Economy

Debt crunch intensifies China’s crisis

World financial markets have been rocked again in recent days. First came the US Fed’s announcement last Wednesday (19 June) that it could start to unwind its cheap credit policy of ‘quantitative easing’ by year-end. The following day financial markets were stunned as a liquidity crisis gripped China’s state-owned banking system, with major banks all but refusing to lend to each other. This ‘credit crunch’ reflects growing fears over the unsustainable surge in debt levels across the Chinese economy, and its growing reliance on the opaque and unregulated shadow banking sector.

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Bag men for the banks

The one section of the the establishment which has so far escaped scot-free are the auditing firms, in particular the “Big 4”, KPMG, PWC, Ernst & Young and Deloitte. These firms gave a clean bill of health to the banks as late as 2008.

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EU-US Free Trade Agreement: Race to the bottom of the Atlantic

A lot of ink has been spilt in the mainstream media, praising the role a free trade agreement between the EU and the US could play in pulling the two economies out of the crisis they are engulfed in. Richard Bruton outdid himself in the Sunday Business Post on 14 April 2013, claiming “abolishing restrictions in the EU’s services sector alone could boost EU GDP by 2.6%.” Three days later a press release from him claimed that the whole deal could boost EU GDP by a mere 0.5%!

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Behind the stock market surge

In the first week of March share prices surged on the New York Stock Exchange followed by other major exchanges. Does this signify a revival of the global capitalist economy? The Financial Times was quick to note that "little of investors’ exuberance is reflected in core economic data… The US and the UK ended the year stagnant; the eurozone and Japan in renewed recession; the emerging world slowing down". (Stock Markets Defy Economic Woes, 6 March)

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Cyprus: “Refuse to pay the ‘debt’!”

Interview with Athina Kariati, New Internationalist Left (CWI in Cyprus). After months of ‘calm’ the capitalist debt crisis has resurfaced over the banking meltdown in Cyprus, sending financial markets into a spin. EU ministers and the newly elected right-wing Greek Cypriot president have demanded that small savers, ie Cypriot workers, pay €billions for a banking bailout.

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