Memo to Greece: Make War Not Love with Goldman Sachs
By Marshall Auerback and Randall Wray | Roosevelt Institute | May 2011
In recent weeks, there has been much discussion about what to do about Greece. These questions become all the more relevant as the country attempts to float a multibillion-euro bond issue later this week. The Financial Times has called this fund-raising a critical test of Greece’s credibility in financial markets as it battles with a spiraling debt crisis and strikes. The “credibility” of the financial markets is an important consideration in a country which has functionally ceded its sovereign ability to create currency, and thus remains dependent on the vagaries of the very banking institutions which helped create the mess in the first place.
Maybe Greece should secede from the European Union and default on its euro debt? Or go hat-in-hand to the International Monetary Fund (IMF) to beg for loans while promising to clean up its act? Or to the stronger Euro nations, hoping for charitable acts of forgiveness? Unfortunately, all of these options are going to mean a lot of pain and suffering for an economy that is already sinking rapidly.
And it is questionable whether any of them provide long term viable answers. Polls show that given the perception of fiscal excesses of Greece and the other countries on the periphery, the public in Germany opposes a bailout of these countries at its expense by a significant margin. Periphery countries such as Ireland that have already undertaken harsh austerity measures also oppose the notion of a bailout, despite-nay, because of — the tremendous pain already inflicted on their own respective economies (in Ireland’s case, the banks are probably insolvent as well). The IMF route is also problematic, given that Greece probably doesn’t qualify under normal IMF standards, and many euro zone nations would find this unpalatable from an ideological standpoint, as it would mean ceding control of EU macro policy to an external international institution with strong US influence.
The Wall Street Journal recently highlighted an article by Simon Johnson and Peter Boone, lamenting that the demands being foisted on Greece and other struggling Euronations would “massively curtail demand, lower wages and reduce the public sector workforce. The last time we saw this kind of precipitate fiscal austerity — when nations were tied to the gold standard — it contributed to the onset of the Great Depression in the 1930s”. Where we disagree with Johnson and Boone is the suggestion that the IMF be brought in to craft a solution. Any help from this organization will come with tight strings attached — indeed, with a noose around Greece’s neck. Germany and France would be crazy to commit their scarce euros to a bail-out of Greece since they face both internal threats from their own taxpayers and external threats from financial vampires who are looking for yet another nation to attack.
Here’s a more appropriate action: declare war on Goldman Sachs and other global financial firms that created this mess. Send the troops, the planes, the tanks, and the ships. Attack every outpost of the saboteurs on European soil. Blockade the airports and ports. Make Wall Street traders and CEOs fear for their lives, or at least for their freedom to travel. Build some Guantanamo-like facility to hold these enemy financial combatants until they can be tried, convicted, and properly punished.
OK, if a literal armed attack on Goldman is too far-fetched, then go after the firm using the full force of the regulatory and legal systems. Close the offices and go through the files with a fine-tooth comb. Issue subpoenas to all non-clerical staff for court appearances. Make the internal emails public. Post the names of all managers and traders on Interpol. Arrest anyone who tries to board a plane, train, or boat; confiscate their passports; revoke their visas and work permits; and put a hold on their bank accounts until culpability can be assessed. Make life at least as miserable for them as it now is for Europe’s tens of millions of unemployed workers.
We know that the Obama administration will not go after the banksters that created this global financial calamity. It has been thoroughly co-opted by Wall Street’s fifth column-who hold most of the important posts in the administration. Europe has even more at stake and has shown somewhat more willingness to take action. Perhaps our only hope for retribution lies there.
Some might believe the term “banksters” is too mean. Surely Wall Street was just doing its job-providing the financial services wanted by the world. Yes, it all turned out a tad unfortunate but no one could have foreseen that so many of the financial innovations would turn into black swans. And hasn’t Wall Street learned its lesson and changed its practices? Fat chance. We know from internal emails that everyone on Wall Street saw this coming-indeed, they sold trash assets and placed bets that they would crater. The crisis was not a mistake-it was the foregone conclusion. The FBI warned of an epidemic of fraud back in 2004-with 80% of the fraud on the part of lenders. As Bill Black has been warning since the days of the Saving and Loan crisis, the most devastating kind of fraud is the “control fraud”, perpetrated by the financial institution’s management. Wall Street is, and was, run by control frauds. Not only were they busy defrauding the borrowers, like Greece, but they were simultaneously defrauding the owners of the firms they ran. Now add to that list the taxpayers that bailed out the firms. And Goldman is front and center when it comes to bad apples.
Lest anyone believe that Goldman’s executives were somehow unaware of bad deals done by rogue traders, William Cohan reports that top management unloaded their Goldman stocks in March 2008 when Bear crashed, and again when Lehman collapsed in September 2008. Why? Quite simple: they knew the firm was full of toxic waste that it would not be able to continue to unload on suckers-and the only protection it had came from AIG, which it knew to be a bad counter-party. Hence on March 19, Jack Levy (co-chair of M&As) sold over $5 million of Goldman’s stock and bet against 60,000 more shares; Gerald Corrigan (former head of the NY Fed who was rewarded for that tenure with a position as managing director of Goldman) sold 15,000 shares in March; Jon Winkelried (Goldman’s co-president) sold 20,000 shares. After the Lehman fiasco, Levy sold over $6 million of Goldman shares and Masanori Mochida (head of Goldman in Japan) sold $56 million worth. The bloodletting by top management only stopped when Goldman got Geithner’s NYFed to produce a bail-out for AIG, which of course turned around and funneled government money to Goldman. With the government rescue, the control frauds decided it was safe to stop betting against their firm. So much for the “savvy businessmen” that President Obama believes to be in charge of Wall Street firms like Goldman.
From 2001 through November 2009 (note the date-a full year after Lehman) Goldman created financial instruments to hide European government debt, for example through currency trades or by pushing debt into the future. But not only did Goldman and other financial firms help and encourage Greece to take on more debt, they also brokered credit default swaps on Greece’s debt-making income on bets that Greece would default. No doubt they also took positions as the financial conditions deteriorated-betting on default and driving up CDS spreads.
But it gets even worse: An article by the German newspaper, Handelsblatt, (”Die Fieberkurve der griechischen Schuldenkrise”, Feb. 20, 2010) strongly indicates that AIG, everybody’s favorite poster boy for financial deviancy, may have been the party which sold the credit default swaps on Greece (English translation here).
Generally, speaking, these CDSs lead to credit downgrades by ratings agencies, which drive spreads higher. In other words, Wall Street, led here by Goldman and AIG, helped to create the debt, then helped to create the hysteria about possible defaults. As CDS prices rise and Greece’s credit rating collapses, the interest rate it must pay on bonds rises-fueling a death spiral because it cannot cut spending or raise taxes sufficiently to reduce its deficit.
Having been bailed out by the Obama Administration, Wall Street firms are already eying other victims (and for allowing these kinds of activities to continue, the US Treasury remains indirectly complicit, another good reason why one shouldn’t expect any action coming out of Washington). Since the economic collapse is causing all Euronations to run larger budget deficits and at the same time is raising CDS prices and interest rates, it is easy to pick off nation after nation. This will not stop with Greece, so it is in the interest of Euroland to stop the vampires now.
With Washington unlikely to do anything to constrain Goldman, it looks like the European Union, which is launching a major audit, just might banish the bank from dealing in government debt. The problem is that CDS markets are essentially unregulated so such a ban will not prevent Wall Street from bringing down more countries-because they do not have to hold debt in order to bet against it using CDSs. These kinds of derivatives have already brought down an entire continent — Asia — in the late 1990s , and yet authorities are still standing by and basically doing nothing when CDSs are being used again to speculatively attack Euroland. The absence of sanctions last year, when we had a chance to deal with this problem once and for all, has simply induced even more outrageous and fundamentally anti-social behavior. It has pitted neighbor against neighbor-with, for example, Germany and Greece lobbing insults at one another (Greece has requested reparations for WWII damages; Germany has complained about subsidizing what it perceives to be excessive social spending in Greece).
Of course, as far as Greece goes, the claim now is that these types of off balance sheet transactions in which Goldman and others engaged were not strictly “illegal” under EU law. But these are precisely the kinds of “shadow banking transactions” that almost brought down the global financial system 18 months ago. Literally a year after the Lehman bankruptcy — MONTHS after Goldman itself was saved from total ruin, it was again engaging in these kinds of deals.
And it wasn’t exactly a low-level functionary or “rogue trader” who was carrying out these transactions on behalf of Goldman. Gary Cohn is Lloyd “We’re doing God’s work” Blankfein’s number 2 man. So it’s hard to believe that St. Lloyd did not sanction the activities as well in advance of collecting his “modest” $9m bonus for last year’s work.
If these are examples of Obama’s “savvy businessmen“, then heaven help the global economy. The transaction highlighted, if reported that way in the private sector, would be accounting fraud. Fraud – “Go to jail, do not pass Go” fraud. That senior bankers had no problem in structuring/recommending/selling such deals to cash-strapped governments should probably not surprise us at this point. However, it would be interesting to know if the prop trading desks of those same investment banks, purely by coincidence of course, then took long CDS (short the credit) positions in the credit of the countries doing the hidden swaps. A proper legal investigation by the EU could reveal this and certainly help to uncover much of the financial chicanery which has done so much destruction to the global economy over the past several years.
In this country, we have had a “war on terror” and a “war on drugs” and yet we refuse to declare war on these financial weapons of mass destruction. We all remember Jimmy Carter’s “MEOW”-the attempt to attack creeping inflation that was said to sap the strength of the US economy in the late 1970s. But Europe-and indeed the entire globe-faces a much more dangerous and immediate threat from Wall Street’s banksters. They created this mess and are not only profiting from it, but are actively preventing recovery. They are causing unemployment, starvation, destruction of lives, and even violence and terrorism across the world. They are certainly more dangerous than the inflation of the 1970s, and arguably have disrupted more lives than Osama bin Laden-whose actions led the US to undertake military actions in at least three countries. That should provide ample justification for Greece’s declaration of figurative war on Manhattan.
However, in an ironic twist of fate, it was just announced that Petros Christodoulou will take over as the head of Greece’s national debt management agency. He worked as the head of derivatives at JP Morgan, and also previously worked at Goldman-the firm that got Greece into all this trouble!
Dimitri Papadimitriou has recently made what we consider to be an important plea for moderation of the hysteria about Greece’s debt. Writing in the Financial Times, he complained that “The plethora of articles in your pages and others, some arguing in favour and other against a bail-out, contribute to market confusion and drive the country’s financing costs to record levels. It is not yet clear that a bail-out is even needed, but this market confusion is rendering the government’s ability to achieve its deficit goals ever more difficult.”
Indeed, we suspect that the same financial firms that helped to get Greece into its predicament are profiting from — and stoking the fires of — the hysteria. He goes on, “what Greece really needs now is a holiday from further market confusion being created by contradictory, alarmist public commentary”.
Greece, Euroland in general, and the rest of the world all need a holiday from the manipulation and destruction of our economies by Wall Street firms that profit from speculative bubbles, from burying firms, households, and governments under mountains and debt, and even from the crises that they create. Governments all over the globe should use all legal means at their disposal to ferret out the bad faith and even fraudulent deals that global financial behemoths are foisting on us.
Roosevelt Institute Braintruster Marshall Auerback is a market analyst and commentator.
L. Randall Wray is Professor of Economics at the University of Missouri-Kansas City.
The Problem of Greece is not Only a Tragedy: It is a Lie
By John Pilger | CounterPunch | July 13, 2015
An historic betrayal has consumed Greece. Having set aside the mandate of the Greek electorate, the Syriza government has willfully ignored last week’s landslide “No” vote and secretly agreed a raft of repressive, impoverishing measures in return for a “bailout” that means sinister foreign control and a warning to the world.
Prime Minister Alexis Tsipras has pushed through parliament a proposal to cut at least 13 billion euros from the public purse – 4 billion euros more than the “austerity” figure rejected overwhelmingly by the majority of the Greek population in a referendum on 5 July.
These reportedly include a 50 per cent increase in the cost of healthcare for pensioners, almost 40 per cent of whom live in poverty; deep cuts in public sector wages; the complete privatization of public facilities such as airports and ports; a rise in value added tax to 23 per cent, now applied to the Greek islands where people struggle to eke out a living. There is more to come.
“Anti-austerity party sweeps to stunning victory”, declared a Guardian headline on January 25. “Radical leftists” the paper called Tsipras and his impressively-educated comrades. They wore open neck shirts, and the finance minister rode a motorbike and was described as a “rock star of economics”. It was a façade. They were not radical in any sense of that cliched label, neither were they “anti austerity”.
For six months Tsipras and the recently discarded finance minister, Yanis Varoufakis, shuttled between Athens and Brussels, Berlin and the other centres of European money power. Instead of social justice for Greece, they achieved a new indebtedness, a deeper impoverishment that would merely replace a systemic rottenness based on the theft of tax revenue by the Greek super-wealthy – in accordance with European “neo-liberal” values — and cheap, highly profitable loans from those now seeking Greece’s scalp.
Greece’s debt, reports an audit by the Greek parliament, “is illegal, illegitimate and odious”. Proportionally, it is less than 30 per cent that of the debit of Germany, its major creditor. It is less than the debt of European banks whose “bailout” in 2007-8 was barely controversial and unpunished.
For a small country such as Greece, the euro is a colonial currency: a tether to a capitalist ideology so extreme that even the Pope pronounces it “intolerable” and “the dung of the devil”. The euro is to Greece what the US dollar is to remote territories in the Pacific, whose poverty and servility is guaranteed by their dependency.
In their travels to the court of the mighty in Brussels and Berlin, Tsipras and Varoufakis presented themselves neither as radicals nor “leftists” nor even honest social democrats, but as two slightly upstart supplicants in their pleas and demands. Without underestimating the hostility they faced, it is fair to say they displayed no political courage. More than once, the Greek people found out about their “secret austerity plans” in leaks to the media: such as a 30 June letter published in the Financial Times, in which Tsipras promised the heads of the EU, the European Central Bank and the IMF to accept their basic, most vicious demands – which he has now accepted.
When the Greek electorate voted “no” on 5 July to this very kind of rotten deal, Tsipras said, “Come Monday and the Greek government will be at the negotiating table after the referendum with better terms for the Greek people”. Greeks had not voted for “better terms”. They had voted for justice and for sovereignty, as they had done on January 25.
The day after the January election a truly democratic and, yes, radical government would have stopped every euro leaving the country, repudiated the “illegal and odious” debt – as Argentina did successfully — and expedited a plan to leave the crippling Eurozone. But there was no plan. There was only a willingness to be “at the table” seeking “better terms”.
The true nature of Syriza has been seldom examined and explained. To the foreign media it is no more than “leftist” or “far left” or “hardline” – the usual misleading spray. Some of Syriza’s international supporters have reached, at times, levels of cheer leading reminiscent of the rise of Barack Obama. Few have asked: Who are these “radicals”? What do they believe in?
In 2013, Yanis Varoufakis wrote: “Should we welcome this crisis of European capitalism as an opportunity to replace it with a better system? Or should we be so worried about it as to embark upon a campaign for stabilising capitalism? To me, the answer is clear. Europe’s crisis is far less likely to give birth to a better alternative to capitalism …
“I bow to the criticism that I have campaigned on an agenda founded on the assumption that the left was, and remains, squarely defeated …. Yes, I would love to put forward [a] radical agenda. But, no, I am not prepared to commit the [error of the British Labour Party following Thatcher’s victory].
“What good did we achieve in Britain in the early 1980s by promoting an agenda of socialist change that British society scorned while falling headlong into Thatcher’s neoliberal trip? Precisely none. What good will it do today to call for a dismantling of the Eurozone, of the European Union itself …?”
Varoufakis omits all mention of the Social Democratic Party that split the Labour vote and led to Blairism. In suggesting people in Britain “scorned socialist change” – when they were given no real opportunity to bring about that change – he echoes Blair.
The leaders of Syriza are revolutionaries of a kind – but their revolution is the perverse, familiar appropriation of social democratic and parliamentary movements by liberals groomed to comply with neo-liberal drivel and a social engineering whose authentic face is that of Wolfgang Schauble, Germany’s finance minister, an imperial thug. Like the Labour Party in Britain and its equivalents among former social democratic parties such as the Labor Party in Australia, still describing themselves as “liberal” or even “left”, Syriza is the product of an affluent, highly privileged, educated middle class, “schooled in postmodernism”, as Alex Lantier wrote.
For them, class is the unmentionable, let alone an enduring struggle, regardless of the reality of the lives of most human beings. Syriza’s luminaries are well-groomed; they lead not the resistance that ordinary people crave, as the Greek electorate has so bravely demonstrated, but “better terms” of a venal status quo that corrals and punishes the poor. When merged with “identity politics” and its insidious distractions, the consequence is not resistance, but subservience. “Mainstream” political life in Britain exemplifies this.
This is not inevitable, a done deal, if we wake up from the long, postmodern coma and reject the myths and deceptions of those who claim to represent us, and fight.
UNSC Resolution on MH17 Tribunal is Untimely, Irrational – German Lawmaker
By Alexander Mosesov – Sputnik – 11.07.2015
On Friday, a source in the UN Security Council told RIA Novosti that a Malaysian proposal to create a tribunal into the crash eastern Ukraine in 2014 will be discussed next week.
The draft UN Security Council resolution on establishing an international tribunal for those who downed Malaysia Airlines flight MH17 last year in Ukraine is ill-timed, since the Netherlands has not completed its official investigation, a member of the German Bundestag Defense Committee told Sputnik.
Russia’s Permanent Representative to the United Nations Vitaly Churkin said earlier this week that the draft resolution fails to correctly classify the crash, adding that international tribunals have never been created following civilian aircraft crashes.
“I think it makes sense to wait with the tribunal until the investigation is done,” Alexander Neu, the member of the German parliament from the left-wing Die Linke party said.
He stressed that “a parallel process [to the investigation] does not make any sense.”
On July 17, 2014, flight MH17 was en route to Kuala Lumpur from Amsterdam when it crashed in southeastern Ukraine. All 298 people on board the aircraft died.
Independence supporters in southeastern Ukraine and Kiev forces, engaged in fighting in the region, accused each other of causing the tragedy.
According to a September 2014 preliminary report by the Dutch Safety Board, MH17 broke up in the air after being hit by multiple “high-energy” objects from outside the airframe. The final report is due in October.
Will Greece’s Tsipras Squander Precious Capital?
By Finian Cunningham – Sputnik – 09.07.2015
When Greece resoundingly rejected economic austerity last week, Prime Minister Alexis Tsipras and his government were given a wealth of political capital.
For the second time, including the election of Tsipras’ Syriza party six months ago, the Greek people spoke out democratically – unequivocally and irrefutably – no more austerity and debt slavery.What do the European Union leadership and the Troika of creditors not understand about the word “No”? The Greek people have spoken — twice en masse — that they no longer want to endure imposed poverty in order to bailout the financial oligarchy, both within their own country and in Europe generally. Enough is enough of the prevailing kleptocracy of the creditors under the cynical guise of “financial probity”.
The Greek people have every moral and legal right to repudiate the gargantuan racket of piling up astronomical debt in their name, the proceeds of which go to the financial aristocracy, leaving the people to pick up the bill in the form of generations of enforced immiseration.
This week, Greek premier Alexis Tsipras gave a defiant-sounding speech to the European parliament in Strasbourg. He was greeted with cheers from many parliamentarians, and also jeers from opponents. It was the first occasion for Tsipras to speak publicly in Europe since the historic Greek referendum on July 5. He called for an end to the “austerity laboratory” that his country has been subjected to over the past five years. He hit out at the financial oligarchy in Europe which has plunged all of the EU countries into ruin.
Tsipras also denounced previous corrupt Greek governments, which in cahoots with the European creditors, have saddled the ordinary citizens with some $320 billion debt. He called for social justice and noted that the richest 10 per cent of Greece’s population owns over 50 per cent of the country’s total wealth yet they don’t pay any tax to support society. Tsipras said, with sound reason, that what is known as the “Greek crisis” is actually a “European crisis” requiring a “European solution”.
So far, so good. Then came that sinking feeling. While Tsipras was giving his bravura speech in Strasbourg news emerged that his newly appointed finance minister, Euclid Tsakalotos, had submitted Greek government plans for a new three-year financial bailout from the EU creditors. The new plans include commitments to implement economic reforms on pensions and taxes. That sounds ominously like the Syriza government is preparing to meet the creditors’ demands for more austerity, or what we might call “austerity-lite”.
In the coming days, Athens is to reveal the full details of its “reforms” which will be assessed by the leaders of the EU 28 member states at a summit on Sunday. If the reforms do not go far enough to satisfy demands led by Germany and the Brussels bureaucratic elite, then the latter has allegedly drawn up plans for Greece to be expelled from the euro monetary system — the so-called Grexit.
In other words, it appears that Tsipras and his Syriza government are readying to cave in to ultimatums for more austerity to be imposed on the already devastated Greek population.Such a capitulation runs in the face of Tsipras’ own logic which he eloquently spelled out to the Strasbourg parliament. Austerity is a demonstratively failed policy, he said. It has crippled the Greek economy and has only resulted in ever-more increasing, un-payable debt.
To engage in any further austerity is also reneging on the democratic mandate that the Greek people have bestowed on its government. The people have trenchantly expressed their position — no more austerity and dictate from the EU’s creditors. This position was also supposed to be a “red line” for Tsipras and his government. So how can he contemplate crossing it — and especially after the landslide referendum result last week?
The Syriza government — and not for the first time — appears to be placing its faith in hatching a deal with the banker-dominated EU leadership. It seems willing to repeat the fatal mistakes of past Greek governments by “extending and pretending” a dubious financial bailout for the country in return for “reforms” — which is just a euphemism for more punitive measures on workers’ wages, social security for the unemployed and entitlements for the elderly. We may be sure that the proffered “tax reforms” do not include long-overdue demands on Greece’s wealthy to pay their fair share. Such measures have already been rejected by the EU creditors and the IMF.
Even before the referendum, Syriza was signalling that it was ready to accept, at least in part, the creditors’ dictates. And within hours of the historic vote, Tsipras asked his then finance minister Yanis Varoufakis to resign because Germany and other hardline creditors did not want Varoufakis back at the negotiating table.
That in itself was an extraordinary capitulation to anti-democratic dictate from Berlin and its banker lackeys.
What the Syriza government should be doing is obeying their democratic mandate by placing its faith in the Greek people, not the Brussels bureaucrats and governments who are serving the financial oligarchy.
The Athens government should also rely on the immense solidarity and political strength afforded by the mass of European citizens who support the anti-austerity cause. Syriza could form a formidable anti-austerity, anti-debt bloc with Spain’s Podemos, Germany’s Left Party, Ireland’s Sinn Fein and other leftwing parties across Europe.
Tsipras and his party leadership do not seem to realise that they are the ones who hold the winning cards, not the discredited Brussels elite. By threatening to leave the euro system on the principled stand of repudiating austerity and defaulting on unethical debts, the Tsipras government wields enormous power against the banker oligarchs and their politician-puppets.
Greece has the power to bring to its knees the corrupt anti-democratic cabal and their bankrupt neoliberal capitalism that has hijacked the entire EU bloc. And to then build a more democratic EU from the people, from the bottom up; to build a Europe where democracy, citizens and workers are at last able to exert the proper control over economic and financial resources.Why do you think US President Barack Obama has this week urged Germany’s Angela Merkel to try to keep Greece within the eurozone orthodoxy? Washington is worried that the rotten EU status quo and its NATO alliance could collapse if genuine European democracy were to resurrect from debt slavery, led by Greece.
The haughty, arrogant EU financial tyrants and their political puppets, like Germany’s finance minister Wolfgang Schauble and the unelected arch-bureaucrats Jean-Claude Juncker and Donald Tusk, are prone to lecture Greece about how it has squandered capital down through the years. The feckless, lazy Greeks now have to pay up, so they imply. Yes, Greece did squander capital, it is true, but on the Greek oligarchs who stashed their money in offshore havens and in European banks. The argument that Greek people indulged in reckless spending is an odious myth to justify debt slavery.
However, what appears now to be bitterly ironic is that Alexis Tsipras and his government are about to squander a much more precious capital — the political capital that the Greek people and other ordinary citizens across Europe have invested in them — to stand up for democratic rights and to strike a decisive blow against debt slavery.
Ukraine Puts 345 State Firms Up For Sale
Sputnik – 10.07.2015
Ukrainian Economic Development Minister Aivaras Abromavicius clarified exactly how many state companies would be offered up for sale to US and European investors at the upcoming Ukrainian-American investment conference in Washington D.C on Monday, stating that 345 state-run firms would be put on offer to the highest bidder.
Speaking before reporters on Thursday, Abromavicius noted that the 345 firms offered for sale “will be included in the first wave of privatizations,” which he earlier confirmed would begin in the fourth quarter of this year.
Kiev’s effort is ostensibly aimed at raising billions of dollars for the country’s cash-strapped budget, as the economy, hit by a decline in trade with Russia, financial panic, and civil war, lies in tatters and on the verge of default.
Companies on the docket include the electricity generation firm Tsentrenergo and six of its regional distributors, gas transportation companies, the Odessa Port Plant, mining operations and agricultural holdings, which together are projected to bring 17 billion hryvnia (about $790 million) into the country’s coffers.
Earlier this year, Ukrainian officials held similar conferences in Washington, Berlin and Paris. As late as last month, Prime Minister Arseniy Yatsenyuk met with Ukrainian-Americans in Washington, telling them that his government wants “to see American owners on the territory of Ukraine,” stating that “they will bring not only investment, but also new standards, new ways of managing the companies, and a new investment culture.”
But with the IMF (conservatively) projecting a 9 percent decline in Ukraine’s GDP in 2015, with inflation hitting nearly 50 percent and the country approaching debt levels amounting to 100 percent of GDP, analysts warn that the present may be the worst possible time for Kiev to sell off its large, state-owned firms. The country’s economic decline, political instability and the war in the east have hit property values hard, which means that Kiev is unlikely to collect significant sums for the large, valuable, strategic assets offered up for sale.
Analysts also suggest that Western investors will have little appetite for the purchase of the unwieldy, heavily-indebted state firms, many operating at a loss since the collapse of the Soviet Union, noting that the most profitable companies were already bought up in crooked schemes by the country’s oligarchs a long time ago. In this connection, AFP recently reported that Rada MPs connected with the country’s oligarchic clans are likely to use their influence to prevent the sale of the profitable state assets under oligarchs’ influence. Moreover, Frankfurter Allgemeine Zeitung columnist Konrad Schuller recently poured cold water on the entire privatization initiative, noting that in an environment of speedy, murky, clan-dominated privatization, Western investors will have no time to assess whether the state companies offered up for sale are truly lucrative or not.
Furthermore, while Yatsenyuk recently announced that over 150 major investors have already RSVP’d to attend the Washington conference, he has already been hit by dissension from within his own cabinet, with officials from the Energy Ministry and the State Property Fund challenging the pace and scale of privatization.
In April of this year, Ukraine agreed to an International Monetary Fund-monitored austerity program, which called for the shedding of 24,000 government jobs, higher taxes, privatization of state assets and the withdrawal of subsidies on utilities in exchange for a total of about $40 billion in IMF-led foreign assistance over the coming four years.
Lessons from Libya’s Destruction
Tortilla Con Sal | July 9, 2015
Later this month the outcome is expected of the completely unjust and incompetent show trials held in Libya over the last year or so of around 200 former officials of the Libyan Jamahiriya. If that outcome is reported at all in North American and European media, its real meaning will be completely hidden in self-serving apologetics for NATO’s destruction of Libya in 2011.
The same psy-warfare framework that justified NATO’s campaign of terrorist aggression will falsely present the show trials’ outcome as rough justice dealt out to individuals who deserve no better.
That outcome should put on high alert anyone defending the countries of the Bolivarian Alliance of the Americas against very similar psychological warfare and terrorist subversion supported by NATO governments of the US and its allies. Not for nothing did Hugo Chávez and Daniel Ortega speak out in defense of Muammar al Gaddhafi and Libya against NATO’s terrorist war. They had already learned long ago the very same lessons to have emerged more recently from the utterly depressing human, moral and political catastrophe of Libya’s destruction.
In 2013, a study by a distinguished Harvard University academic acknowledged that the failure in Libya of the US government’s ostensible avowed policy in Libya and in North and West Africa was based on serial falsehoods. That fact-based, acerbic policy criticism from a source generally supportive of US government foreign policy should give much pause for thought. Along with support for Libya from outstanding revolutionary leaders like Ortega, Chavez and Nelson Mandela it amounts to a categorical indictment of received Western opinion about Libya which, across virtually the entire Western political spectrum, sided either openly or indirectly with NATO’s 2011 war.
No one genuinely concerned to defend progress towards an equitable, peaceful multi-polar world based on mutual respect between sovereign, autonomous nations and peoples should underestimate or forget the horror of what NATO did to Libya. Tens of thousands were killed and wounded in attacks by the bombers and helicopters of many NATO countries. Millions were displaced or forced into exile. Cities like Sirte and Bani Walid were devastated. Schools, universities, hospitals, factories producing food products and other essential civilian infrastructure were targeted and severely damaged or destroyed.
The destruction of Libya marked the categorical abandonment of whatever vestigial moral authority may still have remained to the European Union and its member governments.
It demonstrated in the most humiliating way the impotence and irrelevance of the African Union.
It put hard questions about the anti-imperialism of the Iranian and Syrian governments as well as highlighting the race supremacism of the governments of the Arab League and the already damaged integrity of the Palestinian authorities.
Almost all of them quickly recognized the overtly racist renegade Libyan CNT junta. For their part, the then governments of Russia and China weakly accepted NATO country assurances about the defensive nature of the air exclusion zone.
The only governments to emerge with any real credit from the destruction of Libya were the governments of the ALBA countries and a few African governments like Zimbabwe.
Countries like Cuba, Venezuela, Argentina, Nicaragua, Bolivia and Ecuador have all been victims of comprehensive disinformation campaigns of demonization and caricature, although perhaps not so extreme as the final campaign against Libya’s Jamahiriya and Muammar al Gaddhafi.
It is worth considering the basic component of that disinformation war against Libya. What is sometimes called 4th generation warfare is as old as warfare itself. Like Athens versus Sparta, or Rome versus Carthage the fundamental objective of NATO governments and their allies is to make their chosen target seem Other, creating a despised, outcast doppelganger anti-image of the West’s own phony self-image.
So Libya’s Jamahiriya was tagged as undemocratic by hypocritical Western governments, most of whom came to power with around just 20% to 25% of the vote of their electorates, thanks overwhelmingly to elite corporate funding. Libya’s democratic process was one that recognized its society’s contradictions and attempted continual self-renewal.
By contrast, the Western corporate oligarchies offer virtually meaningless periodic elections obfuscated by public relations and organized on a yes-or-yes basis to favor politicians groomed and bankrolled by their countries’ anti-democratic elites. Muammar al Ghaddafi was labeled a dictator even though his policy initiatives were not infrequently rejected within Libya’s system of popular congresses.
In 2009, during a policy conflict between Muammar al Gaddhafi and pro-Western so-called reformers, these could not get their way in Libya’s popular assemblies so they chose staging a violent putsch to achieve the regime change their Western government backers wanted. Venezuela’s experience has been almost identical, although, to date, the country has avoided the kind of coup d’état and subsequent NATO driven war that destroyed Libya Libya was portrayed as a systematic human rights violator.
But Libya’s response to the constant terrorist attacks and subversion it suffered from the very start of its Revolution in 1969 was no different to that of any Western government faced with a similar threat. The British government tortured and murdered alleged subversives all through the Irish war, colluding with sectarian paramilitary death squads. The same pattern of torture and extrajudicial murder also consistently marked the Spanish authorities’ campaign against Basque separatists. Guantanamo’s torture camp symbolizes the brutality and illegality of the US government’s response to terrorist threats.
Libya’s Jamahiriya probably conformed as closely to international human rights norms in relation to fighting terrorism as the three Western governments that led NATO’s war of destruction. Human rights protection in Libya was certainly superior to Western allies like Turkey, Egypt, Israel, Saudi Arabia, Qatar or the other quasi-feudal Gulf State tyrannies.
All the pretexts for the Western assault on Libya’s legitimate government were completely bogus. In any case, as Gerald Perreira points out, the fundamental objective achieved by the destruction of Libya was to shut down the decisive impetus towards African integration led by Muammar al Gaddhafi.
CNT leaders like Mustafa Abdul Jalil were Arab supremacists who fiercely resisted the Pan-African policies advocated by Muammar al Gaddhafi. Arab supremacism, phony neoliberal reformism and the treachery of repressive human rights abusers like Mahmoud Jibril made a lethal reactionary cocktail perfectly suited to ruthless NATO government manipulation. On cue, Western corporate and alternative media presented the corrupt political project of these viciously reactionary elements as a “revolution”, part of the absurdly hyped “Arab Spring”. As if NATO country governments, dedicated to the service of their countries’ corporate elites, have ever promoted genuine democracy or comprehensive human rights around the world.
From Ukraine and Greece, to Yemen and Syria, to Haiti and Honduras, what the Western powers and their allies want is access to natural resources, control of strategically important territories and decisive advantages for their trade and finance. Destroying Libya effectively removed a real threat to Western control and domination in Africa.
Currently, the NATO country elites’ political sales staff, for the moment President Obama, Prime Minister Cameron, President Hollande and Chancellor Merkel, are battering Greece into submission. But those leaders and their allies are using economic and psychological warfare to attack many other targets, not just Greece. They do so against Venezuela and other stubbornly independent countries around the world.
That is why the leaders of Argentina, Cuba, Ecuador, Nicaragua and Venezuela very publicly welcomed the No vote in the Greek referendum. Unlike Libya, in their different regions Syria and Venezuela are part of regional alliances backed at long last by firm leaders in Russia and China, strong enough to face down any likely economic or military threat from the United States and its allies.
But it would be a mistake to forget Libya. Defending the people of Libya represents an important self-defense measure against Western predators in their global psychological warfare assault on the free, anti-imperialist world.
As a leading force in that free world, ALBA country governments should urgently consider challenging the governments of North America and Europe to protect the thousands of political prisoners in Libya who have been tortured and denied due process.
The ALBA country governments and their allies have infinitely more moral and political authority than Western leaders to speak out in defense of fundamental human rights. They should make outspoken use of that authority now to expose the sadism and hypocrisy of Western governments in Libya, Syria, Yemen and elsewhere.
In Libya, they may perhaps yet help to save the lives of as many as 200 former officials of the Libyan Jamahiriya at risk from quasi-judicial murder by the West’s corrupt terrorist proxies in a country they have devastated with merciless cynicism.
Palm Oil Industry Tied to Ecocide in Guatemalan River
By Jeff Abbott | Upside Down World | July 6, 2015
The Pasión River in northern Guatemala is a disaster area. Beginning on June 6, residents along the river in the municipality of Sayaxché, Peten, began to find millions of fish, their primary source of food and income, floating dead in the river. Community members quickly accused the Palm firm, Reforestadora de Palma del Peten, S.A (REPSA) of contaminating the river. Communities have called the pollution of their river an “ecocide.”
“Unfortunately, there has been a massive pollution of our river,” said Rigoberto Lima, a community representative from Sayaxché. “We need to put an end to the problem of palm in northern Guatemala.”
The Public Ministry of Guatemala initially declared a red alert on June 11; days after the fish first began to appear floating in the river. The Public Ministry initially confirmed that the disaster was caused by run off of the pesticide Malathion into the river, but in the weeks after, they would take back the accusations against the palm company.
However, these accusations were supported by a toxicological study preformed by University of San Carlos, which found elevated levels of the pesticide, and other agro-chemicals in the river. The report determined that the local palm industry was responsible for the contamination.
The contamination affects 106 kilometers of river, and 65 communities. These poor communities have all been forced to rely more and more on the river for their sustenance because of the expansion of palm in the region.
Communities have called on the government to perform an investigation into the pollution of the river.
Late in the evening of June 23, nearly 45 members of communities along the Pasión River arrived to Guatemala City to denounce the pollution of their river. Following a late afternoon press conference, the community members began a sit-in outside the offices of the Presidential Commission Against Discrimination and Racism in Guatemala City to condemn and repudiate the contamination of their river by the palm company. They also demanded that the company be temporarily shut down for threatening life, and that they be allowed to be involved in the investigation of what occurred in Pasión River in order to ensure transparency.
The following day, members of the Public Ministry visited the encampment. Community members expressed frustration at being treated with disrespect and contempt by the state and the firm.
Denial of Responsibility
On June 17, the company, the mayor of Sayaxché, and community members gathered in Guatemala City to sign a document stating that the company “was not responsible for the death of the fish,” and that there “was no ecocide.” In exchange for the signing of the document, the company agreed to provide the communities with water, the improvement of town streets, and the construction of wells.
The document also states that the company is committed to taking better care of the river, but they stress, “They are not the cause of the killing of fish.”
REPSA is a subsidiary of the powerful Grupo Olmeca, Guatemala’s largest palm oil producer, which is owned by the powerful Molina family. The conglomerate was the first to begin the production of African palm in the late 1980s, and today cultivates nearly 46,000 hectares of land in Escuintla, Ocós in San Marcos, and Coatepeque in Quetzaltenango, and Sayaxché.
Those affected by the pollution do not agree with this declaration.
Continuous Pollution
This isn’t the first time that communities in Guatemala have accused the palm industry of polluting their rivers.
Communities in the Municipality Chisec, Alta Verapaz filled a complaint in the Guatemalan Public Ministry against the Ixcan Palm Company in 2013, for the contamination of their river. The following year, communities in Peten also filed a complaint in the Public Ministry against the pollution of their river. In both cases, the Pubic Ministry failed to investigate the contamination.
“This is not the first time that the fish have died in our rivers,” said Margarita, a representative from the Organization of Women of Alta Verpaz. “In 2013, there was massive death of fish in the rivers of northern Chisec. We have made denouncements against the palm firms in the region.”
The Public Ministry and Environmental ministry have called previous contaminations “accidents,” which have not resulted in new regulations.
The failure of the government ministries to respond to the concerns of the communities has increased frustrations with the expansion of palm across the FRANJA of Guatemala, which stretches from Huehuetenango in the west to Izabal in the east. These frustrations have led communities to demand that the government begin to regulate the industry, and end the expansion.
“The palm companies cannot keep expanding,” said Margarita. “They cannot continue to keep sowing, buying, and accumulating more land. We have demanded that the government put in place a law that caps the amount of land used for palm, and allows for us poor farmers to have access to land.”
Expansion of Palm Across Guatemala
The first palm plants were brought to Guatemala in the late 1980s and have since spread like a virus across Guatemala and Central America. The expansion was strengthened especially in the years after the signing of the Central American Free Trade Agreement, which guaranteed multinational companies with security in their investments into sectors such as palm oil.
The fruit of the palm is a high-yielding oil plant, which has gained a significant importance in the processed food industry. Palm oil production has spread because of the increased demand in the United States and Europe as vegetable oil used in a wide range of products including soaps and waxes, as well as popular food products such as Nutella, and Ben & Jerry’s Chubby Hubby Ice Cream. Increasingly the production has been promoted as a renewable biofuel, which has further brought people into the industry.
The bunches of palm oil berries, commonly called Racimos, contain roughly 2,300 berries, and are harvested by hand. From there they are loaded onto a truck, and taken to the processing plant.
The expansion has exasperated the crisis over land that has historically plagued the region; in Guatemala, 3 percent of the population owns nearly 85 percent of arable land.
According to statistics from the Guatemalan National Bank, production of palm oil has spread by nearly 270 percent since 2006. This expansion has been partially influenced by a campaign by the Guatemalan Ministry of the Economy to attract foreign direct investment. In 2011, the ‘Invest in Guatemala” campaign was launched, in which the ministry claims that “88 percent of fertile land is vacant.”
But as production of palm has expanded, small farmers have been pushed further and further to the margins.
“We need the fish,” said Juan Choy. “We are living without land. People are migrating to Mexico and the United States, and families are disintegrating. Where are we supposed to produce? There is no land. The cost of meat has skyrocketed, and our maize is coming from Mexico.”
Jeff Abbott is an independent journalist currently based out of Guatemala. He has covered human rights, social moments, and issues related to education, immigration, and land in the United States, Mexico, and Guatemala. Follow him on twitter @palabrasdeabajo
Three Scenarios for the Donbass
By Andrey Ivanov* | Fort Russ | July 5, 2015
The specialists from the Russian International Affairs Council headed by the former foreign minister Igor Ivanov described three scenarios for the Donbass: confrontation, freeze, or continuing the peace process. How likely are they?
Life itself forces one to make forecasts. It’s clear that the unrecognized republics with a population of five million won’t be able to exist for long in the current suspended state. On the one hand there is a ceasefire, but the shelling of cities continues. Kiev continues to view Donbass as its territory, but doesn’t transfer money and fences it off with barbed wire. Poroshenko claims to adhere to the Minsk Agreements, but is against the constitutional reforms they require…
The first scenario is confrontation. The Council experts are of the opinion that full-scale combat operations can’t be ruled out. Kiev might decide to launch a new offensive with US support. Then the Donbass would suffer the fate of Serb Krajina which Croatia reconquered by force in 1995. It’s also possible that we’ll see the repetition of the events of August 2008 in South Ossetia. Russia was then forced to intervene militarily and then recognize the territory’s independence.
The second scenario is a peaceful resolution of the conflict. Analysts believe this is the least likely scenario. It would require the removal of anti-Russian sanctions and West’s recognition of Crimea’s unification with Russia.
The most likely is the third scenario–freezing the conflict. Ukraine doesn’t have the necessary resources to score a military victory, while Russia is not ready to acknowledge their independence. World powers will continue to exchange military warnings but there will be no heavy loss of life…
–Donbass’ return to Ukraine is hardly possible. Especially considering how Kiev views its inhabitants. Kiev wants to “integrate” Donbass using artillery–says the Moscow State University Center for Ukrainian and Belorussian Studies Director Bogdan Bezpalko–Donbass integration with Ukraine would only be possible in the event of its military defeat which might occur should the conflict escalate.
In actuality, the fate of Donbass depends mainly on major world players: US, EU, Russia. They can influence Ukraine’s elite and its relationship with Donbass.
The situation may develop in several ways. The majority of them are unfavorable. Both for Donbass, Ukraine, Russia, and even the West. Modeling the situation depends on the nature of relations between Russia and the West. Therefore the scenarios may change from quarter to quarter. Or even more frequently.
Svobodnaya Pressa (SP): Are DPR and LPR viable?
–Yes, but only as long as Russia helps them. They are of limited viability as independent states. Incidentally, they never aspired to an independent geopolitical role. DPR and LPR are states which depend on Russia’s support. Just as South Ossetia and Abkhazia did earlier, whose official recognition by Moscow was of considerable help.
SP: Can the republics share the fate of Serb Krajina?
–It all depends on Russia’s position. If Russia helps LPR/DPR, including through military assistance, that scenario is out of the question. One has to keep in mind Ukraine would have to expend considerable resources to break Donbass resistance. Moreover, Krajina did not enjoy the support by either Serbia or by Republika Srpska, which was the Serb state in Bosnia. Abandoned to its fate, the Krajina became easy prey for the Croat army which was well trained by the US. But if DPR and LPR have Russia’s support, retain control over the border with Russia, it won’t share Krajina’s fate. Moreover, Donbass republics have their own record of success against the UAF. The Ilovaysk and Debaltsevo “cauldrons” showed how effective LPR and DPR armies are.
SP: How justified are the hopes that the Ukrainian state will soon collapse?
–Ukraine is descending into a state of socio-economic collapse. This is what makes it different from Croatia, a country with a small population which received powerful financial support from the West. Ukraine has a population of 40 million which is rapidly aging. Industry is degrading. Ukraine is a country on the brink of an abyss. It simply won’t have the resources for military operations. I’d like to remind that the Croatian operation Storm against Krajina took only a few days, but after a lengthy preparation. Therefore even though the operation was costly, its effects were perceptible. Ukraine, on the other hand, is conducting its ATO, it’s spending a lot of money, it’s in the midst of the sixth wave of mobilization. Donbass, which has nothing left to lose, may soon turn out the winner. If it establishes cooperation with Russia, restores control over the port of Mariupol, it will be able to restore its economy and social well-being. DPR and LPR would turn out to be more successful as states than Ukraine.
I want to note that Ukraine’s problems are not due to a bad starting position in economy, culture, human resources. Ukraine in 1991 had colossal resources which were squandered in the most incompetent fashion, which were stolen after independence. This shows how Ukraine’s leaders view its sovereignty. Ordinary people haven’t gained anything out of independence other than impoverishment, depopulation, and aggressive nationalism.
–The current peace plan, based on Minsk Agreements, is unviable–says Geopolitical Problems Academy Vice President Konstantin Sokolov–The agreements pertain only to the separate parts of LPR and DPR and only regulate the relationship along the frontline. What is more, Kiev is actively torpedoing the agreements. Therefore the conflict can only be resolved through an armed clash. What form will it take? Kiev planned an offensive for May, but it was thwarted. Ukraine today is the center of attention of US, EU, and Russian foreign policy. It’s clear that the offensive would encounter political resistance by BRICS and Shanghai Organization countries.
Right now Ukraine is in a state of unstable balance. There are large groups of foreign mercenaries in the country. But will Kiev decide on a major attack? I think that will become clear by the end of summer.
In my view, the West is coming around to the idea of blaming all the crimes on Poroshenko’s team. It could be replaced by other people.
The state of balance will continue for some time. But ultimately the situation will resolve itself through a social explosion in Ukraine. The country is almost bankrupt and the inconveniences of the war are growing more acute. A group of senior military officers recently defected to the republics. It means that the Kiev regime is losing control even over its means of violence.
SP: But Ukraine is continuing to exist, in spite of the dire forecasts.
–Up to 2004, up to the first “orange revolution”, Ukraine compared well to other post-Soviet republics. Now its living conditions are falling to a level which for some might be below the threshold of survival. If earlier one could have patience, today it’s impossible.
The default could be used by the West to change the country’s leadership.
SP: How will the situation unfold?
–The most likely outcome is Ukraine’s break-up into parts. There are forces in the West interested in seeing it happen. In general, the West’s strategy revolves around breaking up countries. We’ve seen it in Yugoslavia, Libya, Syria. But I wouldn’t draw analogies between Donbass and Krajina or South Ossetia. Donbass is a big region, therefore it’s of greater significance. One also mustn’t forget Russia cannot stand aside in this conflict. I believe that ultimately the West’s strategy will suffer a defeat. National forces in Russia and Ukraine always rise up when the situation is on the brink. Ukraine is the trigger that will change the global strategic situation.
–In order to make forecasts, one first need to examine the present–says Novorossia State-Building Committee Chairman Vladimir Rogov–Poroshenko introduced legislation proposing not decentralization, but legalizing the unfolding lawlessness. The president would get the authority to fire elected officials, which he currently doesn’t have.
On the other hand, we see growing conflicts within the ruling Ukrainian elite. The US are preparing Lvov mayor Sadovyy and former SBU head Nalivaichenko as Poroshenko’s replacements. If Sadovyy comes to power, Ukraine will get a “soft”, Baltic, version of nationalism. If Nalivaichenko, Ukraine will become a “euro-ISIS.”
The new head of the SBU is Vasiliy Gritsak who’s devoted to Poroshenko but utterly incompetent. It’s enough to recall his contribution to the Ilovaysk disaster! Poroshenko is trying to place loyal individuals in key positions. And those who have nowhere to run.
Nevertheless, the “main rat” of Ukraine’s politics Yuriy Lutsenko submitted his resignation from the Poroshenko Block chairman in the Rada. We remember that Lutsenko changed his party affiliation more than once. He always left this or that part on the event of its loss of influence.
SP: Can the Donbass wait long enough to see Ukraine collapse?
–We must wait until the Kiev elite falls apart. There is no doubt that Odessa, Kharkov, Zaporozhye, Lvov, will see the founding of their own people’s republics. Donbass simply needs to get stronger, restore its economy, and push the front line far enough so that the UAF can’t shell its big cities. Soon the people in Kiev and Lvov will be able to free their lands from the current authorities.
SP: What influence do world powers have on the situation in the Donbass?
–We are entering the phase of direct interaction between the major international players: Russia and US. But the most important thing is that DPR and LPR model is more attractive than Ukraine. People’s republics have far lower utility rates. People in Ukraine will gradually realize that the Donbass has a more just state than they do.
*Translated from Russian by J.Hawk
Le Pen Calls EU a Cult Engaged in Brainwashing and Blackmail
Sputnik – 06.07.2015
National Front leader Marine Le Pen accused the European Union of becoming an authoritarian “cult engaged in brainwashing and blackmail.”
“The real question is whether we want to continue to live in democracies or if we agree to live in what seems to be more of a cult?” the outspoken politician asked during an interview with the French media, adding that Brussels exerted “an unprecedented pressure on the Greeks.”
The outcome of the Greek referendum provided an answer to this question, according to Le Pen.
Le Pen praised the Greferendum results calling them a victory against “the European Union oligarchy.” On Sunday, more than 60 percent of Greek voters voiced their support for the government of Alexis Tsipras and rejected the terms of a bailout deal offered by the international lenders.
“It is a ‘No’ vote of freedom, of rebellion against European ‘diktats’ of those who want to impose the single currency at any price, through the most inhuman and counter-productive austerity,” Le Pen said in a statement.
According to the National Front leader, the “No” vote “must pave the way for a healthy new approach” to the single European currency, austerity measures and the economic recovery. She reiterated that putting an end to the Eurozone would be an essential step to tackling economic troubles plaguing European nations.
“European countries should take advantage of this event to gather around the negotiating table, take stock of the failure of the euro and austerity and organize the dissolution of the single currency system, which is needed to get back to real growth, employment and debt reduction,” the right-wing politician pointed out.
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.
Featured Video
Iran War Confusion & Mixed Messaging /Lt Col Daniel Davis
or go to
Aletho News Archives – Video-Images
From the Archives
The Tragic Consequences of believing Anti-Science
The Naked Emperor’s Newsletter | January 17, 2023
I try not to write about anyone who has died because if it was my family member I would not want to read any speculations about their death. However, in this case I feel that justice has not been given a chance and therefore it needs highlighting. ... continue
Blog Roll
Aletho News- ‘Project Freedom’ perishes in 48 hours as Trump retreats under the wall of Iran’s asymmetric deterrence
- Iran War Confusion & Mixed Messaging /Lt Col Daniel Davis
- Israel threatens Gaza flotilla activists with death after abduction
- Met refuses to probe British nationals accused of war crimes in Gaza
- Hezbollah denies activity in Syria amid persistent and false claims
- Melkite bishops concerned over Israeli demolitions in South Lebanon
- Israel’s Obliteration Ecocide from Gaza to Lebanon and Beyond
- UAE deports tens of thousands of Pakistanis, seizes their savings amid war on Iran: Report
- Wheels Down in Tbilisi: Was a Routine U.S. Military Stopover a Deliberate Signal to Iran?
- Trump’s second strike on Iran would be suicidal. But that’s not the reason why he won’t go ahead with it
- If Americans Knew
- An All-American Retort to Israel’s Invasion of Lebanon
- How Dr. Adam Hamawy’s experience as a surgeon in Gaza inspired him to run for Congress
- Under Trump, Green Card Seekers Face New Scrutiny for Views on Israel
- With World Distracted by War, Extremist Settlers Intensify Attacks in West Bank
- Israel’s brutality toward Gaza flotilla activists – 3 articles
- “Spitting and humiliation are daily. People are afraid to walk in Jerusalem with Christian symbols.”
- How the US-Israel Relationship Weakens America and Harms the World
- 1 in 5 amputees in Gaza is a child, UN warns amid prosthetic care crisis
- 6,000 Gazans lack prosthetic and/or rehabilitation care – Daily Update
- As in Gaza, Israel is targeting rescue workers in South Lebanon, killing more than 100 since March
- No Tricks Zone
- New Study: Declining Trends In 1980-2023 Tropical Cyclone Frequency, Accumulated Energy
- 46 IPCC Scientists Break Rank, Publicly Challenge Long-Standing Dogmatic Climate Claims
- Another Study Links Warming To Cloud Forcing, Shortwave Radiation, Natural Atmospheric Circulation
- Wind Energy Is Toxic, Hazardous To Human Health, Scientific Review Shows
- Oversupply Of Volatile Solar Energy Leads To Record NEGATIVE Prices!
- New Study: Extreme Heat Records, Heatwaves, Extreme Cold Records Declining Across US Since 1899
- It’s The Cold, Stupid! Cold 20 Times More Lethal Than Heat, Multiple Studies Show
- European Institute For Climate And Energy: “Climate Debate is Seldom About Science”
- New Study: The Climate May Be 5 Times More Sensitive To Solar Forcing Than Commonly Assumed
- EV Industry Reached $70 Billion In Losses In 2024 Due To Delusional Green Ideologies
Aletho News 