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20 Σεπ 2014

Letter to Congress in support of Glass-Steagall

Honorable Congressmen, Greece is now in its fifth year of the intolerable Memorandum and the burdensome loan conditions imposed by the Troika of the European Commission, the European Central Bank and the International Monetary Fund. Our economy has contracted by more than 25%, official unemployment is approaching 30%, with youth unemployment at a level of 64%,

the highest in Europe, incomes have declined on average by 40%, the welfare state is fading, business and especially of medium and small scale is dying, people are committing suicide due to economic deadlocks.

The deep reasons of our crisis are mainly related to the ill functioning of the hard euro, combined with the extreme austerity policies imposed by the Troika, under the umbrella of unbridled speculation of the banking system, that no longer serves the interest of the general welfare. This has led to the ongoing collapse of the real economy not only in Greece, but also in other southern European countries, Italy, Spain, Portugal, and Cyprus.

While we see that a withdrawal of Greece and of the other southern countries from the Eurozone as a first step to our economic recovery, we also believe that, a fundamental reform of the banking system is needed towards the same path.

We have learned that, in both Houses of Congress, draft legislation has been presented to reinstate the separation of commercial and productive banking from speculative investment banking, namely, HR 129 ``Return to Prudent Banking Act of 2013,'' submitted in the House of Representatives by Congresswoman Marcy Kaptur and Congressman Walter Jones, and Senate Bill 985 submitted in the Senate by Senator Tom Harkin.

Both draft legislations are similar to the great President Franklin D. Roosevelt's Glass-Steagall law, which separated commercial and productive banking from speculative investment banking, which is largely responsible for the world economic crisis and in particular the economic catastrophe of our countries.

We believe that, if such an Act is passed in the United States, its example would spread to Europe. This would decisively contribute to ending the current nightmare of economic collapse by removing the cancer of speculation from the public domain, and the issuance of new credit to economic reactivation.

Therefore, with all respect, we urge you to consider and approve this new Legislation.
Theodore Katsanevas

Professor of Economics, University of Piraeus,
Head of the new political party “DRACMA”
Greek Democratic Movement