't. If the ESM decides to increase its budget, it will.

And so what? If the ESM decides to increase the amount of money in its budget, my government has to approve it. I may have voted for the government, or I may not, but it is my government that on behalf of me sets the overall budget of the country and that includes paying money to the ESM, NATO, UN and so on. There are plenty of things I would rather not pay for, but my government has decided that we have too so I must deal with it. That is what being in a society based on democracy and law means..

Again, this is a bank, not a country. And it is a bank that takes your money and pisses on you afterwards.

It is a national bank or similar. Big ass difference. The only people who can get money out of this bank or put money in, are nations. It is like the IMF or World Bank for the EU.
 

Rainman05

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I'll get to this tomorrow. I've been out drinking now and my anger with your incompetence to fairly illustrate the subject at hand won't serve any purpose.
 
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