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US, Poland behind Kiev Maidan unrest: Polish MEP

Janusz Korwin-Mikke , European lawmaker and leader of Poland’s conservative party

Janusz Korwin-Mikke , European lawmaker and leader of Poland’s conservative party
Press TV – April 19, 2015

The violent pro-EU protests staged in Ukraine’s Maidan Square last year were organized by the CIA spy agency and Polish figures, a European lawmaker and leader of Poland’s conservative KORWiN party says.

Janusz Korwin-Mikke made the remarks in an interview with Polish media, the Russia-based Sputnik news agency reported on Saturday.

In mid-February 2014, dozens of people were killed by gunmen during street battles in the center of the Ukrainian capital, Kiev. Pro-EU protesters had staged sit-ins at the Maidan Square since November 2013 to protest against then President Viktor Yanukovych’s refusal to sign an Association Agreement with Brussels in favor of closer ties with Russia.

Korwin-Mikke said that the snipers in Kiev had also been trained in Poland, adding the “terrorists shot dead 40 demonstrators and 20 police officers to provoke unrest and the truth about this is finally coming out.”

This file photo shows the Maidan Square in Kiev, Ukraine, which was destroyed by violence during protests in February 2014.

The Polish politician also pointed to the admission by US Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland that Washington had spent billions of dollars to destabilize Ukraine.

“Victoria Nuland openly admitted that he Americans had spent $5 billion to destabilize the situation in Ukraine, and what we now have in Ukraine is an American aggression with (Russian President Vladimir) Putin bearing the brunt of it all,” said Korwin-Mikke.

Days after the deadly shootings in Kiev, Yanukovych was ousted on February 22, 2014, by Western-backed groups. The ouster triggered in its turn pro-Russia protests in the country’s southern and eastern regions.

In a bid to crush the pro-Russia protests, Kiev launched military operations in mid-April last year, causing deadly clashes in the country’s two mainly Russian-speaking regions of Donetsk and Lugansk in eastern Ukraine.

The warring sides inked a ceasefire agreement in the Belarusian capital, Minsk, in February. Since then, both sides have, on numerous occasions, accused each other of breaking the truce.

The fighting has taken a heavy toll on thousands of people. More than 6,100 people have died, while nearly 15,500 have been injured in the conflict, the United Nations says.

April 19, 2015 Posted by | False Flag Terrorism | , , , , | Leave a comment

Wolf Pack vs. Bear

By Anne Williamson | LewRockwell | April 16, 2015

Having now had a year’s time to get better acquainted with their new Ukrainian friends and the neighborhood overall, Europeans are losing their taste for economic sanctions on Russia.

Contrary to American assurances, economic warfare against Russia meant to compel the return of Crimea to Ukraine hasn’t worked. Nor did the Ukrainian military’s campaign against the Donbas tame the Russian “aggression” mainstream media shouts about daily. All Europe has achieved to date is tens of billions in lost trade and Russia’s abandonment of the South Stream pipeline.

The Russians were building South Stream to insure the – politely put – “integrity” of gas flows to Europe while in transit across Ukraine, and put an end to the country’s 24-year racket of holding Russia’s energy commerce with Europe hostage by virtue of having inherited a key segment of the Soviet pipeline network. The loss of jobs and transit revenues their participation in the construction and operation of South Stream promised was keenly felt in Hungary, Bulgaria, Serbia, Slovenia, Croatia, Macedonia and Bosnia-Herzegovina.  Austria, France, Italy, Cyprus, Luxembourg, the Czech Republic and Germany have all taken serious losses thanks to the trade sanctions as well.

Trade and employment losses coupled with some USD 40 billions more in IMF loans to Kiev, whose proceeds are most likely to be spent – at the US’s insistence – on yet more war, and the growing misery of all the Ukrainian people are typical of the now familiar results of US-organized sedition abroad. However, those results are usually observed in militarily weak, third world nations the US chooses to undermine for whatever reasons, and certainly not on the continent their most loyal and most capable allies occupy.

Besides which, the whole cockamamie story the US has been pushing vis a vis Crimea is falling apart. The fact that one year on there are no Crimean protests and no “Back to Kiev!” grass root committees has undermined the entire premise of the sanctions. Even year long multiple polling by western agencies has shown that large majorities of Crimeans have no regrets concerning the 2014 reunification with their motherland of some 300 years.

In truth, the world owes a debt of gratitude to the Russians. While US State Department operatives busied themselves in Kiev with constructing an interim, post-coup government of fascist stooges and native oligarchs, the Russians’ deft and lightening re-absorption of a willing Crimea took the meat right off the table. The American greenhorns in Kiev were left dumbfounded, and hopping mad.

With the Black Sea port of Sevastopol safely in Russian hands, and the country’s immediate strategic interests secure, there was no need for war. Given time, the Russians know Ukraine as presently constituted will defeat Ukraine, and that not even a Himalaya of dollars and the sacrifices of several generations of Ukrainians will put the country back together again. Default will be Ukraine’s only escape route.

But it is the antics of hyperbolic NATO operatives (Dragoon Ride, a Conga line of armored Stryker vehicles and troops rolling across Europe from the Baltics to central Europe in a “show of force,”) the bloviating of chest-beating US generals (the only way “to turn the tide” is “to start killing Russians”) and the dumb bellicosity of the US Congress for having authorized the export of lethal weaponry to Kiev that finally got the EU leadership looking sideways at one another. Just exactly what has the US gotten them into?

But it was the EU itself who bought, by bits and by pieces, into America’s scheme. The events in Ukraine have left the European Union naked before her own members’ populations, exposed as a highly-bureaucratized system of US vassalage so thoroughly in harness individual nations actually agreed to harm their own economies in pursuit of US policies. There’s a reason for the EU’s acquiescence: The EU and its leadership stands to gain should State Department neoconservatives deliver on their promises. The EU will get bigger and its artificial and suffocating institutions more deeply entrenched.

How so?

The only direction in which the EU can expand is to the East. Ukraine, Moldova, Transdniestr, Armenia and Georgia were all believed ripe for the taking, and each is or was being pursued with EU “association agreements,” which subvert each country to EU dictates while holding the prize of EU membership in abeyance.

Absorbing such contrarily-organized lands is the work of decades. No matter. Their capture alone will enable the ECB to go on an immediate super-binge of vendor financing, which it is believed will conjure up jobs, export profits, and, the ECB (European Central Bank) hopes, a new round of euro-based credit expansion and piratization that will, in the fullness of time, strip the newly “associated” lands and their citizens of their savings and property. Once the fiat money-engineered boom begins to fade, the expectation is that ongoing economic warfare against Russia, directed and policed by the US, will at last bear fruit. Only a small shove and a slight push will be needed to topple and then shatter Russia into bite-sized pieces for the west’s further consumption.

So set upon this course is the US that the White House’s recent offer of a slippery framework to Iran to conclude the Israeli-manufactured dispute over the country’s nuclear enrichment program has the look of arbitrage, indicating there are limits to just how much havoc Washington can create and oversee abroad. Besides, Iran is currently useful in the conflict with the US-created ISIS. With sanctions lifted, the flood of Iranian oil and gas coming to market would further harm Russia’s economic interests while supporting the building of new pipelines to Europe originating in the Middle East and North Africa (under indirect US control) and sparing any further need for US ally Saudi Arabia to continue pumping low-priced oil for which there is insufficient global demand.

As long as Angela Merkel keeps Germany on board, and Germany continues to fund the stagnant EU, the US’s high-tech version of a medieval siege of the Kremlin can proceed.

With new multilateral treaties agreed under cover of tax and banking transparency (FATCA) now in place, the US is well on its way to being able to track in real time every currency unit on the planet that is emitted, earned, deposited, withdrawn, spent, invested, loaned, and borrowed by means of the banks, long seen as a US-engineered globalism’s most effective police force. European governments’ war on cash is meant to insure all commerce will flow through the banks and therefore be recorded. These new surveillance capabilities will be exploited to the maximum in the case of both Russia and hesitant Europeans for the purposes of blackmail, extortion, and control.

In a digital battlescape staffed by the west’s soldiers of finance, winter will not save the Russians.

Another attack strategy the US is about to deploy, drawn not from history but from nature, is that of the wolf pack. Though NATO troops will bedevil Russia’s borders, no western troops will actually set foot on Russian territory prior to the country’s imminent collapse. That would be dangerous, but the more proxy wars and political upheavals the US can stir up along Russia’s periphery while the motherland suffers and declines under the west’s economic blockade, the better.

Necessary and experienced personnel are being appointed and NGOs beefed up in preparation for brewing new crises and rainbow revolutions along Russia’s “soft, underbelly”: the Nagorno-Karabakh enclave, which both Armenia and Azerbaijan claim, in Kyrgyzstan where the south and the north are alienated from one another, in Uzbekistan where control of the Fergana Valley is in dispute with Kyrgyzstan, and in Georgia, which hopes for the return of Ossetia and Abkhazia. Carrots and sticks will miraculously set many a fire.

Keeping those flames under control will seriously tax Russia’s resources.

US objectives include busting up the Collective Security Treaty Organization (CSTO), whose members include Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan, the Shanghai Cooperation Organization (SCO), whose members include China, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Russia, and the Eurasian Economic Union (EAEU), whose members – to date – include Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia.

However, there are problems with the above scenarios unfolding as planned.

US foreign policy assumes everyone on the planet wants to be an American, or – second best – a recipient of American interest and munificence, a notion which the state has successfully sold only to movie-mad foreign teenagers and naive Americans. Rather than being an advertisement for the benefits of American intervention, the Ukraine America is building might better serve as one for the beneficial avoidance of same through membership in the EAEU.

Russia is hardly new to the protection game. Armenia and Georgia, the first Christian nations on earth, soon found themselves unmoored in a sea of Islam. Each petitioned the Kremlin for inclusion into the empire. They wanted and needed the protection of the “Third Rome,” and they got it. Today Armenia wisely continues to huddle close to Russia, eschewing the opportunity of becoming a battle station in any anti-Azeri US campaign, while a US-enamored Georgia still chafes at the protection the US provides their former proxy, the corrupt Saakashvili regime. Azerbaijan has but to look at Iran to see what misfortune the US is quite willing to hand round. Uzbekistan and Kyrgyzstan have the example of their war torn neighbor, US-occupied Afghanistan, to contemplate.

US foreign policy further assumes that targets will stand still and only stare into the blinding glare of America’s oncoming headlights.

Russia’s abrupt shut down of the South Stream gas pipeline’s construction and the rapid replacement of European entry points and participants with a single exit point in Turkey from which Russian gas will flow to the rest of Europe through Greece along pipes it is now the EU’s responsibility to finance and build has put paid to that assumption. It is not only Russia that has an exploitable “soft underbelly.”

Despite the mainstream media’s shameless dissemination of western governments’ fatuous propaganda, and of what is sure to be an exploding supply of tit for tat, sufficient information is available to anyone who cares to look to determine who is destroying and who is trying to build, who is seeking peaceful co-operation and increasing trade and commerce between nations and who is demanding obedience to its diktat while waving a mailed fist.

To paraphrase Mae West, “Democracy has nothin’ to do with it.”

It is certainly an irony of history, wild and raw, that Vladimir Putin, a man who once described himself as “a pure and utterly successful product of a Soviet patriotic education,” is today seen by an increasing number of alarmed citizens worldwide as liberty’s if not civilization’s best, if inadvertent and imperfect, hope. But those souls should have no illusions. Whatever the Russian president does, he will do for Russia’s sake, not ours.

But if Russia cannot stand, we will all sink together into tyranny or eternity.

April 18, 2015 Posted by | Economics | , , , , , , , , , , , , , , , , | 1 Comment

Russia readies end to Greek food embargo – Economy Minister

RT | April 8, 2015

Russia has drafted a number of proposals that could end the embargo on food products from Greece, Russia’s Economic Development Minister Aleksey Ulyukayev said at a meeting with Greek Prime Minister Alexis Tsipras on Wednesday.

“We’ll be discussing in detail this issue during the meeting of the Russian Prime Minister and his Greek counterpart tomorrow,” Ulyukayev told reporters, as quoted by TASS.

“We’ve prepared a number of proposals regarding the embargo issue for discussion,” the Economy Minister said.

Russia is also considering rescinding food sanctions against Cyprus and Hungary, according to Aleksey Pushkov, head of the Duma Foreign Affairs Committee.

Greece has been hit especially hard by the ban, as more than 40 percent of Greek exports are to Russia. In 2013, more than €178 million in fruits and conserves were exported to Russia, according to the Greek fruit export association, Incofruit-Hellas.

On March 3, Greece sent a letter to the Russian food watchdog Roselkhoznadzor requesting the temporary restrictions on agricultural products such as strawberries, kiwis, peaches, and seafood is lifted.

Up until the ban, Russia had been Greece’s biggest single trading partner worth $12.5 billion (€9.3 billion) by 2013, more than double the 2009 figure.

Russia’s agricultural food ban applies to EU countries and is not due to expire until August 2015, a year after the restrictions were imposed in response to Western sanctions.

Alexis Tsipras, the newly elected PM of Greece,is in Moscow for a two-day visit and meets Russian President Vladimir Putin on Wednesday afternoon. Distancing itself from its other EU members, Athens hopes to strike a chord of cooperation with Moscow.

“Your visit could not have come at a better time, as we must analyze what we could do together to restore the former rate of growth,” Putin said ahead of his meeting with Tsipras.

Tsipras has taken a hard-line stance against EU policies towards Russia,calling the sanctions a ”road to nowhere.”

April 8, 2015 Posted by | Economics | , , | Leave a comment

CIA Black Sites and Washington’s Allies

Re-Opening the Investigation

By BINOY KAMPMARK | CounterPunch | April 7, 2015

They certainly sought to please in those initial dark days when a position at the NATO table was at stake. This was something of a New World Order – the attacks after September 11, 2001 did certainly allow Washington to make that spurious case. The stakes were high, and the “need” for pressing intelligence saw a crude clipping of various liberties and protections.

Unfortunately, in so doing, willing allies and proxies lined up their maps, their facilities, and their accomplices in what became a global program of interrogation and torture. These locations willingly offered by host states came to be known as “black sites” and proved all too attractive to powers and institutions.

Lithuania’s case is a particularly conspicuous one. Its authorities have been reluctant to admit providing cover for CIA activities, let alone any specific location. A parliamentary inquiry held during 2009-2010 went so far as to suggest that such a provision had, in fact, been made, advising that prosecutors take the lead. The report in question noted a detention centre set up near Vilnius in 2004-2006.

But it also spoke in tones of reservation – CIA aircraft had landed in Lithuania, but it was not clear whether human cargo had accompanied it. (Why such aircraft would be found on Lithuanian soil without such cargo is an odd point in itself.)

Four years ago, the prosecutors dropped the investigation like a steaming hot potato. The action suggested that something foul was afoot – such a procedure did not look good for the US-Lithuanian relationship, and uncovering any more details than was necessary would have proven, at least in the public eye, impairing.

This has not stopped such actions as those of Saudi-born Abu Zubaydah, who became a near cult figure of the extraordinary rendition program during the Bush years. Zubaydah’s recourse has been through the European Court of Human Rights, where he is seeking to show that Lithuania violated the European Convention on Human Rights. He is arguing that Lithuania is responsible for his unlawful detention, torture and ill-treatment, the deprivation of the right to private and family life, the unlawful transfer from Lithuania, and ongoing violations of his right to legal recourse.

Then came the Senate Intelligence Committee Report on the CIA’s interrogation program, one waged with tentacle-like spread across a range of jurisdictions and continents. Its lurid subject matter got various prosecutors in a range of countries concerned. Had they been too slow off the mark? Much evidence suggested that they had.

The detention centre “Violet” noted in the Senate report seemed eerily close to the descriptions put forth in the Lithuanian parliamentary investigation. The Senate report noted how an amount approximating to $1 million was provided by the US to “show appreciation” for its creation, money which was conveyed via various “complex mechanisms” to evade the government ledgers.

Initially, it did not seem that much would change. Last month, Loreta Grauziniene, speaker of the Lithuanian parliament, told Reuters that, “No new inquest will be considered, because there is no longer sufficient support for it among parliamentary members.” In making such an observation, the speaker merely affirmed the link between state criminality and the will behind prosecuting it. Former president Valdas Adamkus typifies such indifference, insisting that “there were no prisons or prisoners in Lithuania,” a view he would maintain till seeing the incriminating “documents before my eyes”.

This month saw a slight modification of the stance. Lithuania’s senior prosecutor, Irmantas Mikelionis, “decided on January 22 to cancel the January 21, 2011 decision of prosecutors to stop the investigation into possible abuse, and has restarted the investigation.” According to Rita Stundiene, a spokeswoman for the prosecutors, “The prosecutor renewed a previously terminated probe and merged it with the ongoing pre-trial investigation [into the case of Mustafa al-Hawsawi].”

Emphasis will be directed at the alleged violation of two articles of the Lithuanian criminal code: the illegal transportation of a foreigner through Lithuanian territory (the case on CIA prisoner Mustafa al-Hawsawi provides a classic example); and the abuse of power by a state employee resulting in significant harm. In themselves, these read like misdemeanours, minor procedural blots. In actual fact, such conduct was the hallmark of CIA interrogatory procedures, aided and abetted by various state authorities.

Whether the renewed investigation is going to do anything more than keep the common record busy for a time is hard to know. As one of Zubaydah’s lawyers, Helen Duffy, argues, the gesture on the part of the Lithuanian prosecutors might also be construed as a tactic to ward off more concrete legal scrutiny in Strasbourg. “There is every reason to be sceptical about whether this is a meaningful investigation.” Any investigation, to be effective, had to be total.

Such prosecutorial actions tend to be kept on the books, and rarely move off them into the realm of action and consequence. Too much is deemed at stake for such alliances. Justice, in that sense, takes the most distant of backseats, while the soiled hands of the torturers remain in service.

Lithuania’s politicians generally have less of an interest in seeing CIA operatives, and their accomplices, behind bars than holding the fort against what is seen as a viable Russian threat from the east. Bigger enemies loom. Prosecutorial grit, in other words, is lacking.

Dr. Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com

April 7, 2015 Posted by | False Flag Terrorism, Subjugation - Torture | , , , , , | Leave a comment

Greece preparing for Grexit, own currency – media

RT | April 3, 2015

Athens is currently trying to negotiate a new bailout deal with its Troika of creditors, but if that falls ‘Plan B’ could reportedly involve getting rid of the euro and cutting off its banking system from the European Central Bank.

Greece’s government is getting ready to nationalize the country’s banks and return to the the drachma, the Telegraph reported citing sources.

“We are a left-wing government. If we have to choose between a default to the IMF or a default to our own people, it is a no-brainer,” a senior official told The Daily Telegraph.

“We will shut down the banks and nationalise them, and then issue IOUs if we have to, and we all know what this means. What we will not do is become a protectorate of the EU,” according to another source.

The drachma was Greece’s currency from 1832 until 2002, when it switched to the euro. At the time, 1 euro equaled about 340 drachma.

When the financial crisis hit Iceland in 2008, the government decided to let the banks fail and default on $85 billion, and the country’s three main banks were nationalized. The transition was painful- the stock market plummeted 90 percent, unemployment jumped to 10 percent, and inflation ballooned to 18 percent. Though the economy still struggles with an unstable currency, a slow and steady recovery has occurred. GDP is finally back at pre-crisis levels, unemployment has improved to 5 percent, and inflation is below 2.5 percent.

Crunch day April 9

The Greek government has €463.1 million of IMF loans to be repaid by April 9 and another €768 million falling due in May.

After Greece does this, and the EU approves the reform proposals by Finance Minister Yanis Varoufakis, the Troika of lenders- the IMF, the European Central Bank, and the European Commission, is expected to release the next €7.2 billion tranche to Athens.

According to senior official, Syriza and Prime Minister Alexis Tsipras have the power to decide not to make the upcoming payments.

“We may have to go into a silent arrears process with the IMF. This will cause a furor in the markets and means that the clock will start to tick much faster,” the source told The Telegraph.

On Friday the Finance Ministry denied rumors they wouldn’t pay the €460 million sum on April 9.

Countries in the past that have defaulted in their IMF loans include Sudan, Peru, Liberia, the Congo, Somalia, Zambia, Guyana, Yugoslavia, Vietnam, Zimbabwe, and Iraq.

With its massive €316 billion debt, a collapse of the Greek economy has the potential to shake the rest of Europe. The reason the EU came to Athens’ rescue with two bailouts totaling 240 billion euro was to protect the euro currency, which at the time was shared by 18 separate countries, Greece included.

In the case that lending is cut off, Greek banks will overnight become insolvent and Athens would have to start printing its own currency to replace the euro.

In February, deposits in Greek banks declined by around €7.6 billon to a 10-year low of €140.5 billion, as customers started pulling out their money over growing concerns the country may leave the eurozone.

Options on table

Alexis Tsipras came to power in January on the promise of no more austerity from the EU, but has had to compromise many of his big ideals in order to receive more funds.

The four month extension agreed in February will expire at the end of June. In anticipation, Greek and EU officials will hash out a more permanent solution, which could include a third bailout package, or if Greece has its way, debt forgiveness.

Greece needs to receive about €17 billion in order to meet its payments for the rest of 2015.

Another option Greece has is to turn its back on its European creditors and look eastward, either to China or Russia, for a loan with less strings attached. The Greek PM is scheduled to visit Moscow and meet with President Vladimir Putin on April 9.

Former Greek Prime Minister Antonis Samaras has returned to the political arena to try and build a coalition to make sure Greece stays in the eurozone.

Read more: Greece submits 26-page reform plan to get €7.2bn bailout

April 3, 2015 Posted by | Economics | , , | 2 Comments

Free Trade, Corporate Plunder and the War on Working People

By COLIN TODHUNTER | CounterPunch | April 3, 2015

Prior to last year’s national elections in India, there were calls for a Thatcherite revolution to fast-track the country towards privatisation and neo-liberalism. Under successive Thatcher-led governments in the eighties, however, inequalities skyrocketed in Britain and economic growth was no better than in the seventies.

Traditional manufacturing was decimated and international finance became the bedrock of the ‘new’ economy. Jobs disappeared over the horizon to cheap labour economies, corporations bought up public utilities, the rich got richer and many of Britain’s towns and cities in its former industrial heartland became shadows of their former selves. Low paid, insecure, non-unionised labour is now the norm and unemployment and underemployment are rife. Destroying ordinary people’s livelihoods was done in the name of ‘the national interest’. Destroying industry was done in the name of ‘efficiency’.

In 2010, 28 percent of the UK workforce, some 10.6 million people, either did not have a job, or had stopped looking for one. And that figure was calculated before many public sector jobs were slashed under the lie of ‘austerity’.

Today, much of the mainstream political and media rhetoric revolves around the need to create jobs, facilitate ‘free’ trade, ensure growth and make ‘the nation’ competitive. The endless, tedious mantra says ordinary people have to be ‘flexible’, ‘tighten their belts, expect to do a ‘fair day’s work for a fair day’s pay’ and let the market decide. This creates jobs. This fuels ‘growth’. Unfortunately, it does neither. What we have is austerity. What we have is an on-going economic crisis, a huge national debt, rule by profligate bankers and corporate entities and mass surveillance to keep ordinary people in check.

So what might the future hold? Unfortunately, more of the same.

The Transatlantic Trade and Investment Partnership

The Transatlantic Trade and Investment Partnership being negotiated between the EU and US is intended to be the biggest trade deal in history. The EU and US together account for 40 percent of global economic output. The European Commission tries to sell the deal to the public by claiming that the agreement will increase GDP by one percent and will entail massive job creation.

However, these claims are not supported even by its own studies, which predict a growth rate of just 0.01 percent GDP over the next ten years and the potential loss of jobs in several sectors, including agriculture. Corporations are lobbying EU-US trade negotiators to use the deal to weaken food safety, labour, health and environmental standards and undermine digital rights. Negotiations are shrouded in secrecy and are being driven by corporate interests. And the outcome could entail the bypassing of any democratic processes in order to push through corporate-friendly policies. The proposed agreement represents little more than a corporate power grab.

It should come as little surprise that this is the case. Based on a recent report, the European Commission’s trade and investment policy reveals a bunch of unelected technocrats who care little about what ordinary people want and negotiate on behalf of big business. The Commission has eagerly pursued a corporate agenda and has pushed for policies in sync with the interests of big business. It is effectively a captive but willing servant of a corporate agenda. Big business has been able to translate its massive wealth into political influence to render the European Commission a “disgrace to the democratic traditions of Europe.”

This proposed trade agreement (and others like it being negotiated across the world) is based on a firm belief in ‘the market’ (a euphemism for subsidies for the rich, cronyism, rigged markets and cartels) and the intense dislike of state intervention and state provision of goods and services. The ‘free market’ doctrine that underpins this belief attempts to convince people that nations can prosper by having austerity imposed on them and by embracing neo-liberalism and ‘free’ trade. This is a smokescreen that the financial-corporate elites hide behind while continuing to enrich themselves and secure taxpayer handouts, whether in the form of bank bailouts or other huge amounts of corporate dole.

In much of the West, the actual reality of neo-liberalism and the market is stagnating or declining wages in real terms, high levels of personal debt and a permanent underclass, while the rich and their corporations to rake in record profits and salt away wealth in tax havens.

Corporate plunder in India 

Thatcher was a handmaiden of the rich. Her role was to destroy ‘subversive’ or socialist tendencies within Britain and to shatter the post-1945 Keynesian consensus based on full employment, fairness and a robust welfare state. She tilted the balance of power in favour of elite interests by embarking on a pro-privatisation, anti-trade union/anti-welfare state policy agenda. Sections of the public regarded Thatcher as a strong leader who would get things done, where others before her had been too weak and dithered. In India, Narendra Modi has been portrayed in a similar light.

His government is attempting to move ahead with ‘reforms’ that others dragged their feet on. To date, India has experienced a brand of ‘neo-liberalism lite’. Yet what we have seen thus far has been state-backed violence and human rights abuses to ‘secure’ tribal areas for rich foreign and Indian corporations, increasing inequalities, more illicit money than ever pouring into Swiss bank accounts and massive corruption and cronyism.

Under Modi are we to witness an accelerated ‘restructuring’ of agriculture in favour of Western agribusiness? Will more farmers be forced from their land on behalf of commercial interests? Officialdom wants to depopulate rural areas by shifting over 600 million to cities. It begs the question: in an age of increasing automation, how will hundreds of millions of agriculture sector workers earn their livelihoods once they have left the land?

What type of already filthy and overburdened urban centres can play host to such a gigantic mass of humanity who were deemed ‘surplus to requirements’ in rural India and will possibly be (indeed, already are) deemed ‘surplus to requirements’ once in the cities?

Gandhi stated that the future of India lies in its villages. Rural society was regarded as India’s bedrock. But now that bedrock is being dug up. Global agritech companies have been granted license to influence key aspects of agriculture by controlling seeds and chemical inputs and by funding and thus distorting the biotech research agenda and aspects of overall development policy.

Part of that ‘development’ agenda is based on dismantling the Public Distribution System for food. Policy analyst Devinder Sharma notes that the government may eventually stop supporting farmers by doing away with the system of announcing the minimum support price for farmers and thereby reduce the subsidy outgo. He argues that farmers would be encouraged to grow cash crops for supermarkets and to ‘compete’ in a market based on trade policies that work in favour of big landowners and heavily subsidised Western agriculture.

By shifting towards a commercialised system that would also give the poor cash to buy food in the market place, rather than the almost half a million ‘ration shops’ that currently exist, the result will be what the WTO/ World Bank/IMF have been telling India to for a long time: to displace the farming population so that agribusiness can find a stronghold in India.

We need only look at what happened to the soy industry in India during the nineties, or last year’s report by GRAIN, to see how small farmers are forced from their land to benefit powerful global agritech. If it cannot be achieved by unfair trade policies and other duplicitous practices, it is achieved by repression and violence, as Helena Paul notes:

“Repression and displacement, often violent, of remaining rural populations, illness, falling local food production have all featured in this picture. Indigenous communities have been displaced and reduced to living on the capital’s rubbish dumps. This is a crime that we can rightly call genocide – the extinguishment of entire Peoples, their culture, their way of life and their environment.”

Although Helena Paul is referring to the situation in Paraguay, what she describes could well apply to India or elsewhere.

In addition, the secretive corporate-driven trade agreement being negotiated between the EU and India could fundamentally restructure Indian society in favour of Western corporate interests and adversely impact hundreds of millions and their livelihoods and traditional ways of living. And as with the proposed US-EU agreement, powerful transnational corporations would be able to by-pass national legislation that was implemented to safeguard the public’s rights. Governments could be sued by multinational companies for billions of dollars in private arbitration panels outside of national courts if laws, policies, court decisions or other actions are perceived to interfere with their investments.

A massive shift in global power and wealth from poor to rich

Current negotiations over ‘free’ trade agreements have little to do with free trade. They are more concerned with loosening regulatory barriers and bypassing any democratic processes to allow large corporations to destroy competition and siphon off wealth to the detriment of smaller, locally based firms and producers.

The planet’s super rich comprise a global elite. It is not a unified elite. But whether based in China, Russia or India, its members have to varying extents been incorporated into the Anglo-American system of trade and finance. For them, the ability to ‘do business’ is what matters, not national identity or the ability to empathise with someone toiling in a field who happened to be born on the same land mass. And in order ‘to do business’, government machinery has been corrupted and bent to serve their ends. In turn, organisations that were intended to be ‘by’ and ‘for’ ordinary working people have been successfully infiltrated and dealt with.

The increasing global takeover of agriculture by powerful agribusiness, the selling off of industrial developments built with public money and strategic assets and secretive corporate-driven trade agreements represent a massive corporate heist of wealth and power across the world. The world’s super rich regard ‘nations’ as population holding centres to be exploited whereby people are stripped of control of their livelihoods for personal gain. Whether it concerns rich oligarchs in the US or India’s billionaire business men, corporate profits and personal gain trump any notion of the ‘national interest’.

Still want a Thatcherite revolution?

Colin Todhunter is an extensively published independent writer and former social policy researcher based in the UK and India.

April 3, 2015 Posted by | Economics | , , , , , , , | Leave a comment

Greece submits 26-page reform plan to get €7.2bn bailout

RT | April 2, 2015

The Greek Finance Ministry has put together a 26-page list of policy reforms, which calls for €19 billion in funds this year. The reforms also plan to tackle tax evasion, and propose a €1.5 billion privatization plan.

Greece’s international creditors- the European Commission, International Monetary Fund, and European Central Bank- must OK the detailed reform plan before Greece can unlock its next €7.2 billion in bailout funds and avoid going bankrupt. The Greek government is still hesitant to push through the reforms, as they don’t align with hardline promises made back in January.

Greek Finance Minister Yanis Varoufakis intended to submit the plan to parliament, but it was leaked and released early.

The Financial Times obtained and uploaded the document in its entirety.

The plan reaffirms that Greece has no plan to exit the euro currency or the European Union.

“The Hellenic Republic considers itself to be a proud and indefeasible member of the European Union and an irrevocable member of the eurozone,” the document said.

Greece believes it is “urgent” to close the chapter on twin bailout packages from the EU totaling over €240 billion, and to start a fresh deal with less strings attached. The IMF, European Central Bank, and European Commission only lent money to Greece under the condition of severe austerity measures. These budget tightening measures have stifled growth in Greece, which has been in recession for the last six years, and has created a rift between the Syriza party and the country’s creditors. Several reports have sparked it may be looking elsewhere for support, perhaps to Russia.

The Finance Ministry predicts 1.4 percent growth in the real economy in 2015, and unemployment to drop to 22.5 percent on the assumption there are no policy changes.

Tying up the loose ends that allow individuals and businesses to evade taxes remains a priority for the new Syriza government, as does privatization of state assets, which the current government believes has “failed spectacularly” in the past. In 2015, Greece hopes to raise a total of €1.5 billion in privatization revenues, after coming nowhere close to raising the previously proposed €50 billion between 2011 and 2016, of which only €2.6 billion was realized between 2011-2013.

The new, revised plan of the Syriza government is to raise €22.3 billion in revenues by 2020.

Other parts of the plan propose more luxury taxes and a gradual hike in the minimum wage.

The list is still a “very long way from being a basis (for a deal),” a eurozone official said, as quoted by Reuters.

Neither side has signaled that they are close to a new deal. Ministers from the EU and Greece hope to reach a breakthrough in negotiations at their next meeting on April 24.

The European Central Bank has been used as leverage against Greece, by only raising the emergency liquidity for Greek banks by miniscule amounts. The total emergency liquidity assistance now stands at €71.8 billion, which Greece believes is too small.

Greece has told its creditors that it will run out of cash by April 9, and may not be able to pay its €450 million repayment to the International Monetary Fund (IMF) if it didn’t receive a cash injection.

With its massive €316 billion debt, a collapse of the Greek economy has the potential to shake the rest of Europe.

April 2, 2015 Posted by | Economics | , , | Leave a comment

Why the West is to blame for the crisis in Ukraine: the full story

Chris Nineham reviews Frontline Ukraine: Crisis in the Borderlands by Professor Richard Sakwa

WE ALL KNOW about of the fog of war, but the current coverage and commentary on the crisis in Ukraine arguably takes wartime disinformation to new levels.

Richard Sakwa’s new book is a rare and precious exception. It is clear and measured and carefully researched and it shows that the story we are told in the west about events inside Ukraine is deeply flawed.

More generally, it exposes the idea that Russia is the aggressor and the West the protector of Ukraine’s democratic will as a travesty of the truth. In short, Sakwa’s analysis is diametrically opposed to what passes for an explanation of the Ukraine crisis in the mainstream.

One of the book’s great strengths is that it sees the crisis as a product of two connected processes, one domestic, one geopolitical.

Far from being a straightforward expression of popular will, Sakwa details how the government that emerged from the Maidan protests in February 2014 represented the victory of a minority hardline anti-Russian Ukrainian nationalism.

But this minority could come to dominate, he argues, because of the context provided by an aggressive, US-led, Western foreign policy designed to assert Western control over Eastern Europe and, at least in its more hawkish versions, de-stabilise Russia.

The push to the east

Nato and the EU have been pushing steadily eastwards ever since the end of the Cold War, despite verbal assurances from a series of Western leaders that this would not happen.

Twelve countries have joined Nato in the region since 1991. Georgia and Ukraine were promised membership at the Nato Summit in Bucharest in 2008, despite repeated warnings from the Russian government that taking Nato to the Russian border would cause a security crisis of the first order. It was only the intercession of Germany and France that forced the US to put these plans on hold.

The push to the east continued in the form, amongst others, of a plan to get Ukraine to sign up to an ‘Association Agreement’ with the EU. It was this agreement, due to be signed in November 2013, which sparked the crisis. To grasp its significance it is important to understand just how closely tied Nato and the EU have become, especially since the Lisbon Treaty signed by EU members in 2007.

Article 4 in the proposed Association Agreement committed the signatories to ‘gradual convergence on foreign and security matters with the aim of Ukraine’s ever deeper involvement in the European Security area’ (p.76). As Sakwa puts it, “it is pure hypocrisy to argue that the EU is little more than an extended trading bloc: after Lisbon, it was institutionally a core part of the Atlantic security community, and had thus become geopolitical”. (p.255)

All parties involved must have known that this document, if signed, would have caused existential anxiety in Moscow. Defenders of the West’s drive to the east justify it as the reflection of the will of the people concerned.

This is disingenuous. As Western leaders themselves have publicly admitted, a campaign to buy Ukrainain hearts and minds has been running for decades. In 2013, US Assistant Secretary of State for European and Eurasian affairs, Victoria Nuland, publicly boasted of the fact that the US had invested $5 billion in ‘democracy promotion’ since 1991, a huge sum by USAID’s standards (p.86). It has since been revealed that the EU too spent 496 million on front groups in Ukraine between 2004 and 2013 (p.90).

And there was nothing democratic about the process. Discussions about the Association Agreement in fact took place behind the backs of the Ukrainian people and the text of the agreement was not available in Ukraine till the last moment (p.74). It actually contained very little in the way of assistance to Ukraine’s economy, and its centrepiece was a radical liberalisation of EU-Ukraine trade, a direct threat to the traditional economic relations between Ukraine and Russia.

In the end, for a mixture of reasons, President Yanokovich didn’t sign up to the deal. But the pressure to sign helped to polarise the debate in Ukraine. The meaning of the agreement was an open secret in Washington. In the words of Carl Gershman from the National Endowment for Democracy, while Ukraine was ‘the biggest prize’, there was, beyond that, an opportunity to put Putin ‘on the losing end not just in the near abroad but within Russia itself’. (p.75)

Internal impact

This concerted Western strategy to surround and weaken Russia had a profound impact on the internal politics of Ukraine. Sakwa explains well the complex history that links Ukraine and Russia, a history that can’t be reduced to simple formulas of colonial dependency. The long, indigenous tradition of seeing Ukraine as part of greater Russian union has resulted in Russian being the dominant language in most of the country despite ethnic Russians being a relatively small minority. (p.8)

For all the mixed motivations behind the Maidan protests, it was a hardline anti-Russian strand that came to dominate, first in the protests themselves and subsequently in the regime that emerged out of the forced removal of the Yanukovich government.

Western policy in general gave ballast to a hardline nationalist tradition in the country that saw Russia – and the Russian minorities within the country – as the enemies of Ukrainian nationalism.

This tradition centred on the historic figure of Stepan Bandera who collaborated with the German Nazis in atrocities against Jews, Poles and Russians in Ukraine during WW2. His followers formed SS divisions which were responsible for the deaths of up to half a million people. (pp16-17). A giant poster of Bandera hung by the side of the stage in the Maidan, and many leaders of the regime that came out of the Maidan saw him as part of their tradition.

The West was minutely involved in this process. The State Department’s Victoria Nuland visited Ukraine three times in the first few weeks of the Maidan protests (p.86). The famous February leaked phone call between her and the US ambassador in Ukraine in which Nuland said ‘fuck the EU’, showed the extent to which the US was pulling the strings and in which direction.

In the call Nuland judges that the relatively moderate nationalist Vitaly Klitschko, who had the backing of Germany and the EU, should be kept out of office and that Arseniey Yatsenhuk – ‘Yats’ she calls him – a man who turned out to be a hardline chauvinist, should be the key player. Yatsenyuk indeed became the acting Prime Minister in the new government.

The result, in Sakwa’s words, was that, ‘what had begun as a movement in support of ‘European values’ now became a struggle to assert a monist representation of Ukrainian nationhood. The amorphous liberal rhetoric gave way to a much harsher agenda of integrated nationhood, and the euphoria promoted a rash of ill-considered policies’ (p.94).

As President Yanukovich was impeached and the new government was installed, armed insurgents strutted around the debating chamber. Yatsenyuk’s government was a mixture of recycled oligarchs and hard-line nationalists and fascists. It contained only two ministers from the entire south and east of the country, the areas with closest ties to Russia.

Five cabinet positions out of 21 were taken by the far right Svoboda Party, despite the fact they had only received 8% of the seats in Parliament. The minister of justice and the deputy Prime Minister came from the Russophobic Svobada party and its founder, a man with a long record of ultra nationalist activism, Andriy Parubiy, became head of the NSDC security agency.

Provocations

One of the new government’s first acts was to vote to rescind a law guaranteeing the right to instate a second official language where there were significant minorities. Although the change in the law was blocked, the vote was correctly interpreted as an attack on Russian minorities across the country.

It was followed by the outlawing of the Ukrainian Communist Party and the establishment of a ‘special service’ to root out fifth columnists in the armed forces (p.137). A wave of physical assaults on Russians duly followed.

In Odessa, pro-Russian activists were driven from an encampment into a trade union building which was then torched, killing a minimum of 48, many hundreds according to locals. The massacre was hailed by one of the Maidan leaders, Dmytro Yarosh, as ‘another bright day in our national history’ (p.98).

This series of events made a civil war virtually inevitable. Uprisings in the east of the country were motivated by political resentments, opposition to neoliberal policies and other economic grievances against Kiev, but most of all by a sense of the need for self defence. Unlike the largely middle-class movement in Kiev, the anti-Maidan movement in the Donbass region was ‘lower-class, anti-oligarchic (and Russian nationalist)’ (p.149). It was not mainly separatist. A poll by the Pew Research Center in May 2014 found that 70 per cent of eastern Ukrainians wanted to keep the country intact, including 58 per cent of Russian speakers (p.149).

The view from the East

Sakwa carefully analyses Russia’s behaviour during the crisis. His conclusions are a frontal challenge to the West’s narrative that the crisis in the Ukraine was precipitated by Russian aggression.  As he shows, this is the opposite of the truth.

After the collapse of the Soviet Union, successive governments embraced a Western orientation, even making tentative moves to join Nato. In contrast to the stereotype that has been so carefully constructed, in his first term, Putin, and his successor Medvedev, sought engagement and accommodation with the West and tried to establish structured relationships with Nato and the EU. This approach faltered according to Sakwa, because of repeated rebuffs from the West:

“Continued conflicts in the post-Soviet space, the inability to establish genuine relations with the EU and disappointment following Russia’s positive demarche in its attempt to reboot relations with the US after 9/11 all combined to sour Putin’s new realist project” p.31

Over the last decade and a half, the Russian foreign policy establishment has become more and more alarmed by the unilateralism of US foreign policy, particularly over the invasion of Iraq and the attack on Libya. The non-negotiated push eastwards by Nato and the EU could of course only be perceived as hostile.

Even in these circumstances, however, for Sakwa, Putin’s central concern was to maintain the status quo in Ukraine, and try and ensure a friendly or at least neutral buffer state based on a stable settlement within the multi-ethnic Ukrainian state.

The forced, Western-backed removal of the Yanukovich government created an immediate crisis for the Russian government. Putin reacted by running a popular poll and an armed operation to secure the secession of the Crimean region to the USSR. Given the level of hostility and the mobilisations against Russian minorities, this can have surprised no-one. The Crimea was part of Russia until 1954, and it contains Sevastopol, Russia’s only major warm-water naval base. The idea that the Russian ruling class was going to stand aside and allow this area to be taken by a pro-Nato and anti-Russian government was obvious fantasy.

But if Putin’s long-term plan had been to invade, partition or even to destabilise the rest of Ukraine, he would have taken the opportunity presented by the virtual collapse of the Ukrainian government in February last year and the anti-Kiev uprisings in the east of the country which developed as a result.

His response was in fact was very different. Sakwa argues that despite the hoopla in the Western media, with the exception of the special case in Crimea, there is little evidence of significant military intervention by Russia in the months after the crisis of February, at least until August.

Putin supported the rebels to try and gain some leverage, but when it came to military assistance the rebels in the east were denouncing Putin for not delivering it. In Sakwa’s words, “Russia used proxies in the Donbas to achieve its goals within Ukraine, but this was not an attempted ‘land-grab’ or even a challenge to the international system” (p.182).

On 24 June in fact, the Russian Federation Council revoked a ruling which had previously allowed Russian military involvement in Ukraine ‘in order to normalise and regulate the situation in the eastern regions of Ukraine’ in the run up to tripartite talks involving the new Prime Minister Poroshenko  (p.162). But Poroshenko had been the continuity candidate. On taking office, he had issued a statement calling for ‘a united, single Ukraine’ and characterising insurgents in the south-east as ‘terrorists’ (p.161).

Sakwa, along with most other sane commentators, is far from idealising the authoritarian and sometimes aggressive Russian regime. He criticises its human rights record and its institutions of governance. If anything his instincts are with a reformed integrationist ‘wider European project’, which, given the behaviour of the actually-existing Western institutions, seems a bit of a forlorn hope.

But what Sakwa’s book does so well is to ask us to go beyond rhetoric and generalities and examine the actual dynamics of the particular situation in its national and international dimensions.

Most importantly, he argues, we can’t begin to understand the Ukrainian catastrophe unless we completely reject the dominant, not to say consensual, Western account of what is happening. This is a crisis created by the West, but by threatening Russia’s core interests, it contains the possibility of a catastrophic confrontation; ‘the US has sought to create a regime in its own image, while Russia has sought to prevent the creation of one hostile to its perceived interests’ he argues (p.255).

We in the West have a responsibility to do everything possible to force our leaders back from the brink.

See also:
Richard Sakwa: History returns with a vengeance in Ukraine
Jonathan Steele: Who is really responsible for the crisis in Ukraine boiling over?

March 30, 2015 Posted by | Book Review, Economics | , , , , | Leave a comment

Crimeans Keep Saying No to Ukraine

By Robert Parry | Consortium News | March 22, 2015

A central piece of the West’s false narrative on the Ukraine crisis has been that Russian President Vladimir Putin “invaded” Crimea and then staged a “sham” referendum purporting to show 96 percent support for leaving Ukraine and rejoining Russia. More recently, Assistant Secretary of State Victoria Nuland claimed that Putin has subjected Crimea to a “reign of terror.”

Both elements have been part of the “group think” that dominates U.S. political and media circles, but this propagandistic storyline simply isn’t true, especially the part about the Crimeans being subjugated by Russia.

Consistently, over the past year, polls conducted by major Western firms have revealed that the people of Crimea by overwhelming numbers prefer being part of Russia over Ukraine, an embarrassing reality that Forbes business magazine has now acknowledged.

An article by Kenneth Rapoza, a Forbes specialist on developing markets, cited these polls as showing that the Crimeans do not want the United States and the European Union to force them back into an unhappy marriage with Ukraine. “The Crimeans are happy right where they are” with Russia, Rapoza wrote.

“One year after the annexation of the Ukrainian peninsula in the Black Sea, poll after poll shows that the locals there — be they Ukrainians, ethnic Russians or Tartars are all in agreement: life with Russia is better than life with Ukraine,” he wrote, adding that “the bulk of humanity living on the Black Sea peninsula believe the referendum to secede from Ukraine was legit.”

Rapoza noted that a June 2014 Gallup poll, which was sponsored by the U.S. government’s Broadcasting Board of Governors, found that 82.8 percent of Crimeans said the March 16 referendum on secession reflected the views of the Crimean people. In the poll, when asked if joining Russia would improve their lives, 73.9 percent said yes and only 5.5 percent said no.

A February 2015 poll by German polling firm GfK found similar results. When Crimeans were asked “do you endorse Russia’s annexation of Crimea,” 93 percent gave a positive response, with 82 percent saying, “yes, definitely.” Only 2 percent said no, with the remainder unsure or not answering.

In other words, the West’s insistence that Russia must return Crimea to Ukraine would mean violating the age-old U.S. principle of a people’s right of self-determination. It would force the largely ethnic Russian population of Crimea to submit to a Ukrainian government that many Crimeans view as illegitimate, the result of a violent U.S.-backed coup on Feb. 22, 2014, that ousted elected President Viktor Yanukovych.

The coup touched off a brutal civil war in which the right-wing regime in Kiev dispatched neo-Nazi and other extremist militias to spearhead a fierce “anti-terrorism operation” against resistance from the ethnic Russian population in the east, which – like Crimea – had supported Yanukovych. More than 6,000 Ukrainians, most of them ethnic Russians, have been killed in the fighting.

Despite this reality, the mainstream U.S. news media has misreported the crisis and distorted the facts to conform to U.S. State Department propaganda. Thus, many Americans believe the false narrative about Russian troops crushing the popular will of the Crimean people, much as the U.S. public was misled about the Iraq situation in 2002-03 by many of the same news outlets.

Or, as Forbes’ Rapoza put it: “At some point, the West will have to recognize Crimea’s right to self rule. Unless we are all to believe that the locals polled by Gallup and GfK were done so with FSB bogey men standing by with guns in their hands.” (The FSB is a Russian intelligence agency.)

The GfK survey also found that Crimeans considered the Ukrainian media, which has been wildly anti-Russian, unreliable. Only 1 percent said the Ukrainian media “provides entirely truthful information” and only 4 percent said it was “more often truthful than deceitful.”

So, the people at the frontline of this conflict, where Assistant Secretary Nuland, detected a “reign of terror,” say they are not only satisfied with being restored to Russia, which controlled Crimea since the 1700s, but don’t trust the distorted version of events that they see on Ukrainian TV.

Practical Reasons

Some of the reasons for the Crimean attitudes are simply pragmatic. Russian pensions were three times larger than what the Ukrainian government paid – and now the Ukrainian pensions are being slashed further in compliance with austerity demands from the International Monetary Fund.

This month, Nuland boasted about those pension cuts in praising the Kiev regime’s steps toward becoming a “free-market state.” She also hailed “reforms” that will force Ukrainians to work harder and into old age and that slashed gas subsidies which had helped the poor pay their heating bills.

Last year, the New York Times and other U.S. news outlets also tossed around the word “invasion” quite promiscuously in discussing Crimea. But you may recall that you saw no images of Russian tanks crashing into the Crimean peninsula or an amphibious landing or paratroops descending from the skies. The reason was simple: Russian troops were already in Crimea.

The Russians had a lease agreement with Ukraine permitting up to 25,000 military personnel in Crimea to protect the Russian naval base at Sevastopol. About 16,000 Russian troops were on the ground when the Feb. 22, 2014 putsch occurred in Kiev – and after a crisis meeting at the Kremlin, they were dispatched to prevent the coup regime from imposing its control on Crimea’s people.

That Russian intervention set the stage for the March 16 referendum in which the voters of Crimea turned out in large numbers and voted overwhelmingly for secession from Ukraine and reintegration with Russia, a move that the Russian parliament and President Putin then approved.

Yet, as another part of its false reporting, the New York Times claimed that Putin denied that Russian troops had operated inside Crimea – when, in fact, he was quite open about it. For instance, on March 4, 2014, almost two weeks before the referendum, Putin discussed at a Moscow press conference the role of Russian troops in preventing the violence from spreading from Kiev to Crimea. Putin said:

“You should note that, thank God, not a single gunshot has been fired there. … Thus the tension in Crimea that was linked to the possibility of using our Armed Forces simply died down and there was no need to use them. The only thing we had to do, and we did it, was to enhance the defense of our military facilities because they were constantly receiving threats and we were aware of the armed nationalists moving in. We did this, it was the right thing to do and very timely.”

Two days after the referendum, which recorded the 96 percent vote in favor of seceding from Ukraine and rejoining Russia, Putin returned to the issue of Russian involvement in Crimea. In a formal speech to the Russian Federation, Putin justified Crimea’s desire to escape the grasp of the coup regime in Kiev, saying:

“Those who opposed the [Feb. 22] coup were immediately threatened with repression. Naturally, the first in line here was Crimea, the Russian-speaking Crimea. In view of this, the residents of Crimea and Sevastopol turned to Russia for help in defending their rights and lives, in preventing the events that were unfolding and are still underway in Kiev, Donetsk, Kharkov and other Ukrainian cities.

“Naturally, we could not leave this plea unheeded; we could not abandon Crimea and its residents in distress. This would have been betrayal on our part.”

But to make it appear that Putin was denying a military intervention, the Times and other U.S. news outlets truncated Putin’s statement when he said, “Russia’s Armed Forces never entered Crimea.” The Western press stopped there, ignoring what he said next: “they were there already in line with an international agreement.”

Putin’s point was that Russian troops based in Crimea took actions that diffused a possibly violent situation and gave the people of Crimea a chance to express their wishes through the ballot. But that version of events didn’t fit with the desired narrative pushed by the U.S. State Department and the New York Times. So the problem was solved by misrepresenting what Putin said.

But the larger issue now is whether the Obama administration and the European Union will insist on forcing the Crimean people – against their will – to rejoin Ukraine, a country that is rapidly sliding into the status of a failed state and a remarkably cruel one at that.

~

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).

March 22, 2015 Posted by | Mainstream Media, Warmongering | , , , , , | Leave a comment

The charade of Europe’s annual ‘threats’

By Jonathon Cook | The Blog from Nazareth | March 20, 2015

There is something deeply mendacious and cowardly about this ritual leaking by European diplomats of their annual report on Jerusalem. This year they’ve chosen to deposit the “confidential” report in the hands of the Guardian.

Obviously, the Europeans – and Americans – want this information about how angry they are with Israel disseminated as widely as possible in the wake of Netanyahu’s election win. “We’re mad and we’re not going to take it any more!” they shout – yet again, as they have done over the past four or five years.

As ever, the report is being described as “hard-hitting”; as ever, it threatens penalties against Israel; and as ever, it signifies nothing.

This is paltry theatre designed to persuade us – people with consciences – that our representatives care and that they are planning – at some point – to do something. But what it really indicates is that that something is going to amount to nothing more than empty threats. These are the same threats they have been making for more than a decade. And even were Europe actually to carry them out, they would have almost no impact on Israel.

Here’s what these “threats” consist of:

Known Jewish terrorists may face “restrictions” on entering Europe. (One would have hoped such “restrictions” were already in place.)

Europe may give its consumers more information about whether they are being misled into buying products from illegal settlements. (Such products should not even be available in Europe.)

And efforts will be made to “raise awareness” among European companies that it could be bad for business to be associated with the settlements. (And yet, according to free-market ideology, market forces ought to be enough to dissuade most companies from such associations – after all, they are supposed to want to maximise profits.)

In short, this list of potential “sanctions” is complete hot air. It’s zilch. And anyone claiming otherwise, including the Guardian, is simply conspiring in this diplomatic charade.

http://www.theguardian.com/world/2015/mar/20/jerusalem-at-boiling-point-of-polarisation-and-violence-eu-report

March 21, 2015 Posted by | Deception, Ethnic Cleansing, Racism, Zionism, Illegal Occupation, War Crimes | , , , | Leave a comment

NATO and the Two Central Conflicts of the Ukraine Crisis

By Karel van Wolferen • Unz Review • March 14, 2015

Where I live (the Netherlands), if you were to call NATO the world’s most dangerous institution, a consensus would quickly form to conclude that you must have lost your marbles. Yet, without NATO we would not have a Ukraine crisis, and no speculations about the possibility of war with Russia. Taking nuclear war seriously as a policy option should be listed in psychology handbooks as indicative of complete insanity or lethal ignorance. This has not stopped newspaper editors from speculating about it in their headlines, as they fill in the blanks of what a number top officials on both sides of the Atlantic have recently been half-saying or implying. With no NATO they would not have had occasion or reason to do so. Ukraine’s Deputy Foreign Minister Vadym Prystaiko recently said: “Everybody is afraid of fighting with a nuclear state. We are not anymore”. Political insanity can exist independently of NATO, but the least one can say is that it has become a facilitator of that insanity.

It would therefore be a momentous development for what is still called ‘the West’ if last week’s Der Spiegel signals a relevant German awakening. The weekly magazine published a hard hitting article in which the Supreme Allied Commander Europe, General Breedlove, is accused of undermining Chancellor Merkel’s attempts to find a solution to the Ukraine crisis through diplomacy. The military head of NATO, with his exaggerations and untruths about Russian troop movements, spouts “dangerous propaganda” according to officials in Merkel’s Chancellery, as quoted by the magazine. In other words, he can no longer be trusted.

Lies coming out of Washington that portray Putin as the grand aggressor are nothing new; for about a year they have formed a constant stream, from the lips of the Vice President, the Secretary of State, and in a milder form from the President himself. As a result the idea of Russian aggression has become close to an article of faith in Northern Europe’s mainstream media. But by singling out Breedlove, the German finger-pointing is directed at NATO, and Obama and Co may draw their own conclusions from it.

An assortment of conflicts have gone into the Ukraine crisis, but the two that now appear to have become fundamental to it play themselves out far away from that tragic country. One is centered in Washington where an out-of-his-depth president must decide whether to become realistic or give in further to right-wing forces that want to give the Kiev regime the weapons needed to continue its war in Eastern Ukraine. The second conflict is an incipient one about NATO – meaning European subservience to the United States – begun by Angela Merkel’s and Francois Hollande’s recently formed Peace Party, of which their mission to the Kremlin, Merkel’s joint press conference with Obama and the above mentioned German reporting are early signs.

Until now Obama has given as good as free rein to the liberal hawks and neocons in his own government. The War Party. A prominent member of that group, Victoria Nuland, who played a central role in helping to organize the coup d’état in Kiev last year, is eager to give Ukrainian President Petro Poroshenko the means to survive the onslaughts of supernationalists in his own environment and to subdue, finally, the anti-regime troops in South East Ukraine. Nuland works closely with Breedlove, and both have expressed themselves in denigrating terms about European recalcitrance in the face of what they want to accomplish.

Should Obama choose to become realistic, it would require measures to show the world his re-established political control over the State Department, and other institutions where neocons and “responsibility to protect” liberals have nestled. These have been writing America’s foreign policy basics since George W. Bush. It would also have to be accompanied by a genuine change of position vis-à-vis Putin. Obama must be aware that if, instead, he chooses to continue siding with the War Party, he runs the risk of demonstrating to all and sundry NATO’s impotence as military instrument of ‘The West’. The fighting forces of Donetsk and Lubansk wage an existential battle, and have all along been superior to the demoralized and apparently disorganized Kiev military. American intervention could only be effective if the proposed ‘lethal weapons’ have the capacity to turn the Ukraine war into a theatre of full military escalation, with tactical nuclear weapons an ultimate option.

The newly revealed split in transatlantic purposes may finally decide NATO’s future. As an institution that began living a life of its own with purposes and actions entirely different from, and at odds with, the original purposes for which it was created, NATO has had a much more fateful influence on political Europe than is routinely understood. Set up in 1949 to reassure a demoralized and war devastated Europe that it would help prevent a new war, the European member countries normally do not question the official reason that it exists to protect them. But there has not been a single instance since the demise of the Soviet Union to confirm such a function. It has, instead, forced governments to lie to their populations (we are threatened from behind the Hindu Kush and Saddam Hussein can make mushroom clouds), poisoning the air in which reasoned geopolitical discussion ought to have taken place. It has, moreover, created risks from blowback activity as member countries participated in wars that were none of NATO’s business.

But NATO’s worst consequence is what it has done to Europe’s prospects to pull itself out of its current muddle and become a political entity recognizable as such by the rest of the world. It has prevented the European Union from developing a defense policy, and consequently a foreign policy worthy of the term. Since the demise of its original reason for existence, it has caused Europe to slip ever further into a relationship vis-à-vis the United States best compared to medieval vassalage. That sad fact could hardly have been more blatantly obvious when in 2014 it succumbed to Washington’s pressure to join punitive economic sanctions against Putin’s Russia, to its own significant economic detriment, and for reasons justified solely by American propaganda.

The ease with which European Union heads of government fell in line behind misguided American efforts in the demonization of Putin reveals an even deeper problem. Since the end of the Cold War NATO has kept European politicians in a kind of geopolitical kindergarten, encouraging a comic book style vision of world affairs scripted in Washington with bad guys threatening the West and its ‘values’.

Some of this is of course well-understood in parts of the highest ruling circles of the European Union. Hence the recent suggestion made by EU Commission President Jean Claude Juncker in an interview with Germany’s Die Welt newspaper, that Europe requires its own army to amount to anything on the world stage, and also to impress Russia with what Europe stands for. Juncker is well-known as an enthusiast for a federal Europe.

One of the reasons to wake the European Union up to the fact that is a political entity, and to encourage its development in the direction of a federal superstructure, is that by projecting its own power it could create a much needed counterbalance to the tragic American extremism in world affairs. It would force a militarist United States to stop legitimizing its aggression with references and appeals to putative ‘Western values’.

The European Union missed a chance to establish itself squarely on the world stage when Jacques Chirac and Gerhard Schroeder did not clarify why they denied George W. Bush a UN Security Council resolution for his invasion of Iraq. They failed to explain to their own public and to the wider world that Europe continues to uphold the UN Charter as the basis of what we have in the way of fledgling international law. Instead, from that moment onward the world saw an open European display of utter subservience to a tragically out-of-control Washington in Afghanistan and Iraq.

The much bandied about ‘Western values’ do not now include earlier principles connected with international law, desirable world order, sovereignty or diplomacy. Those have been eclipsed by Atlanticism, which is a peculiar European secular faith. It holds that the United States, while perhaps flawed, is still an indispensable savior, and without its leadership there cannot be good world order. Hence we must all do what Washington demands.

Since Atlanticism is worshipped most intensely by NATO, we may think of this institution as the Church of this faith. Its texts are slogans about liberty, ‘shared values’, human rights and the need to spread democracy. It has of course derived strength from historical experience and also from deserved gratitude. A weak lingering fear that without American supervision European quarrels could turn nasty – an original additional reason for wanting to have it around – may still enter into it as well. But its resilience is probably most of all due to an utter dearth of imagination among the technocrats and ideologically crippled men and women that form majorities among Europe’s ruling elites.

“Like no other institution, NATO embodies Atlantic cohesion, something that remains essential for any Western effort to promote a degree of international order. NATO links Europe to the world’s most powerful country and uniquely ties the United States to a common procedure of consultation and cooperation. … European governments, therefore, are crazy not to support NATO. To watch it wither is at best frivolous, at worst dangerous”, so said the well-known NATO advocate Christoph Bertram when in 2004 misgivings about George W. Bush were creating European doubts about its value. The crucial point he and other true believers have missed is that already for some time now genuine consultation is no longer part of the deal and, more importantly, that at the center of their faith is a country addicted to enemies.

An enemy that others can agree on offers a simple, rudimentary, way of measuring the goodness, badness and seriousness of fellow citizens. Especially for American politicians being ‘tough’ on baddies has become an almost indispensable means to demonstrate their political bona fides. When obvious solutions for substantial political problems affecting everyday life are too controversial, politicians tend to take firm stands on matters that brook no disagreement, like crime or familiar enemies. For a long time one of the worst things that could befall an American candidate for high office was to be called “soft on communism”. President Lyndon Johnson against his own better judgment did not end the Vietnam War because he anticipated massive political attacks from Republican ranks for having caved in to it. Today Obama’s detractors in the Republican Party have the Ukraine crisis as a welcome opportunity to ‘prove’ their repeated claim that he is a weak president, who cannot stand up to the challenges supposedly thrown down by Vladimir Putin. As a result the ‘liberal hawks’ in Obama’s own administration have a field day in pushing anti-Russian hysteria.

The mandatory enemy has determined much geopolitical reality since the end of the Cold War. Living with one prompts standard behaviour that, in the way of all regular behaviour, itself becomes an institution, which does not simply go away when the enemy vanishes. So after the demise of the Soviet Union there was a sudden desperate need to promote countries to enemy position. Since 2001 the “soft on terrorism” accusation has partially substituted for the political use of the putative communist threat; and before the attacks that destroyed the World Trade Center Towers in Manhattan a fabrication of ‘rogue states’ or ‘failed states’ was introduced to keep all manner of Cold War institutions going.

When leading Vietnam War official Robert McNamara testified before Congress that with the Soviet Union gone America’s defense budget could be cut in half, the Pentagon and assorted military-related institutions suffered from a collective panic attack. Their answer was a report compiled by Colin Powell, then head of the Joint Chiefs of Staff, who obligingly created new threats, dictating that in future the United States must be able to fight two wars simultaneously against new enemies. China is held in reserve, radical Islamists are currently serving, and Putin’s Russia has now been added as a huge new but still familiar fake monster to join the list. With NATO membership the Europeans get America’s enemies as a bonus.

The one genuine threat to NATO, the fact that it is obsolete, has remained mostly hidden. It has been searching for causes that would keep it relevant, hence the involvement of member states in Afghanistan and Iraq and Mali and Libya. Hence its expansion, through absorbing the former Warsaw pact countries; a bureaucracy that increases in size gains new relevance. Ten years after the Berlin Wall came down it sought relevance by changing from a defensive into an offensive alliance, promptly violating the UN Charter, through its war in Kosovo.

To do away with NATO in one fell swoop, desirable as it may be, is obviously not going to work in the immediate future. But it could be allowed gradually to wither away, as it was doing before the Pentagon dragged it into Afghanistan.

A bureaucracy is not easily killed once it becomes redundant. Complicating matters in this case is that behind its appeals to ‘common values’, the alliance is an outgrowth of the U.S. military-industrial complex, adding to its military procurements, jobs, astronomical profits, and highly remunerated official positions.

But there is something more to NATO than this and all the already mentioned other reasons, something less tangible and hence easily overlooked. Its withering will not make the Atlanticist faith go away. That faith, together with NATO are links to political certainty of a kind. They are an extension of a spiritual handrail that existed throughout the Cold War, one helping to counter radical doubt. The post-World-War-II international order that developed in the shadow of United States-Soviet rivalry came, for all its defects, closer to a relatively stable society of states than anything seen in global relations since the Peace of Westphalia of 1648, and with it we could be certain that we knew what was politically good and bad.

Suddenly that was gone, and we had a post-Cold-War world throwing up massive uncertainties that, as imagined by a generation of concerned Europeans, have eaten into the fabric of moral and political life of the West. One could hardly expect the Cold War generation right away to throw overboard an Atlanticism that had been a political life sustaining faith. Decades later, clinging to that faith and as members of NATO, you get a modicum of certainty along with the American enemies that accompany it.

Listen to why retired French, German, Dutch, British and American top defense officials, in a book prepared for a 2008 NATO conference, advocated a military response not to physical threats but to foreign ideas that question Western supremacy and power. These NATO thinkers spoke explicitly in terms of a “restoration of its certainties” as a condition for the security of the West. China has the temerity to compete with Western interests in Africa, and Iran wants to wipe out Israel. The foreign ideas to be fought are irrational and aimed at defeating Western values. Implicitly claiming a moral monopoly of the use of violence for the United States and NATO, those former NATO generals came out in favor of using nuclear weapons, if need be, to stop other countries from developing weapons of mass destruction. In the words of Germany’s former chief of Defense, “we cannot survive … confronted with people who do not share our values, who unfortunately are in the majority in terms of numbers, and who are extremely hungry for success”. The massive Western propaganda of last year, demonizing Putin, from the putsch in Kiev onward, breathes the same spirit.

Neocons and liberal hawks deal in certainties. They have uncovered existential threats to Western values coming from terrorists and Islamists. The anomalous fantasy of the ‘war on terrorism’, which cannot exist and is the biggest lie of the twenty-first century, nevertheless brings the certainty of valiant defenders of Western values.

But Chancellor Merkel received her political education on the other side of the Iron Curtain. It would appear that her view of the situation has come rather close to that of Putin as expressed in his 2007 Munich Security Conference speech:

“I am convinced that we have reached that decisive moment when we must seriously think about the architecture of global security. And we must proceed by searching for a reasonable balance between the interests of all participants in the international dialogue … The United States, has overstepped its national borders in every way … And of course this is extremely dangerous. It results in the fact that no one feels safe. I want to emphasize this — no one feels safe.”

Germany’s foreign minister, the formidable Frank-Walter Steinmeier visits the United States this week to talk with high officials. Writing in the New York Times of 11 March, he came with what can be read as an appeal to realism and formerly held principles – albeit with a sop to prevailing opinion about Russian aggression.

The potential of a heightened conflict between Washington and a Chancellor Merkel, if she has the courage, the intelligence, and the inclination fully to open her eyes to Europe’s interests, lays bare the all-important question whether the United States is still capable of re-engaging in diplomacy. This is something it abandoned after the end of the Cold War, along with the very principle of respecting the sovereignty of countries that do not do its bidding. As of now, the United States simply will not accept sharing the globe with any other power that has significant political influence in its own part of the world.

This particular superpower psychosis is a first in history.

Merkel, and some other top European officials must by now have concluded that there is urgency in the matter, quite aside from avoiding the further provocation of Moscow by arming Poroshenko. Waiting in the wings is Hillary Clinton who, by all relevant commentary and impressions of her past actions and opinions will be an even worse war president than Obama has been, if she makes it to the White House.

March 15, 2015 Posted by | Militarism, Timeless or most popular | , , , , , , | Leave a comment

Quantitative Easing for Whom?

Why the European Central Bank’s Trillion Euro Plan will Only Help Keep the Banks Afloat

By MICHAEL HUDSON and SHARMINI PERIES | CounterPunch | March 13, 2015

SHARMINI PERIES: In an effort to relieve some pressure on the struggling European economies, Mario Draghi, president of the European Central Bank, announced a 1 trillion euro quantitative easing package on Monday. Quantitative easing is an unconventional form of monetary policy where a central bank creates new money electronically to buy financial assets like government bonds. And this process aims to directly increase private-sector spending in the economy and return inflation to target.

Well, what does that mean and what might be wrong with it is our next topic with Michael Hudson. Michael Hudson is a distinguished research professor of economics at the University of Missouri-Kansas City. His two newest books are The Bubble and Beyond and Finance Capitalism and Its Discontents. His upcoming book is titled Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.

Michael, the Fed and some economists will argue that this is what got the U.S. out of its 2008 financial crisis. In fact, they put several QE measures into place. So what’s wrong with quantitative easing? 

MICHAEL HUDSON: Well, the cover story is that it’s supposed to help employment. The pretense is an old model that used to be taught in textbooks a hundred years ago: that banks lend money to companies to invest and build equipment and hire people.

But that’s not what banks do. Banks lend money mainly to transfer ownership of real estate. They also lend money to corporate raiders. They lend money to buy assets. But they don’t lend money for companies to invest in equipment and hire more workers. Just the opposite. When they lend money to corporate raiders to take over companies, the new buyers outsource labor, downsize the work force, and try to squeeze out more work. They also try to grab the pensions.

The Fed was pretty open in what quantitative easing is supposed to do since 2008. It’s supposed to lower the interest rates, which raises bond prices and inflates the stock market. Since 2008 they’ve had the largest monetary inflation history – $4 trillion of quantitative easing by the Fed. But it’s gone via the banks into the stock and bond market.

What has this done for the economy as a whole? For starters, it’s obviously helped stock and bond holders get richer. And who are they? They’re the 1 percent and the 10 percent.

People are wringing their hands and saying, why isn’t the economy getting richer? Why is it that since 2008, economic inequality and the distribution of wealth have worsened instead of gotten closer together? Well, it’s largely because of quantitative easing. It’s because quantitative easing has increased the value of the stocks and the bonds that are held mainly by the 1 percent or the 10 percent hold. This hasn’t helped the economy because the Fed is really concerned with its constituency, which are the banks.

Quantitative easing hasn’t helped one class of investors in particular: pension funds. It’s done just the opposite. Pension funds made the assumption a few years ago that in order to break even with the rate of contributions that corporations, states and municipalities are paying, they have to make eight percent or eight and a half percent a year as a rate of return. But quantitative easing lowers the interest rate.

Today’s lower interest rates have made pension funds desperate. The risk-free rate of return is less than 1 percent on short-term Treasury bills. If you buy longer-term treasuries you can make 2 percent, but then if the interest rates ever go up, you’re going to take a loss as the bond price declines. So pension funds have said, “We’re desperate; what are we going to do?”

They’ve turned their money over to Wall Street money managers and hedge funds. The hedge funds take a huge rake off of fees to begin with. But even worse, when hedge funds and the big banks – Goldman Sachs, Citibank – see a pension fund manager coming through the door, they think, “How can I take what’s in his pocket and put it in mine?” So they rip them off. That is why there are so many big lawsuits against Wall Street for mismanaging pension fund money.

To summarize, the effect of the quantitative easing has been to make pension funds desperate, and to support real estate prices, as if higher costs to obtain housing will help recovery. It doesn’t help recovery, because to the extent that quantitative easing supports a re-inflation of housing prices, new homeowners have to pay even more of their income to the banks as mortgage interest. That means they have less money to pay for goods and services, so markets for goods and services continue to shrink.

What the quantitative easing has not been used for is what was promised in 2008. Before President Obama won the election and took office, Congress said that the TARP bailout and TALF were supposed to go for debt reduction. Some was to write down mortgages, so that people could afford to stay in their homes rather than the millions of home owners that have been foreclosed on and thrown out. But even before Obama came into office, Hank Paulson, the Secretary of the Treasury, told Democrats in Congress, yes, we’re willing to write down debts. But as Barney Frank explained in exasperation, Obama said no, he’s not going to do that. Obama ended up supporting the banks. So almost none of the TARP bailout money has been used for debt write-downs.

The same phenomenon is happening in Europe.

PERIES: So, Michael, what’s wrong with what the ECB has announced in terms of a trillion euros worth of quantitative easing for Europe?

HUDSON: They head of the European Central Bank, Mario Draghi, has said that he’ll do whatever it takes to keep banks afloat. He doesn’t say that he’ll do whatever it takes to help economic recovery, or to help labor more. The ECB’s job is to help banks make more money.

Draghi was vice chairman of Goldman Sachs during 2002 to 2005. His view is that of Wall Street. It’s not a vantage point helping labor or helping economies grow. So it’s not surprising that the trillion euros of new money that the eurozone’s central bank is creating hasn’t gone to help Greece, for instance, survive. It hasn’t gone to help Greece, Spain, Italy, or Portugal get out of depression by fueling government spending. It’s simply been given away to the banks to buy bonds and stocks, including buying American stocks and bonds.

Behind this policy is the trickle-down theory that if you can make the financial sector richer, if you can make the one percent and the 10 percent richer, it’s all going to trickle down. This is the view of Paul Krugman, and it’s the view of the advisers that Obama has had. But instead of trickling down, the stock and bond price gains by the 1% and 10% drive a wedge in the economy, by increasing the value of stocks and bonds and real estate and wealth against labor. So quantitative easing is largely behind the fact that the distribution of wealth has become worse rather than better since 2008.

PERIES: One of the things that has happened in Europe that you wrote to me actually in an email was the disappearing central banks’ role in stimulating economies. Why is this an issue?

HUDSON: Central banks originally were designed to monetize government deficits. Governments are supposed to spend money into the economy, because that helps economies grow. But in Europe the Lisbon agreements say governments can’t run a deficit more than 3 percent of national income.

Furthermore, the role of the European Central Bank is not to give a penny to governments. They say that if you give a penny to government, you’ll have hyperinflation like you had in Weimar. So the central bank can only give money to banks – to invest in stocks and bonds. But the ECB won’t buy fresh bonds to finance new government spending. The result of this policy of not funding government deficits is that if the economy is to grow, it has to be entirely dependent on commercial banks for credit.

We had this situation in the United States in the last few years of the Clinton administration when the United States actually ran a budget surplus instead of a deficit. Now, how do you think the United States could grow when there’s a budget surplus sucking money out of the economy?

The answer is that commercial banks and bondholders have to supply the money. But the banks only supplied money in the form of junk mortgages and other forms of an economic bubble, such as takeover loans and a stock market bubble.

The interest of banks is not to help economies grow; it’s to extract interest from the economy. The financial sector uses part of its rising wealth to lobby for privatization sell-offs. The problem with this is that when you privatize a public utility, you give away a monopoly – and if you deregulate the economy, you let the monopoly set up tollbooths over the economy, for toll roads, communications or whatever is being privatized.

The ECB is telling Greece to privatize to raise the money to pay its bondholders, the ECB and IMF. So you have quantitative easing going hand-in-hand with the insistence on privatization. The result is debt deflation as the economy is forced to depend more and more on banks for the money to grow, instead of on government spending into the economy. You’re having the governments not being able to spend on infrastructure, letting it fall apart, as is happening with bridges and tunnels in the United States.

The next step is for the government to say, “I’m sorry, the central bank doesn’t have enough money to help us build new infrastructure. So we’ve got to sell it off to private investors who do have the money.” The next thing you know, you have the economy ending up looking like Chicago. That city sold off its sidewalks and its parking meters to Goldman Sachs and to other Wall Street firms. All of a sudden the prices of parking, driving, and living in Chicago went way, way up instead of lowering the costs as privatization promised.

You have the same phenomenon here that England suffered under Margaret Thatcher: costs for hitherto public services go up. Transportation costs go way up. Road costs go up. Communications, internet costs, telephone costs, everything that is privatized goes way up. Financialization leads to a rent-extractive, almost neo-feudal economy.

In that sense, quantitative easing and the refusal of central banks to fund governments (except to pay bondholders and bail out commercial banks) is a new kind of class war. It’s not the old kind of class war, which was between employers and their workforce over what wages will be. It’s by the financial sector trying to take over the economy, and especially to take over the public sector, to take over the public domain, to take over public utilities and whatever assets a government has. If governments cannot borrow from central banks, they have to begin selling off property.

PERIES: Michael, this is exactly what’s happening in Greece right now. The SYRIZA government is somewhat forced to continue privatization as a part of the agreement of the loans that they have been given by European banks. What could they do in this situation?

HUDSON: This is really a scandal, because most privatizations are corrupt insider dealings. The SYRIZA Party came in and said, wait a minute, the privatizations that have been done are by governmental officials to their own cronies at a giveaway price. How can we balance the budget if we’re giving away the public utilities instead of getting a fair price for them?

The European Central Bank said, no, you have to give away privatization to cronies at pennies on the dollar just like Russia did under Yeltsin, just like the United States did with the railroad giveaways of the 19th century.

Remember, the American privatization to the railroad barons and their financial backers created essentially the ruling class of the 20th century. It created the American stock market. The same thing is happening in Greece. It’s being told to continue the former politicians’ drive to endow a new oligarchy, a new kind of a feudal monopoly lord, by these privatization giveaways. The ECB says that if you don’t do that, we’re going to bankrupt the banking system.

Yanis Varoufakis went back to the party congress in Parliament and asked whether they would approve this. The left wing in Greece has said, no, we won’t approve the giveaways.

The pretense is that privatization is to make money, but the European Central Bank is saying, no, you can’t make money; you have to give it away to our cronies. It’s all one happy financial family. This is escalating financial warfare.

I can assure you that neither Varoufakis nor SYRIZA has any interest in this kind of privatization giveaway. It’s trying to figure out some way of perhaps prosecuting the cronies for bribery, for internal connections, or figuring out some way of legally stopping the rotten policies that they’re told to follow by the European Central Bank – which isn’t giving a single euro to help Greece get over the economic depression that debt deflation has brought on. The euros are only given to the financial sector, basically to help declare war on the Greek government, the Spanish government, the Italian government.

This financial warfare is trying to achieve the same thing that military warfare did in the past. It’s aim is to grab the land, to grab control of the public infrastructure, to grab control of governments themselves. But it’s doing it financially rather than militarily.

PERIES: Right. The SYRIZA Party last week did agree to the conditions of privatization, that they would not roll back on the existing agreements that had been made by previous government. They agreed to not roll back on ones that are underway, and that they’re actually not even averse to privatization as a statement by Yanis Varoufakis. What does all this mean for Greece?

HUDSON: The financial gun was put to their head. If they wouldn’t have said that, there would have been a total breakdown, and the European Central Bank would have tried to bankrupt the Greek banks. So he didn’t have much of a choice. Everything that Varoufakis has written, and all that the political leader of SYRIZA has said, has been exactly the opposite. But they had to give lip service to what they were told to do, and any agreement that’s made has to be ratified by Parliament. So, what they’ve said is, okay, we’re going to play good cop, bad cop. We’ll be the good cops with you, and let Parliament and our left wing be the bad cops and say that we’re not going to stand for this.

March 14, 2015 Posted by | Corruption, Economics | , , , , , , , , , | Leave a comment

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