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.
The Greek Debt Crisis and Crashing Markets
By MICHAEL HUDSON | CounterPunch | June 29, 2015
Back in January upon coming into office, Syriza probably could not have won a referendum on whether to pay or not to pay. It didn’t have a full parliamentary majority, and had to rely on a nationalist party for Tsipras to become prime minister. (That party balked at cutting back Greek military spending, which was 3% of GDP, and which the troika had helpfully urged to be cut back in order to balance the government’s budget.)
Seeing how unyielding the opposition was, Syriza’s stance was: “We would like to pay. But there’s no money.”
This kept throwing the ball back into the troika’s court. The Institutions were so unyielding that Syriza’s approval rating in the polls rose by 13% by June. Greek voters became increasingly incensed at the Troika’s demand for further pension cuts and privatizations.
Tsipras and Varoufakis were willing to pay the IMF with the IMF’s own funds, in what V. called “extend and pretend.” But their only interest in keeping current on debt was to obtain additional funding that could be used to pay domestic pensions and other basic government budgetary expenditures.
The basic tactic in such tensions between creditors and debtors is clear: once debt repayments exceed new loans, stop paying.
So when The Institutions made it clear that no more credit would be forthcoming without Syriza adopting the old Pasok/New Democracy capitulation to Troika demands, Tsipras and Varoufakis decided it was time to call a referendum eight days hence, on Sunday, July 5.
Late Friday night and into the early Saturday morning hours, Greeks ran to the ATM machines to convert their checking and savings deposits into euro notes, expecting that the end game would involve a likely 30% depreciation of the drachma – and that indeed, the ECB would stop lending to support Greek banks (the only role the ECB wanted to play).
Syriza had no love for the banks. They were the vehicles through which the oligarchs controlled the Greek economy, after all. For a month, they had been discussing how to separate the banks into “good bank” and “bad bank,” either nationalizing them (wiping out stockholders) or creating a Public Option alternative.
Most important, once out of the eurozone, Greece could create its own Treasury to monetize its spending. The Institutions called this “scrip,” but the Greeks could establish it as their national currency. They would escape from euro-austerity – except, of course, to the extent that the ECB waged economic war on Greece by imposing its own capital controls.
By going through the sham negotiations with The Institutions, Syriza gave Greeks enough time to protect what savings and cash they had – by converting these bank deposits into euro notes, automobiles and “hard assets” (even boats).
Businesses borrowed from local banks where they could, and moved their money into eurozone banks or even better, into dollar and sterling assets. Their intention is to pay back the banks in depreciated drachma, pocketing a 30% capital gain.
What commentators miss is that Syriza (at least its left) wants to be transformative. It wants to free Greece from the post-military oligarchy that evades taxes and monopolizes the economy. And it wants to transform Europe, away from ECB austerity to create a real central bank. In the process, it demands a clean slate of past bad debts. It wants to reject the IMF’s austerity philosophy and refusal to take responsibility for its bad 2010-12 bailout.
This larger, transformative picture is at the center of Syriza-left plans.
I’m in Germany now (on my way to Brussels), and have heard from Germans that the Greeks are lazy and don’t pay taxes. There is little recognition that what they call “the Greeks” are really the oligarchs. They have gained control of the old coalition Pasok/New Democracy parties, avoided paying taxes, avoided being prosecuted (New Democracy refused to act on the “Lagarde List” of tax evaders with nearly 50 billion euros in Swiss bank accounts), orchestrated insider dealings to privatize infrastructure at corrupt prices, and used their banks as vehicles for capital flight and insider lending.
This has turned the banks into vehicles for the oligarchy. They are not public institutions serving the economy, but have starved Greek business for credit.
So one casualty apart from the credibility of the eurozone, the ECB and the IMF will be these banks. Syriza is positioning itself to provide a public option – public banks that will promote the economy, and a national Treasury that will spend government money INTO the economy, not drain it to pay the Troika for having bailed out French and other banks back in 2010-1.
The European popular press is as bad as the U.S. press in describing matters. It warns of “hyperinflation” if a central bank monetizes as much as one euro of government spending in the way that the U.S. Fed does, or the bank of England or any other real central bank. The reality is that nearly all hyperinflations stem from a collapse of foreign exchange as a result of having to pay debt service. That was what caused Germany’s hyperinflation in the 1920s, not domestic German spending. It is what caused the Argentinean and other Latin American hyperinflations in the 1980s, and Chile’s hyperinflation earlier.
But once Greece frees itself from the odious debts forced upon it at financial gunpoint in 2010-12, its balance of payments will be roughly in balance (subject to some depreciation of the drachma; 30% is a number I heard bandied about in Athens last week).
To mimic Margaret Thatcher, “There is No Alternative” to withdrawing from the eurozone. The terms dictated for remaining in it was to sell off all of what remained in Greece’s public sector to European and U.S. buyers, at insider prices – but not to Russian buyers, even for the gas pipeline that was to have been sold.
Evidently the eurozone financial strategists thought that Tsipras and Varoufakis would simply surrender, and be promptly voted out of power, thereby crushing their socialist policy agenda. They miscalculated – and are now hoping to create as much anarchy as possible to punish the Greek people. The punishment is for not continuing to support their client oligarchy, which has moved most of its assets out of reach of the government.
But instead of Syriza losing credibility, it is the ECB – which refuses to create money to finance economic recovery, but only to pay the oligarchs’ banks so that they can continue to control the government. This control is now being weakened precisely because their banks are being weakened.
Greece’s Parliament last week released its Debt Truth Commission report explaining why Greece’s debts to the IMF and ECB are odious, and were taken on without a popular referendum approving these loans. Indeed, Mrs. Merkel and Mr. Sarkozy obeyed Mr. Obama and Geithner when the latter insisted at a G8 meeting that the ECB ignore the IMF economists’ analysis that Greece could not pay its debts, and bail out the banks. Geithner and Obama explained that U.S. banks had placed big financial bets that Greece would pay its private bondholders, so the ECB and IMF had to lend the government the funds to pay – but had to overthrow the country’s Prime Minister Papandreou who had urged a referendum on whether Greek people really wanted to commit economic and political suicide.
Financial technocrats were put in place to serve the domestic oligarchy and foreign bondholders. Greece was under financial attack just as deadly as a military attack. Finance is war. That is this week’s lesson.
And for the first time, debtor countries are realizing that they are in a state of war.
This is why markets are crashing on Monday, June 29.
* * *
Eurozone financial strategists made it clear that they wanted to make an example of Syriza as a warning to Spain’s Podemos party, and anti-euro parties in Italy and France. The message was supposed to have been, “Avoid our austerity and we will cause chaos. Look at Greece.”
But the rest of Europe is interpreting the message in just the opposite way: “Remain in the eurozone and we will only create money to strengthen the financial oligarchy, the 1%. We will insist on budget surpluses (or at least, no deficits) so as to starve the economy of money and credit, forcing it to rely on commercial banks at interest.”
Greece has indeed become an example. But it is an example of the horror that the eurozone’s monetarists seek to impose on one economy after another, using debt as a lever to force privatization sell offs at distress prices.
In short, finance has shown itself to be the new mode of warfare. Resisting debt leverage and financial conquest is as legal as is resisting military invasion.
Michael Hudson’s book summarizing his economic theories, “The Bubble and Beyond,” is now available in a new edition with two bonus chapters on Amazon. His latest book is Finance Capitalism and Its Discontents. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. He can be reached via his website, mh@michael-hudson.com
Russia, China Deepen Win-Win
By F. William Engdahl – New Eastern Outlook – 29.06.2015
It’s scarcely a day passes that there isn’t some fascinating new development bringing Russia and China closer in peaceful economic cooperation. The most recent such development involves what must be described as a win-win development in which Russia has agreed to lease prime Siberian agriculture lands to a Chinese company for the coming fifty years. It fits beautifully to plans for the development of the world’s largest infrastructure project, the planned New Silk Road Economic Belt, a network of new high-speed railway lines criss-crossing Eurasia from China to Mongolia to Russia and beyond ultimately to the EU.
The Chinese government officials in recent years are very fond of talking about “win-win” developments in business and politics. Now a genuine win-win development is emerging for both China and Russia in Siberia near the borders of Mongolia and China in the region known since 2008 as Zabaikalsky krai or region.
The region has a very sparse population of just over 1 million Russians on a land area of some 432,000 square kilometers. It also holds some of the richest, most fertile farmland in the world. China for its part is hurt by increasing desertification, water problems and other pressures on its food production security. China also has population and money to invest in worthwhile projects, something the more remote regions of the Russian Federation have had serious deficits of during the Cold War and especially since the destructive Yeltsin years.
Now the government of Zabaikalsky krai has signed a 49-year lease agreement with China’s Zoje Resources Investment together with its daughter company Huae Sinban to lease 115,000 hectares or just under 300,000 acres of Russian farmland to China. The Chinese company will invest more than 24 billion rubles for development of agricultural sector in the region, to produce agricultural products for Russian and Chinese markets. Plans are to grow fodder, grain and oilseeds as well as to develop poultry, meat and dairy products production in Russia’s Baikal region.
The project will be divided into two stages. If the first stage is successfully completed by 2018, the Chinese company will be given a lease on a second parcel of land bringing the total to 200,000 hectares. For Russia and the region it will be a win. The lands where the project will start have not been farmed for almost 30 years and to make the land suitable again for farming will require the labor of as many as 3,000 hands. Also significant is that the Chinese company had to compete for the land deal with several other Chinese companies as well as companies from South Korea, New Zealand and even from the United States.
Wang Haiyun, senior advisor at the Chinese Institute for International Strategic Studies, called the deal an example of the developing trust between the two countries, according to an article from the Chinese newspaper Huanqiu Shibao. He noted that the fact that Russian authorities agreed to lease such an immense territory for 49 years to a Chinese company proves Moscow has no ideological prejudice towards Beijing.
China-Russia Agriculture Fund
The latest land lease deal in Zabaikalsky krai follows other positive developments in agriculture cooperation between Russia and China. This past May Russia’s state Direct Investment Fund head, Kirill Dmitriev, announced that RDIF, the Russia-China Investment Fund and the government of China’s Heilongjiang province have agreed on the creation of a special investment fund for agriculture projects. The fund will total some $2 billion and be funded by primarily money of institutional Chinese investors, including those with significant experience in investment in the agricultural sector, Dmitriev added. He said that the agreement on the creation of a joint investment bank will help attract Chinese capital to Russia and make it easier for Russian companies to enter China’s markets. China’s Heilongjiang Province is to the east of Zabaikalsky krai.
Silk roads to golden goals
The China-Zabaikalsky krai agriculture agreement is merely the initial step of what will become a major infrastructure and industrial development of the now-remote underdeveloped Siberian region. Zabaikalsky krai is one of the richest regions in all Russia. Russia’s largest known deposit of copper at Udokanskoye in the region has resources of 20 million tons. On June 3 at the Sochi SP1520 annual international railways forum, Russian Railways president Vladimir Yakunin announced that the Russian Copper Company, a joint venture by Russian Railways Public Company, UMMC, and Vnesheconombank, had applied for development of the Udokanskoye copper deposit, confirming that Russia is thinking very strategically about its development in the region.
In addition the region is rich in gold, molybdenum, tin, lead, zinc and coal. Its crops are today wheat, barley and oats. The region is amply blessed with fresh water and flowing rivers.
At the same time Beijing has announced it is creating a huge $16 billion fund to develop gold mines along the rail route linking Russia and China and Central Asia. One major obstacle to date to exploitation of Russia’s vast agriculture and mineral riches has been availability of modern infrastructure to bring the products to market. Contrary to Harvard University or George Soros “shock therapy” free market theories, markets are not “free.”
At the September, 2014 meeting of the Shanghai Cooperation Organization in Dushanbe, at the request of the Mongolian president, China’s Xi, Russia’s Putin and Mongolia’s Tsakhiagiin Elbegdorj agreed to integrate Beijing’s Silk Road Economic Belt initiative with Russia’s transcontinental rail plan and Mongolia’s Prairie Road program, to jointly build a China-Mongolia-Russia economic corridor.
That could turn Mongolia into a “transit corridor” linking the Chinese and Russian economies. Mongolia is larger than Japan, France and Spain together. The three are discussing issues of traffic interconnectivity, how to facilitate cargo clearance and transportation, and the feasibility of building a transnational power grid.
Eurasian Economic Birth
The potential of the recent economic cooperation agreements between the two great Eurasian nations, Russia and China, is without question the most promising economic development in the world today. As US sanctions forced Russia to turn increasingly to its eastern neighbor, China, US military provocations against China in the East China Sea and elsewhere forced China to completely rethink its own strategic orientation. Developing their land connections in a vast economic space is emerging as the result. As the ancient Chinese saying goes, every crisis contains new opportunities if viewed so.
Beijing has discussed building various Eurasian rail ties for several years but in the past eighteen months since the beginning of the Presidency of Xi Jinping it has assumed highest priority, especially the construction of the New Silk Road Economic Belt. President XI has made that Silk Road project the cornerstone of his presidential term. In the meeting of Xi on May 8 in Moscow with Russian President Putin, the two presidents signed a joint declaration “on cooperation in coordinating development of EEU and the Silk Road Economic Belt,” with both declaring their goal to coordinate the two projects in order to build a “common economic space” in Eurasia, including a Free Trade Agreement between the EEU and China. Chinese Foreign Minister Wang Yi recently stated that the trade turnover between China and Russia is likely to reach $100 billion in 2015. The future prospects, with construction of the network of high-speed railways, is staggering.
Markets, all markets, are man-made, products of deliberate or not so deliberate decisions of individuals and usually of governments. The creation of what could become a multi-trillion dollar economic space spanning the vast Eurasian land is moving forward in a beautiful way. The China-Russia agriculture land leasing is a sign that Russia is opening a new qualitative phase in these developments.
In the world of mathematics win-win is referred to as a “non-zero sum game” in which there is typically a matrix of multiple payouts for all participants. That seems to be emerging across the vast Eurasian expanse far faster than anyone could have imagined even two years ago.
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Secret document reveals plans for civil war in Lebanon, Israeli false flags, and invasion
By Randi Nord | Geopolitics Alert | April 5, 2019
Beirut – During his visit with US Secretary of State, Mike Pompeo, Lebanese President Michael Aoun reportedly received a US-Israeli document detailing plans for creating a civil war in Lebanon with covert false flag operations and possible Israeli invasion.
Although the source of the document is Israeli and created in partnership with Washington, no one knows who presented it to Aoun. The Lebanese TV station, Al-Jadeed, initially reported the document on Lebanese TV and a video on its website. Geopolitics Alert translated the report for this article. … continue
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- New Study: Antarctic Ice Melt Has Contributed Less Than 1 Centimeter To Sea Level Rise In The Last 30 Years
