Greece’s Downfall and Redemption
By Finian Cunningham – Sputnik – 29.06.2015
Decades of exorbitant military spending account for Greece’s present downfall under an Olympian-sized debt. European governments and news media portray the problem of Greece’s financial woes as public spending profligacy.
The truth is that Greece’s debt mountain has been incurred from years of wasteful military splurging. That is the tragic downfall of the country, which European creditor governments and the mainstream news media tellingly ignore.
But in this understanding of Greece’s modern tragedy, there is hope for democratic renewal and redemption. Because that realisation permits a radically different option to restore Greece’s economy in a way that is rational and achievable, without piling up more debt and misery for the population. Instead of more austerity imposed on workers and pensioners, the solution is for Greece to embark on a massive disarmament programme to overturn decades of reckless militarism.
Greece’s outstanding total debt is around $320 billion – or 175 per cent of its national economic output (GDP). Its creditors – the Troika of European Union, European Central Bank and the International Monetary Fund – are insisting that the Athens government must oversee more public cuts.
The reality is that austerity is only driving the Greek economy into further depression and debt.
That inevitably means more and more of the Greek people’s sovereign rights whittled away to the point of becoming a vassal state dictated to by foreign governments and finance capital.
As a foreboding sign of things to come, Greek Prime Minister Alexis Tsipras’ latest offer of raising corporation taxes in place of cutting pensions was slapped down last week by the Troika.
The imperious demand for more austerity has now forced the Greek government to put the choice to the public in the form of a proposed referendum on the EU’s bailout terms, to be held on July 5.
Greece’s debt crisis appears to be heading to an even sharper crisis point. But the Greek origin of that word “krisis” also has a positive connotation of decisive event. The Greek people should reject the never-ending debt addiction that the EU creditors and IMF have hooked the country on. For that way only foreshadows increasing austerity and anti-democratic dictate.
What the Greek people can turn to is a realistic and altogether more democratic and humane option – of demanding their country slash its monstrous military spending.
Even after five years of economic catastrophe, Greece’s annual military budget amounts to $4 billion, according to the Stockholm International Peace Research Institute. That translates to 2.2 per cent of the nation’s GDP – a colossal drain on the economy.
To put Greece’s military spending into perspective, it is double the ratio that most other EU countries currently spend on defence. For example, Germany spends 1.2 per cent of GDP, Italy 1.1 per cent, Netherlands 1.2 per cent and Belgium 1.1 per cent.
If Greece were to cut its outsized military budget by half that would generate $2 billion in one year alone, which would pay off its immediate bill to the IMF and help the country reach a 1 per cent budget surplus that the Troika has set for 2015. In other words, that source of finance would obviate any further need for cutting pensions and workers’ salaries.
Why the Syriza government of Alexis Tsipras, which claims to be a radical socialist coalition, does not pursue this more imaginative and democratic alternative is a curious question. Last week, Tsipras offered to cut the military budget by $200 million – or a mere 5 per cent. But the offer was rebuffed by the IMF because it stated that its rules do not permit interference in a country’s defence policy. To which Tsipras and the Greek electorate should respond with their own rebuff of IMF absurdity – especially evident with the IMF’s throwing billions of dollars to the regime in Kiev which is waging war on the eastern Ukrainian population.
But that’s only a trifling start to addressing the Greek tragedy. The Greek people have legal and moral grounds to repudiate the entire debt mountain as illegitimate or, as economists would say, “odious debt”.
During the decade up to the onset of crisis in 2010, Greece was regularly spending 7 per cent of its GDP on military. Some estimate that during that decade the country spent a total of $150 billion on defence – or half of the current debt pile.
As Greek economist Angelos Philippides told the Guardian back in April 2012: “For a long time Greece spent 7 per cent of its GDP on defence when other European countries spent an average 2.2 per cent. If you were to add up that compound 5 per cent [difference]… there would be no debt at all.”
Moreover, Greece’s past military expenditure was mired in corruption.
In October 2013, ex-defence minster Akis Tsochatzopoulous of the previous PASOK government was jailed for 20 years in a bribery case involving $75 million in kickbacks.
And here is an ironic twist in this Greek tragedy. The biggest European weapons dealers to Greece are German and French companies. In the Tsochatzopoulous scandal, German company Ferrostaal paid a fine of $150 million for its part in using bribes to clinch the sale of four submarines.
It was an open secret that Greece’s military largesse was for years stinking with corruption. Yet the German and French authorities did nothing to derail this gravy train. The Berlin and Paris governments continued to ply Greece with loans because the country was using the money to buy massive amounts of weapons from their manufacturers.
Today, the single biggest institutional creditors to Greece are Germany and France. Those countries stand accused of criminal irresponsibility in racking up Greece’s debt precisely because so much of the money was being spent to prop up the German and French economies through lucrative arms sales.
It is a monumental irony that German leader Angela Merkel is most vehement in lecturing Greece about “living within its means”. Rather than directing corrective action at the source of the problem, it is Greek workers, pensioners, the young and infirm who are being made to pay for the largesse that they actually never saw.
If the Greek people repudiate the entirely artificial debt crisis, it would restore their country’s economy on a sound footing. Of course, the country’s bloated military will not be happy with that. The danger of a military coup is a real threat given the country’s history of fascist dictatorship during the US-backed “regime of the colonels” between 1967-1974. Perhaps this is what the Syriza government is afraid of.
And, to be sure, the Troika of EU leadership, ECB and IMF will be intensely displeased if the Greek people go for the radical alternative of rejecting debt and austerity. However, in the battle shaping up, the Greek people have natural justice on their side. They should and can reject debt slavery and dictate. By doing so, Greece may redeem the meaning of “Demos Kratia” – People Power. And what a beautiful denouement in the Greek tragedy that would be, not only for the people of Greece but right across all the debt-ridden Western countries.
Greece is hailed as the ancient birthplace of democracy. Two millennia on, it could also be the very place for its renaissance.
Austrian Institute Clarifies True Costs of the EU’s Anti-Russian Sanctions
Sputnik – 03.07.2015
The Austrian Institute of Economic Research (WIFO) published a monograph clarifying the projected short and long-term costs of anti-Russian sanctions to the EU 28 plus Switzerland. A summary of the report published Friday has confirmed that Europe as a whole expects €92.34 billion in long-term losses, along with over 2.2 million lost jobs.
While the report attempts to downplay somewhat the losses attributed to sanctions, noting that politicized export restrictions must be considered together with the ongoing Russian recession and other factors, the figures speak for themselves.
The report projects an “observed decline in exports and tourism expenditures of €34 billion value added in the short run, with employment effects on up to 0.9 million people.” Switching to a longer-term perspective, the report estimates “the economic effects increas[ing] to up to 2.2 million jobs (around 1 percent of total employment) and €92 billion (0.8 percent of total value added), respectively.”
Commenting on the geographical disbursement of the economic and jobs losses, WIFO’s report shows that “geographical closeness highly correlates with the relative size of the effects at the national level, with the Baltic countries, Finland and the Eastern European countries being hit above the EU average of 0.3 percent of GDP in the short and 0.8 percent in the long run.” The report also notes that Germany, which accounts for nearly 30 percent of all EU 27 exports to Russia, has been hit the hardest in absolute terms, and is projected to lose €23.38 billion in losses in the long term. Italy is second, with €10.93 billion in projected losses. France rounds out the top three with €7.92 billion in losses.
The study’s figures also show that Estonia is the single most heavily affected country in both the short and the long term, with the country suffering a €800 million (4.91 percent) and €2.1 billion (13.24 percent) decline, respectively. Estonia is followed by Lithuania (-6.37 percent long term), Cyprus (-3.25 percent), Latvia (-1.87 percent), and the Czech Republic (-1.53 percent).
In employment terms, Estonia, Lithuania and Cyprus are also the hardest hit in percentage terms, and are projected to suffer 16.3 percent, 10.84 percent and 4.21 percent losses, respectively. In absolute terms, Germany (losing 395,000 jobs) Poland (300,000), and Italy (200,000) have been the hardest hit; Spain, Lithuania and Estonia are projected to lose between 100,000 and 190,000 jobs.
As for the economic sectors most heavily impacted, the WIFO study found that agriculture and food products, metal products, machine-building, vehicles, and manufacturing-related services are hardest hit in the short term, with construction, business services, and wholesale and retail trade services also projected to suffer disproportionately in the long-term.
Speaking to Radio Sputnik about the report, WIFO economist Oliver Fritz noted that while EU politicians still hope that the sanctions will have some effect on Russian policy, pressure is building on them to change their policy, since the economic consequences are rapidly beginning to add up.
While the economist noted that he does not see the sanctions being lifted in the short term, with German Chancellor Angela Merkel successfully keeping other EU nations in line, Fritz noted that as losses mount, EU politicians may eventually decide to consider rethinking their decisions.
Last month, WIFO conducted research for Europe’s ‘Leading European Newspaper Alliance’, estimating up to €100 billion in losses if anti-Russian sanctions remain in place.
Since March 2014, the United States, European Union, and other Western countries have placed sanctions on Russia’s banking, defense and energy sectors over Moscow’s alleged role in the Ukrainian crisis. In August, Moscow imposed a year-long food embargo on the countries that had sanctioned it. Last month, the EU’s foreign ministers agreed to extend sanctions against Russia until January 31, 2016.
Tsipras and the Vampires
By Boris Kagarlitsky | CounterPunch | July 2, 2015
For five years now Europe has been troubled by the problem of the Greek debt. It all began with a relatively modest sum estimated at 15-20 billion euros, though at the time coping even with this debt seemed beyond the country’s capacity. Instead of simply writing off the debt, the “Troika” consisting of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) offered Greece a program of economic assistance in exchange for carrying out “urgent reforms”.
The results of this program, and of the help it provided, speak for themselves. Greece’s economy contracted by 27 per cent, and the debt rose to 320 billion, despite a partial write-off. From an original 60 per cent of GDP, the debt thus reached 175 per cent. Meanwhile, neither the Troika nor the previous Greek government acknowledged the obvious failure. The Troika not only insisted on continuing and even radicalising its clearly pointless actions, but also proposed treating the economic ills of other eurozone countries (Italy, Spain and Portugal) on the basis of the Greek model.
The actions of the Troika seem far less absurd if we reflect that the billions of euros intended to “save Greece” never reached that ill-fated country but were deposited immediately in German and French banks. Under the pretext of servicing the Greek debt a huge financial pyramid was created, analogous to a Ponzi scheme or to the MMM and GKO pyramids in 1990s Russia, but on a much greater scale. Meanwhile, part of the money that finished up in the banks was sucked directly out of Greece, while a further part came from the pockets of West European taxpayers. For decisions made effectively in Berlin and Brussels, with the approval of Paris, the citizens of other Eurozone countries were forced to pay. The victims included even the inhabitants of Spain and Italy, as well as of countries such as Austria and Finland that had no relation whatever to the events concerned. A sort of all-European pipeline was constructed, and used to siphon off state funds for the benefit of German and French financial capital.
With the coming to power of the left-wing government formed by the SYRIZA party and headed by Alexis Tsipras, hopes arose in Greece that the endless series of large and small economic, social and moral catastrophes which the country had suffered since 2008 would finally come to an end. Even if the situation did not improve, things would at least proceed differently. SYRIZA had been elected with a clear mandate to end the policies of economic austerity, to put a stop to the privatisation and commercialisation of the public sector, and above all, to give Greeks back their self-respect by conducting tough, principled negotiations with the creditors who in recent years had behaved toward the country as though they were an occupation administration. SYRIZA, moreover, was considered in Europe to be pro-Russian; during the election campaign representatives of the party had repeatedly voiced disagreement with EU policy toward Russia, criticising the imposition of sanctions and condemning the new political order imposed in Ukraine following the political overturn of February 2014.
The first agreements concluded by the new Greek government with its creditors showed, however, that in practice everything was turning out quite differently. The representatives of Athens made heated declarations, and then, after securing only minimal amendments, proceeded to sign the next agreement dictated by the creditors. In part, this inconsistency resulted from the contradictions of the mandate obtained by Tsipras and his colleagues. They had promised to put an end to the economic austerity that was killing demand and production. But they also pledged to keep the country within the Eurozone and the EU, stressing that a default on foreign debts had to be avoided. This way of formulating the question handed Greeks over to the mercy of their creditors.
To pay off the debts is simply impossible.
Moreover, a re-launching of the economy is technically inconceivable unless the harsh rules imposed by the ECB are rejected, along with its insistence on a dramatic increase in competitiveness unaided by a lowering of the exchange rate. Since it has been understood from the outset that the ECB will not agree to sharply lower the euro exchange rate solely in order to save Greece, it is clear that in technical terms there is not the slightest chance of a successful exit from the dilemma without Greece quitting the Eurozone and returning to the drachma. The only real question has been whether this exit will be planned, organised and prepared in advance, or whether it will be chaotic and disastrous. The situation is very similar to the one in Argentina in 2001, when after a default the peso had to be decoupled from the dollar if economic growth was to resume.
Nevertheless, even discussing this sole realistic scenario, let alone making preparations to carry it out, has been banned; if such a course were followed, the German and French banks would stand to suffer, along with the reputations of the EU leaders. So long as the Greek government accepts these conditions, it is in the situation of a doctor who undertakes to treat a cancer sufferer without infringing on the “lawful interests” of the tumour and without placing obstacles in the way of its growth. Or, it is like a person who negotiates with vampires on how much of his or her blood they will drink. In each case, the prior interests recognised are those of the vampires.
For the sake of fairness, it should be acknowledged that to a certain degree the contradictions of SYRIZA’s position reflect those of Greek society itself. On the one hand, many Greeks are outraged and want changes, while on the other, people are afraid to risk their middle-class comforts, even though these comforts are diminishing by the day. So long as substantial numbers of the population still have savings in euros, these people are paralysed by fear that their money will be lost or devalued. It is one thing to attend demonstrations demanding that the creditors “respect the country”, and quite another to be ready, right now, to accept particular sacrifices and risks for the sake of one’s own future. It is true that there is no other way out, but both the authorities and society need to think and talk about this openly. Through making statements that try to satisfy everyone, the Tsipras government has instead driven itself into a trap.
The problem is not so much that drastic and humiliating conditions have repeatedly been imposed on Greece by its creditors, as that these agreements are not solving the dilemma but exacerbating it. The debt crisis is worsening, and the sum owed is increasing – both in absolute terms and in relation to the size of the economy as the latter shrinks under the impact of the crisis. Consequently, any new agreement simply assumes that a new crisis will arise after a few months. Each time, this new crisis is more destructive.
While lacking the resolve to answer the EU leaders with an emphatic “no”, Alexis Tsipras and his finance minister, the economist Giannis Varoufakis (an import from the University of Texas), cannot fail to understand that agreeing with the Troika will also turn out disastrously for them. Before their eyes, just such a capitulation only two years ago transformed the powerful social democratic party PASOK from the country’s leading political force into an outsider.
Tsipras has sought to manoeuvre, doing his best to please everyone. He has reassured the creditors, indulged the petty-bourgeois illusions of voters, and delivered radical speeches to meetings of left activists. While promising everyone the maximum possible, his government in practice has tried to sabotage some of the agreements signed with the Troika, particularly in cases where the signatures were affixed by earlier administrations. But the ministers have lacked the courage even to suggest that these agreements might be abrogated, or that the government might openly refuse to carry out their stipulations. A notable example of the Greek government’s diplomatic approach is the position it has taken on the question of sanctions against Russia. Under the rules of the EU, Greece could simply block these sanctions in the summer of 2015. This demand was raised by members of the SYRIZA party itself, when they voted en bloc in the European Parliament against anti-Russian resolutions. But in the heat of the next round of negotiations between the Troika and the Greeks, at a time when Tsipras himself was in St Petersburg explaining to Russian colleagues the prospects for the development of special relations with Athens, his representatives in the EU gave their backing to the sanctions. Addressing the public, Greek diplomats then stated that they had fought like lions on behalf of Russian interests, and that it was only because of their persistence and principled character that the sanctions had been extended for a mere six months, instead of twelve months as the Germans had demanded.
Tsipras’s policy of compromise can be explained in part by a desire to win time in expectation of the elections in Spain, where the left coalition headed by the Podemos party had a serious chance of success. Spain is a far more influential country than Greece, with a far stronger economy, but is suffering from a very similar if less severe crisis. If Podemos were to come to power, Athens would be able to escape from its international isolation. In addition, the Left Bloc in Portugal has a definite chance of success. In other words, an opportunity has appeared to establish an international coalition of Mediterranean countries opposing Berlin and Brussels. But among the public in Spain and Portugal, Tsipras’s own actions and his evident weakness have raised questions about the advisability of placing trust in the left alternative, thus weakening the hopes of the left in those countries.
Within the European left milieu, sympathy nevertheless remains for SYRIZA as a party that finds itself in extremely difficult circumstances. Against the background of many years of setbacks for the European left, Tsipras’s initial successes inspired hopes which people are reluctant to abandon. The SYRIZA leader’s principle, of first making radical speeches and then of giving way to the superior forces of his opponents, seemed to be justified. Not only in other parts of Europe but in Greece as well, the popularity of Tsipras’s government increased. People not only refrained from condemning him, but pitied him as the hostage of vampires against which he was time and again proving powerless.
To fool pseudo-lefts and provincial petty bourgeois is not particularly difficult, but financial vampires do not fall for such tricks. The sabotage aroused righteous indignation in the creditors, who steadily increased the pressure. The agreements which the Greeks signed with the creditors after SYRIZA came to office were no better than those endorsed by the previous government, and had the same results.
In June, when the next round of payments fell due, there turned out to be no money in the budget.
A further restructuring of the debt was essential. In exchange, the Troika demanded the acceptance of a new “reform package”, by comparison with which all the preceding austerity measures seemed mere warm-up exercises. At one and the same time wages and pensions would have to be cut, taxes would need to be raised, and all concessions would have to be stripped from tourism, which amid the destruction of industry and the decline of agriculture remained the only relatively stable sector of the economy. The country would sink inevitably into a new spiral of recession. For SYRIZA, this would mean not only abandoning all its election promises, but also submitting to public humiliation, with the obvious prospect of defeat at the next elections. This, indeed, was what the creditors were seeking.
On June 22 Greece effectively capitulated. The government agreed to extract more revenue from the Value Added Tax, raising it to 0.93 per cent of GDP, and to increase taxes on shipping companies (in other words, to make trips between Greek islands and the mainland more expensive). A cut to pensions was also promised, though the Athens authorities asked to be allowed to introduce the changes involved over time rather than immediately.
The only point on which the Greek negotiators demurred, in order to save face, was a demand that the Value Added Tax be raised to 1 per cent of GDP. In other words, the extent of their resistance was a whole 0.07 per cent. The Greek side meanwhile agreed that company tax should be levied at the rate of 28 per cent, instead of 29 per cent as it had initially suggested to the Troika. The Greeks also asked to be allowed to keep defence spending at its former level; this matched the general requirements of the NATO bloc, of which Greece is part.
The game, it might have seemed, was over. The world financial press celebrated, and prices rose on the share markets. In Athens, there was even a demonstration by members of right-wing parties supporting the creditors. Well-dressed citizens gathered in the central Syntagma Square, calling for pensions to be reduced. True, there were not many of these demonstrators, only about 1500, but the television managed to make the picture so impressive that even the well-known American commentator Paul Craig Roberts, a sharp critic of the policy of the financial institutions, expressed puzzlement at the way Greeks had apparently been brainwashed to the point of agreeing to their own country’s humiliation.
Then the unexpected happened. German representatives declared their dissatisfaction at the speed with which the European Commission welcomed the new offers from Athens. Under pressure from Berlin, Tsipras’s offers were rejected. The Greeks had surrendered, but as it turned out, the Germans were not taking prisoners.
The Eurocrats not only refused to agree to the symbolic concessions needed by Tsipras and Varoufakis if they were to save face, but like gangsters with a client who is behind in paying protection money, began making new demands. With its back to the wall, the Greek government suddenly displayed a courage born of despair. Tsipras delivered a fiery speech to the people, and called a referendum. Greeks would decide for themselves whether to agree to the demands of the creditors. The last PASOK prime minister, George Papandreou, had planned to do something generally similar, but the creditors applied pressure to him, and he renounced his attempt. The upshot was that Papandreou lost his reputation, his job as premier, and even his position at the head of his own party. Knowing the fate of his predecessor, Tsipras showed more consistency. A further inducement for him was the fact that even before the eurocrats had rejected the “compromise” he had offered, a revolt had broken out in the SYRIZA ranks, and it was clear that if the agreement with the Troika was to get through parliament, it would only be with the votes of the rightists.
This time, the deputies of the conservative New Democracy party tried to block the vote on the referendum. But eventually they returned to the chamber, and the resolution was adopted. On July 5 Greeks are to decide on whether or not to agree to the conditions of the financial vampires.
It is significant that the Troika characterised the use by the Greeks of this democratic procedure as a rejection of the agreement. Troika representatives then called off the talks and declared that “aid” to Greece would cease from June 30. This means that regardless of the outcome of the referendum, a technical default from July 1 is inevitable, and this in turn will lead almost automatically to Greece’s exit from the eurozone and return to the drachma.
The chance that the supporters of austerity would win the referendum, illusory in any case, has now vanished completely.
What was bound to occur has now actually happened, just as in Argentina in 2001, where all political forces tried desperately to avoid a default and exit from the dollar zone (the Argentinian peso was tied to the US dollar), but where this occurred anyway. In both Argentina and Russia, financial collapse was followed by a few dramatic and chaotic months, after which an economic recovery began. The situation in Greece is somewhat more complex, but in Greece as well the shift to an inevitably devalued drachma opens a range of possibilities. Cheap resorts will attract the tourists who are now in critically short supply (Russian tourism alone in Greece has shrunk this year by 70 per cent). New prospects will open up for tourism and shipbuilding. Relations with Russia could also be placed on a more solid footing.
The situation has turned out to the benefit of Greece, but despite the actions of the country’s present leaders rather than because of them. It should, though, be recognised that Tsipras, even if he dragged out his decision until the very last moment, has nevertheless shown that he has a better claim to the role of national leader than his predecessors. The Greeks were forced to bend, but they were not broken.
What, though, can have motivated the Berlin leaders, when they refused to accept the Greek capitulation? It is possible, of course, that the German leaders simply made a mistake. The situation ran out of control because each side failed to anticipate the reaction of the other. The Greeks overestimated the rationalism of the Germans, and the Germans, the opportunism of the Greeks. The more acute a crisis becomes, the more mistakes are made; this is the general logic of the historical process. It is not excluded that the leaders in Berlin misjudged the likely results of the talks between Russia and Greece, and hoped that the Russians would supply Tsipras with money that the Greeks could use to pay off the creditors. But Tsipras left St Petersburg without having received any money, though with an agreement to build a gas pipeline that for technical reasons will be impossible to implement before 2018 (it should be noted that the Russian gas corporation Gazprom then and there announced that gas transit through Ukraine would continue after 2019, placing the profitability of the highly expensive Greco-Turkish pipeline in question).
Nor can the possibility be excluded that Berlin consciously provoked the crisis.
German analysts may have calculated that the debt bubble would burst in any case, and have decided to deflate it themselves, without waiting for events to develop spontaneously. Even if agreement had been reached on the conditions set down by the Troika, new crises would not only be “predictable with mathematical certainty” (as Varoufakis stated), but much more importantly, the proportion of the funds pumped by the German banks out of Greece would diminish with every new cycle, while the share coming from the German taxpayer would increase. In other words, political risk would be added to the risk that the debt pyramid would crumble. Members of the public in northern Europe are beginning to grasp that under the pretext of “saving Greece”, they themselves are being robbed by “their own” side. Even if northern Europeans fail to understand this, they will still mount resistance, out of reluctance to part with their money. It is also worth noting the publication of the sadly notorious Charlie Hebdo issue that came out with the headline “Drown the Greek to save Europe”.
So – was it evil intent, or a collective miscalculation?
These two explanations, though logically counterposed, may in reality serve to reinforce one another. There was a degree of ill-intent, but there were also miscalculations on both sides. We may recall that it was in precisely this fashion that war broke out in 1914. All the various parties had prepared for a war, had planned it and wanted it, but events nevertheless unfolded in a fashion completely different from what they had counted on. Control over the situation had been lost.
It appears that the same happened this time. Even if the Troika intended something along the lines of “drowning the Greek”, things will now proceed in a way distinctly different from what they anticipated. The referendum called by Tsipras is sharply altering the psychological landscape not just in Athens, but throughout Europe. Willingly or otherwise, SYRIZA has raised the banner of resistance. For the other crisis-wracked countries of the eurozone, this will provide a signal that the financial vampires of the EU are not all-powerful. The vampires themselves will be forced to undertake even harsher measures, in an effort to halt the growing collapse of the neoliberal regime installed in the EU by the Maastricht and Lisbon talks. As history teaches us, such measures ultimately serve only to exacerbate a crisis, provoking more and more active resistance. This is now occurring in the countries of the European “centre” – Italy, France, and even Austria and Germany. In the present situation, however, no other road remains open to the ruling groups in Berlin and Brussels. And before the light appears at the end of the tunnel, we are bound to plunge still further into the depths of the crisis.
All of our countries will feel the direct effects, including Russia.
Translation: Renfrey Clarke.
Boris Kagarlitsky is the director of the Institute of Globalization Studies.
Obama Signs Legislation Inhibiting Boycott of Israel
IMEMC News & Agencies | July 2, 2015
President Obama has signed legislation which would tackle anti-Israel boycotts all over the world and would raise specific US priorities in roughly 150 trade objectives in its negotiations.
One of the main goals, according to World Bulletin/Al Ray, is to counter willingness to support “Boycott Divestment and Sanctions” movement against Israel within the European Union. The legislation was made by a group of congressmen and the American-Israel Public Affairs Committee (AIPAC).
The new US-Israel Trade and Commercial Enhancement Act is specifically targeted “to discourage politically motivated actions to boycott, divest from, or sanction Israel by states, non-member states of the United Nations, international organisations, or affiliated agencies of international organisations that are politically motivated and are intended to penalise or otherwise limit commercial relations specifically with Israel or persons doing business in Israel or in Israeli- controlled territories.”
The new legislation was signed in spite of numerous warnings from Obama’s advisors and officials, who said that such a law can seriously harm trade relations with the European Union members that favor “Boycott Divestment and Sanctions” movement and prohibit trading with Israeli companies that operate in the occupied territories.
Von Hippel’s “Really Good Idea” to Resolve the Nuclear Impasse Was Actually Iran’s Idea First
By Nima Shirazi | Wide Asleep in America | July 1, 2015
Yesterday in The National Interest, Frank von Hippel, co-director of the Program on Science and Global Security at Princeton University’s Woodrow Wilson School of Public and International Affairs, floats the possibility of opening Iran’s domestic uranium enrichment program to international investment. Doing so, Von Hippel contends, would automatically “add a multinational layer of supervision to the program,” as countries that “buy shares in its enrichment program” would do so “in exchange for having full access to all the associated facilities and a say in how they are managed.”
For those who still insist on pretending that Iran’s legal, safeguarded nuclear energy program is “a threat to regional stability” that will be summarily unleashed from the tethers of agreed-to restrictions after the imminent multilateral deal allegedly sunsets a decade from now, Von Hippel’s suggestion should inspire confidence. With foreign investment and multinational involvement in the entire nuclear fuel cycle, coupled with the IAEA’s strict monitoring and inspection regime which has already long been in place, the potential for Iran’s program to ever be secretly militarized is virtually nil.
Furthermore, according to Von Hippel, offering such foreign stake in this Iranian industry “would mitigate the pressure on Saudi Arabia and other regional rivals of Iran to assert their own rights to ‘peaceful’ enrichment programs. Indeed, the door should be open for them to buy a share in the multinational program as well.”
The article’s headline calls Von Hippel’s proposal to open up Iran’s enrichment program to multinational partnerships, “A Really Good Idea.”
And it is.
Except, while certainly a good idea, this isn’t actually a new idea. In fact, this very offer was made over a dozen years ago – by Iran.
It is true that Von Hippel, whose National Interest post is a pared down version of a longer, more detailed (and less alarmist) article he co-authored in the June 19 issue of Science magazine, does make passing reference to the fact that “[s]enior Iranian officials have expressed openness to discussing multi-nationalization.” But this is a gross understatement considering Iran’s leadership and consistency on this issue.
Since its early stages, in fact, Iran has offered specifically to restrict its enrichment program and to open it up to international cooperation, thereby making in it literally impossible for the diversion of fissile material to weaponization efforts to take place unnoticed. As I have noted before, Iran was already making such gestures nearly a quarter century ago, only to be rebuffed, denied, ignored and dismissed by the United States.
In October 1992, for instance, in response to American concern over indications that Iran was pursuing a domestic enrichment program, Iran not only “repeatedly denied any non-peaceful intentions, stating that it accepts full-scope IAEA safeguards,” but also “indicated it is prepared to accept enhanced safeguards measures on both nuclear cooperation agreements with Russia and China, as well as having no objections to the return of the spent fuel to the country of origin as a similar agreement had been concluded with Germany during the 1970s.”
On July 1, 2003 – exactly 12 years ago today – Reuters reported that none other than Hassan Rouhani, then Secretary-General of Iran’s Supreme National Security Council, said Iran was “ready to accept the participation of other big industrialized countries in its [uranium] enrichment projects,” specifically as a means to resolve any questions over whether its nuclear program was peaceful and civilian in nature.
Following its voluntary suspension of uranium enrichment and implementation of the Additional Protocol as confidence-building measures during negotiations with the EU-3, Iran again raised the prospect of multinational collaboration. On March 23, 2005, the Iranians presented a four-phase plan to their European negotiating partners intended to end the nuclear impasse once and for all. It called for Iran to resume uranium enrichment, with EU cooperation, and for the Majlis (Iranian parliament) to begin the process of approving legislation that would permanently ban the “production, stockpiling, and use of nuclear weapons.”
Iran’s offer came on the heels of the IAEA’s own expert endorsement of multinational investment in enrichment programs.
This was not merely the stance of the reformist government of Mohammad Khatami, either. In his first address before the United Nations General Assembly in September 2005, newly-inaugurated Iranian President Mahmoud Ahmadinejad said that, as a “confidence building measure and in order to provide the greatest degree of transparency, the Islamic Republic of Iran is prepared to engage in serious partnership with private and public sectors of other countries in the implementation of uranium enrichment program in Iran. This represents the most far reaching step, outside all requirements of the NPT, being proposed by Iran as a further confidence building measure.”
In early November 2005 it was widely reported that “the Iranian government is allowing the country’s atomic energy agency to seek local or foreign investors for its currently suspended uranium enrichment activities.” Such investment, directed toward the Natanz facility then under construction in central Iran, would be sought “from the public or private sectors.”
Days later, Iranian state-run television stated that Iran would offer the international community “a 35% share in its uranium enrichment programme as a guarantee” that its nuclear program “won’t be diverted toward weapons.” This investment would allow “foreign countries and companies a role in Iran’s uranium enrichment programme,” providing the opportunity for such entities and organizations to “practically contribute in and monitor the uranium enrichment in Natanz.” Gholamreza Aghazade, an Iranian vice president and head of the Atomic Energy Organisation of Iran, told the press that this offer was “maximum concession” Tehran could offer for transparency. “The 35% share is not only investment,” he said. “They will have a presence in the process (of uranium enrichment) and production (of nuclear fuel).”
“It’s the best kind of international supervision totally negating any possibility of diversion (toward weapons),” Aghazade explained.
Later that month, on November 18, 2005, in yet another publicly presented proposal, the Iranian government repeated the offer set forth earlier that year, reiterating its willingness to officially ban nuclear weapons development through legislation, cap its level and scope of enrichment, immediately covert its enriched uranium to fuel rods “to preclude even the technical possibility of further enrichment” towards weapons-grade and “to provide unprecedented added guarantees” to the IAEA that its program would remain peaceful. The proposal, issued by Iran’s permanent mission to the United Nations, reiterated Iran’s “[a]cceptance of partnership with private and public sectors of other countries in the implementation of uranium enrichment program in Iran which engages other countries directly and removes any concerns.”
Iran’s offers were routinely rejected by the United States government, which maintained the absurd position that Iran capitulate to its demand of zero enrichment on Iranian soil. “We cannot have a single centrifuge spinning in Iran,” declared George W. Bush’s undersecretary of state for arms control Robert Joseph in early 2006.
In an April 5, 2006 oped in the New York Times, Iran’s then UN ambassador Javad Zarif laid out a number of proposals for resolving the nuclear standoff. In addition to affirming Iran’s continued commitment to the NPT, acceptance of limitations on enrichment, and its stance against “the development, production, stockpiling and use of nuclear weapons,” Zarif stated Iran’s willingness to “[a]ccept foreign partners, both public and private, in our uranium enrichment program.” He continued:
Iran has recently suggested the establishment of regional consortiums on fuel-cycle development that would be jointly owned and operated by countries possessing the technology and placed under atomic agency safeguards.
In an article for the Los Angeles Times at the end of that same year, Zarif reminded readers of these overtures, none of which were ever responded to by the United States.
Multinational investment in Iran’s enrichment program was endorsed by nuclear experts and MIT researchers Geoff Forden and John Thomson in various articles and reports in 2006 and 2007, as well as by former American diplomats Thomas R. Pickering and William Luers and nuclear expert Jim Walsh in an essay for the New York Review of Books in early 2008. Wholly in line with what Iranian officials had been saying for years, Pickering, Luers and Walsh wrote that a “jointly managed and operated on Iranian soil by a consortium including Iran and other governments… provides a realistic, workable solution to the US–Iranian nuclear standoff.” Such a program, they wrote, “will reduce the risk of proliferation and create the basis for a broader discussion not only of our disagreements but of our common interests as well.”
“Given the enhanced transparency of a multilateral arrangement and the constant presence in Iran of foreign monitors that such a plan would require,” the authors added, any “diversion of material or technology to a clandestine program” would be easily detected. Senators Chuck Hagel and Dianne Feinstein both responded positively to the proposal. The Bush administration dismissed it out of hand.
Iranian officials again endorsed the concept of opening its nuclear program to international investment and collaboration in during a March 2008 conference in Tehran.
In a comprehensive package proposed to the United Nations on May 13, 2008, Iran’s foreign minister Manuchehr Mottaki wrote that Iran was still ready to consider, among a great many other things, “Establishing enrichment and nuclear fuel production consortiums in different parts of the world – including in Iran.”
Reporting on the proposal shortly thereafter, The Guardian‘s Julian Borger noted that while the consortium idea was gaining traction in American “foreign policy circles,” it was still “resisted by the US, French and British governments.” An unnamed “British official” told Borger, “We would be ready to discuss it, as soon as Iran does what it knows it has to,” that is, suspend its enrichment program, an obvious and long-known nonstarter for post-2005 negotiations.
By resurrecting the notion of multinational investment in Iran’s enrichment program, Von Hippel does the conversation over nuclear negotiations a great service. Despite past difficulties regarding Iran’s stake in the Eurodif consortium and a history of American deception and deliberate denialism in breach of its NPT obligations, the prospect of international acceptance and cooperation in Iran’s nuclear industry is still an excellent way out of this manufactured crisis.
But by leaving out the fact that Iran itself has long been the leading champion of such a proposal unfortunately doesn’t give credit where credit is due.
After 8 Years of Delay, EPA Finally Agrees to Test Dangers of Monsanto’s Favorite Pesticide
By Steve Straehley | AllGov | June 29, 2015
Glyphosate, which is the active ingredient in Monsanto’s Roundup herbicide, will finally undergo analysis for its effects on endangered species by the Environmental Protection Agency (EPA), thanks to the persistence of the Center for Biological Diversity (CBD).
The group has been trying for eight years to get the EPA to look at glyphosate, along with atrazine and two chemicals similar to atrazine: propazine and simazine. Glyphosate was found two months ago by the World Health Organization’s International Agency for Research on Cancer to be a probable human carcinogen and was banned for sale in garden centers in France earlier this month.
“This settlement will finally force the EPA to consider the impacts of glyphosate—widely known as Roundup—which is the most commonly used pesticide in the United States, on endangered species nationwide,” said Brett Hartl, CBD’s endangered species policy director. “With more than 300 million pounds of this stuff being dumped on our landscape each year, it’s hard to even fathom the damage it’s doing.”
Roundup appears to be responsible for the 90% drop in the number of monarch butterflies in the United States. The butterflies feed on milkweed, which has been just about eliminated because of Roundup use in fields near butterflies’ habitats.
Monsanto spokesman Robb Fraley said Roundup meets standards set by regulatory and health authorities. However, the EPA hasn’t ever taken a close look at glyphosate’s effect on endangered species.
Atrazine chemically castrates frogs and may be linked to increased risks of thyroid cancer, reproductive harm and birth defects in humans, according to CBD. “The EPA should have banned this years ago,” Hartl said. Up to 80 million pounds of atrazine are used each year in the United States on corn, sugarcane and sorghum, as well as lawns and golf courses.
The EPA’s agreement is only the beginning of a long, slow process. The agency has agreed to complete its assessments by 2020.
To Learn More:
Big Win for Environmentalists Will Force EPA to Study Glyphosate (by Elizabeth Warmerdam, Courthouse News Service )
Settlement: EPA to Analyze Impacts of World’s Two Most Widely Used Pesticides on 1,500 Endangered Species (Center for Biological Diversity)
UN Report Links California’s Favorite Herbicide, Monsanto’s Roundup, to Cancer (by Ken Broder, AllGov California )
EPA Sued over Not Protecting Decimated Monarch Butterflies from Monsanto (by Noel Brinkerhoff and Ken Broder, AllGov California )
EPA Approves Rise in Glyphosate Residue for Monsanto’s Herbicide (by Noel Brinkerhoff, AllGov )
New Study Confirms: Sugary Drinks Kill 184,000 People Each Year
By Jake Anderson | ANTIMEDIA | June 30, 2015
According to a new study, the effects of sugary soft drinks are considerably worse than previously thought: they are directly responsible for 184,000 deaths every year. It is the first comprehensive study of the effects of sugar-sweetened beverages (SSBs) on human health, and the results confirm what medical experts have suspected for decades.
Published in the latest volume of the American Heart Association’s Circulation journal, the research implicates sodas, sweetened iced teas, fruit drinks, and sports/energy drinks.
The study is entitled “Estimated Global, Regional, and National Disease Burdens Related to Sugar-Sweetened Beverage Consumption in 2010,” and it affirms that most of the deaths are from complications resulting from diabetes due to the consumption of “sugar-sweetened beverages” (SSBs).
The rest of the fatalities are due to cardiovascular disease and cancer, which are linked to 45,000 and 6,450 annual deaths, respectively.
The study’s author, Dariush Mozaffarian of Tufts University in Boston, says,
“There are no health benefits from sugar-sweetened beverages, and the potential impact of reducing consumption is saving tens of thousands of deaths each year.”
Further, the report states that economic disparity plays a factor, as 76% of the people who died between the years of 1980 and 2010 as a result of consuming sugary drinks lived in low-to-middle income countries.
Mozaffarian goes on to state that the research “indicate[s] the need for population-based efforts to reduce SSB consumption throughout the world through effective health policies and targeted interventions directed at stemming obesity-related disease.”
He conducted the study by comparing 62 dietary surveys from over 611,000 people in 51 countries over the course of 30 years. While the health effects of sodas, energy drinks, and other sugary beverages have long been suspected of dire health consequences, we now have definitive evidence that they are directly responsible for 184,000 deaths annually.
Moscow Halts Gas Supplies as Kiev Suspends Russian Gas Purchases
RT | July 1, 2015
Gazprom has confirmed the suspension of gas supplies to Ukraine from 10:00am MSK on July 1. Russia’s gas monopoly will not supply gas to Kiev without prepayment, no matter what price, said company CEO Aleksey Miller on Wednesday.
After trilateral Russia-EU-Ukraine gas talks in Vienna failed on Tuesday, Ukraine’s Naftogaz reported it would cease purchases of Russian gas starting from Wednesday as it didn’t agree on the price. The three parties gathered in Vienna to discuss the terms of the gas deal for the next three months as the previous ‘summer package’ expired.
The Ukrainian company stressed that Kiev would continue gas transit to Gazprom’s customers in Europe “in accordance with the existing transit contract”.
Russia offered Ukraine a discount of $40 per thousand cubic meters on Monday. The price of Russian gas with the discount was $247.18 per 1,000 cubic meters. The same price Ukraine bought gas in the second quarter.
However, Naftogaz refused to sign the deal, saying Kiev was dissatisfied with the price and the discount.
Ukraine’s wish to get more than a 40 percent discount is “groundless”, Russia’s Energy Minister Aleksandr Novak told Rossiya 24 TV channel on Wednesday.
The $100 discount Kiev is asking for, worked when the price neared $495 per 1,000 cubic meters, said Novak.
Ukraine’s decision to halt gas purchases from Russia is politicized, not justified by economic reasons, he added.
Last week, Russian President Vladimir Putin said Moscow could no longer provide generous gas discounts to Kiev due to low crude oil prices in the world.
On April 1, 2015 Russia and Ukraine signed a ‘summer package’, deal on gas supplies for the second quarter. The agreement replaced a similar ‘winter package’ signed at the end of October, 2014.
Russia switched Ukraine to prepayment terms last summer after the country’s ‘chronic’ failure to pay its massive debt. Naftogaz paid Gazprom $247.18 per 1,000 cubic meters of gas. The price included a $100 discount.
READ MORE:
Russia prices gas for Ukraine at $247, cuts discount
Russia can’t give another gas discount to Kiev; price should match Poland’s – Putin
The General Dynamics, Saudi Arabia contract and Canada’s moral regress
By Mitchell Thompson | Disinformation | June 28, 2015
With the case of the Canadian-brokered General Dynamics light armored vehicle sale to the Saudi Arabian government, Canada’s manufacturing sector has become complicit in human rights abuses abroad.
The question of benefit could be framed like this: is General Dynamics employing more people than its equipment is killing?
The Globe and Mail reported that Ed Fast, Canada’s Minister of International trade said, the deal will help the manufacturing area in London to “become the epicentre of a cross-Canada supply chain directly benefiting more than 500 local Canadian firms… Our government will continue to support our exporters and manufacturers to create jobs, as part of our government’s most ambitious pro-trade, pro-export plan in Canadian history.”
That export plan, justified by job-creation involves the sale of light armoured vehicles, manufactured in Canada that the Globe and Mail describes as having “effective firepower to defeat soft and armored targets… options for mounted guns include a 25-mm cannon and 7.62-mm machine guns and smoke grenade launchers.”
The Ottawa Citizen reports that:
“Canada’s defence industry has beaten out German and French competitors to win a massive contract worth at least $10 billion US to supply armoured military vehicles to Saudi Arabia.
The win was announced by International Trade Minister Ed Fast to cheering workers Friday at a factory in London, Ont., and will go a long way in bolstering the Harper government’s case for transforming Canada into a global arms dealer.
But it also raises many ethical questions that will continue to surface as Canada’s arms industry turns more and more to the volatile Middle East and South America for business.
Canada has previously sold light armoured vehicles (LAVs) like those used by Canadian soldiers in Afghanistan to Saudi Arabia, with more than 1,000 delivered to the Middle Eastern kingdom in the early 1990s, and 700 more in 2009.
But the government is touting this latest deal as the largest export contract in Canadian history, with the potential to create and sustain 3,000 jobs in southern Ontario and other parts of the country.
Exactly how many LAVs are being sold to Saudi Arabia was not being revealed, but documents filed in the U.S. by General Dynamics Land Systems – Canada, whose London-based subsidiary will be building the vehicles, put the contract at between $10 billion and $13 billion.
Defence and export industry representatives praised the Conservative government Friday for its role in securing the deal.”
The job creation argument that Canada is using stands even more oddly next to the moral cost of the deal, given Saudi Arabia’s human rights record.
Alex Nieve, Secretary General of Amnesty International told the Globe that “[The Saudi government is] known to use armoured vehicles and other weapons in dispersing peaceful protest.”
Jonathan Manthorpe writes for IPolitics that “The Saudi regime is buying these vehicles not to defend the nation from foreign threats, but to protect the regime from Saudis — from internal dissent and demands for reform.”
Hillary Homes of Amnesty told the Globe that “[Saudi Arabia] is among the worst human-rights violators in the world.”
Canada’s support of the Saudi abuse is bad enough, what’s worse is its insistence that working Canadians become participants. The government says it wants this sort of arms manufacturing as the epicentre of a cross-Canada supply chain with connections to over 500 firms. Is that really something Canada wants as an epicentre of any part of its economy?
Let’s consider what that means. If the epicentre of a sector of the manufacturing industry is dependent on the manufacturing of equipment for a third world dictatorship, continued economic progress for that sector would require that government to use that equipment. Canadians would have an interest in the Saudi Arabian government using its old equipment, so it can buy new equipment, made in Canada.
If Amnesty and others are correct, that the equipment that we manufacture will likely be used against civilians and a sector of our economy depends on that manufacturing- that means that a sector of our economy would be dependent on those abuses.
There are good people working in manufacturing. Having their work emanate from third world dictatorships perverts the entire sector. Working people should not be forced to participate in such an exchange, to remain economically viable.
China, India, Russia largest shareholders in China-led bank
The BRICS Post | June 29, 2015
Fifty countries on Monday signed the articles of agreement for the new China-led Asian Infrastructure Investment Bank, the first major global financial instrument independent from the Bretton Woods system.
Seven remaining countries out of the 57 that have applied to be founding members, Denmark, Kuwait, Malaysia, Philippines, Holland, South Africa and Thailand, are awaiting domestic approval.
“This will be a significant event. The constitution will lay a solid foundation for the establishment and operation of the AIIB,” said Chinese Finance Minister Lou Jiwei.
The AIIB will have an authorized capital of $100 billion, divided into shares that have a value of $100,000.
BRICS members China, India and Russia are the three largest shareholders, with a voting share of 26.06 per cent, 7.5 per cent and 5.92 per cent, respectively.
Following the signing of the bank’s charter, the agreement on the $100 billion AIIB will now have to be ratified by the parliaments of the founding members.
Asian countries will contribute up to 75 per cent of the total capital and be allocated a share of the quota based on their economic size.
Chinese Vice Finance Minister Shi Yaobin said China’s initial stake and voting share are “natural results” of current rules, and may be diluted as more members join.
Australia was first to sign the agreement in the Great Hall of the People in Beijing on Monday, state media reports said.
The Bank will base its headquarters in Beijing.
The Chinese Finance Ministry said the new lender will start operations by the end of 2015 under two preconditions: At least 10 prospective members ratify the agreement, and the initial subscribed capital is no less than 50 per cent of the authorized capital.
The AIIB will extend China’s financial reach and compete not only with the World Bank, but also with the Asian Development Bank, which is heavily dominated by Japan.
China and other emerging economies, including BRICS, have long protested against their limited voice at other multilateral development banks, including the World Bank, International Monetary Fund and Asian Development Bank (ADB).
China is grouped in the ‘Category II’ voting bloc at the World Bank while at the Asian Development Bank, China with a 5.5 per cent share is far outdone by America’s 15.7 per cent and Japan’s 15.6 per cent share.
The ADB has estimated that in the next decade Asian countries will need $8 trillion in infrastructure investments to maintain the current economic growth rate.
China scholar Asit Biswas at the Lee Kuan Yew School of Public Policy, Singapore, says Washington’s criticism of the China-led Bank is “childish”.
“Some critics argue that the AIIB will reduce the environmental, social and procurement standards in a race to the bottom. This is a childish criticism, especially because China has invited other governments to help with funding and governance,” he writes.
The US and Japan have not applied for the membership in the AIIB.
However, despite US pressures on its allies not to join the bank, Britain, France, Germany, Italy among others have signed on as founding members of the China-led Bank.
Meanwhile, New Zealand and Australia have already announced that they will invest $87.27 million and $718 million respectively as paid-in capital to the AIIB.
The new lender will finance infrastructure projects like the construction of roads, railways, and airports in the Asia-Pacific Region.
Iran, 49 states sign Asia bank charter
Press TV June 29, 2015
Iran on Monday joined 49 countries in signing up to the Asian Infrastructure Investment Bank (AIIB), bringing Asia’s largest financial lender a step closer to existence.
Finance and Economy Minister Ali Tayebnia put Iran’s signature to the bank’s articles of association at a ceremony in Beijing’s Great Hall of the People, which capped six months of intense negotiations.
In April, China accepted Iran as a founding member of the Asian Infrastructure Investment Bank being seen as a rival to the US-led World Bank, the International Monetary Fund (IMF) and the Asian Development Bank.
With the signing which amounted to the creation of AIIB’s legal framework, China’s Finance Minister Lou Jiwei said he was confident the bank could start functioning before the end of the year.
Seven more founding members would ink the articles after approval by their respective governments.
The bank will have a capital of $100 billion in the form of shares, each worth $100,000, distributed among the members. Beijing will be by far the largest shareholder at about 30%, followed by India at 8.4% and Russia at 6.5%.
China will also have 26% of the votes which are not enough to give it a veto on decision-making, while smaller members will have larger voice.
Singapore’s Senior Minister for Finance and Transport Josephine Teo said the bank will provide new opportunities for its members’ businesses and promote sustainable growth in Asia.
Seventy-five percent of AIIB’s shares are distributed within the Asian region while the rest is assigned among countries beyond it.
Germany, France and Brazil are among the non-Asian members of the bank despite US efforts to dissuade allies from joining it. Another US ally joining AIIB is Australia but Japan has stayed away from it.
Countries beyond the region can expand their share but the portion cannot be bigger than 30%. Public procurement of the AIIB will be open to all countries around the world.
But the president of the bank will have to be chosen from the Asian region for a maximum of two consecutive five-year terms.
The bank will be headquartered in Beijing and its lean structure will be overseen by an unpaid, non-resident board of directors which, architects say, would save it money and friction in decision-making.
Earlier this month, former Federal Reserve chairman Ben Bernanke rebuked US lawmakers for allowing China to found the new bank, which threatens to upend Washington’s domination over the world economic order.
He said lawmakers were to blame because they refused to agree 2010 reforms that would have given greater clout to China and other emerging powers in the International Monetary Fund.
Wisconsin Government to Garnish the Wages of Poor People to Fund New Sports Arena
By Justin Gardner | The Free Thought Project | June 29, 2015
Milwaukee, WI — Wisconsin governor Scott Walker may be the darling of mainstream Republicans for next year’s presidential election, but “less taxation, less government” is an illusion under his current tenure. Milwaukee residents will soon be forced to pay an extra 15% tax surcharge that will go toward public financing of a new sports arena, under a plan put together by this champion of limited government.
The 15% surcharge will apply to Milwaukee County residents who are behind on their property taxes or court fines. Walker’s sports arena plan calls for the state to take over the collection of Milwaukee County’s old debt and use it to help pay for half the cost of a new arena for the Milwaukee Bucks.
This blatant example of extortion and public-private cronyism is troubling to Milwaukee County Supervisor John Weishan Jr.:
“To think we would put the squeeze on someone because they didn’t pay a parking ticket and their only crime is being poor and unable to pay it, and then taking that money and giving it to people who are extremely wealthy, doesn’t sit well with me.”
Wisconsin state, unlike county government, has the power to garnish wages and intercept other income such as tax refunds. Citizens will be powerless to stop the state from taking their money so their government can go into partnership with sports moguls on a fancy new spectacle. The cost to Wisconsin taxpayers—whether or not they care about the arena—will be $400 million after accounting for interest.
Government’s interest in using major televised sports as a public distraction is no secret, hearkening to the Roman days of bread and circus. In May, we reported how NFL teams are paid millions of dollars by the U.S. Department of Defense for nationalistic propaganda. The appeals to emotion in furtherance of patriotism serve two purposes—entrenching corporatism and stifling dissent of military hegemony.
Back in Wisconsin, Walker and his team are salivating at the prospect of taking over debt collection in Milwaukee. Nearly $77 million is owed to the county courts, most of it older than five years. The surcharge would mean an extra burden of $11.5 million on citizens, and would cover 4.6% of the public’s obligation toward Walker’s sports arena.
While Governor Walker and his team withhold details of the plan under the guise of “finalizing legislative language,” they are drumming up support among lawmakers and telling Republican senators to avoid making critical comments.
They’re working hard to suppress public dialog while PR experts couch the plan in Orwellian terms.
“There is a cost to collecting debt. The cost is now borne by the county. The benefit of this program is that the burden falls on the people who can afford to pay this debt,” said bureaucrat Teig Whaley-Smith.
Another spokesperson, Laurel Patrick, said the 15% surcharge is standard procedure, so why should anyone care? “Unpaid debts impact others who do pay their bills, fines, etc. on time, and are now paying more than they otherwise would need to for those government services and programs.”
The likelihood that this tax increase will be mentioned as Walker and other presidential hopefuls parade about next year, wrapped in the flag and false concern for the people, is little to none. We can expect the usual bread and the usual circus.
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From the Archives
World War II Didn’t End The Great Depression
Stark Realities with Brian McGlinchey | April 4, 2024
A principal goal of Stark Realities is to “expose fundamental myths across the political spectrum” — and few myths are as universally embraced as the notion that US participation in World War II (1941-1945) lifted the American economy out of the Great Depression.
This myth is dangerous not only because it leads citizens and politicians to see a bright side of war that doesn’t really exist, but also because it helps foster a belief that government spending is essential to countering economic downturns. That belief, in turn, has helped propel us to a point where the national debt now exceeds $34.6 trillion, with interest payments alone on pace to reach $1 trillion a year in 2026, inviting financial catastrophe. … continue
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