Take the UK. In 2010, 2.9% of its entire GDP went on interest charges that it paid to the banks. Do you need me to tell you how the banking sector can afford to pay such massive bonuses? If you can get money from the Bank of England at 0.5% and charge the UK tax payer 4.0% (which is what the UK government was paying in February 2011), then you hardly have to be a genius to see that you can make collosal amounts of money for doing nothing.
We have been repeatedly told that it has to be like this : that the Lisbon Treaty prevents central banks lending to governments. And the UK public has been told by Cameron and Osborne that they should be very grateful to have such a wonderful Government because, thanks to their austerity plan, the ratings agency have maintained triple A status, and that thanks to that, the UK only has to pay 2.29%. Wonderful!
But, if the Bank of England lent money to the government at the same rate it lends to banks (0.5%), interest costs would plummet, and there would be something like 25 billion pounds more to pay for public services, pensions, education etc etc.
Of course, if they did that, the Fat Cats in the City who have fixed the system would not "earn" their 49 billion euros a year that they got out of the UK taxpayer in 2010 - and the even more colossal sums they have lined up for the future.
But it's GAME OVER boys. Michel Rocard and Larrouturou in Le Monde on Monday have seen the same point that I cottoned on to. Paragraph 2 of article 123 of the Treaty allows lending by central banks to "publicly owned credit institutions", and the ECB told me explicitly in a reply to my question that such institutions, like banks, can do what they want with money they get from central banks. As a result, THERE IS NO LONGER ANY REASON WHATSOEVER FOR GOVERNMENTS TO BORROW FROM THE LOAN SHARKS IN THE FINANCIAL SECTOR.