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LaRouche's "New Bretton Woods" Debated in Italian Parliament
This article is reprinted from March 21, 2005 issue of The New Federalist
The motion, N. 1-00230, which was directly inspired by the LaRouche movement, came before the Chamber of Deputies on March 14 at the end of the daily session, and featured substantial debate from a number of deputies. Further discussion was suspended over the next few days, in favor of other issues, including Italy's proposed pull-out from Iraq, so it is not clear whether the matter will come to a vote this week.
The debate in the Italian Chamber reflects not only the intense process of discussion about LaRouche's New Bretton Woods proposal which has gone on over the past 7 years, but the realization of leading international policy makers that it is the breakdown of the world financial system which is driving the current series of foreign policy and economic crises. While many of these policy makers realize that support for reforming the monetary system with a New Bretton Woods must come from within a now-crazy United States, they also realize that visible support for LaRouche's monetary proposals can play a useful role in furthering motion toward sanity in the U.S.
- Lettieri's Motion -
Leading off the debate on March 14 was Deputy Mario Lettieri, a member of the center-left opposition Margherita party and secretary of the Chamber's Finance Committee. Lettieri drafted the resolution in collaboration with LaRouche Italian representative Paolo Raimondi back in 2004, and finally was able to bring the matter to a debate over a year later. In the opening moments of his speech, Lettieri powerfully and accurately summarized both the current financial disaster, and the alternative offered by FDR's Bretton Woods system, and Lyndon LaRouche's New Bretton Woods. We quote:
Mr. President, it is well known that last year was the anniversary of the founding of the Bretton Woods system, with which, in 1944, the global economic and financial structure was planned. Bretton Woods, despite certain monetarist conceptions, was first and foremost intended as a system for economic reconstruction, supported above all by the President of the United States, Franklin Delano Roosevelt.
The goal was the development of the real economy of nations, which finance and credit were to support and promote. Unfortunately, this is not what happened, or at least, not what always happened: large-scale international finance, after the death of Roosevelt, immediately began to undermine that spirit of growth that was intended not only to overcome colonialism, but also to defeat the misery and underdevelopment of the countries of the Third and Fourth Worlds.
The reality, unfortunately, is quite different; the data is dramatic, especially if we look at the countries of Africa and Asia: there are still wars, misery, disease and death. I will spare you the numbers, which have been abundantly published both in the specialized press and in other media.
In 1971, Nixon decreed the end of the Bretton Woods system, and that opened the doors to large-scale speculation, and big financial bubbles. In recent years, people have reached the point of even believing that wealth is no longer produced by work, industry, agriculture and the application of scientific and technological research to productive economic sectors, but rather by stock markets and finance. In my view, we are faced with a true case of collective insanity, which must be cured at the international level.
Today, reflection is beginning on this issue, and not only in our country. I am thinking, in the United States of America, of an important economist and Democratic politician, Lyndon LaRouche, who has promoted an international campaign, called For a new Bretton Woods: the alternative to the global financial crash Large-scale Eurasian infrastructure projects. A new Bretton Woods must therefore strive for a system that restarts development of the real economy of nations, and therefore reduces, especially, the delays in developing countries. To this end, the credit system is essential; it must supply long-term credit at low interest rates, to promote large-scale projects, infrastructure networks and productive investment for research, education and health care. This is the scenario in which the motion presented a year ago was conceived.
However, one year later, not only do we find confirmation of what we had written and what I presented in my first intervention, but unfortunately, we must also observe that the systemic financial crisis is producing shocks on the markets in an increasingly significant and negative manner, with increasingly serious and uncontrollable consequences, at a level which clearly goes beyond that of Italy.
The Next Steps
Lettieri went on to expose the dangers looming from the current speculation-ridden global economy, and to motivate his call for a new financial architecture through a New Bretton Woods. He was followed by Deputy Paola Mariani from the opposition Left Democrats, and Deputy Sandro Delmastro delle Vedove of the government party Alleanza Nazionale, both of whom amplified the point about the bankrupty and evil of the current financial system, although without reference to LaRouche's solution.
While the debate was scheduled to continued March 15, that did not occur, in part due to the uproar over Prime Minister Berlusconi's announcement about withdrawing Italian troops from Italy. The ruling party has reportedly introduced a counter-resolution to Lettieri's, the which essentially affirms that the Italian government should simply continue on the economic course it is currently taking.
A Clarion Call
This is not the first time the Italian Chamber of Deputies has debated the Bretton Woods issue. Back in September 2002, the Chamber debated and passed a similar motion, which called for Italy to organize a conference which would establish a new monetary system. During that debate Rep. Giovanni Bianchi (who has also endorsed the current Lettieri resolution) cited the role of Lyndon LaRouche in inspiring the fight for a New Bretton Woods.
However, a conference has not been called.
Numerous Italian Senators, many of whom have held extensive discussions with LaRouche, also came forward to organize for a resolution demanding the calling of a conference for a New Bretton Woods in 2002, although the matter did not come to a vote. A similar motion was presented by Sen. Oskar Peterlini in 2003, and also in the European Parliament by Hon. Cristiana Muscardini. The motions were not brought to a floor debate.
The Crisis Deepens
As the debate continued in the Italian Parliament, there were yet new signs that the monetary system is near collapse. Themarker for that system, the U.S. dollar came under renewed pressure, as the Commerce Department announced a new record current accounts deficit for 2004 of $665.9 billion, up more than 25% over the previous year: and, the shortfall is worsening. To finance this growing deficit, and the ballooning Federal budget deficit, more and more funds are being sucked into the U.S. The Treasury Department reported March 16 that the net capital inflow is now officially at the record level of more than $4 billion per day; some sources say that the actual figure is higher still, over $5 billion.
Meanwhile, there are reports of huge capital flows into commodities, as mainstream investment funds are buying up hard physical assets, while liquidating dollar-denominated financial paper, pushing prices for several commodities to new records; oil, for example, is now headed past the $55 per barrel threshold, and still rising. The funds, according to a Reuters report, are also buying comoodities infrastructure, and even taking delivery of large tonnages of hard commodities and raw materials. This is creating yet another enormous new bubble, which Reuters notes, cannot be sustained much longer before it explodes.
All of this underscores the urgency of the needed move to LaRouche's New Bretton Woods.
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