This comment on the worldwide actions of the Occupy movement last weekend was not published by a small radical left magazine or an anti-capitalist blogger. It is the opinion of the editors of the Financial Times, one of the most influential and prestigious global newspapers and a strong defender of free markets and liberal democracy.
It is only one example of the many positive endorsements of the “Occupiers” by establishment representatives. German Finance Minister Wolfgang Schäuble, a member of Chancellor Angela Merkel’s conservative Christian Democrats, admitted that he was taking the protests “very seriously.” Future head of the European Central Bank (ECB) Mario Draghi said, “Young people have a right to be furious.”
How to explain this support for what still seems to be a marginal phenomenon in terms of numbers of people and institutions that are crucial parts of the very system the demonstrators are protesting? It is true that last weekend hundreds of thousands all over the world participated in so-called occupations of places that are seen as symbolic for an unjust and rotten banking system. But in most cities the turnout was not impressive, and the message was unclear for the simple reason that there are no agreed slogans or demands. Besides, we have seen much bigger and targeted demonstrations in the past, for instance against the Iraq War, that had no impact at all on the decision makers in Washington, London or Madrid. Why all of a sudden this sympathy and understanding?
Part of the explanation is probably that in the last couple of months many politicians have noticed that the anger over the extreme consequences suffered by the people because of the present financial system has reached their middle and lower class electorate as well. Calls for more and better control of bankers who were able to survive the economic crisis because governments bailed them out with taxpayers’ money started with a small group of activists. But the sentiment is shared by a growing number of ordinary citizens who will not take to the streets easily but who do agree that “something needs to be done” against financial markets that have failed them.
Here we come to the second reason for the unexpected backing. European Commission President Jose Manuel Barroso even went so far as to demand legal consequences for rogue bankers, and he has announced European legislation to make it happen. On top of that, European leaders are preparing drastic plans to save Greece from insolvency at a summit this weekend. Many expect a debt haircut for Greece of up to 50 percent. That would create major problems for several big French and German banks that have lent billons of euros to the Greek state in the past. Therefore, the plans might also include a forced recapitalization of European banks to help them deal with the hefty write-downs that may result. Leading European bankers are not happy with the prospect of new state funding and the public control that comes with it.
For that reason, as the German magazine Der Spiegel put it, “From the perspective of European leaders, the timing of last weekend’s protests – and their message casting banks as the bad guys – could not have been better.”
In order to impose new and strict regulations and reset the power balance between private banks and public authorities, European leaders will try to surf on the waves of popular protests that started one month ago with Occupy Wall Street. I am sure the New York activists were not aware of their huge and acute impact on the restructuring of the European banking system. I am convinced Barroso and Schäuble were not at the time. Now they are. For them the Occupiers are a blessing in disguise.
