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International Viewpoint, the monthly English-language magazine of the Fourth International, is a window to radical alternatives world-wide, carrying reports, analysis and debates from all corners of the globe. Correspondents in over 50 countries report on popular struggles, and the debates that are shaping the left of tomorrow. International Viewpoint—magazine of the Fourth International IV445 February 2012 Economy - The Next Banking Crisis P1 Greece - From despair to resistance P2 Greece - Social explosion, a question of months? P5 Greece - Hundreds of thousands oppose repression at Syntagma Square P9 Greece - For an independent women’s movement against debt and austerity P9 Greece - Eleftherotypia’s Workers are back with their own newspaper! P10 Greece - Restructure, audit or cancel the debt? P11 Debt - What priorities, tasks and ambitions for the citizens’ audit in Europe? P14 Debt - Our AAA : Audit, Action, Abolition P16 Abolish the IMF - The CADTM downgrades its IMF rating! P17 World Economy - The roots of the world economic crisis P18 Arab Revolutions - Theses on the Arab Spring P26 Arab revolutions - Revolutions are not over P28 Syria - The point of no return P30 Egypt - In defence of the Ultras- Egyptian Revolutionary Socialists on the football stadium massacre P32 Environment - Call to action – Reclaiming our future 3A Rio +20 and Beyond P33 Porto Alegre Thematic Social Forum - Is another world still possible? P35 Porto Alegre Thematic Social Forum - Is the "Green economy" the new Washington consensus? P38 Social Forums - On green capitalism, the indignados and the social forums P39 Environment - Hunger is man-made and man can unmake it P40 Geopolitics in South Asia - Pakistan, theatre of war P42 Pakistan - Lahore factory blast: Lift Ban on Factory inspection P49 Banglade sh: - Coup bid reveals extremism within P50 India - Against the Rule of Capital; For the General Strike P51 India - Condemn the killings of CPI(M) activists, stand up for democratic rights for all P52 Sri Lanka - Face the enemy in unity or back the chauvinists and perish P53 Burma - What new wind is blowing in Burma? P54 Nigeria - Occupy Nigeria: A general strike against the “Cabalocrocy” P57 China - The Aggravating Crisis Cannot be Solved Even with Wen Jiabao’s Push for Political Reform P59 Brazil - From Lula to Dilma P61 Russia - The Russia of the indignant P65 USA - Occupy, longshore workers challenge anti-union bosses P67 USA - The Real Ron Paul P71 Fourth International - Bensaid’s indignation P72
INTERNATIONAL VIEWPOINT Economy - The Next Banking Crisis In the ongoing Euro-crisis, our political leaders are constantly criticized for ‘playing catch-up’ and not being ‘ahead of the curve’ (although others might feel that they are completely round the bend). Perhaps, therefore, it is time to look up from the turmoil in the sovereign bond markets and the counsels of the European Union, dust off the crystal ball, and look forward to the next banking crisis. For it is becoming increasingly clear that banks across Europe face a much more serious problem than a 50 percent haircut on their holdings of Greek government bonds; and that problem goes to the heart of what is wrong with the current culture and practices of the financial sector. A bank draws its income from three main sources: shareholders, depositors and lenders. The shareholders provide the risk capital, as in any capitalist business. Depositors seeking a safe and convenient place to store their money traditionally provide the bulk of the funds which the bank then lends to its clients, while holding a modest proportion in reserve to meet any possible withdrawals by depositors. And lenders provide additional funds by buying marketable securities issued by the bank in the form of bonds. Credit Boom In the run-up to the 2007-08 banking crisis, banks expanded their activities very rapidly by increasing their income especially from the last of these three. The higher risk attached to equity means that it is an expensive source of funds, ruled out except when absolutely necessary or required by state regulators. Growth in deposits is broadly limited by the rate of growth of economic activity, since winning a higher share of total deposits from one’s competitors involves costly investments in marketing or service quality. But in the conditions of feverish growth at the height of the boom, borrowing is easy and cheap, so banks like Royal Bank of Scotland(RBS) and Lehman Brothers threw caution to the winds. Not only did they increase their debt levels massively in relation to their equity capital and reserves, but they also kept down the cost by borrowing for relatively short periods of 1 to 5 years. They believed that they would have no difficulty in ‘rolling over’ these debts when they fell due – or even that they could redeem them with cash, either from the vast profits they expected to make, or from new equity issues. But like all credit booms, this one ended in a massive crash. Beginning in the sub-prime household mortgage sector in the USA, rising default rates on loans opened up the fantasy world of no-risk finance. The widespread use of derivatives, developed on the basis of models that bore little or no relation to the actual functioning of financial markets, had meanwhile created chains of potential contagion that reached to the furthest corners of global finance. As investors began to appreciate the real risk to the market value of their financial assets, there ensued a classic flight to cash; as a consequence the wholesale money markets, in which banks borrow from each other and from other investors, began to freeze up. Bank debts falling due could not, in this situation, be rolled over; the main source of discretionary funding for banks disappeared. As so often Britain led the way, with the collapse of Northern Rock in September 2007, and the slide into the global banking crisis began. Now it is true that central banks and governments succeeded in stabilizing the banking systems in most countries through the provision of massive infusions of funds, whether in the form of equity (as in the UK government stakes in RBS and Lloyds), loans from central banks, or cash from central bank purchases of financial assets held by banks (notably through quantitative easing). It is also true that, as the world economy began an apparent recovery in 2009, there ensued also a certain growth in bank deposits, and a recovery in the market price of bank shares which even allowed some banks to raise new equity or loans. Next Few Years? But banks still have huge amounts of outstanding debt, issued during the boom years, which will contractually fall due in the next few years: for example, Lloyds Bank currently has £295-billion of 1
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Page 31 and 32: imperialism in the region is articu
Page 33 and 34: nearly 300 people were killed on on
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Page 39 and 40: e felt in student organizations, th
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Page 43 and 44: Consequently : the World Food Progr
Page 45 and 46: it mean that most Pakistanis are fr
Page 47 and 48: The Afghan issue has become a domes
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Five of the JeI’s top leaders, in
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that less than a year after being t
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The revolts of 1988 and 2007 led to
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Nigeria - Occupy Nigeria: A general
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of 16,000 times the minimum wage th
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Poor Public Health Services Public
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The PT candidate, Luis Inacio Lula
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One of the great limits of ten year
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Another characteristic should be no
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Over the years, the ports of Oaklan
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Like many other Libertarians, Ron P
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of possible social change and as a
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