Goldman's European coup

The vampire squid that is Goldman Sachs is busily jamming its blood funnel into as many positions of power in Europe as it can. By Aidan Regan.

So, Berlusconi was eventually removed, like Papendreou, by external forces in the ECB alongside European technocrats and anonymous bankers. The money markets decided that Italy must pay a premium on its bonds for having Berlusconi as head of government. Within days he was gone. We don’t know the fine details of the communication between the ECB, international finance actors and domestic technocrats in Italy. But we do know that it was not millions of furious Italians that brought Berlusconi down. It was the political pressure of markets. Central to this nexus of political power is Goldman Sachs.

What do Mario Monti (new head of the Italian government), Lucas Papademos (new head of the Greek government), Mario Draghi (new head of the ECB) and Peter Sutherland (hugely influential in Irish public policy) have in common? They all worked for the American investment bank Goldman Sachs. This is not a coincidence: there is a subtle takeover taking place in Europe, oriented around elite networks of business plutocrats, in alliance with political technocrats, to ensure that the crisis is resolved without damaging the banking sector. Goldman Sachs is weaving a powerful network through a subtle form of quiet politics, under the guise of economic technical management.

Draghi was Goldman Sachs vice chairman of the European division from 2002-2005, during the period they helped cover up dodgy accounting practices in the Greek treasury. Monti was a special adviser to European Goldman Sachs from 2005, using his influence to “open doors” to the corridors of European political power. Papademos worked as a trader for the investment bank, and as governor of the Greek central bank from 1994-2002, was centrally involved in covering up Greek debt with assistance from Goldman Sachs. Sutherland is a chairman of Goldman Sachs international, with direct access to the political executive of the Irish state, because of his close Fine Gael connections. He was hugely influential in the decision to bail out the banks – and to make the Irish state insolvent.

These are just four players in the European Goldman Sachs network. There are many more in high seats in the European civil service, finance ministries, and national central banks. The strategy of the US investment banks, according to French journalist Marc Roche, is to target EU commissioners and central bankers. This ensures direct access to information on interest rates, and undisclosed political decision-making. Discretion and quiet politics is the strategy. Goldman Sachs do not want their name mentioned anywhere. They are content with a subtle process of manufacturing collective consensus, behind closed doors, in alliance with other neutral ’economists’, to ensure the rules of the game are instituted in their favour.

It is an extraordinary network of power that connects Washington, Dublin, Brussels, Frankfurt, Rome and Athens. The Europen Goldman Sachs government has significantly more influence than national politicians, backbenchers, and of course, European citizens. They, like most financiers, have a contempt for any attempt at politicising macro-economic policies. This is why they want prime ministers replaced with technocrats, preferably from the central bank, to get on with the job of imposing structural adjustments in wage, fiscal and labour market policies. The Irish, Italian, Spanish, Portuguese and Greek governments (whether they realise it or not) are nothing more than debt collecting agents of international finance. Democracy has been suspended in the interest of the London/Frankfurt stock exchange.

 Aidan Regan is a PhD candidate in Public Policy at University College Dublin. aregan.wordpress.com.