NOVANEWS
You know the European economic crisis is nowhere near to being resolved when not even the Holy Spirit can save Europe’s zombie banks from going bust. I am referring, of course, to one of the latest twists in Portugal’s (and Europe’s) economic and banking crises, the 4.9 billion euro (6.6 billion dollar bailout) of Banco Espirito Santo. As a recent New York Times article reports, this affair has brought the detention of the patriarch of the family after which the bank was named, Ricardo Espirito Santo Silva Salgado, also “widely known in Portugal as ‘Dono disto todo,’ or the owner of everything”. (1) Mr. Salgado and his bank are investigated for a litany of crimes, including tax evasion, money laundering, “possible accounting fraud, abuse of privileged information and … dubious loans to parts of the Espirito Santo empire, which includes hotels, hospitals, farms and more.”
The history of Mr. Salgado’s ‘holy family’ is quite instructive regarding the dubious relationship between capitalism and democracy. The family’s rise goes back to the early 20th century and to the family’s ties to the Rockefellers. In retrospect, this seems only appropriate given John D. Rockefeller’s unrivalled status as robber baron par excellence. Not surprisingly, the family went on to thrive under Salazar’s fascist dictatorship, so much so that the Portuguese Revolution’s restoration of parliamentary democracy in 1974 landed “some of the more senior members in prison after the confiscation of Espirito Santo assets.”
This small victory for democracy was quickly erased, however, thanks to the rise of neoliberalism, which allowed Portugal’s ‘holy family’ to regain its rightful place by buying back its bank when “[i]n 1989, Portugal started to privatize assets that had been seized in the revolution”. When neoliberalism brought the world the worst economic crisis since the Great Depression of the 1930s, Mr. Salgado, “the country’s most powerful banker,” was among the first to be consulted by the Portuguese prime minister. After this consultation the latter agreed to the kind of savage austerity that has thrown millions of people in Portugal and across the European periphery to unemployment and destitution. Given the fact that the austerity programs imposed across the European periphery are designed to protect European financial capital at the expense of workers and ordinary people, one wonders what Mr. Salgado’s advice was.
In any case, all is well that ends well, since Portugal’s taxpayers, most of whom are still reeling from the austerity program imposed upon them, are there to foot the bill. There is nothing surprising here: if the surplus extracted from ordinary workers, laborers and peasants has for centuries financed the building of majestic cathedrals named after the ‘Holy Spirit,’ what’s the harm using that same surplus to plug the holes of banks with the same name? After all, this is the 21st century and progress never stops.
Note:
1. All quotations are from Landon Thomas Jr. and Raphael Minder, “Banco Espirito Santo Patriarch Humbled Amid Bailout,” The New York Times, August 4, 2014.
