The real reason Julian Assange sought asylum

The WikiLeaks chief fears he could face the death penalty in the US for treason.

WikiLeaks is well-known for dropping surprises. But when the whistleblower organisation posted a tweet yesterday afternoon saying “stand by for an extraordinary announcement,” it is doubtful even one of its 1.5 million followers could have predicted what was coming.

Four hours and forty minutes later WikiLeaks dramatically announced that its editor-and-chief, Julian Assange, was at the Ecuadorian embassy in central London where he had made a request for political asylum. Ecuador’s foreign affairs ministry issued a confirmation, saying it was evaluating Assange’s request. Meanwhile it looked like the country’s foreign minister, Ricardo Patiño Aroca, had already made up his mind as he took to Twitter, posting a series appearing to back the 40-year-old Australian. “We are ready to defend principles, not narrow interests,” he wrote.

Why did Assange take such a drastic course of action? Last week Supreme Court judges ruled he would have to be extradited to Sweden to be questioned over sexual misconduct accusations made against him there in 2010. He has been fighting the extradition for more than eighteen months, principally because he believes that if he is sent to Sweden, he could be held incommunicado and then be ultimately handed over to authorities in the United States, where a Grand Jury is actively investigating him over WikiLeaks’ publication of classified US government documents.

In a statement, Assange said that he was in a “state of helplessness” and felt abandoned by the Australian government, who had failed to intervene in his case. He added that he had been attacked openly by top politicians in Sweden and feared he could eventually face the death penalty in the US for the crimes of treason and espionage.

The timing was unexpected, because the WikiLeaks founder still had the option of asking the European Court of Human Rights to hear an appeal. But in some ways seeking refuge at the Ecuadorian embassy was an obvious choice. Assange interviewed the country’s president, Rafael Correa, recently for his television show, and the two men had a rapport (“WikiLeaks has strengthened us,” Correa beamed). Ecuador previously offered Assange a safe haven in 2010, just a few months before it expelled the US ambassador following WikiLeaks revelations. (It is worth noting, however, the country is not exactly aligned with WikiLeaks ideologically: it has a record on free speech that Human Rights Watch says is the poorest in the region after Cuba.)

Assange will not have taken the decision to ask for asylum lightly. It is a huge step borne out of clear desperation, with massive ramifications to boot. For eighteen months he has been obediently adhering to strict bail conditions – subjected to a curfew forcing him to stay a registered address between the hours of 10pm and 7am, an electronic tag strapped around his ankle that can track his movements. Now Assange is in breach of those conditions and, as a result, the thousands of pounds supporters pledged to secure his release from jail in 2010 may be forfeited.

Police will be actively seeking his arrest – though are currently powerless to do so, as under the terms of the Vienna Convention on Diplomatic Relations an embassy is considered “inviolable.” That means UK authorities are not allowed to enter “except with the consent of the head of the mission.” Assange should therefore be safe so long as he is within the confines of the embassy. If he tries to leave, however, he could find himself in trouble.

Historically, people who have sought refuge in embassies have met different fates. Dissident Chinese lawyer Chen Guangcheng recently fled to the US embassy in Beijing China and negotiated a quick and safe passage out of the country on a flight to New York. But others have not been so lucky. In 1956 a leader of the Hungarian uprising, wanted by Soviet authorities, took refuge at the US embassy in Budapest and ended up spending the next 15 years inside its compound, watched by police around the clock.

For Assange, a man haunted by fears of solitary confinement and a draconian US prosecution, 15 years inside an embassy compound may sound like a preferable option.

The embassy of Ecuador in London where WikiLeaks editor Julian Assange is claiming political asylum. Photograph: Getty Images.
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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation