A War of Each Against All Has Erupted in Euroland

February 14, 2010 (LPAC)—In the aftermath of Thursday's disastrous European Union heads of state summit in Brussels, where a huge rift surfaced over how to deal with the imminent threat of sovereign default by a number of European states, the pages of the European financial press are filled with the spectacle of a true Hobbesian "each against all" war of survival among rival factions of bankers and other oligarchs.

In addition to Greek Prime Minister Papandreou's rant against Brussels bureaucrats who let the previous Greek conservative government get away with cooking the books and hiding the looming debt explosion, a deep rift seems to be building between France and Germany. The French are touting the bailout of Greece, Spain and the rest of the PIGS—so long as Germany puts up the cash. And at the summit, German Chancellor Angela Merkel put her foot down, refusing to cough up the bailout cash for Greece—at least until Greece makes a credible show of murderous Schachtian austerity. In reality, the German Constitutional Court has set the grounds for Germany's refusal, by imposing limits on how far down the road to extinction Germany can go in order to live up to the Maastricht and Lisbon treaties. And, as the London Financial Times was forced to admit, the German population are overwhelmingly in support of Merkel's refusal to be the piggy-bank of last resort for the weaker states of the EU.

Perhaps the nastiest words came from Albert Edwards, chief strategist for the Paris-based Société Générale, who told the Mail Online that the euro is doomed under any circumstances, so why should anyone spend a penny bailing out Greece or Spain. In a note to investors, Edwards wrote, "My own view is that there is little 'help' that can be offered by the other eurozone nations other than temporary, confidence-giving 'sticking plasters' before the ultimate denoument: the break-up of the eurozone. Any help given to Greece merely delays the inevitable break-up of the eurozone." Edwards went on to argue that Portugal, Ireland, Greece, and Spain are two weak to be in the European Monetary Union (EMU).

The weekend edition of the Financial Times was one big hysterical rant over the Thursday Brussels fiasco and the implications for the demise of the entire EMU. In a doom-and-gloom lead editorial, "Europe Stumbles Upon Closer Union," the editors actually made the opposite argument: Europe does not have the social cohesion to get its financial act together, through greater centralization and coordinate austerity and bailout policies. After warning that no new countries will wish to get involved in the European Union, if Brussels can't assert centralized fiscal controls, the editorial fell back on the same tired City of London position, throughout the past two years of crisis: Bring in the International Monetary Fund to impose the tough sanctions, and dole out the bailout loans. "It would be embarrassing for a member of the EU to receive help from the Washington-based Fund, so admitting the continent could not solve its own problems. But better that than sleepwalking into constitutional upheaval." In an accompanying news article titled "Trust Is Wearing Thin in Europe's Union of Opposites," Tony Barber ranted, "Merkel is determined to uphold the historic promise to German voters not to be a cash dispenser for villains."

Recalling last week's recommendation by UBS to their clients that they dump stock in Banco Santander, it is becoming clearer and clearer that Lyndon LaRouche is right: In times of systemic collapse, oligarchical bankers turn their knives on their closest friends, and Hobbesian warfare will continue until the last banker has fallen. Indicative of this warfare is an article in the Sunday, Feb. 14 London Observer, noting management changes at both Rothschild and Lazard, and anticipating that the two firms are about to go after some vulnerable big banks on Wall Street.