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Kudrin Returns?

Why did Putin bring Alexey Kudrin back?

Alexander Mercouris

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The announcement that former Russian Finance Minister Alexey Kudrin has been appointed deputy head of Russian President Putin’s Council of Economic Advisers has provoked a stir.

This is not surprising. Few individuals in Russian politics polarise opinion as strongly as Kudrin does.

Kudrin’s admirers are to be found in the business community, amongst liberal economists and amongst people of generally elite backgrounds and liberal views. Amongst people of this sort Kudrin’s reputation is of the highest.

The wider Russian population – to the extent it is aware of him – however views Kudrin very differently, whilst his name is anathema across the very large “patriotic/left wing” section of Russia’s political spectrum

So who is Alexey Kudrin and why does he arouse such strong feelings? Kudrin was Russia’s Finance Minister from 2000 to 2011 as well as the Deputy Prime Minister in overall charge of the economy from 2007 to 2011.

Amongst his liberal admirers Kudrin is the official who is widely credited with engineering the economic boom Russia experienced during Putin’s first two terms as President. He is lauded for his rigidly orthodox free market economic thinking, his tight fiscal management, his refusal to run deficits, and for Russia’s early repayment of its sovereign debt just a few years after its humiliating default in 1998.

Above all he is credited with the creation of Russia’s two national savings funds, the Reserve Fund, which funds the national budget when it is in deficit, and the National Welfare Fund, which acts as Russia’s sovereign wealth fund.

Kudrin’s glowing reputation amongst people of elite and liberal backgrounds both in Russia and abroad is well illustrated by the awards they have showered on him.

He was named “Best Finance Minister of the Year 2005” by The Banker magazine, “Best Finance Minister of a Developing European Country”; in 2006 by the Emerging Markets newspaper (a journal published by the IMF and the World Bank) and “Best Finance Minister of the Year 2010” by Euromoney magazine.

Kudrin’s Russian critics have a very different view of him. They see him as a doctrinaire laissez faire Atlanticist, as the Finance Minister whose dogmatic insistence on cutting spending strangled the economy, causing its productive sectors to wither away as money which should have been used for investment was instead accumulated uselessly, becoming “dead money” in the two Funds.

In addition many Russians have not forgotten or forgiven Kudrin’s monetisation in 2005 of many of their Soviet era social security benefits, turning them from benefits in kind into benefits paid in money.

Given Russia’s historically high inflation and its two periods of hyperinflation in the 1990s this understandably was a very unpopular move and one which provoked widespread protests. Though in the West these protests are largely forgotten, they actually involved more people than the much better known protests which took place during the election season in 2011-2012.

Kudrin is also known to be a supporter of increasing the pension age – another reform that is for equally understandable reasons also very unpopular with many Russians. Beyond these very practical criticisms, much of the hostility to Kudrin within Russia has a distinct ideological hue.

In a country where opinion polls show a clear majority of the population favours a planned economy it is unsurprising that the man who was known as the most prominent economic liberal in the government became unpopular with many people. Russians also tend to conflate support for liberal economic policies with pro-Western political positions. As Russia’s relations with the West have deteriorated this has inevitably exposed economic liberals like Kudrin to charges that they are part of a pro-Western Fifth Column. In Kudrin’s case some of his actions have lent force to these fears.

Lastly but crucially, for many Russians an economic liberal like Kudrin who supports private business and private enterprise is almost by definition an apologist for the system that created the oligarchs – the hated class of plutocrats who emerged in Russia during the corrupt privatisations of the 1990s.

All these factors taken together explain why the individual who in the West was the most highly regarded official of Putin’s government in Russia is one of its least popular. The truth about Kudrin is that both the praise he gets and some – though not all – the criticism is overdone.

Kudrin as Finance Minister did indeed run a tight ship. He did indeed create the two Funds which did indeed help keep the economy stable by financing the budget deficit after the financial crash of 2008.

However the praise for Kudrin’s tight fiscal management ignores the fact that fiscal policy has been no loser since he left the government in 2011. On the contrary the high oil prices in 2012 and 2013 enabled the government to avoid running deficits in those years even though Kudrin before his dismissal had actually planned for them.

Since then the government has managed to run lower deficits during the current recession than those Kudrin ran and planned for during the 2008 crisis. In 2015 the federal deficit was just 2.4% of GDP and though it will probably be higher this year the target is still 3% of GDP.

If Kudrin is a fiscal conservative and a supporter of balanced budgets the record shows his successors also are. In the Russian government and in the Finance Ministry, Kudrin’s fiscal conservatism is not the exception. It is the rule.

This point about Kudrin that is consistently overlooked by his admirers is that whilst he was a member of the government he worked as part of a team. The head of that team was not Kudrin but Putin.

It is Putin not Kudrin who must ultimately take the credit – or blame – for the tough fiscal discipline of the Kudrin years. It is because of Putin’s heavy emphasis on budget discipline that budget spending has continued to be tight since Kudrin left the government in 2011. It was also Putin more than Kudrin who insisted on early repayment of Russia’s debt.

As for the idea of setting up the two Funds, credit – or blame – for that does belong to Kudrin. However it could not have happened without Putin’s support. One must resist the temptation – irresistible to Kudrin’s admirers – of giving Kudrin all the credit for everything that went right under his watch whilst putting all the blame on Putin for everything that went wrong.

If one believes that keeping tight control of budget spending, accumulating reserves and paying off debt is the hallmark of a good manager, then the record shows the good manager in Russia’s case is Putin not Kudrin and that it is Putin not Kudrin who should be given the credit.

In fact Kudrin’s record as an economic manager is decidedly mixed. It is certainly true that Russia’s economy grew rapidly during Putin’s first two terms when Kudrin was Finance Minister and that Kudrin’s success in restoring order to Russia’s previously chaotic budget played a role in this.

However though Kudrin – with Putin’s support – kept a tight lid on government spending he was far too complacent about the borrowing and spending binge Russian companies were cranking up towards in the years immediately prior to the 2008 financial crash.

Several commentators warned at the time that the credit build-up – much of it in foreign currency loans from Western banks – was getting out of control. However the mounting concern appears to have passed Kudrin completely by. Presumably as an economic liberal and as a believer in the virtues of free enterprise he found it difficult to believe the private sector could do wrong.

The result was that the country found itself dangerously exposed in the weeks and months following the financial crash of 2008 as Western banks at the urging of their own central banks scrambled to get cash out of Russia as fast as they could by calling in their loans.

Money poured out of the country putting the very existence of some of the country’s biggest companies at risk. The panic fed on itself as investors then also began to pull out of Russian companies causing Russia’s two stock markets to crash. For a few terrifying weeks it looked as if the entire economy was about to collapse.

In the event the reserves Kudrin and Putin had built up in the previous years proved sufficient to avert disaster, though the single thing that saved the economy… from a much more severe crisis was the sharp recovery in oil prices that took place in the spring of 2009.

Kudrin was obviously not solely to blame for all this. However as the country’s Finance Minister and as the man in overall charge of the economy he must bear the principal blame. At a crucial moment he took his eye off the ball and it was as much a matter of good luck as of good management that the country came through.

By contrast one of the reasons why the Russian economy has proved so resilient in the face of the sanctions and the 2014 oil price collapse is precisely because the lesson of those terrible months in 2008 and 2009 has been learnt. Instead of resuming their wild borrowing and spending spree when the crisis abated Russian companies and businesses instead – at the urging of their government – reined their borrowing and spending in as they moved to hedge and consolidate their positions.

The result was that this time round with the help of a certain amount of support from the government and the Central Bank they have been able to meet their debt obligations without undue strain and without the economy spiralling into crisis.

I would add in passing that the much discussed fall in the Russian growth rate since 2012 is in part a consequence of this process. Reining in borrowing and spending and consolidating positions has inevitably led to a cut in investment causing growth to slow. In other words the frenetic growth of the immediate period prior to the 2008 crash (which touched an annualised rate of 9% in the months preceding the crash) has had to be paid for by a lower growth rate since then.

None of these points are ever made by Kudrin’s admirers, just as when they claim – as they often do – that the Russian economy has been badly managed during Putin’s period as President so that the economy is supposedly insufficiently diversified they somehow manage to forget who was actually in charge of the economy during most of the time that Putin has been President.

This same exercise in selective memory comes up whenever the circumstances of Kudrin’s leaving the government are discussed. Kudrin’s admirers tend to claim that Kudrin left the government because of disagreements between him and Putin over defence spending. Kudrin supposedly was unhappy that defence spending was getting out of control and was becoming unaffordable. Putin supposedly refused to listen and

Kudrin therefore left the government rather than carry out a policy he considered irrational and unrealistic. No part of this is true. The true reason Kudrin was dismissed from the government was not because there was a row between him and Putin over defence spending. Kudrin was dismissed from the government because he made public his strong disagreement with Putin’s decision to appoint Dmitry Medvedev Prime Minister after the so-called “tandem switch” in 2011 when Putin and Medvedev swapped jobs, with Medvedev stepping aside from the Presidency to allow Putin to stand for the Presidency in the 2012 Presidential election and Putin in return nominating Medvedev to be his Prime Minister.

kudrin:medvedev

Alexey Kudrin with then President Dmitry Medvedev

What is strange about the claims Kudrin quit the government over defence spending is that his row with Medvedev which led to his dismissal was carried out in the most public way imaginable on national television for everyone to see. Kudrin started it all by saying on US television that he would not be able to stay in the government if Medvedev was appointed Prime Minister. There was then a public row between Medvedev and Kudrin in Russia shown in full view on national television during which an ashen-faced Kudrin asked for time to speak to Putin only to be sacked by Medvedev on the spot.

The issue of defence spending came up incidentally during the row as Kudrin searched for a reason to justify his objection to Medvedev’s becoming Prime Minister. The reason he hit upon was that he disagreed with Medvedev’s commitment to higher defence spending. He did not however exactly say it was completely unaffordable. Rather he said he wanted to spend more money on education instead.

As to the reasons for Kudrin’s objections to Medvedev’s appointment those to this day remain unclear. There were suggestions Kudrin was disappointed not to have been appointed Prime Minister himself.

There were also suggestions that he had come in for some criticism from within the government for his failure to foresee and pre-empt the 2008 financial crisis (see above) and that his position was already becoming shaky and that this provoked him to lash out.

It seems there was also a plan hatched by someone in the government (probably the Kremlin spin-doctor Vladislav Surkov) for Kudrin to leave the government to head a loyalist liberal pseudo-opposition party. It seems that Kudrin was unenthusiastic about this idea. However the fact it was floated at all shows that at the time of his dismissal the idea of Kudrin leaving the government was already in the air.

The true reason for Kudrin’s row with Medvedev is in fact obvious to anyone who watches the television film of their row: the two men detest each other. Quite why they do is unknown. Possibly it was rivalry for Putin’s favour and resentment by Kudrin that Medvedev – whom he obviously considers his inferior – was stealing a march on him.

Kudrin’s and Medvedev’s mutual dislike does however show one thing. This is that there is no united liberal Atlanticist bloc inside the government. At the time of their row Medvedev and Kudrin were widely credited with being the two most prominent liberal Atlanticists in the government.

Their all too evident mutual dislike however makes it all but inconceivable that they could forge a united front together. Having managed to get himself thrown out of the government in the most public way imaginable Kudrin then committed an action that deeply angered his former colleagues in the government and which has ever since fuelled widespread distrust of him in the country.

During the protests that followed the parliamentary elections in December 2011 Kudrin turned up and spoke at a liberal opposition rally on Sakharov Avenue in Moscow. By doing so he appeared to burn his bridges with the government and seemed to be aligning himself with the pro-Western liberal opposition against Putin.

Kudrin’s speech at the Sakharov Avenue rally in fact demonstrated something else: Kudrin’s complete lack of the most basic political skills needed by a successful politician. His speech at the rally was by common consent a disaster – a boring lecture from a former academic and technocrat that turned everybody off – very far from the rallying cry the situation demanded.

From that moment it was obvious to everyone including Kudrin himself that he could never successfully lead a political party or make himself a significant political force and that he represented no conceivable political threat or challenge either to Putin or to the government.

That realisation almost certainly explains Kudrin’s actions since then. Having realised that he had `no future as an opposition leader he began instead to try to work himself back into Putin’s favour.

The story of Kudrin’s career since then has been one of constant lobbying both by himself and by his supporters to bring him back into the government. Though during this period he regularly made coded criticisms of the government he always stopped short of direct attacks on it. The impression he gave was of someone who wanted the government to succeed but thought it was not being reformist enough. As is often the case with those in Russia who call for more reform he was vague about what was the reform he wanted but he tended to give the impression that he wanted to cut budget spending even more and wanted to raise the pension age.

It seems Kudrin finally persuaded Putin some months ago to bring him back and that the one issue that delayed his return was disagreement about the post he would be given.

In the event the post Kudrin was eventually given – deputy head of Putin’s Council of Economic Advisers – though important is advisory and hardly compares with the posts of Deputy Prime Minister and Finance Minister he held before he was sacked in 2011. If Kudrin held out for a more important position -as is likely – then he clearly didn’t get it. In fact it seems that both Medvedev and Sergey Ivanov (Putin’s Chief of Staff) vetoed any possibility of Kudrin being given executive posts either in government or in the Presidential Administration.

Why then did Putin bring Kudrin back?

There may have been an element… of political calculation behind the decision. Though Kudrin’s new post is hardly one of key importance his reappointment does carry important symbolism. It could be intended as a gesture to the West – where Kudrin is held in high regard – at a time when the anti-Russian policy the US and the EU have been following has been coming under increasing challenge.

More cynically, bringing Kudrin back into the fold might have been intended to keep him quiet and onside in the run-up to the pending parliamentary elections this autumn. More practically, it seems Kudrin is being asked to work on a national economic plan. Almost certainly this will include a recommendation to raise the pension age – a deeply unpopular measure which Putin is known however to have come round to. Possibly Putin is using Kudrin for political cover – looking to Kudrin to recommend an unpopular reform Putin realises is needed whilst setting Kudrin up as the fall guy who will take the flak if or rather when the measure is opposed.

However beyond these tough-minded political calculations personal factors have probably also played an important role. One must put aside the idea of major ideological differences between Putin and Kudrin. To the constant dismay of most of his supporters Putin’s record shows that he is a convinced economic liberal. Putin has never shown the slightest inclination to row back on the market reforms Russia has followed since the USSR’s collapse. If Kudrin is an economic liberal then the record shows Putin is one too.

As for Kudrin he is not quite the doctrinaire liberal or Atlanticist he is sometimes made out to be. He supported Putin’s action against Khodorkovsky and Yukos in 2004. As Deputy Prime Minister and Finance Minister he supported investment in Russia’s infrastructure. He also voiced support for the government’s policy of creating national champions in specific sectors of the economy.

Though a supporter of privatisation he never made this a fetish of his policy. Kudrin has also been careful not to challenge openly Putin’s foreign policy. Whatever his private thoughts on the matter he has never spoken out publicly against Crimea’s reunification with Russia. He surely knows that both for Putin and for the Russian public this question has become the touchstone of loyalty to the country.

Not only is there therefore enough common ground for Putin and Kudrin to work together in the future but there is a long history of close friendship and collaboration between them. Both Kudrin and Putin worked together in St. Petersburg in the 1990s for the city’s then mayor Anatoly Sobchak. Both Kudrin and Putin were then transferred to the Presidential Administration in Moscow when Sobchak failed to gain re-election in 1996. When Putin became the country’s President in 2000 he appointed Kudrin his Finance Minister and backed him in that post thereafter.

If there is one consistent pattern to Putin’s career it is his fierce loyalty to his friends even when – as in Kudrin’s case – that loyalty has not been fully reciprocated. It is probably Putin’s sense of friendship and loyalty to Kudrin which more than anything else explains his decision to bring him back.

Whether Putin’s feelings of friendship and loyalty to Kudrin will be enough to outweigh Kudrin’s unpopularity in the country and with many of his colleagues is another matter. On balance it is unlikely. However by bringing Kudrin back Putin has brought back into the fold an old friend and collaborator with a history of loyal service.

Should Putin decide to take a more liberal turn in managing the economy after the 2018 election Kudrin is there to help him take it. Whilst perennial rumours that Kudrin will become Prime Minister in place of Medvedev are probably misplaced, it is very much in character of Putin to move to keep his options open, and by bringing Kudrin back he has done just that.

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Watch: Democrat Chuck Schumer shows his East Coast elitism on live TV

Amazing moment in which the President exhibits “transparency in government” and shows the world who the Democrat leaders really are.

Seraphim Hanisch

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One of the reasons Donald Trump was elected to the Presidency was because of his pugnacious, “in your face” character he presented – and promised TO present – against Democrat policy decisions and “stupid government” in general.

One of the reasons President Donald Trump is reviled is because of his pugnacious, “in your face” character he presented – and promised TO present – in the American political scene.

In other words, there are two reactions to the same characteristic. On Tuesday, the President did something that probably cheered and delighted a great many Americans who witnessed this.

The Democrats have been unanimous in taking any chance to roast the President, or to call for his impeachment, or to incite violence against him. But Tuesday was President Trump’s turn. He invited the two Democrat leaders, presumptive incoming House Speaker Nancy Pelosi, and Senate Minority Leader Chuck Schumer, and then, he turned the cameras on:

As Tucker Carlson notes, the body language from Schumer was fury. The old (something)-eating grin covered up humiliation, embarrassment and probably no small amount of fear, as this whole incident was filmed and broadcast openly and transparently to the American public. Nancy Pelosi was similarly agitated, and she expressed it later after this humiliation on camera, saying, “It’s like a manhood thing for him… As if manhood could ever be associated with him.”

She didn’t stop there. According to a report from the New York Daily News, the Queen Bee took the rhetoric a step below even her sense of dignity:

Pelosi stressed she made clear to Trump there isn’t enough support in Congress for a wall and speculated the President is refusing to back down because he’s scared to run away with his tail between his legs.

“I was trying to be the mom. I can’t explain it to you. It was so wild,” Pelosi said of the Oval Office meet, which was also attended by Vice President Pence and Senate Minority Leader Chuck Schumer (D-N.Y.). “It goes to show you: you get into a tinkle contest with a skunk, you get tinkle all over you.”

This represented the first salvo in a major spin-job for the ultra-liberal San Francisco Democrat. The rhetoric spun by Mrs. Pelosi and Chuck Schumer was desperate as they tried to deflect their humiliation and place it back on the President:

With reporters still present, Trump boasted during the Oval meeting he would be “proud” to shutdown the government if Congress doesn’t earmark cash for his wall before a Dec. 21 spending deadline.

Pelosi told Democrats that Trump’s boisterousness will be beneficial for them.

“The fact is we did get him to say, to fully own that the shutdown was his,” Pelosi said. “That was an accomplishment.”

The press tried to characterize this as a “Trump Tantrum”, saying things like this lede:

While “discussing” a budgetary agreement for the government, President Donald Trump crossed his arms and declared: “we will shut down the government if there is no wall.”

While the Democrats and the mainstream media in the US are sure to largely buy these interpretations of the event, the fact that this matter was televised live shows that the matter was entirely different, and this will be discomfiting to all but those Democrats and Trump-dislikers that will not look at reality.

There appears to be a twofold accomplishment for the President in this confrontation:

  1. The President revealed to his support base the real nature of the conversation with the Democrat leadership, because anyone watching this broadcast (and later, video clip) saw it unedited with their own eyes. They witnessed the pettiness of both Democrats and they witnessed a President completely comfortable and confident about the situation.
  2. President Trump probably made many of his supporters cheer with the commitment to shut down the government if he doesn’t get his border wall funding. This cheering is for both the strength shown about getting the wall finished and the promise to shut the government down, and further, Mr. Trump’s assertion that he would be “proud” to shut the government down, taking complete ownership willingly, reflects a sentiment that many of his supporters share.

The usual pattern is for the media, Democrats and even some Republicans to create a “scare” narrative about government shutdowns, about how doing this is a sure-fire path to chaos and suffering for the United States.

But the educated understanding of how shutdowns work reveals something completely different. Vital services never close. However, National Parks can close partly or completely, and some non-essential government agencies are shuttered. While this is an inconvenience for the employees furloughed during the shutdown, they eventually are re-compensated for the time lost, and are likely to receive help during the shutdown period if they need it. The impact on the nation is minimal, aside from the fact that the government stops spending money at the same frenetic pace as usual.

President Trump’s expression of willingness to do this action and his singling out of the Dem leadership gives the Democrats a real problem. Now the entire country sees their nature. As President Trump is a populist, this visceral display of Democrat opposition and pettiness will make at least some impact on the population, even that group of people who are not Trump fans.

The media reaction and that of the Democrats here show, amazingly, that after three years-plus of Donald Trump being a thorn in their side, they still do not understand how he works, and they also cannot match it against their expected “norms” of establishment behavior.

This may be a brilliant masterstroke, and it also may be followed up by more. The President relishes head-to-head conflict. The reactions of these congress members showed who they really are.

Let the games begin.

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French opposition rejects Macron’s concessions to Yellow Vests, some demand ‘citizen revolution’

Mélenchon: “I believe that Act 5 of the citizen revolution in our country will be a moment of great mobilization.”

RT

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Via RT…


Macron’s concessions to the Yellow Vests has failed to appease protesters and opposition politicians, such as Jean-Luc Mélenchon, who called for “citizen’s revolution” to continue until a fair distribution of wealth is achieved.

Immediately after French President Macron declared a “social and economic state of emergency” in response to large-scale protests by members of the Yellow Vest movement, promising a range of concessions to address their grievances, left-wing opposition politician Mélenchon called on the grassroots campaign to continue their revolution next Saturday.

I believe that Act 5 of the citizen revolution in our country will be a moment of great mobilization.

Macron’s promise of a €100 minimum wage increase, tax-free overtime pay and end-of-year bonuses, Mélenchon argued, will not affect any “considerable part” of the French population. Yet the leader of La France Insoumise stressed that the “decision” to rise up rests with “those who are in action.”

“We expect a real redistribution of wealth,” Benoît Hamon, a former presidential candidate and the founder of the Mouvement Génération, told BFM TV, accusing Macron’s package of measures that benefit the rich.

The Socialist Party’s first secretary, Olivier Faure, also slammed Macron’s financial concessions to struggling workers, noting that his general “course has not changed.”

Although welcoming certain tax measures, Marine Le Pen, president of the National Rally (previously National Front), accused the president’s “model” of governance based on “wild globalization, financialization of the economy, unfair competition,” of failing to address the social and cultural consequences of the Yellow Vest movement.

Macron’s speech was a “great comedy,”according to Debout la France chairman, Nicolas Dupont-Aignan, who accused the French President of “hypocrisy.”

Yet many found Melanchon’s calls to rise up against the government unreasonable, accusing the 67-year-old opposition politician of being an “opportunist” and “populist,” who is trying to hijack the social protest movement for his own gain.

Furthermore, some 54 percent of French believe the Yellow Vests achieved their goals and want rallies to stop, OpinionWay survey showed. While half of the survey respondents considered Macron’s anti-crisis measures unconvincing, another 49 percent found the president to be successful in addressing the demands of the protesters. Some 68 percent of those polled following Macron’s speech on Monday especially welcomed the increase in the minimum wage, while 78 percent favored tax cuts.

The Yellow Vest protests against pension cuts and fuel tax hikes last month were organized and kept strong via social media, without help from France’s powerful labor unions or official political parties. Some noted that such a mass mobilization of all levels of society managed to achieve unprecedented concessions from the government, which the unions failed to negotiate over the last three decades.

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Soros Mimics Hitler’s Bankers: Will Burden Europeans With Debt To ‘Save’ Them

George Soros is dissatisfied with the current EU refugee policy because it is still based on quotas.

The Duran

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Via GEFIRA:


After the Second World War, many economists racked their brains to answer the question of how Hitler managed to finance his armament, boost the economy and reduce unemployment.

Today his trick is well known. The economic miracle of Führer’s time became possible thanks to the so-called Mefo promissory notes.

The notes were the idea of the then President of the Reichsbank, Hjalmar Schacht, and served not only to finance the armament of the Wehrmacht for the Second World War, but also to create state jobs, which would otherwise not have been possible through the normal use of the money and capital markets, i.e. the annual increase in savings in Germany.

The Reich thus financed the armaments industry by accepting notes issued by the dummy company Metallurgische Forschungsgesellschaft GmbH (hence the name Mefo) rather than paying them in cash. The creation of money was in full swing from 1934 to 1938 – the total amount of notes issued at that time was 12 billion marks. The Reichsbank declared to the German banks that it was prepared to rediscount the Mefo notes, thus enabling the banks to discount them.

Because of their five-year term, the redemption of notes had to begin in 1939 at the latest. This threatened with enormous inflation. Since Schacht saw this as a threat to the Reichsmark, he expressed his doubts about the Reich Minister of Finance. But it did not help, and Schacht was quickly replaced by Economics Minister Walther Funk, who declared that the Reich would not redeem the Mefo notes, but would give Reich bonds to the Reichsbank in exchange. At the time of Funk, the autonomous Reichsbank statute was abolished, the Reichsbank was nationalized, and inflation exploded in such a way that Mefo notes with a circulation of 60 billion Reichsmark burdened the budget in post-war Germany.

George Soros also proposes such a money flurry in the style of Schacht and Funk.

Soros is dissatisfied with the current EU refugee policy because it is still based on quotas. He calls on the EU heads of state and governments to effectively deal with the migrant crisis through money flooding, which he calls “surge funding”.

“This would help to keep the influx of refugees at a level that Europe can absorb.”

Can absorb? Soros would be satisfied with the reception of 300,000 to 500,000 migrants per year. However, he is aware that the costs of his ethnic exchange plan are not financially feasible. In addition to the already enormous costs caused by migrants already in Europe, such a large number of new arrivals would add billions each year.

Soros calculates it at 30 billion euros a year, but argues that it would be worth it because “there is a real threat that the refugee crisis could cause the collapse of Europe’s Schengen system of open internal borders among twenty-six European states,” which would cost the EU between 47 and 100 billion euros in GDP losses.

Soros thus sees the financing of migrants and also of non-European countries that primarily receive migrants (which he also advocates) as a win-win relationship. He calls for the introduction of a new tax for the refugee crisis in the member states, including a financial transaction tax, an increase in VAT and the establishment of refugee funds. Soros knows, however, that such measures would not be accepted in the EU countries, so he proposes a different solution, which does not require a vote in the sovereign countries.

The new EU debt should be made by the EU taking advantage of its largely unused AAA credit status and issuing long-term bonds, which would boost the European economy. The funds could come from the European Stability Mechanism and the EU balance of payments support institution.

 “Both also have very similar institutional structures, and they are both backed entirely by the EU budget—and therefore do not require national guarantees or national parliamentary approval.“

In this way, the ESM and the BoPA (Balance of Payments Assistance Facility) would become the new Mefo’s that could issue bills of exchange, perhaps even cheques for Turks, Soros NGOs. Soros calculates that both institutions have a credit capacity of 60 billion, which should only increase as Portugal, Ireland and Greece repay each year the loans they received during the euro crisis. According to Soros, the old debts should be used to finance the new ones in such a way that it officially does not burden the budget in any of the EU Member States. The financial institutions that are to carry out this debt fraud must extend (indeed – cancel) their status, as the leader of the refugees expressed such a wish in his speech.

That Soros is striving to replace the indigenous European population with new arrivals from Africa and Asia is clear to anyone who observes its activities in Europe. The question is: what does he want to do this for and who is the real ruler, behind him, the real leader?

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