Category Archives: neo-liberalism

‘Brazil’: now more than ever, a satire for our age

Prologue: a slow ‘soft coup’ in Brazil

When Brazil hosted the World Cup in 2014, the gaping contradiction between the sporting festival and anger on the streets was widely commented upon. This reported ‘popular uprising’ was said to have been against government corruption and President Dilma Rousseff’s handling of the economy. In fact the forecast riots never happened, and the drama instead took place on the pitch, when the host nation was routed 7-1 by Germany in a semifinal disaster. A portent perhaps that Rousseff’s days were also numbered.

Two years on, in the immediate aftermath of a de facto coup, Brazil descended into more serious political turmoil just as the Olympics arrived in Rio. However, this time around the tear-gas and the plastic bullets failed to make the headlines, with TV coverage maintaining a steady focus on the events inside the stadia.

Brazil’s soft coup is now complete: Rousseff was impeached on August 31st 2016, and the presidency thereafter seized by then-Vice President Michel Temer. With a meager 5% approval rating, he has since become the most unpopular president in Brazil’s history:

Since his appointment, Temer has also been accused of corruption scandals, the alleged reason for which former president Rousseff was impeached, and the very reason that he assumed office. Every measure of social wellbeing has plummeted as Temer’s administration has passed sweeping austerity measures and cut funding the social programs implemented by the Workers’ Party that are credited with making Brazil a main power on the global stage, increasing social inclusion in higher education, growing the middle class, and decreasing hunger and homelessness… Despite his abysmal approval rating, mass protests, public criticism, and a tanking economy, Temer is still in office. And now, the main leftist candidate, Luiz Inácio Lula da Silva (also known as Lula), who has consistently led in the polls by wide margins, is in prison serving a 12-year sentence for a legal proceeding that has yet to be concluded.

From an article entitled “The ‘Soft Coup’ and the Attack on the Brazilian People” by Celina Stien-Della Croce.

The legal battle over former president Lula’s imprisonment is ongoing. Last Sunday Judge Rogério Favreto ordered his release but was subsequently overruled not once but three times “as bewildered Brazilians on social media compared the legal drama to a World Cup penalty shootout”.

Celina Stien-Della Croce continues:

When we think of coups, most of us imagine an image of the past or, at the very least, a clear and undeniable use of force. Large guns. Military intervention. Blood. The brutal overthrow of an elected government. (Think: Chile in 1973, Honduras in 2009, Argentina in 1976). What has been deemed a ‘soft coup’ in Brazil in 2016 stems from the same motive—the protection of corporate, foreign, and imperialist interests over the interests of the poor and working people and their right to self-determination—but comes wrapped in more palatable packaging that makes it easier to deny the violation of democracy. As Tricontinental: Institute for Social Research discusses in their recent dossier “Lula: The Battle for Democracy in Brazil,” the foreign and national elite used a series of legally sanctioned measures to remove the Workers’ Party from office under the guise of corruption. Though the legal case against former president and current Presidential candidate Luiz Inácio Lula da Silva and former President Dilma Rousseff is full of holes (a lack of evidence, unreliable and changing quid-pro-quo testimonies given in exchange for lighter sentences, illegal wiretapping, etc), it allowed the bourgeoise—operating through the Brazilian courts—a means to sentence Lula to prison and remove Dilma from power. Quoting law professor Carlos Lodi, Tricontinental defines lawfare as the ‘process of using the law to produce political results. Opponents are removed by use of the legal system rather than the constitutionally valid electoral process’. This is a major strategy behind Brazil’s ‘soft coup’ and the assault on Brazilian democracy. 1

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Nineteen eighty-four and a half

The following piece was first drafted at the height of the Brazilian World Cup four years ago but for various reasons remained unpublished. Given the situation in Brazil and elsewhere, it seems more applicable than ever…

Braaaaa-zzzilll, dah, dah, dah, da-da-dah etc… if you’ve been watching what I’ve been watching throughout the last month then you will have been hearing it rather a lot: the laid-back guitar riff on which we drift into every World Cup commercial break. Does it turn my thoughts to warm, golden sands and ice-cold sips of Piña Colada? Well, no actually, barely at all. Instead the dreamy jingle is in the habit of recalling Terry Gilliam’s elegant satire on a garish and tawdry bureaucratic dystopia in his film (called appropriately enough) Brazil. The odd juxtaposition – 1985 film and 2014 tournament – snaps unconsciously into place as if the two were always meant to be conjoined.

Interestingly, Brazil (the movie) is quite deliberately set in no specified place or time. Gilliam’s dread warning is of a tyranny that might assert itself anywhere and anytime. Indeed, his is the more hideous portrait of a society frozen precisely at “the end of history” where every form of alternative outlook and unorthodox opinion has been dismissed outright from the collective psyche. Devoid of nonconformity, all nascent dissent, though it very seldom arises, is stamped out in an instant. Not a very pretty picture.

Yet instead of a cunning and ruthlessly efficient despotism, we marvel only at how such a grey and faceless system grinds on unstoppably, even when it is as comically disorganised as the stiflingly ubiquitous ducts – yes, ducts (as in duct tape… there’s no such thing as duck tape!) – ducts for heating, air-conditioning, for water and waste disposal, and even those old-fashioned ones for sending documents through. Ducts that coalesce into one vast, tortuous entanglement that worms itself throughout Brazil‘s high-rise sprawl; twisting and looping in and out of every gloomy apartment block, shop and restaurant, and every administrative office. A labyrinthine network no less invincible than the Byzantine regime it embodies; one that occasionally, and especially when in need of repair, behaves all-too viscerally: throbbing like the guts of some tremendous monster. Eerily, the ducts often seem more alive than any of the denizens who have to squeeze their lives so awkwardly to fit in around them.

To add to the general misery of Brazil, citizens also have routine terrorist attacks to dodge. Again, it is prescient how terrorism exists as an overarching pretext for these authoritarian rulers (whoever they may be, since – like the terrorists – the powers-that-be are never fully seen) to bring all “enemies of the state” to a swift new equivalence of justice. Long gone is the old-fashioned inconvenience of habeas corpus, with law-enforcement streamlined thanks to SAS-style SWAT team raids and jurisprudence reduced to “interrogation” somewhere inside the wittily titled “Office of Information Retrieval”. A procedure of kidnap and torture that in today’s real world is (no less euphemistically) called “rendition”. In keeping with the tone of the satire, each suspect is thereafter scrupulously billed for “the service” they received! In Brazil the corporatocracy is total.

The title track and accompanying score (composed around the same famous tune as ITV’s jingle 2) is the solitary theme that beguiles us. A leitmotif, it fades up on occasions when central character Sam Lowry (played by Jonathan Pryce) daydreams his escape from the humdrum trauma of his dutiful but otherwise meaningless existence. And in some ways, the World Cup also feels like a daydream of distraction to lull us briefly from the inanities and brutalities that we rub against in our own lives or else pass over as news. For it turns out that Gilliam’s futuristic vision (thirty years old already) is prophetic in too many ways. His world of secrecy, surveillance, and superficiality (cosmetic surgery features strongly), an altogether grim exaggeration of where we had been heading all along. Briefly, if you’ve never seen Brazil, then just think Orwell’s Nineteen Eighty-Four retold as a black comedy of errors – it was originally pitched as “1984 and a half” apparently.

Back in Brazil (and now I refer to the country rather than the film), as here and elsewhere, “austerity” remains very much in vogue. Here as elsewhere, of course, “austerity” isn’t for everyone. Our political leaders may try to persuade that “we’re all be in this together” but tightening the belt has never been very respectable in the more prosperous strata of our societies – and for perfectly understandable reasons, never will be.

So yes, there may indeed be inadequate revenues to maintain fully-functioning public services, to rebuild infrastructure or new housing, but money was readily available when the bankers needed their bailouts. It is also noticeable how the public purse can always be stretched (here and elsewhere) whenever it comes to putting on spectaculars like the Olympics and World Cup – not forgetting a stage the Tour de France that passed through my home city Sheffield at the estimated cost to the city council alone of £1 million. With less bread to go around, how blessed we all are with more circuses than ever!

Please don’t get me wrong however, I enjoyed the Tour de France and love the four-year reappearance of every World Cup… FIFA, try as they might, are fighting a losing battle to destroy the romance altogether. But I am torn. For even when the World Cup has been as entertaining this one, a small part of me aches to join in the chorus in the streets (you know, those protesters we don’t normally hear about – reported on just once in a blue moon and especially if it happens to suit Western interests).

It would be far better, of course, if politics and sport never mixed; but unavoidably they do. Take the obvious recent example involving a few overpaid Cameroon players squabbling about bonuses. Individual greed of this sort is just the visible (one might say risible) tip of a truly gigantic iceberg of corruption: but obviously corruption in sport exists simply because sport is a microcosm of wider society.

To take an overhead view, corruption is an oily slime that gurgles through serpentine systems, like those ducts in Brazil, connecting up governments and corporations via the murky conduits of foundations and “political charities”. Looking for social welfare? Well, there’s no money! Corporate welfare? Sure, no problem! Tax breaks, cozy public-private partnerships, no-bid contracts, and bailouts: the media, itself corrupted, naturally plays along.

We see welfare benefits transformed into income support in the most literal sense imaginable, with vital public revenues redirected to make up for shortfalls in real wages – full-time work is no longer sufficient to make ends meet. This is evidently just another form of corporate welfare, but widely misrepresented as an element of social welfare.

And why? Why isn’t every adult in Britain, a developed nation in the twenty-first century, in receipt of, at a bare minimum, adequate income to have a home and keep a family (as opposed to struggling on the laughably titled “Living Wage”)? Well, because government policies are not set in accordance with the popular will (which as vulgar as it sounds is the inherent principle of ‘democracy’ from the Greek dēmokratia, meaning dēmos ‘the people’ + -kratia ‘power, rule’) but at the behest of a few giant corporations, accredited by the foundation funded ‘think tanks’ and ‘policy institutes’: a plethora of staunchly anti-democratic organs of the same monolithic financial-corporate establishment. Thus welfare makes way to ‘workfare’. Workfare – how they must laugh… at the choice of homonym.

Then we come to lobbying. Money creamed off from the top of this extensive profiteering and stuffed into the back pockets of the cronies in government – legalised (though I’m not sure when) bribery. Bringing us inevitably to the biggest racket on this planet…

Warfare is more profitable by miles than any amount of workfare when viewed in purely business terms. It pours out of our tax revenues and directly into arms industry coffers. What other activity could transfer comparable wealth from the poor to the rich with greater efficiency? Not that this constant burden on the public purse is much discussed. Nor do our politicians or media urge much restraint in spite of recent historical precedents: so-called ‘humanitarian interventions’ wreaking far greater horrors than those we ostensibly intended to prevent. That none of the many wars is finally ‘winnable’ is tacitly accepted. It serves as an excuse to double down. Because when it comes to waging war, the government behaves like an addicted gambler. The country’s reserves might just as well be bottomless.

As in Brazil, the nebulous threat of terrorism is the main pretext that justifies all of this. It permits the rollback of civil liberties and the steady abolition of human rights – take for instance the resurgent debate about whether or not torture is effective, which is not only horrifying but a grotesque anachronism.

Counterterrorism also justifies our killing abroad and the total surveillance of our populations at home. A cynical person might say that if terrorism did not exist then the corporatocracy would have to invent it.

Meanwhile, Braaaaa-zzzilll, dah, dah, dah… and there we find our celebrity politicians clamouring to be seen and heard in support of “the team”, feigning ordinariness in the hope that we regard them merely as compatriots, forgiving their true allegiance to transnational corporations and special interests… Whoa! Here comes those commercials… and it’s time once more to be teased: fresh inducements to throw the last remnants of your meagre salary on tantalisingly (im)probable bets… “Have a bang on that!” growls Ray Winstone, as he plays head tennis with an overgrown digitised Big Brother likeness…

In short, there are plenty of lotteries and cheap beer to keep the proles happy, which is exactly as Orwell tried to forewarn us. It is one strand of Nineteen Eighty-Four that is mostly overlooked and forgotten.

The rule is straightforward, of course: financial depression brings political oppression in its wake. Out of political oppression comes conflict and division: riots at home, wars abroad. It is a dire and incontrovertible fact that this cycle of misery has already cost multiple millions of lives, not once, but twice, during the last century. A lesson from history we ought to have learned the hard way.

Instead, it’s getting late again… yet another storm is threatening to break out across the Middle East as clouds are also darkening the skies over Ukraine. Time is running short because the existential threat to Western democracy has nothing to do with terrorism, but is the entirely terrifying prospect of a full-blown international shoot-out. The war that everyone says can never happen.

So this is not the most opportune moment to be putting our feet up and settling back to enjoy ice-cold sips of Piña Colada, or (more probably) pints of lager, as pleasant as putting our feet up and supping ale is. When the circuses have pulled up sticks and temporarily left town, and the final whistle is blown for another four years – or if you happened to live on a stage of the Tour de France, the last of the yellow bunting is taken down – the War Party remains in power.

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Epilogue: it’s not coming home… but that’s ok

“Someone said to me ‘To you football is a matter of life or death!’ and I said ‘Listen, It’s more important than that’”

— Bill Shankly 3

I was a disappointed as anyone after England’s semifinal defeat to Croatia, but have we lost all sense of proportion? I watched the game at a friend’s house and when ITV switched over to the news studio afterwards we were all quite staggered that its World Cup coverage continued unabated and throughout the rest of the broadcast. Repeats of game that had ended just a few minutes earlier were now interspersed with wide-angle shots of beer-hurling crowds and vox pop interviews of supporters, and on and on and on it went. Eventually we crossed over to Thailand to see pictures of the boys miraculously rescued from the cave who are thankfully now recuperating inside an isolation unit. Apparently they were watching the World Cup too. But the genuine emotion of their cave rescue was over and with far stronger emotion directly on tap back home, the news abruptly switched over once more – to the overblown spectacle of yet more pogoing crowds and bleary-eyed fans.

In truth, the media role today is not to dispassionately present information as it claims but to whip up raw emotion. The targets may shift – fear and loathing of terrorism has mostly given way to fear and loathing of Russiagate ‘meddling’, Putin, ‘Novichok’ and Trump – but the hysteria remains. As playwright and novelist CJ Hopkins writes:

The speed at which they switched from the War on Terror narrative to the Putin-Nazi narrative attests to the power of the corporate media and the neoliberal propaganda machine, generally. It really is an amazing achievement. In less than two years, they managed to condition a significant portion of the Western masses to forget about “the Islamic terrorists” that they had been conditioned to live in fear of, and to transfer their fear and hatred to Trump, and Putin, and anyone who appears to support them, or doesn’t sufficiently hate and fear them.

The ruling classes have achieved this feat by generating an ongoing series of episodes of mass hysteria. Most of them last a week or two, but their cumulative effect is powerful and enduring. Fake news, bots, travel bans, Confederate statues, neo-Nazi rallies, “novichok” attacks, kids in cages … anything the corporate media can use to channel more hatred toward Trump and Putin. None of these episodes are generated out of whole cloth. Obviously, the Russians are pursuing their interests, there is a white supremacist subculture in the United States, as there always has been, those kids were put in those cages, and so on … none of which began with Trump, or has anything exclusively to do with Putin, or triggered mass protests and widespread outrage until the neoliberal ruling classes and corporate media decided it should. 4

Click here to read CJ Hopkins’ latest satirical piece entitled “Hardcore Hitler on Hitler in Helsinki”.

Sport provides another way to push our buttons.

An audience of 26 million Britons apparently watched the game live on Wednesday night although there isn’t anything close to 26 million football fans living on this small island. How many packed-in beneath the giant screens would be watching any ordinary England match? Fewer still are regular match-goers.

Those beside me on the sofa were all long-standing fans of the game. One supported local club Sheffield Utd, another cheers on Crystal Palace and I’ve supported Wolves for most of my life. We all know very well the giddy ups and downs of football fandom. Intense feelings of elation and defeat are recurring experiences. But this was different. This was a festival backed by a media frenzy – the strange intensity heightened again thanks to a highly intoxicated social media. Sorry if I sound like an old fuddy-duddy, but quite frankly I don’t wish to be sprayed with beer every time my team takes the lead – that’s not football; it’s Glastonbury or Ibiza or something.

Bill Shankly was only joking when he made his famous remark usually misquoted as “football is not a matter of life and death, it’s much more serious than that”, even if a woeful number with the literal-minded priggishness of Christian end-timers are silly enough to have taken him seriously. Shankly knew hardship. After he left school aged fourteen, he had worked in a coal mine. He knew first-hand what it felt like to be hungry and confined in darkness. He surely would have understood the quiet anguish felt by the Thai boys better than any of us, but what would he have made of the media-hyped and largely manufactured heartbreak felt by England’s johnny-come-lately carnival fans? I imagine he might well have choked on his beer… chortling in derision.

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1 From an article entitled “The ‘Soft Coup’ and the Attack on the Brazilian People” written by Celina Stien-Della Croce, published in Counterpunch on June 22, 2018. https://www.counterpunch.org/2018/06/22/the-soft-coup-and-the-attack-on-the-brazilian-people/  

2 A symphonic reworking of “Aquarela do Brasil” (Watercolor of Brazil), known in the English-speaking world simply as “Brazil”, written by Ary Barroso in 1939.

3 In an interview on a Granada Television chat-show, hosted by Shelley Rohde on Wednesday 20th of May 1981

4 From an article entitled “Hardcore Hitler on Hitler in Helsinki” written by CJ Hopkins published in Counterpunch on July 10, 2018. https://www.counterpunch.org/2018/07/10/hardcore-hitler-on-hitler-in-helsinki/

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Jonathan Cook on “Brexit Hysteria and the Liberal Mind”

I do not ordinarily reprint articles in full, but have decided to break with normal policy to promote Jonathan Cook’s exceptionally important article. Cook understands and brilliantly dissects the febrile atmosphere after Brexit and urges a way forward.

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The enraged liberal reaction to the Brexit vote is in full flood. The anger is pathological – and helps to shed light on why a majority of Britons voted for leaving the European Union, just as earlier a majority of Labour party members voted for Jeremy Corbyn as leader.

A few years ago the American writer Chris Hedges wrote a book he titled the Death of the Liberal Class. His argument was not so much that liberals had disappeared, but that they had become so coopted by the right wing and its goals – from the subversion of progressive economic and social ideals by neoliberalism, to the enthusiastic embrace of neoconservative doctrine in prosecuting aggressive and expansionist wars overseas in the guise of “humanitarian intervention” – that liberalism had been hollowed out of all substance.

Liberal pundits sensitively agonise over, but invariably end up backing, policies designed to benefit the bankers and arms manufacturers, and ones that wreak havoc domestically and abroad. They are the “useful idiots” of modern western societies.

The liberal British media is current awash with articles by pundits on the Brexit vote I could select to illustrate my point, but this one by Guardian columnist Zoe Williams, I think, isolates this liberal pathology in all its sordid glory.

Here is a revealing section, written by a mind so befuddled by decades of neoliberal orthodoxy that it has lost all sense of the values it claims to espouse:

“There is a reason why, when Marine le Pen and Donald Trump congratulated us on our decision, it was like being punched in the face – because they are racists, authoritarian, small-minded and backward-looking. They embody the energy of hatred. The principles that underpin internationalism – cooperation, solidarity, unity, empathy, openness – these are all just elements of love.”

A love-filled EU?

One wonders where in the corridors of the EU bureaucracy Williams identifies that “love” she so admires. Did she see it when the Greeks were being crushed into submission after they rebelled against austerity policies that were themselves a legacy of European economic policies that had required Greece to sell off the last of its family silver?

Is she enamoured of this internationalism when the World Bank and IMF go into Africa and force developing nations into debt-slavery, typically after a dictator has trashed the country decades after being installed and propped up with arms and military advisers from the US and European nations?

What about the love-filled internationalism of NATO, which has relied on the EU to help spread its military tentacles across Europe close to the throat of the Russian bear? Is that the kind of cooperation, solidarity and unity she was thinking of?

Williams then does what a lot of British liberals are doing at the moment. She subtly calls for subversion of the democratic will:

“The anger of the progressive remain side, however, has somewhere to go: always suckers for optimism, we now have the impetus to put aside ambiguity in the service of clarity, put aside differences in the service of creativity. Out of embarrassment or ironic detachment, we’ve backed away from this fight for too long.”

That includes seeking the ousting of Jeremy Corbyn, of course. “Progressive” Remainers, it seems, have had enough of him. His crime is that he hails from “leftwing aristocracy” – his parents were lefties too, apparently, and even had such strong internationalist principles that they first met in a committee on the Spanish civil war.

But Corbyn’s greater crime, according to Williams, is that “he is not in favour of the EU”. It would be too much trouble for her to try and untangle the knotty problem of how a supreme internationalist like Corbyn, or Tony Benn before him, could be so against the love-filled EU. So she doesn’t bother.

Reversing the democratic will

We will never know from Williams how a leader who supports oppressed and under-privileged people around the world is cut from the same cloth as racists like Le Pen and Trump. That would require the kind of “agile thinking” she accuses Corbyn of being incapable of. It might hint that there is a leftwing case quite separate from the racist one – even if Corbyn was not allowed by his party to advocate it – for abandoning the EU. (You can read my arguments for Brexit here and here.)

But no, Williams assures us, Labour needs someone with much more recent leftwing heritage, someone who can tailor his or her sails to the prevailing winds of orthodoxy. And what’s even better, there is a Labour party stuffed full of Blairites to choose from. After all, their international credentials have been proven repeatedly, including in the killing fields of Iraq and Libya.

And here, wrapped into a single paragraph, is a golden nugget of liberal pathology from Williams. Her furious liberal plea is to rip up the foundations of democracy: get rid of the democratically elected Corbyn and find a way, any way, to block the wrong referendum outcome. No love, solidarity, unity or empathy for those who betrayed her and her class.

“There hasn’t been a more fertile time for a Labour leader since the 1990s. The case for a snap general election, already strong, will only intensify over the coming weeks. As the sheer mendacity of the leave argument becomes clear – it never intended to curb immigration, there will be no extra money for the NHS, there was no plan for making up EU spending in deprived areas – there will be a powerful argument for framing the general election as a rematch. Not another referendum, but a brake on article 50 and the next move determined by the new government. If you still want to leave the EU, vote Conservative. If you’ve realised or knew already what an act of vandalism that was, vote Labour.”

A coup in the making

Williams and the rest of the media, of course, are not making these arguments in a vacuum. Much of the Labour shadow cabinet has just resigned and the rest of the parliamentary party are trying to defy the overwhelming democratic will of their membership and oust Corbyn. His crime is not that he supported Brexit (he didn’t dare, given the inevitable reaction of his MPs) but that he is not a true believer in the current neoliberal order, which very much includes the EU.

Here is what one of the organisers (probably a shadow cabinet minister) of this coup-in-the-making says:

“The plan is to make Corbyn’s job as leader extremely difficult in the hope of pushing him to resign, with most MPs refusing to serve as shadow ministers, show up on the frontbench in the House of Commons, support him at PMQs or formulate policy under his leadership.”

This was presumably said with a straight face, as though Corbyn has not been undermined by these same Blairite MPs since day one of his leadership. This is not a new campaign – it has simply been forced to go more public by the Brexit vote.

Labour MPs do not just want to oust a leader with massive support among party members. They have hamstrung him from the outset so that he could not lead the political revolution members elected him to begin. And now he is being made to pay the price because he privately backs a position that, as the referendum has just shown, has majority support.

The neoliberal prison

The Brexit vote is a huge challenge to the left to face facts. We want to believe we are free but the truth is that we have long been in a prison called neoliberalism. The Conservative and Labour parties are tied umbilically to this neoliberal order. The EU is one key institution in a transnational neoliberal club. Our economy is structured to enforce neoliberalism whoever ostensibly runs the country.

That is why the debate about Brexit was never about values or principles – it was about money. It still is. The Remainers are talking only about the threat to their pensions. The Brexiters are talking only about the role of immigrants in driving down wages. And there is good reason: because the EU is part of the walls of the economic prison that has been constructed all around us. Our lives are now only about money, as the gargantuan bail-outs of the too-big-to-fail banks should have shown us.

There is a key difference between the two sides. Most Remainers want to pretend that the prison does not exist because they still get privileges to visit the living areas. The Brexiters cannot forget it exists because they are never allowed to leave their small cells.

The left cannot call itself a left and keep whingeing about its lost privileges while denouncing those trapped inside their cells as “racists”. Change requires that we first recognise our situation – and then have the will to struggle for something better.

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Jonathan Cook won the Martha Gellhorn Special Prize for Journalism. His latest books are “Israel and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle East (Pluto Press) and “Disappearing Palestine: Israel’s Experiments in Human Despair” (Zed Books). His website is www.jkcook.net.

Click here to read the same article published by Counterpunch.

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this is the EU — so take it or leave it… #5. Greece and the tyranny of Brussels

“In the euro area, the countries in the periphery have nothing at all to offset austerity. They are simply being asked to cut total spending without any form of demand to compensate. I think that is a serious problem.

“I never imagined that we would ever again in an industrialised country have a depression deeper than the United States experienced in the 1930s and that’s what’s happened in Greece.

“It is appalling and it has happened almost as a deliberate act of policy which makes it even worse”. [Bold highlight added]

— Lord Mervyn King, former Governor of the Bank of England. 1

“The Greek people have been living through hell during the last six years, and unfortunately they trusted that Tsipras [PM] would put an end to the extreme austerity measures, which are combined with a total undemocratic regime. Unfortunately, instead of putting an end, he put his signature to a third memorandum, which is even worse than the previous two…

“People are back on the streets protesting for their rights and dignity because right now they’re being asked to pay taxes which amount to almost the totality of their revenue. They’re asked to give up their homes… They’re asked to surrender public property, which is privatized at very, very low prices. And, they’re also asked to give up democracy”

— Zoe Konstantopoulou, lawyer and former Speaker of Hellenic Parliament. 2

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On 13th July [2015], the democratic elected Greek government of Alexis Tsipras was brought to its knees by the European Union. The “agreement” of 13th of July is in fact a coup d’état. It was obtained by having the European Central Bank close down the Greek banks and threaten never to allow them to open up again, until the Greek government accepted a new version of a failed program. Why? Because official Europe could not stand the idea that a people suffering from its self-defeating austerity program dared elect a government determined to say “No!”.

So begins the call for “A plan B in Europe” put together by a group of prominent European left-leaning politicians from Parti de Gauche (France), Die Linke (Germany), Red Green Alliance (Denmark), Socialist Party (SP) (Ireland), Bloco de Esquerda (Portugal), and Syriza (Greece). Top of the bill is Yanis Varoufakis (a principle author, I imagine, given some of the polemical flourishes within this signed but otherwise uncredited page-long call to action).

The piece continues:

We must learn from this financial coup. The euro has become the tool of economic and governmental dominance in Europe by a European oligarchy hiding behind the German government, delighted to see Mrs Merkel doing all the « dirty work » other governments are incapable of undertaking. This Europe only generates violence within nations and between them: mass unemployment, fierce social dumping and insults against the European Periphery that are attributed to Germany’s leadership while parroted by all the “elites”, the Periphery’s not excluded. The European Union has thus become an agent of an extreme right wing ethos and a vehicle for annulling democratic control over production and distribution throughout Europe. 3

Click here to read the full statement.

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Now let us go back nine months – back to the eve of the Greek referendum during the dog days of last summer, and just before the extraordinary ‘oxi’ vote which momentarily reverberated across our western hemisphere.

Yanis Varoufakis [3:45 mins in]: Let me tell you something which is probably unknown. Ever since we declared the referendum and we incensed our European partners we had the most interesting proposals coming from Brussels. Perhaps this referendum and the impasse it represents concentrated several minds in Brussels and we’ve had some really good proposals – proposals we would sign on the dotted line for.

Paul Mason: You have a proposal you would sign on the dotted line for?

Varoufakis: Yes, we do.

Mason: Where is it?

Varoufakis: Well, I’m not going to tell you. It’s somewhere in this building. But the crucial part of the story is that before this proposal becomes a genuine negotiating document which we can sign off on Monday, the people have to empower us with a “no”.

From the Channel 4 news interview embedded above broadcast on July 3rd 2015 that is also available here.

You can find the same clip here on Varoufakis’ blog.

Shortly thereafter [July 5th] the people of Greece, perhaps in light of Varoufakis’ advice, went to the polls and voted overwhelming in favour of rejecting the Eurogroup deal with its demands for increasing doses of “austerity” and ‘Washington Consensus’-style ‘conditionalities’ — the enforced privatisation of public services and other forms of so-called ‘deregulation’. To which the response from Brussels was to immediately double down by issuing still harsher neoliberal demands. With this, the mask of European social democracy fell away completely.

Nobel laureate economist, Paul Krugman, was one who helped to promote the hashtag #ThisIsACoup when he wrote in the New York Times:

This Eurogroup list of demands is madness. The trending hashtag #ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.

Left Unity (which has a loose alliance with political parties Syriza and Podemos) also sent a message of support to the Greeks:

The people of Greece have resisted every threat, every piece of establishment propaganda telling them a No vote would mean ruin, and asserted their democratic rights. This will be a No heard around the world.

Now is the time to celebrate – and to step up our solidarity ahead of the Troika’s next move. Come along to what will now be a victory rally at the TUC’s Congress House, organised by Greece Solidarity Campaign.

And the Greeks had indeed empowered their government with a resounding ‘no’, but instead of fighting on, Syriza under Tsipras’ leadership swiftly capitulated in what must be one of the fastest political U-turns of all time. In response, Varoufakis resigned, refusing to criticise his friend Tsipras, and also declining an invitation to join a small breakaway faction who hoped to restore the party’s anti-austerity ticket on which Tsipras and Syriza had stood little more than six months previously.

So there is a mystery here that remains. Varoufakis, who prides himself on openness, has simply never explained what actually happened during those most momentous days in early July. Specifically, what became of that proposal from Brussels he was so keen “to sign on the dotted line”. Surely he owes the Greek people a fuller explanation.

Moreover, while Varoufakis was quick to attribute blame for the Eurogroup failures on the inflexibility of Wolfgang Schäuble and fellow German Karl Lamers, he has to a large extent absolved other key players including, most notably, President of the ECB, Mario Draghi for their part in “the coup” (his words).

I have consistently defended Varoufakis and Tsipras and been scathing of others on the left for being too hurried in passing judgement and unduly hypercritical (as many earlier posts testify). Caught up in the drama, like others hoping Syriza’s election signified the beginning of truly revolutionary reforms, I confess that I became a cheerleader for both.

With the benefit of hindsight it is clear that Syriza and Varoufakis were both tremendously guilty of an over-reliance on the efficacy of “reasonableness” (more here), because ‘reasonableness’ only ever makes headway when it engages with opposition that is principled and reasoned. Against the irrational, it is blunt, and against the unscrupulous it becomes a danger to itself. Yet Syriza and Varoufakis seem incapable of learning this simple lesson. This is what Varoufakis wrote in the abstract to his “Confessions of an Erratic Marxist” [December 2013]:

Should we use this once-in-a-century capitalist crisis as an opportunity to campaign for the dismantling of the European Union, given the latter’s enthusiastic acquiescence to the neoliberal policies and creed? Or should we accept that the Left is not ready for radical change and campaign instead for stabilising European capitalism? This paper argues that, however unappetising the latter proposition may sound in the ears of the radical thinker, it is the Left’s historical duty, at this particular juncture, to stabilise capitalism; to save European capitalism from itself and from the inane handlers of the Eurozone’s inevitable crisis. 4

Throughout the crisis, he and the party he once represented at the Eurogroup meetings have been chewed up and spat out time and again and yet his response has been to remain unruffled and reasonable in his continued fight (hardly the right word) “to save European capitalism from itself”.

Today Varoufakis leads a parallel campaign Democracy In Europe 2025 made up of lecture tours and larger academic-style conferences making speculative calls for a Plan B in Europe. Beyond the well-meaning rhetoric, the movement is entirely bereft of strategy. And my immediate question to Varoufakis is actually this: why must we wait until 2025 to bring democracy (a gift of the ancient Greeks) back to Europe? After all he knows better than most that a week in politics is an exceedingly long time – so a decade might as well be an aeon.

Here then, to redress the balance of earlier posts (at the risk of angering readers and friends alike), I present the condemnatory appraisal courtesy of political commentator James Petras, who in March 2015 (a mere two months after Syriza were elected) wrote the following:

The vast majority of Greeks, who voted for Syriza, expected some immediate relief and reforms.  They are increasingly disenchanted.  They did not expect Tsipras to appoint Yanis Varoufakis, a former economic adviser to the corrupt neo-liberal PASOK leader George Papandreou, as Finance Minister. Nor did many voters abandon PASOK, en masse, over the past five years, only to find the same kleptocrats and unscrupulous opportunists occupying top positions in Syriza, thanks to Alexis Tsipras index finger.

Nor could the electorate expect any fight, resistance and willingness to break with the Troika from Tsipras’ appointments of ex-pat Anglo-Greek professors.  These armchair leftists (‘Marxist seminarians’) neither engaged in mass struggles nor suffered the consequences of the prolonged depression.

Syriza is a party led by affluent upwardly mobile professionals, academics and intellectuals.  They rule over (but in the name of) the impoverished working and salaried lower middle class, but in the interests of the Greek, and especially, German bankers.

They prioritize membership in the EU over an independent national economic policy.  They abide by NATO, by backing the Kiev junta in the Ukraine, EU sanctions on Russia, NATO intervention in Syria/Iraq and maintain a loud silence on US military threats to Venezuela! 5

[bold highlight added]

Click here to read the full article by James Petras.

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By latest estimates total Greek debt is 384 billion euros, or US$440 billion. That’s approaching nearly twice the size of Greece’s annual GDP.  A decade ago, in 2007-08 before the global crash, Greek debt was roughly half of what it is today, in terms of both total debt and as a percent of GDP.  Greek debt was actually less than a number of Eurozone economies.  So Greece’s debt has been primarily caused by the 2008-09 crash, Greece’s six year long economic depression [that] followed, the extreme austerity measures imposed on it by the Troika during this period which has been the primary cause of its long depression, and the Troika’s piling of debt on Greece to repay previously owed debt.

Contrary to European media spin, it’s not been rising Greek wages or excessive government spending that has caused the US$440 billion in Greek debt. Since 2009 Greek annual wages have fallen from 23,580 to less than 18,000 euros. Government spending has fallen from 118 billion euros to 82 billion.

writes Jack Rasmus in an extremely detailed overview of the state of the Greek crisis in light of the recent parliamentary vote (passed by a narrow margin of 153 to 145) to implement the latest demands of “the Troika” in order to ensure another tranche of unpayable loans. “Bailouts” that, as Rasmus explains at length, are then returned directly to the creditors:

As a recent in depth study by the European School of Management and Technology, ‘Where Did the Greek Bailout Money Go?, revealed in impeccably researched detail, Greek debt payments  ultimately go to Euro bankers. For example, of the 216 billion euros, or US$248 billion, in loans provided to Greece by the Troika in just the first two debt deals of May 2010 and March 2012, 64 percent (139 billion euros) was interest paid to banks on existing debt; 17 percent (37 billion euros) to Greek banks (to replace money being taken out by wealthy Greeks and businesses and sent to northern Europe banks), and 14 percent (29 billion euros) to pay off hedge funds and private bankers in the 2012 deal. Per the study, less than 5 percent of the 216 billion euros went to Greece to spend on its own economy. As the study’s authors concluded, “ the vast majority (more than 95 percent) went to existing creditors in the form of debt repayments and interest payments”.  And that’s just the 2010 and 2012 Troika deals. Last August’s third deal is no doubt adding more to the totals. 6

[bold highlight added]

Click here to read Jack Rasmus’ full article published in Counterpunch.

The cycles of debt-repayment might literally be never-ending, because Greece will never be able to fully repay all of its (odious) debts. It is a situation compounded because Greece’s already floundering economy is completely suffocated by the Troika’s imposed “austerity” regime.

But this disastrous situation is no accident. The trap in which Greece finds itself satisfies two neo-liberal objectives. Firstly, Greece becomes so impoverished that it is forced to sell state assets at rock-bottom prices. Secondly, the sustained wealth transfer from the pockets of the ordinary Greeks into the hands of the bankers helps to prop up a failed financial system.

Setting the bizarre academic justifications aside, and overlooking the deeper reasons Greece became so indebted in the first place, what we see is how the Troika – two thirds of which is the EU – has put the sanctity of debt repayment far above the sanctity of human well-being. So whenever Greece comes up gasping for air, the IMF and the EU repeatedly pushes it back under again:

The media persists in calling the looting of Greece a “bailout.”

To call the looting of a country and its people a “bailout” is Orwellian. The brainwashing is so successful that even the media and politicians of looted Greece call the financial imperialism that Greece is suffering a “bailout.”

writes former Assistant Secretary of the Treasury for Economic Policy and former Associate Editor of the Wall Street Journal, Paul Craig Roberts in a recent article entitled “We Have Entered The Looting Stage of Capitalism”. In the piece, Roberts explains the EU’s role and the IMF’s apparent policy shift as follows:

Having successfully used the EU to conquer the Greek people by turning the Greek “leftwing” government into a pawn of Germany’s banks, Germany now finds the IMF in the way of its plan to loot Greece into oblivion.

The IMF’s rules prevent the organization from lending to countries that cannot repay the loan. The IMF has concluded on the basis of facts and analysis that Greece cannot repay. Therefore, the IMF is unwilling to lend Greece the money with which to repay the private banks.

The IMF says that Greece’s creditors, many of whom are not creditors but simply bought up Greek debt at a cheap price in hopes of profiting, must write off some of the Greek debt in order to lower the debt to an amount that the Greek economy can service.

The banks don’t want Greece to be able to service its debt, because the banks intend to use Greece’s inability to service the debt in order to loot Greece of its assets and resources and in order to roll back the social safety net put in place during the 20th century. […]

The way Germany sees it, the IMF is supposed to lend Greece the money with which to repay the private German banks. Then the IMF is to be repaid by forcing Greece to reduce or abolish old age pensions, reduce public services and employment, and use the revenues saved to repay the IMF.

As these amounts will be insufficient, additional austerity measures are imposed that require Greece to sell its national assets, such as public water companies and ports and protected Greek islands to foreign investors, principally the banks themselves or their major clients. […]

In other words, Greece is being destroyed by the EU that it so foolishly joined and trusted. The same thing is happening to Portugal and is also underway in Spain and Italy. The looting has already devoured Ireland and Latvia (and a number of Latin American countries) and is underway in Ukraine.

The current newspaper headlines reporting an agreement being reached between the IMF and Germany about writing down the Greek debt to a level that could be serviced are false. No “creditor” has yet agreed to write off one cent of the debt. All that the IMF has been given by so-called “creditors” is unspecific “pledges” of an unspecified amount of debt writedown two years from now.

The newspaper headlines are nothing but fluff that provide cover for the IMF to succumb to pressure and violate its own rules. The cover lets the IMF say that a (future unspecified) debt writedown will enable Greece to service the remainder of its debt and, therefore, the IMF can lend Greece the money to pay the private banks. […]

We have entered the looting stage of capitalism. Desolation will be the result. 7

Click here to read Paul Craig Roberts’ full article.

The overarching agenda of the EU – a plan rarely mentioned above a murmur – is to fuse its member nations under unelected technocratic governance for the benefit of a few corporations and the oligarchs who own them. So the notion that sticking by the EU is some sense an act of European solidarity is extremely misguided. Having already sold many of its people down the river, however, we are rapidly approaching a critical and perilous moment.

The far-right is now on the rise in many parts of Europe – Greece being an example, although thankfully Golden Dawn remains very much a minority party. And this swing towards ring-wing extremism is a direct consequence of the EU’s savage economic policies combined with its abject failure to save refugees and resolve the so-called “migrant crisis” (more in a later piece). As this alarming political shift occurs, the EU does next to nothing to address it. No debt relief for Greece or the other struggling member states. No let up on enforced “austerity” or privatisation. Neo-liberalism to the bitter end. But then, after Greece was collectively punished for the insolence of its ‘oxi’ vote last summer, only the most dewy-eyed believers can remain in serious doubt of the EU’s callous indifference towards the plight of its poorest citizens.

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1 Quote taken from “Euro depression is ‘deliberate’ EU choice, says former Bank of England chief” written by Mehreen Khan, published in The Telegraph on March 1, 2016. http://www.telegraph.co.uk/business/2016/03/01/europes-depression-is-deliberate-eu-choice-says-former-bank-of-e/ 

2 Quote taken from an article entitled “The Ugly Truth Behind the Greek Bailout” written by Robert Hunziker, published by Counterpunch on May 10, 2016. http://www.counterpunch.org/2016/05/10/the-ugly-truth-behind-the-greek-bailout/ 

3 From a statement entitled “A plan B in Europe” from Plan B for Europe. https://www.euro-planb.eu/?page_id=96&lang=en. The statement continues:

It is a dangerous lie to assert that the euro and the EU serve Europeans and shield them from crisis. It is an illusion to believe that Europe’s interests can be protected within the iron cage of the Eurozone’s governance “rules” and within the current Treaties. President Hollande’s and Prime Minister Renzi’s method of behaving like a “model student”, or in fact a “model prisoner”, is a form of surrender that will not even result in clemency. The President of the European Commission, Jean-Claude Juncker, said it clearly: « there can be no democratic choice against the European treaties ». This is the neoliberal adaptation of the « limited sovereignty » doctrine invented by the Soviet leader Brezhnev in 1968. Then, the Soviets crushed the Prague Spring with their tanks. This summer, the EU crushed the Athens Spring with its banks.

We are determined to break with this “Europe”. It is the basic condition needed to rebuild cooperation between our peoples and our countries on a new basis. How can we enact policies of redistribution of wealth and of creation of decent jobs, especially for the young, ecological transition and the rebuilding of democracy within the constraints of this EU? We have to escape the inanity and inhumanity of the current European Treaties and remould them in order to shed the straightjacket of neoliberalism, to repeal the Fiscal Compact, and to oppose the TTIP.

We live in extraordinary times. We are facing an emergency. Member-states need to have policy space that allows their democracies to breathe and to put forward sensible policies at the member-state’s level, free of fear of a clamp down from an authoritarian Eurogroup dominated by the interests of the strongest among them and of big business, or from an ECB that is used as a steamroller that threatens to flatten an “uncooperative country”, as it happened with Cyprus or Greece.

4 From “Confessions of an Erratic Marxist in the Midst of a Repugnant European Crisis” written by Yanis Varoufakis, published on December 10, 2013. http://yanisvaroufakis.eu/2013/12/10/confessions-of-an-erratic-marxist-in-the-midst-of-a-repugnant-european-crisis/ 

5 From an article entitled “Lies and Deceptions on the Left: The Politics of Self Destruction” written by James Petras, published by Global Research on March 22, 2015. http://www.globalresearch.ca/lies-and-deceptions-on-the-left-the-politics-of-self-destruction/5438105

6 From an article entitled “Greek Debt Negotiations: Will the IMF Exit the Troika?” written by Jack Rasmus, published in Counterpunch on May 26, 2016. http://www.counterpunch.org/2016/05/26/greek-debt-negotiations-will-the-imf-exit-the-troika/ 

7 From an article entitled “We Have Entered The Looting Stage Of Capitalism” written by Paul Craig Roberts, published on May 25, 2016. http://www.paulcraigroberts.org/2016/05/25/we-have-entered-the-looting-stage-of-capitalism-paul-craig-roberts/ 

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this is the EU — so take it or leave it… #3. ‘The Brussels Business’

“Who runs the European Union?” This is the question front and centre of the excellent 2012 documentary The Brussels Business which takes the viewer on “a journey into the corridors of power of the biggest economy on earth – the European Union.” What filmmakers Matthieu Lietaert (Belgium) and Friedrich Moser (Italy) find is a Byzantine complex of corporate entanglements and high-powered lobby groups.

Assiduously researched and documented, the real importance of this film is that almost uniquely it presents an exposé of the European Union from a leftist perspective:

Produced by:
Steven Dhoedt (VisualAntics – Be)
Friedrich Moser (green + blue communication – Austria)

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Additional: latest example of EU corporatocracy at work

On Tuesday [May 31st] the European Commission together with Facebook, Twitter, YouTube and Microsoft announced a code of conduct “to combat the spread of illegal hate speech online in Europe”:

The definition of illegal online content is based on the Framework Decision on Combatting Racism and Xenophobia which criminalises the public incitement to violence or hatred directed against a group of persons or a member of such a group defined by reference to race, colour, religion, descent or national or ethnic origin. 1

In accordance with the directive, views and opinions that the aforementioned corporations deem “hate speech” will be removed within 24 hours, whereas “alternative” content deemed “a counter narrative” to “hate speech” will be actively promoted. In other words, the tech giants who already own most of the internet will be put in charge of policing it too:

In short, the “code of conduct” downgrades the law to a second-class status, behind the “leading role” of private companies that are being asked to arbitrarily implement their terms of service. This process, established outside an accountable democratic framework, exploits unclear liability rules for companies. It also creates serious risks for freedom of expression as legal but controversial content may well be deleted as a result of this voluntary and unaccountable take down mechanism. 2

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1 http://ec.europa.eu/news/2016/05/20160531_en.htm

2

Today, on 31 May, European Digital Rights (EDRi) and Access Now delivered a joint statement on the EU Commission’s “EU Internet Forum”, announcing our decision not to take part in future discussions and confirming that we do not have confidence in the ill considered “code of conduct” that was agreed.

Launched at the end of 2015, the “EU Internet Forum” was meant to counter vaguely defined “terrorist activity and hate speech online”. The discussions were convened by the European Commission and brought together almost exclusively US-based internet companies and representatives of EU Member States. While no civil society organisations were invited to attend the discussions on terrorism, several civil society representatives were allowed to take part in some of the discussions on online hate speech. However, civil society was systematically excluded from the negotiations that led to the voluntary “code of conduct” for IT companies – an official document that was presented today, despite the lack of transparency and public input into its content.

From the joint statement released by European Digital Rights (EDRi) and Access Now on May 31, 2016. https://edri.org/edri-access-now-withdraw-eu-commission-forum-discussions/ 

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this is the EU — so take it or leave it… #2. TTIP and other “free trade” deals

Irish MEP Luke “Ming” Flanagan visits the TTIP reading room where he can read texts that have already been agreed on – in the language of the EU this constitutes “democratic oversight”. He is not allowed a camera or tape recorder:

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The agreement we have secured means that the EU Member States will fully support the European Commission’s recent trade strategy. Central to this strategy are ambitious and comprehensive trade deals that will substantially boost the UK’s growth and economic security. […]

Concluding all the trade deals already underway could ultimately be worth in total more than £20 billion a year to UK GDP. These include the UK’s top trade priority: an agreement between the EU and the US (the Transatlantic Trade and Investment Partnership), which alone could add £10 billion to UK GDP. 1

Taken from “The Best Of Both Worlds”; the government policy document that explains Cameron’s negotiated deal with the EU. The Transatlantic Trade and Investment Partnership (TTIP) features centrally in the new arrangements.

The first point to note in the extract reprinted above is that a claim that TTIP “will substantially boost the UK’s growth and economic security” is certainly bogus. Long-term economic projections of any kind are notoriously unreliable under the best of circumstances, but here we have a far from impartial assessment. Indeed, as its title “The Best of Both Worlds” makes blatant, this is a sales pitch.

Embedded below is an excellent short film produced by wikileaks about the American-led “free trade agreements” collectively known as the 3Ts: namely Trans-Pacific Partnership (TPP), Transatlantic Trade and Investment Partnership (TTIP) and the lesser known Trade in Services Agreement (TISA). Quite literally everyone should watch this film:

In reality, these treaties have little to nothing to do with facilitating trade in any ordinary sense, but enable a greater transfer of power away from democratic government and into the hands of the unelected corporatocracy. Operating at their heart is a parallel judicial system known as the Investor-state dispute settlement (ISDS), which is conducted on the basis of secret tribunals open solely to the transnational corporations (our governments do not have access).

This legal arrangement permits companies to sue states for anything that adversely affects their profits. Thus, under the rules of TTIP (the precise details of which remain as a closely guarded secret), national governments will lose jurisdiction to a kangaroo court that sits in judgement of all impediments to profit-making. Paring back regulations under the guise of “free trade” will thereby rig the market still more in the favour of a few special interests.

Such a thoroughgoing dismantlement of regulations has tremendous ramifications both for individuals and for our communities. It threatens the environment, our education system, healthcare (the NHS is especially endangered) and even privacy. In short, if ratified the 3Ts will impact the lives of all of those who live in signatory nations (and that includes nearly all developed countries). The EU is committed to signing two of these treaties – TTIP and also TISA.

Here are a few extracts from a detailed analysis of TTIP published by Der Spiegel International and entitled “Corporation Carte Blanche: Will US-EU Trade Become Too Free?”:

Lori Wallach had but 10 minutes to speak when she stepped up to podium inside Room 405 at George Washington University, located not too far away from the White House. Her audience was made up of delegates currently negotiating the trans-Atlantic free trade agreement between the United States and the European Union.

They had already spent hours listening to presentations by every possible lobbying group — duty bound to hear myriad opinions. But when Wallach, a trade expert for the consumer protection group Public Citizen, took the stage, people suddenly started paying attention. The 49-year-old Harvard lawyer, after all, is a key figure in international trade debates.

“The planned deal will transfer power from elected governments and civil society to private corporations,” she said, warning that the project presents a threat of entirely new dimensions. [bold emphasis added]

The same article, which was published more than two years ago, then outlines how TTIP will impact our societies:

After the third round of negotiations, an unusually broad alliance of anti-globalization groups, NGOs, environmental and consumer protection groups, civil rights groups and organized labor is joining forces to campaign against TTIP.

These critics have numerous concerns about the treaty – including their collective fear that the convergence of standards will destroy important gains made over the years in health and nutrition policy, environmental protection and employee rights. They argue the treaty will make it easier for corporations to turn profits at the public’s expense in areas like water supply, health or education. It would also clear the path for controversial technologies like fracking or for undesired food products like growth hormone-treated meat to make their way to Europe. Broadly worded copyrights would also restrict access to culture, education and science. They also believe it could open the door to comprehensive surveillance. 2

Click here to read the full article in Der Spiegel.

More recently [Feb 22nd], the Guardian published an article exposing how “TTIP deal poses ‘real and serious risk’ to NHS, says leading QC”:

The controversial transatlantic trade deal set to be agreed this year would mean that privatisation of elements of the NHS could be made irreversible for future governments wanting to restore services to public hands, according to a new legal analysis.

The legal advice was prepared by one of the UK’s leading QCs on European law for the Unite trade union, which will reveal on Monday that it has been holding talks with the government about the Transatlantic Trade and Investment Partnership (TTIP) deal between Europe and the US.

Unite believes the government has been keeping Britain in the dark over the impact of the deal and argues the NHS should be excluded from the trade deal. The government dismissed the idea that TTIP poses a threat as “irresponsible and false”.

TTIP would give investors new legal rights, which extend beyond both UK and EU law as well as NHS contracts, according to Michael Bowsher QC, a former chair of the Bar Council’s EU law committee who was tasked by Unite to prepare the advice.

Bowsher said he had concluded that the deal poses “a real and serious risk” to future UK government decision making regarding the NHS.

“We consider that the solution to the problems TTIP poses to the NHS – and which is likely to provide the greatest protection – is for the NHS to be excluded from the agreement by way of a blanket exception contained within the main text of TTIP,” Bowsher said. 3

Click here to read the full article published in the Guardian.

I disagree, however. Ad hoc exclusions are entirely insufficient. TTIP is so dreadful that we should fight to stop it clean in its tracks.

Voting to remain, gives assent to Cameron’s negotiated EU agreement as summarised in the “The Best Of Both Worlds” policy document and everything contained within it. Since TTIP is central to the agreement, a vote to remain will then be reinterpreted as a signal of our tacit approval to go ahead with TTIP.

If, on the other hand, we vote to leave the EU, then this automatically keeps Britain out of TTIP and potentially nips TTIP in the bud altogether. There are, of course, other “trade deals” in the pipeline, and we need to be committed to blocking them all. First and foremost though, the target must be TTIP.

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Additional:

On May 3rd, Press TV invited Paul Craig Roberts, the former Assistant Secretary of US Treasury, to debate with Sean O’Grady, the Finance Editor of The Independent over TTIP and the other “free trade agreements”:

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1 From paragraph 2.62–3 on p. 23–24 of “The Best Of Both Worlds: the United Kingdom’s special status in a reformed European Union”, published by UK government in February 2016 to “satisf[y] the duty to provide information set out in section 6 of the European Union Referendum Act 2015”.

2 From an article entitled “Corporation Carte Blanche: Will US-EU Trade Become Too Free?” written by Michaela Schiessi, published in Der Spiegel on January 23, 2014. http://www.spiegel.de/international/business/criticism-grows-over-investor-protections-in-transatlantic-trade-deal-a-945107.html

3 From an article entitled “TTIP deal poses ‘real and serious risk’ to NHS, says leading QC” written by Ben Quinn, published in the Guardian on February 22, 2016. http://www.theguardian.com/business/2016/feb/22/ttip-deal-real-serious-risk-nhs-leading-qc

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Whoops austeritypocalypse! or why unbounded economic reasonableness runs into such trouble…

Q: At the onset of the crisis, the former Finance Minister Papaconstantinou likened the Greek economy to the “Titanic” heading straight for the iceberg. Do you also feel as if you are standing on the bridge of the “Titanic”?

A: No. The “Titanic” sank a while ago. We’re steering the lifeboat and throwing lifebelts to those drowning around us.

This was the response Greek Prime Minister, Alexis Tsipras, gave in an exclusive interview to German magazine Stern1

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“austerity”, what is it good for…?

As the economies of the western world continue to flounder, with Germany too (Europe’s last remaining industrial powerhouse) reeling just a little from the greater crisis, debt reduction is still regarded as the key component to any recovery programme. To meet these ends, all our governments have been overseeing huge cuts in public services, welfare payments especially gouged, in concerted efforts to reduce their deficits. This death of our societies by a thousand cuts of “austerity” being the recommended cure which mainstream economists have called for, and though alternative voices have no less insistently pointed out that “austerity measures” are inherently counterproductive (since they reduce tax revenues), these dissenting voices continue to be marginalised.

A few years ago Thomas Herndon stepped forward. Herndon, a university student and thus less rigid in his outlook, caused quite a rumpus – as a consequence, he has since been rewarded with his own wikipedia entry. This sudden burst of fame coming after he inadvertently stumbled upon grievous errors in an influential paper entitled Growth in a Time of Debt (published 2010), authored by eminent Harvard professors, Carmen Reinhart and Ken Rogoff – Rogoff, a former chief economist at the IMF.

In their paper, Reinhart and Rogoff had purported to show that whenever national debt is in excess of 90% of GDP, growth is “roughly cut in half”. This correlation had subsequently been quoted by policy-makers across the world, as well as routinely served up as empirical proof that there was simply no viable alternative to our continuing “austerity” programmes. Most notably, perhaps, former EU Commissioner for Economic and Monetary Affairs, Olli Rehn, leant rather heavily on Reinhart and Rogoff’s work.

But then doubting Thomas Herndon decided to check their figures for himself. And, to his own astonishment, discovered that one of the most frequently cited justifications for the imposed “austerity” strategy actually rested upon a few careless mistakes on a spreadsheet!

[Herndon had] spotted a basic error in the spreadsheet. The Harvard professors had accidentally only included 15 of the 20 countries under analysis in their key calculation (of average GDP growth in countries with high public debt).

Australia, Austria, Belgium, Canada and Denmark were missing.

Oops.

Herndon and his professors found other issues with Growth in a Time of Debt, which had an even bigger impact on the famous result. The first was the fact that for some countries, some data was missing altogether. 2

Click here to read more in this BBC news article.

Taken aback by this unexpected challenge from a novice, Reinhart and Rogoff felt obliged to issue a response:

We are grateful to Herndon et al. for the careful attention to our original Growth in a Time of Debt AER paper and for pointing out an important correction to Figure 2 of that paper. It is sobering that such an error slipped into one of our papers despite our best efforts to be consistently careful. We will redouble our efforts to avoid such errors in the future.

Confessing to their blunder, but keen also to defend their professional reputation, they casually added:

We do not, however, believe this regrettable slip affects in any significant way the central message of the paper or that in our subsequent work.

There has since been no halt to the economic gouging and scourging of Europe. Despite the more immediate evidence coming out of Greece, Spain, Portugal, and every other place where such “measures” have been most strongly administered, that prove “austerity” isn’t working. And even when all other factors, social and human factors, are set aside, and success or failure is judged within the exceedingly narrow terms of its proponents, we see that the sovereign debt burdens in all these countries have continued to rise. 3

Given such a lack of success, the response is obviously to double-down. Apply more stringent “austerity”; if the original cuts have failed, then they needed to be deeper. In former times the doctors would just have ordered more leeches, or the priests would have demanded a tightening of the cilice. Tougher love. Just too bad if the supposed antidote is the worst of the poison, because orthodoxy asserts that, poison or not, it is the best and only remedy. The really important thing is to never let mere facts (especially incalculable costs like human misery) get in the way of a damned fine economic theory!

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 whose debt is it anyway…?

But how did these sovereign debt burdens arise in the first place? Or put another way, the related question might be asked, to whom are the debts actually owed? This second question is rarely broached, but in 2013 award-winning business journalist, Harald Schumann, sought a direct answer to precisely this question. He journeyed across the stricken eurozone countries and poised the question to those working inside the so-called “Troika” (IMF, European Central Bank and EU Commission) as well as significant politicians, economists, lawyers, journalists and even the occasional central banker. The result, a brilliantly constructed documentary entitled The Secret Bank Bailout, is embedded below:

I highly recommend watching the documentary in full, but would also like to offer a brief overview.

Schumann asks which parties were actually rescued by the bailouts, and finds that contrary to what ordinary Germans were led to believe (this is a German documentary originally titled Staatsgeheimnis Bankenrettung) the people living in the poorer eurozone states received barely a penny of this apparent ‘foreign aid’ – our own media perpetuates the self-same falsehood.  Because rather than letting the creditors and the banks absorb their speculative losses, these financial institutions were deemed “too big too fail” and protected. So the bailouts were never used to support the governments, but always passed on to the creditors of major banks, especially ones in Germany and France, who had taken the unwise risks that caused the crisis – the original losses often due to property bubbles in places like Spain and Ireland. (The whole notion of “too big too fail” is, of course, a contravention of even the most basic tenets of free market capitalism.)

And who have been the ultimate recipients of all this bailout money? Well, that has remained a closely guarded secret. We ought to be asking why, of course, which Schumann’s documentary does. He also seeks to penetrate the secret itself.

In the next sections, I will present a further overview comprising highlights of Schumann’s discoveries, and following the same route (then a little beyond it) as he investigated country by country, across the blighted eurozone.

*

 Ireland

The Irish people have been forced to take on 70 billion euros of additional debt to pay off foreign creditors.

Stephen Donnelly, independent Irish MP, says that the ECB held the Irish government virtually at gunpoint:

“The suspicion is that European Central Bank said ‘You will continue to pay these bondholders [the mainly foreign creditors] to whom you owe nothing or we will pull the emergency funding out of your banking system, thereby collapsing your banking system, thereby collapsing your economy.’ To me that is gunboat diplomacy… [with a little prompting] or blackmail. It is a very, very serious threat for a central bank to have made in actually forcing a sovereign nation to surrender its sovereignty to bailout an independent group of investors. Was the ECB acting illegally?”

Brian Hayes, Irish Deputy Minister of Finance:

“Of course that was a position that was foisted on the Irish people as a result of the decisions taken… It was the majority view of the ECB that this money had to be paid back.”

And where did the Irish bailout money go? A full breakdown of the bondholders of Anglo Irish bank is available here. (The list was publicly released by blogger Guido Fawkes.)

Germany has the most with 15 of the bond holders. Who between them hold 5.3 trillion euros.

France is next with 10 bond holders.  Who have an estimated 4 trillion.

Britain is third with 9 who have around 3 trillion.

The Swiss have 6 but who have about 8.5 trillion.

America has only three and hold only a trillion.

Other nations include, Spain, Belgium, Portugal, Holland Finland, Norway, Sweden, Poland, South Africa and Italy.

The bondholders include some of the world’s largest banks: Deutsche, Soc Gen, Barclay’s, PNB Paribas, UniCredit (who don’t appear on the list but own Pioneer Investments) and Wells Fargo (also not on the list but who own European Credit Management). There is also Goldman Sachs and Rothschild Group4

As Harald Schumann says “It’s like a Who’s Who of the financial world.”

Back to Stephen Donnelly:

“No country on earth in history has ever paid that amount of money back without having its own monetary policies… you gradually bleed, year on year on year. And now you really do depend on Europe. There was a quote by Nelson Mandela where he said something like: ‘It is the greatest tragedy of the human condition that we must endure so much pain before arriving at a compromise that we always knew was going to be needed.’”

The first lesson, therefore, is that the solution – any practicable solution – has to include debt cancellation.

*

 Spain

The Spanish people have been forced to take on 40 billion euros of additional debt to pay off foreign creditors.

Harald Schumann confronted Luis De Guindos, Spanish Minister of Finance, with advice he was given Stephen Donnelly that they would be better to let (some of) the banks fail because “banks have to be allowed to fail”. But Luis De Guindos disagrees:

“I think that the Irish situation is totally different from the Spanish situation. As I have said before, the size of the balance-sheet of the Irish banks in comparative terms with the GDP of Ireland was three times larger than the case of Spain. So I think that while in the case of Ireland the cost of recapitalising the banks has been above 20% of the Irish GDP, in the case of Spain we are talking 4% of GDP. So it’s a totally different situation and it’s not comparable at all.”

But economist Juan Rallo disagrees with De Guindos, and beginning with the figures themselves: “The real figure is not 40 billion, but 80 or 90 billion…”

And who are the creditors of the Spanish banks (particularly Bankia)? When Schumann manages to get hold of a list (thanks to “friendly people that help me”) he discovers that Deutsche Bank again features prominently.

Juan Moreno is a lawyer working with the 15M protest movement, who filed the lawsuit for the closure of Bankia to save the Spanish taxpayers from a bailout. When asked if the system would have collapsed, Moreno says:

“If you were to drop Bankia it would probably lead to the collapse of other banks, but not the big banks like BBVA, Santander, La Caixa, [Banco] Sabadell, or [Banco] Popular.”

Back to Luis De Guindos:

“A money market economy with fiat money is unstable. And we have an example that we let the banks go down… it was the Great Depression. It was the worst depression we had over the last century.”

Juan Moreno’s response:

“It’s all scaremongering. I don’t want that, I want numbers. I want to know what would really happen if they were to go bankrupt… With what we know now we would say this bank is beyond saving. We can’t continue to pour billions of euros into it. The creditors must take losses…

“The trial uncovered that the bank figures were falsified by upper management, but now we discover that the same had happened at the lower management levels. So a banking culture developed where employees were rewarded with bonuses so that the upper level did not realise how bad things were at the local branch level… The judge said that there was indeed public control of the bank, but the government supervisors played along. Letting the fox guard the hens is good for nothing.

“They’re all criminals: those in charge of Bankia and the public supervisors. If they’d let the savings banks go bankrupt, we would have found out what the politicians did with the money. Much of the debt that cannot be repaid is money that went to political parties, to city administrations, for work in the autonomous southern regions to companies connected to the government. These revelations would have made the political class disappear.”

So what is Moreno’s advice to the Germany citizens who are paying to prop up this corrupt system…?

“Numbers. The balance-sheet. It’s simple. You have to know the facts and apply the laws.”

*

 Cyprus

Meanwhile, depositors in Cypriot banks (savers as opposed to taxpayers) had more than 6 billion euros seized overnight in a so-called bail-in to pay off foreign creditors. This has crippled many businesses and stifled economic growth in a different way.

Panicos Demetraides, Governor of the Central Bank of Cyprus:

“It’s a change from past bailouts that we have had to bail-in on this occasion [from] uninsured depositors in the two big Cypriot banks. The burden of this bail-in has been borne partly by non-residents, but also partly by residents, Cypriot companies and households. About two-thirds of the burden has been borne actually by non-residents and one-third by residents.”

But as German MP Gerhard Schick (Green Party) explains:

“The European Central Bank allowed the Cypriot Central Bank to give money to banks in Cyprus even though they were insolvent. That’s a real mistake because then non-functioning structures are upheld and taxpayers’ money – and that’s what we’re talking about with a central bank – is endangered. In this way the ECB slowed down the rescue programme and made it possible for many creditors to withdraw their money and invest it elsewhere… The ECB was a creditor acting in self-interest to protect its own money. This conflict of interest should never have been allowed to happen, but it did because central bank money was put into bad banks.”

Back to Panicos Demetraides:

“Certainly the delays offered more informed investors [the chance] to protect their own investments. And they put the less informed investors at a disadvantage.”

Does this mean the ECB allowed other European banks time to withdraw their money? That must be some sort of rumour, says Demetraides. It is a rumour that must persist until there is an independent investigation, but as Gerhard Schick points out:

“The problem is that the ECB is a closed shop, and neither the European Parliament nor national parliaments are really able to call it to account when it breaks the rules.”

Harris Georgiades, Cypriot Minister of Finance:

“For us it was a take it or leave it situation. A decision that we accepted under pressure, and with no time to negotiate extensively. Essentially both of our kneecaps have been broken, and now we are asked to run.”

*

 Greece

Greece entered the crisis with a debt-to-GDP ratio of 110% and with around 10% unemployment. It was then put through an “austerity programme” supposedly designed to tackle the debt. Five years and several thousand suicides later, unemployment currently stands at 30% and debt-to-GDP is at around 180%.

This tremendous spike in debt remains in spite of ‘haircuts’ known as the Greek “Private sector involvement” or PSI, the first announced in July 2011, and quickly followed by PSI Mk2 (after PSI Mk1 failed), which involved a impressive sounding 50% reduction in the face value of Greek government bonds (GGB). 5 But then, as Yanis Varoufakis, current Greek Finance Minister, but as then a lowly Professor of Economics, wrote soon after:

In short, and so as not to overlabour the point, PSI Mk2 is dead in the water. The shenanigans of the shadow banking sector (which, lest we forget, includes not only the hedge funds but also, remarkably, the ‘proper’ banks shady Special Vehicles) plus the predictable deterioration of the Greek economy have put paid to it. The negotiations may go on for a little while longer, the announcement of a brilliant agreement may be made but, in truth, the idea that the Greek haircut will put Greece’s debt-to-GDP ratio back on a course towards 120% has sunk without trace. And if you need hard evidence for this, the European Summit of 9th December provided it even before 2011 was seen off: Officially, Europe’s great and good announced the end of PSI as a policy of the new ESM; Europe’s future central, permanent bailout fund. It had all been a mistake, they seemed to confess. 6

Greece has never been bailed out, only the European banks (well over 90% of the bailout money returning to them), and likewise the ‘haircut’ actually caused more problems than it solved. In particular, it permitted the looting of social security and public pension funds that are mandated by law to invest in government bonds – the following is taken from a special report published by Reuters:

Greece’s pension funds – patchily run in the first place, say unionists and some politicians – have been savaged by austerity and the terms of the international bailout keeping the country afloat.

Workers and pensioners suffered losses of about 10 billion euros ($13 billion) just in the debt restructuring of March 2012, when the value of some Greek bonds was cut in half. That sum is equal to 4.6 percent of the country’s GDP in 2011.

Many savers blame the debacle on the Bank of Greece, the country’s central bank, which administers three-quarters of pension funds’ surplus cash. Pensioners and politicians accuse it of failing to foresee trouble looming, or even of investing pension fund money in government bonds that it knew to be at high risk of a ‘haircut’ – having their value reduced. 7

Click here to read the full Reuters report.

In June 2014, Yanis Varoufakis was interviewed by Harald Schumann. Excerpts would feature in another collaboration between Arpad Bondy and Schumann; their follow-up documentary The Trail Of The Troika (in German, Macht ohne Kontrolle – Die Troika), which plotted another route across the continent in order to show how “austerity measures” have utterly failed to rescue the eurozone economies, and how in the process “the Troika” has also flagrantly breached its own European treaty regulations. Unfortunately, an English version of this more recent documentary is at present unavailable on youtube or elsewhere (so far as I can ascertain – but I will certainly embed a version as and when I find one). Meanwhile, uploads of the various interviews filmed during its making are now freely available, and embedded below is Schumann’s unabridged interview with Varoufakis, of which I have again selectively transcribed some of the answers he gave last summer:

What was the bailout for? The bailout was not in order to bail Greece out. Greece was never bailed out. The bailout loan that was extended in May of 2010 had a very singular, simple purpose. It was to transfer banking losses from the asset books of banks, not only Greek ones, but also French ones and German ones, onto the shoulders of the taxpayers. Initially the Greek taxpayers – because they knew that these shoulders were too weak to bear those losses, eventually it was always part of the plan to transfer them onto the shoulders of the German, and the French, and the Dutch and the Finnish taxpayers. And “the Troika” is here supervising this sinister transfer. [5:45 mins]

Smart people in Brussels, especially in Frankfurt, and of course Berlin, knew in May 2010 that Greece would never be able to repay its debts. They knew that again in the Spring of 2012 when they extended the second loan. They know it again now. In their minds they have already written off a very large bulk of the billions and billions that was given to the Greek state to give to the Greek banks and to give to the rest of the banks. All other things being equal, of course, “the Troika” would much rather more money was repaid than less money. But all other things are not equal. At this very moment in time, as we speak, while the Greek banks have huge black holes that we all know, even though they are not being admitted to, something similar is happening in the rest of the eurozone. Deutsche Bank, Finanzbank, BNP Paribas are skating on thin ice. They will never admit to it. And part of the angst and of the anxiety of the powers in Brussels, in Frankfurt, in Berlin, is how not to admit to the German, to the French, to the Dutch, to the Finnish people, that their banking sector was never really put back on an even keel. 8 [7:15 mins]

In 2010, what they had done was this: they lied to the Greek people and to the German people. They said to the Greek people: We have avoided bankruptcy. And they said to the German people that the Greeks, they were waivered, now we are going to punish them with austerity. But we will lend them the money because European solidarity demands that. In reality, what they were doing was transferring banking losses from the bankers – the European bankers, all of them – onto the shoulders first of the Greek taxpayers and eventually onto the German taxpayers, because the Greek taxpayers could not shoulder all of this money.

So they had lied to the German taxpayers. They said: We are not going to haircut the Greek debt. They were always going to haircut the Greek debt. They knew it. What they did with first bailout loan was to shift that big bulk, a 110 billion, from the bankers’ loss book onto the shoulders of Europe’s taxpayers. And then, after that had been effected, of course then they had to haircut – to do what they said they were never going to do – and who did they haircut? They haircut the small bondholders and the pension funds… So the PSI, the second bailout, the haircut of the private sector, was part of the original process of shifting the burden of adjustment and the cost of the crisis from the shoulders of those who caused it, onto the shoulders of those who didn’t cause it in Greece and in Germany. And all that in the name of European solidarity. And then they wonder why right-wing parties of the extreme part of the spectrum are winning power – or, at least, winning seats in the European Parliament. [21:30 mins]

Asked whether he thought the 2008 crisis had been caused as a result of incompetence or due to a more deliberate act of conspiracy, Varoufakis replied:

It wasn’t a conspiracy. It was a very simple operation: How do we stay in power? Mr [Jean-Claude] Juncker said it. Once he admitted: we know what needs to be done, we just don’t know how to do it and remain in power. Now don’t forget that before 2008, 2010, all parties of government, whether they were Christian-Democratic, Social-Democratic, it doesn’t matter. They had developed this extremely close relationship with the financial sector. They had looked at the financial sector as the cow that would bear the milk from which they would feed all, not only their political parties and careers, but also the welfare state – from the point of view of the Social-Democrats.

There was a kind of Faustian bargain between our politicians and bankers. We will let you do what you want, and you pay us a small amount proportional in order to fund our states. So when the crisis hit – which was completely unexpected for them – they had neither the analytical power nor the moral authority to go to these bankers and say: You know what, you’re out. You’re bankrupt, we’re taking over the banks… 9 [24 mins]

Finally, here was what Yanis Varoufakis, the economist (and not yet Finance Minister) said when asked for “any realistic proposal [to] how the dire economic situation in Greece can be improved”:

Well, we have to stop doing what we are doing and do something quite diferent. And there are two levels at which you should see this, because let’s not forget that once we have a monetary union you can’t talk about the overcoming of the crisis in one part of it in isolation to the others. It would be like talking about how South Dakota would escape the Great Depression in 1933 without the rest of the United States going through the New Deal. So we need a New Deal for Europe… 10 [32:30 min]

But, I have to insist: The solution must be European, because the crisis is European. And there are things we can do within two weeks to end this euro-crisis without violating any of the European Union treaties as long as we have the political will to do it. 11 [34:30 min]

*

there is a better alternative… (and always was)

Q: Your Finance Minister Varoufakis said that he is not afraid of an Armageddon.

A: He said in parliament: if you enter into negotiations, you are not seeking a breakup. But you have to keep a breakup in mind as a contingency. I share this view.

 

Q: So you have a Plan B in case Greece does decide to exit from the single currency?

A: We don’t need a contingency plan because we will stay in the eurozone. But we won’t achieve this objective at the expense of the weak – like our previous government.

 

– Alexis Tsipras in same interview published in Stern magazine.

On April 16th, Varoufakis was invited to speak at a press conference hosted by the Brookings Institute which is based in Washington. In answer to a question about being trapped in a position where the Greeks are left with little alternative but to default, Varoufakis replied:

I would willingly, eagerly and enthusiastically accept any terms offered to us if they made sense. I would have no problem with the Memorandum of Understanding if it was founded upon a reform programme that attacked the worse cases of rent-seeking in Greece, and made the reforms that were necessary in order to enhance efficiency and social justice. If it came for the planet Mars, if it came from Berlin, if it came from Brussels, if it came from Portugal, from Slovakia, I don’t care which, I would have embraced it. The problem we have with these conditions – you know, the take it or leave it conditions – is not so much the authoritarianism, it is that fact that we’ve tried that medicine and it hasn’t worked…

It is almost precisely three years ago since I wrote a post entitled ‘austerity’ or ‘Grexit’: is there really no better alternative for Greece? There have since been more than two and a half years of unrestrained “austerity” (prior to Syriza’s victory), a “take it or leave it” Hobson’s choice, which has deepened the crisis not only in Greece but across the entire eurozone. ‘Grexit’ has never been a realistic alternative, and as Syriza have maintained from the outset, they have no intention whatsoever of ditching the euro. So ‘Grexit’ becomes ‘Grexident’, in other words, an impossibility. Because any accidental Greek exit can only occur if it is accidentally on purpose, and that would mean ‘Grexpulsion’ – a term the mainstream has yet to adopt for obvious reasons.

In Washington, Varoufakis was once again unequivocal about Syriza’s position:

“Toying with ‘Grexit’, which is something we don’t do – we are refusing to discuss it, because as I have said before even worrying about it is like worrying about being hit by a comet in a universe in which comets are attracted to you if you are worried about them – toying with ‘Grexit’ and ideas of amputating Greece is profoundly anti-European because anybody who claims that they know what the effect of a ‘Grexit’ is, are deluded.” [52 mins]

*

Which brings us to an impasse. Accept “austerity” or get out! Jump off a cliff or suffer slow death by a thousand cuts. Is there really no genuine alternative for the Greeks?

Well, the answer to that question actually depends upon what you value. If you think that all debts are sacrosanct, then it necessarily follows that the Greeks must go on paying the banks to their bitter end. That the debt is unpayable doesn’t matter. That the debt is the consequence of so much ineptitude and malfeasance within the banking system doesn’t matter either. The Greeks must cough up because otherwise the chaos will worsen (or so we are again constantly given to believe). But if you value human life above money, and recognise that debts that cannot be repaid will never be repaid, then you can begin to think more constructively. In fact, the alternative becomes immediately and blindingly apparent. Since a debt cancellation will inevitably come sooner or later, the only real question is how much longer must the Greeks be punished in the meantime.

A way-out of all this mess is entirely possible. It doesn’t involve “austerity” and does not necessarily require a Greek exit from the eurozone. What is needed is simply an end to the bottomless banker bailouts and then new money being made available for reconstruction projects and other productive enterprise within Greece, Spain and elsewhere. Such a ‘New Deal’ injection is unlikely to be offered by the IMF, and neither will it be supported by the likes of Angela Merkel. But it can be fought for by the Greek people themselves, and in this battle to stop the wanton destruction of their nation, as fellow Europeans we should stand with them, recognising that the same aggressive financial interests that have already eviscerated Greece, will be pillaging our own lands soon enough.

The paragraphs above are taken from the post I wrote three years ago – yet so little has significantly altered that it remains pertinent enough to repeat it.

Back to Varoufakis who puts flesh on those barest of bones regarding the ‘New Deal’ option for Europe (and presenting the way ahead without any recourse to deficit spending by governments – so heretical to the neo-liberals):

Europe as a whole, the eurozone as a whole, is typified not only by a mountain of great private and public debts, which we do have. But there is another mountain hiding behind it: a huge mountain of idle savings with nowhere to go. And it should be our joint project to energise, to motivate, those idle savings, to help them overcome their great fear that keeps them idle, and channel them into productive investments – not investments into assets, but investments into real productive capacity. Now, how do we do this? Well, we have the European Investment Bank [EIB] that could do this. And we have the European Central Bank which is embarking on quantitative easing. Well, why can’t the EIB fund a major ‘New Deal’ for Europe, that channels investment to the private sectors of the countries and regions within countries that have a major output gap? [44 mins]

The whole of Varoufakis speech at the Brookings Institute and the subsequent Q+A session is embedded below:

*

last frenzy of reasonableness…?

Just days after Syriza were swept to election victory on January 26th, economist and former US Assistant Secretary of the Treasury for Economic Policy under Reagan, Paul Craig Roberts, published an article entitled “Is Democracy Dead In The West?” which began:

We will find out the answer to the question posed in the title in the outcome of the contest between the new Greek government, formed by the political party Syriza, and the ECB and the private banks, with whose interests the EU and Washington align against Greece.

Roberts, once known as the “Father of Reaganomics” but more recently a repentant neo-liberalist and outspoken opponent of the financial elites, continues:

The new [Syriza] government wants to moderate the agreements made by previous Greek governments that sold out the Greek people. The new government wants to stop giving away at bargain prices Greek public assets to clients of its creditors, and the new Greek government wants to raise the Greek minimum wage so that the Greek people have enough bread and water on which to live.

However, for the private bank creditors, for Merkel’s Germany that stands behind the banks, for Washington which could care less about the Greeks, for the Greek elites who see themselves as “part of Europe,” Syriza is something to be rid of.

Adding that:

A purpose of the “Greek financial crisis” is to establish that EU members are not sovereign countries and that banks that lend to these non-sovereign entities are not responsible for any losses with regard to the loans. The population of the indebted countries are the responsible parties. And these populations must accept the reduction of their living standards in order to ensure that the banks do not lose any money.

This is the “New Democracy.” It is a resurrection of the old feudal order. A few super-rich aristocrats and everyone else serfs obliged to support the ruling order. 12

Click here to read Paul Craig Robert’s full article.

The question is, who is actually right here? Certainly we ought to acknowledge that elements in Paul Craig Roberts’ more conspiratorial outlook are irrefutable, recognising that Goldman Sachs did indeed deliberately help to hide previous government debt in order to extend credit to Greece. The Greeks were set up; this has been established – details of Goldman Sachs involvement can be found in this previous post.

Varoufakis is diplomatic, arguably too diplomatic. But then, is Paul Craig Roberts unduly pessimistic when he says that Syriza can now do “very little”, and, in either case, is the very moderate and rather modest approach of Varoufakis a good one, pragmatically speaking? Extending a hand of friendship being unlikely to impress “the powerful rich interest groups that rule the West [who] could not care less about the people over whom they rule” (to quote Roberts again, who knows them well, of course). Yet it may be effective in another way, such relentless persuasion and his “frenzy of reasonableness” at least winning the more public battle for hearts and minds. My own view is that Varoufakis (and Syriza) have adopted a sensible stance, which is in fact evidenced by the harsh criticism they have received from both extreme flanks. Appearing too flexible has made him a target for derision from the more radical (and Communist) left-wing, whereas standing his ground irritates his more powerful opponents working within the establishment (who lash out publicly whenever Varoufakis is out of earshot).

Meanwhile, ‘Grexident’, German Finance Minister Wolfgang Schäuble’s own portmanteau neologism (I gather), is now trending on twitter – not literally, of course, because it doesn’t have a celebrity angle. But the hashtag certainly exists and the tweets that include it are mostly German and Greek, alternating like a stack of incomprehensible post-it-notes. And sadly, the word ‘Grexident’ isn’t the only eurozone nonsense currently trending:

Academic-turned-finance minister Varoufakis was called “a time-waster, a gambler and an amateur”, a source privy to the closed-door talks told the news service Bloomberg.

This is according to a Guardian article published on Friday [April 24th] and entitled “Time is running out for Greece, says Eurogroup chief”. The article continues:

Jeroen Dijsselbloem, head of the eurogroup of finance ministers, told reporters in Latvia it was a “highly critical” meeting as Greece had still not agreed a comprehensive and detailed list of reforms.

Although there were positive signs, there remained “wide differences to bridge on substance”, he said.

“We are all aware that time is running out … too much time has been lost.” […]

Dijsselbloem warned on Friday that after the lack of recent progress it would be very hard to consider a new programme for Greece to cover its funding needs beyond June. He ruled out giving Greece an early slice [of] bailout cash. […]

ECB president Mario Draghi also betrayed his exasperation and warned that central bank could impose tougher conditions in return for keeping Greek banks afloat.

Weeks ago, the Riga meeting had been pencilled in as the moment when the eurozone could sign off an aid payment for Greece, but in the event ministers vented their frustration with Varoufakis for Greece’s failure to bridge the gap with creditors.

Just to remind you, Mario Draghi is not only the former vice chairman of Goldman Sachs – directly implicated in bringing the crisis to Greece – but serves as a trustee of the Brookings Institute13

So watching Varoufakis descend into the belly of the beast that is the Brookings Institute and to receive such a warm welcome and nonjudgmental reception, I must confess that I was instantly reminded of the film, Goodfellas, Martin Scorsese’s gangster classic, and of one scene in particular:

“If you’re part of a crew, nobody ever tells you that they’re going to kill you. It doesn’t happen that way. There weren’t any arguments or curses like in the movies. So your murderers come with smiles. They come as your friends, the people who have cared for you all of your life, and they always seem to come at a time when you’re at your weakest and most in need of their help.”

But Varoufakis is not easily daunted, and so, as the Guardian piece describes:

Varoufakis said the talks [in Latvia] were “intense”, but remained confident that the two sides will resolve their differences in time.

“We agreed that an agreement will be difficult but it will happen and it will happen quickly because that is the only option we have,” he told a press conference.

Varoufakis later declared: “We want an agreement and we are willing to make compromises to achieve this … The cost of not having a solution would be huge for all of us, Greece and the eurozone”. 14

In saying so, he is quite correct. Not only the Greeks, but the Germans too, whose major banks are set to carry the heaviest losses in the event of default, ought to be aware of the extreme dangers of such brinksmanship. A basic instinct for self-preservation is what Varoufakis is relying on, but for so long as the banks and other financial institutions remain confident of receiving further bailouts, it is the German taxpayers who ought to worry – as should the rest of us – because so long as they remain “too big too fail” (i.e., untouchable) then bankers like Mario Draghi and co really have nothing at stake. For once the Greeks are unable to shoulder the debt burden, as Varoufakis reminded us last summer, it will be passed on to the shoulders of the Germans and the French.

Indeed, the people of Europe stand to lose enormously if this so-called ‘Grexident’ (in reality ‘Grexpulsion’) leads to ‘Grexit’ and then to ‘Grextagion’ as it will be doubtless be called; as idiotically named as it will have been idiotically contracted and spread. Because, if no compromise can be reached in spite of Varoufakis’ tireless efforts, then sooner then we imagine we may all be standing in the Greek people’s shoes.

*

Update:

A weekend can be a very long time in politics…

Unbeknownst to me, on Sunday 26th [the day before I posted this article] Yanis Varoufakis had put out a tweet in which he quoted the words of Franklin D Roosevelt, who famously said “They are unanimous in their hate for me; and I welcome their hatred”, adding simply “A quotation close to my heart (& reality) these days”:

This would be one of his final acts as chief negotiator at the Eurogroup meetings:

Greece moved to inject fresh momentum into problem-plagued talks with creditors on Monday, reshuffling its negotiating team to try and defuse tensions over its outspoken finance minister. […]

In a bid to ease tensions with lenders, the Syriza party-led coalition said the minister of international financial relations, Euclid Tsakalotos, would take over the coordination of the new team. The appointment will see the economics professor, who was raised in the UK, assuming a more active role in face-to-face negotiations with creditors.

So writes Helena Smith in the Guardian [April 27th], her report released a mere two hours after I posted.

Varoufakis told us that before he took the job he had written a pre-prepared resignation letter to carry around with him at all times, just in case he ever found himself sounding too much like a politician. Hopefully this will not be needed, and news that he has been “removed” is perhaps a little exaggerated:

[However,] one well-placed Athens official insisted that Varoufakis’s role had been upgraded “in many ways”. The official added: “To make him resign would be to retreat and the government would never do that.”

Three months after his elevation to power, prime minister Alexis Tsipras has come under extraordinary pressure to remove Varoufakis. Yet last night Tsipras said that his finance minister “is an important asset for the government, and [with creditors] he speaks their language better then they do”. In a wide-ranging interview aired on Greek TV, Tsipras rejected suggestions that his government had any intention of sacrificing the politician. Now that negotiations with creditors were in the final straight, Greece had to reorganise its negotiating team, the PM said. […]

But insiders insisted that the politician still enjoyed Tsipras’ confidence, even if the young premier was now reaching out to the German chancellor Angela Merkel in an effort to reach a political solution.

With his high popularity ratings at home, Varoufakis is credited with internationalising the country’s debt problem and raising questions over austerity economics.

“They [creditors] couldn’t counter his economic arguments rationally so they went for him claiming he didn’t understand eurozone rules and regulations, that his reforms weren’t good enough,” said one official. “Tsipras knows this is not about Varoufakis, but his government, because it has dared to take on the system that is Europe’s neoliberal doctrine. He knows that if one goes the other goes too, which is why Varoufakis is here to stay.”

I very much encourage Tsipras to stick by Varoufakis, certainly in the capacity of his chief economic advisor, if not within government itself. We so very seldom see anyone of such intelligence, integrity and courage in public office. The world needs more politicians like Varoufakis, not less.

Please note that I corrected this update after mistakenly believing that Varoufakis had stepped down from his role as Greek Finance Minister. Apologies for posting the incorrect original version.

*

1 From an interview published as “Give us six more months, and we will be another country”, written by A. Albes, F. Batzoglou, A. Petzold, published by Stern on February 18, 2015. http://www.stern.de/politik/ausland/interview-with-greek-primeminister-alexis-tsipras-give-us-six-more-months-and-we-will-be-another-country-2174273.html

2 From an article entitled “Reinhart, Rogoff… and Herndon: The student who caught out the profs” written by Ruth Alexander, published by BBC news on April 20, 2013. http://www.bbc.co.uk/news/magazine-22223190

3 Here are some interesting graphs taken from an wikipedia article entitled “European sovereign-debt crisis”, which show the rise in the levels of Greek, Spanish and Portuguese debt since 1999 as compared to the average of the eurozone:

 

 

 

All three graphs (and others including those for Ireland and Cyprus) show a marked turning point around 2007–8, providing further evidence not only that “austerity” hasn’t worked (even within its own terms of debt reduction), but that the western world is actually faced with a systemic banking crisis that flared up at that time. The debt-to-GDP ratios have flattened towards the end, but even so the downturn is mostly in the projected regions.

And this is from an article written by Tyler Durden and posted on zerohedge from February 18, 2013:

“Beleaguered Prime Minister Mariano Rajoy just broke another record. As if a plague of corruption scandals was not enough, Spain’s debt-to-GDP has now reached levels not seen in over 100 years. As El Pais reports, Spanish debt levels rose at an alarming EUR 400 million per day in 2012 making for the largest annual increase in debt in the nation’s history – all the while proclaiming austerity.”

And here’s another helpful graph that goes along with the article, showing once more that rather than reducing the nation’s debt, “austerity measures” are more closely correlated to the growth of that debt:

 

 

http://www.zerohedge.com/news/2013-02-18/chart-day-spanish-debt

4 These details of a summary of more detailed notes complied here: http://www.golemxiv.co.uk/2010/10/who-are-the-bond-holders-we-are-bailing-out/ 

5 Based on figures taken from an article entitled “Greece’s PSI is Dead on Arrival: An error in search of a rationale but also a failure that may prove a harbinger for the Modest Proposal” written by Yanis Varoufakis, published on January 11. 2012:

Back to the drawing board, our European leaders came up with a deeper haircut in October 2011. They called it PSI Mk2 and even had the foolish Greek PM fall on his sword, to be replaced by a hitherto loyal ECB functionary, so as to ensure that PSI Mk 2 would become Greece’s new light on the hill; a beacon of the last glimmer of hope for a desperate nation. PSI Mk 2 envisaged an impressive sounding 50% reduction in the GGBs’ face value which, in present value terms, would result in a haircut no less than 60% (since the interest rates charged on the new bonds, that would be swapped with the old ones, could not exceed the interest rates charged by the ECB and the EU for the original bailout funds). In other words, holders of GGBs would be hair-cut in two ways: a 50% reduction in face value and an interest rate less than 5% which would cut further into the present value of the old GGBs.

http://yanisvaroufakis.eu/2012/01/11/greeces-psi-is-dead-on-arrival-an-error-in-search-of-a-rationale-but-also-a-failure-that-may-prove-a-harbinger-for-the-modest-proposal/ 

6 Ibid.

7 From a special report entitled “Greeks rage against pension calamity” written by George Georgiopoulos & Lefteris Papadimas, published in Reuters on November 30, 2012. http://www.reuters.com/article/2012/11/30/us-greece-crisis-pensions-idUSBRE8AT0CV20121130

8 Varoufakis adds:

“The one thing if I were, I am not, but if I were the CEO of Deutsche Bank, I would be very wary of the dangers from “the Troika” in Athens that is casting a critical gaze into what is happening to Greek banks. Because if “the Troika” takes a keen interest, it will have to declare that the Greek banks are beyond salvation. And the only possible outcome of that would be nationalisation of these banks.”

9 Varoufakis  adds:

“There is no doubt that there was a great deal of incompetence. Our leaders, and I have to say most of my profession – speaking as an economist – had become steadily lobotomised since the late 1970s. We didn’t have leaders who understood macroeconomics… You just let the markets perform their triumphant trick and everything will be fine. Politicians were convinced of that, their careers went swimmingly, their cosy relation with the financial sector was working out for them beautifully. When the whole thing, this bubble, collapsed, they were found wanting analytically – they didn’t understand what happened – they believed their own rhetoric and when they started realising the truth, at that point they had already misled parliaments and electorates to such an extent that they would much rather die than confess to the sins of omission and commission.” [25:45 min]

10 Varoufakis offers the following example:

Regarding the Greek situation, the Greek debt, for instance. What we need to do is, we need, since the German government is going to find it politically very difficult to go to the parliament in Berlin and say: Well, it was all a mistake, we have to write off their debt. What you can do is you can create euphemisms – you can create what Keynes referred to as bisque bonds, GDP-related bonds. The Greek government could issue particular bonds that it exchanges for the debt that the ESF [European Social Fund] holds. And those bonds could specify that they can last 30 years let’s say. In 30 years they become extinct whether they have been repaid or not. And that the coupons, the repayments, on a year to year basis depend on the level of growth in Greece. So if growth is more than 3% then it specifies particular payment. That way Mr Schäuble will be able to look at his parliamentarians and say: We haven’t haircut it, but the extent to which the Greek debts will be repaid will be linked to our success in helping Greek growth. So you make them partners in Greek growth as opposed to bailiffs who come in and take your furniture away and throw you out on the street. [33:15 min]

11 The details go as follows:

Three things: The first thing we need to do is deal with the banking sector troubles throughout the eurozone. And the way I would do it – because we know we have declared this banking union which is really a term confirms there is no banking union – so what we should do about banks is this: Banks that are found out by the ECB in September (when the ECB assumes the role of the single supervisor of the banking system) to be wanting in terms of recapitalisation to have bad assets that have not been declared so far, they should accept money from the ESM – from the European stability mechanism – directly, not through the governments, directly. And the ESM should get shares, the shareholders should be wiped out and the ECB should appoint a new board of directors – hopefully not from within the country in which the bank is domiciled. This way you Europeanise these banks. In 6 months, 12 months, you resell them – you will resell them with a profit because those shares will be purchased by the ESM at very low prices. And then the ESM gets money back, the European taxpayers get their money back, TARP-like. And you do it step by step. You don’t Europeanise all 6,000 banks. The banks that are in trouble…

The second thing you do is to deal directly with the public debt, which is getting worse everywhere – except in Germany because of the low, low interest rates due to the fact that the crisis is proceeding. The European Central Bank should make a simple announcement tomorrow morning that will cost it nothing, zero. And the announcement is this: From now on, every time a government bond matures, the ECB will service, will pay, for the proportion of that bond that corresponds to the country’s Maastricht compliant legal debt. So in the case of Italy it will be half of it. So the European Central Bank will pay for this, not the Italian government. Now I said it won’t cost the European Central Bank anything, so how can that be if it pays half of it? The answer is the ECB issues its own bonds and sells them to the Chinese, to the Russians, to whoever wants to buy them at very, very low interest rates – because the ECB is such a sterling institution – and immediately opens a direct debit account for Italy. And says to Italy: Look, within ten years, this amount of money has to go in there in order to repay the Chinese. So in other words, what I’m suggesting is that the ECB should play a management role for public debt in Europe that costs nothing, that doesn’t require printing a single euro, and does not violate any treaty. Because ths is not a bailout…

And then we have the big problem of growth. Of investment. We have an amazing dearth of investment in Europe, both in the north and in the south. Even in Germany. So what we need is really a Roosevelt-like New Deal – a very large investment programme. I am not talking about a 100 million here and a 100 million there. We need something between 8 and 9% of eurozone GDP to be invested in productive activities… That would be what we need in order to avert deflation and in order to restart growth in Europe. Now we have the European investment Bank in Europe. The European Investment Bank is three times the size of the World Bank. It could very easily effect such a large scale investment-led recovery programme in Europe. The reason why it doesn’t do it, is because the convention is that 50% of every project is funded from a nation state. The nation state is bankrupt. Waive it. And what should we do instead? We should have either the ECB issuing more bonds in order to support the EIB bonds or something simpler than that. Everyone now, including Mr [Mario] Draghi and Mr [Jens] Weidmann [President of German Bundesbank], are speaking about the need for quantitative easing in Europe. Or at least they are considering it. Now we do not want American-style or British-style quantitative easing because this simply inflates bubbles… Mr Draghi’s worried about quantitative easing because he doesn’t know which assets to buy. German assets? Italian, you know, we are going to start arguing like children amongst ourselves, as to whose assets should be purchased. Bu the European Investment Bank issues European bonds, EIB-bonds. Why not have the EIB effect quantitative easing by purchasing EIB-bonds to such an extent that the EIB ca start a New Deal for Europe programme of 8–9% of eurozone GDP with the ECB buying only its bonds, which are European bonds?  And also they are triple-A bonds. Now that a combination of those three measures would deal with the banking sector crisis, it would create a rational way of managing the Maastricht compliant and legal part of the debt… and you have a massive investment-led recovery programme.

12 From an article entitled “Is Democracy Dead In The West?” written by Paul Craig Roberts, published on January 29, 2015. http://www.paulcraigroberts.org/2015/01/29/democracy-dead-west-paul-craig-roberts/ 

13 From Bloomberg Business (bold highlight added):

Mr. Mario Draghi has been the President of Executive Board and President of European Central Bank since November 2011. Mr. Draghi served as Governor of Banca d’Italia SpA since December 29, 2005 until November 01, 2011. He served as Managing Director of The Goldman Sachs Group, Inc. until January 2006. He served as Director-general of Italy’s treasury. He served as an Adviser to the Bank of Italy, an Executive Director of the World Bank and as a member of the Group of Seven deputies. He served as the Chairman of Financial Stability Board. He has been a Director at Bank For International Settlements since June 2012. He serves as a Trustee of The Brookings Institution. He has been Member Of Governing Council of European Central bank since January 16, 2006. He served as a Member of Governing Board at Banca d’Italia SpA and served as its Member of General Councils. He served as Member of Board of Governors – Italy of Asian Development Bank until November 2011. He served as Director of Bank For International Settlements from September 2011 to November 01, 2011. Mr. Draghi has a Doctorate in Economics from the Massachusetts Institute of Technology.

http://www.bloomberg.com/research/stocks/private/person.asp?personId=13154633&privcapId=5774394

14 From an article entitled “Time is running out for Greece, says Eurogroup chief” written by Graeme Wearden, published in the Guardian on April 24, 2015. http://www.theguardian.com/business/2015/apr/24/time-is-running-out-for-greece-says-eurogroup-chief-jeroen-dijsselbloem

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Syriza must win and be seen to win: we need solidarity across Europe

In current discussions of what Greece might or might not get in the way of concessions from the Eurozone, there has so far been relatively little appreciation of one basic political reality: as far as the governments of Spain, Portugal, Ireland, probably Italy and perhaps even France are concerned, Syriza must fail and must be seen to fail.

So begins an article by neo-liberal economic guru Andrew Lilico in Wednesday’s Telegraph. Why? Well, because of the domino effect. Although no debt deal has been reached so far, if the other Eurozone finance ministers were to agree some kind of a compromise and bailout package with Syriza, then it is a near certainty that other European nations, starting with those suffering the worst of the “austerity”, would follow suit.

Here is Lilico to elucidate further:

The reasons differ slightly between countries. The easiest case to see is perhaps Spain. In Spain, the governing party is the centre-right Partido Popular led by Mariano Rajoy. It is currently facing pressure from a far-left party, Podemos, allied to Syriza. Indeed the Podemos leader Pablo Iglesias even campaigned in partnership with Syriza and, following Syriza’s victory, at his own party’s rally he proclaimed: “Syriza, Podemos – we will win [venceremos]!” Podemos is currently leading in the polls, ahead of an election later this year. The very last thing Rajoy can afford is for Syriza’s approach to be seen to succeed, emboldening and vindicating Podemos.

As for Portugal and Ireland, where the governments stuck to bailout conditions despite the domestic pain, how would they sell concessions to Syriza to their own voters? Suppose they go back and say: “We were suckers. We shouldn’t have made all those cuts. Instead, what we really should have done was to raise the minimum wage, hire back the public sector staff that had been fired, say we weren’t going to pay our debts to our eurozone partners, cosy up to the Russians and tell the Germans they didn’t feel nearly guilty enough about World War Two. Then everyone would have said we were ‘rock stars’ and and [sic] forgiven our debts.” Do you reckon that would go down well?

Lilico is horrified by all this, saying that he worries about “amateurish hard-left lunacy” which might somehow make, what he necessarily concedes is an already terrible situation, worse again. Not that Lilico is an impartial observer. He may write for the Guardian as well as The Telegraph, but that’s just how it works these days. The mainstream left and right merged long ago. So when he suddenly pops up to ward us away from Syriza, remember that he has his own interests to worry about. Potentially serious repercussions for his consultancy firm Europe Economics, which lists as its clients government departments, regulators, the European Commission and the European Parliament. With that in mind, here’s a little more of what he writes:

The best way for [Syriza] to fail would be for it to capitulate utterly and crawl back to Greece with its tail between its legs and a few cosmetic patronising “concessions” such as renaming the “Troika” the “Consultative Committee” (or, if it makes them feel better, the “Symvouleftiki Epitropi”). If it won’t do that — and there’s a good chance that if it did try to do that then the Greek government would collapse, anyway — then things get a bit more complicated. Because if it’s bad and dangerous for Syriza to succeed inside the euro, it would be disastrous for it to succeed outside the euro.

In short, Syriza must not be allowed to succeed under any circumstances, and although he may claim to speak “from the perspective of [the] eurozone governments”, it is more accurate to say that Lilico speaks here from the perspective of the bankers and the super-rich. For instance, in the hypothetic instance of Syriza’s success, Lilico predicts a calamity. This is what he foresees:

[Syriza] would nationalise the banks and many other industries, print money to cover public spending, overthrow property rights and impose wealth taxes in a desperate attempt to obtain revenue, and many other crazy things. 1

All these, at least to the mindset of Lilico and his powerful ilk, are “crazy things”. Thus, imposing every kind of tax on wealth becomes, ipso facto, a crazy thing. And as for “print[ing] money to cover public spending”, well printing money to bail out the banks is just fine, of course. That’s called Quantitative Easing which, combined with historically low interest rates (recently turned negative in some places), is all that’s keeping the ever more precarious Ponzi scheme afloat. So don’t be mistaken: what worries Lilico is not the unfettered overproduction of money ‘out of thin air’, but an awful dread that some significant part of this new money might be misdirected “to cover public spending”. Money for public expenditure instead of funnelled into the pockets the bankers (like almost all of the money from the previous ‘Greek bailouts’); to Lilico, this is unthinkable. As for “overthrow[ing] property rights”, well I’m really not sure what Lilico means, but I think the problem might lie in his inherent inability to see beyond a certain characterisation of Syriza. His own hard-right lunacy obscuring the fact that Syriza’s actual demands are both democratic and reasonable.

In the end it is the people who matter, and in Greece, the people are suddenly taking to the streets in droves. Not to shout down government injustices, but to add their own chorus of support. Yes, pro-government rallies without a can of tear gas in sight. Can you imagine? Lilico can’t.

However, the main trouble still facing the majority of us (the 99 percent) is that evangelists of loopy free-market, neo-liberal economics such as Andrew Lilico have been ruling the roost for decades. Intent only to smooth the way for business as normal, they are already the technocrats and they have a great deal to lose if the system were ever to be radically reformed. Unfortunately, these people are now embedded, and not only within ‘think tanks’ and ‘policy forums’, but also throughout academia, which in itself ensures any dissenting voice – anyone who does not fully subscribe to the current economic orthodoxy – is conveniently sidelined as a heretic.

Yanis Varoufakis is a perfect example of just such a heretic. A Professor of Economic Theory at the University of Athens, yet Lilico entirely brushes aside his alternative vision on the grounds that it is “amateurish”. For having cornered the market in supplying economic “expertise”, the likes of Lilico are very handsomely rewarded in their role as ‘consultants’: in reality, one of an increasing number of unelected and unaccountable architects of policy, who pocket a small fortune irrespective of results. Small wonder Lilico fears Syriza’s success.

Those wishing to see real political change should get behind Syriza. I suggest that we give those like Lilico good cause to keep on squealing.

*

The following statement and call for action is taken from the Greece Solidarity Campaign website:

The European Central Bank is trying to force the new anti-austerity Greek government to its knees. Its actions provoked mass demonstrations in Athens last week in support of the government anti-austerity stance.  On Wednesday 11 February the Eurozone Finance Ministers have called an Emergency Meeting with Greece where Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis will present their plans.

The Greece Solidarity Campaign, Syriza London and other organisations are calling for a Mass Rally in support of the people of Greece on Sunday 15th February at 13.00 in Trafalgar Square. This is part of an international wave of rallies and protests in support of Greece taking place across Europe. Come along with friends and colleagues to show your support for the first anti-austerity government in Europe.

1 From an article entitled “Eurozone leaders believe Syriza must fail and be seen to fail”, written by Andrew Lilico, published in The Telegraph on February 11, 2015. http://www.telegraph.co.uk/finance/11406154/Eurozone-leaders-believe-Syriza-must-fail-and-be-seen-to-fail.html

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“Sell-Off”: new documentary charts the abolition of the NHS

A crowd-funded documentary called simply “Sell-Off” about the privatisation of NHS has just been released. The film is approximately one hour in length and constructed around interviews with those who now work, or have formerly worked, inside the NHS. With a general election around the corner, producer and director Peter Bach has decided to release his film early, and make it freely available on the internet. Embedded below is the version currently uploaded on youtube:

To read an earlier and extended post about the role of New Labour in the on-going privatisation of the NHS you might like to click here.

You can also click here to watch or else download a version on vimeo.

Click here for further information about the documentary and if you wish to make a contribution on the StartJOIN website.

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sixty years of Bilderberg and all that…

Throughout the last decade and longer, the news media has been leaking the story of a new kind of global technocratic leadership. Often this has revolved around talk of “Davos Man”, a new taxonomic sub-group (or rather super-group) which evokes (in my own mind at least) the image of a silhouetted yet still pinstriped figure leading our ancestors out of the primordial sludge and striding forth at the head of that catwalk procession of ever more erect hominids. Java Man, Peking Man… you know what’s coming:

Davos Man is most publicly embodied in Bill Gates, the ubiquitous chairman of the Microsoft Corporation. He appeared recently, as do all main speakers at the gathering, both in person and blown up on a huge television screen. Mutterings were heard from some techies in the hall as the giant head spoke; they find the quality of Microsoft products mediocre. But to most of the executives, he is a heroic figure, and not just because he built a huge business from scratch.

That comes from an article published by The Independent as far back as 1998, which provided one of the first reports on the annual Davos shindig in the Alps – officially known as the World Economic Forum – and from whence “Davos Man” cometh. The article tells us that:

Along the main street a snake of limousines writhes in front of the conference hall, where there are guards, police dogs, and metal detectors. Each of the 2,000 people who descend on the village need an electronic security badge to enter the hall, but the badge does more than keep out riff-raff. It has an electronic code which allows the bearer to read and send messages on an elaborate computer system, and so to arrange meetings and to cut deals – in the coffee lounges, on the ski slopes, or at the exquisite dinners whose seating plans are frequently disrupted by the press of business.1

With regards to these early sightings of Davos Man in the flesh (so to speak), Richard Sennett the author of the piece, explains how these “monarchs of capitalism [who] assembly their courtiers and meet to plot all our futures” prefer to see themselves. Like Gates, our new crop of plutocrats are “ruthless and greedy”, but unlike the older crew, they are more “flexible” with a greater “tolerance for fragmentation” (whatever that means precisely) and, most importantly, these guys are properly connected – not that the old guard wasn’t.

A more recent article published by the Financial Times (in 2011) offers, however, an alternative view of the rise of Davos Man, pointing out how “As the World Economic Forum grew in importance and prominence, so outside observers [i.e., the corporate media] began to identify a new creature – ‘Davos Man’” Although the label itself was originally intended as a pejorative, apparently:

The phrase was coined by political scientist Samuel Huntington (of “Clash of Civilisations” fame). Huntington was no fan of “Davos man”, whom he regarded as elitist and loyal only to his own financial interests and to his international peer group. The delegates at Davos, Huntington later wrote disapprovingly, “have little need for national loyalty, view national boundaries as obstacles that are thankfully vanishing, and see national governments as residues from the past whose only useful function is to facilitate the elite’s global operations.”2

This is interesting because Samuel Huntington is someone very much on the inside track. Closely connected with this same “elite” (his word), Huntington is most renowned for his forecast of a coming “Clash of Civilisations”, whilst he also co-authored a notorious report – produced by another globalist group known as the Trilateral Commission – entitled “The Crisis of Democracy”, in which Huntington frets about future problems arising from “an excess of democracy” in the western world. The solution, he (and his fellows) advise, is to ensure we (Homo plebeians) are far too disorientated and beleaguered to organise any serious or sustained challenge against the powers-that-be.

Here is what Noam Chomsky wrote about the Trilateral Commission and Huntington’s report back in 1981:

The Trilateral Commission was founded at the initiative of David Rockefeller in 1973. Its members are drawn from the three components of the world of capitalist democracy: the United States, Western Europe, and Japan. Among them are the heads of major corporations and banks, partners in corporate law firms, Senators, Professors of international affairs – the familiar mix in extra-governmental groupings. Along with the 1940s project of the Council on Foreign Relations (CFR), directed by a committed “trilateralist” and with numerous links to the Commission, the project constitutes the first major effort at global planning since the War-Peace Studies program of the CFR during World War II. […]

The Trilateral Commission has issued one major book-length report, namely, The Crisis of Democracy (Michel Crozier, Samuel Huntington, and Joji Watanuki, 1975). Given the intimate connections between the Commission and the Carter Administration, the study is worth careful attention, as an indication of the thinking that may well lie behind its domestic policies, as well as the policies undertaken in other industrial democracies in the coming years. […]

The report argues that what is needed in the industrial democracies “is a greater degree of moderation in democracy” to overcome the “excess of democracy” of the past decade. “The effective operation of a democratic political system usually requires some measure of apathy and noninvolvement on the part of some individuals and groups.” This recommendation recalls the analysis of Third World problems put forth by other political thinkers of the same persuasion, for example, Ithiel Pool (then chairman of the Department of Political Science at MIT), who explained some years ago that in Vietnam, the Congo, and the Dominican Republic, “order depends on somehow compelling newly mobilized strata to return to a measure of passivity and defeatism… At least temporarily the maintenance of order requires a lowering of newly acquired aspirations and levels of political activity.” The Trilateral recommendations for the capitalist democracies are an application at home of the theories of “order” developed for subject societies of the Third World.

In Short, “The Crisis of Democracy” provides a blueprint for our current race to the bottom and politico-economic subjugation. As Chomsky details at the end of the same article:

The crucial task is “to restore the prestige and authority of central government institutions, and to grapple with the immediate economic challenges.” The demands on government must be reduced and we must “restore a more equitable relationship between government authority and popular control.” The press must be reined. If the media do not enforce “standards of professionalism,” then “the alternative could well be regulation by the government” – a distinction without a difference, since the policy-oriented and technocratic intellectuals, the commissars themselves, are the ones who will fix these standards and determine how well they are respected. Higher education should be related “to economic and political goals,” and if it is offered to the masses, “a program is then necessary to lower the job expectations of those who receive a college education.” No challenge to capitalist institutions can be considered, but measures should be taken to improve working conditions and work organization so that workers will not resort to “irresponsible blackmailing tactics.” In general, the prerogatives of the nobility must be restored and the peasants reduced to the apathy that becomes them.

This is the ideology of the liberal wing of the state capitalist ruling elite, and, it is reasonable to assume, its members who now staff the national executive in the United States….3

You can read my own fuller critique of Huntington’s “The Crisis of Democracy” in the lower half of this earlier post.

Huntington is himself well connected and part of the big club which Davos is just a smaller and supposedly more cuddly offshoot. So all this brouhaha about the rights and wrongs of Davos Man is really nothing more or less than internal bickering about the proper way for plutocrats to tyrannise. Naturally, the Financial Times are keen to play up this supposed schism (just as chocolate manufacturers are keen to bring out tantalisingly novel candy bars), and especially so when provided with the opportunity to pour scorn on an editorial, “In Praise of Davos Man”, published by their immediate competitors at The Economist. Oddly, the author of the piece which challenges The Economist‘s “paean to Davos Man”, Gideon Rachman, concedes in his own article (parenthetically) “I was working for The Economist at the time, but did not write the editorial in question”. He might just as well have added “Splitters! Splitters…!”

Which brings me at last to the main point of my own piece – that Davos Man plus Trilateralist Man [Left Twix and Right Twix, as the advert puts it] are gathering again and under cover of that more perennial darkness which cloaks the premier confab of all globalist confabs – the annual Bilderberg meeting, which kicks off tomorrow in Copenhagen. Founded in 1954, it is precisely sixty years to the weekend since “the great and the good” first secretly convened at the Hotel de Bilderberg in Oosterbeek in the Netherlands.

Sixty years is a long time in (geo-)politics, and so the poisonous fruits of their clandestine bargaining are scattered and rotting all around – from the banking crisis and “austerity” to mass surveillance; and from dismantlement of the NHS to privatisation of the post office (and everything else besides). Neo-liberal policies that have opened the way to the success of racist Marine Le Pen’s Front National and to the lesser gains of neo-Nazis Golden Dawn in Greece, combined with directly neo-conservative assaults that have deliberately aided the spread of Islamist fundamentalism and inflamed wars across the Middle East and beyond. This has all occurred under Bilderberg’s watch – and yet Bilderberg takes little blame, because they are unaccountable. The media makes sure they remain so.

Last year I joined the protests when the Bilderbergers met at Watford and witnessed for myself the enormous state protection afforded this “private meeting”. There were an estimated three thousand of us coralled within the ‘free speech paddock’ staring out across a canal and about half a mile of rolling Hertfordshire parkland to the hotel on the hill. A steel cordon had been erected in the distance, just to make sure. As a helicopter buzzed overhead, the police and G4S security guards all faced us, although the criminals were behind them of course – Henry Kissinger, the world’s greatest living war criminal, enjoying five-star hospitality and the chance to impart wisdom to the likes of Peter Mandelson, George Osbourne, Ed Balls — there was also a surprise appearance by our illustrious leader David Cameron.

I shot the video below, which features activist Charlie Skelton and Labour MP Michael Meacher speaking at Watford:

This year I can’t make it and so will look out for analysis from across the alternative media, keeping an eye out for Charlie Skelton in particular, who will be reopening his annual Bilderblog. Here are a few extracts from Skelton’s first article of this summer, in which he pries into the Bilderberg connection to the Transatlantic trade deal known as TAFTA (and also TTIP). He begins:

Next week, at the Marriott Hotel in Copenhagen, the annual trade and policy summit held by the Bilderberg Group will throw open its doors for three days of top level talks, from May 29th to June 1st. I say “throw open its doors”… the doors will remain, as ever, firmly closed to the public and press. Unless you happen to own a newspaper, or run a publishing conglomerate, or be the Executive Chairman of Google, chances are you’re not going.

It’s remarkable how many bank bosses and corporate CEOs manage to clear their diary, every year, for a full three days of conferencing at Bilderberg. Last year, BP sent its Group Chief Executive, the Michelin Group sent its CEO, while HSBC was represented by both the Group Chairman and the Vice Chairman. From Goldman Sachs came two board members, including their Vice Chairman. And Royal Dutch Shell left a skeleton crew back at headquarters: the company sent its Chairman, CEO, and CFO – and in case that wasn’t enough, they also sent along a director, Josef Ackermann. Who’s also on the board of Investor AB, the £20 billion asset management company. Which also sent its CEO and Chairman. You get the picture.

All this corporate brass spending three days conferencing with media moguls and billionaire investors wouldn’t matter so much, but for the fact that quite a few of the participants who get locked away with them are politicians. And senior politicians at that.

In 2013, the Bilderberg conference was attended by seven Finance Ministers, three Foreign Ministers, two deputy Prime Ministers, and two serving Prime Ministers: Mark Rutte, the PM of Holland, and our very own David Cameron. With them: the President of the European Commission, José Manuel Barroso; EU Commissioner, Viviane Reding; the head of the IMF, Christine Lagarde; and various other politicians and policymakers.

He ends:

For now, if we want transparency at Bilderberg, it’s going to have to be provided by the politicians. Luckily, many of them who go to Bilderberg are avowed champions of transparency. Like David Cameron (Bilderberg 2008, 2013) who launched a war on out-of-control lobbying in a speech back in 2010, when he attacked the “far-too-cosy relationship between politics, government, business and money”.

In that speech, Cameron described lobbying as “the next big scandal waiting to happen.” At Bilderberg, that scandal happens every year. This year, it’s happening in Copenhagen, at the Marriott Hotel, from May 29th to June 1st.4

Click here to read Charlie Skelton’s full article, in which he points to the many conflicts of interest that arise in light of TTIP and the surrounding secrecy of Bilderberg.

We also now have this year’s official (and thus almost certainly incomplete) Bilderberg attendee list. Reading down, it quickly becomes evident that this is more than just an out-of-control lobbying group (as bad as that is). So here is just a small selection of famous (or not) names and associations which are indicative of a broader agenda:

Victor Halberstadt – Professor of Economics at Leiden University

Yiping Huang – Professor of Economics at National School of Development, Peking University

Christine Lagarde – Managing Director, International Monetary Fund

Benoît Coeuré – Member of the Executive Board, European Central Bank

Stephen Poloz – Governor of the Bank of Canada

H.R.H. Princess Beatrix of the Netherlands

H.M. the Queen of Spain

And then more worryingly, I feel:

Anders Fogh Rasmussen – Secretary General of NATO

Gen. David Petraeus (as Chairman of KKR Global Institute)

Eugene Rumer – Senior Associate and Director of the Russia Carnegie Endowment for International Peace

John Sawers – Chief of UK Secret Intelligence Service

Ahmet Üzümcü – Director-General, Organisation for the Prohibition of Chemical Weapons

Just for the record, two other notables on his year’s list are:

Martin Wolf – Chief Economics Commentator at the Financial Times…

and, not to be outdone, John Micklethwait – Editor-in-Chief at The Economist.

Let’s pray they will at last see eye-to-eye about the wondrous rise of Davos Man… but then, who is more Davos, I wonder – Wolf or Micklethwait. It has to be Micklethwait, doesn’t it…?

Oh, nearly forgot… another attendee of some note: dear old Henry Kissinger, who is, coincidentally it seems, also Chairman of Kissinger Associates, Inc.

Click here to read the full (official – and thus incomplete) list of this year’s Bilderberg attendees at zerohedge.

1 From an article entitled “The Dizzy life of Davos man”, written by Richard Sennett, published by The Independent on October 11, 1998. http://www.independent.co.uk/arts-entertainment/the-dizzy-life-of-davos-man-1177451.html

2 From an article entitled “What’s on the mind of Davos Man?” written by Gideon Rachman, published in the Financial Times on January 28, 2011. http://www.ft.com/cms/s/2/3a6d0774-2977-11e0-bb9b-00144feab49a.html#axzz331G9ApDa

3 From an article entitled “The Carter Administration: Myth and Reality” written by Noam Chomsky and published in 1981. http://www.chomsky.info/books/priorities01.htm

4 From an article entitled “Bilderberg and transatlantic trade: a lobbying scandal waiting to happen” written by Charlie Skelton published by transparency.org.uk. http://www.transparency.org.uk/news-room/blog/12-blog/917-bilderberg-and-transatlantic-trade-a-lobbying-scandal-waiting-to-happen

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Filed under analysis & opinion, Charlie Skelton, Denmark, neo-liberalism, Noam Chomsky

never let a good Ukrainian crisis go to waste…

On Thursday [April 17th] Democracy Now! welcomed back Stephen Cohen, Professor Emeritus of Russian Studies and Politics at New York University and Princeton University, to discuss the deepening crisis in Ukraine. Cohen, a specialist on Russia and the Soviet Union, is the author of numerous books on the subject including his latest Soviet Fates and Lost Alternatives: From Stalinism to the New Cold War. He was asked “Are we seeing the beginning of a new Cold War?” and “what exactly is happening right now in Ukraine?” Cohen’s response began as follows:

Those are big questions. We are not at the beginning of the Cold War, a new one; we are well into it—which alerts us to the fact, just watching what you showed up there, that hot war is imaginable now, for the first time in my lifetime, my adult lifetime, since the Cuban missile crisis, hot war with Russia. It’s unlikely, but it’s conceivable. And if it’s conceivable, something has to be done about it.

You did two things on your introduction which were very important. Almost alone among American media, you actually allowed Putin to speak for himself. He’s being filtered through the interpretation of the mass media here, allegedly, what he said, and it’s not representative. The second thing is, let us look just what’s happening at this moment, or at least yesterday. The political head of NATO just announced a major escalation of NATO forces in Europe. He did a Churchillian riff: “We will increase our power in the air, in the sea, on the land.” Meanwhile, as negotiations today begin in Geneva, we’re demanding that Russians de-escalate. And yet, we, NATO, are escalating as these negotiations begin.

So, if you were to say what is going on in Ukraine today—and, unfortunately, the focus is entirely on eastern Ukraine. We don’t have any Western media—in eastern Ukraine. We don’t have any Western—any Western media in western Ukraine, the other half of the country. We’re not clear what’s going on there. But clearly, things are getting worse and worse. Each side has a story that totally conflicts with the other side’s story. There seems to be no middle ground. And if there’s no middle ground in the public discourse, in the Russian media or the American media, it’s not clear what middle ground they can find in these negotiations, though personally, I think—and people will say, “Oh, Cohen’s a Putin apologist”—but it seemed to me that the proposals the Russians made a month ago for resolving the conflict are at least a good starting point. But it’s not clear the United States is going to accept them.

I will come back to some of Cohen’s further points in a moment, but first I’d like to just try to understand why, as Cohen points out, there is such a lack of media coverage across Ukraine and in particular in the western half of the country.

Below is a video (I can’t find a still frame) recorded in mid-March featuring a statement by Vitali Klitschko as he warned of an impending catastrophe in Crimea should it vote to join Russia in the recent referendum. Klitschko has since been sidelined, of course, but what strikes me as odd is that he was standing in front of a board much like the kind of sponsorship boards we see behind interviews of Premier League footballers. Similar except that the ex-sportsman here was backed by just one logo. You can see that it reads “Ukraine Crisis Media Center”:

Now if you type “Ukraine Crisis Media Center” into the Google image search you will find many other Ukrainian political figures giving statements in front of that same logo board. So just who are the “Ukraine Crisis Media Center”?

Well, they have a website and you can search for details there, but in fact you will find very few and none at all about their own sponsors. Instead, what you will read is this:

Ukrainian Crisis Media Center is launched to provide the international community with objective information about events in Ukraine and threats to national security, particularly in the military, political, economic, energy and humanitarian spheres. During this crisis period, the Center on a 24/7 basis will provide support to all the media who cover events in Ukraine.

Having failed to find further information on their website, I decided to email the organisation [on Thursday April 3rd] and asked the following:

I cannot find any information on your site about where financial support for the media center comes from. Without information on who is backing the venture how can we be sure that your coverage is wholly impartial?

I have not received a reply.

In the meantime, I also searched the web for insight from other places – and came across a glowing report published in Kyiv Post which began as follows:

Much like the EuroMaidan Revolution itself, the Ukraine Crisis Media Center sprang to life with speed, spontaneity, creativity, competence – and a strong sense of mission.

Although the center has been open only since March 4, its third floor headquarters in the Hotel Ukraine on 4 Institutska St. is already a required daily stop for dozens of Ukrainian and foreign journalists.

Continuing:

The group came together at Razumkov Center in Kyiv on March 2.

Nataliya Popovych, the president of Kyiv’s PRP Group, an affiliate of the global Webber Shandwick company, is among the founders.

Popovych said that the Kremlin is fast on its feet in spreading lies about Ukraine, whose government is often slow to respond to allegations and counter untruths.

Well, here’s one of the details I was searching for – so who is Nataliya Popovych?

Nataliya started career in Leo Burnett, one of the leading advertising agencies in the world, and continued in Romyr & Associates, Canadian government and public relations firm. After getting Master degree and probation in USA, Nataliya has become a head of PRP Ukraine, a Weber Shandwick Affiliate Company in Ukraine, and in a year became the President of PRP Group, Weber Shandwick partner on CIS markets.

And PRP? You probably won’t be surprised to learn that they are a PR company:

PRP is more than an integrated solutions agency. It is a creative concept. It is a strategy. It is the management of reputations in a new era. It is the ability to communicate and create goodwill. It is integrated solutions which engage audiences into the lives of companies and brands.

That’s taken from their current LinkedIn profile and the profile of Nataliya Popovych is from PR Congress.

But back to the article in the Kyiv Post:

She [Nataliya Popovych] considers Ukrainians to be loving, peaceful and tolerant people and, while she didn’t consider herself a follower of iconic and controversial nationalist hero Stepan Bandera (1909-1959), she is now “proud to be called a Banderite.”1

And for those who don’t know who Stepan Bandera was, then here are a few extracts taken from a detailed and rather generous biography written by Professor of History at Yale University, Timothy Snyder, and published by The New York Review of Books around the time Viktor Yushchenko (President after the “Orange Revolution”) was voted out of office in 2010:

The incoming Ukrainian president will have to turn some attention to history, because the outgoing one has just made a hero of a long-dead Ukrainian fascist. By conferring the highest state honor of “Hero of Ukraine” upon Stepan Bandera (1909-1959) on January 22, Viktor Yushchenko provoked protests from the chief rabbi of Ukraine, the president of Poland, and many of his own citizens. It is no wonder. Bandera aimed to make of Ukraine a one-party fascist dictatorship without national minorities. During World War II, his followers killed many Poles and Jews. Why would President Yushchenko, the leader of the democratic Orange Revolution, wish to rehabilitate such a figure? Bandera, who spent years in Polish and Nazi confinement, and died at the hands of the Soviet KGB, is for some Ukrainians a symbol of the struggle for independence during the twentieth century. […]

Consistent as the rehabilitation of Bandera might be with the ideological competition of the mid-twentieth century, it makes little ethical sense today. Yushchenko, who praised the recent Kiev court verdict condemning Stalin for genocide, regards as a hero a man whose political program called for ethnic purity and whose followers took part in the ethnic cleansing of Poles and, in some cases, in the Holocaust. Bandera opposed Stalin, but that does not mean that the two men were entirely different. In their struggle for Ukraine, we see the triumph of the principle, common to fascists and communists, that political transformation sanctifies violence. It was precisely this legacy that east European revolutionaries seemed to have overcome in the past thirty years, from the Solidarity movement in Poland of 1980 through the Ukrainian presidential elections of 2005. It was then, during the Orange Revolution, that peaceful demonstrations for free and fair elections brought Yushchenko the presidency. In embracing Bandera as he leaves office, Yushchenko has cast a shadow over his own political legacy.2

All of which helps to explain something else that has been puzzling me… why every other story about what’s happening in Ukraine is entitled “Ukraine Crisis: something or other” – the reason being that “Ukraine Crisis” is more or less the brand name that Nataliya Popovych and other “Ukrainian nationalists” have adopted — a list of the founders of the “Ukraine Crisis Media Center” is available at the end of the same Kyiv Post article.3

So what is this new political brand promoting?

*

The “war on terror” is dead, long live the new cold war!

Returning to Stephen Cohen, here is what he had to say about the rise of this new cold war:

As a historian, I would say that this conflict began 300 years ago, but we can’t do that. As a contemporary observer, it certainly began in November 2013 when the European Union issued an ultimatum, really, to the then-president, elected president, of Ukraine, Viktor Yanukovych, that “Sign an agreement with us, but you can’t have one with Russia, too.” In my mind, that precipitated this crisis, because why give a country that has been profoundly divided for centuries, and certainly in recent decades, an ultimatum—an elected president: “Choose, and divide your country further”? So when we say today Putin initiated this chaos, this danger of war, this confrontation, the answer is, no, that narrative is wrong from the beginning. It was triggered by the European Union’s unwise ultimatum.

Now flash forward to just one month ago, about the time I was with you before. Remember that the European foreign ministers—three of them, I think—went to Kiev and negotiated with Yanukovych, who was still the president, an agreement. Now, the Russians were present at the negotiation, but they didn’t sign it. But they signed off on it. They said, “OK.” What did that agreement call for? Yanukovych would remain president until December—not May, when elections are now scheduled, but December of this year. Then there would be a presidential election. He could run in them, or not. Meanwhile, there would be a kind of government of national accord trying to pull the government together. And, importantly, Russia would chip in, in trying to save the Ukrainian economy. But there would also be parliamentary elections. That made a lot of sense. And it lasted six hours.

The next day, the street, which was now a mob—let’s—it was no longer peaceful protesters as it had been in November. It now becomes something else, controlled by very ultra-nationalist forces; overthrew Yanukovych, who fled to Russia; burned up the agreement. So who initiated the next stage of the crisis? It wasn’t Russia. They wanted that agreement of February, a month ago, to hold. And they’re still saying, “Why don’t we go back to it?” You can’t go back to it, though there is a report this morning that Yanukovych, who is in exile in Russia, may fly to eastern Ukraine today or tomorrow, which will be a whole new dimension.

But the point of it is, is that Putin didn’t want—and this is reality, this is not pro-Putin or pro-Washington, this is just a fact—Putin did not want this crisis. He didn’t initiate it. But with Putin, once you get something like that, you get Mr. Pushback. And that’s what you’re now seeing. And the reality is, as even the Americans admit, he holds all the good options. We have none. That’s not good policymaking, is it?

Click here to read a full transcript or watch the latest interview with Stephen Cohen on the Democracy Now! website.

*

The United States spent over a decade hunting down Osama Bin Laden at financial a cost running into multiple trillions and a human cost of more than a million lives, yet since his demise the jihadist cause that Bin Laden once spearheaded is stronger than ever. Forces of al-Qaeda and other near identical jihadist factions now hold control of a large region of Iraq and Syria that exceeds the area of Britain, whilst other Islamist gangs run amok throughout Libya. Thus, after a decade of dirty wars executed by means of “shock and awe” air strikes, the perpetual overhead threat of drones and the knock at the door that ends with secret rendition to faraway torture sites, the “war on terror” has been lost. “Terror” reigns supreme as the victor: terror from all sides that is.

But then, it is hard to imagine any foreign policy that could have manufactured and spread terrorism more effectively than the policies enacted during this decade-long “war on terror”. Blowback? Up to a point. But, we must not forget that all of the many al-Qaeda factions that have gained so much territory could never have done so without our help. Whether indirectly, with the establishment of the power vacuum in Iraq, or more purposefully, with Nato bombers opening the way for the Islamist insurgency in Libya. But mostly, the gains of al-Qaeda are thanks to the very generous funding of one of America and Britain’s closest allies, that bastion of freedom and democracy, Saudi Arabia. Saudi Arabia, the birthplace of Bin Laden, and the nation known to have the closest ties to those accused of the 9/11 attacks. Attacks that provided the very springboard from which the “war on terror” was launched all those years ago. These are the facts and none can be refuted, so make of them what you will – if it was a plot for a film it would seem ludicrously far-fetched.

Of course, the “war on terror” lost a great deal of its public appeal with the bludgeoning of Iraq, and so under Obama we’ve had “humanitarian interventions”. But this new gloss has also flaked away, with the majority of people in the West absolutely sick of war. That said, the wars go on regardless – wreaking havoc but still satisfying the insatiable thirst for blood demanded by our military-industrial-financial complex.

None of these wars have had anything to do with stamping out terrorism or, surely more laughably, the West’s desire to bring “freedom and democracy”. The United States’ covert backing of al-Qaeda is nothing new and neither is the West’s more brazen support of al-Qaeda’s primary sponsor Saudi Arabia? If the wars were about either terrorism or “freedom and democracy”, then the Saudi regime would surely have topped the charts of “the axis of evil”.

In truth, the game never changed. And sadly it is a game (at least to those currently holding power) – as Zbigniew Brzezinski, one of America’s leading geopolitical strategists, makes clear not least with the title of his notorious book on Eurasian geostrategy, “The Grand Chessboard”. In it he wrote:

In brief, for the United States, Eurasian geostrategy involves the purposeful management of geostrategically dynamic states and the careful handling of geopolitically catalytic states, in keeping with the twin interests of America in the short-term: preservation of its unique global power and in the long-run transformation of it into increasingly institutionalized global cooperation. To put it in a terminology that hearkens back to the more brutal age of ancient empires, the three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together.4

This neo-imperialist game is much the same as the older imperialist game, in which only the strategies have been updated. It is about control of territory, of energy resources, of financial systems, and it has (and always did) amount to a series of proxy wars against the competing interests of competing powers. Traditionally Russia have been the great adversary, but now there is China too. So the Cold War that officially concluded with the fall of the Berlin Wall in October 1989… ended only in name. With the Ukrainian crisis (or should that be “Ukraine Crisis”) the chill that remained has become considerably icier. Treacherously so. But our military-industrial-financial complex needs perpetual war just to keep the racket going, or, when that ceases to be an option (as it now has), to maintain the illusion of an imminent threat against us. Bin Laden is dead, so a new Cold War is just the ticket. On top of which, as Brzezinski also explained in his book:

“Ukraine, a new and important space on the Eurasian chessboard, is a geopolitical pivot because its very existence as an independent country helps to transform Russia. Without Ukraine, Russia ceases to be a Eurasian empire.”

Here’s Stephen Cohen again:

The real debate going on in NATO—the real debate, because this is a distraction—is what Rasmussen said in your earlier clip—he’s the political head of NATO—that we’re building up, as we talk, our forces in eastern Europe. Now, understand what’s going on here. When we took in—”we” meaning the United States and NATO—all these countries in eastern Europe into NATO, we did not—we agreed with the Russians we would not put forward military installations there. We built some infrastructure—air strips, there’s some barracks, stuff like that. But we didn’t station troops that could march toward Russia there. Now what NATO is saying, it is time to do that. Now, Russia already felt encircled by NATO member states on its borders. The Baltics are on its borders. If we move the forces, NATO forces, including American troops, to—toward Russia’s borders, where will we be then? I mean, it’s obviously going to militarize the situation, and therefore raise the danger of war.

And I think it’s important to emphasize, though I regret saying this, Russia will not back off. This is existential. Too much has happened. Putin—and it’s not just Putin. We seem to think Putin runs the whole of the universe. He has a political class. That political class has opinions. Public support is running overwhelmingly in favor of Russian policy. Putin will compromise at these negotiations, but he will not back off if confronted militarily. He will not.

*

A trade war opens the way for new trade deals

The new cold war isn’t only a military escalation, it also potentially marks the beginning of a new trade war. But due to reliance on Russia imports (especially when it comes to energy) EU sanctions on Russia will be difficult, and so one way forward could involve loosening trade restrictions between the EU and the US.

The following passages are taken from a press release by the European Council following the recent EU-US Summit in Brussels. It begins:

Recent events in Ukraine have confirmed that strong cooperation between the European Union and the United States on peace and security is of critical importance.

Continuing under the next heading “Economy and global challenges” as follows:

Reinforcing economic growth and job creation remains central on both sides of the Atlantic. The EU and the United States have taken important steps to stabilise financial conditions and overcome the crisis. The EU remains committed to building a deep and genuine economic and monetary union, including a banking union. […]

The EU and US leaders renewed their commitment to a strong Transatlantic Trade and Investment Partnership (TTIP). this should go beyond a free trade agreement and reaffirm Europe and the United States’ shared values of democracy, individual freedom, the rule of law and human rights, and a common commitment to open societies and economies. [bold highlights maintained from original source]

And what is TTIP? Here are additional notes at the end of the same press release:

The EU and US have decided to take their economic relationship to a higher level by agreeing to launch negotiations on a comprehensive trade and investment agreement. It aims to remove trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US.

In fact, I have already touched on the subject of the Transatlantic Trade and Investment Partnership (TTIP) as well as its sister treaty the Trans-Pacific Partnership (TPP) . Both of these “free-trade agreements” appear to have alternative and conflicting names and acronyms and in the case of TTIP it is also known as the Transatlantic Free Trade Area, abbreviated as TAFTA, which is how it appeared in that earlier post. Why trade agreements need to have multiple names becomes more apparent when you realise what this commitment to “freeing up regulations” will mean. Here are a few extracts from a detailed analysis published by Der Spiegel International and entitled “Corporation Carte Blanche: Will US-EU Trade Become Too Free?”:

Lori Wallach had but 10 minutes to speak when she stepped up to podium inside Room 405 at George Washington University, located not too far away from the White House. Her audience was made up of delegates currently negotiating the trans-Atlantic free trade agreement between the United States and the European Union.

They had already spent hours listening to presentations by every possible lobbying group — duty bound to hear myriad opinions. But when Wallach, a trade expert for the consumer protection group Public Citizen, took the stage, people suddenly started paying attention. The 49-year-old Harvard lawyer, after all, is a key figure in international trade debates.

“The planned deal will transfer power from elected governments and civil society to private corporations,” she said, warning that the project presents a threat of entirely new dimensions. [bold emphasis added]

How will TTIP help to transfer even more power out of democratic control and into the hands of the major corporations? Well, let us count the ways:

After the third round of negotiations, an unusually broad alliance of anti-globalization groups, NGOs, environmental and consumer protection groups, civil rights groups and organized labor is joining forces to campaign against TTIP.

These critics have numerous concerns about the treaty – including their collective fear that the convergence of standards will destroy important gains made over the years in health and nutrition policy, environmental protection and employee rights. They argue the treaty will make it easier for corporations to turn profits at the public’s expense in areas like water supply, health or education. It would also clear the path for controversial technologies like fracking or for undesired food products like growth hormone-treated meat to make their way to Europe. Broadly worded copyrights would also restrict access to culture, education and science. They also believe it could open the door to comprehensive surveillance.5

Click here to read the full article in Der Spiegel.

*

Fracking for freedom (and digging for victory)

I have already highlighted at the end of an earlier and rather more extended post how energy giants Chevron and Exxon Mobil have been getting ready to move their operations to Ukraine with the intention of exploring both conventional and “unconventional” resources (otherwise known as “fracking”). On Saturday’s Keiser Report, Max Keiser spoke to freelance journalist JP Sottile of Newsvandal.com, who also occasionally writes for the Guardian, about not only how Big Oil, but also Big Agra, have their eyes fixed on Ukraine. Sottile names the people and corporations hoping to take advantage of Ukraine’s exceptional fertile lands. Here are some excerpts of what he had to say [from about 13 mins in]:

“One of the bones of contention with Russia, Europe, and its transit point Ukraine, is Russia’s domination of the natural gas market in Europe. So I thought it was very interesting when the deal was announced that Chevron was involved in developing shale gas in Ukraine. Now that would have been with the previous government of Yanukovych – and I believe that that led to a lot of the pressure coming out of Moscow for Yanukovych to reject the economic deal between Ukraine and Europe, and that then of course led to a cascading number of events, which led to the deposing of Yanukovych and the ‘crisis in Ukraine’ as it is now called.”

Beyond the oil and gas, Sottile has also looked closely into the interests of agricultural giants Cargill and Monsanto, who are keen to exploit Ukraine’s riches closer to the surface:

US-Ukraine Business Council is an investor in the US-Ukraine Foundation where Ms [Victoria] Nuland was speaking on December 13th [about how the US had already spent $5 billion helping Ukraine realise its “European aspirations”] and also on December 13th, that was the day that Cargill invested in a Black Sea port to help open the Russian market to its agriculture. Well, Cargill is also heavily invested in Ukraine in a company called Ukrlandfarming. The just bought a two hundred thousand dollar stake in Ukrlandfarming. In fact they bought that stake – or it was announced – on the very day, January 12th of this year, that fifty thousand Ukrainians flooded Kiev to protest the government of Yanukovych.

They are all connected through Freedom House – a guy there who worked with Ms Nuland, who is Assistant Secretary of State for European and Eurasian Affairs, she had a Deputy Assistant Secretary of State for European and Eurasian Affairs, a guy named David Kramer. David Kramer serves on – he’s actually head of Freedom House – Freedom House is one of the organisations that the United States uses to stoke democracy movements around the world. It is actually responsible, along with the National Endowment for Democracy, for funding many of the opposition forces there in Ukraine. And David Kramer also serves on the US-Ukraine Business Council. If you go the US-Ukraine Business Council – which is a very interesting organisation – on the executive board of the US-Ukraine Business Council you’ll find Cargill, Monsanto, John Deere, CNH International (which is a farming equipment and tractor-making company), Eli Lilly and DuPont Pioneer – DuPont Pioneer being the genetically modified organisms and agricultural wing of DuPont. And they all serve together under the guidance of a guy named Morgan Williams. Morgan Williams is CEO and President of US-Ukraine Business Council, and he has been a fixer for Archer Daniels Midland, Cargill, [and] other big agricultural companies in Ukraine for the last fifteen to twenty years.

There is an expression from my part of the world that goes: “where there’s muck, there’s brass”. Well, as Sottile’s investigations reveal, there’s loads of muck in Ukraine and not just in oil and gas deposits. Perhaps, as he suspects, the bigger prize is the land itself. Either way, the vultures are already circling. Except that they are more predatory than the much maligned vulture. Rather than waiting for a crisis to happen they have been directly involved in fomenting one, and now, as their “Ukraine Crisis” escalates, they won’t be planning to let it to go to waste.

Click here to read more about this in JP Sottile’s article entitled “Ukraine, Chevron, Condi Rice and Shale Gas… join the dots” published by The Ecologist magazine on March 18th.

1 From an article entitled “Crisis Media Center springs into action” written by Brian Bonner, published by Kyiv Post on March 14, 2014. https://www.kyivpost.com/guide/about-kyiv/crisis-media-center-springs-into-action-339299.html 

2 From an article entitled “A Fascist Hero in Democratic Kiev” written by Timothy Snyder, published by The New York Review of Books on February 24, 2010. http://www.nybooks.com/blogs/nyrblog/2010/feb/24/a-fascist-hero-in-democratic-kiev/

3Founders of Ukraine Crisis Media Center include:

Valeriy Chaly, Razumkov Centre, deputy foreign minister of Ukraine (2009-2010)
Ivanna Klympush-Tsyntsadze, Yalta European Strategy, director
Nataliya Popovych, PRP, president
Natalia Olbert-Sinko, PRP in Ukraine, executive director
Yaryna Klyuchkovska, independent communications consultant
Gennadiy Kurochka, CFC, founder and managing partner
Vasyl Myroshnychenko, CFC, partner
Alina Frolova, R.A.M. 360, CEO
Volodymyr Degtyaryov, NewsFront PR agency, director
Ivetta Delikatnaya, AGL, director of development
Maxim Savanevskyi, PlusOne DA, managing partner
Andriy Zagorodskiy, Newsplot, director

From the same article entitled “Crisis Media Center springs into action” written by Brian Bonner, published by Kyiv Post on March 14, 2014. https://www.kyivpost.com/guide/about-kyiv/crisis-media-center-springs-into-action-339299.html 

4 Extract from The Grand Chessboard, Chapter 2 “The Eurasian Chessboard”, p. 40, written by Zbigniew Brzezinski, published in 1997. It is available at http://en.wikiquote.org/wiki/Zbigniew_Brzezinski 

5 From an article entitled “Corporation Carte Blanche: Will US-EU Trade Become Too Free?” written by Michaela Schiessl, published by Der Spiegel International on January 23, 2014. http://www.spiegel.de/international/business/criticism-grows-over-investor-protections-in-transatlantic-trade-deal-a-945107.html

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Filed under al-Qaeda & DAESH / ISIS / ISIL, analysis & opinion, fracking (shale & coal seam gas), Max Keiser, neo-liberalism, Ukraine