Tagged: banks

Confronting the EU “Oligarchy of Governments”. Joining Forces for Another Europe

By Tommaso Fattori

In Europe we are living in particularly dramatic times. Democracy is in death-agony and we are witnessing post-democratic processes taking over at the national and supranational level. EU leaders have further concentrated decision-making power on public and fiscal policies in the hands of an oligarchy of governments, technocrats and the European Central Bank (ECB), which are subject to the dictates of the financial markets. Neoliberalism, the real cause of the crisis, not only is not dead, but it appears to be in perfect health: it uses the crisis to destroy social rights and workers’ rights and to privatize commons, public goods and public services.

Finally, the most incredible propaganda operation of our times is in full swing, in which states and ‘markets’ try to make people believe that public debt was caused by excessive social spending and high salaries. In fact the financial sector caused the crisis and the fiscal deficit in the EU is the result of the crisis, not its cause.

A moment like this needs a strong social answer: it is urgent to act now, uniting our forces, creating the conditions for a common social response, for a pan-European mobilization. There is an objective need to build a European space of ‘strategic alliances’: in order to elaborate common strategies and initiatives and to rebuild solidarity. When the attack on Greece by the great economic powers and the ‘troika’ [the International Monetary Fund, the European commission and the ECB] began, we, in Europe, were unable to organize a social response. Rather, each stayed wrapped up in their own crisis and their own national dimension, leaving the Greeks alone. It must never happen again.

Beyond Fragmentation

We must go beyond the current fragmentation of our forces. Most of the time, we agree on analysis and proposals – now in Europe we have hundreds of similar documents, calls, statements which are a good basis for a common platform – but we need to join forces.

Firenze 10+10 is only a contribution to a more general process [November 8-11, 2012]. The European space today is the minimum space necessary if we are to build a credible social and economic alternative. To underestimate the global dimension of the clash between capital and labour, capital and nature, capital and the commons is a mistake. In Firenze we want to provide to the real social actors with a useful space for alliances and strategy at the European level, linking up the local resistance and struggles.

We must also break down the wall between eastern and western Europe by getting the east and the Balkans fully involved. And of course we must build bridges toward the southern Mediterranean, where the next WSF will be held in 2013.

Finally, it is necessary to have a long-term vision. That’s why the name is 10+10: Ten years after the 2002 European Social Forum (ESF), but above all ‘plus ten’: which shows the need to build a common strategy and vision for the next ten years and not limit our horizons to tomorrow, to the next political elections. It is a question of understanding which way we want to go.

Not the ESF

Firenze 10+10 is an experiment, building on previous experiences and processes: a space for reconnecting, in an action-oriented way. It is not a European Social Forum (ESF), despite the fact that the ‘excuse’ for setting the process in motion was precisely the tenth anniversary of the first ESF. The ESF constituted an extraordinary moment in the construction of a continent-wide demos, which presented analyses, proposals and solutions which – had they been translated into policies – would have avoided Europe and the world crashing into the terrible economic, environmental, social and democratic crisis in which it is now mired.

“For sure it is no longer the time for spreading ourselves out over thousands of workshops and seminars, but time to produce a nucleus of strong, shared actions and initiatives. ”

Ten years on, there is no desire to celebrate what we had then and even less do we intend today to repeat paths which belong to that time and that stage of development. The social movements have changed, new actors have emerged, there have been defeats but also victories, such as that of the water and commons movement in the Italian referendum one year ago. For sure it is no longer the time for spreading ourselves out over thousands of workshops and seminars, but time to produce a nucleus of strong, shared actions and initiatives.

That’s why the programme for Firenze 10+10 is not simply a space to be filled up with hundreds of disconnected initiatives (nor a sort of ‘Summer Academy’ for social movements). On the contrary, we have together identified, during the preparatory international Milan meeting, five key ‘alliance spheres’ (or focus areas), starting from the subjects which networks and coalitions are already working on in Europe.

Five Key Spheres

1) Democracy

Networks, social movements and organizations from all over Europe intend to oppose the top-down constituent process with a grassroots approach, in order to build a democratic Citizens’ Pact (the foundation for a democratic Europe based on respect for the dignity of everyone, native and non-native, and on guarantee of individual, collective, labour and social rights). It is also a question of building a democratic floodwall against the right, against xenophobia, against the breaking up solidarity: democracy also means rebuilding social solidarity.

2) Finance/debt/austerity

During Firenze 10+10, we will discuss both public and private debt with the purpose of formulating new proposals for another European economic model, free from financial markets and debt dictatorships and based on the solidarity and participation of people into the decisions that determine our future. This will bring together campaigns against austerity, the European fiscal compact, and for debt audits and tribunals.

3) Labour and social rights

Labour rights cannot be separated from social rights in general and there is a need to propose concrete alternatives to give everyone a life in dignity and jobs with a future. Many different proposals are to be discussed, including a universal basic minimum income.

4) Commons and public services

This ‘alliance sphere’ brings together many issues in relation to our natural, social, digital commons and public services, such as land, food, water, energy but also social rights, education, and knowledge. It will also tackle and refute the post-Rio agenda covering the green economy, financialization of nature and unnecessary large-scale infrastructures which are supposed to help us out of the crisis. The aim is to find mutual ground and strategic joint actions as well as concrete solidarity solutions for those fighting right now on the ground to protect their public services and commons from privatization and commodification.

5) Europe in the Mediterranean and the world

This sphere of alliance rests on some fundamental elements: the necessary inclusiveness of Europe; cooperation, solidarity and fair trade; peace and social justice; the support for the struggles for democracy and human rights (the Arab revolutions, the struggles against the occupation – Palestinian territories, Western Sahara – and rights of entire peoples like the Kurds). Strategies against the militarization of the Mediterranean will also be discussed.

Concrete Outcomes

In the best-case scenario Firenze 10+10 could produce a hard core of proposals for action, which are the fruit of the five ‘alliance spheres’ when we converge, and launch a sort of grand common European mobilization for the beginning of 2013: a continent-wide demonstration? An international rally in Brussels? A European strike? We should at least try to identify something which we can all do together.

At the same time, we aim to build a third level: to start together a process for the medium-long term. One of the main ideas and proposals is the launch of the ‘Alter Summit’ as a process that will start in November and have several stages including various mobilizations and a culmination point for 2013 in late spring, probably in Athens.

A huge range of social actors are now behind the initiative: social movements, trade unions, citizens’ groups and associations (environmental, cultural), student organizations, feminist groups, individual activists.

In Firenze many existing processes will flow together: the first gathering of the European Water Commons Movement; a big assembly on democracy, which will bring together very different actors (including 15M in Spain and Blockupy Frankfurt); the meeting of the different coalitions working on finance and debt; the meeting of critical economists, just to mention some examples.

Firenze 10+10 is an opportunity and a contribution. It is not a process in itself: it’s a crossroad part of more extended process. Maybe this process is not perfect and November is just round the corner, but our enemies – the economic-financial powers, the technocrats – are very fast, while at the moment we’re too slow and fragmented. •

Tommaso Fattori is an Italian anti-privatization activist and member of the Firenze 10+10 organizing committee. For more on Firenze 10+10 go to www.firenze1010.eu.


Self-Financing that Works for the Poor

Arely Domínguez, right, and other members of El Guapo at the inauguration of the bankomunales exhibit. Credit: Estrella Gutiérrez/IPSArely Domínguez, right, and other members of El Guapo at the inauguration of the bankomunales exhibit. Credit: Estrella Gutiérrez/IPS

CARACAS, Oct 2 2012 (IPS) – “We were used to losing, so a group of us said to ourselves: let’s lose something here,” said Carmen Caravallo, describing the start of a “bankomunal”, a self-managed microfinance fund based on investment, in her rural community in eastern Venezuela.

Ten years later, Caravallo and the other members of the bankomunal in Llanada de Puerto Santo, in the state of Sucre, “are getting used to winning,” she told IPS. “Now we are a family, and we have learned to be responsible; we have improved our lives with money that belongs to us, and strange as it may seem, we feel we are very much in charge,” she added.

Bankomunales, present in 14 countries on four continents, are the brainchild of Venezuelan social entrepreneur Salomón Raydán, who demonstrated that the poor can be self-financed, after Muhammad Yunus of Bangladesh, the father of microcredit, had shown that they could be financed.

The 54-year-old Caravallo, who is in mourning after the recent death of one of her three children, said the road has been “slow, hard and paved with mistrust.” But after three years “people began to make a profit, and saw that we were reliable and responsible.”

In her community of 1,000 people, in one of the poorest states in the country, she is treasurer of the local bankomunal, which began with 20 members and now has 107 as well as “a long waiting list to join.”

Similar experiences have been repeated in 180 bankomunales throughout Venezuela, which have a combined total of 25,465 members who contributed a minimum of 2.30 dollars to become both investors and clients.

Raydán, a philosopher and sociologist by training, told IPS the idea was born 15 years ago, out of his experiences as an adviser for small farmer financial assistance programmes and from what he learned about the way of life of poor rural communities.

Poverty is defined by the irregularity of income, more than the lack of it, he said. “Insecure and fluctuating resources do not allow the poor to face spending that is needed for survival, and so poverty takes root,” said Raydán, the head of the Foundation for Rural Finance (FUNDEFIR).

“Eighty percent of poor people in the world have access to credit through informal systems,” mostly self-managed in their communities, he said.

“But these sources are insecure and they do not add value for their users. They need to be adapted to offer more transparency, training, security and efficiency, so they become more formal, although that doesn’t mean they need to be regulated according to the rules of the state that has excluded them,” said Raydán.

These mutual credit associations began to operate in 1997, granting multiple and variable loans, in contrast with traditional systems that make rotating loans of fixed amounts, which are widespread in poor areas of the developing South.

Furthermore, “their members are not just savers, but investors; they are active, not passive,” he emphasised.

“Only 2.5 percent of the poor population of the world has access to banking services, and microcredit systems serve 105 million people, while the demand for microfinance is two billion people,” he said.

Venezuelan microinvestors acquire a certificate of assets worth 2.30 dollars. No one can acquire more than 15 percent of the total assets, members of different bankomunales who have arrived in Caracas for a photo exhibit about the system tell IPS enthusiastically.

Members are the leading lights of the show launched in September in a gallery in the capital city, where powerful images are shown of open-air meetings or gatherings in borrowed spaces – meetings of credit committees and activities involving the granting or payment of loans.

There are also images of members on cultivated land in both rural and urban areas, grocery stores set up in homes, other small shops, home renovations, sewing or repair workshops, and minifactories producing different products. Other members are depicted next to children wearing new school uniforms, or holding up new kitchen utensils.

Credits are granted for “any legal purpose,” in general to be repaid in three to 18 months, with interest decided by each organisation. Loan amounts vary: a new association may only lend up to 100 dollars, while a more established one may have a ceiling of 2,000 dollars.

All decisions are made at well-attended meetings, and the credit committee gives its decision on each request within 24 hours. “We know each other and we know everyone’s payment capacity; we work on trust,” said Arely Domínguez, head of the bankomunal in El Guapo, a village that was reborn from tragedy.

In December 1999 a flood burst the dam near the village, located 125 kilometres from Caracas, in the north-central state of Miranda. The low-lying land in El Guapo, home to some 3,000 people, was flooded.

FUNDEFIR was one of the organisations to come to their aid, and a year later Domínguez and 34 others founded their bankomunal, which now has 117 members and makes an average of 10 loans a week, totalling 6,000 dollars.

First of all, like everyone else involved in the initiative, they received training and advice from FUNDEFIR. “We learned how to balance our accounts, write budgets, do audits, assess risks and use computers,” said Domínguez, a 49-year-old schoolteacher with two daughters.

Up to August, bankomunales had granted 275,631 credits to 84,884 people, for a total 3.6 million dollars at the official exchange rate.

In El Guapo, the bankomunal operates in the building of a cultural association, but most of the associations meet in members’ houses. Officers are elected at general meetings and work on an honorary basis.

The vast majority of members are women, but the number of men is increasing. One-third of loans are requested for consumption, one-third for enterprises and one-third for emergencies, especially health problems.

Every loan is backed up to at least 40 percent by certificates of assets of the member and his or her sponsors, “to be in the safe zone,” a mantra repeated by the members. “There are hardly ever any problems, but on the second default, they are out,” Caravallo said.

Profits are calculated monthly and distributed to the members annually. “One of the principles of bankomunales is distribution rather than accumulation,” said Raydán. “The profits have little economic importance, but a great deal of educational importance.”

It is “a financial education programme, not a microfinance programme, and the profits help generate a sense of entrepreneurship,” he said.

The model has spread to Bolivia, Brazil, Chile, Colombia, Dominican Republic, Haiti, Peru, Germany, Spain, Hungary, Portugal, Senegal and Indonesia.

The Spanish version, Comunidades Autofinanciadas, won the 2009 prize for the best microfinance programme in Europe, while FUNDEFIR’s system was voted in 2010 one of the 25 social projects in the world most likely to be globalised, by Ashoka Globaliser, an international foundation that promotes social enterprise.

FUNDEFIR has financial support from Total Oil and Gas Venezuela, a subsidiary of the transnational French oil corporation Total, which works in the east of the country.

Diana Vilera, the sustainable development manager, told IPS the company “seeks to promote projects that are a tool for people to be lifted out of poverty.”

“Oil companies take a lot out of the planet and the environment, and we have a duty to contribute whatever we can, beyond the business angle,” she said.