18 Mar, 2015 16:21

‘ECB injects billions into doomed to failure eurozone’

Instead of investing money into the real economy and helping those suffering in Southern Europe, the ECB is pouring money into financial markets to be used for further speculation, Ernst Wolff, economic journalist and author, told RT.

RT:What's the justification for spending so much money on the ECB new building during a time of austerity?

Ernst Wolff: Nobody knows that. Spending €1.3 billion on a building is kind of crazy but the politics of the ECB have been kind of crazy lately. But what we see now is that anger is really boiling over.

RT:Are the austerity policies promoted by the ECB really as harsh as the protesters say?

EW: I don’t think they justify any kind of violence but the problem is that the mainstream media in Europe are going to use any incident of violence against all the critics of the ECB, and a lot of criticism of the ECB these days is justified. The ECB has just started a program of quantitative easing. They are injecting €60 billion a month into the financial markets, which is not going to go to the real economy as they have promised. It’s going to go and be used for financial speculation again, and at the same time people in Southern Europe are suffering. There are old people in Greece who have to go through the garbage in order to find something edible. There are a lot of people who don’t have healthcare anymore down there. And at the same time the ECB is handing out €1.1 trillion to the financial industry for more speculation. So that’s why all this anger is very understandable.

RT:It's been several years since the eurozone started imposing austerity cuts, what are the results so far and is there any end in sight?

EW: It’s a complete failure because all they are doing is propping up a system that is doomed anyway. The euro is going to fail just as the US dollar is going to fail. And there is no way around it. And everybody knows that. And the only ones that are profiting from it are the big investors, the big financial institutions because they are going to invest more money in speculating and like the big companies they are going to continue purchasing their own stocks and thus raise the value of their own stocks and bonuses of their managers. And everybody sees that nowadays, more and more people are getting together and they are all fed up with the system and that’s why we see these clashes in the streets of Frankfurt these days.

General view of the exterior of the European Central Bank (ECB) building on the inaugural of it's new headquarters in Frankfurt March 18, 2015. (Reuters / Wolfgang Rattay)

RT:Does the eurozone have a future, given its current state?

EW: The situation now is way worse than five years ago. Five years ago or let’s say seven years ago you had the big euro crisis but ever since, all the government debt has increased, the debts of the banks have increased. Take a look at the government debt these days, its €10 trillion. Bank debt is at €20 trillion. It’s never going to be repaid. All they are doing is keeping the system alive that is dead already alive. The eurozone is going to fall apart.

‘Some people losing while others gaining’

Toine Manders, leader of the Libertarian Party of the Netherlands, suggests that one should blame governments and not capitalism for ordinary people’s suffering.

“The policies of the ECB like all central banks have some damaging effects. The fact that they keep printing more money means that all those people who have saved money are losing. Their savings become more worthless and they are getting almost zero interest. People who saved up for their retirement…also suffer as a result. And a lot of people have lost their jobs and homes because of the economic recessions that are caused by the central banks’ policies… So a lot of people are losing and being damaged, some people are gaining. The banks obviously gain… It’s a very unfair system. So it’s very understandable that a lot of people are very angry about the system.”

“Unfortunately they usually misdiagnose the problem. Most of these people that are now committing violence - which I of course condemn - completely misunderstood the problem. They blame it on capitalism, on the free market, on not enough government involvement. They think the government is not regulating enough and they think that the solution is more government. And it’s quite the opposite. The problem is caused by government. Its government, its institutions, its central banks responsible for these monetary policies of printing ever more money and it’s causing inflations, recessions and depressions…”

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