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Fannie, Freddie, Africa and Europe in context

18
07
08

Fannie, Freddie, Africa and Europe in context

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It has been estimated that Fannie Mae and Freddie Mac between them underwrite debt of some $5,000,000,000,000 and that US losses from the current credit crunch could amount to $1,600,000,000,000.

The entire external debt obligations of the world's 40 odd Highly Indebted Poor Countries (HIPCs) is some $300,000,000,000 - that's about 6% of Fannie and Freddie's problems. So any bailout of the US mortgage system is going to amount almost certainly to more money than would write off all that, mainly African, debt (were that the best way to proceed, which I believe it is, with conditions).

By contrast the EU has today decided to support the idea of giving the surplus it has made on the Common Agricultural Policy as a result of rising food crop prices (so it has been subsidising less) to "African farmers". That's about €1,000,000,000 - or one three-thousandth of Fannie and Freddie's problems and two hundredths of Africa's problems.

But where did they get that money from, how did it arise? Robbing those very African farmers by denying them access to our markets and subsidising dumping on theirs. Tariffs are pure evil, aren't they?

So, whenever anyone says to you that it's difficult to find the finance for debt relief in the poorest countries, you'll now know that is total bollocks.  Just think of the scale of the US mortgage debt and what such sums could do for the 600 million or so poorest on the planet.

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Comments

Anonymous's picture
Submitted by James Schneider (not verified) on July 18, 2008 - 21:15.
Don't forget robbing European consumers through higher prices too. A thoroughly evil thing, tariffs.
Jock's picture
Submitted by Jock on July 18, 2008 - 21:27.
Indeed - there used to a figure that CAP doubled the price of food in European retail markets.  If that were the case of course the current price increases would not be biting so hard.
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