US Sanctions May Force India Out of Iran’s Chabahar Port With China More Than Able to Fill This Gap
By Adam Garrie | EurasiaFuture | June 27, 2018
Iran’s Chabahar Port on the Gulf of Oman represents the crowning achievement of Indo-Iranian cooperation in recent decades. The port itself represents the centre of the wider North-South Transport Corridor (NSTC) which will link India to Russia and the wider north-western Eurasian space via Iran and Azerbaijan. While under Premier Narendra Modi, India has sought to sell NSTC as an alternative to China’s One Belt–One Road and in particular as rival to the China-Pakistan Economic Corridor which links China to the wider Indian Ocean space via the Arabian Sea port at Gwadar, Iranian officials who themselves are eager participants in One Belt–One Road, have wisely distanced themselves from India’s zero-sum narrative on Chabahar and NSTC more widely.
Likewise, as Iranian relations with Pakistan continue to improve, it also remains clear that Iranian leaders are carefully avoiding being sucked into south Asia’s manifold rivalries by maintaining healthy ties with China, India and increasingly Pakistan simultaneously.
As it stands, Gwadar is a more substantial port vis-a-vis Chabahar in terms of its capacity and the fact that unlike the Indian built port in Iran, the Chinese built Gwadar is a Panamax deep water port. In this sense, both Gwadar and Chabahar could function together on the win-win model which would see some of the supplies shipped from China to Pakistan via Gwadar being routed on to Chabahar depending on their ultimate destination. Here one could see One Belt–One Road and the North South Transport Corridor functioning as integrated rather than as rival logistics networks – something that Pakistani officials recently spoke about with optimism.
Now though, India’s very presence in Chabahar may be impacted negatively as the US moves to sanction countries that conduct business with Iran. The US CAATSA sanctions aimed at Iran are back in the spotlight after the US withdrawal from the JPCOA (aka Iran nuclear deal) caused Washington to threaten many of its longstanding allies against conducting further business with Iran under the threat of so-called second party sanctions. These threats have most notably been aimed at the European Union, in spite of the fact that the bloc remains rhetorically adamant that it will continue to preserve the JCPOA without US involvement.
India has also come under threat of sanctions due to its healthy relationship with the Islamic Republic. The US has stated that it will sanction Indian companies who do business with Iran and this week, the US issued an even more specific threat to its Indian partner, stating that New Delhi will face sanctions if it continues to purchase Iranian oil.
Last month it was reported that international investors in Chabahar were beginning to show signs of nervousness in light of the new sanctions threats from Washington. As India is already facing tariffs on its exports to the United States while simultaneously cutting itself off from a would-be win-win Chinese partnership, India is scarcely in a position to economically leverage the United States which under Donald Trump has taken a merciless approach to conducting trade wars with allies as well as threatening partners with sanctions if they do business with countries including Russia, Iran and the DPRK (although this might soon change in the case of the DPRK).
This could mean that as the primary investor and operator of the Chabahar Port, India could find itself cut off from its own investment under the cloud of sanctions. If it comes to this and India is forced to either partially or even entirely withdraw from the Chabahar project, it would mean that Iran would seek a new international partner for the port.
The only realistic partner to take over Chabahar would be China, a nation with experience in port building and management, a country that has shown itself to be able to transact deals with Iran in spite of the attitude of Washington and a country that because of America’s own dependence on Chinese goods – is largely sanction proof for all practical purposes.
Not only could China help to revive the economic fortunes of Chabahar if India becomes frightened off due to threats from the United States, but China could actually help Chabahar to grow both infrastructurally and commercially by linking it into a uniformed trade route centred on the larger Gwadar port and existing One Belt–One Road lines of connectivity in the region. This would ultimately be a win-win for China, Iran and Pakistan.
If India were to abandon the underlying prejudices behind its zero-sum approach to antagonising both China and Pakistan, India could actually remain active in Chabahar as key player in a wider Sino-Iranian partnership which would necessarily also include Pakistan via CPEC. This could help to not only reduce tensions with India’s largest neighbours, but it could demonstrate that the only way for India to effectively leverage US threats of further tariffs and sanctions is by keeping at least one foot in China’s already open door.
However, given the attitude of the current Indian government, such a win-win model looks increasingly distant however theoretically attractive it might sound when analysed objectively. Because of this, the more likely scenario for Chabahar will be a short-term waiting game where India will see just how far the US is willing to punish its newfound south Asian partner due to its dealings with Iran.
If India’s involvement in Chabahar does come under a US financial attack, it is all but certain that India will minimise its involvement in the flagship project – thus paving the way for China to take over where India left off.
The choice for India therefore is three fold: New Delhi can simply hope for the best while possibly sweetening the deal by making concessions to the US over existing tariffs, India can bow out of Chabahar in order to possibly attain better trading relations with the US in the future or India can work with China to leverage the US over its anti-Iranian position.
At a time when the US is embracing unilateralism in its economic relations with the rest of the world – India must look realistically at its options, even if this means dropping its Sinophobic prejudices.
ATR gives up delivering planes to Iran: Report
The first four of the 72-600 ATR turboprops landed in Tehran’s Mehrabad Airport in May 2017
Press TV – June 27, 2018
Regional aircraft manufacturer ATR says it must give up delivering the remaining aircraft ordered by Iran because of new US sanctions and that it will try to reclassify 12 aircraft if it does not obtain a waiver.
“In 2018, our delivery target could be impacted given the Iranian context,” ATR CEO Christian Scherer said in an interview published on LaTribune.fr.
IranAir, the national flag carrier, signed a contract to buy 20 planes from turboprop maker ATR in April 2017. The deal came after Iran signed contracts with Europe’s Airbus and US rival Boeing to purchase about 180 jets.
“Of the 80 planes we expected to deliver in 2018, there were 12 for Iran, that’s a lot,” said Scherer whose company is joint-owned by France-based Airbus and Leonardo of Italy.
Iran took delivery of the first four ATR aircraft last May, two more in September, beside another two in December, with the rest due to be handed over to the country by the end of 2018.
Scherer said the Iranians want to take delivery of the planes, “but ATR will not take any risk of falling out with US authorities and exposing our shareholders Leonardo and Airbus to US sanctions.”
He said two aircraft have already been completed, six are being assembled and the last four have been launched and “customized” for Iran, particularly with pressurization devices, to fly over mountainous areas.
As a result, “these devices will be harder to reclassify,” he continued. “We are working hard but we have no firm tracks yet.”
To still deliver to Iran, ATR is trying to get a waiver from the Americans, but Scherer said he was “not entirely confident” about it.
“The Americans have promised a three-month period (from May to August) to allow companies to deliver the materials that were in production” after US President Donald Trump’s announcement to reimpose sanctions on Tehran.
“For the aviation industry, this three-month period is ridiculously short,” Scherer said.
ATR, Scherer said, intends to rely on the help offered by the French government to protect companies.
“We want to use the help of the French government to negotiate the best possible licenses during this period of three months to be able to deliver the aircraft manufactured or being manufactured to cushion this shock, which in any case will hurt us a lot.”
He also hoped to continue business in Iran with “a new license to support our customer, and we want to play our role as an after-sales service provider.”
“Here too, the Americans have made a declaration of intent explaining that they will not endanger the public,” Scherer said.
“The Iranians were in discussion with us to continue to develop their fleet; we were not going to stop at the first 20 aircraft” ordered in total by Iran, he said. “It was just the beginning of a story,” he lamented.
IranAir’s deal with ATR includes options for a further 20 aircraft and a training program for Iranian pilots and engineers.
The 70-seat planes are aimed at underserved local economies, used in flights over a maximum distance of 1,528 kilometers.
Iran has also received three Airbus jets – one Airbus A321 and two Airbus A330s – and will get another by year-end, but US sanctions have put further deliveries in doubt.
The first Boeing was due in Iran around May 2018, but the company said early this month that it will not deliver any aircraft to Iran in light of US sanctions.
Boeing in December 2016 announced an agreement to sell 80 aircraft valued at $16.6 billion to IranAir. It also announced a contract in April 2017 to sell Iran Aseman Airlines 30 Boeing 737 MAX aircraft for $3 billion, with purchase rights for another 30 aircraft.
“We have not delivered any aircraft to Iran, and given we no longer have a license to sell to Iran at this time, we will not be delivering any aircraft,” a Boeing spokesman said.
United States demands that Japan stops buying oil from Iran – reports
Press TV – June 23, 2018
Washington has asked Tokyo to halt all crude purchases from Iran, insisting that its allies cease all trade with the country, according to Bloomberg.
The request was made during a meeting between US and Japanese officials in Tokyo this week, according to the media. No decision has been made yet, though, and talks will continue.
This means that Washington is taking a harder stance on Iran than it did in 2012. Six years ago, before the nuclear deal, the US demanded that its allies should reduce oil purchases from sanctioned Iran, rather than stop them completely.
Japan is Asia’s fourth-largest buyer of Iranian crude, which accounts for 5.3 percent of its oil consumption, or 172,000 barrels per day.
Refiners in Japan earlier said they could substitute Iranian oil with crude from other Middle Eastern countries, even though their plants are particularly compatible with crude from Iran.
Some analysts see the demand as a negotiating tactic before trade talks begin between the US and Japan.
“It could be that the US is initially demanding a big thing before offering Japan a way to go around it in negotiations,” Satoru Yoshida, a commodity analyst at Rakuten Securities told Bloomberg. “Even if the US is asking Japan to completely stop Iranian crude imports, which is a very high hurdle, it may lower its demand later.”
Iranian President Suggests Pullout of Advisors, Foreign Military From Syria
Sputnik – 13.06.2018
Iranian President Hassan Rouhani has discussed the situation in Syria, as well as prospects of Iran deal with his French counterpart Emmanuel Macron in a telephone call, the official website of the Iranian president reported.
Hassan Rouhani noted that Tehran had sent its military advisers to the Arab republic at the request request of its legitimate government in order to help Damascus fight terrorism. He expressed hope that no “foreign military presence” would be needed after the terrorist threat had been eradicated.
Israel accuses Iran of sending the country’s troops to Syria in order to attack it from Syrian territory. Tel Aviv has already conducted several airstrikes against Syrian bases under a pretext of Iranian Revolutionary Guards being stationed there. Tehran and Damascus deny these accusations.
The two presidents also discussed the current state of the JCPOA. Rouhani praised the stance that Europe took to keep the deal alive after the US withdrawal, but noted that, so far, statements had not been “accompanied by practical and tangible measures and solutions.”
“If Iran cannot benefit from the privileges of this agreement, remaining in it will not be possible,” the Iranian president said.
Emmanuel Macron confirmed commitment to the JCPOA and assured Rouhani that France is working on “a series of measures and practical solutions” to make the deal work.
The US withdrew from the Iran nuclear deal in May 2018, with President Donald Trump claiming the deal was “flawed” at its core. Other parties to the agreement have confirmed their readiness to stick with the deal and work out solutions against possible US sanctions.
Iran turns to old friends amid European exodus
Press TV – June 12, 2018
The world’s biggest container shipper Maersk Line says it is reviewing Iran operations in the face of US sanctions following President Donald Trump’s withdrawal from an international nuclear deal.
Verbal pledges by European governments to shield trade with the Islamic Republic have not stopped companies from pulling out of Iran projects as they face a “wind-down” period of up to six months before the US reimposes sanctions.
On Monday, German container shipping firm Hapag-Lloyd was reported to have stopped one of its two feeder services to Iran.
The Hamburg-based group, which provides third party services to Iran, will decide on the remaining operation before the Nov. 4 US deadline for companies to halt all trade with Tehran, Reuters reported.
The company was awaiting further clarification as to what operations would be permitted after the wind-down period in order to take final decisions on whether to serve Iran, the news agency reported.
Hapag-Lloyd provides third party feeder ships to Iran from Jebel Ali in the United Arab Emirates because it does not have direct dealing with the Islamic Republic.
Danish shipping companies Maersk Tankers and Torm were reported last month to have stopped taking new orders in Iran.
The EU has said it remained committed to the 2015 Iran nuclear deal and the suspension of its own sanctions but European business entities have questioned the viability of continuing their projects after the sanctions kick in.
And in the absence of clear-cut guarantees from the European governments, Iran has started shoring up ties with the countries which stood their ground in the past when Tehran came under similar sancitons.
On Sunday, Iran President Hassan Rouhani met his Chinese counterpart Xi Jinping in Beijing, with China’s foreign policy mouthpiece Global Times writing that the visit saw Iran’s “comprehensive strategic” relationship with China “upgraded to a new level”.
The meeting with China’s president Xi Jinping took place on the sidelines of the Shanghai Cooperation Organization summit in the eastern coastal city of Qingdao,
China, the largest buyer of Iranian crude, did not reduce crude imports from Iran even at the height of the previous sanctions against Tehran in 2012.
In the first quarter of 2018, China’s imports of Iranian crude rose 17.3% year on year to 658,000 barrels per day, making Iran its sixth biggest supplier.
In their talks, Xi called on the two countries to deepen political relations to enhance strategic mutual trust, increase exchanges at all levels, and continue to support each other on issues of major concern involving their respective core interests, Xinhua news agency reported.
Rouhani also met Indian Prime Minister Narendra Modi who stressed the strategic importance of developing Chabahar Port for expansion of economic and regional cooperation.
India is Iran’s second biggest oil customer and its imports are expected to rise this year, even as Nayara Energy, formerly known as Essar Oil, was reported Tuesday to have decided to slash its Iran imports by almost a half.
Another key meeting on Rouhani’s itinerary was with Russian President Vladimir Putin who criticized the unilateral US move to pull out of the nuclear agreement and reimpose sanctions on Iran.
Rouhani said Iran and Russia should continue multilateral cooperation in the fields of security and regional issues.
Iran to boost production of uranium enrichment material – state atomic agency
RT | June 5, 2018
Iran has begun preliminary work on infrastructure for advanced centrifuges, the country’s Atomic Energy Organization has confirmed. The announcement comes after Tehran said it would revamp its uranium enrichment program.
The infrastructure project is being carried out at a facility in Natanz. Iran also plans to boost production of UF6, a gas needed to produce fuel for nuclear reactors and weapons. But the country’s nuclear activities will remain within the framework of the 2015 nuclear deal, Ali Akbar Salehi, the director of Iran’s Atomic Energy Organization (AEOI), has stated.
A spokesman for the organization said that the International Atomic Energy Agency (IAEA), which oversees Iran’s compliance with the 2015 JCPOA deal, will be notified of Iran’s activities on Tuesday.
“In a letter that will be handed over to the International Atomic Energy Agency … Iran will announce that the process of increasing the capacity to produce … UF6 (uranium hexafluoride) … will start on Tuesday,” he said.
The spokesman said it was being done on the orders of Iranian Supreme Leader Ayatollah Ali Khamenei, who said in a speech on Monday that AEOI must promptly prepare to start uranium enrichment “up to a level of 190,000 SWU for the time being within the framework of the JCPOA (Joint Comprehensive Plan of Action).”
SWU or “separative work unit” is a standard measure of the effort needed to separate isotopes of uranium during an enrichment process. 1 SWU equals 1 kg of such effort.
Previously, Iran’s Atomic Energy Agency estimated that its enrichment capacity will reach 190,000 SWUs by the 15th year after the deal comes into effect. For that purpose, Iran planned to gradually increase its number of centrifuges, while staying within the scope of the deal.
Speaking to ISNA, Kamalvandi stressed that, by boosting its nuclear program, Iran does not seek to develop nuclear weapons. “Our goals are not to achieve a nuclear weapon, and it’s against our religious stance.”
“The message of our actions is that we will maintain our capacity for activation at a high level, and if we agreed to limit it now, it is because the parties must adhere to their commitments,” he said.
After the US exit from the deal on May 8, other parties to the landmark agreement, including France, the UK, and Germany vowed to abide by the deal and keep it intact, despite the US withdrawal. However, European nations followed the lead of Washington in demanding that Iran’s missile program and its regional posture must be a part of any future negotiations for a post-deal security framework. Iran has vehemently refused to tie its ballistic missile program, which has not been a part of the original agreement, to the deal and has called on Europe to compensate it for the impact that the reimposed US sanctions will have on its economy. On Monday, Khamenei said Europe should not expect Teheran to stay in the deal if it does nothing to shield it from the brunt of punitive measures coming its way.
“It seems from what they say that some European governments expect the Iranian nation to both put up with sanctions and give up its nuclear activities and continue to observe limitations [on its nuclear program]. I tell those governments that this bad dream will never come true,” he said.
He again ruled out that Iran might agree to curtail its ballistic missile development, saying that it’s wishful thinking by Europe if it believes otherwise.
“I am telling the Europeans, ‘Limiting our missile work is a dream that will never come true,” Khamenei stressed.
One of the major points of Iran’s ultimatum to Europe is that it must offset the damage inflicted on its energy industry by buying Iranian oil and protecting trade with the Islamic Republic by providing banking guarantees.
Last week, a senior adviser to Khamenei, Ali Akbar Velayati, told Iranian media that the continuation of the talks would depend on Europe’s readiness to meet these demands.
“We will preserve Iran’s regional and missile power to kill US with envy,” he added.
Israel intelligence minister proposes ‘military coalition’ against Iran
Israeli Intelligence Minister Yisrael Katz (L) and Israeli Prime Minister Benjamin Netanyahu
Press TV – June 5, 2018
Israel has proposed that “a military coalition” be formed against Iran in case Tehran pursues “military-grade” uranium enrichment, suggesting that the military force would comprise of the Israeli regime, the US, the Western states and their Arab allies.
Speaking to media on Tuesday, Israeli Intelligence Minister Yisrael Katz claimed that Iran had once been running an “unsupervised” enrichment scheme with the potential of arming the country with nuclear weapons.
The allies will need to issue a statement against the Islamic Republic “if the Iranians don’t surrender now, and try to return,” he said, adding that the statement would be threatening Iranians that “a military coalition will be formed against them.”
“There should be a clear statement by the president of the United States and all of the Western coalition” if Iran returns to enriching “military-grade” uranium, the minister said. “The Arabs and Israel surely would be there too,” he added.
Washington and Tel Aviv, and to a lesser extent their Western and Arab partners, have claimed that Tehran’s nuclear energy program harbors military aspects.
Iran has strictly and in all circumstances denied pursuing any military ambitions through its nuclear work.
The country asserts that under a fatwa (religious decree) issued by Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei, its long-established policy is to oppose the acquisition, production, stockpiling, and use of nuclear weapons.
In December 2015, the International Atomic Energy Agency’s governing board voted overwhelmingly in favor of a draft resolution, which closed the so-called possible military dimensions (PMD) case in Iran’s nuclear program.
The vote brought an end to a 12-year investigation into the “past and present issues” regarding Iran’s nuclear activities, which the United Nations nuclear watchdog had been probing under pressure from the Israeli regime, the US and their allies.
The vote came after Iran and the P5+1 group of countries signed a nuclear agreement in 2015.
The US, however, withdrew from the accord last month, emboldening Israel in its efforts to try to kill the deal and rally more support for its anti-Iran campaign.
Despite Tel Aviv and Washington’s hostile endeavors, European states have vowed to keep respecting the deal and try their utmost to preserve it.
The Israeli minister’s comments come as Prime Minister Benjamin Netanyahu has embarked on a tour of Europe to persuade European leaders to follow the US and ditch the Iran deal.
This is while Iran is currently in talks with the other signatories on the future of the deal. Tehran has said it will stay in the JCPOA if the Europeans give guarantees that a deal without the US would still protect the Iranian interests.
Russia pushes back at US on North Korea
By M.K. Bhadrakumar | Asia Times | June 4, 2018
The visit by the Russian Foreign Minister Sergey Lavrov to Pyongyang on May 31 was a poignant moment for both countries. This was a rare meeting between a senior Russian official and a member of the Kim dynasty. Yet, Russia has been the oldest friend and mentor of the ruling family in Pyongyang.
Kim’s family escaped from Japanese-occupied Korea to the Soviet Union in 1920 when the revered founder of North Korea, Kim Il Sung, was only eight years old. He grew up in Russia, joined the Red Army and fought the Japanese in Manchuria. When World War II ended, Kim returned to his country and with some Soviet backing, went on to lead North Korea’s Communist Party and lay the foundations of the new state north of the 38th parallel.
Make no mistake, it was not a coincidence that Kim received Lavrov on the same day his deputy Vice-Chairman Kim Yong-chol met US President Donald Trump at the White House. Kim told Lavrov in front of TV cameras: “I highly value the fact that Putin’s administration strictly opposes the US’ hegemony. You strictly oppose, and we are always ready to conduct negotiations and a profound exchange of opinions with the Russian side on this issue.” Russia’s Cold War ally is picking up the threads with ease.
Unsurprisingly, Lavrov gave whole-hearted backing for the North Korean stance on the vexatious issue of denuclearization. In Lavrov’s words: “We assume that a complete resolution cannot be achieved until all the sanctions are lifted. It is up to the negotiators to make this happen, but in any case, it would be impossible to achieve this in a single round. The same applies to denuclearization. For this reason, this should be a step-by-step process with reciprocal moves at each of the stages.”
Denuclearization not a stand-alone issue
Lavrov called for a “judicious approach” not to rush things and cautioned against any “rash actions”, bearing in mind the need for “careful consideration and coordination of all elements of a package decision.” The carefully-chosen expression “package decision” implies that denuclearization is not a stand-alone issue.
He underscored: “Russia and North Korea hold a common view… We know that this is an extremely complicated problem and that the goal of denuclearization is inseparably connected with the eventual restoration of peace, stability and a system of interaction, cooperation and equal and indivisible security in Northeast Asia.” Simply put, Lavrov asserted Russia’s role in the current process as a stakeholder in the stability and security of its region. Interestingly, Lavrov flagged the need at some point to revive the format of six-party talks (involving the two Koreas, US, China, Japan and Russia.)
The Russian Foreign Minister also discussed substantive issues of bilateral cooperation in the economic sphere in anticipation of a post-sanctions future. In particular, he brought up the languishing 10-year-old idea of linking the Trans-Siberian and Trans-Korean railway systems to connect Moscow with Seoul via Pyongyang and to build a parallel gas pipeline.
Meeting between Putin and Kim soon?
Meanwhile, the speaker of the upper house of the Russian parliament, Valentina Matviyenko, is expected to visit North Korea soon. Most importantly, a meeting between Putin and Kim is on the cards. Reports speculate that the meeting may take place as early as next week during Putin’s state visit to China following the Shanghai Cooperation Organization summit in Qingdao (June 9-10).
The Russian Deputy Foreign Minister Igor Morgulov who accompanied Lavrov to Pyongyang was in Beijing on May 29 and would have discussed the forthcoming trip with Chinese officials. While in Beijing, Morgulov made some highly critical remarks about US policies in the Asia-Pacific, which reflected the thrust of Lavrov’s mission:
“I am referring… to the idea of the Indo-Pacific region, which the United States and Japan are actively advocating. Essentially, it is designed to divide the regional countries into friends and foes… Both Russia and China hold a diametrically opposite view. They are against creating blocs and believe that an effective and system-wide response to security challenges in the Asia Pacific must include a comprehensive military and political détente and uniform rules of the game… This architecture must be based on the universal principles of indivisible security and the supremacy of international law, as well as non-use of force or threat of force.”
Beijing has welcomed “Russia’s positive role” and said high-level exchanges between Russia and North Korea are “conducive to promoting the political settlement process of Korean Peninsula issue and upholding the peace and stability of the peninsula and Northeast Asia.” Russia is airing opinions supportive of North Korean concerns and vital interests, which Beijing shares but for obvious reasons is not in a position to voice openly.
Process will be a long haul
Clearly, Lavrov’s mission is making it more difficult for Washington to pressure the North Korean leadership or dictate the dynamics of the current process. Moscow is signaling that it will not remain a passive bystander (as in the negotiations over the Iran nuclear issue). And, it has taken a common position with Beijing that the denuclearization of North Korea impacts on the regional security matrix in Northeast Asia. Given this developing situation, the final outcome is almost certainly going to be a long haul.
Simply put, the US’ containment strategy against Russia and China has created a complex regional security environment in Northeast Asia. On one side there is talk of a new US military base in Poland and additional deployment of 30,000 NATO troops to Central Europe on Russia’s western fringe, while on the other side US Secretary of Defence James Mattis promised at the Shangri-La Dialogue in Singapore on the weekend to step up military pressure on China in the South China Sea, and Trump is beating the drums of a trade war with Beijing.
However, somewhat incredibly, in this milieu of growing big-power tensions, Washington still expects Moscow and Beijing to remain docile as Trump and his team go about denuclearizing North Korea and reset the regional security calculus. This expectation is plainly unrealistic. Moscow has signaled that as a stakeholder, it will push back and will not allow a replay of what happened over the Iran nuclear deal.
Significantly, Lavrov disclosed that the North Korean leadership is “fully aware” of developments relating to the US’ exit from the Iran nuclear deal, and “will determine its position taking into consideration all these factors.”
Italy: The Center Cannot Hold
By Diana Johnstone | Consortium News | June 3, 2018
The traditional governing parties, center “left” and center “right” all follow the same neoliberal policies and constitute the self-designated “center.” Mainstream media enforce center right claims to authority on the base of orthodox economic expertise, while the center left derives its authority from its “values,” centered on an identity politics version of human rights. “Center” sounds so reasonable, so safe from dangerous “extremes” and unpredictable populism. Against such threats, the Center presents itself as the champion and safeguard of “democracy.”
How true is this?
World Values Survey results indicate that in Europe and the United States, people who describe themselves as “centrist” on the average have less attachment to democracy (e.g. free and fair elections) that those on the left, and even those on the far right. This is not as surprising as it may seem at first, since “centrists” are by definition attached to the status quo. In European countries, the authoritarian neoliberal “center” is institutionalized in the European Union, which imposes economic policy over the heads of the parliaments of the member countries, dictating measures which conform to the choices of Germany and northern Europe, but are increasingly disastrous for the Southern EU members.
The Centrist fear of democracy was resoundingly confirmed by March 4 legislative elections in Italy. The Center was relegated to the margins and outsiders burst in. The winner, with 32 percent of the votes, was the Five Star Movement (M5S) whose campaign “against corruption” won popular support in the impoverished South. In second place, with 17 percent, was “the League”, formerly the Northern League – that is, a party of rich north Italy chauvinists ready to secede from the “lazy good-for-nothing” south. It took almost three months for this extremely odd couple to agree to a coalition government.
The mystique of the European Union is anti-nationalist, based on the theory that “nations” are bad because they caused the devastating wars of the twentieth century, while European unification is the sole guarantee of “peace.” Convinced of their mission, the Eurocentrists have had no qualms in throwing out the baby of democratic choice along with the nationalist bathwater.
The notion that “peace” depends on “Europe” persists despite the NATO bombing of Serbia and European participation in U.S. wars in Afghanistan, Iraq, Libya and Syria, not to mention EU participation in the current major military buildup in the Baltic States against “the Russian enemy.” Indeed, thanks to NATO, the EU is gearing for a war even worse than the previous ones.
Since the “nation-state” is blamed for evil in the world, the Eurocentrists react with horror at growing demands in Member States for a return to “national sovereignty.” This, however, is a natural reaction to the economic and social disasters resulting from policies dictated by EU institutions in Brussels. The 1992 Maastricht Treaty legally bound member countries to centralized neoliberal monetarist policies; not only “socialism” became illegal – even Keynesianism was ruled out. Promised endless peace and prosperity, citizens of European countries were cajoled into giving up their sovereignty to EU institutions, and many now want it back.
Disillusioned Italy
Italian disillusion is particularly significant. Italy was an exceptionally enthusiastic founding member of the unification begun with the 1957 Treaty of Rome. And yet, Italy’s own history illustrates what can go wrong with such unification, since the 19th century political creation of a unified Italy centered in Turin led to the enrichment of the industrial north at the expense of southern Italy, where the splendor of Naples declined into chronic poverty, crime and corruption. Now Italy itself is “the south” in the periphery of a European Union centered around Germany.
Antagonism between northern and southern Italy has given way to a much stronger antagonism between Italy and Germany – each blaming the other for the crisis.
It is only fair to recall that Germans were very attached to their Deutsche Mark and to their own austere financial policies. Germany could only be lured into the common currency by agreeing to let the euro follow German rules. France eagerly supported this concession based on the notion that the common currency would unify Europe. It is doing quite the opposite.
Germany is a major exporting nation. Its trade with the rest of the EU is secondary. It uses the EU as its hinterland as it competes and trades globally with China, the United States and the rest of the world. The proceeds of Germany’s favorable EU trade balance is less and less invested in those countries but in Germany itself or outside the EU. In the official German view, the main function of the Southern EU members is to pay back their debts to Germany.
Meanwhile, Italy’s once flourishing industrial network has lost its competitive edge due to the euro. It cannot save its exports by devaluation, as it was accustomed to doing. Italy’s debt is now 132 percent of its GNP, whereas the Maastricht Treaty governing the monetary union puts a ceiling of 60 percent on national debt. And to continue paying the debt, public services are cut back, the middle class is impoverished, the domestic market declines and the economy gets even weaker.
This is precisely the situation that has plunged Greece into ever deepening poverty.
But Italy is not Greece. Greece is a small peripheral country, which can be pounded to death by creditors as a warning of what can happen to others. Italy, on the contrary, is too big to fail. Its collapse could bring the whole EU crashing down.
Italy’s Potential Strength Through Weakness
The traditional Italian parties had no solution beyond those that have ruined Greece: cut back social spending, impoverish workers and pensioners, and pay back the foreign banks, with interest.
The odd coalition of the League and the M5S was obliged to try something different: basically, to invest in the economy rather than abandon it to its creditors. Their program combines lower taxes with Keynesian stimulation of investment. Since the leader of the League, Matteo Salvini, and Luigi Di Maio of M5S do not like each other, they selected law professor Giuseppe Conte to be Prime Minister in their coalition cabinet. The interesting choice was that of Paolo Savona for the key post of Minister of Economy and Finance. Savona, whose long career has taken him across the summits of Italian and international finance, was certainly the most qualified choice imaginable. Savona knows everything there is to know about the Italian economy and international currency creation.
And yet, it was the appointment of this 81-year-old expert that created outrage in the Eurocenter.
The uproar was spurred by the fact that in one of his books Savona had described the euro as “a German prison.” Savona had also said it was necessary to prepare a Plan B, to leave the euro if there is no other choice. “The alternative is to end up like Greece.”
This hint of disloyalty to the euro was totally unacceptable to the European establishment.
The Center struck back in the person of the largely figurehead President of Italy, Sergio Mattarella, who used, or misused, his unique constitutional power by refusing to approve the government. On May 28, he designated as prime minister Carlo Cottarelli of the International Monetary Fund – a man who represented everything the Italians had just voted against. Known in Italy as “Mr. Scissors” for his advocacy of drastic government spending cuts, Cottarelli was supposed to run an apolitical “technical” government until new elections could be held in the fall.
This coup against the Italian voters caused momentary rejoicing in the Authoritarian Center. The European Budget Commissioner (a German of course), Günther Oettinger, was reported to be gloating over the prospect that “the markets” (meaning the financial markets) would soon teach Italians how to vote. Italy’s economy “could be so drastically impacted,” he said, as to send a signal to voters “not to vote for populists on the right and left.”
This simply intensified Italian indignation against “German arrogance.”
Savona: Plan B just a negotiating tactic
Meanwhile Savona wrote a letter to President Mattarella which introduced a bit of cold reason into an increasingly hysterical situation. He reminded the president that an important meeting of EU heads of state was to be held at the end of June; without a political government, Italy would be absent from negotiations which could seal the fate of the EU. Italy’s plea for economic change could expect French support. Savona denied having called for leaving the euro; in the spirit of game strategy, he had mentioned the need for Plan B in order to strengthen one’s position before negotiations. He made it clear that his strategy was not to leave the euro but to transform it into a genuine rival to the dollar.
“Germany prevents the euro from becoming ‘an essential part of foreign policy’, as the dollar is for the United States”, wrote Savona. But change becomes necessary, as the dollar is less and less suitable for its role as world currency.
Indeed, the Italian crisis merges with a mounting trans-Atlantic crisis, as the U.S. uses sanctions as a weapon in competition with its European “partners.” The paradox is that Italy could use its very weakness to oblige Germany to reconsider its monetary policy in a moment when the German economy is also facing problems due to U.S. sanctions on deals with Russia and Iran, as well as protectionist measures. Savona’s message was that clever diplomacy could work to Italy’s advantage. In its own interest, Germany may need to accept transformation of the euro into a more proactive currency, able to defend European economies from U.S. manipulation.
It was a matter of hours before Cottarella stepped back and a new M5S-League government was formed, with Savona himself back as Minister of Relations with the European Union.
Italy’s Double Jeopardy
The new Italian cabinet sworn in on June 1 is riven with contradictions. Despite all the released anti-EU sentiment, it is definitely not an “anti-EU” government. Conte is back as prime minister. The new foreign minister, Enzo Moavero Milnesi, is a staunch pro-European. As interior minister, the northern Italy chauvinist Salvini – who doesn’t particularly care for southern Italians – will get tough with migrants. As minister of economic development M5S’ Di Maio will try to find ways to improve conditions in the southern regions that elected him. Since Salvini is the more experienced of the two, the League is likely to profit from the experiment more than the M5S.
Some Italians warn that by leaving the “German prison” Italy would simply find itself even more dependent on the United States.
One should never forget that ever since the end of World War II, Italy is an occupied country, with dozens of U.S. military bases on its territory, including air bases with nuclear weapons poised to strike the Middle East, Africa or even Russia. The Italian Constitution outlaws participation in aggressive war, and yet Italian bases are freely used by the United States to bomb whichever country it pleases, regardless of how Italians feel about it.
Worst of all, the U.S. used its Italian “NATO bases” to destroy Libya, a disaster for Italy which thereby lost a valuable trade partner and found itself inundated with African refugees and migrants. While international financial experts exhort Italy to cut government expenses, the country is obliged by NATO to spend around 13 billion euros to buy 90 U.S. F-35 fighters and to increase its military spending to around 100 million euros per day.
Italy’s economic prospects have also been badly hit by U.S.-enforced sanctions against trade with Russia and Iran, important potential energy sources.
U.S. economic aggression, in particular Trump’s rejection of the Iranian nuclear deal, is the issue with the potential to bring European leaders together at a time when they were drifting apart. But at present, the Europeans are unable to defy U.S. sanctions in punishment for trade with those countries because their international dealings are in dollars.
This has already led to the U.S. exacting billions of dollars in fines from the biggest French and German banks, the BNP and Deutsche Bank, for trading that was perfectly legal under their own laws. The French petroleum giant has been obliged to abandon contracts with Iran because 90% of its trade is in dollars, and thus vulnerable to U.S. sanctions. And that is why the idea is growing of building financial instruments around the euro that can protect European companies from U.S. retaliation.
The Disappearance of the Left
The disappearance of left political forces has been almost total in Italy. There are many reasons for this, but a curable part of the problem has been the inability of what remains of the left to face up to the two main current issues: Europe and immigration.
The left has so thoroughly transformed its traditional internationalism into Europism that it has been unable to recognize EU institutions and regulations as a major source of its problems. The stigmatization of “the nation” as aggressively nationalistic has held back the left’s ability to envisage and advocate progressive policies at the national level, instead putting its hopes forever in a future hypothetical “social Europe.” Such a transformation would require unanimity under EU rules – politically impossible with 28 widely differing Member States.
Without such inhibitions, the far right capitalizes on growing discontent.
Another related handicap of the left is its inability to recognize that mass immigration is indeed “a problem” – especially in a country like Italy, with a flagging economy and 20 percent official unemployment (although this figure is probably too high, considering undeclared labor). There is resentment that prosperous Germany issued a general invitation to refugees, which for geographic reasons pile in Mediterranean countries unable to cope. The mass influx of economic migrants from Africa is not even “taking jobs away from” Italians – the jobs are not there to take. These migrants fled war and misery to come to Europe in order to earn money to send back to their families, but how can they possibly meet these expectations?
It is all very well to extol the glorious hospitality of America entreating the world to “Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me…”. Such generosity was suited to a new nation with huge empty spaces and rapidly growing industry in need of a work force. The situation of a “full” nation in a time of economic downturn is quite different. What is to become of the tens of thousands of vigorous young men arriving on Italian shores where there is nothing for them to do except sell African trinkets on the sidewalks of tourist centers? To make matters worse, the great contemporary thrust of technical innovation aims at replacing more and more workers with robots. Leftist denial of the problem leaves its exploitation and resolution to the extreme right.
Some leftist politicians in Italy, such as Stefano Fassina of the Sinistra Italiana are waking up to this need. A left that dogmatically ignores the real concerns of the people is doomed. A bold, honest, imaginative left is needed to champion Italians’ independence from both German-imposed austerity and the expensive military adventurism demanded by the United States. But the interlaced problems created by unregulated globalization do not lend themselves to easy solutions.
Diana Johnstone is a political writer, focusing primarily on European politics and Western foreign policy. She received a Ph.D. at the University of Minnesota and was active in the movement against the Vietnam War. Johnstone was European editor of the U.S. weekly In These Times from 1979 to 1990, and continues to be a correspondent for the publication. She was press officer of the Green group in the European Parliament from 1990 to 1996. Her books include Queen of Chaos: The Misadventures of Hillary Clinton, CounterPunch Books (2016) and Fools’ Crusade: Yugoslavia, NATO and Western Delusions, Pluto Press (2002).
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Sam Husseini: The entire US establishment helped lie their way into the Iraq war
By Slava Zilber | American Herald Tribune | October 14, 2019
Sam Husseini is a senior analyst with the Institute for Public Accuracy, independent journalist and contributor to The Nation and FAIR.
Slava Zilber: Sam, three years ago, you appeared on Talk Nation Radio with David Swanson and spoke about the case of the GCHQ whistleblower Katharine Gun. You pointed out that the people involved in the spying on the UN and the people authorizing the Iraq War were not held accountable:
“Virtually everybody who went along with the war, whether it is Kerry or Clinton, of course, the Bush administration themselves has falsified their own records in terms of why, what they did, when they did, why they did it, to the extent that they’ve been scrutinised at all.”
You also address it in a recent article. And recently, Joe Biden has been lying about his position on the Iraq War. How can such an important issue escape meaningful scrutiny? … continue
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