The expanded bailout fund will not help if Italy or Spain is dragged into the economic crisis, and the austerity packages are driving Greece and Portugal to revolutions, warned British European Parliament member Nigel Farage.
“They are having austerity packages pushed upon them, which is forcing them into downward deflation, which in my opinion could lead to revolution in Greece and possibly in Portugal, too,” Farage told RT. “What we are doing is stupid, and very, very dangerous indeed.”
“If Italy goes down, they would need a couple of trillion to bail it out,” he said. “And what it the point of bailing these countries out anyway? Are these bailouts helping people in Greece or Portugal? No, they're not!”
“What they are actually doing,” he continued, “is giving money to these countries to give back to our banks, who over-lent to them in the first place. I mean, the whole thing is mad. What these countries trapped inside this economic prison called the Eurozone need is to devalue.”
Within the course of actions chosen by the EU, the Greek default is inevitable, Farage stated.
“I've been asking for nine months for a Plan B,” he said. “Could we please be grown up, could we please be mature, could we please be good Europeans and recognize that when the inevitable Greek default comes, unless we have a Plan B, on the first day there will be no money in the banks, on Day 2 there will be no bread in the bakeries. To date they have prepared absolutely nothing. I think what will happen now is that senior economists will begin to put together a contingency plan that allows Greece, Portugal and Ireland, too, to leave the Eurozone, reschedule their debts, get a new currency that devalues 50, maybe 60 percent. And as Iceland proved back in 2008, sometimes it is best to take the bad news, accept where you are, and start again. That is what needs to happen.”
Farage sees a very clear motive behind the current EU leadership’s actions to postpone the default of Greece and Portugal.
“These people are absolutely intent on creating a United States of Europe, they don't care how many millions of people are trapped in the unemployment trap, they don't care about the tide of human misery they cause, they have got their political goal,” Farage said. “But the reality is that not only economically it is failing, but politically it is failing, too. We can talk about the Slovakian Parliament, but look what happened in Finland earlier this year, when virtually a brand new political party got a 20 percent vote, look at the opinion polls in the Netherlands, there is now a split in Europe from north to south. And in the north we are witnessing a democratic revolution against the whole concept of the euro, and the idea that people like Mr. Barroso and my old friend van Rompuy should govern 500 million people. It is not acceptable.”
Still, there are those for whom the idea of entering a united Europe still looks appealing – among them Serbia, which was granted candidate status on Wednesday.
“It is very stupid, and again it is the political class of Europe that wants to do this,” Farage concluded. “Serbian politicians, of course, will become multi-millionaires if they join the EU, so that's extremely attractive to them. But think about this: Just a decade ago, we had Croats and Serbs killing each other in vast numbers, so they can be in separate countries, and now their politicians and leaders want to reunite them all again in the same kind of political union as Yugoslavia was. It is absolutely insane.”
The head of the European Commission has put forward a new crisis plan, saying European banks should increase their reserves to withstand market turmoil.
The move is designed to force banks to set aside more assets to cushion the system against a possible collapse.
Jose-Manuel Barroso also wants no dividends or bonuses to be paid until the plan is implemented.
RT's contributor Demetri Kofinas says the new regulations could freeze the whole system. He says a threat of contagion in the banking system is very real and must be addressed seriously.
“In philosophical terms, the debate about what is going on in Europe comes down to – do we want to advocate solutions of more control and centralization, or do we want to create decentralization?”