• What we may see at the upcoming European Council meeting (28-29 June 2012)is a desperate EU beginning to put in place capital controls towards establishing a 'debt union' that can only be held together through repression, Nigel Farage told KWN, June 22.
Asked whether they will be able to hold the euro together, Farage said: “There were many people that thought communism would fall many years before it did because it was such a total failure. But they managed, through repression, to keep the whole thing together. What you may see is a very desperate European Union begin to put in place capital controls and things like this..."
"In a sense the proposal that is on the table next week, which is coming from Van Rompuy and Barroso, would be the first step towards that repression.
"If they are able to put together a debt union from a European Union; if they are able to have total control over individual member states' budget and all the rest of it, then we are heading very, very rapidly down that road towards repression and, frankly, that's the only way they can win now.
"The only way they can win is to take away from the citizens the ability through the ballot box to do anything about this. They are hell-bent on doing it, but they know that the electorate, particularly in the north of Europe, are with every passing day, beginning to suss out their little scheme. We know that the markets have no confidence in them.
"And one important thing happened in the last few days: that was the Barroso statement that he made at [the] G20 [meeting], when he said: 'we will not take lessons from the rest of the world in democracy' - which is a bit rich, wasn't it, for a man that's never been voted for..."
“I would be very, very surprised at that big summit next week, which incidentally I have a ticket to - not that I’ll be the most popular person in the building, but I just don’t think there is going to be an agreement of any great significance next week. I just don’t see it happening.”
“I hold to the theory that at some point in time, the markets are just going to overwhelm all of this, and then we will face the IMF global bailout situation. It would be better to admit we’ve made a terrible mistake and take losses on the money we’ve already foolishly thrown in and say, ‘Let’s start again boys.’
"Bearing in mind that overhanging all of this is the threat of something even worse in the banking system, which of course is very much beyond our control now...."
“The total amount of money that is needed to shore up the Spanish banking system is more like €400 billion, some people even think €500 billion. The trouble is that if Europe was to do that they would be penniless. Because in theory they’ve got that money in their stability mechanism, although in practice all they’ve got are commitments from countries to put money in. The cash isn’t actually there.
"But even if they were able to rally around and get the cash, that would be it. The money would have run out. Then the market run would move to Italy. So the scale of the Spanish banking problem is such that I don’t think Europe on its own is able to get Spain out of it.
"So then you come back to the IMF. If we reach a point where the EU has run out of money, and where the IMF begins to fragment in terms of what it’s willing to do, then what you face is the possibility of some of these banks actually going under.
"So you throw trillions (of euros) at the thing, but six months later you find that the economy is still contracting, we’re still heading into a downward spiral, unemployment is getting worse, people are rioting on the streets and demanding a different solution.
"At the end of the day there is no way that these countries are not going to go back to their own currencies that float on the exchanges. What all of that means is that all of this money that’s been chucked in through the European Union and through the IMF, most of it in the end is going to be lost.”