Nord Stream Sues Insurance Companies in London Court – Reports
Sputnik – 12.03.2024
The operator of Nord Stream gas pipelines has sued its insurers in a London court for 400 million euros ($436 million) for their refusal to cover damages following the explosions, the Financial Times reported, citing court documents.
The operator reportedly sued Lloyd’s of London and Arch Insurance companies in February.
The Nord Stream and Nord Stream 2 gas pipelines, built to deliver gas under the Baltic Sea from Russia to Germany, were hit by explosions in September 2022. Nord Stream’s operator, Nord Stream AG, said that the damage was unprecedented, and it was impossible to estimate the time repairs might take.
Russia considers the explosions of the two pipelines an act of international terrorism. There are no official results of the investigation yet, but Pulitzer Prize-winning US investigative journalist Seymour Hersh published a report in February 2023, alleging that the explosions had been organized by the United States with the support of Norway. Washington has denied any involvement in the incident.
To date, none of the Western countries involved in the subsequent investigation – Sweden, Denmark, and Germany – have presented explanations of what happened or named a culprit. Moreover, Sweden announced on February 7 that it would drop its investigation into explosions.
Does the Fate of US Arms in Ukraine Create Pause for Thought Ahead War with China?
By Brian Berletic – New Eastern Outlook – 12.03.2024
In recent months, advanced US weapon systems provided to Ukrainian forces have been cornered and destroyed on the battlefield by Russian troops. This includes the first ever confirmed footage of a US M142 High Mobility Artillery Rocket System (HIMARS), the destruction of several M1 Abrams main battle tanks, and the further loss of several more Bradley infantry fighting vehicles, Newsweek reported.
Last year, the US Department of Defense admitted that a US-made Patriot air defense battery sustained damage in a Russian missile attack, according to CNN. This year, in an article by Forbes, it is admitted that a Russian short-range Iskander ballistic missile destroyed at least two Patriot missile launchers.
These developments end decades of US claims regarding the superiority of its weapons systems, including boasts that Russia’s Soviet-era equipment “won’t be a match” for US arms, as the Business Insider claimed regarding M1 Abrams being sent to Ukraine.
Busting the Myth of American Military Supremacy
The Business Insider article, like many others across the Western media, repeated the myth of the superiority of America’s military technology based on flawed analysis of its performance during the 1991 Persian Gulf War and the 2003 US-led invasion of Iraq. In both instances, the US pitted its best troops and equipment against poorly trained Iraqi forces using Soviet-era equipment already obsolete at the time.
The lopsided results of the fighting in both conflicts were cited as evidence of American superiority over Soviet and then Russian Federation military technology. It also serves as the basis of assumed military superiority over Chinese military power. Such lopsided fighting was imagined by Western analysts ahead of US weapons arriving at the battlefield in Ukraine, and despite the poor performance of these systems in Ukraine, such lopsided fighting is still imagined amid any potential conflict between the US and China.
However, for analysts carefully studying the evolution of modern warfare from 1991 to present day, the disparity between Western military technology and that of even non-state armed organizations was closing. During the 2006 Israeli invasion of southern Lebanon, Hezbollah used modern Russian anti-tank weapons to inflict heavy casualties on Israeli forces, Haaretz reported. Hezbollah’s enhanced military might allowed it to stop the advance of Israeli Merkava main battle tanks and supporting troops well before their stated objective of reaching the Litani River.
The Syrian Arab Army’s successful use of Soviet and Russian-made air defense systems during the ongoing conflict in Syria has forced US, European, and Israeli warplanes to launch attacks using longer-range stand-off weapons. These same air defense systems have been used to intercept Western cruise missiles, reducing damage to targets across the country.
Russia’s intervention in Syria at the invitation of Damascus in 2015 was followed by an effective use of modern Russian air power, cutting the supply lines of Western-backed militants, and aiding Syrian forces on the ground in encircling and destroying them.
It was becoming clear that should modern Western weapon systems face modern Russian military technology, the myth of Western military superiority would be shattered. It was also becoming clear that a similar gap was closing in terms of US military technology and its Chinese counterparts.
On the battlefield in Ukraine, Russian forces using modern Russian weapons are eliminating Ukrainian brigades trained and armed by the US and other NATO members. Despite high expectations ahead of Ukraine’s 2023 offensive, up to 9 NATO-trained and armed brigades were decimated in months of fighting. The New York Times would report at the end of 2023 that despite Ukraine’s massive offensive campaign, Russia had gained the most territory that year.
While it is true that Ukraine did not have enough time to properly integrate the Western arms transferred to it from 2022 onward, the performance of both Western and Russian weapons on the battlefield has made it clear that, now more than ever, the idea of Western military superiority is a more nostalgic interpretation of history, and far from a current reality.
Beyond the performance of Western and Russian weapons on the battlefield themselves, both Western and Russian military industrial capacity has been put to the test. Western private industry-run arms manufacturing had failed to develop surge capacity needed for the protracted, large-scale fighting now taking place in Ukraine. Russia’s military industrial base inherited and then enhanced and modernized such surge capacity from the Soviet Union and, according to the New York Times, despite sanctions, is now outproducing the collective West.
Additionally, because of the complex nature of modern Western arms, a vast network of logistics, sustainment, and maintenance is required to keep these arms operating on the battlefield. A recent press release by the US Department of Defense Inspector General reveals that no such system was created for US weapons transferred over to Ukraine and that without it, “the Ukrainians would not be capable of maintaining these weapon systems.”
Such support was not provided to Ukraine because of the massive undertaking such support requires. For any given fighting force, one many times larger is required to support, sustain, and maintain that force and the weapons and vehicles it uses.
Taken together, all of these weaknesses revealed about Western military technology do not bode well for the United States ahead of any potential conflict directly or by proxy against China.
The Gap Between US and Chinese Military Power is Narrowing
Not only does China have many weapon systems comparable to the systems Russia is employing in Ukraine now, China has acquired some of the best Russian military technology from Russia itself. This includes the Su-35 warplane and the S-400 air defense system.
The US Department of Defense admits the growing capabilities of Chinese military systems, particularly in terms of missile technology, both surface-to-surface missiles and air-to-air missiles launched by warplanes, comparable to or exceeding the capabilities of American missiles, Air and Space Forces Magazine reported.
A 2023 Reuters article would likewise cite the US Department of Defense, admitting that China’s navy was already larger than the US Navy.
Even as Russia’s military industrial base is outcompeting the collective West, China’s industrial base is larger still. Any difficulties the US is having outproducing Russia in terms of military equipment and ammunition will pale in comparison to China’s military industrial output.
Together with the fact that any potential conflict the US seeks to provoke with China will take place in the Asia-Pacific region, thousands of kilometers away from US shores, and considering the extensive nature of the networks required to support US military technology on the battlefield, the idea of Washington fighting and winning any armed conflict against China appears particularly and increasingly absurd.
Even if Washington’s strategy is to subordinate China not with the threat of fighting and winning a war against China in the Asia-Pacific region, but to hold peace and stability in the region hostage by threatening war regardless of its outcome, the US finds itself in a difficult and increasingly weak position year-by-year.
Current US foreign policy is predicated on the premise, “might makes right.” However, the US is clearly no longer “the mightest.” As it provokes conflicts around the globe directly or by proxy, it risks suffering severe consequences its previous advantages in terms of military power had protected it against decades ago.
Continuing to pursue an unsustainable policy like this will end in disaster for Washington and for the American people. However, the US could always pivot toward a policy of coexistence and cooperation, built on mutual respect for other nations like Russia and China as well as the primacy of national sovereignty of all nations.
While the US would no longer be the most powerful nation on Earth, it would still assume a prominent and respected position within a multipolar world. Conversely, if it continues pursuing a foreign policy of belligerence, it still will no longer be the most powerful nation on Earth, but will arrive at that conclusion under much more difficult conditions.
What is unfolding on the battlefields of Ukraine is giving the collective West insight into what it itself may undergo if it continues provoking conflict within a world where Western supremacy has diminished and the rest of the world is now capable of asserting their own best interests within their borders and regions of the world above the collective West and its ambitions worldwide.
The collective West insists on its continued pursuit of global primacy at its own peril.
Brian Berletic is a Bangkok-based geopolitical researcher and writer.
US Intel Debunks Biden, Admits Russia ‘Doesn’t Want Direct Military Conflict’ With NATO
By Ilya Tsukanov – Sputnik – 12.03.2024
US and NATO officials have spent months claiming that Russia has plans to attack bloc countries and calling on the West to prepare for a costly, decades-long confrontation with Moscow. President Putin squashed these allegations in December, calling them “complete nonsense.”
Russia “almost certainly” doesn’t want to go to war with the US or NATO. That’s the view of the Office of the Director of National Intelligence in its Annual Threat Assessment of the US Intelligence Community report.
“Russia almost certainly does not want a direct military conflict with US and NATO forces and will continue asymmetric activity below what it calculates to be the threshold of military conflict globally. President Vladimir Putin probably believes that Russia has blunted Ukrainian efforts to retake significant territory, that his approach to winning the war is paying off, and that Western and US support to Ukraine is finite, particularly in light of the Israel-HAMAS war,” the assessment, presented to US officials in early February but released publicly only on Monday, indicated.
The ODNI listed off all its usual claims about the tools the US expects Russia to use to advance its global interests, ranging “from using energy to try to coerce cooperation and weaken Western unity on Ukraine” (it’s worth recalling here that it was the US, not Russia, which blew up the Nord Stream pipeline network) “to military and security intimidation, malign influence, cyber operations, espionage, and subterfuge,” tools Washington itself has used repeatedly throughout its unipolar moment since 1991.
The report admitted that despite “enormous damage at home and abroad” resulting from the proxy war with NATO in Ukraine, Russia “remains a resilient and capable adversary across a wide range of domains and seeks to project and defend its interests globally and to undermine the United States and the West.”
Kissinger’s Nightmare
The report highlighted deep US concerns about the prospects of enhanced Russian-Chinese cooperation – an eventuality which gurus of US foreign policy like Henry Kissinger and Zbigniew Brzezinski spent their careers warning about and seeking to avoid by dividing the Eurasian mega powers.
“Moscow’s deep economic engagement with Beijing provides Russia with a major market for its energy and commodities, greater protection from future sanctions, and a stronger partner in opposing the United States. China is by far Russia’s most important trading partner with bilateral trade reaching more than $220 billion in 2023, already surpassing their total 2022 volume by 15 percent,” the document indicated.
On the economic front, the ODNI expects Russia’s GDP to record “modest growth” this year (the IMF expects a 2.6 percent bump in Russia’s GDP – up from 1.5 percent projected last fall), and says the country’s economic ties with non-Western countries will continue to strengthen.
“Moscow has successfully diverted most of its seaborne oil exports and probably is selling significant volumes above the G7-led crude oil and refined product price caps, which came into effect in December 2022 and February 2023, respectively – in part because Russia is increasing its use of non-Western options to facilitate diversion of most of its seaborne oil exports and because global oil prices increased last year,” the report said.
On top of that, US intelligence expects Moscow to maintain “significant energy leverage,” even in Europe, where it remained the second-largest supplier of liquefied natural gas through the first half of 2023 despite Brussels’ self-defeating restrictions.
Assuring that the NATO proxy war in Ukraine has “incurred major, lasting costs for Russia,” the ODNI nonetheless admitted that the defensive strategy Moscow took in the face of Kiev’s summer counteroffensive “plays to Russia’s strategic military advantages and is increasingly shifting the momentum in Moscow’s favor.” Russia’s defense sector is engaged in “significantly ramping up production of a panoply of long-range strike weapons, artillery munitions, and other capabilities that will allow it to sustain a long high-intensity war if necessary. Meanwhile, Moscow has made continual incremental battlefield gains since late 2023, and is benefitting from uncertainties about the future of Western military assistance,” the report said.
Russia, China, Iran and North Korea are listed as the four major state actors “engaging in competitive behavior that directly threatens US national security,” with China specifically listed as a power which “vies to surpass the United States in comprehensive national power and secure deference to its preferences from its neighbors and from countries around the world, while Russia directly threatens the United States in an attempt to assert leverage regionally and globally.”
Iran is listed as a threat to “US interests, allies, and influence in the Middle East” and a nation which “intends to entrench its emergent status as a regional power while minimizing threats… and the risk of direct military conflict.” As for the DPRK, the ODNI expects North Korean leader Kim Jong Un to “continue to pursue nuclear and conventional military capabilities that threaten the United States and its allies,” with strengthening economic, diplomatic and defense ties with China and Russia expected to help Pyongyang achieve “international acceptance” of the DPRK’s status as a nuclear power.
The ODNI report’s section on Russia, and specifically the passage admitting Moscow’s lack of desire to wage a shooting war against US and NATO runs contrary to months of claims by officials ranging from President Biden to NATO chief Jens Stoltenberg to a host of US and European media that if Russia is “allowed to win in Ukraine,” its next target will be bloc countries.
“We can’t let Putin win,” Biden warned in December 2023, while urging Congress to approve his $61 billion in proposed new aid for Ukraine. “If Putin takes Ukraine, he won’t stop there… He’s going to keep going. He’s made that pretty clear. If Putin attacks a NATO ally – well, we’ve committed as a NATO member that we’d defend every inch of NATO territory. Then we’ll have something that we don’t seek and that we don’t have today: American troops fighting Russian troops,” Biden claimed.
“It’s complete nonsense – and I think that President Biden understands that,” Putin retorted. “Russia has no reason, no interest – no geopolitical interest, neither economic, political nor military – to fight with NATO countries,” he said.
But even after the ODNI assessment was published for internal use in February, US and NATO officials continued with the “aggressive Russia” narrative.
Last month, NATO chief Jens Stoltenberg urged the West to “prepare ourselves for a confrontation that could last decades,” and claimed that “if Putin wins in Ukraine, there is no guarantee that Russian aggression will not spread to other countries.”
In his interview with Tucker Carlson last month, Putin said it was “absolutely out of the question” for Russia to attack NATO members unless they began aggression first. “We have no interest in Poland, Latvia or anywhere else. Why would we do that? We simply don’t have any interest,” Putin said.
The ODNI report finally admits what Russia has been saying all along. The question is: why now?
Biden, Along With NATO, Is Losing His Grip on Reality
By Martin Jay | Strategic Culture Foundation | March 12, 2024
The state of the union speech was an insight into how the senile U.S. president is stuck in the past, out of touch with the reality of a multipolar world.
While many will wonder whether he wrote the speech himself or it was drafted for him, President Joe Biden made his case to the American public in simple terms. Vote for me, as I am living the dream of USA 80 years ago. The references to the second world war should have shocked the American public who are more concerned about the price of groceries, gas pumps and their utility bills rather than what was going on in 1941.
And yet 1941 for any half-rate history teacher in Alabama would seem an odd choice of dates to pluck out of nowhere and use as a reference point to present America as an unchallenged superpower. As it was, after all, the date where German troops took on their greatest challenge – Russia – and were mercilessly defeated through, amongst other military considerations – being both deluded about their strengths and poor military planning.
Those two points might be on the minds of western elites while Biden used the podium to once again beg Congress to approve his aid package for Ukraine. As even the BBC correspondent in Ukraine admitted – that Russia was now advancing and its troops no longer taking villages but now towns – it would seem that NATO planners have indeed repeated the Barbarossa lesson. Is this the real reason why the bill cannot get passed? The Americans have realised they have simply bitten off more than they can chew in Ukraine and the humiliation already of three U.S.-made Abrams tanks – the most cumbersome, impractical and overrated piece of modern U.S. military hardware ever conceived – along with a general ground swell of opinion that the war can never be won is weighing down on them. Even the Guardian newspaper recently published an opinion piece by Simon Jenkins who argued the case the NATO had become “reckless” in Ukraine, citing the carelessness of the German phone tap which revealed the plan to hit the bridge in Crimea, seemed to draw a new water line of despondency.
Perhaps this explained why Biden didn’t take too much time on harping on about Ukraine in his speech, preferring more to use the opportunity to strike out at Trump – a tactic which surely confirms that he is as stupid as he looks as it will surely backfire on him and raise Trump’s prowess ever further. Instead, Biden attempted at great length to divert cash back into the pockets of humble Americans who don’t understand how the so-called trickle down affect is supposed to work – how big businesses making huge profits don’t always distribute their gains throughout the financial system – by admitting that it is not working. On paper, the figures show that the U.S. is doing well. Try explaining that to millions of Americans facing hardship on a scale never before seen. Biden is going to be remembered in history as the buffoon who left office while two wars raged in the world, while he raised taxes from corporations and can’t remember where he is, or what day of the week it is. He will be remembered for the fiasco of the pullout of U.S. troops from Afghanistan and for his incoherent dithering. And for that bloody ice cream.
But one has to wonder if there is a slight, but noticeable change in policy in the White House towards the Ukraine war – and how the West gets out of it and still keeps face. Victoria Nuland, the very architect of the Ukraine war itself, is to step down from her post in the state department, remembered really only for her transformation from a babe to the monster from the black lagoon with her own facial transformation cruelly portrayed on social media posts with the before and after photo montage. It is reported by the NYT that she has resigned but the only real question is whether she was pushed out or not and by whom. Is there a new strategy in the pipeline to pull out of Ukraine as well, one which she woefully disagreed with? Is this perhaps part of the reason why, I’m informed, that eight German special forces soldiers hastily left Ukraine in the last few days following the phone tap scandal which exposed the Germans for being the amateurs they are?
How Washington Killed the Nuclear Arms Control System
By Ted Galen Carpenter | The Libertarian Institute | March 12, 2024
During the Cold War, world populations faced the ongoing nightmare of a nuclear attack coming out of the blue. All it would have taken was one miscalculation by either side. Such a trigger could even have taken the form of a false alert. We know that at least one such incident nearly led to catastrophe.
In 1983, the Soviet Union’s alert system indicated that there were incoming missiles on their way. Fortunately, the alert commander ordered a double check to be sure the indications of a missile launch from NATO were genuine. That check confirmed that the alert was erroneous. Given the dire state of East/West tensions, World War III would have at the time been almost certain if the commander had not been extra cautious.
The end of the Cold War ended the prospect of such a nightmare scenario. Unfortunately, Bill Clinton’s administration “found new causes to promote using American power, a fixation that would lead to serial campaigns of intervention and social engineering.” U.S. leaders, especially Secretary of State Madeline Albright, went out of their way to demonstrate Russia’s impotence publicly. In particular, they humiliated Russia’s Serbian clients both in Bosnia and in Serbia itself. Washington’s treatment of the Serbs caused renewed East/West tensions and began to generate a second Cold War.
Even more directly, the United States and its principal European allies provoked Russia with multiple rounds of NATO expansion. In April 1998, NATO admitted Poland, Czechoslovakia, and Hungary over Russia’s vehement objections. Expansion continued under both George W. Bush and Barrack Obama. The result was a steady increase in military tensions. In addition to provoking Russia by mistreating its Serbian clients, Washington expanded NATO eastward, creating a threat within Russia’s core security zone.
There were multiple rounds of eastward expansion involving Bill Clinton, George W. Bush, and Barrack Obama. The mythology has also developed that Donald Trump was soft on policy toward Russia, if not an outright traitor. The reality was the opposite. U.S. policy towards Russia hardened significantly under Trump. That point was most obvious with regard to Trump’s attitude towards crucial arms control agreements.
Under Trump, the United States had adopted several measures that again raised the extent of tension. An especially unhelpful action took place during Trump’s administration when hawkish U.S. officials decided that the United States should withdraw from the Intermediate-Range Nuclear Forces Treaty in August 2019. Such intermediate range missiles had always been Russia’s Achilles’ heel and Russian leaders were hypersensitive about their country being at a disadvantage with respect to such weapons. Threatening to withdraw from that agreement was extremely unhelpful. The situation worsened when Washington followed up by deciding to withdraw from the Open Skies Treaty in November 2020.
As Western-Russian relations deteriorated further, Russian President Vladimir Putin put Russia’s nuclear forces on higher alert in February 2022 following the advance of Russian forces deeper into Ukraine. Later in the year, relations became even more confrontational. The “architecture of disarmament and nonproliferation is now gradually being dismantled. On [November, 2023] President Vladimir V. Putin signed a law revoking Russia’s ratification of the global treaty banning nuclear testing. In pushing through the de-ratification, Putin said that he wanted to “mirror” the American position. Although the United States signed the treaty in 1996, it has never been ratified. Since the United States has never ratified the treaty, Russia’s move was more symbolic than practical. But it leaves only one significant nuclear weapons pact between Russia and the United States in place: the New START treaty.” If Russia further weakens its commitment to the test ban, that will create yet another arena for instability.
It is sobering to consider the state of global nuclear arms control today to what it was at the end of the Cold War. It is alarming that Moscow and Washington have returned to the state of nuclear rivalry and confrontation in less than a quarter century. An unparalleled opportunity for peace has been wasted.
Pentagon reveals $10 billion arms ‘hole’ due to Ukraine – media
RT | March 12, 2024
The Pentagon wants the US Congress to allocate $10 billion to compensate for weapons it has delivered to Ukraine and to replenish its own stocks, American media reported on Monday citing senior officials.
Unless the deficit is covered, the “ongoing hole” will put a strain on the US military itself, one source told Politico. The White House has requested over $60 billion in supplemental Ukraine assistance, but the Republican-controlled House has stonewalled repeated calls by US President Joe Biden to release the money.
The official said the “big funding piece waiting in the supplemental” needs to be approved for the US arsenal to be replenished. Otherwise “it would come back on our own readiness, on our own stockpile, to a certain extent.”
The $10 billion shortfall was created due to the differences between the listed value of weapons drawn from stockpiles and the cost of replacing them with new ones. For instance, if older munitions are sent to Ukraine, the Pentagon will replace them with a newer and more expensive version.
Politico was among the first to report the story, saying the remarks were made on condition of anonymity. Voice of America later confirmed the deficit issue, citing Deputy Secretary of Defense Kathleen Hicks and another unnamed military official.
Last June, the Pentagon announced that it could deliver additional weapons to Ukraine, after realizing that the cost of stockpiled arms was lower than it thought. It said it was free to provide an extra $6.2 billion in aid under its existing authorization thanks to the re-evaluation.
By the end of last year, the Biden administration had provided more than $75 billion in cash and equipment for Ukraine’s war effort, by far surpassing other Western donors. The deliveries stopped after the Congress-approved money pot ran dry, the White House said in mid-January.
The anonymous source said the Pentagon still had the authority to send $4.4 billion worth of aid to Ukraine, but Defense Secretary Lloyd Austin has been “reluctant” to tap into that fund, according to Politico.
NATO should oblige all members to spend 3% of GDP on defense, says Polish President Duda
WPOLITYCE.PL | March 12, 2024
President Andrzej Duda has revealed he will propose that NATO allies increase their defense spending to 3 percent of GDP to bolster the alliance’s strength in response to the war in Ukraine.
Duda was speaking ahead of a trip to Washington D.C. on Tuesday alongside Prime Minister Donald Tusk, where they are expected to hold talks with U.S. President Joe Biden at the White House.
Duda views the alliance with the United States as the cornerstone of Polish security, noting that the U.S. invited both him and the Polish prime minister to come to Washington on the 25th anniversary of Poland joining NATO.
Duda will also have meetings with both Democratic Party and Republican Party politicians in the U.S. Congress, as well as the U.S. military. He will be present at a demonstration of the most modern M1 Abrams tank and the AH-64 Apache helicopter, both of which have been ordered by the Polish military.
On his way back from Washington, Duda will visit NATO’s HQ in Brussels, where he will discuss his proposal for NATO states to spend 3 percent of GDP on defense and the security situation on the eastern flank of the alliance.
“I want to propose in the near future, and I will be discussing this with all our allies, including with the NATO secretary general at NATO headquarters, that member countries jointly decide to spend not 2 percent, but 3 percent of their GDP on defense,” Duda said during a meeting of Poland’s National Security Council on Monday.
He emphasized the need for a strategic push for enhanced military capabilities within NATO, reflecting a broader response to geopolitical tensions, claiming “a robust NATO is less likely to be challenged.”
“No one will dare to attack a strong NATO, no one will dare to attack strong countries, no one will dare to attack countries that know how to defend themselves efficiently, countries that will be ready to stand up to defend their borders and land,” Duda added.
Reflecting on Poland’s commitment to defense and security, Duda credited the previous conservative (PiS) government for its efforts to strengthen the nation’s deterrence capabilities.
“There must be a clear and bold response to Russian aggression. That response will be to increase the military potential of the North Atlantic alliance,” he said.
The Polish president also stressed the strategic importance of NATO’s latest round of enlargement to include Finland and Sweden, saying it was a testament to the alliance’s growing strength and a message to Russia.
“In the near future, NATO should be able to make the bold decision to admit Ukraine,” Duda added.
Poland: the Biggest Army in the EU And the Biggest Risks in the Making
By Dmitry Babich – Sputnik – 11.03.2024
The Polish ministers love surprises. This week, Polish Foreign Minister Radoslaw Sikorski stunned the public when he said “several NATO countries already have their troops in Ukraine.”
Sikorski represents the pro-EU “liberal” party Civic Platform, which recently replaced the “anti-European” nationalists from the Law and Justice (PiS) party. By voicing the shocking remark, Sikorski was effectively attempting to outdo the media star of the previous cabinet formed by the PiS.
That media star was Mariusz Blaszczak, the former minister of defense who promised Poland would have “the strongest army in Europe” in two years.
In fact, Sikorski’s statement about NATO troops in Ukraine was not much of a secret for Russia. Even Sikorski’s attempt to create intrigue by saying he would not reveal the troops’ countries of origin was a failure.
Maria Zakharova, the official representative of Russia’s Foreign Ministry, acknowledged that Russia knew about the presence of Western servicemen and which countries they came from. She said: “It does not make sense for NATO to deny it’s sending soldiers to Ukraine any more.”
However, German Defense Minister Boris Pistorius again denied the presence of NATO troops in Ukraine recently, in this way one more time exposing himself or Sikorski as a liar.
Sikorski made his revelation about NATO troops at a celebration devoted to the 25th anniversary of Poland joining the NATO alliance alongside Hungary and the Czech Republic in 1999.
In his speech, Sikorski also said that sending Western troops to Ukraine was a “creative” move, and that “the West should pursue the policy of asymmetrical escalation” in Ukraine.
Through the official’s commentary and by ignoring Russia’s warnings of the inevitable retaliation for the escalation, Sikorski is – again – following in Blaszczak’s footsteps. It was under him that Poland, indeed, became Europe’s fastest growing military power, and the Civic Platform does not show any willingness to stop the project.
According to official data from Blaszczak’s defense ministry, in 2023 alone, Poland bought 1,000 K2 tanks from South Korea and 673 K9 howitzers from the same supplier. From the United States, Poland purchased 366 Abrams tanks and 32 F-35A fighter jets.
“If Blaszczak’s plans are fulfilled, by 2030 Poland will have more tanks than the combined forces of the UK, Germany, France, Italy, Netherlands and Belgium,” the Wall Street Journal reported in an article headlined, “Poland Hardens Its Defenses Against Russia.”
In 2023, Poland spent $ 23 billion on defense purposes, a sum that makes up 4% of the country’s GDP against the NATO-required 2%.
But is spending tens of billions of dollars from a poor country’s budget for preparations of war against the historically and ethnically close eastern neighbor a wise policy?
Not so, say cooler heads.
“NATO is acting like a fireman, who sets on fire more and more buildings in order to show the community how much it needs him,” Mateusz Piskorski, a well known journalist and former leader of Zmiana party, told Sputnik.
In Piskorski’s opinion, NATO and Polish aggressive elite bear at least a part of the responsibility for the fire which is now devouring Ukraine. Ironically, these same elites point to Ukraine as the proof of Russia’s belligerence.
These same Polish elites try to talk Poles into spending more money on arms for Ukraine and on increasing the power of the native Polish army. Blaszczak’s plan was to increase the staff of the Polish army from the current 172,000 men to 300,000. The timeframe for the reform is intended to proceed between two and three years, and this is one of the few initiatives of the outgoing PiS party, which the new “liberal” Polish Prime Minister Donald Tusk promises to continue.
So, the dangerous military machine is set in motion, and the new foreign minister, Sikorski, is acting in a way that makes risky confrontations inevitable. In his speech before the US’ Atlantic Council in February, Sikorski claimed that “negotiations with [Russian President Vladimir] Putin are impossible.”
“And if you ask me whether we are going to war with Russia, my answer will be – not yet,” Sikorski added in his address before a panel of experts at the Atlantic Council.
In their comments, some of those present pointed out that Sikorski spoke “flirtatiously.” However, ‘irresponsibly’ would be an even more appropriate word.
GOD IS UNDERWRITING ISRAEL’S GENOCIDE BOND
SO THE US SECURITIES & EXCHANGE COMMISSION & GOLDMAN SACHS AGREE GENOCIDE IS NO SECTION 17(A) FRAUD ON BOND INVESTORS
By John Helmer | Dances with Bears | March 10, 2024
Last week it happened that God and the United States Treasury managed to underwrite a record issue of Israel Government bonds to continue the war against the Arabs in Gaza, West Bank, Lebanon, Syria, Iraq – and Iran if necessary.
The war financing comprised $2 billion of five-year bonds, and $3 billion each of 10 and 30-year bonds.
The US Treasury guarantees bond holders that if Israel defaults on repayment of its obligations, the US will pay instead. Notwithstanding this, the Israelis were obliged to offer an extra 1.35%, 1.45%, and 1.75% more in interest over the going rate for US Treasury bonds for the same length of term.
The Reuters news agency headline on March 6 celebrated “Israel sells record $8 billion in bonds despite Oct 7 attacks, downgrade”. The propaganda agency based in New York quoted Israel’s Accountant-General as claiming the bond placement “results showed an “unprecedented expression of confidence in Israel’s economy by the world’s largest international investors”.*
In fact, according to well-informed bond trade sources in Europe, with the higher interest rates the market has just demanded from the Israelis, the spread between the Israel bonds and US Treasuries has never been wider, and the worse this spread will become for Israel. This is a vote of no-confidence from the market which the Israelis, the Americans, and their media are trying to keep secret.
The longer the war is protracted, the more obvious the costs of Israel Defence Forces’ (IDF) failure will become – and the deeper the negative bond sentiment will grow. By converting secrecy into money, the market is signalling that it has begun to turn against Israel – and profit at Israel’s expense.
Also unprecedented is the secrecy in which the “expression of confidence” has been managed by the US, French, and German banks acting as managers of the Israeli bond issue; and of the US Securities and Exchange Commission (SEC), which has had regulatory oversight of the process. The debt financing has been reported as a “private placement”; this has removed the requirement that the Israelis produce a public prospectus explaining how they think their war – plausibly genocide, according to the International Court of Justice in its ruling of January 26, 2024 – is going, and how long the IDF claim it will last.
This does not remove the legal requirement on the two US banks engaged in marketing the bonds to US investors, Bank of America and Goldman Sachs, to submit a formal application for SEC approval of what is called a letter of consent. However, asked to confirm the contents of the letter of consent application for the sale of the Israeli bonds, and its official approval, the SEC has refused to give any answer.
Goldman Sachs was asked the same questions. The bank also refuses to say.
Last October the chief executive of Goldman Sachs, David Solomon,* issued a personal letter to the bank’s employees claiming the Hamas operation was a “violation of fundamental human values”: Solomon then proposed a $2 million gift of bank funds “to organizations providing critical support and humanitarian relief in Israel”; plus additional bank money, three bank dollars for every one contributed by bank staff making donations under $25, and one for one if the staff contribution was over $25. Asked how much money has been raised for Solomon’s gift to the Israelis, the bank is refusing to reply.
In other words, Israel’s public genocide is a private secret among Americans who are paying for it, and among US government officials responsible for regulating the scheme according to US law.
According to well-informed bond traders, this deal-making is worth in fees to the dealmakers, led by Goldman Sachs, about $100 million.
The following week, the downgrade by the Moody’s rating agency confirmed the inflection in market sentiment against Israel, with worse to come.
A month ago, Bloomberg’s Israeli reporter Galit Altstein was assigned the job of printing all the material he could find promoting the sale of the bonds. The headline of his report implied that Israel would be able to finance its war despite the Moody’s downgrade and the longer-term risks in the small print of the Moody’s report.
Source: https://origin.www.bloomberg.com/ — February 11, 2024.
According to Bloomberg, about $58 billion in new debt would be issued this year, up by a third from the prewar year. About 80% of that total is usually raised in the domestic Israeli market; but if Israeli investors lack the funds or are fleeing to safe havens for their money, a much larger percentage of the issue will have to be raised from international investors, most of them in the US. This, conceded Bloomberg’s Israeli informants, would require “private placements, which are typically bought by a few investors at most. Those have been arranged by banks such as Goldman Sachs and Deutsche Bank.”
“Domestic issuance in the first two months of this year,” Altstein reported for Bloomberg, “is projected to total the equivalent of more than $9 billion, a 350 percent rise from the same period last year… The cost of insuring against an Israeli default — as measured by credit default swaps — is now higher than that for lower-rated sovereigns such as Mexico and Indonesia, indicating some investors are nervous.”
Israeli financial media reporting indicates that the $8 billion in bond sales completed this month were entirely placed outside Israel.
In the money markets, nervousness fetches a rising price; in the case of Israel’s genocide bonds the only way to keep that price rise secret is through private placements. They are operations run by banks like Goldman Sachs which avoid the requirements of issuing a prospectus; obtaining a credit rating from a ratings agency which evaluates the prospectus claims; and making a market with semi-public meetings with investors and answering their questions. What Goldman Sachs does instead, according to those familiar with the bank’s operations, is to “dump the issue in state or institutional pension funds which can be counted on to hold the issue until maturity, and ask no questions.”
But even passive pension fund managers have their fiduciary limits: Israel’s war began to trigger withdrawals from both Israeli state and corporate bonds by Norwegian pension funds last November; by Danish pension funds after the genocide ruling by the ICJ in January.
An index tracking ten Israeli corporate bonds for the banking, telecommunication, pharmaceutical, and real estate sectors, shows market demand for Israeli debt issues fell in the first month of the war, but then began recovering above the pre-war levels.
ISRAEL BOND INDEX SHOWS RECOVERY FROM WAR STRIKE
Source: https://www.marketvector.com/
By opting for private placement, the Israelis, Goldman Sachs and Bank of America agreed to avoid having to issue prospectus claims about the war against the Arabs which, if truthful, might reveal how false Israeli government claims about the war have been so far; and if false, would create a legal liability for the Israelis and the banks to being charged with a Section 17(a) fraud.
In the US Securities Act, which the Securities and Exchange Commission (SEC) enforces, Section 17(a) “makes it unlawful to ‘employ any device, scheme, or artifice to defraud’, ‘obtain money or property’ by using material misstatements or omissions, or to ‘engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.’ This provision is closely tracked by Section 10b of the Securities Exchange Act and Rule 10b-5, which is used more widely by investors suing for fraud.”
The ICJ ruling against Israel in January has not stopped or even paused the IDF operations in Gaza, the West Bank, or on the northern front with Lebanon. However, the court has established a benchmark for “material misstatements and omissions” in what the Israel bond marketeers can say without running into Section 17(a) fraud litigation. This makes Israel’s war financing riskier and a bond prospectus impossible; it also makes the interest rate cost to the Israelis more expensive. For Goldman Sachs and the other banks engaged, that has meant more profit with higher fees.
Asked what the market was thinking about the private placement of the Israeli paper, a veteran European trader refused to reply. Other traders in Switzerland answered in generalities until Israel’s bonds were mentioned; then there was stonewalling. “It’s certain there’s an omerta,” a trade source commented. “The Israeli finance ministry has claimed the bond offer drew 400 investors from 36 countries making bids totalling $38 billion. But there is no mention of how the bonds were actually allocated. I suspect there were many token offers and only a few selected buyers got most of the issues.”
The Israeli financial source Globes claims “demand for the issue was led by first-rate strategic investors such as pension funds, insurance companies, hedge funds, and institutions that have been holding Israeli securities for many years.”
A bond trade source at an international institution points out that “when issuing a bond, the lead manager charges a fee. The net proceeds are going to be obviously less. The question is how much is Goldman Sachs charging in fees? This is usually stated in a prospectus but we don’t have that in the Israeli case. If the issue is difficult to place, the lead manager will contract with other banks to share the burden. They will then use a portion of the fees to make a market for the issued instruments and stabilize the pricing. Again this should be disclosed.”
In the results given by Israeli officials to Reuters on March 6, it was reported that Israel sold $2 billion of five-year bonds, and $3 billion each of 10 and 30-year bonds. “This is unusual,” the trade source comments. “If you need to restructure your economy you would expect most of the costs will be upfront, with payback from the higher efficiencies or higher profits reimbursing the borrowed funds later. This should not take ten or thirty years, so another calculation is in play.”
He believes the Israel government’s calculation is that the war on the military front is going to get worse, and the economic war for longer than can be acknowledged publicly. “So they are trying to lock in as much money for the long term as they can now, leaving less to pay back in the short term. They say they are aiming to raise $58 billion over this year, but we are already three months in — they have $50 billion still to go. At this rate of timing and at this pricing, they won’t make it.”
“As for the fees charged by a lead manager for an $8 billion debt issue, these can vary depending on several factors including the complexity of the issuance, prevailing market conditions, and negotiation between the government and the lead manager. Typically, lead managers charge a percentage fee based on the size of the offering, often from 0.5% to 2% of the total amount raised. Therefore, for an $8 billion issue, lead manager fees could range from $40 million to $160 million. However, these figures are indicative and could vary based on the specific terms of the deal.”
“I speculate that the fees will be around $100 million. The princes at Goldman Sachs are being rewarded handsomely. We will have to wait and see if they will regret it. The buyers should also be asking the fee question. If there is no answer, then these Israel bonds are not being bought or placed based on financial reasoning. It’s political, ideological, religious.”*
The SEC last published an Israel bond prospectus in June 2018. The amount of the placement is not recorded.
The US Government was identified as the guarantor of the debt paper. “The amount of guarantees that may be issued to Israel under the loan guarantee program may be reduced by an amount equal to the amount extended or estimated to have been extended by Israel for activities that the President of the United States determines are inconsistent with the objectives and understandings reached between the United States and Israel regarding the implementation of the loan guarantee program. Under the program, the United States issues guarantees with respect to all payments of principal and interest on certain bonds issued by Israel. The proceeds of the guaranteed loans may be used to refinance existing debt. Under the $9 billion loan guarantee program, between September 2003 and November 2004 Israel issued guaranteed notes totaling $4.1 billion face value. Israel has not issued any notes under the loan guarantee program since November 2004, and up to $3.8 billion of U.S. loan guarantees (subject to the reductions described above) remains available.”
There has never been a determination by the President that the guarantees should be suspended because of “activities… inconsistent with the objectives and understandings reached between the United States and Israel”. For the Biden Administration, genocide is not an “inconsistent activity”.
The map accompanying the 2018 prospectus shows the occupied West Bank and Golan Heights as subject “to agreements between the State of Israel (the “State” or “Israel”) and the Palestinian Liberation Organization”. The Golan Heights are legally Syrian territory, and there is no agreement. Gaza is marked separately without explanation – and without an agreement with the Hamas administration of Gaza. According to the document, before the date of the prospectus, Israeli military operations against Hamas in Gaza “did not materially affect the Israeli economy.” To claim this now is not only propaganda, it would be a material misstatement — in SEC terminology, a Section 17(a) fraud.
Click to enlarge view on source: https://www.sec.gov/ — page D-1.
During the marketing of the $8 billion in bonds, there were highly confidential briefings for selected investors. According to Globes, “prior to the offering, Israel’s Accountant General Yali Rothenberg and his team led rounds of extensive meetings in Europe and the US.”
US bond trading sources believe it likely that Goldman Sachs and Bank of America, the two US banks identified as placing the bonds in the US market, sought to protect themselves from what Rothenberg and his Israeli officials said at these meetings, and from later reaction by bond buyers if the war goes longer and much worse for Israel than they were led to believe. A letter of consent seeking approval from the SEC is protective cover from Section 17(a) fraud liability in the absence of SEC review and approval of a prospectus.
Scott Schneider is head of public affairs and press spokesman at the SEC. He speaks for Gary Gensler, chairman of the SEC since 2021.* The SEC was asked by email whether “the widely publicized Israeli government bonds to be issued this year on a private placement basis are subject to SEC supervision to the extent of requiring a formal application for consent to the issues.” He was also asked to say what letters of consent have been approved by the SEC in relation to earlier Israeli issues.
Left to right, Yali Rothenburg, Israel’s Accountant General; Gary Gensler, SEC Chairman; Scott Schneider, SEC press spokesman.
There was no reply to the email, and no reply when the questions were repeated by telephone to the SEC press office in Washington.
When clarification of the letter of consent issue was then requested from Goldman Sachs, the press spokesman in New York, Jen Blackhall, promised a response, but none there came. The stonewalling by Goldman Sachs has also extended to the patsy question asked – how much in charity funds have been donated to Israel on CEO Solomon’s request to his staff last October.
Bond traders in London, Europe, and the US consulted for this story believe that the most reliable indicator that the money markets have begun to turn against Israel can be found in the spread between the interest rates (or yield-to-maturity**) of Israel’s bond issues compared with US Treasuries. For more details, click to read.
COMPARISON OF THE SPREAD BETWEEN 10-YEAR ISRAEL & US BONDS, MARCH 11, 2023-MARCH 11, 2024
Source: https://www.worldgovernmentbonds.com/
The positive-negative spread between Israel’s 10-year government bond yield and the United States’ 10-year Treasury yield indicates when Israel’s yield is lower or higher than that of the US Treasury at that particular point in time.
The source, Worldgovernmentbonds.com, explains: “In the case of government bonds, the yield spread also means credit spread. These countries usually differ regarding credit quality. A positive spread means that the percentage yearly return of one bond over another is higher. For example, if one bond is yielding 5% and another is yielding 3%, the spread is 2%, or 200 basis points (bp).”
What remains unclear is whether the private-placement Israel bonds are included in the charting; if they are excluded, this is an attempt to keep the political and military meaning of the spread from becoming obvious outside the bond market.
The international bond trade source explains: “Until the war, Israel was able to finance itself at a lower cost than the US government, if you look at the 10-year bond spread in basis points [percentage points] between them. Then at the start of the war the situation reverses itself. Israeli bonds lose their advantage. The Israeli government is now having to pay a premium in interest rate over US Treasuries in order to secure buyers. Last week’s reports show that Israel is committing to pay 135 basis points over comparable 5-year US Treasuries, 145 basis points over 10-year Treasuries and 175 basis points over US 30-year bonds. For comparison, US 5-year bonds currently yield 4.15%, 10-year Treasuries are at 4.16%, and 30-year notes yield 4.30%.”
“Note that the chart is lagging behind the new $8 billion placement, and has not yet registered the widening of the spread against Israel. This is because the chart is based on all bonds which have a residual maturity of ten years, so it is showing an average. This average indicated that Israel’s 10- year residual maturity bonds were trading at a positive spread of 4.9 basis points (100 basis points = one percent) to the US equivalents. Worldgovernmentbonds.com does not provide a listing of the issues included in its calculations, but future charting can be expected to reveal the latest private placements will accelerate the widening of the spread. With $50 billion more in private placements still to go, the cost to the Israelis will become higher than ever before – and the spread will be pushed wider. That is if the private placements are included in the charting.”
“The outcome of the latest Israel government bond issue is nothing for them to cheer about. The previously favourable spread compared to their US Government guarantor has evaporated and now reversed itself. The same goes for the loss of money market confidence in Israel.”
[*] When an international court of law determines that a religious organization like the state of Israel is plausibly genocidal, it is relevant to note the religious affiliations of organizations which may be assisting in the genocide with money or propaganda. For example, the Reuters executive responsible for ethics and standards is Alix Freedman, who is Jewish. The SEC Chairman since 2021 is Gary Gensler, who is Jewish. The Goldman Sachs chief executive David Solomon is Jewish.
[**] The yield to maturity (YTM) of a government bond is a measure indicating the total return investors can expect to receive if they hold the bond until it matures, taking into account its current market price, the coupon payments, and the time remaining until maturity. For more details, click to read.
Down and out: How 5 months of genocidal war on Gaza paralyzed Israeli economy
Press TV – March 11, 2024
Last month, in what economic pundits saw as a death knell for the already-beleaguered Israeli economy, a US credit rating agency downgraded the regime’s rating and outlook.
The downgrade from “stable” to “negative”, according to Moody’s, is the direct consequence of the Israeli regime’s genocidal war on the Gaza Strip and political instability inside the occupied territories marked by growing discontent and simmering protests.
A few weeks ago, the Israeli regime’s Central Bureau of Statistics released another damning report, according to which Tel Aviv’s economy shrank by nearly one-fifth in the last quarter of 2023.
Amid depleting consumer spending, trade and investment since October 7, Israel’s Gross Domestic Product (GDP) recorded a 19.4 percent drop in its annual rate in the last three months of 2023.
Benjamin Netanyahu’s regime launched a devastating war on the coastal Palestinian territory on October 7, stung by the unprecedented Al-Aqsa Storm Operation led by Hamas.
In the last 156 days, more than 31,000 Palestinians, including over 14,000 children and nearly 9,000 women have been killed in Gaza. It has also spawned the worst humanitarian crisis in the territory.
According to observers, the indiscriminate bombings on Gaza have badly backfired on the regime amid both internal and external turmoil for the Netanyahu regime.
Hundreds of thousands of Israeli reservists have in recent months been forced to abandon their jobs while many more have fled in panic, due to which major industries have come to a grinding halt.
The labor shortage is acute as over 350,000 reservists have been pressed into military service, as per the Organization for Economic Cooperation and Development, which says the law has caused a “pronounced slowdown” of the Israeli economy, which had grown about 3 percent before October 7.
Foreign investments have also virtually ended as investors are not willing to put their money on tinderbox – both due to the war in Gaza as well as the internal turmoil for the Netanyahu regime.
According to the data from the Israeli labor ministry in December, about 950,000 jobs were lost in the first three months of the war, which has increased manifolds now as the situation remains precarious and the war rages on – now into its sixth month.
Multi-national brands linked to the Israeli regime have also faced blanket boycotts in recent months, suffering enormous losses. Many companies have tried to distance themselves from the regime.
Domestic economy in tatters
Every sector of the Israeli economy – from high-tech to agriculture to tourism to various industries – has been irreparably dented by the raging war on Gaza, a problem exacerbated by the shortage of workforce and precarious situation.
Many businesses have suspended their operations while others have been forced to shut down their operations. Some workers have been forced to join military duty while many others have fled.
A Bloomberg survey last month said the Israeli economy suffered one of its worst-ever slumps after it launched the genocidal war on Palestinians in Gaza, with businesses coming to a screeching halt.
The regime’s GDP plummeted by 19.4 percent in the last quarter of 2023, which the report said was worse than every estimate in its survey of analysts.
“The release highlights the degree to which the Israeli economy has been affected by the conflict, particularly on the private activity side,” Goldman Sachs economists Tadas Gedminas and Kevin Daly were quoted as saying in the report.
Israeli newspaper Maariv, in a report earlier this week, also said the continuation of the Israeli war on Gaza has contributed to massive losses for the regime in both political and economic spheres.
It followed another report published by the Israeli website Walla, which cited the Director of the Israeli Tax Authority Shai Aharonovitz as saying that the damage caused by the Gaza war is “six times greater” than the Second Lebanon War (2006), and about half a million compensation claims have been filed by those who have suffered due to it.
According to analysts, the Israeli war on Gaza, which has failed in all its stated objectives, has resulted in a steep drop in the regime’s tax revenues, skyrocketing debt and economic recession.
The regime’s GDP has also taken a serious blow, as attested by Moody’s report in February, which cut the regime’s rating to ‘A2’ and described its credit outlook as ‘negative’.
It was the first time ever that the regime’s economic outlook was downgraded, pointing to the staggering costs of the war that is increasingly turning out to be an exercise in futility.
The war, according to analysts, has discouraged potential investors and disrupted the labor market, especially with hundreds of thousands of workers summoned for mandatory military duty.
In a report in November, the Bank of Israel said the absence of thousands of workers from their jobs was costing the Israeli economy an estimated $600 million a week, or about 6 percent of the weekly GDP.
That number, according to economic analysts, has surged dramatically in the past three months, to the tune of a few billion dollars every week.
The regime’s tourism industry has also been affected. Monthly figures announced by Israel’s Central Bureau of Statistics revealed that in January only 500 single-day visits to the occupied territories were registered, compared to 14,000 in January 2023, marking a drastic decrease of 96 percent.
The travel industry used to make up nearly 3 percent of the regime’s GDP in 2019, before the pandemic. The figure fell to 1.1 percent in 2021 and has been virtually paralyzed since October 7.
The Israeli newspaper Calcalist reported in January that about 900,000 tourists were expected to visit the occupied territories in the three months after the start of the war. The number dropped to 190,000 because many of them opted out. That number has also sharply come down now.
“The war (on Gaza) was a huge breaking point for the (Israeli) economy which is still ongoing,” Professor Benjamin Bental from the Taub Center for Social Policy Studies was quoted as saying in December by The Median Line website.
“There are tremendous consequences that we still cannot estimate the end of.”
A RAND analysis in 2015 estimated that the financial impact of any conflict between the Israeli regime and Palestine in the next ten years would be to the tune of $400 billion.
Daniel Ege, the director of the Economics and National Security Initiative at the RAND Corporation, who authored that report, in an article published in November made a fresh assessment.
“For Israel, 90 percent of the economic shock will come from the indirect effects: reduced investment, a disrupted labor market, and slowed productivity growth. The specifics of this current crisis will, of course, differ from our model and the past,” he wrote.
Israeli ports hit the hardest
In the past five months, gas fields in the occupied territories have dried, airlines have become defunct, farms have been destroyed, major businesses have shut down and ports have been empty.
Colossal losses have been recorded at ports occupied by the Israeli regime, most notably the Port of Umm Al-Rashrash (Eilat), which recorded a 90 percent drop in traffic and $3 billion in direct losses.
“All cargoes arriving in Eilat through the Bab el-Mandeb Strait from the Far East, i.e. China, Japan, South Korea and India, are no longer transported because ships are afraid to pass through the Bab el-Mandeb Strait,” Gideon Golber, CEO of the Eilat port company, said late January.
Golber’s company deals primarily with the import of cars and export of potassium fertilizers, and before October 7, 50,000 new cars were stored at the port. Yemeni military’s actions in support of Gaza have virtually brought business activities at the bustling port to a grinding halt.
“If Yemeni operations in the Red Sea continue, we will reach a situation where there are no ships in the port,” he was quoted as saying by Reuters, referring to the repercussions of the Red Sea events.
Eilat Port has also been struck with missiles by both the Yemeni military and the Iraqi resistance groups, sending ripples of shock and fear among investors and shipowners there.
The two other major Israel-occupied international ports, Haifa and Ashdod, a third of whose transport depends on the Red Sea, have also recorded heavy losses, with a 70 percent drop in transshipment.
Yemeni military has carried out a string of operations against ships linked to the Israeli regime or its Western backers, mainly the US and the UK, in the Red Sea in solidarity with the people of Gaza.
The operations have forced major shipping companies doing trade with the Israeli regime to avoid the strategic waterway in recent months, incurring staggering losses for the regime.
Amid the continuation of the Yemeni military’s operations against ships trading with the Israeli regime in the Red Sea, it is to be expected that the losses will continue to pile up.
The Islamic Resistance in Iraq has also carried out attacks on the Israeli-occupied ports, including Haifa and Ashdod, as well as the natural reserves in the Mediterranean Sea.
Haifa Port (situated on the Mediterranean) is believed to store about 90 percent of essential commodities destined for the occupied Palestinian territories.
The operations of the strategic port were taken over by Indian business conglomerate Adani Group in February, months after a consortium of Adani Ports and Special Economic Zone and Israel’s Gadot Group won the tender to privatize it for a mammoth USD 1.18 billion.
Only days after the Palestinian resistance launched its unprecedented operation against the occupying regime on October 7, Adani shares fell by 4.5 percent, triggering alarm and anxiety among investors.
According to informed sources, the Indian company has suffered staggering losses in the past five months and speculation has been rife about ending the contract given the high costs.
Ashdod port, close to Gaza’s border with occupied territories, handles about 40 percent of the Israeli regime’s total maritime-bound trade, including imports and exports, according to the Israeli media.
Equipped with the Iron Dome military system, Ashdod port has been severely hit amid the war on Gaza, with most cargo diverted to other Israeli-occupied ports, which have also been deserted lately.
One of the first ships to divert from Hashdod to Haida in October last year was a Taiwanese container ship Evergreen Line, which cited a “persistent unsafe situation” amid the war on Gaza. Since many, virtually all ships have avoided the port, turning it into a desolate and barren island.
According to analysts, the total damage to the Israeli economy varies by estimate and reaches over $100 billion, with a minimum of ten years estimated for full recovery, which looks very unlikely.
Military and arms boycott
The Israeli regime’s economy has always been heavily dependent on trade and imports, especially military equipment, which makes the regime’s much-hyped military vulnerable to foreign boycott.
Israel’s beleaguered military industry is experiencing serious problems with imports as civil society, lawmakers and courts in many countries want to prevent arms exports to the regime.
The decisions have been partly influenced by the interim ruling issued by the International Court of Justice (ICJ) in The Hague in early February, ordering the Israeli regime to halt its genocide in Gaza.
The UN experts also issued a statement late last month, saying any transfer of weapons or ammunition to Israel that would be used in Gaza would “violate international humanitarian law.”
The impact of the ICJ ruling was clearly visible. A court in the Netherlands ordered the Dutch government on February 12 to halt the export of F-35 jet fighter parts to the Netanyahu regime.
The Hague Court of Appeal found that there was “a clear risk” that the F-35 jets used by the Israeli regime, some components of which are exported by the Netherlands, would enable to commit “serious violations of humanitarian law” against the Palestinians in Gaza.
The judges considered that “Israel does not take sufficient account of the consequences for the Gaza Strip civilian population when conducting its attacks.”
Israel’s attacks have caused a disproportionate number of civilian casualties, including thousands of children,” the Dutch judges concluded.
Britain, one of the Israeli regime’s biggest arms exporters, which manufactures 15 percent of F-35 parts, has resisted calls from rights groups to end the exports. The High Court in London also greenlighted the arms shipments last week by dismissing a case filed by some human rights groups.
Italy, however, has already announced the end of its arms sales to the Israeli regime.
Italian Foreign Minister Antonio Tajani announced in January that his country had halted all exports of military equipment to Tel Aviv. Spain’s foreign minister also claimed that his country has not sold any arms to Israel since the events of October 7, and added that an arms embargo is in place now.
European Union foreign policy chief Josep Borrell, otherwise a staunch supporter of Israel, has also in recent months raised concerns over arms sales to the Tel Aviv regime, even taking potshots at US President Joe Biden for his administration’s approval of $14 billion worth arms to Israel.
“Well, if you believe that too many people are being killed, maybe you should provide fewer arms in order to prevent so many people being killed,” Borrell told reporters last month.
Itochu, one of Japan’s largest trading firms, also announced that it was ending its partnership with Elbit Systems, the Israeli regime’s largest arms manufacturer, due to the genocide in Gaza.
Itochu Chief Financial Officer Tsuyoshi Hachimura cited the top UN court’s order on January 26 as the reason for terminating the memorandum of understanding (MoU) signed between Itochu, Elbit and Nippon Aircraft Supply in March last year.
Elbit is the largest military contractor owned by the Tel Aviv regime with a share of 85% in the production of ground equipment and drones, and Japan is one of the world’s largest arms importers.
The company has already gained notoriety for testing new weapons on Palestinian civilians, as well as for cases of bribery around the world, multiple failures of their systems in tests aboard, etc.
Due to boycott activism, Elbit has lost hundreds of millions of dollars worth of international contracts in recent years, particularly since October 7 of last year. Many of its factories have been either shut down or disrupted by pro-Palestine activists in the US and the UK.
Since the outbreak of the genocidal war on Gaza, a major collaboration deal with Elbit has also been terminated by the Brazilian state of Rio Grande do Sul.
Boycott of big brands
In November of last year, the Press TV website published an investigation on global companies with close ties to the Israeli regime facing boycott amid the regime’s genocidal war on Gaza.
Worldwide campaigns have been launched during this period calling for the boycott of Israeli and international companies and brands directly or indirectly complicit in the Gaza genocide.
The companies that have faced boycott include Siemens, which is complicit in the regime’s settler-colonialism project through its EuroAsia Interconnector; Hewlett Packard, which helps the regime run biometric systems used to monitor and restrict the movement of Palestinians; AXA Divest, one of the largest investors in Israeli regime-run banks; Puma, a footwear giant that sponsors Israeli football.
Food and beverage giants such as McDonalds and Starbucks have also recorded huge losses.
Starbucks, the multinational chain of coffeehouses and roasteries headquartered in Seattle, has seen losses worth billions of dollars due to the global boycott campaign, which gathered momentum after the company took action against workers’ unions over its pro-Palestine stance.
Starbucks’ longtime CEO Howard Schultz is known to be an ardent supporter of the Israeli regime. Schultz has in the past boasted of being an active Zionist and worked closely with Israeli Premier Benjamin Netanyahu and radical Zionist settler groups, for which he even received awards.
Back in December 2013, around $11 billion in losses were reported, and it is estimated that the figure has now surged to $15 billion as the boycott campaign intensifies.
Last week, retail giant AlShaya Group, which owns the rights to operate Starbucks in West Asia, announced staff downsizing, citing “challenging trading conditions over the last six months.”
McDonald’s also has been hit by the boycott campaign. The US-headquartered company last month reported its first quarterly sales miss in nearly four years, sending the company’s shares down about 4 percent.
The company admitted that the losses were the reflection of “the impact of the war” in Gaza, where the Israeli regime has been carrying out relentless bombings since October 7.
“So long as this conflict, this war is going on, we’re not making any plans, we’re not expecting to see any significant improvement in this,” McDonald’s CEO Chris Kempczinski told investors.
“It’s a human tragedy what’s going on, and I think that that does weigh on brands like ours.”
Ian Borden, the company’s chief financial officer, also noted that the war had meaningfully impacted the fast food giant’s bottom line in the region during the last quarter of 2023.
The campaigns against McDonald’s, Starbucks and other multinational brands have significantly expanded in recent months, including in regional countries such as Jordan, Kuwait and Morocco.
Workers at American tech giants Google and Amazon have also stepped up pressure on their companies to snap ties with the Israeli regime, with Google workers also urging an end to Project Nimbus, under which the tech company supplies technology to the Israeli military for surveillance purposes.
The potential for the expansion of the boycott campaign remains high, as proved by recent large-scale protests in countries considered key trade partners of Israel, as well as public opinion in those countries.
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A not-so-trivial quiz
By Maidhc Ó Cathail | 14 March 2010
Maidhc Ó Cathail names and shames the top 19 politicians, academics and policy makers – all con men and all Zionist Jews – who lied and conspired to steer the US toward aggression against the Iraqi people. … continue
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- Destructive Green New Deal: German Energy And Metal Group Warns Of Drastic Crisis
- New Study Documents A 20-Year Pause In Arctic Sea Ice Decline – Driven By Internal Variability
- Wake-up Call: Survey Shows Majority Of Germans Now Favor Postponing Climate Targets!
- Televised! Leading German Political Candidate Tells Schoolchildren CO2 Makes Sun Hotter!
- New Study: A Century Warming Of 1.1°C Is ‘Commonplace’ And ‘Not Unusual’ During This Interglacial
- New Study: ‘Internal Noise’ And Volcanic Forcing Can Trigger 10-15°C Warming Within Decades
- Glaciers Worldwide Are Suddendly Surging, Experts Blame Warming!
- Surprising Discovery: Sahara Is Greening…Billions Of Trees Where Once Thought To Be Barren
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