A leading maker of solar panels in the United States backed by Goldman Sachs has been using prison labor to help keep its production costs down.
Suniva Inc., based in Georgia, contracts with UNICOR, the name of the 80-year-old Federal Prison Industries, so inmates can assist with the assembly of solar panels.
Company officials told Reuters that prison labor accounts for only a small portion of its manufacturing operations, less than 10%. They say Suniva factories in Georgia and Michigan employing 350 people produce most of the panels. Several hundred inmates make solar panels at prisons in Sheridan, Oregon and Otisville, New York, reported the news organization.
The arrangement is part of a longtime government program said to be designed to prepare inmates for transitioning to life after their release from prison. However, prison workers reportedly earn only between 23 cents and $1.15 per hour, and are required to spend at least half of their UNICOR income to pay off court-ordered financial debts. Furthermore, the prisons apparently provide no job placement assistance for inmates released onto the streets, whose prison records follow them as they seek employment.
Relying on cheap labor is nothing new for Suniva, the third-largest producer of solar modules in the U.S., which was using factories in Asia until 18 months ago to keep costs down. Signing a contract with UNICOR has enabled them to transfer their operations to the U.S., according to company sales vice-president Matt Card.
“By making panels in the United States, Suniva has been able to capture lucrative federal contracts, avoid U.S. government tariffs on Chinese-made panels, and appeal to private sector customers who want American-made products,” wrote Reuters’ Nichola Groom.
The company reportedly earned nearly $100 million in revenue last year.
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
After a little more than six months since President Obama and his Cuban counterpart Raul Castro historic announcements on December 17th, 2014 that the United States and Cuba would begin to re-establish diplomatic relations, a crucial step has been taken to usher both nations down the path of normalization. The formal establishment of embassies in both countries, announced July 1st and beginning July 20th with the official opening of the embassy of the Republic of Cuba in Washington, will be the first time in 54 years that the two countries will have formal diplomatic relations.
This rapprochement that has transpired over a little more than half a year has been universally lauded and a number of foreign dignitaries have been quick to act. In May, France’s President François Hollande visited Cuba and expressed Europe’s desire to normalize relations as soon as possible and called upon the United States to end the embargo. During Dilma Roussef’s visit to the White House last week both she and Obama released a joint communique saying:
President Rousseff praised President Obama’s policy changes towards Cuba, and the Leaders agreed that the latest Summit of the Americas (held in Panama, on April 10 and 11, 2015) demonstrated the region’s capacity to overcome the differences of the past through dialogue, thereby paving the way for the region as a whole to find solutions to the common challenges facing the countries of the Americas.
American citizens have been in overwhelming support of ending the embargo for years and the latest results of last month’s Chicago Council’s poll indicates that 67% want an end to the embargo. Even a majority of Republicans (59%) think it’s time for an end to the extraterritorial anomaly that is the United States’ policy of economic strangulation.
The Cuban American community has also demonstrated in various polls, including electoral, that there is an ever-increasing majority of those who want normalization between the two nations. Since Obama’s change of Cuba policy started Cuban Americans have taken advantage of executive actions directed at them that gave the right to unlimited travel and send remittances to the island in 2009. In his 2012 re-election bid, Obama won the Cuban American vote in Florida and, emboldened, has continued to open up inroads within this powerful voting block in Southern Florida with his calls for normalization of relations.
As in most aspects, politicians usually lag behind society.
While the president has shown leadership it is up to Congress to dismantle the odious embargo codified in the Helms-Burton Act and also repeal other legislation that are aimed at punishing Cuba like the Torricelli Act of 1992 and the Cuban Adjustment Act of 1966.
Although several measures that would chip away at the embargo have been introduced in both chambers, there are still many Congress members who take the word of a few “representatives” who espouse to champion the aspirations of Cubans and Cuban Americans as if they truly spoke for these citizens as a whole. This cabal of recalcitrant hardliners is tragically failing their constituencies and the people on the island, whose misery is perpetuated by the pro-embargo stance of these hypocritical, self-serving opportunists. Their continued presence in Congress is something that the 1.8 million Cuban Americans who reside in southern Florida are going to have to reckon with in upcoming election cycles.
Indeed, even when Senator Jeff Flake’s (R-AZ) S. 299 Freedom to Travel to Cuba Act has garnered 44 cosponsors and bipartisan support, the odds that it get to a filibuster-proof 60 votes is still low as reflected by govtrack.com having put the bill’s chances of passing at 11%. It would need that to avoid the histrionics of Senators Marco Rubio (R-FL), Ted Cruz (R-TX), and Bob Menendez (D-NJ). Each of these legislators have sworn through clenched teeth that they will not allow any gains made by Obama’s overtures towards Cuba to continue and, in Cruz and Rubio’s case, have vowed to reverse all progress made with the island if elected to the White House.
Travel to Cuba has been a hot topic and since December 17th’s announcements there has been a 36% uptick in Americans visiting the island. Celebrities, politicians, business leaders, and curious Americans have flocked to the island. Airbnb’s fastest growing market is Cuba. Even White House Press Secretary Josh Earnest told a reporter that the president “would relish the opportunity” to visit Havana in 2016.
However, this past June 18th the House Appropriations Committee passed its FY 2016 Financial Services Appropriations bill. It contains three “Cuba-specific” prohibitions that were drafted by one of the most out-of-touch members of Congress – Mario Diaz-Balart. These prohibitions are a threat to the advancements in U.S.-Cuba relations and seek to effectively end president Obama’s highly successful “people-to-people” policy that has generated interest among all Americans to go to Cuba and see for themselves the devastating effects of the embargo. These measures will also hurt Cubans on the island who have benefited by the influx of tourism and those Cuban Americans who have invested in family businesses and enterprises in a nascent market economy. What will Diaz-Balart be facing on Election Day when a majority of his constituents have already voted against him and his draconian legislation with their feet by going to Cuba in the thousands and with their pocketbooks by sending money millions to loved ones on the island?
With all that has been accomplished in the past several months it should be noted that any or all of it could be sabotaged by the misguided efforts of a few delusional congressional members who have done very little in their undistinguished careers except perpetuate the pro-embargo industry. All the bills and measures for free travel and more commerce can be introduced but as long as these obstructionists remain in office full normalization will be a delayed longer than it should. Repealing the embargo will probably only happen if some, hopefully all, of these politicians are removed from office.
Normalization = Normal
Every day a new group or coalition appears that is in favor of travel and commerce with the island. James A. Williams, director of Engage Cuba and the New Cuba PAC, expressed this in an interview on June 16th on CNBC’s Squawk Box with Michelle Caruso-Cabrera.
MCC: “… There’s really nothing left to the embargo. What you’re calling for is an end to the embargo, essentially, right? Is there really anything left?”
JW: “Yeah, well, there are pieces of.., it depends on what you call the embargo. I mean, what I think we’re saying is we’re not interested in the debate around the democracy programs and some of these other issues that I think, you know, are still contentious and deserve a full debate, but I think we can all agree that trade and travel restrictions need to be lifted immediately.
MCC: “I’m confused, so when it comes to the democracy programs you just don’t want to talk about them? You don’t support them? You do support them?
JW: “It’s just not an issue we’re focusing on. You know our campaign is led by the private sector on its ability to travel freely, trade freely, uh, and have the opportunity for Americans to compete.”
I’d like to thank James Williams for graciously ceding the floor to those of us who have been “focusing on” these “contentious issues” for more than a few months. During the Obama era, it has been imperative for moderate Cuban American voices to defend the President’s actions and to call for the normalization of relations. A number of organizations, with which I have had the pleasure and honor of working, have been at the forefront of the U.S-Cuba conversation within the Cuban American community, denouncing U.S. policy that includes “democracy promotion”, and not working “behind the scenes” as Williams claims to have been doing these years.
The so-called “democracy promotion” programs have ham-handedly put the lives of Cubans and Americans in danger because of the illegal nature of said programs. Alarmingly, these programs have seen their budget increased to $30 million for FY 2016- a fifty percent increase from the $20 million in 2015. Alan Gross’ five-year imprisonment was the result of his activities as a subcontractor for the U.S. Agency for International Development (USAID), a benefactor of this increase. His wife sued the American government in 2013 for more than $60 million dollars for having sent him “on five semi-covert trips to Cuba without proper training, protection, or understanding of Cuban laws.” The case was eventually settled for $3.2 million a week after the historic announcements that released him on December 17th of last year. When Engage Cuba launched it did so in the residence of Scott Gilbert, Gross’ lawyer, with Gross present as a spokesperson for the endeavor. Using Gross as a spokesperson and then not wanting to talk about “democracy programs” defies credulity.
Some of Williams’ newfound friends (read backers), Cuban Americans who represent the Miami power base and until just recently had poured millions into the pro-embargo lobby, also didn’t want to focus on “contentious” issues like Cuba’s designation as a State Sponsor of Terrorism these past six years. So it’s no surprise that Engage Cuba doesn’t want to talk about the “democracy programs”. Nor do they want to broach the topic of the U.S. Naval Base at Guantanamo and the violation of Cuban sovereignty that it represents. Nor do they have much to say about the recent immigration crisis brought upon by Cubans realizing that they won’t be able to take advantage of the Cuban Adjustment Act much longer if relations are truly normalized. The United States unfair policy encourages Cubans to test their fate with the swirling currents of the Straits of Florida on homemade rafts and this perilous exodus will persist as long as U.S. law encourages it. Will it also be left to “others” to call for the immediate closure and abandonment of Radio and TV Marti, a $28 million taxpayer footed boondoggle that doesn’t even reach Cuban audiences? In short, if it’s not travel and trade Engage Cuba isn’t interested in commenting on it, for now.
Whether or not these supposed champions of “engagement” want to address the myriad obstacles that still stand in the way of full normalization, the Cuban government has, and will continue to call for an end to these hostile policies that violate Cuban law and international norms established in the Vienna Convention and the 1970 Declaration of the United Nations General Assembly on principles of international law concerning friendly relations of cooperation among states.
In an official statement by the Revolutionary Government of the Republic of Cuba on July 1st, the Cubans delineated a number of issues that would need to be rectified in order to fully normalize relations:
“There can be no normal relations between Cuba and the United States as long as the economic, commercial and financial blockade that continues to be rigorously applied, causing damages and scarcities for the Cuban people, is maintained, it is the main obstacle to the development of our economy, constitutes a violation of International Law and affects the interests of all countries, including those of the United States.
To achieve normalization it will also be indispensable that the territory illegally occupied by the Guantanamo Naval Base is returned, that radio and television transmissions to Cuba that are in violation of international norms are harmful to our sovereignty cease, that programs aimed at promoting subversion and internal destabilization are eliminated, and that the Cuban people are compensated for the human and economic damages caused by the policies of the United States.”
So no, it’s not just as easy as saying that restrictions on travel and trade need to be lifted immediately. The Cubans want a normalization that is actually “normal” and not just an influx of tourists and businessmen who either come to the island led by the perverse American provincial thought that Cuba needs to “be seen before it’s ruined” or by the repugnant philosophy that American dollars will fix every Cuban’s problems.
Besides, as long as the embargo exists there will always effectively be a travel ban because there is no infrastructure for all the Americans who suddenly want to go to visit. And, if Cuba cannot receive the international financing that it needs to truly make the recent economic reforms function, then no American business is going to be willing to invest any significant amount in a country where it can still be penalized by Uncle Sam.
After more than 50 years of animosity both nations are going to need diplomatic corps that aren’t hindered by extraterritorial legislation that puts them at odds. There is much work to be done in order for the United States and Cuba to trust each other and if there is a pre-ordained policy for regime change then that trust will never fully be forged.
Benjamin Willis is a founding member of Cuban Americans for Engagement (CAFE) and Co-Director of the United States Cuba Now PAC. http://www.uscubanowpac.com
The latest reports from Vienna indicate that the negotiators from Iran and the “5 +1″ nations, i.e., UN Security Council’s Permanent Powers plus Germany, have reached a tentative deal and are only inches away from turning it into the final agreement.
According to a source close to the Iran negotiation team, as of July 4th, there were still some residual issues regarding the sanctions, the Additional Protocol, and what is referred to as the “Possible Military Dimension (PMD),” but none of these at this stage is going to “break the deal” and are expected to be resolved in the next few days.
One of the reasons for the rapid progress of the Vienna talks has to do with the important Tehran visit of the head of International Atomic Energy Agency (IAEA), which was reportedly successful in closing the gaps between Iran and the agency, which has repeatedly confirmed the absence of any evidence of diversion of nuclear material in Iran and, yet, insisted that it is unable to verify the complete peacefulness of Iran’s civilian program in light of the PMD issues.
From Iran’s vantage point, however, the PMD has been exploited as a license to access Iran’s military secrets, which is why it was important for Mr. Amano to meet with Iranian leaders last week and reach a new understanding on the future scope of IAEA’s inspection access. Certainly, the U.S.’s unreasonable demand for inspections “anytime, anywhere,” is unacceptable and by now the Americans have realized it and retreated from what could have been a deal-breaker.
On the issue of sanctions, Iran has rightly insisted on the concept of simultaneity, so that the other side will not have the luxury of playing with delays after Iran’s fulfillment of its obligations. With respect to the timeline for the removal of sanctions, there would be a UN Security Council resolution that would render moot the existing sanctions resolutions on Iran. By all indications, this is a tremendous diplomatic victory for Iran, thus short cutting a potentially arduous and lengthy process.
Henceforth, with the imminent announcement of a final agreement in Vienna, the stage is set for a tremendous breakthrough in a nuclear stalemate that has blocked normal relations between Iran and the West. In addition to releasing the potential for rapid growth in market relations between the two sides, the final nuclear agreement also carries the seed of “linkage” to anti-terrorism, deemed as a “common threat” by Iran’s lead negotiator, foreign minister Javad Zarif, who has exhorted the West to wrap up the nuclear talks so that both sides can focus on a hitherto missing comprehensive strategy to defeat the growing menace of terrorism, reflected in the on-going barbaric atrocities of the self-declared Islamic State (Daesh).
In terms of the reaction by the conservative Arab bloc led by Saudi Arabia, the final nuclear deal ought to bring a new sense of realism to Riyadh, which has been led astray by a senseless, even genocidal, unilateral war on Yemen, which must be brought to an end for the sake of millions of suffering people in Yemen as well as regional stability. Some of the Persian Gulf Cooperation Council states such as UAE are eyeing to rip huge economic benefits from the lifting of Iran sanctions and, therefore, it is futile for Saudi Arabia to continue with its anti-deal approach that is bound to put it at odds with some PGCC member states.
Israel, on the other hand, is expected to continue with its current negative campaign against the deal, hoping that the U.S. Congress would ruin it, yet even the Republican opponents of the deal have recently conceded that they lack the votes to override a presidential veto. Hopefully, the nuclear deal will spawn a new era of attention on Israel-Palestinian issue, which has been quietly festering and requires serious global focus, which has to some extent been deflected so far due to the Iran nuclear crisis.
While it remains to be seen what a final nuclear agreement would look like in the technical details, it is a sure bet that it will be complex, multi-layered, and fully dependent on the faithful implementation by both sides, which is why a special dispute resolution commission will be handling the issues of potential non-compliance. A similar panel set up by the 2013 Geneva Agreement was highly successful in this regard and has thus set a positive precedent. One of Iran’s informal complaints during the timeline of the Geneva agreement has been, however, that the U.S. had officially agreed to certain provisions, such as the lifting of restrictions on shipping insurance, and yet would send envoys to Europe to discourage the Europeans from entering into new contracts with Iran. Such “double dealings” with Iran must stop after a final deal is signed, which will sound the death knell for the unjust sanctions regime on Iran.
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.
Last week we saw an encouraging sign that the 50 year cold war between the US and Cuba was finally coming to an end. President Obama announced on Wednesday that the US and Cuba would restore full diplomatic relations and that embassies could be re-opened in each country by the end of the month.
For this achievement, which was resisted by vested interests in the US, Obama should be praised. However we shouldn’t be too optimistic about truly establishing normal relations until we understand how relations became so abnormal in the first place. The destruction of relations between the two countries was preceded by US intervention on behalf of a hated Cuban dictator, Fulgencio Batista, which had turned the Cuban people against the United States and set the stage for the emergence of Fidel Castro.
In 1944, after Batista’s first term as president of Cuba, he emigrated to the United States. When his campaign to return to office in 1952 looked lost, he led a military coup, seized power, and declared himself president. The US government quickly recognized his military junta as the legitimate government of Cuba and began propping him up. Much of the Cuban economy was in the hands of well-connected US companies, and the US government exerted its influence to their financial benefit.
The Cuban dictatorship was helped along by US assistance. The secret police was trained by the United States and was used to brutally suppress any political opposition. Almost all US aid to Cuba was in the form of military equipment used brutally against the Cuban people. The US was seen as the force behind Batista’s dictatorship.
As John F. Kennedy said while campaigning for the presidency in 1960:
Fulgencio Batista murdered 20,000 Cubans in seven years … and he turned Democratic Cuba into a complete police state — destroying every individual liberty. Yet our aid to his regime, and the ineptness of our policies, enabled Batista to invoke the name of the United States in support of his reign of terror.
US intervention in Cuban affairs really got a boost when Batista was overthrown by the young revolutionary Fidel Castro. As Stephen Kinzer writes in the excellent book, “The Brothers,” Castro’s rise to power was not immediately condemned by the US. When Castro traveled to the US shortly after taking power, he met with Vice President Richard Nixon, who found that Castro “has those indefinable qualities which make him a leader of men.” But Nixon worried that the US might not be able “to orient him in the right direction.” Nixon was concerned that Castro sounded too much like Indonesian president Sukarno, who urged countries to join a non-aligned movement to resist both superpower camps at the time. The US could not tolerate the non-aligned movement and pushed a zero-sum game in global politics.
When Washington realized it could not control Castro, it embargoed the island and began launching plots to overthrow and even kill him. US policy likely was responsible for Castro turning to the Soviet Union in the first place.
This US intervention in Cuba’s internal affairs continues to this day. Even under Obama several US plots to overthrow the regime have been exposed. So while opening an embassy in Havana is a positive step, this embassy must be used to help promote truly normal relations with Cuba. That means an end to the embargo, an end to the travel ban, and an end to US interference in Cuba’s internal affairs. A more free and prosperous Cuba will not emerge as long as US interventionism continues to turn Cubans against the United States.
About 60 percent of Greeks have voted “No” in Sunday’s referendum on the bailout deal and austerity measures, reported the Interior Ministry after almost 30 percent of the vote had been counted.
About 9.9 million Greeks were eligible to take part in the vote, which was labeled #Greferendum on social media.
The “No” victory has been predicted by several opinion polls, including GPO, Metron Analysis and MRB, whose polls were released after the end of the voting.
Before the results were announced, the parliamentary spokesman for the ruling Syriza party, Nikos Filis, told Greek television that “No’”s prevalence in these polls indicated that Greek government can now make a deal with the Troika of international creditors.
“I think this is guidance for the government… to move forward quickly to seek a deal and normalise the banking system,” he said.
In the meantime, Greek government spokesman Gabriel Sakellaridis told state TV that Athens is planning to resume the talks with the Troika.
“The negotiations which will start must be concluded very soon, even after 48 hours,” Sakellaridis said, “We will undertake every effort to seal it soon.”
Proponents of the “Yes” vote argued that a “No” vote may lead to Greece’s exit from the Eurozone, and potentially the EU.
The talks between Greece and the Troika of international creditors – the EU, the European Central Bank and the International Monetary Fund – have stalled since June, after the Eurogroup declined to prolong a financial aid program for Greece or delay payments on earlier debts.
Greece, which has been in crisis since 2009, was supposed to make an IMF loan payment of €1.6 billion by June 30 but failed to do so. It is required to make another major payment of €3.5 billion to the ECB on July 20.
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.
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.
For five years now Europe has been troubled by the problem of the Greek debt. It all began with a relatively modest sum estimated at 15-20 billion euros, though at the time coping even with this debt seemed beyond the country’s capacity. Instead of simply writing off the debt, the “Troika” consisting of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) offered Greece a program of economic assistance in exchange for carrying out “urgent reforms”.
The results of this program, and of the help it provided, speak for themselves. Greece’s economy contracted by 27 per cent, and the debt rose to 320 billion, despite a partial write-off. From an original 60 per cent of GDP, the debt thus reached 175 per cent. Meanwhile, neither the Troika nor the previous Greek government acknowledged the obvious failure. The Troika not only insisted on continuing and even radicalising its clearly pointless actions, but also proposed treating the economic ills of other eurozone countries (Italy, Spain and Portugal) on the basis of the Greek model.
The actions of the Troika seem far less absurd if we reflect that the billions of euros intended to “save Greece” never reached that ill-fated country but were deposited immediately in German and French banks. Under the pretext of servicing the Greek debt a huge financial pyramid was created, analogous to a Ponzi scheme or to the MMM and GKO pyramids in 1990s Russia, but on a much greater scale. Meanwhile, part of the money that finished up in the banks was sucked directly out of Greece, while a further part came from the pockets of West European taxpayers. For decisions made effectively in Berlin and Brussels, with the approval of Paris, the citizens of other Eurozone countries were forced to pay. The victims included even the inhabitants of Spain and Italy, as well as of countries such as Austria and Finland that had no relation whatever to the events concerned. A sort of all-European pipeline was constructed, and used to siphon off state funds for the benefit of German and French financial capital.
With the coming to power of the left-wing government formed by the SYRIZA party and headed by Alexis Tsipras, hopes arose in Greece that the endless series of large and small economic, social and moral catastrophes which the country had suffered since 2008 would finally come to an end. Even if the situation did not improve, things would at least proceed differently. SYRIZA had been elected with a clear mandate to end the policies of economic austerity, to put a stop to the privatisation and commercialisation of the public sector, and above all, to give Greeks back their self-respect by conducting tough, principled negotiations with the creditors who in recent years had behaved toward the country as though they were an occupation administration. SYRIZA, moreover, was considered in Europe to be pro-Russian; during the election campaign representatives of the party had repeatedly voiced disagreement with EU policy toward Russia, criticising the imposition of sanctions and condemning the new political order imposed in Ukraine following the political overturn of February 2014.
The first agreements concluded by the new Greek government with its creditors showed, however, that in practice everything was turning out quite differently. The representatives of Athens made heated declarations, and then, after securing only minimal amendments, proceeded to sign the next agreement dictated by the creditors. In part, this inconsistency resulted from the contradictions of the mandate obtained by Tsipras and his colleagues. They had promised to put an end to the economic austerity that was killing demand and production. But they also pledged to keep the country within the Eurozone and the EU, stressing that a default on foreign debts had to be avoided. This way of formulating the question handed Greeks over to the mercy of their creditors.
To pay off the debts is simply impossible.
Moreover, a re-launching of the economy is technically inconceivable unless the harsh rules imposed by the ECB are rejected, along with its insistence on a dramatic increase in competitiveness unaided by a lowering of the exchange rate. Since it has been understood from the outset that the ECB will not agree to sharply lower the euro exchange rate solely in order to save Greece, it is clear that in technical terms there is not the slightest chance of a successful exit from the dilemma without Greece quitting the Eurozone and returning to the drachma. The only real question has been whether this exit will be planned, organised and prepared in advance, or whether it will be chaotic and disastrous. The situation is very similar to the one in Argentina in 2001, when after a default the peso had to be decoupled from the dollar if economic growth was to resume.
Nevertheless, even discussing this sole realistic scenario, let alone making preparations to carry it out, has been banned; if such a course were followed, the German and French banks would stand to suffer, along with the reputations of the EU leaders. So long as the Greek government accepts these conditions, it is in the situation of a doctor who undertakes to treat a cancer sufferer without infringing on the “lawful interests” of the tumour and without placing obstacles in the way of its growth. Or, it is like a person who negotiates with vampires on how much of his or her blood they will drink. In each case, the prior interests recognised are those of the vampires.
For the sake of fairness, it should be acknowledged that to a certain degree the contradictions of SYRIZA’s position reflect those of Greek society itself. On the one hand, many Greeks are outraged and want changes, while on the other, people are afraid to risk their middle-class comforts, even though these comforts are diminishing by the day. So long as substantial numbers of the population still have savings in euros, these people are paralysed by fear that their money will be lost or devalued. It is one thing to attend demonstrations demanding that the creditors “respect the country”, and quite another to be ready, right now, to accept particular sacrifices and risks for the sake of one’s own future. It is true that there is no other way out, but both the authorities and society need to think and talk about this openly. Through making statements that try to satisfy everyone, the Tsipras government has instead driven itself into a trap.
The problem is not so much that drastic and humiliating conditions have repeatedly been imposed on Greece by its creditors, as that these agreements are not solving the dilemma but exacerbating it. The debt crisis is worsening, and the sum owed is increasing – both in absolute terms and in relation to the size of the economy as the latter shrinks under the impact of the crisis. Consequently, any new agreement simply assumes that a new crisis will arise after a few months. Each time, this new crisis is more destructive.
While lacking the resolve to answer the EU leaders with an emphatic “no”, Alexis Tsipras and his finance minister, the economist Giannis Varoufakis (an import from the University of Texas), cannot fail to understand that agreeing with the Troika will also turn out disastrously for them. Before their eyes, just such a capitulation only two years ago transformed the powerful social democratic party PASOK from the country’s leading political force into an outsider.
Tsipras has sought to manoeuvre, doing his best to please everyone. He has reassured the creditors, indulged the petty-bourgeois illusions of voters, and delivered radical speeches to meetings of left activists. While promising everyone the maximum possible, his government in practice has tried to sabotage some of the agreements signed with the Troika, particularly in cases where the signatures were affixed by earlier administrations. But the ministers have lacked the courage even to suggest that these agreements might be abrogated, or that the government might openly refuse to carry out their stipulations. A notable example of the Greek government’s diplomatic approach is the position it has taken on the question of sanctions against Russia. Under the rules of the EU, Greece could simply block these sanctions in the summer of 2015. This demand was raised by members of the SYRIZA party itself, when they voted en bloc in the European Parliament against anti-Russian resolutions. But in the heat of the next round of negotiations between the Troika and the Greeks, at a time when Tsipras himself was in St Petersburg explaining to Russian colleagues the prospects for the development of special relations with Athens, his representatives in the EU gave their backing to the sanctions. Addressing the public, Greek diplomats then stated that they had fought like lions on behalf of Russian interests, and that it was only because of their persistence and principled character that the sanctions had been extended for a mere six months, instead of twelve months as the Germans had demanded.
Tsipras’s policy of compromise can be explained in part by a desire to win time in expectation of the elections in Spain, where the left coalition headed by the Podemos party had a serious chance of success. Spain is a far more influential country than Greece, with a far stronger economy, but is suffering from a very similar if less severe crisis. If Podemos were to come to power, Athens would be able to escape from its international isolation. In addition, the Left Bloc in Portugal has a definite chance of success. In other words, an opportunity has appeared to establish an international coalition of Mediterranean countries opposing Berlin and Brussels. But among the public in Spain and Portugal, Tsipras’s own actions and his evident weakness have raised questions about the advisability of placing trust in the left alternative, thus weakening the hopes of the left in those countries.
Within the European left milieu, sympathy nevertheless remains for SYRIZA as a party that finds itself in extremely difficult circumstances. Against the background of many years of setbacks for the European left, Tsipras’s initial successes inspired hopes which people are reluctant to abandon. The SYRIZA leader’s principle, of first making radical speeches and then of giving way to the superior forces of his opponents, seemed to be justified. Not only in other parts of Europe but in Greece as well, the popularity of Tsipras’s government increased. People not only refrained from condemning him, but pitied him as the hostage of vampires against which he was time and again proving powerless.
To fool pseudo-lefts and provincial petty bourgeois is not particularly difficult, but financial vampires do not fall for such tricks. The sabotage aroused righteous indignation in the creditors, who steadily increased the pressure. The agreements which the Greeks signed with the creditors after SYRIZA came to office were no better than those endorsed by the previous government, and had the same results.
In June, when the next round of payments fell due, there turned out to be no money in the budget.
A further restructuring of the debt was essential. In exchange, the Troika demanded the acceptance of a new “reform package”, by comparison with which all the preceding austerity measures seemed mere warm-up exercises. At one and the same time wages and pensions would have to be cut, taxes would need to be raised, and all concessions would have to be stripped from tourism, which amid the destruction of industry and the decline of agriculture remained the only relatively stable sector of the economy. The country would sink inevitably into a new spiral of recession. For SYRIZA, this would mean not only abandoning all its election promises, but also submitting to public humiliation, with the obvious prospect of defeat at the next elections. This, indeed, was what the creditors were seeking.
On June 22 Greece effectively capitulated. The government agreed to extract more revenue from the Value Added Tax, raising it to 0.93 per cent of GDP, and to increase taxes on shipping companies (in other words, to make trips between Greek islands and the mainland more expensive). A cut to pensions was also promised, though the Athens authorities asked to be allowed to introduce the changes involved over time rather than immediately.
The only point on which the Greek negotiators demurred, in order to save face, was a demand that the Value Added Tax be raised to 1 per cent of GDP. In other words, the extent of their resistance was a whole 0.07 per cent. The Greek side meanwhile agreed that company tax should be levied at the rate of 28 per cent, instead of 29 per cent as it had initially suggested to the Troika. The Greeks also asked to be allowed to keep defence spending at its former level; this matched the general requirements of the NATO bloc, of which Greece is part.
The game, it might have seemed, was over. The world financial press celebrated, and prices rose on the share markets. In Athens, there was even a demonstration by members of right-wing parties supporting the creditors. Well-dressed citizens gathered in the central Syntagma Square, calling for pensions to be reduced. True, there were not many of these demonstrators, only about 1500, but the television managed to make the picture so impressive that even the well-known American commentator Paul Craig Roberts, a sharp critic of the policy of the financial institutions, expressed puzzlement at the way Greeks had apparently been brainwashed to the point of agreeing to their own country’s humiliation.
Then the unexpected happened. German representatives declared their dissatisfaction at the speed with which the European Commission welcomed the new offers from Athens. Under pressure from Berlin, Tsipras’s offers were rejected. The Greeks had surrendered, but as it turned out, the Germans were not taking prisoners.
The Eurocrats not only refused to agree to the symbolic concessions needed by Tsipras and Varoufakis if they were to save face, but like gangsters with a client who is behind in paying protection money, began making new demands. With its back to the wall, the Greek government suddenly displayed a courage born of despair. Tsipras delivered a fiery speech to the people, and called a referendum. Greeks would decide for themselves whether to agree to the demands of the creditors. The last PASOK prime minister, George Papandreou, had planned to do something generally similar, but the creditors applied pressure to him, and he renounced his attempt. The upshot was that Papandreou lost his reputation, his job as premier, and even his position at the head of his own party. Knowing the fate of his predecessor, Tsipras showed more consistency. A further inducement for him was the fact that even before the eurocrats had rejected the “compromise” he had offered, a revolt had broken out in the SYRIZA ranks, and it was clear that if the agreement with the Troika was to get through parliament, it would only be with the votes of the rightists.
This time, the deputies of the conservative New Democracy party tried to block the vote on the referendum. But eventually they returned to the chamber, and the resolution was adopted. On July 5 Greeks are to decide on whether or not to agree to the conditions of the financial vampires.
It is significant that the Troika characterised the use by the Greeks of this democratic procedure as a rejection of the agreement. Troika representatives then called off the talks and declared that “aid” to Greece would cease from June 30. This means that regardless of the outcome of the referendum, a technical default from July 1 is inevitable, and this in turn will lead almost automatically to Greece’s exit from the eurozone and return to the drachma.
The chance that the supporters of austerity would win the referendum, illusory in any case, has now vanished completely.
What was bound to occur has now actually happened, just as in Argentina in 2001, where all political forces tried desperately to avoid a default and exit from the dollar zone (the Argentinian peso was tied to the US dollar), but where this occurred anyway. In both Argentina and Russia, financial collapse was followed by a few dramatic and chaotic months, after which an economic recovery began. The situation in Greece is somewhat more complex, but in Greece as well the shift to an inevitably devalued drachma opens a range of possibilities. Cheap resorts will attract the tourists who are now in critically short supply (Russian tourism alone in Greece has shrunk this year by 70 per cent). New prospects will open up for tourism and shipbuilding. Relations with Russia could also be placed on a more solid footing.
The situation has turned out to the benefit of Greece, but despite the actions of the country’s present leaders rather than because of them. It should, though, be recognised that Tsipras, even if he dragged out his decision until the very last moment, has nevertheless shown that he has a better claim to the role of national leader than his predecessors. The Greeks were forced to bend, but they were not broken.
What, though, can have motivated the Berlin leaders, when they refused to accept the Greek capitulation? It is possible, of course, that the German leaders simply made a mistake. The situation ran out of control because each side failed to anticipate the reaction of the other. The Greeks overestimated the rationalism of the Germans, and the Germans, the opportunism of the Greeks. The more acute a crisis becomes, the more mistakes are made; this is the general logic of the historical process. It is not excluded that the leaders in Berlin misjudged the likely results of the talks between Russia and Greece, and hoped that the Russians would supply Tsipras with money that the Greeks could use to pay off the creditors. But Tsipras left St Petersburg without having received any money, though with an agreement to build a gas pipeline that for technical reasons will be impossible to implement before 2018 (it should be noted that the Russian gas corporation Gazprom then and there announced that gas transit through Ukraine would continue after 2019, placing the profitability of the highly expensive Greco-Turkish pipeline in question).
Nor can the possibility be excluded that Berlin consciously provoked the crisis.
German analysts may have calculated that the debt bubble would burst in any case, and have decided to deflate it themselves, without waiting for events to develop spontaneously. Even if agreement had been reached on the conditions set down by the Troika, new crises would not only be “predictable with mathematical certainty” (as Varoufakis stated), but much more importantly, the proportion of the funds pumped by the German banks out of Greece would diminish with every new cycle, while the share coming from the German taxpayer would increase. In other words, political risk would be added to the risk that the debt pyramid would crumble. Members of the public in northern Europe are beginning to grasp that under the pretext of “saving Greece”, they themselves are being robbed by “their own” side. Even if northern Europeans fail to understand this, they will still mount resistance, out of reluctance to part with their money. It is also worth noting the publication of the sadly notorious Charlie Hebdo issue that came out with the headline “Drown the Greek to save Europe”.
So – was it evil intent, or a collective miscalculation?
These two explanations, though logically counterposed, may in reality serve to reinforce one another. There was a degree of ill-intent, but there were also miscalculations on both sides. We may recall that it was in precisely this fashion that war broke out in 1914. All the various parties had prepared for a war, had planned it and wanted it, but events nevertheless unfolded in a fashion completely different from what they had counted on. Control over the situation had been lost.
It appears that the same happened this time. Even if the Troika intended something along the lines of “drowning the Greek”, things will now proceed in a way distinctly different from what they anticipated. The referendum called by Tsipras is sharply altering the psychological landscape not just in Athens, but throughout Europe. Willingly or otherwise, SYRIZA has raised the banner of resistance. For the other crisis-wracked countries of the eurozone, this will provide a signal that the financial vampires of the EU are not all-powerful. The vampires themselves will be forced to undertake even harsher measures, in an effort to halt the growing collapse of the neoliberal regime installed in the EU by the Maastricht and Lisbon talks. As history teaches us, such measures ultimately serve only to exacerbate a crisis, provoking more and more active resistance. This is now occurring in the countries of the European “centre” – Italy, France, and even Austria and Germany. In the present situation, however, no other road remains open to the ruling groups in Berlin and Brussels. And before the light appears at the end of the tunnel, we are bound to plunge still further into the depths of the crisis.
All of our countries will feel the direct effects, including Russia.
Translation: Renfrey Clarke.
Boris Kagarlitsky is the director of the Institute of Globalization Studies.
One of the main goals, according to World Bulletin/Al Ray, is to counter willingness to support “Boycott Divestment and Sanctions” movement against Israel within the European Union. The legislation was made by a group of congressmen and the American-Israel Public Affairs Committee (AIPAC).
The new US-Israel Trade and Commercial Enhancement Act is specifically targeted “to discourage politically motivated actions to boycott, divest from, or sanction Israel by states, non-member states of the United Nations, international organisations, or affiliated agencies of international organisations that are politically motivated and are intended to penalise or otherwise limit commercial relations specifically with Israel or persons doing business in Israel or in Israeli- controlled territories.”
The new legislation was signed in spite of numerous warnings from Obama’s advisors and officials, who said that such a law can seriously harm trade relations with the European Union members that favor “Boycott Divestment and Sanctions” movement and prohibit trading with Israeli companies that operate in the occupied territories.
Yesterday in The National Interest, Frank von Hippel, co-director of the Program on Science and Global Security at Princeton University’s Woodrow Wilson School of Public and International Affairs, floats the possibility of opening Iran’s domestic uranium enrichment program to international investment. Doing so, Von Hippel contends, would automatically “add a multinational layer of supervision to the program,” as countries that “buy shares in its enrichment program” would do so “in exchange for having full access to all the associated facilities and a say in how they are managed.”
For those who still insist on pretending that Iran’s legal, safeguarded nuclear energy program is “a threat to regional stability” that will be summarily unleashed from the tethers of agreed-to restrictions after the imminent multilateral deal allegedly sunsets a decade from now, Von Hippel’s suggestion should inspire confidence. With foreign investment and multinational involvement in the entire nuclear fuel cycle, coupled with the IAEA’s strict monitoring and inspection regime which has already long been in place, the potential for Iran’s program to ever be secretly militarized is virtually nil.
Furthermore, according to Von Hippel, offering such foreign stake in this Iranian industry “would mitigate the pressure on Saudi Arabia and other regional rivals of Iran to assert their own rights to ‘peaceful’ enrichment programs. Indeed, the door should be open for them to buy a share in the multinational program as well.”
The article’s headline calls Von Hippel’s proposal to open up Iran’s enrichment program to multinational partnerships, “A Really Good Idea.”
And it is.
Except, while certainly a good idea, this isn’t actually a new idea. In fact, this very offer was made over a dozen years ago – by Iran.
It is true that Von Hippel, whose National Interest post is a pared down version of a longer, more detailed (and less alarmist) article he co-authored in the June 19 issue of Science magazine, does make passing reference to the fact that “[s]enior Iranian officials have expressed openness to discussing multi-nationalization.” But this is a gross understatement considering Iran’s leadership and consistency on this issue.
Since its early stages, in fact, Iran has offered specifically to restrict its enrichment program and to open it up to international cooperation, thereby making in it literally impossible for the diversion of fissile material to weaponization efforts to take place unnoticed. As I have noted before, Iran was already making such gestures nearly a quarter century ago, only to be rebuffed, denied, ignored and dismissed by the United States.
In October 1992, for instance, in response to American concern over indications that Iran was pursuing a domestic enrichment program, Iran not only “repeatedly denied any non-peaceful intentions, stating that it accepts full-scope IAEA safeguards,” but also “indicated it is prepared to accept enhanced safeguards measures on both nuclear cooperation agreements with Russia and China, as well as having no objections to the return of the spent fuel to the country of origin as a similar agreement had been concluded with Germany during the 1970s.”
On July 1, 2003 – exactly 12 years ago today – Reuters reported that none other than Hassan Rouhani, then Secretary-General of Iran’s Supreme National Security Council, said Iran was “ready to accept the participation of other big industrialized countries in its [uranium] enrichment projects,” specifically as a means to resolve any questions over whether its nuclear program was peaceful and civilian in nature.
Following its voluntary suspension of uranium enrichment and implementation of the Additional Protocol as confidence-building measures during negotiations with the EU-3, Iran again raised the prospect of multinational collaboration. On March 23, 2005, the Iranians presented a four-phase plan to their European negotiating partners intended to end the nuclear impasse once and for all. It called for Iran to resume uranium enrichment, with EU cooperation, and for the Majlis (Iranian parliament) to begin the process of approving legislation that would permanently ban the “production, stockpiling, and use of nuclear weapons.”
Iran’s offer came on the heels of the IAEA’s own expert endorsement of multinational investment in enrichment programs.
This was not merely the stance of the reformist government of Mohammad Khatami, either. In his first address before the United Nations General Assembly in September 2005, newly-inaugurated Iranian President Mahmoud Ahmadinejad said that, as a “confidence building measure and in order to provide the greatest degree of transparency, the Islamic Republic of Iran is prepared to engage in serious partnership with private and public sectors of other countries in the implementation of uranium enrichment program in Iran. This represents the most far reaching step, outside all requirements of the NPT, being proposed by Iran as a further confidence building measure.”
In early November 2005 it was widely reported that “the Iranian government is allowing the country’s atomic energy agency to seek local or foreign investors for its currently suspended uranium enrichment activities.” Such investment, directed toward the Natanz facility then under construction in central Iran, would be sought “from the public or private sectors.”
Days later, Iranian state-run television stated that Iran would offer the international community “a 35% share in its uranium enrichment programme as a guarantee” that its nuclear program “won’t be diverted toward weapons.” This investment would allow “foreign countries and companies a role in Iran’s uranium enrichment programme,” providing the opportunity for such entities and organizations to “practically contribute in and monitor the uranium enrichment in Natanz.” Gholamreza Aghazade, an Iranian vice president and head of the Atomic Energy Organisation of Iran, told the press that this offer was “maximum concession” Tehran could offer for transparency. “The 35% share is not only investment,” he said. “They will have a presence in the process (of uranium enrichment) and production (of nuclear fuel).”
“It’s the best kind of international supervision totally negating any possibility of diversion (toward weapons),” Aghazade explained.
Later that month, on November 18, 2005, in yet another publicly presented proposal, the Iranian government repeated the offer set forth earlier that year, reiterating its willingness to officially ban nuclear weapons development through legislation, cap its level and scope of enrichment, immediately covert its enriched uranium to fuel rods “to preclude even the technical possibility of further enrichment” towards weapons-grade and “to provide unprecedented added guarantees” to the IAEA that its program would remain peaceful. The proposal, issued by Iran’s permanent mission to the United Nations, reiterated Iran’s “[a]cceptance of partnership with private and public sectors of other countries in the implementation of uranium enrichment program in Iran which engages other countries directly and removes any concerns.”
Iran’s offers were routinely rejected by the United States government, which maintained the absurd position that Iran capitulate to its demand of zero enrichment on Iranian soil. “We cannot have a single centrifuge spinning in Iran,” declared George W. Bush’s undersecretary of state for arms control Robert Joseph in early 2006.
In an April 5, 2006 oped in the New York Times, Iran’s then UN ambassador Javad Zarif laid out a number of proposals for resolving the nuclear standoff. In addition to affirming Iran’s continued commitment to the NPT, acceptance of limitations on enrichment, and its stance against “the development, production, stockpiling and use of nuclear weapons,” Zarif stated Iran’s willingness to “[a]ccept foreign partners, both public and private, in our uranium enrichment program.” He continued:
Iran has recently suggested the establishment of regional consortiums on fuel-cycle development that would be jointly owned and operated by countries possessing the technology and placed under atomic agency safeguards.
In an article for the Los Angeles Times at the end of that same year, Zarif reminded readers of these overtures, none of which were ever responded to by the United States.
Multinational investment in Iran’s enrichment program was endorsed by nuclear experts and MIT researchers Geoff Forden and John Thomson in various articles and reports in 2006 and 2007, as well as by former American diplomats Thomas R. Pickering and William Luers and nuclear expert Jim Walsh in an essay for the New York Review of Books in early 2008. Wholly in line with what Iranian officials had been saying for years, Pickering, Luers and Walsh wrote that a “jointly managed and operated on Iranian soil by a consortium including Iran and other governments… provides a realistic, workable solution to the US–Iranian nuclear standoff.” Such a program, they wrote, “will reduce the risk of proliferation and create the basis for a broader discussion not only of our disagreements but of our common interests as well.”
“Given the enhanced transparency of a multilateral arrangement and the constant presence in Iran of foreign monitors that such a plan would require,” the authors added, any “diversion of material or technology to a clandestine program” would be easily detected. Senators Chuck Hagel and Dianne Feinstein both responded positively to the proposal. The Bush administration dismissed it out of hand.
Iranian officials again endorsed the concept of opening its nuclear program to international investment and collaboration in during a March 2008 conference in Tehran.
In a comprehensive package proposed to the United Nations on May 13, 2008, Iran’s foreign minister Manuchehr Mottaki wrote that Iran was still ready to consider, among a great many other things, “Establishing enrichment and nuclear fuel production consortiums in different parts of the world – including in Iran.”
Reporting on the proposal shortly thereafter, The Guardian‘s Julian Borger noted that while the consortium idea was gaining traction in American “foreign policy circles,” it was still “resisted by the US, French and British governments.” An unnamed “British official” told Borger, “We would be ready to discuss it, as soon as Iran does what it knows it has to,” that is, suspend its enrichment program, an obvious and long-known nonstarter for post-2005 negotiations.
By resurrecting the notion of multinational investment in Iran’s enrichment program, Von Hippel does the conversation over nuclear negotiations a great service. Despite past difficulties regarding Iran’s stake in the Eurodif consortium and a history of American deception and deliberate denialism in breach of its NPT obligations, the prospect of international acceptance and cooperation in Iran’s nuclear industry is still an excellent way out of this manufactured crisis.
But by leaving out the fact that Iran itself has long been the leading champion of such a proposal unfortunately doesn’t give credit where credit is due.