Tag Archives: Ambrose Evans-Pritchard

the coming wars with Russia, China and Iran? why the stakes are raised in the last days of the unipolar order

While Britain’s political class is distracted by a Downing Street party, the world is at the most dangerous strategic juncture since the Cuban missile crisis in 1962.

These are the sobering thoughts of Daily Telegraph’s International Business Editor, Ambrose Evans-Pritchard, as expressed in the opening paragraph in his latest article entitled “The West’s nightmare: a war on three fronts”.

Under the strapline “There has never been a more unsettling strategic landscape in my lifetime – we must turn our attention to the prospect of conflict”, the same piece then continues:

The West faces escalating threat of conflict on three fronts, each separate but linked by unknown levels of collusion: Russia’s mobilisation of a strike force on Ukraine’s border, China’s “dress rehearsal” for an attack on Taiwan, and Iran’s nuclear brinksmanship.

Each country is emboldening the other two to press their advantage, and together they risk a fundamental convulsion of the global order.

You have to go back yet further to find a moment when Western democracies were so vulnerable to a sudden change in fortunes. Today’s events have echoes of the interlude between the Chamberlain-Daladier capitulation at Munich in 1938 and consequences that followed in rapid crescendo from Anschluss to the Hitler-Stalin Pact.

Click here to find Ambrose Evans-Pritchard’s article published on December 9th behind The Telegraph paywall.

Meanwhile, in the Washington Post, regular columnist Michael McFaul, Director of the Freeman Spogli Institute for International Studies and a Hoover fellow at Stanford University teamed up with Oleksiy Honcharuk, former Ukrainian Prime Minister under current President Volodymyr Zelensky, and member of the Atlantic Council’s Eurasia Center in an article headlined “The best response to Russia’s threats is a closer relationship with Ukraine”, which states:

Since 1939, the specter of an all-out conventional war in Europe between two major militaries has never been greater.

Click here to read the full article published by the Washington Post on Dec 1st.

It is quite easy, of course, to write off commentators like Evans-Pritchard and McFaul as alarmists, since what they are speculating on – even forecasting – is more or less unthinkable. War with Russia. War with Iran. War with China. War with all three simultaneously! This is absolute madness, and nothing good could possibly come from a war with any of these three rising powers.

However, if we accept Evans-Pritchard’s account this build up to the terrifying potential of full-fledged global conflict becomes very nearly inevitable, as an unavoidable response to the expansionism of Putin and Xi and/or the belligerence of the Iranians. To have stood by and done nothing, he compares directly with appeasement of Nazism – all three rivals to western hegemony duly compared to the most wicked and unassuageable enemy of humanity in modern times. Such unabashed reduction ad Hitlerum is always deemed permissible when enemies under scrutiny are ours!

Setting aside the partisanship, Ambrose Evans-Pritchard is both a well-informed and (for what it’s worth) a respectable mainstream commentator and so his concerns surrounding this growing crisis and the tripartite nature of the envisioned threat surely demand our attention, even when the background he paints overlooks countless and crucial pieces that are required to the complete the picture.

When he says straightforwardly “there has never been a more unsettling strategic landscape in my lifetime” and then announces “we must turn our attention to the prospect of conflict” I don’t believe he is exaggerating purely for effect. This is not mere hyperbole. It represents an honest appraisal of the rapidly escalating geopolitical tensions and of the commensurable threat the West is at least potentially facing. Where his analysis fails, however, is in correctly apportioning blame for these crises and in his surprising lack of informed historical context.

In the case of Russia, for instance, he makes no mention of the West’s broken promise to Gorbachev that in exchange for Russia’s consent to German reunification, Nato would not move an inch eastward. Instead it has since expanded 700 miles right up to Russia’s doorstep. This is critical. Without recognising this Nato expansion eastwards, we instantly lose all sense of Russia’s justified fear of invasion – eighty years ago under codename Operation Barbarossa the Nazis launched a massive Blitzkreig attack through the Baltic States and Ukraine: an entirely unprovoked attack that laid waste to towns and cities and was beaten back at the cost of some 25 million Russian lives. The Russian people have not forgotten this.

On December 5th, The Grayzone’s Aaron Maté spoke with Richard Sakwa, Professor of Russian and European politics at the University of Kent, and author of Frontline Ukraine: Crisis in the Borderlands and just released Deception: Russiagate and the New Cold War:

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Their discussion took place shortly after UN Secretary of State Anthony Blinken had ended talks with his Russian counterpart Sergei Lavrov and on the eve of the Biden-Putin summit.

Richard Sakwa reminds us:

“This is the second time this year that we’ve seen a war theatre emerging with Russian troop movements, Ukrainian troop movements and so on. The immediate issue clearly is concern on both sides that there’s going to be a forcible attempt to resolve the Donbass question: that is the secessionist republics in that part of Ukraine.

“But the larger context is like a Russian doll – a Matryoshka doll – in which that conflict is nested in a larger one, which in the immediate context is the model of Ukrainian state building since 1991, where a certain Russophone population was objecting to a particular vision of Ukrainian statehood – a lot of authors have pointed this out over the years – and it came to a crunch in 2014. And so then we had the counter movement in Crimea and Donbass.

“But even bigger than that is the failure since 1991 to establish what the Russians would certainly call an inclusive and equitable security order. And that of course is what was being discussed at the OSCE Security Conference just these last few days when Blinken and Sergei Lavrov, the Russian Foreign Minister met.” [from 0:50 mins]

Regarding Russia’s true motives, Sakwa continues:

“The idea that Putin is, as an article in the New Statesman (this week’s issue) puts it, ‘the agent of chaos’ and the fomenter of instability is the complete mistake; it’s in fact the opposite. Russia constantly wants stability; it wants a framework for order. And more than that, it is committed still to that international system, and the international law established after 1945…

“Certainly the Russians would argue that it’s the West that has become revisionist; it’s the West that wants to destabilise the order by advancing a military alliance almost to Russia’s borders. And the idea that Putin needs some sort of external adventure in order to consolidate his position at home is also mistaken.

“I think that there’s a whole stack of arguments involved here, including of course the view that what’s going on in Ukraine is a Russian invasion or Russian attack, when there’s the internal domestic – let’s perhaps not call it a civil war but civil contestation about the vision of Ukrainian statehood. It’s homemade.

“And so what we see in this second Cold War is the constant projection of internal contradictions in Ukraine, and indeed in the Western Atlantic power system, onto Russia, which leads to a very mistaken view of the dynamics and motivations of the Russian leadership today, which leads of course to mistaken policies, which leads then to the intensification of the conflict and leads us to the danger of an inadvertent war. This is why the context is just so important…

Any basic realist view would suggest that Russia has national interest, it has concerns. And any power in Moscow would be concerned about a military alliance coming up to its borders. Even if Nato doesn’t expand, as Putin has been saying over the last few months, Ukraine de facto is being armed with very offensive weapons – the Javelin and other things – which of course even Barack Obama refused to give because he warned that this would only intensify and exacerbate the conflict.” [from 5:00 mins]

Moving away from Russia and the Ukrainian crisis, Evans-Pritchard also says nothing of the West’s more recent broken promise to Iran in the form of the Joint Comprehensive Plan of Action (JCPOA), which was painstakingly negotiated between Iran and the P5+1 (five permanent members of the UN Security Council and the European Union) and eventually signed off in July 2015.

However, within the term of the very next US administration under Donald Trump, the US unilaterally withdrew from the agreement doubtless at the behest of Trump’s great friend Netanyahu. Thus, having struck a deal that removed crippling economic sanctions by assent to a rigorous inspection regime to ensure nuclear non-proliferation, this hard-won reward was snatched away and with it the disincentive to pursue a nuclear weapons programme was lost. Nevertheless Iran is back at the negotiating table in Vienna, even while the prospect of a revised deal looks increasingly unlikely:

On Sunday {Dec 5th], amid reports that the talks might collapse, Israeli Prime Minister Naftali Bennett called on the countries in Vienna to “take a strong line” against Iran. According to Channel 12 news in Israel, Israeli officials are urging the US to take military action against Iran, either by striking Iran directly or by hitting an Iranian base in Yemen. Regardless of the outcome of the negotiations, Israel says that it reserves the right to take military action against Iran.

This is the assessment of Medea Benjamin and Ariel Gold, who are respectively cofounder and national co-director of Codepink, in an article entitled “Israel Is Hell-Bent on Sabotaging US Nuclear Negotiations With Iran”, that also reminds us:

Israeli threats aren’t just bluster. Between 2010 and 2012, four Iranian nuclear scientists were assassinated, presumably by Israel. In July 2020, a fire, attributed to an Israeli bomb, caused significant damage to Iran’s Natanz nuclear site. In November 2020, shortly after Joe Biden won the presidential election, Israeli operatives used remote control machine guns to assassinate Iran’s top nuclear scientist. Had Iran retaliated proportionately, the US might have backed up Israel, with the conflict spiraling into a full-blown US-Middle East war.

In April 2021, as diplomatic efforts were underway between the Biden administration and Iran, sabotage attributed to Israel caused a blackout at the Natanz. Iran described the action as “nuclear terrorism.”

Ironically described as Iran’s Build Back Better plan, after each of Israel’s nuclear facility sabotage actions, Iranians have quickly gotten their facilities back online and even installed newer machines to more rapidly enrich uranium. As a result, American officials recently warned their Israeli counterparts that the attacks on Iranian nuclear facilities are counterproductive. But Israel replied that it has no intention of letting up.

Obviously if the original deal had not been so rashly torn up by Trump there is every reason to presume Iran would have stayed disarmed, but instead, with so much sabre-rattling out of Israel and America, there is every incentive to follow North Korea’s lead and join the nuclear club. As the same piece points out:

Stakes are high for the talks to succeed. The International Atomic Energy Agency (IAEA) confirmed this month that Iran is now enriching uranium up to 20 percent purity at its underground facility at Fordo, a site where the JCPOA forbids enrichment. According to the IAEA, since Trump pulled the US out of the JCPOA, Iran has furthered its uranium enrichment to 60 percent purity (compared with 3.67% under the deal), steadily moving closer to the 90 percent needed for a nuclear weapon. In September, the Institute for Science and International Security issued a report that, under the “worst-case breakout estimate,” within a month Iran could produce enough fissile material for a nuclear weapon.

Click here to read the full article by Medea Benjamin and Ariel Gold published by Jacobin magazine on December 12th.

Nor does Evans-Pritchard give proper context to the question of Taiwan, which first separated from the mainland when the governing Kuomintang (KMT) and its leader Chiang Kai-shek had fled there following their catastrophic defeat to the communists. Both sides soon after advocated a “One-China Policy” although each disputed the right of the other to rule over a future reunited China. Prior to 1971, it had actually been the Taiwanese Republic of China (ROC) that held the seat on the UN Security Council.

Then, when the great reformer Deng Xiaoping came to power in the late 1970s, he proposed an updated constitutional arrangement of “One Country Two Systems”, according to which partial autonomy would be granted, permitting Taiwan to operate an unfettered free-market economy and an independent military although under mainland sovereignty. This offer was formally rejected by Taiwan, but still a “One-China Policy” has been long-standing and officially recognised by successive American presidents – at least until now.

To quote from the current Wikipedia entry:

Today, ROC is the de facto government of Taiwan; whereas the PRC is the de facto government over Mainland China. However, each government claims to be the legitimate government of all China de jure.

In short, Taiwanese independence remains a highly contentious issue on both sides of the strait.

Stepping back therefore we should acknowledge that China has both political and strategic interest in Taiwan and the sovereignty issue remains an exceedingly complex one. Likewise, Russia has historical and cultural ties to the people of the breakaway republics of the Donetsk and Luhansk, who are still embattled and fighting for independence against Ukrainian Nationalists (including neo-Nazis) in response to oppressive measures introduced in the immediate aftermath of the Maidan coup of 2014.

So although it is easy to characterise each of these conflicts as revanchist on the part of the Russian and Chinese regimes, which then in turn validates the prevailing argument that we must not repeat the historical error of appeasement, this is actually a dangerous misrepresentation of the full picture. It denies the basic fact that all nations have interests, and that some of interests are non-negotiable.

Returning to Evans-Pritchard’s cited example of the Cuban missile crisis in 1962, which involved an American response to a perceived as a Soviet threat that was in turn a Soviet retaliation after the US moved its missiles to Turkey, we see that both sides considered the danger posed by the other as a just cause for nuclear brinksmanship.

In 2016, John Pilger released his 60th documentary film The Coming War on China which is embedded below. In the notes on the official website, Pilger writes:

This film, The Coming War on China, is a warning that nuclear war is not only imaginable, but a ‘contingency’, says the Pentagon. The greatest build-up of Nato military forces since the Second World War is under way on the western borders of Russia. On the other side of the world, the rise of China as the world’s second economic power is viewed in Washington as another ‘threat’ to American dominance.

To counter this, in 2011, President Obama announced a ‘pivot to Asia’, which meant that almost two-thirds of all US naval forces would be transferred to Asia and the Pacific, their weapons aimed at China.

Today, some 400 American military bases encircle China with missiles, bombers, warships and nuclear weapons. They form an arc from Australia north through the Pacific to Japan, Korea and across Eurasia to Afghanistan and India. It is, says one US strategist, ‘the perfect noose’.

In secrecy, the biggest single American-run air-sea military exercise in recent years – known as Talisman Sabre – has rehearsed an Air-Sea Battle Plan, blocking sea lanes in the Straits of Malacca, cutting off China’s access to oil, gas and other raw materials from the Middle East and Africa.

It is largely this fear of an economic blockade that has seen China building airstrips on disputed islands and reefs in the South China Sea. Last year, Chinese nuclear forces were reportedly upgraded from low to high alert.

This is not news, or it is news distorted or buried. Instead, there is a familiar drumbeat identifying a new enemy: a restoration of the psychology of fear that embedded public consciousness for most of the 20th century. The aim of The Coming War on China is to help break the silence. As the centenaries of the First World War presently remind us, horrific conflict can begin all too easily. The difference today is nuclear.

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All of today’s escalating crises have been – and continue to be – inflamed, in the most part deliberately, by Western interference. The Ukrainian Maidan was initially sparked by the actions of the European Union although the violent protests that ended in the toppling of elected President Viktor Yanokovych and installation of Western puppet Arseniy Yatsenyuk were directed by Washington as a notorious leaked phone call between Victoria Nuland and US Ambassador Geoffrey Pyatt revealed.

Having helped to orchestrate a coup, America continues to supply arms and offer military and intelligence support to the Ukrainian nationalists in their war against the peoples of the Donetsk and Luhansk regions. Meanwhile Nato sails its warships provocatively on the Black Sea, while occasionally buzzing the still disputed territory of Crimea. Likewise, America and Britain now regularly send their warships to the South China Sea for large-scale exercises. Why are the British and American navies patrolling waters so far from their own shores? What other purpose than provocation?

On December 1st, the German newspaper Die Welt published an opinion piece by its Chief Foreign Policy Correspondent Clemens Wergin under the headline “The West must finally treat Moscow like the pariah regime it is acting as”, in which it boldly asserts in the language of this new Cold War era that: “Moscow is trying, as in Soviet times, to force parts of Eastern Europe under its thumb.” Yet in reality, most of the former Soviet Bloc countries including Croatia, Estonia, Hungary, Latvia, Lithuania, Poland, and Romania, are now fully-fledged members of Nato.

Richard Sakwa says:

“Ultimately the question is ‘what is the US strategic goal’? It should be peace. It should be some sort of framework in which Russia is part of the solution, instead of which being constantly externalised as an enemy… There’s a marvellous book which I’m sure you know [by] William Hill called No Place for Russia which describes how since 1991 desperate attempts by Yeltsin and then Putin to establish an inclusive security order – and indeed Medvedev with his ideas in 2008 – so the idea is that you can’t negotiate with Moscow because it doesn’t want to deal, or that any negotiation effectively is appeasement.

“It is sort of crazy talk. That means there can be no diplomacy. There can be no engagement, no dialogue, no working on common issues, though Biden of course after the Geneva Summit has established a working party on cyber issues and on strategic security, which is very welcome, and so there is talk going on, but in an atmosphere of fundamental distrust.” [from 10:35 mins]

In fact these crises are happening because the world’s superpowers are butting heads, just as they did during the first Cold War. And throughout that first Cold War the public was constantly informed about the Soviet Union’s abysmal human rights record and their tremendous eagerness to invade the West. The first claim is provably true, of course, but the follow-up claim was false; a cheap propaganda trick that instilled fear and maximised the expansion of the military-industrial complex.

Nor do the Russians or Chinese have plans to invade us tomorrow, but threatened by western expansion up to their borders, both are now preparing to defend their national interests. The latest threats of pre-emptive strikes on Ukraine and Taiwan are reactive. Thus Evans-Pritchard’s parallels with the Cuban Missile Crisis are entirely valid. And keep in mind that in 1962 the world only narrowly escaped disaster thanks to courage of Soviet submarine commander Vasily Arkhipov, who overrode a decision to launch a nuclear strike that otherwise might have ended civilisation and annihilated much of the life on this planet.

Meanwhile, the Iranians are not, as Evans-Pritchard states in his article, on the immediate brink of testing a bomb, but instead, and unlike their Israeli adversaries, lack any nuclear capability. Nevertheless another Israeli attack on an Iranian nuclear facility – especially if it is a civilian one that causes widespread radioactive contamination – might yet be the trigger that ignites a war to end all wars.

As John Pilger describes in his notes to The Coming War on China:

When I first went to Hiroshima in 1967, the shadow on the steps was still there. It was an almost perfect impression of a human being at ease: legs splayed, back bent, one hand by her side as she sat waiting for a bank to open. At a quarter past eight on the morning of 6 August, 1945, she and her silhouette were burned into the granite. I stared at the shadow for an hour or more, unforgettably. When I returned many years later, it was gone: taken away, ‘disappeared’, a political embarrassment.

Another shadow now looms over all of us.

As a youth I was a member of CND and also subscribed to their in-house magazine which carried the apt title Sanity to helpfully distinguished the group’s unilateralist disarmament position from the multilateralist principle of deterrence known as ‘Mutually Assured Destruction’ or MAD. Today instead of MAD we have a more frank if utterly absurd discussion that considers nuclear first-strike to be an option; crazy nonsense that mostly comes from the neo-con factions inside the US and Israel. These are the Strangeloves; not merely psychopaths, but madmen with a death wish, because adopting such a strategy is far, far madder than MAD ever was! How did our democratic systems fail so badly as to enable these certifiable lunatics ever to come to power? (That’s a question for another day.)

Writing for the Quincy Institute journal Responsible Statecraft, British policy analyst and Orwell Prize-winning journalist, Anatol Lieven, goes so far as to describe Washington’s antagonist relationship with Russia, including the tit-for-tat diplomatic expulsions as “absurd and reckless”. An article published on December 1st begins:

Official U.S. behavior towards Russia is suffering from a pretty acute case of what might charitably be called obsessive-compulsive disorder. As a result of this affliction, it has often lost touch not only with basic strategic common sense, but with the overall goals and strategy of the current U.S. administration.

The latest manifestation of this has been the U.S. refusal to extend the visas of Russian diplomats in Washington, which this week naturally and inevitably led to a new round of tit for tat expulsions of U.S. diplomats from Moscow. As a result of an escalating cycle of retaliation in recent years, the U.S. embassy in Moscow is now the only U.S. diplomatic presence in that country, and the number of its staff is barely one tenth of its previous figure.

While being unwilling to seek any real compromises with Russia, President Biden and his team are clearly anxious to avoid new crises if possible; and there are the most obvious and sensible reasons for this desire. The administration has made meeting the challenge (whether real or imagined) from China the core of its entire global strategy. Any new confrontation with Russia would be a colossal distraction from this strategy, and would in fact be a magnificent strategic gift to Beijing.

In these strategic circumstances, the obvious course for America would be to carry out the “opening to China” of the 1970s in reverse, and aim for a grand strategic compromise with Russia that would neutralize U.S.-Russian tensions and split Moscow from Beijing. Even if such a move is beyond the vision and moral courage of U.S. leaders today, at the very least one would expect that U.S. policy would avoid all purely gratuitous and unnecessary gestures of hostility towards Russia, especially when these are absolutely bound to provoke an equal Russian response.

Yet since the Biden administration took office, efforts to defuse tension with Russia have been interspersed with episodes of insulting language, symbolic affronts and meaningless but deeply provocative statements. It is as if the U.S. establishment simply cannot control itself when it comes to jabbing at Russia.

Concluding:

The result is to damage or eliminate precisely those lines of communication which it is essential to keep open if minor incidents are to be prevented from escalating into major and unnecessary crises.

If these moves were part of a U.S. considered strategy, they would be deeply foolish and reckless; but at a time when the U.S. leadership actually wants to reduce tension with Moscow, they verge on the insane.

Click here to read Anatol Lieven’s full article entitled “Tit for tat diplomatic expulsions by Russia and America are absurd and reckless: At a time when Washington wants to reduce tension with Moscow, these acts verge on the insane” published in Responsible Statecraft.

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America’s long-term geostrategic repositioning through the stealth expansion of Nato directly up to the borders of Russia and China is now combined with its ever more bellicose political posturing. Repeatedly under the threat of attack, loose defensive alliances have tightened between Russia, China and Iran, so a coordinated response becomes all the more likely. Should the West or Israel (with US consent) take the decision to declare “pre-emptive” war against any one of the three sovereign powers, the realistic expectation is wider war. Given the probable magnitude of a three-pronged retaliation and the genuine potential for a thermonuclear exchange, the prospect of wars against Russia, China and Iran is therefore absolutely unthinkable.

A century ago a detached and callous ruling class led a largely innocent and unwitting generation into the bloody technological hellhole of no-man’s land to slaughter one another for the glory of king and country and, importantly, for the sake of empire. Back then and ever since, we have rightly talked of “lions led by donkeys”. Astonishingly, the donkeys are back in charge again, except that this time around besides an imbecilic and unprincipled political class, we also have an atrophied antiwar opposition, a moribund fourth estate and an endlessly diverted populous, so the worry is that we may be dealing with donkeys virtually all the way down.

So forgive me when I hammer this point: war is in the air again, and not just any old war. WAR with Russia! WAR with Iran! WAR with China! WAR with all three simultaneously!

I make no apologies for my vulgar use of capitals. We all need to shout about this. What’s the alternative?

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Under UN Resolution 2758, passed on 25 October 1971, the People’s Republic of China (PRC) was recognised as “the only legitimate representative of China to the United Nations, and to expel forthwith the representatives of Chiang Kai-shek from the place they unlawfully occupy at the United Nations and in all organizations related to it.” An earlier General Assembly Resolution 1668 passed in 1961 had ensured this change in recognition had required a two-thirds majority of all voting members.

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Filed under analysis & opinion, China, did you see?, Iran, Israel, John Pilger, Russia, Ukraine, Uncategorized, USA

another landslide victory as the Greeks say OXI!

everywhere is OXI! all say NEIN!

Following the financial crisis (which was actually a banking crisis, as I have pointed out many times before), it was Greece that was unfortunate enough to have been singled out and placed at the head of the queue for dose after dose of neo-liberal economic shock therapy. The financial group formerly known as “the Troika” — the IMF, ECB and EU — were exceedingly quick when it came to imposing their strict austerity programme, backed up with further ‘Washington Consensus’-style ‘conditionalities’ — the enforced privatisation of public services and other forms of so-called ‘deregulation’.

More than half a decade on, and rather than prosperity, “austerity” (i.e., savage cuts – I always apply apostrophes) has created a vicious debt spiral, with mass unemployment and reduced incomes leading inexorably to reduced demand, stifled economic growth and, as a direct and consequence, lost tax revenues that would otherwise have been available for government investment. Along the way, money has been deliberately siphoned from the poorest in society to the wealthiest. But then “austerity” automatically provides a wonderful excuse for this sort of wealth redistribution.

Six months ago, the Greeks voted in the anti-austerity government Syriza. Their message then was already clear: “austerity” simply does NOT work! They had had enough. Now with today’s dramatic referendum result they have said ‘enough’ a second time – in effect this was a landslide vote calling for a complete end to “austerity” and even more loud and clear than when Syriza were first elected.

What happens next is uncertain. The real fight for the future of their country is perhaps only just beginning. But the vote shows both the strength of support for the Syriza government as well as the tremendous courage of the Greek people to continue to take a stand against the Eurogarchs. To win by such a margin was a remarkable victory.

What the Greek people achieved today provides yet another boost in our own fight against “austerity”.

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greek solidarity march

 Left Unity, who have a loose alliance with both Syriza and Podemos, tonight issued the following message and call for support:

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.

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Update:

Here is a very short report on Monday’s [July 7th] Democracy Now! featuring Costas Panayotakis, professor of sociology at NYC College of Technology at City University of New York, and author of Remaking Scarcity: From Capitalist Inefficiency to Economic Democracy.

Panayotakis says:

Yeah, I think it surprised everybody, including the government. All the polls before the vote suggested that it was very close. So, I think that was a great victory for democracy in Greece. People were under immense psychological pressure from the media, that were threatening them with nightmare scenarios; from workplaces, where many business owners were threatening their workers that if a “no” prevailed, they would lose their jobs; and from the European partners, who basically were saying that a “no” vote would mean exit from the eurozone. So, it’s a very important result. It’s a hopeful development. It will not end the austerity, even if there is an agreement, but it creates a better environment for anti-austerity forces to keep fighting. […]

Well, the situation in Greece is still very difficult. It is urgent, because the banks are closed, so the normality in the banking system has to be restored. As long as it is not restored, it basically will have a bad effect on the economy. And this creates lots of pressure, of course, on the Greek government, and it is consistent with a strategy of economic strangulation of—that the Europeans have used ever since the election of this new anti-austerity government.

With regards to the resignation of Yanis Varoufakis, the former Greek Finance Minister, Costas Panayotakis points out:

He’s not a sort of long-term politician. So he doesn’t want to just—he didn’t want to just achieve an agreement that would last a few months and would continue this kind of pattern of agreements that are made and have to be reconsidered and revisited a few months later. So that made him very, very unpopular with his partners, who are the more traditional politicians. Perhaps it was partly a stylistic issue, as well. You know, he wasn’t—you know, finance ministers in the eurozone are usually very sort of gray, sort of technocratic figures, so perhaps his style was commented on. But I think there was substantial differences, and he basically held for his position, which was substantially right.

Click here to read the full transcript or to watch the debate on the Democracy Now! website.

Meanwhile, Ambrose Evans-Pritchard, International Business Editor for The Telegraph, provides an excellent overview of available options the Greek government can choose from in the event that the ECB decides to continue denying the banks “emergency liquidity assistance (ELA)”, i.e., euros:

Top Syriza officials say they are considering drastic steps to boost liquidity and shore up the banking system, should the ECB refuse to give the country enough breathing room for a fresh talks.

“If necessary, we will issue parallel liquidity and California-style IOU’s, in an electronic form. We should have done it a week ago,” said Yanis Varoufakis, the finance minister.

Alternatively (and bearing in mind that Varoufakis has stepped down):

Syriza sources say the Greek ministry of finance is examining options to take direct control of the banking system if need be rather than accept a draconian seizure of depositor savings – reportedly a ‘bail-in’ above a threshhold of €8,000 – and to prevent any banks being shut down on the orders of the ECB.

Government officials recognize that this would lead to an unprecedented rift with the EU authorities. But Syriza’s attitude at this stage is that their only defence against a hegemonic power is to fight guerrilla warfare.

Hardliners within the party – though not Mr Varoufakis – are demanding the head of governor Stournaras, a holdover appointee from the past conservative government.

They want a new team installed, one that is willing to draw on the central bank’s secret reserves, and to take the provocative step in extremis of creating euros.

“The first thing we must do is take away the keys to his office. We have to restore stability to the system, with or without the help of the ECB. We have the capacity to print €20 notes,” said one.

Such action would require invoking national emergency powers – by decree – and “requisitioning” the Bank of Greece for several months. Officials say these steps would have to be accompanied by an appeal to the European Court: both to assert legality under crisis provisions of the Lisbon Treaty, and to sue the ECB for alleged “dereliction” of its treaty duty to maintain financial stability.

Click here to read Ambrose Evans-Pritchard’s full report entitled, “Defiant Greeks reject EU demand as Syriza readies IOU currency”

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On Tuesday [July 7th], Democracy Now! ran a rather more extended report on the Greek crisis in the light of their defiant rejection of “austerity”. They spoke with Richard Wolff, author of several books, including, most recently, Democracy at Work: A Cure for Capitalism, and emeritus professor of economics at University of Massachusetts, Amherst, as well as Channel 4 News skittish economics editor, Paul Mason.

Richard Wolff says:

I think the real importance of what is happening in Greece is that fundamentally a poor corner of Europe has said it will no longer absorb the disproportionate burden of this crisis and of the bailouts that have been used to cope with it. Basically, what is going on here is that the richer countries of Europe, led by Germany, are shifting the burden of all these crises—that they are responsible for—onto people in Greece. They never imagined that in trying to do that they would generate their worst nightmare: a left-wing political organization that goes from 4 percent of the vote a few years ago to an ability to call out a referendum and get 60 percent of the people to support them. So, they have generated a response, and that struggle, of which this is only one step, is what’s being played out here. And that’s why it’s relevant to the rest of Europe and to the United States, everywhere where there is mounting evidence of people saying, “No, we will not continue to absorb the costs of a system that works in this dysfunctional way.”

Regarding Germany’s part in the crisis, Wolff says:

The irony here, the historical irony, is something I think we need to understand. Back in 1953, the Germans, with a very crushed economy—in that case, because of the Great Depression and the fact that they lost World War II—went to the United States, France and Britain and said, “We can’t join you as a bulwark against the Soviet Union unless you relieve us of our enormous debts, which are hampering our ability to grow.” Across 1953, they had meetings in London. When those meetings concluded, with the so-called London Agreement, here’s what Germany got from the United States, France and Britain: 50 percent of their outstanding debt, which was very high, was erased, and the other 50 percent of their debt was stretched out over 30 years. In effect, Germany got the relief of all of its basic indebtedness, based on two world wars that they were held accountable for, and that enabled them to have the so-called Wirtschaftswunder, the economic miracle that happened. They now refuse to give to Greece what they got. They refuse to allow Greece to have the chance to solve its economic problems just the way Germany asked for and got. And this discrepancy between these two countries is producing a stress inside Europe that is, what Paul Mason correctly points to, fundamentally dangerous to the whole project of a United States of Europe.

Adding a little later:

The Germans are victims of their own propaganda. They converted an economic crisis into a nationalist, we-versus-them mentality—we, Germans who work hard, against the Greeks, who don’t. Reminded me of nothing so much as Mr. Romney’s unfortunate remark in the last campaign where he divided Americans into the 47 percent moochers and the 53 percent who work hard, trying to get the 53 percent to believe they were carrying the other 47. That’s what the Germans have done. “We Germans work very hard, and we’re carrying these lazy Greeks.” This—put aside the questionable issue of whether the Germans ought to play such a nationalist card, given their history, but this is a way of solidifying opposition to what’s going on, and this is a very, very dangerous track. But she may be trapped by it. She has done it now. So, as Paul said, her own people wouldn’t support making a deal. She’s made that impossible for herself.

And finishing:

There’s no question in my mind, from the evidence we have, that the American government is more interested with a stable Europe than with provoking this kind of a split inside Europe, partly because of the ramifications here in this country, where the same anti-austerity is building. That’s one of the causes for the support for Bernie Sanders, for example. But he’s also concerned that the Germans are making a classic political error, going way too far, and that this will disturb global markets. The economic recovery in this country is very weak and very fragile, and that doesn’t want disturbance to come from a powerhouse like Europe.

Click here to read the full transcript or to watch the debate on the Democracy Now! website.

*

The eleventh hour intercession by the IMF was intriguing. Why decide to put out its “Debt Sustainability Analysis” draft report which confirms that Greek debt repayment is unsustainable whilst announcing Greece’s need for large-scale debt relief to create “a breathing space” on the very eve of such a crucial vote? A statement that came as grist to the mill for the “no” campaign, was cited by Alexis Tsipras in his televised appeal to voters, and, hardly surprising, was frowned upon by other Eurozone countries that tried to block its release. Yet, seemingly at the behest of Washington and in defiance of Berlin, the IMF went ahead anyway.

At Zerohedge, Tyler Durden offered up this somewhat unsatisfactory answer:

Perhaps after all is said and done, the powers that be need chaos, need instability, need panic in order to ensure the public gratefully accept the all-in QE-fest that they want.

On the other hand, Paul Craig Roberts suggests a rather more persuasive, if still highly speculative, geostrategic reason:

If the inflexible Germans were to have Greece booted from the EU, Greece’s turn to Russia and financial rescue would put the same idea in the heads of Italy and Spain and perhaps ultimately France. NATO would unravel as Southern Europe became members of Russia’s Eurasian trade bloc, and American power would unravel with NATO.

This is simply unacceptable to Washington.

If reports are correct, Victoria Nuland has already paid a visit to the Greek prime minister and explained to him that he is neither to leave the EU or cozy up to the Russians or there will be consequences, polite language for overthrow or assassination. Indeed, the Greek prime minister probably knows this without need of a visit.

I conclude that the “Greek debt crisis” is now contained. The IMF has already adopted the Greek government’s position with the release of the IMF report that it was a mistake from the beginning to impose austerity on Greece. Pressured by this report and by Washington, the EU Commission and European Central Bank will now work with the Greek government to come up with a plan acceptable to Greece.

This means that Italy, Spain, and Portugal can also expect more lenient treatment.

The losers are the looters who intended to use austerity measures to force these countries to transfer national assets into private hands. I am not implying that they are completely deterred, only that the extent of the plunder has been reduced.

Time will tell if Roberts is right.

Click here to read Paul Craig Roberts’ full article.

Finally, on Friday [July 10th], Democracy Now! spoke with Mark Weisbrot, co-director of the Center for Economic and Policy Research and author of forthcoming book, Failed: What the Experts Got Wrong About the Global Economy. As part of his response to a question about why Yanis Varoufakis resigned, Weisbrot offered an alternative explanation for the IMF/Washington intervention:

Well, I don’t know why—I mean, I don’t know why the finance minister quit. Obviously, you know, the European—the other finance ministers and European authorities wanted him out, and they said it was his negotiating style and things like that. I don’t know that that makes much difference.

You know, the main thing, again, is whether they can get a deal that allows for an economic recovery. You know, this is the ironic thing about it, is that the European authorities have made this mess. The reason they need all this debt relief is because the economy has shrunk by more than 25 percent and greatly reduced their ability to pay. And now, the IMF is already saying—or the IMF has already acknowledged that the debt is unsustainable.

And some of that is U.S. influence. You know, you have a difference between the U.S. and the European Union, or the European authorities, I should say, because the U.S. is only concerned with keeping Greece in the euro, whereas the others have this project. They want to transform Europe into a place that has a smaller social safety net, a reduced state, cuts in pensions and healthcare. This isn’t just Greece. Greece is the obstacle in their way of transforming Europe. So they have these whole set of other interests that they’re fighting for, and that’s why they’re being so brutal and stubborn about this.

So, again, you know, we don’t really know what’s going to happen yet. We don’t know whether they’re going to grant sufficient debt relief to allow for an economic recovery. So I think this fight is going to go on for a while.

In other words, Washington and Berlin have somewhat divergent interests — interests that, as Paul Craig Roberts indicates, may hinge on Washington’s grander and more lunatic geostrategic objectives.

Click here to read the full transcript or to watch the debate on the Democracy Now! website.

 

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