The Slog reveals how EU Regulations can become law with MEP involvement - and how the Bail In Law will impact and apply not just in the Eurozone but the wider EU itself ! Stated bluntly - if you live within the EU , a mechanism is already in place to loot your bank accounts !

http://hat4uk.wordpress.com/2013/08/12/global-looting-how-an-eu-regulation-can-become-a-law-without-mep-involvement/

GLOBAL LOOTING: How an EU regulation can become a law without MEP involvement

EC process and Brussels Mole confirm that a legal mechanism exists to fleece all of us in the event of a euro bank collapse

The exceptionally unexceptional Olli Rehn

In this follow-up to the weekend’s bailin process adoption posts, The Slog fills in the remaining pieces of the jigsaw. You may think you are a member of a Democratic European Union. You are not. There are many easy ways to hide from the EU Parliament: bundling a Delegated Regulation Supplement into a larger package (eg, on banking union); or the meeting of an EC committee followed by “no response” from MEPs are just two…the RRM is another. All have the force of Law. Follow the timeline, observe the press statements, read the speeches….and make your own minds up.

Let me at the outset pay tribute to two folks here. First, my longstanding Brussels mole who has gone more than the extra mile here to point me in the right direction; and the indefatigable Anna Raccoon (great post today by the way) mistress of the art of deconstructing obfuscation.

There is certainly no call at all for any tribute to the EU’s own press officers and bureaucrats.  It’s obvious there is at least some degree of deliberate  obfuscation going on as regards the Bailin Law question. There is, for example, no clear line of responsibility between Olli Rehn (Economic & Monetary Affairs) & Michael Barnier (European markets). All their press officers – and the EU Parliament’s press office – are on holiday now until 23rd August. And since 19th July until 26th August, the MEPs are in recess.

All of which presents a question I’ve been badgering the Brussels Mole with since yesterday afternoon: how can a bailin law have passed if the EU Parliament is
as usual out to lunch enjoying annual holidays?

To which the answer is: because many instruments in the EU do not need democratic approval.

Hold that thought, and then follow this timeline.

The story starts in Michel Barnier’s manor after Cyprus.  Quizzed by MEPs  on 27th May this year, his inquisitors formally recorded their view that his answers were “unsatisfactory and evasive”.

But behind the scenes, the one-off that was a template and then an untemplate was being hastily turned into a proposal. This is where one or more EC committees recommend something full of caveats to see if anyone will notice.

Three weeks later on June 17th, Reuters teased out some facts from sources in Brussels. The euro zone, it confirmed “is separately working on a law, called the bank recovery and resolution directive (BRRD), that will establish its own order in which losses are imposed on those who entrusted money to a failing financial institution.”

In typical EC style, it outlined four options ranging from bromide to draconian. EC proposals always put the thing they want to do last.

Within ten days (this is going at the speed of light for the EU machine) the full EC Council decided on “a compromise”. While on the surface it looked very yes-and-no-with-reservations, as usual there was a disturbing Get out of Jail Free Card in small print at the end. My emphasis should be self-explanatory:

’11228/13 4 E

The Council’s compromise approach provides flexibility to national resolution authorities, subject to strict criteria and only in exceptional cases, to exclude liabilities and to use the resolution fund to absorb losses or recapitalise an institution. However, such flexibility would only be available after a minimum level of losses equal to 8% of total liabilities including own funds has been imposed on an institution’s shareholders and creditors, or under special circumstances 20% of an institution’s risk-weighted assets‘.

This is classic EC/ECB doublespeak: we will be flexible, but only after we’ve cleaned you out, dear customer: 8% of a bank’s liabilities (by the EU’s own liquidity rules alone) in a full-on bank collapse would be more than enough to wipe out ‘shareholders and creditors’ – which as of May, by some Divine Right of Banks, has been taken to mean us.

In EUspeak, ‘exceptional’ and ‘special’ both mean the same thing: ‘inevitable’.

On July 7th ,Mario Draghi addressed a hearing at Rehn’s EAMAC  as follows…..note the key word italicised: “until the regulation on the single supervisory mechanism (SSM) is adopted, we at the ECB cannot formally take decisions. In this context, it is my understanding that the supervisory accountability arrangements with the Parliament, in line with the SSM regulation, are nearing finalisation on the basis of a constructive stance by both parties.”

What does devious Draghi mean by finalisation and constructive behaviour? Exactly this:

‘In accordance with voting procedure on a Commission proposal, the qualified majority rule applies. If the vote is favourable (which is the case for the vast majority) The European Parliament and The Council of the European Union have 3 months to oppose the adoption of the draft Regulation by the Commission. If the European Parliament and the Council give their favourable opinion on the adoption or the 3 months elapsed without opposition from their side, the Commission adopts the draft Regulation. After adoption, it is published in the Official Journal and enters into force on the day laid down in the Regulation itself.

The first draft of the Barnier proposal was circulated on Friday May 3rd. The three months were up nine days ago. A draft resolution becomes law under this procedure when the regulation says so. This is the main contention of my source: he merely showed me where to look, thus saving me about a week’s work. But he also suggested other ways they could trump any MEP objections.

So I went to the EUParl press office site at the crack of sparrow this morning. And guess what? They’re all on holiday until August 23rd. There’s an emergency office phone with one bloke on call. It rang out, with no message service. But eventually I tracked down the bloke – Vaclav Lebeda – on his mobile. He was very helpful. And his input suggested yet another way in which such a regulation could become Law immediately.

Mr Lebeda said no, nothing had passed through the EUParl before the holidays….it (OBR procedure) is still due to be debated in the Autumn, with a view to becoming Law in 2014. He didn’t know what Mario Draghi meant by constructive cooperation between the Parliament and the Commission/Council. He didn’t seem evasive: he obviously just didn’t know.

“So if the Spanish banking system collapsed tomorrow, what would the EC and ECB do?” I asked Vaclav.

“Ah,” he answered, “That would then be defined as an emergency, and the EAMAC (Olli Rehn) would meet to take action. In exceptional circumstances, they could issue an emergency directive.”

There was that ‘exceptional’ word again. So I asked had there been any EAMAC meetings since the recess? He didn’t know, because (he very fairly pointed out) he was at the EUParl press office, not the EC or EAMAC office. And of course, they’re all on holiday too.

As Alistair Campbell might have said, “Yes, July-August is a good time to bury some bad news”. So I went back to the Mole, and this time he gave me another link dating from 2001. It related to something called the Rapid Response Mechanism. And it sort of makes the whole debate about “Proposal or Law” somewhat academic:

The European Council Regulation (EC) No 381/2001 of 26 February 2001 created a rapid-reaction mechanism, to be used in those ‘exceptional’ circumstances where ‘the action is immediate and cannot be launched within a reasonable time-limit under the existing legal instruments‘. Basically, it’s an Emergency Powers Act by any other name.

I have to leave the last word on this from my Mole….whose view, by the way, is unofficially corroborated by a long-standing Treasury-connected source:

“There are a thousand ways to ignore the EU Parliament. My information is that with some Parliamentary complicity, the proposal is in place as a regulation under the 3-month rule. But anyway, they could use the RRM,  or they could just do it anyway – for example, Draghi at the second Greek bailout, or the Cyprus fiasco. I can only tell you what I know: on this issue, the full backing of European Law is already in place to conduct an Open Bank Reconciliation (bailin) where they could choose to do anything”.

The caveats in the proposal suggest they would indeed do anything to save the banks and the euro. Let’s see what further evidence – in the blogosphere or the MSM – can be dug up to add further support….to what looks pretty solidly to me like a done deal.

I’m off to pick some fruit.



Once again , it's all about bailing out the banksters from their prior recklessness - why do folks accept this ?

BREAKING: EU Bailin law will move derivatives off balance sheet

Dead hand of Draghi seen in Article 38

“Look into my eyes look into my eyes look into my eyes”

The third piece on EU under-the-radar Bailin capability I posted this morning has tempted quite a bit of leakage from the wood work. And some of it is dynamite.

A regular Slogger source writes to tell me that ‘”Derivatives” can remain “off-balance sheet” under this “resolution” process. Thus the true nature of the problem is going to remain hidden.’

He quotes how Article 38 of the proposal uses this quite brazen but explosive phrase:

‘Exceptionally and where there is a justified necessity to ensure the critical operations of the
institution and its core business lines or financial stability (Article 38) the resolution authority
could exclude derivatives’ liabilities.’

Well damn me boys, there’s the E word again. And we all know what that means. But specifically to the point, this part of the proposal will have come down from Count Draghula at the ECB himself: nobody since the start of this four year disaster has grasped the ability of non-netted derivatives to blow the entire banking system to smithereens quite like the Italian Galleon. Il conti Mario doesn’t care if Spain splits into three parts, Italy has a revolution and the Greek population starves to death….as long as the banking system survives. But the derivatives must be faced one day. And that day is always tomorrow.

Meanwhile, a Dutch Slogger has copied me on an email he sent to Nigel Farage this morning on the subject of a Bailin procedure that can circumnavigate the EU Parliament. He clearly grasps the eurojargon better than I do, writing to Nigel that ‘this legislation is being handled under the “regulatory comitology procedure with scrutiny”, which means that it is automatically adopted if your Parliament does not oppose the draft’. Let’s see what Farrago Man does with this. I’m happy to settle past differences and join forces to defeat a common enemy.

Earlier at The Slog: How an EU proposal can become law without a single MEP voting on it

In the UK, of course, the process is already real…as in the Co-Op bailin that isstrengstens verboten from debate in Westminster. Make your view equally strongly known to the legislature:

A reprise as this is very serious , should not be missed and accompanies piece above ....

http://hat4uk.wordpress.com/2013/08/09/global-looting-the-new-eu-bailin-law-was-passed-8-days-ago-did-you-notice/

GLOBAL LOOTING: The new EU bailin law was passed 8 days ago….did you notice?

Revealed: official details on how the EU will steal from us

Are you a citizen with rights, or just a helpless crustacean?

Three beaming eurocrats – Barroso, Van Rompuy and Lithuanian Dalia Grybauskaite – emerged triumphant from a session two days ago, in which they mapped out the biggest bank heist in world history. This is to put flesh on the eurozone law hastily passed on August 1st (while EU citizens were on holiday) to deal with theinevitability event of a bank collapse. Under this draft proposal – which many expect to be applied to the entire EU – no depositor big or small will in future be able to feel safe with money deposited in a bank. The Slog now calls for those who represent us, across the entire cultural spectrum of European society – to do something.

In a barely read piece a month ago, the International Business Times reported on the rapidly drafted new EU law for “overhauling its policy on how banks receive bumper bailouts”. Be aware: this is an EU move, not a eurozone move: it is already law (it passed on August 1st) and although for now it applies only to the eurozone, it is an EU law. Hardly anyone has commented on this, but the approach being taken matches word for word the 3-card trick George Osborne used six weeks ago when he said:

“In future, taxpayers will not be called upon to bail banks out. It will be down to the creditors and the owners”.

The most remarkable example of double-speak to date, at the time I pointed out that creditors are taxpayers (they’re account holders, simple as that) and so as the Establishments daren’t ask us for higher taxes to bail out their mates in the banking system, they will take it via, if you like, Direct Debit. It is exactly the same principle of stealing the Troika wishes to apply to Greek private pension funds.

The initial piece at the IBT website noted that ‘Eurozone leaders agreed upon the major policy shift and also confirmed that the new rules will help protect the taxpayer and move the burden of bailing out the banks onto shareholders and junior debt holders.” Again, more bollocks: how will ripping your money outprotect you? And note – junior debt holders…aka, you and I.

But yesterday from the German site Deutsche Wirtschafts Nachrichten (German Economic News) came a piece reporting that all bets are off as far as the ‘guarantee of all funds under €100,000′ pledge is concerned. Under the current Lithuanian Presidency of Dalia Grybauskaite (seen left between a Trot and a poet), the proposal as drafted – and almost entirely ignored by the Western media – states as follows:

* Treatment will not be the same regardless of size of deposit, BUT small account holders will have to wait up to four weeks to get their money….’depending on how serious the insolvency is’. During that time, there will be a maximum withdrawal of €100-200 per day – again, perhaps less depending on the seriousness of the failure. (Based on the Cyprus experience, the haircut in the end will be at least 60%).

* The EU Parliament – allegedly – is demanding that deposits of €100,000+ euros should be confiscated within five days. (So much for MEPs offering us some kind of protection from the Sprouts).

* In the event of a banking collapse, all previous government commitments are null and void.  The force majeur of “exceptional circumstances” can lead to ways round such pledges. Part of the new plan suggests savers could also be subject to a ‘penalty tax’ if they have less than € 100,000 in the bank. (So much for Merkel’s promise to the German people).

George Orwell could’ve dropped acid and still not come up with a scheme quite so assumptive and brazenly deranged as this one. It is based on the following insane principles:

1. Putting money in a bank makes every citizen a creditor of that bank, equally prone to confiscation in order to repay….who exactly? The answer is, other banks it owed money. So it’s not really our money after all, it’s the banking sector’s money. After it’s been taxed by the Government, despite the fact that we earned it…it’s really all bankers’ money after all. Unbelievable.

2. If we are prudent enough to keep money in smaller amounts in lots of accounts, we will have to pay a ‘penalty tax’ – well of course we will: I mean, given it’s never our money really – we’re just borrowing it, or something – then quite right too. And because it isn’t really our money, we shall be given strictly limited spending money per day. The brass neck is beyond belief.

3. If you have been seditious enough in your life to actually make quite a lot of money legally, then within five days the money that was never really yours will be taken back by its rightful owners…the bankers….or the Government rescuing the bankers but without doing it in our taxes. Why five days – why not five seconds? I mean, it’s their money: we were just earning it for safe keeping, right? Of course we were.

4. Anything is an exceptional circumstance if they say it is. Even the Nazis in 1933 had to burn down the bloody Reichstag to declare a State of Emergency. In 2013, it requires just one dumb, over-leveraged, f**kwitted bank to collapse under the weight of its CEO’s ego, and we’re all pauperised by Law.

I think the time has finally come when we must give our legislators and ‘leaders’ here in the UK a gigantic kick up the jacksy. And I think the time has come for every decent organisation to mobilise even Wayne and Waynetta to GTF off the sofa and start making it clear to the scheming Wankers of Westminster that we’re not having any of this crap here in Britain.

As I tried to point out two years ago, this is no longer a political issue. This is a case of one simple rule by which decent citizens must abide: stealing things is wrong…especially when it’s done to repair your own stupid decisions in the past.

These are the questions we should address to everyone supposed to represent us,starting today:

1. To German Sloggers, demand Angela Merkel make the safety of ALL EU citizens’ bank money a solid Election pledge next month.

2. To the Christian, Jewish, Muslim and humanist leaderships of Britain: start an outcry in the media. Why aren’t you giving your parishioners more support? Where is the outcry about pilfering from innocent citizens? Where is the condemnations of illegal, amoral confiscation?

3. To the anti-EU Conservative Right, to UKip and its leader Nigel Farage, to our MEPs – especially Dan Hannan: do you realise the delayed referendum on EU membership will come far too late to stop this? When are you going to start spelling this out to your supporters and media contacts that this is now a matter of citizen survival? Why hasn’t there been uproar in the European Parliament about this? You guys talk a good game, but where’s the line in the sand?

4. To the TUC: Your members are about to be fleeced by the Co-op’s management, and stand to be ruined by the EU’s ECB-driven policy of slashing both the wages and assets of the European workforce. Can we have less political point-scoring, and more ecumenical organising action?

5. To the Labour Party leadership: show that you truly are our friend in tough times. Stop doing bloody focus groups and poncing about between the lines of bland policy statements designed to make you look harmlessly voteworthy. Come back off your holidays and take a stand – when are you going to start hounding Camerlot bigtime on this iniquitous policy? Or are you complicit in it? Please tell us.

6. To the whingers and it-won’t-make-any-difference-it’s-nothing-to-do-with-me brigade: sorry, but you just ran out of road. Like it or not, you’re involved. Start a movement now to remove every penny of current account and deposit monies from the bank. Are you a live Homo sapiens, or a braindead lobster?

The Co-operative scandal is just the beginning. They are going to take our money and leave us all penniless….at their mercy. To combat this, we really don’t need any slogan beyond this one: