director of policy and research at Oxfam America.
executive director of Jubilee USA Network.
former managing director at Bear Stearns and Goldman Sachs, and previously an analyst at Lehman Brothers and Chase Manhattan Bank. She’s now a distinguished senior fellow at Demos. Prins is also the author of All the Presidents’ Bankers: The Hidden Alliances That Drive American Power.
As leaders of the seven wealthy democracies known as the Group of Seven hold talks in a secluded castle in Germany, thousands of protesters have been met with 20,000 police in the largest security operation in the history of Bavaria. Issues on the G7 agenda include climate change, a $10.4 billion bailout package for Greece, and more austerity measures. We are joined by three guests: Gawain Kripke of Oxfam America, which just published the new report, "Let Them Eat Coal"; Eric LeCompte of the Jubilee USA Network; and former banker Nomi Prins, author of "All the Presidents’ Bankers."
JUAN GONZÁLEZ: Climate change is a top agenda item as leaders of the seven wealthy democracies known as the Group of Seven, or G7, wrap up a two-day meeting in Germany today. Heads of state from Britain, Canada, France, Germany, Italy and the United States are holding talks in a secluded resort housed in a 100-year-old castle. Outside the summit, protesters have been met by a massive show of police force, with as many as 20,000 officers deployed for crowd control. Thousands of demonstrators took to the streets Saturday in the nearby town of Garmisch to oppose other issues under discussion, including the Trans-Pacific Partnership trade deal, or TPP, and austerity measures. This is Stop G7 spokesperson Benjamin Russ.
BENJAMIN RUSS: [translated] It’s totally over the top. And one has to see that the way we’ve been walking in the streets and have organized ourselves well, the camp was well organized. This massive police presence is totally over the top.
JUAN GONZÁLEZ: On Sunday, leaders and reporters had to be shuttled to the G7 talks by helicopter after protesters blocked a main road. Today, the summit host, German Chancellor Angela Merkel of Germany, is seeking endorsement of goals to limit the increase in global temperatures and to provide financing to countries dealing with the impact of climate change.
AMY GOODMAN: Talks are expanding today with the addition of several African leaders and Iraqi Prime Minister Haider al-Abadi, who’s set to meet with President Obama.
Meanwhile, a $10.4 billion bailout package for Greece has been a central focus among the country’s creditors attending the summit, including heads of the European Union, European Central Bank and the International Monetary Fund. Greek Prime Minister Alexis Tsipras is in attendance, neither is—is not in attendance. Neither is Russian President Vladimir Putin, as leaders agreed to continue sanctions against Russia over its aggression in Ukraine.
Well, for more, we’re joined by three guests. Joining us from Garmisch, Germany, near the G7 summit, is Gawain Kripke, the director of policy and research at Oxfam. They’ve just published a new report called "Let Them Eat Coal," which notes the G7 countries remain major consumers of coal, which is the biggest driver of climate change and world hunger. In Washington, D.C., Eric LeCompte is with us, executive director of Jubilee USA. He was recently in Dresden, Germany, for the G7 finance ministers’ gathering. And here in New York, Nomi Prins, former managing director at Bear Stearns and Goldman Sachs, and previously an analyst at Lehman Brothers and Chase Manhattan Bank, now a distinguished senior fellow at Demos. She’s also the author of All the Presidents’ Bankers: The Hidden Alliances That Drive American Power. Last week, Nomi Prins was invited to address global central bank leaders at the Federal Reserve and IMF’s annual conference.
We welcome you all to Democracy Now! Let’s go first to Garmisch, to Bavaria, to Gawain Kripke. Can you talk about the massive protest that’s going on outside, met by an even larger police presence, believed to be the largest police operation in Bavarian history, why people are protesting the G7 summit, Gawain?
GAWAIN KRIPKE: Well, it’s a very energetic protest. It started in Munich a few days ago and then has moved up here to the mountains. And it’s a wide diversity of complaints that the protesters have against the G7. I would say the biggest one that I observed was a real concern about the free trade agreement that is being negotiated between Europe and the United States, with a concern among the protesters that it will be pushing lower standards for things like energy efficiency and food safety onto European markets, so a real resistance to that trade agreement from the protesters. But also protesters are concerned about climate change, about global poverty and a range of other issues.
JUAN GONZÁLEZ: And on the issue of global poverty, what are some of the concerns that you feel, from Oxfam, are not being addressed by the summit?
GAWAIN KRIPKE: Well, the G7 have always sort of fashioned themselves as the board of directors for global development and the global economy. And so we always look to them to make new commitments and statements about ending poverty and reducing hunger. We’re hoping for something ambitious from the G7 leaders. This is a very important year for global poverty and also for climate change, with very big conferences scheduled for later this year. And the G7 can really put a lot of energy into those efforts if they make some commitments here. We’re looking for them to say something about how these richest and most developed countries will take actions to reduce their climate change, to provide funding for less developed countries to also develop in a clean way, and also to end hunger, which is going to be one of the big goals that is going to come out of the U.N. later this year in which the world is going try to end hunger by 2030.
AMY GOODMAN: Gawain, can you describe the scene for us there—the G7 meeting in this 100-year-old castle and the massive police presence outside, along with thousands of protesters?
GAWAIN KRIPKE: Right. Well, it’s very beautiful, for one thing. It’s a great location that the Germans picked for the G7. The castle is quite remote, and we can’t even see it from where we are. Most of the protesters and the nonprofits and most of the media are actually located some distance from the castle. So we see it on TV, but we don’t—we’re not really observing it. The protesters are in the streets. They have an encampment a few miles away, that is, I’m told, very orderly. There’s been some big rainstorms, so I think it’s a bit muddy. But the protesters have been going around the streets in a very festive way and laying out their concerns. The police presence, what I’ve seen, is pretty restrained, but massive, and looks very highly militarized. They’re marching down the streets in columns looking like soldiers. But I haven’t seen a lot of rioting or excessive abuse myself
JUAN GONZÁLEZ: I’d like to ask Nomi Prins, one of the big issues is going to be obviously debt and what to do about Greece and, in general, the restructuring of the banking system of the world following the 2008 crisis. I’m wondering—you’ve spoken to the IMF recently. What is the main message you’re trying to send to those who are dealing with financial reform?
NOMI PRINS: One of the things I talked about in Washington last week to the Fed and IMF and the central banks, bankers around the world, is that there is a continued instability, which some of them know and some of them refuse to admit, in the financial system throughout the world. And that has had a knock-on effect on global economies everywhere. There was a decision made by central banks, by private banks and governments together at the highest levels of these countries, to help the banking system at the expense of the people system, the real economy, to invoke austerity measures in order to pay bondholders. And that continues to be in place. So when you talk about the situation in Greece, what Greece is basically saying and has been saying for a long time is that, "Look, the austerity measures you pressed upon us are irrational, are impossible to use relative to the fact that our economy has slowed down and our debt, the strings attached to the bailout that we received in order to pay bondholders, in order to pay the IMF and central banks and so forth, are impossible to pay." But yet, they continue to facilitate stability for the financial system and the major banks around the world. So they are getting the money, they are getting the benefit. People in the countries outside of that upper echelon are simply getting hurt.
AMY GOODMAN: You have written about Clinton cash. Can you explain what that means and what it actually has to do with what we’re talking about today, what it has to do with the G7, what it has to do with banking in the United States and multinational banking?
NOMI PRINS: Well, Clinton Cash was a book that came out recently by Peter Schweizer where he looks at some of the Clinton Foundation associations with countries, and I go further into examining what their associations are with the major banks in these countries, particularly from the United States. And if you follow a two-decade through line from when Bill Clinton became president through Hillary Clinton now trying to become president, you see that the relationships along the way, with Bank of America, with Citigroup, with Goldman Sachs and so forth, whether through appointed positions, whether through money along the side, whether through pushing their policies of deregulation and benefit to the banks at the expense of the rest of the population, they continue to go through. So, in the beginning, we had deregulation coming in through the Clinton administration. We had the Glass-Steagall Act being repealed, which meant these bigger banks could become bigger and consolidate people’s deposits with all of these risky derivatives and other types of transactions, which then imploded the financial system.
In the wake of the financial crisis, that still exists. Relative to the rest of the world, the biggest six banks in the United States are bigger than they were before the crisis. They’ve received more help from Obama’s government, which has a lot of people in it from the Clinton administration, from a Treasury perspective, and they continue to thrive at the expense of the real economy. In addition, the foundation, the Clinton Foundation, has received from $250,000 to $5 million donations from these same largest institutions, among others, that continue to push their agenda throughout the United States as well as throughout the world.
JUAN GONZÁLEZ: But do you think that real structural change has occurred since—I mean, because we still get information or news about the Libor exchange conspiracy, the currency manipulation. We see continued crime after crime in the financial world, and there doesn’t seem to be any real structural change occurring.
NOMI PRINS: No, absolutely. That was one of the things that I said in Washington. Basically, and also the big six banks in the United States, they’re hoarding cash. So the result of these zero-interest rate policies throughout the world emanating from the Fed and the United States and this quantitative easing are buying bonds back from all these banks, giving them more money, is they have 400 percent more cash after the crisis than they had before, not going into the real economy, and they’re committing crimes. The big six banks in the United States have paid fines or settled to pay fines for $120 to $130 billion—Libor rigging, FX rigging, mortgage fraud, money laundering. It goes on and on.
AMY GOODMAN: So, we just saw the U.S. attorney general, Loretta Lynch, with this big announcement about FIFA, right, the whole soccer scandal. Person after person in the leadership of FIFA have now been indicted. Right before that was the allegations about banking fraud. Now, we’re not talking person after person; in fact, we’re not talking anyone. We’re talking about institutions, banks. Can you address this, as a person who worked at many of these banks, from Lehman to Goldman Sachs?
NOMI PRINS: First of all, the FIFA thing, as a scandal, is such a non-event relative to the fact that we had, just recently, that $5.6 billion fine on FX rigging. That means rigging the currencies, these five banks, including JPMorgan, Citigroup from the United States, UBS and Barclays, they got together and rigged what people pay for goods back and forth. They engendered harm to the global economy. They got a $5.6 billion fine, compared to a $150 million fine, nowhere in the same vicinity, for people at FIFA, and heads rolled. No heads rolled. Jamie Dimon got a $20 million increase in his compensation, voted upon by his shareholders right before that FX rigging fine came out.
AMY GOODMAN: And what would it mean? I mean, you lived within this culture. Why aren’t people indicted? Why aren’t people sent to jail? And what would it mean for what happens inside these banks if they were?
NOMI PRINS: I think it would make a big difference if the heads of these banks, and I mentioned, if some of the CEOs would actually be sent to jail, be held accountable in any personal way whatsoever at all. Instead they’ve been able to point fingers inside their institution. "Oh, that trader did it. Oh, that was sort of a bad department." That was the bad apple approach. And they continue, Jamie Dimon and Lloyd Blankfein, they continue to run these companies. And globally, again, these banks have committed more crime and been settling for more crimes than anywhere else in the world. It would make a difference. It would send a message that you can’t do that. But not only have they not been sent to jail, not only have they not had any personal indictments or convictions, they also continue to get upholded by their shareholders here, which actually isn’t something—in Europe, they’ve kicked out some bankers along the way and CEOs along the way, by shareholders.
JUAN GONZÁLEZ: I’d like to bring in Eric LeCompte of Jubilee USA Network. The issue of coal. We heard over the weekend of Norway’s sovereign wealth fund deciding to divest in coal investments. Could you talk about the G7 nations’ role in the issue of coal?
ERIC LECOMPTE: Well, I think, you know, the whole entire role of the G7, as they describe it themselves, is to focus on global economic growth. And when we’re looking at these particular issues around divestment, I think we also see a lot of connections between what Nomi was just describing, in terms of how the global banking system is operating, as well as what Gawain described as some of chief concerns from protesters on the ground being TTIP, these trade agreements, as well as an overall negligence to really addressing global poverty issues. You know, right now, when we look at Greece, when we look at the developing world, when we look at the International Monetary Fund, the European Central Bank and others wanting to promote a higher degree of austerity in Greece in order for them to receive more bailout funds, we have to understand that fundamentally we’re dealing with a problem of global instability. And, in fact, when the G7 financial ministers met last week in Dresden, when I was in Dresden, the chief focus, how the table was actually set for this G7 summit, the financial ministers focused on the issues of high debt, being able to achieve growth in what is now considered by the G7 and the International Monetary Fund to be unsustainable debt, unsustainable debt that will prevent economic growth.
And I think, as we’re looking at the Greek situation, we’re looking at these broader issues of divestment, I think we need to see some real shifts in terms of how the global financial system operates. And I think one of the issues that was very interesting, that’s now been at the table at the United Nations with three General Assembly—three General Assembly votes in favor of a global bankruptcy process, they’re working on a process. The International Monetary Fund for the last two years has been working on a process. Last week in Dresden, we saw all of the major religious leaders, the Catholic bishops, the Protestant bishops, call on the G7 to end poverty by bringing stability, by erecting a global bankruptcy process to end poverty. And in fact, at the prayer service last week in Dresden, we saw German Finance Minister Schäuble attend, because we know these issues are so key right now. We do need to see some solutions if we’re going to have greater stability in the markets, in the global financial system.
JUAN GONZÁLEZ: But in terms of this whole issue of a global bankruptcy regime, what about the issue of the ability of so many corporations to hide their wealth and profits in tax-sheltering countries?
ERIC LECOMPTE: Well, and this is an incredible concern. We have to understand that debt and tax are flip sides of the same coin. You know, two years ago at the Lough Erne summit, we saw the G7 take some historic action. They called on broad ways to curb corporate tax avoidance, to be able to stop these anonymous shell corporations, which around the world are hiding these funds. And although we’ve seen some action, much of it has just been talk so far. I think at this particular summit we’ve also heard that they’re reviewing these issues. This last summer here in Washington, President Obama and the White House hosted a very important Africa summit, and one of the main drives that came out of that summit is the curbing of corporate tax avoidance, evasion and corruption, because right now the developing world is losing a trillion dollars a year to these illicit financial flows, to tax evasion, to corruption.
And we’re looking at the question of Greece right now. We have to say that these issues are very much connected. You know, certainly, more austerity plans for Greece are not going to work. They can’t be part of the recipe. And there needs to be some real debt relief, like we saw in 1953, ironically, with Germany, when Germany had what Germans call the Wirtschaftswunder, the economic miracle. And that was a direct result of the 1953 London accord, where all of the lenders, all of the creditors were brought together to London. Not only was Germany given debt relief, but more importantly, Germany was given what the Greeks are asking for right now. And that’s not even necessarily debt relief. It’s to be able to extend those payments further in the future so that money can be invested in the people now. And that also deals with this tax issue, Juan, that you’re bringing up, because we have to understand that in Greece there are issues in terms of corruption and tax evasion, that although the government has done a better job at collecting these monies, they need to also improve this in the future so they can get out of the debt trap.
AMY GOODMAN: We’re going to break in a minute, and we’re going to stick with Eric LeCompte and Gawain Kripke, who’s in Bavaria right now. But, Nomi, your final comment, as you leave, for what’s most important for people to assess what comes out of this G7 summit?
NOMI PRINS: Yeah. Well, I mean, I totally was nodding to everything Eric was saying, that there has to be a moving over of supporting the global financial system at the bank level to supporting the global real economy at the foundation level, at the people-up level. And whether that’s debt relief, bringing in taxes so they’re not off shelter, deleveraging the banking system, making it more transparent, cutting up the banks, making them responsible, because they’ve gotten all this help, to the real economies, all of that has to be part of the play; otherwise, this continues, and it just continues to hurt the economies least able and least getting all of the help from the top.
AMY GOODMAN: Nomi Prins, thanks for being with us, former banker, author of All the Presidents’ Bankers: The Hidden Alliances That Drive American Power. We’ll go back to Bavaria to speak with our guests. We’ll be speaking with Gawain Kripke of Oxfam America about the issue of coal, and Eric LeCompte, with us in Washington, D.C. Stay with us.
AMY GOODMAN: The Weavers, "If I Had a Hammer." Singer Ronnie Gilbert died on Saturday in Mill Valley, California. The great folksinger was 88 years old. This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Juan González. We’re still with Eric LeCompte, executive director of Jubilee USA Network. He was recently in Dresden, Germany, for the G7 finance ministers’ gathering. And we’re joined by Gawain Kripke, the director of policy and research at Oxfam America. He is currently in Garmisch, Germany, for the G7 summit, a little ways away from this castle where the Group of Seven wealthiest democracies are meeting. Juan?
JUAN GONZÁLEZ: Well, Gawain Kripke, I wanted to ask you—I should more properly have asked you about the issue of the G7 and coal and their relationship to—as they’re discussing climate change, their relationship to coal production worldwide.
GAWAIN KRIPKE: Yeah, the G7 leaders come here every year and say that they want to tackle climate change. And then, at the end of the day, their communiqué says very little. You heard President Obama earlier in the program mention climate change as one of the big issues that they’re going to take up at the G7. Chancellor Merkel has talked about climate change being a key issue for this G7. Other leaders have said so. And we want to see some real action. This is the year to do it. Oxfam has been calling on the G7 leaders to commit to phasing out coal from our energy portfolio. And it’s quite feasible to do. Coal is no longer the cheapest option, in a lot of cases, but it’s certainly the dirtiest option. And by our calculations, it’s quite feasible for the G7 countries to phase out coal and make a big step toward solving the problem of climate change. So we made that call before they started, and we’ll see what they do when they come out of the G7 summit. We’ll know within an hour about what they’re going to do. We don’t expect them to take the big steps they need to. And so, it all rings a little false when the leaders come here and say they want to tackle climate change, and they don’t do much.
AMY GOODMAN: So, Paris, France, is coming up. That’s in December. That’s the U.N. climate summit. That’s different from the others, back to more like what happened in Kyoto. It’s going to be a binding summit. What is Oxfam America calling for? And how is this laying—setting the table for that?
GAWAIN KRIPKE: Well, the first thing to recognize is that, historically, climate change is the problem—a problem caused by developed countries. In the room at the G7 are leaders representing 50 percent of the carbon that’s in our atmosphere right now. So these guys have a special responsibility to help solve this problem. Developing countries have been coming up, and they’re producing more climate change, but the problem started in rich countries, and the solution should start in rich countries. So we’re calling on developed countries to do things like phasing out coal, make big commitments to reducing our carbon implant—their carbon emissions, and also to providing the funding necessary for the world’s economy to move to zero-carbon energy sources and to adopt—adapt to the climate change that we know is going to happen.
Many of the poorest countries and many of the poorest people are very vulnerable to changes in the weather. Most farmers in Africa, for example, depend on the rain. They don’t have irrigation. So if the rain changes, they’re really in trouble. And we think that the richest countries in the world, that are here, have an obligation to help poor people in poor countries adapt to climate change. We’re calling for them to make commitments. In Copenhagen, leaders said that they would provide $100 billion a year to make these transitions, and so far that money hasn’t been coming.
JUAN GONZÁLEZ: Well, on Sunday, White House spokesman Josh Earnest told reporters, Obama and German Chancellor Angela Merkel discuses Greece in their bilateral meeting ahead of the G7 summit.
PRESS SECRETARY JOSH EARNEST: As it relates to Greece, I will say that there is unanimity of opinion in the room, that it was important for Greece and their partners to chart a way forward that builds on crucial structural reforms and returns Greece to sustainable long-term growth. We’re pleased that we have seen similar indications from the Greek government. And there obviously is a deadline that’s looming, and the president is certainly hopeful that Greece and their partners will be able to chart this path without causing undue volatility in the global financial markets.
JUAN GONZÁLEZ: Eric LeCompte, Greece keeps being discussed. And here in this summit, they’re not even there, obviously, at the table. Your thoughts on this issue of the G7 again trying to urge Europe to resolve the ongoing, months-long now, crisis with Greece?
ERIC LECOMPTE: Well, you know, we have to understand, just as some background in terms of the Greek situation—you know, we look at Greece as one of the most terrible examples of how the global financial crisis impacted our world. You know, the further we get away from the crisis of 2008, all economists tend to agree that we’re getting closer to the next crisis. And our inability to deal with the Greek situation illustrates a greater inability to deal with the global situation. In 2010, instead of dealing with the severe debt problems that took place in Greece, the can was kicked down the road, where emergency financing was given, which mostly bailed out the private sector, German banks and others, without really dealing with the problems. Intense austerity measures were put in place in 2010. And those measures now, the International Monetary Fund agrees, are essentially what drove about a third of the entire population of Greece under the poverty line. Greece now, instead of dealing with those problems in 2010, is the third most indebted country in the world. And right now, what leaders are talking about are more financing as opposed to dealing with the debt situation head-on.
We have to understand that Greece also exemplifies what went wrong with the global financial system. And although world leaders are not firmly agreeing on solutions, they’re all agreeing on the problems. And we see those problems in Greece, that the Greek crisis was caused because of a combination of an unsustainable debt load and speculative, extreme risky investment. And then we see that in the mortgage crisis back here at home in the United States, we see it in developing countries having food security issues, and it becoming a global economic crisis.
The question now: What should be done about Greece? What needs to be done, moving forward, to not only address the Greek problem, but to promote real global stability? Well, in Greece, you know, more financing isn’t necessarily the answer. We saw last week the Greek government say that they’re going to bundle their IMF payments to the end of this month, about 1.6 billion euros. They delayed the payment, about three million eurors, $218 million last week, as a negotiating tactic. You know, we have the Greeks, and we have the G7, we have the Germans, the European Central Bank, playing a poker match with people’s lives. And what’s happening right now is a negotiation of how much austerity for financing that the Greeks are willing to take.
But, you know, we go back to what happened in 1953 with the London accord, where we saw a real global bankruptcy process that led for the economic miracle for Germany to become one of the strongest economies in the world. And we see that as a model for the Greek situation, that we could have a global bankruptcy process that not only could be applied for Greece, but now, for the financial system, stem risky investment behavior and start to get debt loads around the world in a more sustainable place.
AMY GOODMAN: Eric, it’s not only that Germany has taken the lead in going after Greece on debt, but this is—the G7 is taking place in Germany. And Alexis Tsipras, the head of—the prime minister of Greece, is not there, as Putin is not there, though other leaders, like the prime minister of Iraq, are meeting, for example, with President Obama today. What is the significance of this?
ERIC LECOMPTE: Well, I think it’s very significant. And we have to understand that just last week Greece was considered to be a part of the official agenda of the G7. And then on Friday, we saw it removed. We know it dominated the conversation yesterday. But part of what we’re seeing by the G7 is, to some degree, a snub of Greece. We’re seeing the Obama administration align with the other G7 countries and starting to take a harder-line approach with Greece. And although what the White House has continually said about working together, about keeping Greece in the eurozone, not necessarily turning to austerity as the solution—these are positive things, but we have to understand that with the summit being hosted in Germany, that right now Merkel, along with the other G7 leaders, are snubbing Greece and trying to play hardball with them.
JUAN GONZÁLEZ: And is it your sense that there can be a deal worked out here, or is it likely that the default will move forward in terms of Greece?
ERIC LECOMPTE: Well, we’re certainly really concerned, because we do recognize there is a real opportunity here to be able to do something different, to be able to turn away from austerity, to be able to start to invest in people and not to invest in banks, not to say that the markets should drive what’s happening, but, you know, as Pope Francis has pointed out, it’s not about markets, it’s about people. And so, we do see that there is a real opportunity. We see there are models. We see at some points there have been some positive conversation. I think the concern we have right now is, at the end of the day, from conversations that we’ve also had with governments and seeing how these kinds of issues are moving forward, that the Germans and others are perhaps willing just to push Greece outside of the eurozone and perhaps look at some of these policies for greater stability in the future, because even though Greece is happening right now, even some of the G7 countries themself and some of the wealthiest countries of Europe, from Italy to Spain, are dealing with these serious debt issues. So, you know, we’ve even heard acknowledgments from the German government that eventually they do want to create a bankruptcy process, at least for the eurozone. But in the short term, we might see the Greeks getting pushed out and them bearing the brunt of what’s been a problem of the making of the banks in the private sector.
AMY GOODMAN: Eric LeCompte, we want to thank you for being with us, head of Jubilee USA Network, and Gawain Kripke, speaking to us from Bavaria, Oxfam America, who released "Let Them Eat Coal," which notes the G7 countries remain major consumers of coal, which is the biggest driver of climate change and world hunger.
This is Democracy Now! Stay with us for our next segment, the tragic news that a young man here in New York that was held without charge for three years at Rikers, much of that time in solitary confinement—he went in when he was 16 years old, supposedly for stealing a backpack, which he said he never did. Kalief Browder has just committed suicide. Stay with us.