According to prominent Italian publication L’Espresso, more than 160 Italian academics came out in support of the Palestinian boycott, divestment and sanctions (BDS) campaign.
The petition, reportedly the first large-scale BDS effort from Italian academia, said it was “a response to the known and well-documented complicity of Israeli academic institutions with Israeli state violence and the total lack of serious condemnation on their part since the foundation of the State of Israel.”
The BDS campaign specifically targeted Technion, the Israeli Institute of Technology in Haifa, for its prominent role in the Israeli military-industrial complex, and called on Italian universities to sever ties with the institution.
Hamas spokesman Sami Abu Zuhri welcomed the move on Saturday, saying the petition “illustrates the increasing state of isolation the occupation suffers as a result of its crimes.”
Israel has been struggling to tackle a growing Palestinian-led boycott campaign which has had a number of high-profile successes abroad in both academic and artistic fields.
The BDS movement aims to exert political and economic pressure over Israel’s occupation of the Palestinian territories in a bid to repeat the success of the campaign which ended apartheid in South Africa.
In recent years, some 1,200 academics in Spain, 343 British professors and lecturers and more than 200 South African academics have publicly come out in support of BDS.
There was an underwhelming sense when Pentagon boss Ashton Carter met this week in Paris with other members of the US-led military coalition supposedly fighting the ISIL terror group.
The US-led coalition was set up at the end of 2014 and in theory comprises 60 nations. The main military operation of the alliance is an aerial bombing campaign against terrorist units of IS (also known as ISIL, ISIS or Daesh).
At the Paris meeting this week, Secretary of Defense Carter was joined by counterparts from just six countries: France, Britain, Germany, Italy, Netherlands and Australia. Where were the other 54 nations of the coalition?
Carter and French defense minister Jean-Yves Le Drian patted themselves on the back about “momentum”in their campaign against the terrorist network. However, platitudes aside, there was a noticeable crestfallen atmosphere at the meeting of the shrunken US-led coalition.
One telling point was Carter exhorting Arab countries to contribute more. As a headline in the Financial Times put it: “US urges Arab nations to boost ISIS fight”.
Carter didn’t mention specific names but it was clear he was referring to Saudi Arabia and the other oil-rich Persian Gulf Arab states, including Kuwait, Qatar, United Arab Emirates and Bahrain.
When the US initiated the anti-IS coalition in 2014, fighter jets from the Sunni Arab states participated in the aerial campaign. They quickly fell away from the operation and instead directed their military forces to Yemen, where the Saudi-led Arab coalition has been bombing that country non-stop since March 2015 to thwart an uprising by Houthi revolutionaries.
But there is an even deeper, more disturbing reason for the lack of Arab support for the US-led coalition in Iraq and Syria. That is because Saudi Arabia and the other Sunni monarchies are implicated in funding and arming the very terrorists that Washington’s coalition is supposedly combating.
Several senior US officials have at various times admitted this. Democrat presidential hopeful Hillary Clinton labelled Saudi Arabia as the main sponsor of “Sunni extremist groups”in diplomatic cables when she was Secretary of State back in 2009, as disclosed by Wikileaks.
Vice President Joe Biden, while addressing a Harvard University forum in late 2014, also spilled the beans on the Persian Gulf states and Turkey being behind the rise of terror groups in the Middle East.
So there is substantial reason why the US-led anti-terror coalition in Iraq and Syria has not delivered decisive results. It is the same reason why Carter was joined by only six other countries in Paris this week and why there was a glaring absence of Saudi Arabia and other Arab members. These despotic regimes –whom Washington claims as “allies”–are part of the terrorist problem.
Not that the US or its Western allies are blameless. Far from it. It was Washington after all that master-minded the regime-change operations in Iraq and Syria, which spawned the terror groups.
In fact, we can go further and point to evidence, such as the testimony of Lt General Michael Flynn of the Defense Intelligence Agency, which shows that the US enlisted the terror brigades as proxies to do its dirty work in Syria for regime change.
The US and its Western allies conceal this collusion by claiming that they are supporting “moderate rebels”–not extremists. But the so-called moderates have ended up joining the terrorists and sharing their US-supplied weapons. The distinction between these groups is thus meaningless, leaving the baleful conclusion that Washington, London and Paris are simply colluding with terrorism.
US Republican presidential contenders and media pundits berate the Obama administration for not doing enough militarily to defeat IS. Or as Donald Trump’s backer Sarah Palin would say to “kick ass”.
The unsettling truth is that the US cannot do more to defeat terrorism in the Middle East because Washington and its allies are the source of terrorism in the region. Through their meddling and machinations, Washington and its cohorts have created a veritable Frankenstein monster.
The “coalition”that is actually inflicting serious damage to IS and its various terror franchises is that of Russia working in strategic cooperation with the Syrian Arab Army of President Bashar al-Assad. Since Russia began its aerial bombing campaign nearly four months ago, we have seen a near collapse of the terror network’s oil and weapons smuggling rackets and hundreds of their bases destroyed.
Yet Ashton Carter this week accused Russia of impeding the fight against terrorism in Syria because of its support for the Assad government. Talk about double think!
If we strip away the false rhetoric and mainstream media misinformation, Washington’s “anti-terror”coalition can be seen as not merely incompetently leading from behind.
The US, its Western allies and regional client regimes are in the front ranks of the terror problem.
The European Union should impose sanctions on Turkey and Saudi Arabia for financing the Islamic State (IS or Daesh in Arabic) jihadist group, instead of extending its anti-Russia sanctions, the leader of Italy’s Eurosceptic Lega Nord party, Matteo Salvini, told Sputnik Wednesday.
A UN Security Council Resolution to counter the financing of terrorism, targeting in particular Daesh, an organization outlawed in a number of states including Russia, was adopted Thursday. The resolution specifies that Daesh derives its main source of income from smuggled oil and obliges all states to oppose this illicit oil trade in the strongest terms. Russian Ambassador to the United Nations Vitaly Churkin said that Turkish companies found to be involved in this illicit oil trade might be sanctioned by the UN Security Council.
“Europe needs to impose sanctions against Turkey and Saudi Arabia instead of extending sanctions against Russia,” Salvini said.
Salvini added that his party does not believe that the Islamic coalition against extremists that was announced by Saudi Arabia earlier this week “will serve its alleged goals because it is the state that supports terrorism.”
Daesh controls large swathes of land in oil-rich Syria, Iraq and Libya. Earlier this month, the Russian Defense Ministry presented evidence showing that Daesh has been smuggling oil across the porous Syria-Turkey border in large volumes.
Salvini is currently in Moscow and is set to meet on Friday with the head of Russia’s upper house of parliament’s International Committee, Alexei Pushkov, Deputy Chairman of the Federation Council Committee on International Affairs Andrey Klimov, as well as with the representatives of the United Russia Party.
The military alliance’s largest exercises in over a decade involving over 36,000 troops from 30 NATO members and partner countries, Trident Juncture moved into an active phase across southwestern Europe in mid-October.
“We are against NATO, against war, against the enormous costs that go to the upkeep of military bases,” Chiara Paladino, one of the protest organizers, told RIA Novosti.
Paladino said around 1,000 people demonstrated in Marsala, south of the Vincenzo Florio Airport used as a NATO forward operating base. Anti-NATO protesters gathered from across the province of Trapani, including large Sicilian cities of Palermo, Catania, Messina and Ragusa, she said.
A similar anti-Trident Juncture and anti-NATO rally took place in the major Sicilian city of Palermo late on Friday.
The first phase of the Trident Juncture drills began October 3, running for two weeks in Canada, Norway, Germany, Belgium and the Netherlands. The second phase, which ends on November 6, is taking place in southern Europe – Spain, Italy, and Portugal – as well as in the Mediterranean Sea and the Atlantic Ocean.
Spanish and Portuguese demonstrators staged protests against NATO this month.
Germany, the largest and most industrialized economy in the EU, projected as a key member of the continent’s economic, political, and defense organizations, is set to remain within the tight grip of the US, as Washington fears becoming isolated in the international arena amid the rise of the BRICS countries, according to a Russian Colonel General.
Germany, Europe’s most industrialized and populous country, famed for its technological achievements, is prohibited from acquiring its own nuclear weapons. It renounced the nuclear option in the Non-Proliferation Treaty of 1968.
However, it is among the nations with the dubious distinction of hosting US nuclear weapons, along with Belgium, Italy, the Netherlands and Turkey.
The removal of the US nuclear warheads from Germany is a long-term aim of the country’s government. However, the weapons remain in place.
Germany has 3,396 metric tons of gold: its vast reserves rank second worldwide. However, 45% of its gold, worth roughly $635 billion, is kept at the US Federal Reserve Bank of New York.
Last year, Berlin announced that it wouldn’t repatriate its gold reserves from the US; instead the Bundesbank issued an official statement underscoring its “trust” in its American partners.
According to Bloomberg, Germany gave up after repatriating just 5 metric tons of gold, though earlier it was told that it would get all the German gold back by 2020.
Russian Colonel General Leonid Ivashov has therefore explained why Berlin is so dependent on the US and is set to remain in its tenacious arms.
“The US is cautious that by acquiring its own nuclear weapons, Germany would become militarily and politically independent. Such attempts have been undertaken by then-chancellors Helmut Kohl and Gerhard Schröder,” he told Vesti Nedeli (News of the Week), a television program on the Russian TV channel Rossiya-1.
“Germany, France and Belgium attempted to create their own militarily-political block, but those attempts have been suppressed by the Americans,” he added.
Instead, Ivashov said, the US is sending more weapons and servicemen to the country.
“The Americans fear ending up alone at the end of the day. Thus, they are trying to tie up Europe, weakening it through Ukraine and anti-Russian sanctions. They flood it with arms, troops and military equipment in order to stop its efforts to break free from America’s grip.”
Fifty countries on Monday signed the articles of agreement for the new China-led Asian Infrastructure Investment Bank, the first major global financial instrument independent from the Bretton Woods system.
Seven remaining countries out of the 57 that have applied to be founding members, Denmark, Kuwait, Malaysia, Philippines, Holland, South Africa and Thailand, are awaiting domestic approval.
“This will be a significant event. The constitution will lay a solid foundation for the establishment and operation of the AIIB,” said Chinese Finance Minister Lou Jiwei.
The AIIB will have an authorized capital of $100 billion, divided into shares that have a value of $100,000.
BRICS members China, India and Russia are the three largest shareholders, with a voting share of 26.06 per cent, 7.5 per cent and 5.92 per cent, respectively.
Following the signing of the bank’s charter, the agreement on the $100 billion AIIB will now have to be ratified by the parliaments of the founding members.
Asian countries will contribute up to 75 per cent of the total capital and be allocated a share of the quota based on their economic size.
Chinese Vice Finance Minister Shi Yaobin said China’s initial stake and voting share are “natural results” of current rules, and may be diluted as more members join.
Australia was first to sign the agreement in the Great Hall of the People in Beijing on Monday, state media reports said.
The Bank will base its headquarters in Beijing.
The Chinese Finance Ministry said the new lender will start operations by the end of 2015 under two preconditions: At least 10 prospective members ratify the agreement, and the initial subscribed capital is no less than 50 per cent of the authorized capital.
The AIIB will extend China’s financial reach and compete not only with the World Bank, but also with the Asian Development Bank, which is heavily dominated by Japan.
China and other emerging economies, including BRICS, have long protested against their limited voice at other multilateral development banks, including the World Bank, International Monetary Fund and Asian Development Bank (ADB).
China is grouped in the ‘Category II’ voting bloc at the World Bank while at the Asian Development Bank, China with a 5.5 per cent share is far outdone by America’s 15.7 per cent and Japan’s 15.6 per cent share.
The ADB has estimated that in the next decade Asian countries will need $8 trillion in infrastructure investments to maintain the current economic growth rate.
China scholar Asit Biswas at the Lee Kuan Yew School of Public Policy, Singapore, says Washington’s criticism of the China-led Bank is “childish”.
“Some critics argue that the AIIB will reduce the environmental, social and procurement standards in a race to the bottom. This is a childish criticism, especially because China has invited other governments to help with funding and governance,” he writes.
The US and Japan have not applied for the membership in the AIIB.
However, despite US pressures on its allies not to join the bank, Britain, France, Germany, Italy among others have signed on as founding members of the China-led Bank.
Meanwhile, New Zealand and Australia have already announced that they will invest $87.27 million and $718 million respectively as paid-in capital to the AIIB.
The new lender will finance infrastructure projects like the construction of roads, railways, and airports in the Asia-Pacific Region.
Iran, 49 states sign Asia bank charter
Iran on Monday joined 49 countries in signing up to the Asian Infrastructure Investment Bank (AIIB), bringing Asia’s largest financial lender a step closer to existence.
Finance and Economy Minister Ali Tayebnia put Iran’s signature to the bank’s articles of association at a ceremony in Beijing’s Great Hall of the People, which capped six months of intense negotiations.
In April, China accepted Iran as a founding member of the Asian Infrastructure Investment Bank being seen as a rival to the US-led World Bank, the International Monetary Fund (IMF) and the Asian Development Bank.
With the signing which amounted to the creation of AIIB’s legal framework, China’s Finance Minister Lou Jiwei said he was confident the bank could start functioning before the end of the year.
Seven more founding members would ink the articles after approval by their respective governments.
The bank will have a capital of $100 billion in the form of shares, each worth $100,000, distributed among the members. Beijing will be by far the largest shareholder at about 30%, followed by India at 8.4% and Russia at 6.5%.
China will also have 26% of the votes which are not enough to give it a veto on decision-making, while smaller members will have larger voice.
Singapore’s Senior Minister for Finance and Transport Josephine Teo said the bank will provide new opportunities for its members’ businesses and promote sustainable growth in Asia.
Seventy-five percent of AIIB’s shares are distributed within the Asian region while the rest is assigned among countries beyond it.
Germany, France and Brazil are among the non-Asian members of the bank despite US efforts to dissuade allies from joining it. Another US ally joining AIIB is Australia but Japan has stayed away from it.
Countries beyond the region can expand their share but the portion cannot be bigger than 30%. Public procurement of the AIIB will be open to all countries around the world.
But the president of the bank will have to be chosen from the Asian region for a maximum of two consecutive five-year terms.
The bank will be headquartered in Beijing and its lean structure will be overseen by an unpaid, non-resident board of directors which, architects say, would save it money and friction in decision-making.
Earlier this month, former Federal Reserve chairman Ben Bernanke rebuked US lawmakers for allowing China to found the new bank, which threatens to upend Washington’s domination over the world economic order.
He said lawmakers were to blame because they refused to agree 2010 reforms that would have given greater clout to China and other emerging powers in the International Monetary Fund.
Russia has censured the United States and its NATO allies for “violating” the Non-Proliferation Treaty (NPT) by conducting nuclear planning and missions.
“The so-called joint nuclear missions practiced by the United States and their NATO allies are a serious violation of the said treaty,” the Russian Foreign Ministry said in a statement released on Thursday.
The statement also called for the return of all US nuclear weapons to the country, a ban on nuclear warheads abroad and the dismantling of the technology that facilitates the use of nuclear weapons as well as abstaining from nuclear exercises.
Back in April, Russia’s Foreign Minister Sergei Lavrov said Washington is breaching the NPT by deploying its nuclear weapons in Belgium, Italy, Turkey, Germany and the Netherlands.
Also in March, Russian Foreign Ministry spokesman Alexander Lukashevich urged the US, as a NATO member, to withdraw its nuclear weapons from Europe, highlighting that their deployment on the continent violates the NPT.
“We have repeatedly drawn NATO’s attention to the fact that such practices directly run counter to the spirit and the letter of NPT,” he said on March 24.
The remarks came days after the US State Department spokeswoman, Jen Psaki, claimed that “the deployment of US nuclear weapons on the territories of our NATO allies is consistent with the NPT.”
Under the article 1 of NPT, no country is allowed to transfer its nuclear weapons to other parties while article 2 of the treaty prohibits those countries lacking nuclear know-how from having access to nuclear weapons, Lukashevich stated, adding that the US deployment of nuclear arms in Europe infringes upon the terms of the agreement.
Washington-Moscow relations have become markedly tense in recent months. The US and NATO accuse the Kremlin of supporting pro-Russia forces in east Ukraine. Russia categorically denies the allegation, saying NATO’s presence near the Russian borders is responsible for the flare-up in the restive region.
The United States is perhaps the principle nuclear weapons proliferator in the world today, openly flouting binding provisions of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). Article I of the treaty forbids signers from transferring nuclear weapons to other states, and Article II prohibits signers from receiving nuclear weapons from other states.
As the UN Review Conference of the NPT was finishing its month-long deliberations in New York last week, the US delegation distracted attention from its own violations using its standard Red Herring warnings about Iran and North Korea — the former without a single nuclear weapon, and the latter with 8-to-10 (according to those reliable weapons spotters at the CIA) but with no means of delivering them.
The NPT’s prohibitions and obligations were re-affirmed and clarified by the world’s highest judicial body in its July 1996 Advisory Opinion on the legal status of the threat or use of nuclear weapons. The International Court of Justice said in this famous decision that the NPT’s binding promises not to transfer or receive nuclear weapons are unqualified, unequivocal, unambiguous and absolute. For these reasons, US violations are easy to illustrate.
Nuclear Missiles “Leased” to British Navy
The US “leases” submarine-launched intercontinental ballistic missiles (SLBMs) to Britain for use on its four giant Trident submarines. We’ve done this for two decades. The British subs travel across the Atlantic to pick up the US-made missiles at Kings Bay Naval base in Georgia.
Helping to ensure that US proliferation involves only of the most verifiably terrible nuclear weapons, a senior staff engineer at Lockheed Martin in California is currently responsible for planning, coordinating and carrying out development and production of the “UK Trident Mk4A [warhead] Reentry Systems as part of the UK Trident Weapons System ‘Life Extension program.’” This, according to John Ainslie of the Scottish Campaign for Nuclear Disarmament, which closely watchdogs the British Tridents — all of which are based in Scotland, much to the chagrin of the Scots.
Even the W76 warheads that arm the US-owned missiles leased to England have parts made in United States. The warheads use a Gas Transfer System (GTS) which stores tritium — the radioactive form of hydrogen that puts the “H” in H-bomb — and the GTS injects tritium into the plutonium warhead or “pit.” All the GTS devices used in Britain’s Trident warheads are manufactured in the United States. They are then either sold to the Royals or given away in exchange for an undisclosed quid pro quo.
David Webb, the current Chair of the British Campaign for Nuclear Disarmament reported during the NPT Review Conference, and later confirmed in an email to Nukewatch, that the Sandia National Laboratory in New Mexico announced, in March 2011, that it had conducted “the first W76 United Kingdom trials test” at its Weapons Evaluation and Test Laboratory (WETL) in New Mexico, and that this had “provided qualification data critical to the UK [United Kingdom] implementation of the W76-1.” The W76 is a 100 kiloton H-bomb designed for the so-called D-4 and D-5 Trident missiles. One of the centrifuges at Sandia’s WETL simulates the ballistic trajectory of the W76 “reentry-vehicle” or warhead. This deep and complex collusion between the US and the UK could be called Proliferation Plus.
The majority of the Royal Navy’s Trident warheads are manufactured at England’s Aldermaston nuclear weapons complex, allowing both the Washington and London to claim they are in compliance with the NPT.
US H-bombs Deployed in Five NATO Countries
An even clearer violation of the NPT is the US deployment of between 184 and 200 thermonuclear gravity bombs, called B61, in five European countries — Belgium, The Netherlands, Italy, Turkey and Germany. “Nuclear sharing agreements” with these equal partners in the NPT — all of whom declare that they are “non-nuclear states” — openly defy both Article I and Article II of the treaty.
The US is the only country in the world that deploys nuclear weapons to other countries, and in the case of the five nuclear sharing partners, the US Air Force even trains Italian, German, Belgian, Turkish and Dutch pilots in the use of the B61s in their own warplanes — should the President ever order such a thing. Still, the US government regularly lectures other states about their international law violations, boundary pushing and destabilizing actions.
With so much a stake, it is intriguing that diplomats at the UN are too polite to confront US defiance of the NPT, even when the extension and enforcement of it is on the table. As Henry Thoreau said, “The broadest and most prevalent error requires the most disinterested virtue to sustain it.”
There’s a popular movement in Sicily called No MUOS. MUOS means Mobile User Objective System. It’s a satellite communications system created by the U.S. Navy. The primary contractor and profiteer building the satellite equipment at the U.S. Navy base in the desert in Sicily is Lockheed Martin Space Systems. This is one of four ground stations, each intended to include three swivelling very-high-frequency satellite dishes with a diameter of 18.4 meters and two Ultra High Frequency (UHF) helical antennas.
Protests have been growing in the nearby town of Niscemi since 2012. In October 2012, construction was suspended for a few weeks. In early 2013 the President of the Region of Sicily revoked the authorization for the MUOS construction. The Italian government conducted a dubious study of health impacts and concluded the project was safe. Work recommenced. The town of Niscemi appealed, and in April 2014 the Regional Administrative Tribunal requested a new study. Construction goes on, as does resistance.
I spoke with Fabio D’Alessandro, a juornalist and law school graduate living in Niscemi. “I’m part of the No MUOS movement,” he told me, “a movement that works to prevent the installation of the U.S. satellite system called MUOS. To be specific, I’m part of the No MUOS committee of Niscemi, which is part of the coalition of No MUOS committees, a network of committees spread around Sicily and in the major Italian cities.”
“It is very sad,” said D’Alessandro,”to realize that in the United States people know little about MUOS. MUOS is a system for high-frequency and narrowband satellite communications, composed of five satellites and four stations on earth, one of which is planned for Niscemi. MUOS was developed by the U.S. Department of Defense. The purpose of the program is the creation of a global communications network that allows communication in real time with any soldier in any part of the world. In addition it will be possible to send encrypted messages. One of the principal functions of MUOS, apart from the speed of communications, is the ability to remotely pilot drones. Recent tests have demonstrated how MUOS can be used at the North Pole. In short, MUOS will serve to support any U.S. conflict in the Mediterranean or the Middle East or Asia. It’s all part of the effort to automate war, entrusting the choice of targets to machines.”
“There are many reasons to oppose MUOS,” D’Alessandro told me, “first of all the local community has not been advised of the installation. The MUOS satellite dishes and antennas are built within a non-NATO U.S. military base that has existed in Niscemi since 1991. The base was constructed within a nature preserve, destroying thousands of cork oaks and devestating the landscape by means of bulldozers that leveled a hill. The base is larger than the town of Niscemi itself. The presence of the satellite dishes and antennas puts at serious risk a fragile habitat including flora and fauna that exist only in this place. And no study has been conducted of the dangers of the electromagnetic waves emitted, neither for the animal population nor for the human inhabitants and the civilian flights from the Comiso Airport approximately 20 kilometers away.
“Within the base there are already present 46 satellite dishes, surpassing the limit set by Italian law. Moreover, as determined anti-militarists, we oppose further militarizing this area, which already has the base at Sigonella and other U.S. bases in Sicily. We don’t want to be complicit in the next wars. And we don’t want to become a target for whoever attempts to attack the U.S. military.”
What have you done thus far, I asked.
“We’ve engaged in lots of different actions against the base: more than once we’ve cut through the fences; three times we’ve invaded the base en masse; twice we’ve entered the base with thousands demonstrating. We’ve blocked the roads to prevent access for the workers and the American military personnel. There has been sabotage of the optical communication wires, and many other actions.”
The No Dal Molin movement against the new base at Vicenza, Italy, has not stopped that base. Have you learned anything from their efforts? Are you in touch with them?
“We are in constant contact with No Dal Molin, and we know their history well. The company that is building MUOS, Gemmo SPA, is the same that did the work on Dal Molin and is currently under investigation subsequent to the seizure of the MUOS building site by the courts in Caltagirone. Anyone attempting to bring into doubt the legitimacy of U.S. military bases in Italy is obliged to work with political groups on the right and left that have always been pro-NATO. And in this case the first supporters of MUOS were the politicians just as happened at Dal Molin. We often meet with delegations of activists from Vicenza and three times have been their guests.”
I went with representatives of No Dal Molin to meet with Congress Members and Senators and their staffs in Washington, and they simply asked us where the base should go if not Vicenza. We replied “Nowhere.” Have you met with anyone in the U.S. government or communicated with them in any way?
“Many times the U.S. consuls have come to Niscemi but we have never been permitted to speak with them. We have never in any way communicated with U.S. senators/representatives, and none have ever asked to meet with us.”
Where are the other three MOUS sites? Are you in touch with resisters there? Or with the resistance to bases on Jeju Island or Okinawa or the Philippines or elsewhere around the world? The Chagossians seeking to return might make good allies, right? What about the groups studying the military damage to Sardinia? Environmental groups are concerned about Jeju and about Pagan Island Are they helpful in Sicily?
“We are in direct contact with the No Radar group in Sardinia. One of the planners of that struggle has worked (for free) for us. We know the other anti-U.S.-base movements around the world, and thanks to No Dal Molin and to David Vine, we have been able to hold some virtual meetings. Also thanks to the support of Bruce Gagnon of the Global Network Against Weapons and Nuclear Power in Space we are trying to get in touch with those in Hawaii and Okinawa.”
What would you most like people in the United States to know?
“The imperialism that the United States is imposing on the countries that lost the Second World War is shameful. We are tired of having to be slaves to a foreign politics that to us is crazy and that obliges us to make enormous sacrifices and that makes Sicily and Italy no longer lands of welcome and peace, but lands of war, deserts in use by the U.S. Navy.”
Why the European Central Bank’s Trillion Euro Plan will Only Help Keep the Banks Afloat
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.
What’s the punishment for a 300 million euro tax fraud? If you are in Italy and your name is Silvio Berlusconi it is about a week hanging out with people your age.
A court in Milan ruled earlier this week that as his sentence the 77-year-old billionaire media mogul and thrice Italian PM would be performing community service in the small northern town of Cesano Boscone – “once a week and for a period of no less than four consecutive hours” – in a centre for the elderly and disabled.
The ruling came eight months after his conviction for tax fraud was made definitive by Italy’s supreme court. In August last year the country’s top court had found him guilty of having had a role in allowing his Mediaset company – which has a virtual private terrestrial TV monopoly in Italy – to fraudulently lower its tax bill by buying US film and television rights at inflated prices.
Last August, the supreme court judges handed down a four-year sentence, but immediately commuted it to a year.
Under this week’s ruling, the poor ex-premier will be subject to a curfew of 11pm and will not be able to leave the region of Lombardy.
Except, that is, to go to his home in the centre of Rome. And he will be able to do that every week from Tuesday to Thursday, providing he is back at his vast Arcore palace – the venue of his bunga bunga parties located just 40 kilometres down the road – by 11pm on the Thursday.
Furthermore, the sentence could be further cut for good behaviour to nine months.
It is not just the punishment that is scandalously soft.
Just how appropriate is it? His job may entail entertaining the elderly guests of the home – and his past life as a cruise ship crooner will no doubt help.
But according to Article 47 of the Prison Administration Act community service should only be offered to the criminal “in cases where it can be assumed that the measure…contributes to the rehabilitation of the offender and ensures the prevention of the danger of committing other crimes,” Rossella Guadagnini highlights in the Italian journal Micromega.
As Al Jazeera points out Berlusconi claims total innocence of any crime he has ever been charged with. And he is currently involved in two other court cases.
In a trial set to start on June 20, he will appeal a seven-year prison sentence and lifetime ban from parliament for having sex with an underage 17-year-old prostitute and abusing his official powers. He is also a defendant in a trial for allegedly paying a $4m bribe to get a centre-left senator to join his party in 2006 in a move that helped bring down a rival government.
As a indicator of the seriousness of the crime of robbing a heavily indebted state blind, the punishment speaks for itself. Tax dodging – running at 130 billion euros annually officially but double that figures according to some sources – is bleeding the public coffers dry. The result is two trillion euros in public debts, which are being used as the excuse for swinging cuts to welfare and public services, privatisation, roll back of labour rights, and attacks on public servants’ wages.
Italian businessmen with access to expensive lawyers and good political links (any serious player in Italy has them) will have been taking due note of Berlusconi’s case.
The worst of it is that, as the Guardian reports, although he has been booted out of the Senate and is now banned from office, he’ll still be ‘allowed time’ to continue his political activities – nominally behind the scenes but no doubt very visible on Italians’ screens – as head of Forza Italia.
The party is the third largest political force in the country, behind PM Matteo Renzi’s centre-left Democratic Party and Beppe Grillo’s anti-establishment Five Star Movement, according to recent polls. The first appointment is the European elections next month.
Italy has lost two decades under the rule of Berlusconi, who entered politics in person in 1994 when his political protectors – notably former right-wing Socialist PM Bettino Craxi – melted away under the scrutiny of the same ‘communist’ judges Berlusconi has so long railed against. But if this is the best the toghe rosse can do, it can only be said that communism is well and truly dead in Italy.
People in Venice and its surrounding region have voted in an online poll to split from the rest of Italy and establish their own independent state.
More than two million residents of the Veneto region participated in the week-long survey, with 89 percent voting in favor of secession from Italy.
The online vote, organized by local pro-independence parties, is not legally binding but is only meant to muster support for a bill calling for a referendum.
The Indipendenza Veneta party behind the bill says the separatist campaign is driven by the Italian government’s alleged inability to stem corruption, protect Venice’s citizens from a debilitating recession and control waste water in the poorer south.
Supporters say the new Republic of Veneto would be inspired by the ancient Venetian Republic, which existed from the seventh century until its fall to Napoleon in 1797.
Critics argue that an attempt to break away from Italy could be unconstitutional.