the fact about the alleged “independence” of the central banks of peripheral capitalism
In the erstwhile articles in the "Panorama of Central Banks" series, I spoke mainly of those central banks that are at the top of the global hierarchical pyramid. These are, figuratively speaking, the “golden billion” Central Banks. But the vast majority of Central Banks are located in the central part or at the base of this pyramid. They can be called central banks of peripheral capitalism. In the erstwhile article I included 1 central bank in this group – the Central Bank of the Republic of Turkey.
How can we specify the central banks of peripheral capitalism? – These are institutions powerfully linked to the currencies of Central Banks, which issue planet currencies. frequently specified central banks of peripheral capitalism are called ‘foreign management’ or ‘foreign advice’. And the currencies to which they are associated are called an anchor. For example, the 3 Baltic republics, which gained independency after the collapse of the USSR (Estonia, Latvia, Lithuania) until the end of the last century were linked to the German brand and then with the euro. And this cord disappeared after they abandoned their national currencies to the euro: Estonia – from the crown (2010)), Latvia – from the patch (2014), Lithuania – from lita (2014).
For example, present Bulgaria has a national currency, a lion, which is besides associated with the German brand, and since 2002 with the euro. The Bulgarian authorities dream of when, like the Baltic republics, they will be able to abandon the left completely and control to the euro. However, so far, Brussels and Frankfurt am Main (the seat of the ECB) are not ready to accept Bulgaria in their currency coverage.
Many another central banks are in the same situation. For example, the Bermuda Monetary Office has maintained its currency linked to the US dollar since 1915. Hong Kong monetary authorities have linked their currency (Hong Kong dollar) to the US dollar since 1983. Since 1914, the Gibraltar Monetary Council has linked its currency (the Gibraltar Pound) to the British Pound. Brunei has linked its currency to the Singapore Dollar since 1938, etc.
Many central banks attach their currencies to an anchor not in the form of a fixed course, but in a more soft way, as part of tiny deviations (stabilised rate system, fixed rate with anticipation of correction, etc.).
As I have already written, many countries have abandoned their national currencies, but at the same time have retained their national central banks. Thus, reasonably large countries specified as Ecuador, Panama, El Salvador and Zambia have completely switched to utilizing the US dollar. And everyone inactive has central banks. It can be concluded without exaggeration that these central banks are branches of the U.S. national Reserve System. They are a kind of "currency cantors" in countries of peripheral capitalism.
Central banks located at the base of the global central bank pyramid are controlled in 1 way or another by a group of central banks at the top of the pyramid. These are the United States national Reserve, the ECB, the Bank of England, the Bank of Japan and respective another central banks. First, they are central banks of the G-10 group. I've already written about this group that was formed in 1962. The General Agreements to Borrow-GAB were subsequently signed in Paris. The signatories were 10 associate States of the global Monetary Fund (IMF): Belgium, Canada, France, Italy, Japan, the Netherlands, the United Kingdom, the United States, Sweden and Germany. A small later the agreement was signed by Switzerland. There are presently 11 signatories, but the group is inactive named G-10. There are indications that the G-10 central banks form a cartel that helps them keep the peculiar position of their currencies.
But central banks located outside a circumstantial cartel are forced to conflict desperately to guarantee a more or little unchangeable exchange rate for their currencies and overall financial stability. Moreover, according to the unwritten principles of the Washington Consensus, governments and, in general, the countries under whose jurisdiction specified central banks are subject are not entitled to enter the "independence" of these institutions. And defend their economies by introducing all restrictions and prohibitions on the cross-border movement of goods, capital and currency. In order to guarantee that central banks do not become truly sovereign institutions, “money rulers” (with the US national Reserve and another G-10 central banks) form the “fifth column” in the countries of peripheral capitalism (in legislative, executive and judicial branches of power). The hard situation of specified central banks can be illustrated by respective examples.
At the turn of the first and second decades of our century, the then president of Argentina Cristina Fernandez de Kirchner attempted to take control of the central bank of the country and usage it in the interests of the country's economical development. In particular, Kirchner decided to usage the Central Bank's abroad reserve assets to repay the country's abroad debt. In early 2010, the country's external public debt was about $13 billion, and the global reserves of the Central Bank were $48 billion. specified a large amount of abroad reserves is explained by the fact that the Argentines inactive in the 1990s, the global Monetary Fund, which is known to be in the interest of the global financial institution, imposed a monetary emanation model called “money management”.
The president of Argentina decided to take over about 1/7 global Central Bank reserves ($6.6 billion) to pay off external public debt. From an economical point of view, this was absolutely right, since the global Central Bank reserves provided purely symbolic gains: between 0.5 and 1.0 percent per year. Argentina offered loans of 14-15% on the global market. If government debts were covered by external loans, the country would become increasingly dependent on global lenders. utilizing the Central Bank's reserves, Argentina could in a short time completely get free of its dependence on abroad debt. It is not hard to imagine how the “financial international” reacted to specified an effort by a courageous woman. The reaction was expressed by then president of the Argentine Central Bank Martin Redrado, who refused to follow Kirchner's instructions. In response, the president of the country signed a decree to cancel Redrado. Incidentally, in order for the presidential decree to enter into force, it must be approved by all ministers of the government of the country. All ministers put their signatures on the document. Nevertheless, Redrado filed a suit in the Buenos Aires court and after a fewer days (10 January 2010, what an effectiveness!) Argentine Temida invalidated the country's president's decree. In particular, justice Sarmiento, who presided over the case, justified her decision by stating that "the president has no power to resign the Head of the Central Bank".
Surprisingly, the court not only decided to reinstate Redrado as president of the Central Bank, but besides demanded the repeal of the decision of the president of Argentina to usage the Central Bank's global reserves to repay the country's debt. Pointing out that specified a decision requires discussion and voting in both chambers of parliament. It is worth noting that the next session of Parliament was not due until March, and the debt had to be repaid as early as 2010.
Ultimately, after the parliament's commitment to solving this issue, the president of the National Bank of Poland Martin Redrado was released at the beginning of the following month. However, the decision to ban the usage of the global reserves of the Central Bank was maintained. It is worth noting that in January 2010, by decision of the fresh York court, the account of the National Bank of Argentina in US banks was frozen. The decision was taken on the basis of claims by creditors holding a abroad debt of Argentina. The formal decision of the fresh York court had nothing to do with Kirchner's decision. However, experts well aware of the “rules of the game” in the global financial strategy believe that this was a kind of informing from the global financial institution to the president of Argentina. I believe that this was a reminder to these countries that the global financial institution has committed itself to collecting abroad reserves and printing its "national" banknotes exclusively on the back of paper sheets called "dollar" or "euro".
However, the communicative did not end there. The female president didn't want to follow the example of a global financial mafia. On March 1, 2010, Christina Kirchner signed a decree to make a peculiar Debt Repayment Fund that was powered from the free gold and currency reserves of the Central Bank ($4.382 billion). National emergency law has made it possible to legalise this programme. In the first half of 2010, US$1.604 million was spent on the fund to repay government liabilities to private creditors and US$766 million to global financial institutions. At the end of the first half of 2010, Argentine management managed to regulate a large part of the old public debt created during the insolvency period (at the beginning of the decade).
Of course, the fight to get the president of Argentina to usage the central bank as an instrument of national improvement is met with furious opposition from global financial agents. Christina Kirchner created an unacceptable precedent for “moneyholders”. Since this communicative with the Central Bank of Argentina it has been a decade and a half, but a female is inactive a victim of constant threats and persecution.
But this is the communicative of the Central Bank of Hungary, which began around the same time as the past of the Central Bank of Argentina. In the spring of 2010, those whose planet media described them as "nationalist forces" won a decisive triumph in Hungary. The Fidesz-led coalition won two-thirds of the parliamentary seats. A large surprise for the West was the announcement by the coalition of the refusal to proceed the current course, which any coalition politicians aptly referred to as "the country's nutrition" of abroad investors. The fresh government went from words to deeds. In the summertime of 2010, the fresh Hungarian Prime Minister Viktor Orban spoke out against the IMF's orders: he refused to comply with the Fund's request for cuts in budgetary expenditure, poorness of the majority of the country's population and the introduction, contrary to the IMF's recommendations, of an additional taxation imposed on the banking sector, trying to strengthen the economy at the expense of those who profit most from it. But these actions are not the most crucial subversive activities (remember that, for example, in the European Union, any countries, especially from confederate Europe, besides refuse to cut budget expenditure, reduce workers' social rights, etc.).
Most importantly, in the last days of 2011, the rules governing the position of the Hungarian central bank were amended. The IMF and the EU immediately saw this as an effort by the government of Orban of the Central Bank, the Hungarian National Bank (MNB), depriving the Hungarian State of its celebrated independence. And this is simply a direct threat that the country may get out of control of a financial international. Here are any details of the law. It provides for the position of another vice president of the head of the National Bank, appointed by the head of government. The Monetary Council shall be increased from 7 to 9 members. Its members are elected by parliament. Now you gotta choose again the objectionable manager of MNB. And the Prime Minister will present the candidacy for head of MNB to the president of the country.
A fewer days after the adoption of the "subversive" amendments to the Central Bank Act, the fresh constitution of Hungary entered into force (as of 1 January 2012). This clearly did not coincide with the European Union's concept of "universal human values". The Basic Law so provided that the Hungarian people were united by “God and Christianity”. Attention – not banks and the market, not “democratic values”, but the ideals of Christianity. In addition, the Basic Act confirmed the control of the Central Bank by the government of the country. Incidentally, the Basic Act has established that the national currency of the country is forint. A peculiar parliamentary majority may decide whether to control to the euro. Viktor Orban's legislative initiatives made him a hero among most of his fellow countrymen. In addition to Hungary, the Prime Minister Hugo Chavez of Europe (expression of European Parliament MP Daniel Cohn-Bendit) was named. As a associate of the European Parliament, Jean-Luc Mélenchon assessed the global implications of the fresh Act on the National Bank of Hungary: "When the utmost right came to power in Slovakia, the European Union was silent, just as later erstwhile nationalists entered the Greek government. They didn't care – they only cared about money. But Orban has entered into the position of the ECB and cannot be forgiven. Everything, but not this. In this context, the associate stresses that the Hungarian Central Bank Act can force European politicians to reflect on the position of the European Central Bank, whose "independence" is simply unlimited.
International financial consequence immediately. Demonstrators appeared on the streets of Budapest and another Hungarian cities – something like our “mud-rus” audience. The most amazing thing: they had posters with them, demanding “independence” of the central bank! It is simply touching to see specified deep cognition of monetary issues among street Protestants in Hungary. MNB itself protested the actions of Hungarian legislators. The attacks of Hungarian media on Viktor Orbán have intensified (in particular, they took revenge on him for placing the Basic Act on censorship). The search began for the "intimate life" of the 69-year-old Hungarian president Pal Schmitt, who supported all major legislative initiatives of the Prime Minister.
External forces have besides been involved. Even before the Constitution was adopted, US Secretary of State Hillary Clinton tried to convince the Prime Minister. The head of the European Commission, Jose Manuel Barroso, wrote respective letters to Viktor Orban, in which he expressed his concern about the reforms he was carrying out, promising to check the fresh Hungarian government through the Court of Justice of the European Union for compliance with European standards. In order to put force on Hungary, the European Commission has besides utilized economical levers to show that it has stopped negotiations on the granting of the required Hungarian credit. However, somewhat earlier, Hungary was on the list of "model democracies" even during the 2008-2009 financial crisis. It received a full of around EUR 20 billion of loans from the EU, the planet Bank and the IMF. Negotiations on another IMF debt began in January 2012, and the Fund stated that the condition for granting the debt was to reconstruct the position of ‘independent’ to the Hungarian National Bank. According to experts, Hungary needed an external debt of around EUR 20 billion for the coming year.
The reaction of leading credit rating agencies was immediate: in the first days of 2012, they importantly lowered Hungary's credit rating. abroad capital went outside Hungary. The forint course has fallen, reaching the lowest values since the crisis. The interest rate of 10-year government bonds of the Hungarian government exceeded 10%.
Already at the end of January 2012, "Hungary Chavez" was forced to resign. In particular, V. Orban said: “We are ready to follow all the recommendations concerning our Central Bank and its independence. In my opinion, the sharp conflict between us and Brussels now lies only in 1 thing: any members of the European Commission have recommended members of the board of directors of our Central Bank not to curse to our constitution. I agree with everything but this.” In April, legislators were forced to vote to reconstruct the Hungarian National Bank's "independence".
Financial global rapidly managed to suppress the “rebellion on the ship”. After losing his fight with the global financial mafia, Viktor Orban openly stated in May 2012: “The gang of bandits who took over in the European Union deals with the banal enslavement of anyone he can lure there! In Hungary, they realized this and tried to save themselves. But the global financial mafia holds Hungarians firmly by the throat...” Here is another comment by V. Orban: “Hungary has been treated like a colony”.
The form of the article does not allow, even in telegraphic form, to mention all the stories that happened (and take place) to central banks of peripheral capitalism. To those curious in these stories I urge to usage the publication: Valentin Katasonov. "Central banks in the service of their masters". In 3 Volumes (M.: Tion, 2023). There you will find articles on central banks of Turkey, Greece, South Africa, Afghanistan and Ukraine.
Written by Valentine J. Katasonov
SOURCE:
https://www.zolotoy-club.ru/tpost/fosz6gv5m1-panorama-tsentrobankov-o-valyutnih-uprav
(PL)
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Special Appendix:
Central Bank of Central Banks | Bank of global Settlements | BIS – “Corporate of Central Banks” | Valentin Katasonov
Reads Valentine J. Katasonov [can turn on Polish subtitles]
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