Eurozone Bailout: Tax Transfer to the Wealthy?

[amborin]

Harald Hau: Eurozone Bailout – Tax Transfer to the Wealthy?

....banksters have improved their game....this bailout favors bondholders, and those constitute the top 5% of the population....the prime objective of this exercise is to spare big Eurobanks any pain, which means the highly paid professionals and executives in their employ are the biggest beneficiaries.

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Last week, the European heads of government added €109 billion to the existing €110 billion rescue plan for Greece. As Europe’s financial sector would have otherwise taken a huge hit.....How did the financial sector manage to negotiate such a gigantic wealth transfer from the Eurozone taxpayer and the IMF to the richest 5% of people in the world?

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The private creditors’ contribution is therefore extremely modest compared to the €109 billion in new public commitments. Especially given that private creditors had the most to lose. Given that the market discount was already 50% for Greek debt, giving up 21% could be viewed as a gain. This has to be qualified as a very bad negotiation outcome for the Eurozone taxpayer.

A closer look shows the deal is much worse for taxpayers

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..... a €200 billion subsidy to sovereign creditors is a gigantic wealth transfer from the taxpayer to essentially the richest 5% of the world. In the US, the 5% richest households control roughly 70% of all financial wealth, and this percentage is not much different in the rest of the world. Ultimate ownership of bank capital and sovereign debt is so concentrated among high-wealth individuals that we should characterise the bailout subsidy as an “impôt pour la fortune” (“a tax for wealth”) – a wealth tax supporting the rich...

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http://www.nakedcapitalism.com/2011/07/harald-hau-eurozone-bailout-%e2%80%93-tax-transfer-to-the-wealthy.html