Tag Archives: Brookings Institute

genocide in Yemen is great business — all hail Prince Mohammed bin Salman!

People in war-torn Yemen are facing a situation that “looks like the Apocalypse”, the UN’s humanitarian chief has told Al Jazeera, warning that the country could become the worst humanitarian disaster in half a century. […]

“The situation in Yemen – today, right now, to the population of the country – looks like the apocalypse,” Mark Lowcock, the head of the UN office for the coordination of humanitarian Affairs (OCHA), said on Friday.

“The cholera outbreak is probably the worst the world has ever seen with a million suspected cases up to the end of 2017.”

Lowcock said “a terrible new epidemic” of diphtheria, a bacterial disease which should be completely preventable by immunisation, has already “affected up to 500 people with dozens and dozens of deaths” in the past few weeks

“That is going to spread like wildfire,” he added.

“Unless the situation changes, we’re going to have the world’s worst humanitarian disaster for 50 years”.

From a report entitled “Yemen could be ‘worst’ humanitarian crisis in 50 years” published by Al Jazeera.

The same report continues:

Lowcock’s comments came as the UN’s Central Emergency Response Fund (CERF) allocated $50m to bolster the relief effort in Yemen, where more than eight million people are on the brink of famine. 1

This manufactured starvation is due to a blockade of the country’s air and sea ports that amounts to genocide. However, here is a genocide carried out by a ‘Saudi-led coalition’ that is very much armed and enabled by close allies Britain and America. In fact without British and US intelligence and other assistance including the refuelling of aircraft, this genocide could be ended tomorrow:

The U.S. has supplied Saudi Arabia with more than $20 billion worth of weapons during its Yemen campaign, including thousands of MK-82 bombs. In November, the State Department approved the sale of 8,020 new MK-82 bombs as part of a $1.29 billion transfer of more air-to-ground weapons.

Throughout his presidency, President Obama has sold more than $115 billion worth of weapons to the Saudis – more than any other President.

Reports Alex Emmons in a carefully documented piece published last October by The Intercept.

The same piece concludes with a quote from CIA officer and senior fellow at the Atlanticist ‘think tank’ Brookings Institute, Bruce Riedel, who in April described the U.S as “a partner in this war” and said:

“If the United States and the United Kingdom, tonight, told King Salman [of Saudi Arabia] ‘this war has to end,’ it would end tomorrow. The Royal Saudi Air Force cannot operate without American and British support.” 2

Click here to read the full report.

Which is why the deliberate starvation of eight million people gets scarcely a mention by the corporate media.

Meanwhile, Saudi Arabia’s ruler-in-waiting, Crown Prince Mohammed bin Salman, “who Riedel called the ‘architect’ of the war in Yemen” 3 is set to visit Britain this coming Wednesday. Following a formal reception with Prime Minister May, he will afterwards be wined and dined at Windsor Castle by the Queen. A week on, the Crown Prince arrives in the United States to begin a state visit running from March 19th to the first week of April.

But no amount of red carpet will be able to soak up all the blood, just as nothing at all can disguise the stench of western hypocrisy.

*

Additional:

On RT’s Going Underground, Afshin Rattansi today spoke to Andrew Smith from the Campaign Against Arms Trade (CAAT) on how billions of pounds worth of UK weapons sales to Saudi Arabia threatens the lives of the millions already suffering in Yemen:

Click here to petition the UK government to cancel the invitation for the visit of Prince Mohammed bin Salman.

And here to read more about the #SaudiPrinceNotWelcome campaign.

*

1 From an article entitled “Yemen could be ‘worst’ humanitarian crisis in 50 years” published by Al Jazeera on January 5, 2018. https://www.aljazeera.com/news/2018/01/yemen-worst-humanitarian-crisis-50-years-180105190332474.html

2 From an article entitled “Photos Show Fragments of U.S. Bombs at Site of Yemen Funeral Massacre” written by Alex Emmons, published in The Intercept on October 10, 2016. https://theintercept.com/2016/10/10/photos-show-fragments-of-u-s-bombs-at-site-of-yemen-funeral-masssacre/  

3 https://www.brookings.edu/blog/brookings-now/2016/04/22/watch-sen-chris-murphy-on-revisiting-u-s-saudi-relationship/

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what’s the truth about the civil war in Syria? update: on the origins of ISIS

According to a recent survey conducted between June 10th  and July 2nd by ORB International, a U.K.-based  market research firm, that was published in the Washington Post on September 15th, 82% of Syrians questioned believe “IS is US and foreign made group”.*

So are four out of every five Syrians mistaken…?

*

This will be the longest article I have ever published and also the most intensively documented. The main assertion is that the story of the Syrian “civil war” as it has been (and continues to be) presented – periodically reframed to conceal the most glaring discrepancies in the permitted narrative – is entirely phoney. That the Arab Spring was not so much the catalyst for an uprising which opened the door for Islamist terrorists, but served as a pretext to orchestrate regime change by means of a deliberate invasion of Salafist death squads. In short, that al-Qaeda factions (ISIS is merely an allied splinter group and a later brand) were always the unwitting agent and enabling force for western expansionism in the pursuit of corporatist geostrategic interests – most obviously for the capture and control of fossil fuel resources.

To argue that al-Qaeda/ISIS operate as our pawns does not mean, however, that we own them – only that (with the help of close allies) we have covertly backed them, and then manoeuvred and manipulated them to pursue our ends. This strategy is not as novel as it may sound, but tried and tested in the Cold War battle to defeat the Soviet Union when we armed and backed the Mujahideen (forerunners to al-Qaeda) during Operation Cyclone.

More than three years ago (August 7th, 2012), I published an article entitled “what’s the truth about the civil war in Syria?” in which I collated evidence of how the west and its allies were already knowingly supporting al-Qaeda fighters against Assad. Back then I wrote:

It seems then, that America are back in the business of supporting al-Qaeda. This is not as unusual as it may sound. If you wind back only as far as the Libyan intervention you’ll find that al-Qaeda was leading much of the opposition there too. Indeed, you may recall that back in November, the black flag of al-Qaeda was actually raised over the courthouse in Benghazi – the place where the Libyan revolution had first ignited

And including an appending quote taken from an article entitled “Al-Qaeda’s specter in Syria”, written by Senior Fellow for Middle Eastern Studies for the Council on Foreign Relations, Ed Husain, that reads:

The Syrian rebels would be immeasurably weaker today without al-Qaeda in their ranks. By and large, Free Syrian Army (FSA) battalions are tired, divided, chaotic, and ineffective. Feeling abandoned by the West, rebel forces are increasingly demoralized as they square off with the Assad regime’s superior weaponry and professional army. Al-Qaeda fighters, however, may help improve morale. The influx of jihadis brings discipline, religious fervor, battle experience from Iraq, funding from Sunni sympathizers in the Gulf, and most importantly, deadly results. In short, the FSA needs al-Qaeda now.

What follows is a sequence of official admissions and mainstream articles that document the origins of ISIS in Iraq and subsequent expansion into Syria which prove beyond contradiction that the west backed the extremists since the earliest stages of the “civil war”, how the majority of the so-called “rebels” are and always have been foreign invaders and not domestic insurgents, and why the only viable long-term solution must be a political one that starts with the total isolation of all Islamist terrorist groups. For as Vice President Joe Biden confessed to us a year ago, when they were looking for opponents to fight the Assad government “there was no moderate middle”. Moreover, Biden, strangely eager to spill the beans, then went on to say:

[America’s allies] poured hundreds of millions of dollars and thousands of tons of weapons into anyone who would fight against Assad – except that the people who were being supplied were al-Nusra and al-Qaeda, and the extremist elements of jihadis coming from other parts of the world.

[Joe Biden’s speech from October 2014 is transcribed in its entirety in the timeline below.]

However, what Biden failed to add is how both the emergence and the survival of ISIS are not solely due to Gulf state support nor merely the maintenance of supply lines running via Turkey, but more directly thanks to the clandestine activities of the CIA under the leadership of General David Petraeus and then John Brennan who spent $1 billion a year ($1 out of every $15 of the CIA budget) to train and equip some 10,000 fighters. To a considerable extent, it has been the CIA that built up ISIS:

The CIA declined to comment on the program or its budget. But U.S. officials defended the scale of the expenditures, saying the money goes toward much more than salaries and weapons and is part of a broader, multibillion-dollar effort involving Saudi Arabia, Qatar and Turkey to bolster a coalition of militias known as the Southern Front of the Free Syrian Army.

Much of the CIA’s money goes toward running secret training camps in Jordan, gathering intelligence to help guide the operations of agency-backed militias and managing a sprawling logistics network used to move fighters, ammunition and weapons into the country.

Click here to read the full Washington Post report entitled “Secret CIA effort in Syria faces large funding cut” published on June 12th.

It is also worth bearing in mind that the Nato war against ISIS which began August last year has been an inherently phoney one. A war committed to achieving two mutually incompatible outcomes: on the one hand, the restoration of order by the annihilation of Islamist terrorists in the region, and, on the other, the defeat of the Syrian army to bring about the toppling of the government. And given these contradictory goals, how can we be sure that the primary mission has ever been to weaken ISIS, rather than an opportunity to further damage and degrade Syrian infrastructure, which is, of course, another prerequisite for regime change?

Today’s “coalition of the willing” is in any case intrinsically conflicted. For instance, when the US supported Kurdish resistance fighters in the battle to liberate Kobane a year ago, we are told that they accidentally airdropped weapons and other supplies to Islamic State fighters – which happened because “Turkey would not allow Kurdish fighters to cross its borders into Kobane to bolster the town’s defenses.” So which side is Turkey, a Nato member, on?

More recently, once Turkey had joined the ostensibly anti-ISIS coalition this July, its first action involved the launch of airstrikes simultaneously against both IS and Kurdish forces. Little surprise then, that after well over a year and around $4 billion spent conducting this undeclared air offensive there remains no end in sight at all. Meanwhile, and as with previous wars against Iraq and Libya, the civilian death toll directly resulting from the western intervention is rarely reported upon and officially denied. Our bombs are “surgical” and our killings of civilians simply don’t get counted.

Finally, ISIS really is not the invincible force we are accustomed to believe. Rather, they are affiliated gangs of thugs and murderers, who have been successfully held off and then beaten back by committed and courageous though wholly under-resourced Kurdish resistance forces in the north of Syria. However, for those who desire either to see the butchering continue in order to undermine regional stability, or else to use this threat of murderous hoards in a bait and switch where the ultimate aim is always regime change (the neo-con agenda all along, and an outcome that is furthered by chaos and instability) we should not be surprised if the propaganda tends to magnify the strength of ISIS and to exaggerate the difficulty of eradicating them. In reality, they are surrounded by enemies on many sides and if supplies of armaments, other material support and finance were shut off – with Turkey controlling its own border and with serious pressure applied to their sponsors in the Gulf States – then ISIS, as sitting ducks, would rather quickly wither away.

The greater part of this article will be based around an adaptation and extension of a timeline of mainstream articles put together and published by Kevin Borge. His aim, in part, is to reveal how instead of joining the dots, the corporate media overlooks the evidence (evidence it has actually published), in order to preserve an overarching officially sanctioned narrative which justifies all ongoing western “interventions” on the grounds of spreading “freedom and democracy” and other “humanitarian” goals.

In the same spirit as Borge I have tried to limit my own commentary so far as possible and to let the endless misdirection and duplicity within the mainstream version of events speak for itself. In contrast to Borge, I have also decided to try to prise apart the interlocking roles played by i) the United States, Nato and the other western powers; ii) the Gulf States and most especially – though certainly not exclusively – Saudi Arabia and Qatar; iii) Turkey under President Recep Erdoğan and Prime Minister Ahmet Davutoğlu; and last but by no means least, iv) Benjamin Netanyahu and Israel.

But I will begin with what is arguably the single most extraordinary admission so far in this sorry tale…

*

When Lieutenant General Michael T. Flynn, former head of the Defense Intelligence Agency (DIA) was interviewed in late July by Mehdi Hasan on Al Jazeera’s show Head to Head, Hasan pointed to a DIA report presented in August 2012 but recently declassified through the Freedom of Information Act (FOIA), which correctly predicts: “If the situation unravels, there is the possibility of establishing a declared or undeclared Salafist principality in eastern Syria… and this is exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime.”

In other words, as Hasan points out, “the US saw ISIL caliphate coming and did nothing”

Flynn replies [from 9:35 mins]:

I think that where we missed the point – where we totally blew it – was in the very beginning. I mean we’re talking four years now into this effort in Syria. Most people won’t even remember – I mean it’s only been a couple of years – the Free Syrian Army, that movement, I mean where are they today? Al-Nusra, where are they today? And how much have they changed? When you don’t get in and help somebody they’re going to find other means to achieve their goals. And I think right now, we’ve allowed these extremist militants to come in…

Hasan cuts in: Why did you do that? You were the head of the Defense Intelligence Agency… Did you see this document in 2012? Did this come across your table…? So when you saw this, did you not pick up a phone and say “what on earth are we doing supporting these Syrian rebels? And what did you do about it? Did you say we shouldn’t be supporting these groups?

Flynn responds: I did. I mean we argued about these different groups that are there and we said, you know, who is that is involved here. And I will tell you that I do believe that the intelligence was very clear, and now it’s a matter of whether or not policy is going to be as clear and as defining and as precise as it needs to be. And I don’t believe it was…

Hasan: Just to clarify here, today my understanding is you’re saying we should have backed the rebels.

Flynn: We should have done more earlier on in this effort, you know, than we did…

Hasan: But three years ago, let’s just be clear – for the sake of our viewers – in 2012, your agency was saying quote: “the Salafist, the Muslim Brotherhood, and AQI [Al- Qaeda in Iraq] are the major forces driving the insurgency in Syria.” In 2012, the US was helping coordinate arms transfers to those same groups. Why did you not stop that, if you’re worried about the rise of quote-unquote “Islamic extremists”?

Flynn: I hate to say it’s not my job, but… my job was to ensure that the accuracy of our intelligence that was being presented was as good as it could be. And I will tell you it goes before 2012. I mean when we were in Iraq and we still had decisions to be made before there was a decision to pull out of Iraq in 2011. I mean it was very clear what we were going to face.

Hasan: Well, I admire your frankness on this subject. Let me just clarify once more: you are basically saying that even in government at the time you knew those groups were around. You saw this analysis and you were arguing against it. But who wasn’t listening?

Flynn: I think the administration.

Hasan: The administration turned a blind eye to your analysis…

Flynn: I don’t think they turned a blind eye, I think it was a decision. I think it was a wilful decision.

Hasan: A wilful decision to support an insurgency that had Salafists, Al-Qaeda and the Muslim Brotherhood?

Flynn: Well, a wilful decision to do what they’re doing… you have to really ask the President, what is it that he actually is doing with the policy that is in place because it is very, very confusing. I’m sitting here today Mehdi and I can’t tell you exactly what that is, and I’ve been at this a long time.

[The transcript above is mine.]

Click here to watch the full interview first broadcast on Friday July 31st at the Al Jazeera website.

*

Before proceeding to the more closely documented timelines, some further background and additional insights are available in a Guardian article written by Nafeez Ahmed and published shortly after the Ghouta gas attack on August 30, 2013. Here are some extracts:

In May 2007, a presidential finding revealed that Bush had authorised CIA operations against Iran. Anti-Syria operations were also in full swing around this time as part of this covert programme, according to Seymour Hersh in the New Yorker. A range of US government and intelligence sources told him that the Bush administration had “cooperated with Saudi Arabia’s government, which is Sunni, in clandestine operations” intended to weaken the Shi’ite Hezbollah in Lebanon. “The US has also taken part in clandestine operations aimed at Iran and its ally Syria,” wrote Hersh, “a byproduct” of which is “the bolstering of Sunni extremist groups” hostile to the United States and “sympathetic to al-Qaeda.” He noted that “the Saudi government, with Washington’s approval, would provide funds and logistical aid to weaken the government of President Bashir Assad, of Syria,” with a view to pressure him to be “more conciliatory and open to negotiations” with Israel. One faction receiving covert US “political and financial support” through the Saudis was the exiled Syrian Muslim Brotherhood.

According to former French foreign minister Roland Dumas, Britain had planned covert action in Syria as early as 2009: “I was in England two years before the violence in Syria on other business”, he told French television:

“I met with top British officials, who confessed to me that they were preparing something in Syria. This was in Britain not in America. Britain was preparing gunmen to invade Syria.”

After referring back to Wesley Clark’s notorious post-9/11 memo outlining US plans to “attack and destroy the governments in 7 countries in five years”, Ahmed then continues:

Much of the strategy currently at play was candidly described in a 2008 US Army-funded RAND report, Unfolding the Future of the Long War (pdf). The report noted that “the economies of the industrialized states will continue to rely heavily on oil, thus making it a strategically important resource.” As most oil will be produced in the Middle East, the US has “motive for maintaining stability in and good relations with Middle Eastern states”:

“The geographic area of proven oil reserves coincides with the power base of much of the Salafi-jihadist network. This creates a linkage between oil supplies and the long war that is not easily broken or simply characterized… For the foreseeable future, world oil production growth and total output will be dominated by Persian Gulf resources… The region will therefore remain a strategic priority, and this priority will interact strongly with that of prosecuting the long war.”

Adding:

The report noted especially that Syria is among several “downstream countries that are becoming increasingly water scarce as their populations grow”, increasing a risk of conflict. Thus, although the RAND document fell far short of recognising the prospect of an ‘Arab Spring’, it illustrates that three years before the 2011 uprisings, US defence officials were alive to the region’s growing instabilities, and concerned by the potential consequences for stability of Gulf oil.

Click here to read Nafeez Ahmed’s full article.

Incidentally, and contrary to some wilder claims, there is no convincing evidence that most instrumental to igniting hostilities that then plunged the country into “civil war” was the Syrian government’s failure to respond to a severe drought:

There is no doubt that the major drought witnessed in Syria between 2006 and 2011 had a catastrophic environmental and societal impact on the country, but it is not the over-arching cause of the war.

So writes Louis Allday who was working at the British Embassy in Damascus at the time.

Click here to read his full account published on September 11th by Counterpunch.

*

i) Timeline for US, Nato and other western powers from 2006

Please note that the bold emphasis is mine throughout unless otherwise stated.

Time Magazine, December 19, 2006:

http://content.time.com/time/world/article/0,8599,1571751,00.html

The Bush Administration has been quietly nurturing individuals and parties opposed to the Syrian government in an effort to undermine the regime of President Bashar Assad. Parts of the scheme are outlined in a classified, two-page document that says that the U.S. already is “supporting regular meetings of internal and diaspora Syrian activists” in Europe. The document bluntly expresses the hope that “these meetings will facilitate a more coherent strategy and plan of actions for all anti-Assad activists. […]

The proposal says part of the effort would be run through a foundation operated by Amar Abdulhamid, a Washington-based member of a Syrian umbrella opposition group known as the National Salvation Front (NSF).

The Front includes the Muslim Brotherhood, an Islamist organization that for decades supported the violent overthrow of the Syrian government, but now says it seeks peaceful, democratic reform […]

Money for the election-monitoring proposal would be channeled through a State Department program known as the Middle East Partnership Initiative, or MEPI. According to MEPI’s website, the program passes out funds ranging between $100,000 and $1 million to promote education and women’s empowerment, as well as economic and political reform, part of a total allocation of $5 million for Syria that Congress supported earlier this year.

Reuters, April 18. 2011:

http://www.reuters.com/article/2011/04/18/us-usa-syria-wikileaks-idUSTRE73H0E720110418

The State Department has secretly funded Syrian opposition groups, according to diplomatic cables released by WikiLeaks, The Washington Post reported on Monday. The cables show that the State Department has funneled as much as $6 million since 2006 to a group of Syrian exiles to operate a London-based satellite channel, Barada TV, and finance activities inside Syria, the Post said. Barada TV began broadcasting in April 2009 but has ramped up operations to cover the mass protests in Syria that began last month as part of a long-standing campaign to overthrow President Bashar al-Assad the Post said. The U.S. money for Syrian opposition figures began flowing under President George W. Bush after political ties with Damascus were frozen in 2005, the newspaper said. The financial backing has continued under President Barack Obama, even as his administration sought to rebuild relations with Assad, the Post said.

Reuters, July 20, 2012:

http://www.reuters.com/article/2012/08/01/us-usa-syria-obama-order-idUSBRE8701OK20120801

President Barack Obama has signed a secret order authorizing U.S. support for rebels seeking to depose Syrian President Bashar al-Assad and his government, U.S. sources familiar with the matter said.

Sydney Morning Herald, September 11, 2012:

http://www.smh.com.au/federal-politics/alqaeda-now-a-us-ally-in-syria-20120910-25oby.html

In Syria, there is mounting evidence that Al Qaeda and its allies are actively deploying terror tactics and suicide bombers to overthrow the Assad regime.

Syrian citizens who prefer the secular and stable state to the prospect of an Iraqi-style sectarian state may well be turning this same question around to the US government: are you with us, or with the terrorists?

This week, head of the Salafi jihad and close ally of al Qaeda, Abu Sayyaf, pledged “deadly attacks” against Syria as “our fighters are coming to get you” because “crimes” by the regime ”prompts us to jihad”.

If only the Syrian uprising was as simple as the Arab Spring narrative where citizens seek democracy and freedom. But those unarmed protests have long since been hijacked by a cocktail of agendas which have little to do with Syrian democracy, and more to do with a proxy war to create a sectarian Sunni state that weakens Shi’te Iran’s main partner in the region.

[In his “historic” State of the Union address on September 20th, 2001] Bush was correct in claiming that al Qaeda “want to overthrow existing governments in many Muslim countries such as Egypt, Saudi Arabia, and Jordan” – who were all US-Israel allies at that time.

But his list stopped short of mentioning Syria or Iraq, the real targets of al Qaeda. Why does overthrowing Syria, using the same terror tactics, fail to attract the same degree of outrage?

Bush continues: “We will starve terrorists of funding, turn them one against another, drive them from place to place, until there is no refuge or no rest. And we will pursue nations that provide aid or safe haven to terrorism.”

This pledge appears to have fallen on its own sword, given the funding of the jihadists in Syria. The terrorists have bred and spread across borders, which is the opposite of Bush’s prophecy.

The US administration must come clean about its financial aid. It cannot use one hand to sign a blank cheque to the rebels, and the other hand to cover its eyes to their immoral and illegal tactics. It cannot hide behind “the end justifies the means” as there are too many innocent lives at stake. […]

The US regime should be actively and publicly distancing itself from the foreign terrorists and Salafist jihadists that are proliferating within sovereign Syria.

It should be condemning al Qaeda for its militant intervention. It should be condemning the Saudi sheikhs who issue fatwas for an Alawite holocaust. […]

Perhaps the US is applying another principle that they may have learned from their pragmatic Arab allies – the enemy of my enemy is my friend.

Business Insider, October 9, 2012:

http://www.businessinsider.com/us-syria-heavy-weapons-jihadists-2012-10

The official position is that the U.S. has refused to allow heavy weapons into Syria. But there’s growing evidence that U.S. agents — particularly murdered ambassador Chris Stevens — were at least aware of heavy weapons moving from Libya to jihadist Syrian rebels. […]

In November 2011 The Telegraph reported that Belhadj, acting as head of the Tripoli Military Council, “met with Free Syrian Army [FSA] leaders in Istanbul and on the border with Turkey” in an effort by the new Libyan government to provide money and weapons to the growing insurgency in Syria. Last month The Times of London reported that a Libyan ship “carrying the largest consignment of weapons for Syria … has docked in Turkey.” The shipment reportedly weighed 400 tons and included SA-7 surface-to-air anti-craft missiles and rocket-propelled grenades. Those heavy weapons are most likely from Muammar Gaddafi’s stock of about 20,000 portable heat-seeking missiles—the bulk of them SA-7s—that the Libyan leader obtained from the former Eastern bloc. Reuters reports that Syrian rebels have been using those heavy weapons to shoot down Syrian helicopters and fighter jets.

Vice Presidential Debate, October 11, 2012:

http://www.debates.org/index.php?page=october-11-2012-the-biden-romney-vice-presidential-debate

US Vice President Joe Biden:

We are working hand and glove with the Turks, with the Jordanians, with the Saudis, and with all the people in the region attempting to identify the people who deserve the help so that when Assad goes – and he will go – there will be a legitimate government that follows on, not an al-Qaida-sponsored government that follows on.

[almost precisely two years later, October 2014, Biden entirely contradicts this statement – see below]

New York Times, October 14, 2012:

http://www.nytimes.com/2012/10/15/world/middleeast/jihadists-receiving-most-arms-sent-to-syrian-rebels.html?_r=0

Most of the arms shipped at the behest of Saudi Arabia and Qatar to supply Syrian rebel groups fighting the government of Bashar al-Assad are going to hard-line Islamic jihadists, and not the more secular opposition groups that the West wants to bolster, according to American officials and Middle Eastern diplomats. […]

The opposition groups that are receiving the most of the lethal aid are exactly the ones we don’t want to have it,” said one American official familiar with the outlines of those findings, commenting on an operation that in American eyes has increasingly gone awry.

McClatchy, December 2, 2012:

http://www.mcclatchydc.com/news/nation-world/world/middle-east/article24741022.html

Nearly a year later, however, Jabhat al Nusra, which U.S. officials believe has links to al Qaida, has become essential to the frontline operations of the rebels fighting to topple Assad. […]

The group’s prominence makes clear the dilemma of Syria’s revolutionaries, as well as those who might provide support to them. Though members of Nusra operate independently of the other rebel groups that have taken up arms and particularly those that are calling for elections if Assad is deposed it is increasingly clear that their operations are closely coordinated with more secular rebels.

The Guardian, March 8, 2013:

http://www.theguardian.com/world/2013/mar/08/west-training-syrian-rebels-jordan

Western training of Syrian rebels is under way in Jordan in an effort to strengthen secular elements in the opposition as a bulwark against Islamic extremism, and to begin building security forces to maintain order in the event of Bashar al-Assad’s fall. […]

According to European and Jordanian sources the western training in Jordan has been going on since last year and is focused on senior Syrian army officers who defected. […]

For western and Saudi backers of the opposition, Jordan has become a preferable option through which to channel aid than Turkey. Ankara has been criticised for allowing extremist groups, such as the al-Nusra Front, become dominant on the northern front while it focused on what it sees as the growing threat of Kurdish secessionism. “The Americans now trust us more than the Turks, because with the Turks everything is about gaining leverage for action against the Kurds,” said a Jordanian source familiar with official thinking in Amman. The US has announced an extra $60m (£40.2m) in direct aid to the rebels, including military rations and medical kits.

Reuters, March 10, 2013:

http://www.reuters.com/article/2013/03/10/us-syria-crisis-rebels-usa-idUSBRE9290FI20130310

Americans are training Syrian anti-government fighters in Jordan, the German weekly Der Spiegel said on Sunday

New York Times, April 20, 2013:

http://www.nytimes.com/2013/04/21/world/middleeast/kerry-says-us-to-double-aid-to-the-opposition-in-syria.html

Secretary of State John Kerry announced Sunday morning that the United States would double its aid to the Syrian opposition, providing $123 million in fresh assistance.

New York Times, April 27, 2013:

http://www.nytimes.com/2013/04/28/world/middleeast/islamist-rebels-gains-in-syria-create-dilemma-for-us.html?pagewanted=all&_r=1

In Syria’s largest city, Aleppo, rebels aligned with Al Qaeda control the power plant, run the bakeries and head a court that applies Islamic law. Elsewhere, they have seized government oil fields, put employees back to work and now profit from the crude they produce. Across Syria, rebel-held areas are dotted with Islamic courts staffed by lawyers and clerics, and by fighting brigades led by extremists. Even the Supreme Military Council, the umbrella rebel organization whose formation the West had hoped would sideline radical groups, is stocked with commanders who want to infuse Islamic law into a future Syrian government. Nowhere in rebel-controlled Syria is there a secular fighting force to speak of.

BBC News, May 6, 2013:

http://www.bbc.com/news/world-middle-east-22424188

Testimony from victims of the conflict in Syria suggests rebels have used the nerve agent, sarin, a leading member of a UN commission of inquiry has said.

Washington Times, May 6, 2013:

http://www.washingtontimes.com/news/2013/may/6/syrian-rebels-used-sarin-nerve-gas-not-assads-regi/

Testimony from victims strongly suggests it was the rebels, not the Syrian government, that used Sarin nerve gas during a recent incident in the revolution-wracked nation, a senior U.N. diplomat said Monday.

The Guardian, May 8, 2013:                                             

http://www.theguardian.com/world/2013/may/08/free-syrian-army-rebels-defect-islamist-group

Syria’s main armed opposition group, the Free Syrian Army (FSA), is losing fighters and capabilities to Jabhat al-Nusra, an Islamist organisation with links to al-Qaida that is emerging as the best-equipped, financed and motivated force fighting Bashar al-Assad’s regime. […]

Illustrating their plight, FSA commanders say that entire units have gone over to al-Nusra while others have lost a quarter or more of their strength to them recently. “Fighters feel proud to join al-Nusra because that means power and influence,” said Abu Ahmed, a former teacher from Deir Hafer who now commands an FSA brigade in the countryside near Aleppo. “Al-Nusra fighters rarely withdraw for shortage of ammunition or fighters and they leave their target only after liberating it,” he added. “They compete to carry out martyrdom [suicide] operations.” Abu Ahmed and others say the FSA has lost fighters to al-Nusra in Aleppo, Hama, Idlib and Deir al-Zor and the Damascus region. Ala’a al-Basha, commander of the Sayyida Aisha brigade, warned the FSA chief of staff, General Salim Idriss, about the issue last month. Basha said 3,000 FSA men have joined al-Nusra in the last few months, mainly because of a lack of weapons and ammunition. […]

Al-Nusra has members serving undercover with FSA units so they can spot potential recruits, according to Abu Hassan of the FSA’s al-Tawhid Lions brigade. […]

Western governments say they are aware of the al-Nusra problem, which is being monitored by intelligence agencies, but they are uncertain about its extent.

Reuters, June 19, 2013:

http://www.reuters.com/article/2013/06/19/us-syria-rebels-islamists-specialreport-idUSBRE95I0BC20130619

It’s a pattern repeated elsewhere in the country. During a 10-day journey through rebel-held territory in Syria, Reuters journalists found that radical Islamist units are sidelining more moderate groups that do not share the Islamists’ goal of establishing a supreme religious leadership in the country. […]

Many pledge allegiance to the notion of a unified Free Syrian Army (FSA). But on the ground there is little evidence to suggest the FSA actually exists as a body at all. […]

So far the Islamist groups have been the ones to attract outside support, mostly from private Sunni Muslim backers in Saudi Arabia, according to fighters in Syria. […]

The moderates are losing ground. In many parts of rebel-held Aleppo, the red, black and green revolutionary flag which represents more moderate elements has been replaced with the black Islamic flag. Small shops selling black headbands, conservative clothing and black balaclavas have popped up around the city and their business is booming. Reuters met several Islamist fighters who had left more moderate rebel brigades for hardline groups. One member of Ahrar al-Sham, who would only speak on condition of anonymity, said: “I used to be with the Free Syrian Army but they were always thinking about what they wanted to do in future. I wanted to fight oppression now.”

Los Angeles Times, June 21, 2013:

http://articles.latimes.com/2013/jun/21/world/la-fg-cia-syria-20130622

CIA operatives and U.S. special operations troops have been secretly training Syrian rebels with anti-tank and antiaircraft weapons since late last year, months before President Obama approved plans to begin directly arming them, according to U.S. officials and rebel commanders. The covert U.S. training at bases in Jordan and Turkey, along with Obama’s decision this month to supply arms and ammunition to the rebels, has raised hope among the beleaguered Syrian opposition that Washington ultimately will provide heavier weapons as well. […]

The training began in November at a new American base in the desert in southwestern Jordan, he said. So far, about 100 rebels from Dara have attended four courses, and rebels from Damascus, the Syrian capital, have attended three, he said. […]

But arms shipments from Qatar, Saudi Arabia and other Arab countries, provided with assent from the Americans, took months to arrive and included less than the rebels had expected.

The Telegraph, August 2, 2013:

http://www.telegraph.co.uk/news/worldnews/africaandindianocean/libya/10218288/CIA-running-arms-smuggling-team-in-Benghazi-when-consulate-was-attacked.html

Up to 35 CIA operatives were working in the city during the attack last September on the US consulate that resulted in the death of Ambassador Chris Stevens and three other Americans, according to CNN.” […]

The television network said that a CIA team was working in an annex near the consulate on a project to supply missiles from Libyan armouries to Syrian rebels. Sources said that more Americans were hurt in the assault spearheaded by suspected Islamic radicals than had been previously reported. CIA chiefs were actively working to ensure the real nature of its operations in the city did not get out. So only the losses suffered by the State Department in the city had been reported to Congress.

The Independent, August 27, 2013:

http://www.independent.co.uk/voices/comment/does-obama-know-hes-fighting-on-alqaidas-side-8786680.html

If Barack Obama decides to attack the Syrian regime, he has ensured – for the very first time in history – that the United States will be on the same side as al-Qa’ida. […]

Maybe the Americans should ask al-Qa’ida for intelligence help – after all, this is the group with “boots on the ground”, something the Americans have no interest in doing. And maybe al-Qa’ida could offer some target information facilities to the country which usually claims that the supporters of al-Qa’ida, rather than the Syrians, are the most wanted men in the world.

Washington Post, September 11, 2013:

https://www.washingtonpost.com/world/national-security/cia-begins-weapons-delivery-to-syrian-rebels/2013/09/11/9fcf2ed8-1b0c-11e3-a628-7e6dde8f889d_story.html 

The CIA has begun delivering weapons to rebels in Syria, ending months of delay in lethal aid that had been promised by the Obama administration, according to U.S. officials and Syrian figures. The shipments began streaming into the country over the past two weeks, along with separate deliveries by the State Department of vehicles and other gear — a flow of material that marks a major escalation of the U.S. role in Syria’s civil war. […]

The CIA shipments are to flow through a network of clandestine bases in Turkey and Jordan that were expanded over the past year as the agency sought to help Middle Eastern allies, including Saudi Arabia and Qatar, direct weapons to moderate Syrian rebel forces.

Foreign Affairs (CFR), January 23, 2014:

https://www.foreignaffairs.com/articles/syria/2014-01-23/good-and-bad-ahrar-al-sham

“The Good and Bad of Ahrar al-Sham, An al Qaeda–Linked Group Worth Befriending”

New York Times, January 28, 2014:

http://www.nytimes.com/2014/01/29/world/middleeast/rebels-in-syria-claim-control-of-resources.html

Islamist rebels and extremist groups have seized control of most of Syria’s oil and gas resources, a rare generator of cash in the country’s war-battered economy, and are now using the proceeds to underwrite their fights against one another as well as President Bashar al-Assad, American officials say. While the oil and gas fields are in serious decline, control of them has bolstered the fortunes of the Islamic State of Iraq and Syria, or ISIS, and the Nusra Front, both of which are offshoots of Al Qaeda.

The Independent, April 2, 2014:

http://www.independent.co.uk/news/world/middle-east/i-am-not-fighting-againstalqaida-itsnot-our-problem-says-wests-last-hope-in-syria-9233424.html

The rebel leader touted as the West’s last hope to stem the tide of extreme jihadist groups in Syria has said he will not fight against al-Qa’ida, and openly admits to battling alongside them. Speaking from a safe house on the outskirts of the Turkish town of Antakya, Jamal Maarouf, the leader of the Syrian Revolutionary Front (SRF) told The Independent that the fight against al-Qa’ida was “not our problem” and admitted his fighters conduct joint operations with Jabhat al-Nusra – the official al-Qa’ida branch in Syria.

The Telegraph, June 25, 2014:

http://www.telegraph.co.uk/news/worldnews/al-qaeda/10925602/Al-Qaeda-merges-with-Isis-at-Syria-Iraq-border-town.html

Al-Qaeda’s Syrian offshoot has issued a loyalty pledge to Isis at a remote town on the Iraqi border, a monitor said.[…]

After months of clashes between the two sides, al-Qaeda’s official Syrian arm the al-Nusra Front “pledged loyalty to Isis” in Albu Kamal, said Observatory director Rami Abdel Rahman.

Washington Post, June 26, 2014:

https://www.washingtonpost.com/world/national-security/obama-backs-us-military-training-for-syrian-rebels/2014/06/26/ead59104-fd62-11e3-932c-0a55b81f48ce_story.html?wpisrc=al_comboPN

The Obama administration asked Congress on Thursday to authorize $500 million in direct U.S. military training and equipment for Syrian opposition fighters, a move that could significantly escalate U.S. involvement in Syria’s civil war. Money for the assistance, which would expand a CIA covert training program, is included in a $65.8 billion request for the Pentagon’s Overseas Contingency Operations, or OCO.

Brookings Institute, September/October 2014 Issue:

http://www.brookings.edu/research/opinions/2014/09/02-army-defeat-assad-syria-pollack

The cons begin with the simple fact that the United States has no interests in Syria itself. Syria is not an oil producer, a major U.S. trade partner, or even a democracy. […]

But there is, in fact, a way that the United States could get what it wants in Syria — and, ultimately, in Iraq as well — without sending in U.S. forces: by building a new Syrian opposition army capable of defeating both President Bashar al-Assad and the more militant Islamists. The United States has pulled off similar operations before and could probably do so again, and at far lower cost than what it has spent in Afghanistan and Iraq. […]

Second, any proposal must provide for the defeat of both the Assad regime and the most radical Islamist militants, since both threaten U.S. interests. […]

Recruiting Syrian army personnel would be the first task.

Bloomberg, September 25, 2014:

http://www.bloomberg.com/news/articles/2014-09-25/syria-to-ukraine-wars-send-u-s-defense-stocks-to-records

Led by Lockheed Martin Corp., the biggest U.S. defense companies are trading at record prices as shareholders reap rewards from escalating military conflicts around the world. Investors see rising sales for makers of missiles, drones and other weapons as the U.S. hits Islamic State fighters in Syria and Iraq, said Jack Ablin, chief investment officer at Chicago-based BMO Private Bank. President Barack Obama approved open-ended airstrikes this month while ruling out ground combat. […]

Lockheed, the world’s biggest defense company, reached an all-time high of $180.74 on Sept. 19, when Northrop, Raytheon Co. and General Dynamics Corp. also set records. That quartet and Chicago-based Boeing accounted for about $105 billion in federal contract orders last year, according to data compiled by Bloomberg Government.

Washington Post, October 6, 2014:

https://www.washingtonpost.com/news/worldviews/wp/2014/10/06/behind-bidens-gaffe-some-legitimate-concerns-about-americas-middle-east-allies/

During a question and answer session at Harvard University’s Kennedy School of Government last week, Vice President Biden somehow managed to anger some of the U.S.’s most vital allies in the fight against Islamic State.

Biden has now apologized to both the United Arab Emirates and Turkey for the comments, but to anyone who has been following the conventional wisdom in foreign policy circles, it’s not surprising that he would think this privately (even if it is surprising that he would say so publicly). […]

The vice president’s comments may be a “gaffe” in diplomacy – and, yes, his comments do reveal a worrying habit of lumping al-Qaeda’s al-Nusra Front in with Islamic State and not noting the difference between private and public funding at play here. But there are genuine, though complicated, concerns at the heart of this gaffe.

Here is a FULL transcription of Joe Biden’s now infamous “gaffe”:

The idea of identifying a moderate middle has been a chase America has been engaged in for a long time. We Americans think in every country in transition there’s a Thomas Jefferson hiding behind some rock or a James Madison beyond one sand dune.

The fact of the matter is the ability to identify a moderate middle in Syria was… [hesitation] there was no moderate middle because the moderate middle is made up of shopkeepers, not soldiers, made up of people who in fact have ordinary elements of the middle class of that country.

And what happened was, and history will record this because I’m finding that former administration officials as soon as they leave, write books, which I think is inappropriate. But any rate. [audience laughter] No I’m serious, I do think it’s in appropriate. At least give the guy a chance to get out of office. And what my constant cry was… was that our biggest problem was our allies.

Our allies in the region were our largest problem in Syria. The Turks were great friends, and I have a great relationship with Erdogan, [who] I just spent a lot of time with, [and] the Saudis, the Emirates, etcetera.

What were they doing? They were so determined to take down Assad, and essentially have a proxy Sunni-Shia war, what did they do? They poured hundreds of millions of dollars and thousands of tons of weapons into anyone who would fight against Assad – except that the people who were being supplied were al-Nusra and al-Qaeda, and the extremist elements of jihadis coming from other parts of the world.

Now, you think I’m exaggerating? Take a look. Where did all of this go? So now that’s happening, all of a sudden, everybody’s awakened because this outfit called ISIL, which was al-Qaeda in Iraq, when they were essentially thrown out of Iraq, found open space and territory in eastern Syria, [and they] work with al-Nusra, who we declared a terrorist group early on. And we could not convince our colleagues to stop supplying them.

So what happened? Now, all of a sudden – I don’t want to be too facetious – but they have seen the lord. Now we have … been able to put together a coalition of our Sunni neighbours, because America can’t once again go into a Muslim nation and be the aggressor. It has to be led by Sunnis. To go and attack a Sunni organization. And so what do we have for the first time?

Now Saudi Arabia stops funding. Saudi Arabia’s allowing training on its soil. American forces under Title 10 training. The Qataris have cut-off their support for the most extremist elements of the terrorist organisations. And the Turks, President Erdogan told me – he’s an old friend – said “you’re right, we let too many people through.” Now they’re trying to seal their border.

The same Washington Post article includes an oddly bowdlerised transcription of Biden’s speech which is cut short and missing the final highlighted paragraph, which it claims was lost because “the White House recording cuts out”. The article then adds:

Other accounts, however, suggest he went further. According to Hurriyet Daily News, Biden also said:

President Erdoğan told me, he is an old friend, said you were right, we let too many people through, now we are trying to seal the border.

But as you see from the video above, in actual fact Biden’s remarks are significantly different to those reported by Hurriyet Daily News (a Turkish news source). His true statement also contains embarrassing admissions that would certainly have strained US relations with its two closest Gulf allies – hence the rapid apologies and retractions.

Brookings Institute, November 7, 2014:

http://www.brookings.edu/blogs/up-front/posts/2014/11/07-big-questions-islamic-state-threat-hein

Rather than defeat, containing their activities within failed or near-failing states is the best option for the foreseeable future. […]

There is a parallel here between the war on Islamic extremists and the war on drugs: the absolute end-states for both may be unachievable, but that in no way diminishes the need to execute counter operations. Some wars cannot be won but still must be fought. There are other hard questions for even bigger threats in the Middle East, such as how to ensure a nuclear free Iran and how to deal with the Assad regime in Syria. For ISIS, though, we may have it right.

The Telegraph, February 17, 2015:

http://www.telegraph.co.uk/news/worldnews/middleeast/syria/11419243/Moderate-Syrian-rebels-to-be-given-power-to-call-in-US-air-strikes.html

The US and Turkey have reached a tentative deal to train and equip moderate Syrian rebels, according to officials from both countries, amid reports that commanders will be given authority to call in air strikes. […]

At the same time The Wall Street Journal reported that some rebels will be equipped with pick-up trucks modified with mounted machine guns as well as radios for calling in US airstrikes – an approach modelled on that used to successful effect by Kurdish forces in Kobane last month.

The Independent, February 17, 2015:

http://www.independent.co.uk/news/world/africa/sudans-president-claims-cia-and-mossad-stand-behind-isis-and-boko-haram-10051024.html

Sudan’s President has claimed the CIA, America’s intelligence agency, and Israel’s Mossad are behind the Islamist militant groups Boko Haram and Isis.

Foreign Affairs (CFR), March 9, 2015:

https://www.foreignaffairs.com/articles/middle-east/2015-03-09/accepting-al-qaeda

Since 9/11, Washington has considered al Qaeda the greatest threat to the United States, one that must be eliminated regardless of cost or time. After Washington killed Osama bin Laden in 2011, it made Ayman al-Zawahiri, al Qaeda’s new leader, its next number one target. But the instability in the Middle East following the Arab revolutions and the meteoric rise of the Islamic State of Iraq and al-Sham (ISIS) require that Washington rethink its policy toward al Qaeda, particularly its targeting of Zawahiri. Destabilizing al Qaeda at this time may in fact work against U.S. efforts to defeat ISIS. […]

It is certainly ironic that at this point, when the United States is the closest it has ever been to destroying al Qaeda, its interests would be better served by keeping the terrorist organization afloat and Zawahiri alive.

The Guardian, June 1 2015:

http://www.theguardian.com/uk-news/2015/jun/01/trial-swedish-man-accused-terrorism-offences-collapse-bherlin-gildo

The prosecution of a Swedish national [Bherlin Gildo, 37] accused of terrorist activities in Syria has collapsed at the Old Bailey after it became clear Britain’s security and intelligence agencies would have been deeply embarrassed had a trial gone ahead, the Guardian can reveal.

His lawyers argued that British intelligence agencies were supporting the same Syrian opposition groups as he was, and were party to a secret operation providing weapons and non-lethal help to the groups, including the Free Syrian Army. […]

Gildo’s defence lawyers quoted a number of press articles referring to the supply of arms to Syrian rebels, including one from the Guardian on 8 March 2013, on the west’s training of Syrian rebels in Jordan. Articles on the New York Times from 24 March and 21 June 2013, gave further details and an article in the London Review of Books from 14 April 12014, implicated MI6 in a “rat line” for the transfer of arms from Libya. […]

The attorney general was consulted about Monday’s decision. Karmy-Jones [for the crown] told the court in pre-trial hearings that Gildo had worked with Jabhat al-Nusra, a “proscribed group considered to be al-Qaida in Syria”. He was photographed standing over dead bodies with his finger pointing to the sky.

The Guardian, June 3, 2015:

http://www.theguardian.com/commentisfree/2015/jun/03/us-isis-syria-iraq

Reports were cited that MI6 had cooperated with the CIA on a “rat line” of arms transfers from Libyan stockpiles to the Syrian rebels in 2012 after the fall of the Gaddafi regime. […]

A revealing light on how we got here has now been shone by a recently declassified secret US intelligence report, written in August 2012, which uncannily predicts – and effectively welcomes – the prospect of a “Salafist principality” in eastern Syria and an al-Qaida-controlled Islamic state in Syria and Iraq.

In stark contrast to western claims at the time, the Defense Intelligence Agency document identifies al-Qaida in Iraq (which became Isis) and fellow Salafists as the “major forces driving the insurgency in Syria” – and states that “western countries, the Gulf states and Turkey” were supporting the opposition’s efforts to take control of eastern Syria. Raising the “possibility of establishing a declared or undeclared Salafist principality”, the Pentagon report goes on, “this is exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime, which is considered the strategic depth of the Shia expansion (Iraq and Iran)”. […]

That doesn’t mean the US created Isis, of course, though some of its Gulf allies certainly played a role in it – as the US vice-president, Joe Biden, acknowledged last year. But there was no al-Qaida in Iraq until the US and Britain invaded. And the US has certainly exploited the existence of Isis against other forces in the region as part of a wider drive to maintain western control.

Reuters, June 22, 2015:

http://www.reuters.com/article/2015/06/22/us-mideast-crisis-syria-usa-idUSKBN0P22BX20150622

Syrian rebels receiving U.S. military training to battle Islamic State militants are being paid $250 to $400 per month, depending on their skills, performance and leadership position, the Pentagon said on Monday.

Brookings Institute, June 23, 2015:

http://www.brookings.edu/~/media/research/files/papers/2015/06/23-syria-strategy-ohanlon/23syriastrategyohanlon.pdf

Training opposition fighters in the safety of Turkey, Jordan, and other friendly countries would still be the first step. But it  would not over time be sufficient, either, since many opposition fighters are reluctant to leave their home territories and thereby leave their families  and  communities  unprotected in  order  to  go  abroad  for  training. The idea would be to help moderate elements establish reliable safe zones within Syria once they were able. American, as well as Saudi and Turkish and British and Jordanian and other Arab forces would act in support, not only from the air but eventually on the ground via the presence of special forces as well. […]

This type of plan may be the only realistic path forward… Moreover, while it is not without risks for the United States, the scale of military involvement envisioned is not substantially greater than what we have been doing the last year or so in Afghanistan. President Obama…. should not view Syria as a problem to hand to his successor, but rather a crisis that demands his attention and a new strategy now.

Wall Street Journal, June 25, 2015:

http://www.wsj.com/articles/to-many-iraqis-u-s-is-not-really-seeking-to-defeat-islamic-state-1435224647

“We all know that America is providing ISIS with weapons and food, and that it is because of American backing that they have become so strong,” added Abbas Hashem, a 50-year-old who also escaped from Ramadi and now lives in the makeshift Baghdad camp that is only occasionally supplied with water. Such conspiracy theories about America’s support for Islamic State are outlandish, no doubt. But they are so widespread that they now represent a political reality with real-world consequences—making it harder for the U.S. and allies to cobble together Iraqi forces that could regain the country’s Sunni heartland from Islamic State’s murderous rule one day. […]

This spreading perception that the U.S. isn’t really interested in defeating Islamic State has undermined local resistance to the militant group in Anbar in recent months. It represents a major obstacle to recruiting local Sunni tribes—one of the U.S. strategies in the war—provincial leaders say. […]

“We don’t have any trust in Americans anymore,” said Alia Nusseif, a prominent Shiite lawmaker from Baghdad. “We now think ISIS is being used as a tool by America to divide and weaken Iraq.”

New York Times, August 25, 2015:

http://www.nytimes.com/2015/08/26/world/middleeast/pentagon-investigates-allegations-of-skewed-intelligence-reports-on-isis.html?_r=1

The Pentagon’s inspector general is investigating allegations that military officials have skewed intelligence assessments about the United States-led campaign in Iraq against the Islamic State to provide a more optimistic account of progress, according to several officials familiar with the inquiry.

*

ii) Timeline for the Gulf States from 2012

Saudi Gazette, February 11, 2012:

http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentID=20120207117076

The six-nation Gulf Cooperation Council (GCC) will soon recognize the Free Syrian Army as the sole and legitimate representative of the Syrian people, a high-ranking official in Bahrain told the Saudi Gazette.

The Independent, February 23, 2012:

http://www.independent.co.uk/news/world/middle-east/rebel-forces-armed-by-wealthy-exiles-7320510.html

As Syria slides towards a civil war, a wealthy Syrian exile is racing to provide additional arms and ammunition to the loosely organised bands of rebels fighting under the umbrella of the Free Syrian Army (FSA). Abu Qotaiba, a nom de guerre, has lived for the past 19 years in a wealthy Gulf country. He told The Independent he was buying weapons from arms dealers in Lebanon, Iraq and Jordan and sending them into Syria, despite the cost of an AK-47 rising from about $300 to about $1,500. “Now is a chance for [dealers] to sell them at a high price,” Abu Qotaiba said. Earlier this week, US Senator John McCain told reporters that there were ways to get weapons to the Syrian opposition without direct US involvement.

“People that are being massacred deserve to have the ability to defend themselves,” he said. […]

The FSA has proved successful at getting hold of arms, he said. Syrian security forces can no longer go wherever they wanted in the country, especially inside cities such as Homs and Idlib because some streets were controlled by the FSA. Abu Qotaiba refused to say where the Libyan weapons came from, only denying that the arms were provided by Libya’s National Transitional Council. They came “through some revolutionaries,” he said. “There are many Libyan people trying to help. They want to return the slap to Bashar because he supported Gaddafi. They have lived our situation.”

CNN, February 23, 2012:

http://www.cnn.com/2012/02/23/world/meast/syria-unrest/index.html?_s=PM:MIDDLEEAST

Diplomatic sources told CNN that a number of Arab nations are supplying arms to the Syrian opposition. The sources wouldn’t identify which countries.

Al-Arabiya News, February 27, 2012:

http://english.alarabiya.net/articles/2012/02/27/197380.html

In other news, Qatar’s prime minister said Monday he was in favor of delivering arms to the Syrian opposition that is battling President Bashar al-Assad’s regime. “We should do whatever necessary to help them, including giving them weapons to defend themselves,” Sheikh Hamad bin Jassim Al-Thani said during an official visit to Norway.

Washington Post, May 15, 2012:

https://www.washingtonpost.com/world/national-security/syrian-rebels-get-influx-of-arms-with-gulf-neighbors-money-us-coordination/2012/05/15/gIQAds2TSU_story.html

Syrian rebels battling the regime of President Bashar al-Assad have begun receiving significantly more and better weapons in recent weeks, an effort paid for by Persian Gulf nations and coordinated in part by the United States, according to opposition activists and U.S. and foreign officials. […]

Material is being stockpiled in Damascus, in Idlib near the Turkish border and in Zabadani on the Lebanese border. Opposition activists who two months ago said the rebels were running out of ammunition said this week that the flow of weapons — most still bought on the black market in neighboring countries or from elements of the Syrian military — has significantly increased after a decision by Saudi Arabia, Qatar and other gulf states to provide millions of dollars in funding each month. Syria’s Muslim Brotherhood also said it has opened its own supply channel to the rebels, using resources from wealthy private individuals and money from gulf states, including Saudi Arabia and Qatar, said Mulham al-Drobi, a member of the Brotherhood’s executive committee.

Time Magazine, September 18, 2012:

http://world.time.com/2012/09/18/syrias-secular-and-islamist-rebels-who-are-the-saudis-and-the-qataris-arming/

As TIME reports here, disorder and distrust plague two of the rebels’ international patrons: Saudi Arabia and Qatar. The two Gulf powerhouses are no longer on the same page when it comes to determining who among the plethora of mushrooming Syrian rebel groups should be armed. The rift surfaced in August, with the alleged Saudi and Qatari representatives in charge of funneling free weaponry to the rebels clearly backing different factions among the groups — including various shades of secular and Islamist militias — under the broad umbrella that is the Free Syrian Army (FSA).

Huffington Post, September 21, 2012:

http://www.huffingtonpost.com/2012/09/21/switzerland-hand-grenades-syria_n_1904516.html

An investigation has concluded that Swiss hand grenades exported to the United Arab Emirates several years ago found their way to Syria after being given to Jordan, the Swiss government said Friday.

Switzerland set up a joint commission in July with the UAE to investigate whether grenades exported to the Gulf nation were sent on to Syria. The move came after a newspaper published a photograph indicating a Swiss-made grenade was found with Syrian rebels.

Washington Post, June 15, 2013:

https://www.washingtonpost.com/world/national-security/private-money-pours-into-syrian-conflict-as-rich-donors-pick-sides/2013/06/15/67841656-cf8a-11e2-8845-d970ccb04497_story.html

The private funding of individual militias — some with extremist views — further complicates the task facing the Obama administration as it ventures into arming Syria’s rebels. With its decision to increase support for the Syrian opposition, Washington is seeking to influence a patchwork of militia groups with wildly different abilities and views about how Syria should be run after the war.

From Persian Gulf cities hundreds of miles from the battlefield, wealthy patrons help decide which of Syria’s hundreds of rebel groups will receive money to pay salaries and buy weapons and supplies for the fight against the government of President Bashar al-Assad.

In practice, these donors overwhelmingly back Islamist groups whose ultraconservative views reflect their own, intelligence officials and analysts say.

The Telegraph, June 19, 2013:

http://www.telegraph.co.uk/news/worldnews/middleeast/syria/10131063/Syrian-rebels-get-first-heavy-weapons-on-the-front-line-of-Aleppo.html

Rebel sources said Russian-made “Konkurs” anti-tank missiles had been supplied by America’s key Gulf ally, Saudi Arabia. They have already been used to destructive effect and may have held up a promised regime assault on Aleppo. A handful of the missiles were already in use and in high demand after opposition forces looted them from captured regime bases. More have now arrived, confirming reports that the White House has lifted an unofficial embargo on its Gulf allies sending heavy weapons to the rebels […]

“We now have supplies from Saudi Arabia,” a rebel source said. “We have been told more weapons are on their way, even higher-end missiles.”

Brookings Institute, December 2013:

From an analysis paper entitled Playing with Fire: Why Private Gulf Financing for Syria’s Extremist Rebels Risks Igniting Sectarian Conflict at Home by Elizabeth Dickinson.

http://www.brookings.edu/~/media/research/files/papers/2013/12/06%20private%20gulf%20financing%20syria%20extremist%20rebels%20sectarian%20conflict%20dickinson/private%20gulf%20financing%20syria%20extremist%20rebels%20sectarian%20conflict%20dickinson.pdf

Over the last two and a half years, Kuwait has emerged as a financing and organizational hub for charities and individuals supporting Syria’s myriad rebel groups. These donors have taken advantage of Kuwait’s unique freedom of association and its relatively weak financial rules to channel money to some of the estimated 1,000 rebel brigades now fighting against Syrian president Bashar al-Asad. […]

From the early days of the Syrian uprising, Kuwait-based donors—including one group currently under U.S.sanction for terrorist financing—began to pressure Syrians to take up arms. The new brigades often adopted the ideological outlook of their donors. As the war dragged on and the civilian death toll rose, the path toward extremism became self-reinforcing. Today, there is evidence that Kuwaiti donors have backed rebels who have committed atrocities and who are either directly linked to al-Qa’ida or cooperate with its affiliated brigades on the ground.

Haaretz, February 24, 2014:

http://www.haaretz.com/news/middle-east/.premium-1.576083

U.S., Saudi Arabia and Jordan are reportedly helping rebels plan attack starting in south and spreading to Damascus. […]

According to reports in the Syrian media and on websites run by the opposition, Jordan is replacing – or perhaps has already replaced – Turkey as the rebels’ new base of operations. […]

Meanwhile, the United States is constructing runways for reconnaissance aircraft near the border between Jordan and Syria, and in recent weeks Saudi Arabia has flown weaponry and ammunition purchased in Ukraine to bases in Jordan.

Reuters, March 9. 2014:

http://www.reuters.com/article/2014/03/09/us-iraq-saudi-qatar-idUSBREA2806S20140309

Iraqi Prime Minister Nouri al-Maliki has accused Saudi Arabia and Qatar of openly funding the Sunni Muslim insurgents his troops are battling in western Anbar province, in his strongest such statement since fighting started there early this year. […]

“I accuse them of leading an open war against the Iraqi government. I accuse them of openly hosting leaders of al Qaeda and Takfirists (extremists),” he said in the interview when asked about possible Saudi and Qatari links to the violence.

Maliki has long had chilly relations with the Gulf states, who view him as too close to Iran, and has long suspected them of funding al Qaeda-linked groups in order to bring down his Shi’ite-led government.

He accused the Saudi government of allowing “commissions” there “to attract Jihadists, to lure them, to get them fighting in Iraq”.

He also blamed both countries for launching Syria’s three-year civil war through al Qaeda-linked groups that now operate on both sides of the Iraqi-Syrian border, next to Anbar.

“They are attacking Iraq through Syria indirectly. They absolutely started the war in Iraq, they started the war in Syria,” Maliki said. ISIL has been one of the biggest fighting forces in Syria’s civil war.

“Saudi Arabia supports terrorism against the world, Syria, Iraq, Egypt and Libya.”

Both Saudi Arabia and Qatar have played an activist role in the Syria war, supporting armed groups fighting President Bashar Assad. They both deny supporting al Qaeda.

New York Times, March 24, 2014:

http://www.nytimes.com/2013/03/25/world/middleeast/arms-airlift-to-syrian-rebels-expands-with-cia-aid.html?pagewanted=all&_r=0

With help from the C.I.A., Arab governments and Turkey have sharply increased their military aid to Syria’s opposition fighters in recent months, expanding a secret airlift of arms and equipment for the uprising against President Bashar al-Assad. […]

Although rebel commanders and the data indicate that Qatar and Saudi Arabia had been shipping military materials via Turkey to the opposition since early and late 2012… Simultaneously, arms and equipment were being purchased by Saudi Arabia in Croatia and flown to Jordan on Jordanian cargo planes for rebels working in southern Syria and for retransfer to Turkey for rebels groups operating from there, several officials said.

Raw Story, August 20, 2014:

http://www.rawstory.com/2014/08/german-minister-accuses-qatar-of-funding-islamic-state-fighters/

German Development Minister Gerd Mueller accused Qatar on Wednesday of financing Islamic State militants […]

In March, David Cohen, the U.S. Treasury Under Secretary for Terrorism and Financial Intelligence, cited reports of Qatari backing for Islamist fighters in Syria and described this as a “permissive jurisdiction” for donors funding militants.

BBC news, September 1, 2014:

CAUTION!!! Before reading further, please note that the author of this article is Michael Stephens, director of the Royal United Services Institute in Qatar.

http://www.bbc.co.uk/news/world-middle-east-29004253

It is true that some wealthy individuals from the Gulf have funded extremist groups in Syria, many taking bags of cash to Turkey and simply handing over millions of dollars at a time.

This was an extremely common practice in 2012 and 2013 but has since diminished and is at most only a tiny percentage of the total income that flows into Islamic State coffers in 2014.

It is also true that Saudi Arabia and Qatar, believing that Syrian President Bashar al-Assad would soon fall and that Sunni political Islam was a true vehicle for their political goals, funded groups that had strongly Islamist credentials.

Liwa al-Tawhid, Ahrar al-Sham, Jaish al-Islam were just such groups, all holding tenuous links to the “bad guy” of the time – the al-Nusra Front, al-Qaeda’s wing in Syria. […]

So has Qatar funded Islamic State? Directly, the answer is no. Indirectly, a combination of shoddy policy and naivety has led to Qatar-funded weapons and money making their way into the hands of IS.

Saudi Arabia likewise is innocent of a direct state policy to fund the group, but as with Qatar its determination to remove Mr Assad has led to serious mistakes in its choice of allies.

Both countries must undertake some soul searching at this point, although it is doubtful that any such introspection will be admitted in public.

BBC news, October 7, 2014:

http://www.bbc.co.uk/news/world-us-canada-29528482

“Our biggest problem was our allies,” [US Vice President] Mr Biden told students at the Harvard Kennedy School.

“The Turks… the Saudis, the Emirates, etc, what were they doing? They were so determined to take down (Syrian President Bashar al) Assad and essentially have a proxy Sunni-Shia war, what did they do? They poured hundreds of millions of dollars and tens, thousands of tonnes of weapons into anyone who would fight against Assad.”

These policies ended up helping militants linked to al-Qaeda and ultimately IS, he said.

Reuters, March 4, 2015:

http://uk.reuters.com/article/2015/03/04/uk-mideast-crisis-nusra-insight-idUKKBN0M00G620150304

Leaders of Syria’s Nusra Front are considering cutting their links with al Qaeda to form a new entity backed by some Gulf states trying to topple President Bashar al-Assad, sources said. Sources within and close to Nusra said that Qatar, which enjoys good relations with the group, is encouraging the group to go ahead with the move, which would give Nusra a boost in funding. […]

The Nusra Front is listed as a terrorist group by the United States and has been sanctioned by the United Nations Security Council. But for Qatar at least, rebranding Nusra would remove legal obstacles to supporting it. […]

But if Nusra is dissolved and it abandons al Qaeda, the ideology of the new entity is not expected to change. [The leader of Nusra, Abu Mohamad al-] Golani fought with al Qaeda in Iraq. Some other leaders fought in Afghanistan and are close al Qaeda chief Ayman Zawahri.

BBC News, March 6, 2015:

http://www.bbc.com/news/world-middle-east-31764114

Being a directly affiliated al-Qaeda group, the Nusra Front is nearer the IS end of the spectrum. Yet, while the Qatari relationship with the Nusra Front appears to be far from straightforward with some of the state’s initiatives failing, indicating some distance between the two, according to recent reports, Qatar appears to want to reform this relationship. This begs the question of why Qatar would want even loosely to associate itself with a group like the Nusra Front. […]

Secondly, the Nusra Front has pledged to concentrate its efforts on removing the Bashar al-Assad government, as opposed to attacking the “far enemy” (ie Western states)… This is why Qatar is hoping to bring the Nusra Front in from the cold.

If the state can get the group to eschew its al-Qaeda affiliation and adhere to a broadly moderate Islamist platform, Qatar can officially commence, with Western blessing, the supply of one of the most effective fighting forces in Syria. […]

But the fact remains that Qatar is a key Western ally. It hosts a critical US military base, it grafted US and UK higher-education institutions and ideas onto its education system, and has long promoted the Middle East’s most visible and powerful woman, Sheikha Mozah bint Nasser al-Missned, the Emir’s mother. These are transparently not the policies of a state with sympathies for the likes of IS or al-Qaeda. Indeed, there is no chance that Qatar is doing this alone: the US and UK governments will certainly be involved in or at least apprised of Qatar’s plans.

*

iii) Timeline for Turkey from 2011

The Telegraph, November 27, 2011:

http://www.telegraph.co.uk/news/worldnews/africaandindianocean/libya/8919057/Leading-Libyan-Islamist-met-Free-Syrian-Army-opposition-group.html

Abdulhakim Belhadj, head of the Tripoli Military Council and the former leader of the Libyan Islamic Fighting Group, “met with Free Syrian Army leaders in Istanbul and on the border with Turkey,” said a military official working with Mr Belhadj. “Mustafa Abdul Jalil (the interim Libyan president) sent him there. […]

The meetings came as a sign of a growing ties between Libya’s fledgling government and the Syrian opposition. The Daily Telegraph on Saturday revealed that the new Libyan authorities had offered money and weapons to the growing insurgency against Bashar al-Assad.

[bold emphasis as original]

New York Times, June 21, 2012:

http://www.nytimes.com/2012/06/21/world/middleeast/cia-said-to-aid-in-steering-arms-to-syrian-rebels.html?pagewanted=all

A small number of C.I.A. officers are operating secretly in southern Turkey, helping allies decide which Syrian opposition fighters across the border will receive arms to fight the Syrian government, according to American officials and Arab intelligence officers.

The Telegraph, July 12, 2012:

http://www.telegraph.co.uk/news/worldnews/middleeast/syria/9396256/Al-Qaeda-tries-to-carve-out-a-war-for-itself-in-Syria.html

The Daily Telegraph has seen al-Qaeda’s flag flying openly in some areas of Idlib and Aleppo provinces that straddle the borders with Turkey and Iraq and fighters in the rebel Free Syrian Army have told how representatives of the militant group have tried in past months to win control of towns and villages.

Wall Street Journal, July 26, 2012:

http://www.wsj.com/articles/SB10000872396390443343704577551281530782466

Al Qaeda in Syria (often operating as the “Al Nusra Front for the People of the Levant”) is using traffickers—some ideologically aligned, some motivated by money—to secure routes through Turkey and Iraq for foreign fighters, most of whom are from the Middle East and North Africa. A growing number of donors from the Persian Gulf and Levant appear to be sending financial support, according to U.S. Treasury Department officials I interviewed.

The Globe and Mail, August 2, 2012:

http://www.theglobeandmail.com/news/world/obama-authorizes-secret-cia-support-for-syrian-rebels/article4457317/

President Barack Obama has signed a secret order authorizing U.S. support for rebels seeking to depose Syrian President Bashar al-Assad and his government, U.S. sources familiar with the matter said. […]

A U.S. government source acknowledged that under provisions of the presidential finding, the United States was collaborating with a secret command center operated by Turkey and its allies. […]

Turkey’s moderate Islamist government has been demanding Assad’s departure with growing vehemence. Turkish authorities are said by current and former U.S. government officials to be increasingly involved in providing Syrian rebels with training and possibly equipment. European government sources said wealthy families in Saudi Arabia and Qatar were providing significant financing to the rebels. Senior officials of the Saudi and Qatari governments have publicly called for Assad’s departure.

The Times, September 14, 2012:

http://www.thetimes.co.uk/tto/news/world/middleeast/article3537770.ece

A Libyan ship carrying the largest consignment of weapons for Syria since the uprising began has docked in Turkey and most of its cargo is making its way to rebels on the front lines, The Times has learnt. Among more than 400 tons of cargo the vessel was carrying were SAM-7 surface-to-air anti-aircraft missiles and rocket-propelled grenades (RPGs), which Syrian sources said could be a game-changer for the rebels.

Time Magazine, September 18, 2012:

http://world.time.com/2012/09/18/syrias-secular-and-islamist-rebels-who-are-the-saudis-and-the-qataris-arming/

The middlemen of the two countries [Saudi Arabia and Qatar] operate out of Turkey, the regional military power. Ankara has been quite public with its denunciation of Assad even as it denies any involvement in shuffling weapons across the border to Syrian rebels. […]

According to sources who have dealt with him, Saudi Arabia’s man in the Istanbul control center is a Lebanese politician named Okab Sakr. He belongs to the Future Movement, the organization of former Lebanese Prime Minister Saad Hariri, which has a history of enmity with Damascus. […]

The bulk of Ahrar al-Sham’s substantial funding reportedly comes from Kuwait.

Reuters, December 7, 2012:

http://www.reuters.com/article/2012/12/07/us-syria-crisis-rebels-idUSBRE8B60QX20121207

Syrian rebel groups meeting in Turkey elected a 30-member unified command on Friday at talks attended by security officials from international powers, delegates said. The 30 included many with ties to the Muslim Brotherhood and Salafists, and excluded the most senior officers who had defected from President Bashar al-Assad’s military, they said. […]

Another delegate said that two-thirds of the leadership had ties to the Muslim Brotherhood or were politically allied with the group, a composition which resembles that of the civilian opposition leadership coalition created under Western and Arab auspices in Qatar last month.

Jerusalem Post, July 30, 2014:

http://www.jpost.com/Middle-East/Islamic-State-fighter-Turkey-paved-the-way-for-us-369443

Prime Minister’s [sic] Recep Tayyip Erdogan’s “AKP government has helped us a lot” since the war in Syria began, an Islamic State fighter told a Turkish journalist. […]

Turkey paved the way for us. Had Turkey not shown such understanding for us, the Islamic State would not be in its current place. It [Turkey] showed us affection. Large number of our mujahedeen [jihadis] received medical treatment in Turkey,” he said.

Washington Post, August 12, 2014:

https://www.washingtonpost.com/world/how-turkey-became-the-shopping-mall-for-the-islamic-state/2014/08/12/5eff70bf-a38a-4334-9aa9-ae3fc1714c4b_story.html

Before their blitz into Iraq earned them the title of the Middle East’s most feared insurgency, the jihadists of the Islamic State treated this Turkish town near the Syrian border as their own personal shopping mall.

And eager to aid any and all enemies of Syrian President Bashar al-Assad, Turkey rolled out the red carpet.

In dusty market stalls, among the baklava shops and kebab stands, locals talk of Islamist fighters openly stocking up on uniforms and the latest Samsung smartphones. Wounded jihadists from the Islamic State and the al-Nusra Front — an al-Qaeda offshoot also fighting the Syrian government — were treated at Turkish hospitals. Most important, the Turks winked as Reyhanli and other Turkish towns became way stations for moving foreign fighters and arms across the border.

“Turkey welcomed anyone against Assad, and now they are killing, spreading their disease, and we are all paying the price,” said Tamer Apis, a politician in Reyhanli, where two massive car bombs killed 52 people last year. In a nearby city, Turkish authorities seized another car packed with explosives in June, raising fears of an Islamic State-inspired campaign to export sectarian strife to Turkey.

The Guardian, October 4, 2014:

http://www.theguardian.com/world/2014/oct/04/us-jets-attack-isis-syrian-town-turkish-leader-rebukes-biden

In Turkey, President Recep Tayyip Erdogan demanded and received an apology from the US vice-president, Joe Biden, over comments in which Biden said the Turkish leader had admitted Turkey had made mistakes by allowing foreign fighters to cross into Syria.

Erdogan denied ever saying that and told reporters in Istanbul that Biden “will be history for me if he has indeed used such expressions”.

The White House said Biden spoke to Erdogan on Saturday “to clarify comments”, and said Biden apologised “for any implication” that Turkey or other allies had intentionally supplied or helped in the growth of the Isis group or other extremists in Syria.

Responding to questions following his speech at the Harvard Kennedy School on Thursday, Biden described Erdogan as “an old friend” and added: “He [Erdogan] said: ‘You were right. We let too many people through.’ Now they’re trying to seal their border.”

BBC news, October 7, 2014:

http://www.bbc.co.uk/news/world-us-canada-29528482

Mr Biden also claimed [speaking to students at Harvard Kennedy School] that Turkey admitted it had let too many foreign fighters cross its border into Syria.

The incandescent response from Ankara and expressions of “astonishment” from the United Arab Emirates led Mr Biden to “clarify” that he didn’t mean the allies had intentionally facilitated the growth of IS or other violent extremists.

But there is little doubt about the flow of weapons, money and fighters from these countries into Syria. […]

Unlike the other rebel groups, Islamic State has its own sources of revenue, including until recently a booming business in oil smuggling into Turkey. US officials have accused Ankara of, at best, turning a blind eye to the black market trade. Pressing the government to clamp down on it was a key focus of a recent visit by the Secretary of State John Kerry.

And despite denials by the Turkish president Recep Tayyip Erdogan, the steady flow of fighters, including foreign extremists, across Turkey’s long and porous border with Syria is well-documented.

Huffington Post, August 19, 2015:

http://www.huffingtonpost.com/harut-sassounian/turkeys-pays-former-cia-d_b_8002534.html

The Wall Street Journal reported on August 12 that a senior US military official accused Turkey of deceiving the American government by allowing its use of Incirlik airbase to attack ISIS, as a cover for President Erdogan’s war on Kurdish fighters (PKK) in northern Iraq. So far, Turkey has carried out 300 air strikes against the PKK, and only three against ISIS! […]

To conceal its deception and mislead the American public, within days of starting its war on the Kurds, Ankara hired Squire Patton Boggs for $32,000 a month, as a subcontractor to the powerful lobbying firm, the Gephardt Group. Squire Patton Boggs includes former Senators Trent Lott and John Breaux, and retired White House official Robert Kapla.

The Gephardt lobbying team for Turkey consists of subcontractors Greenberg Traurig, Brian Forni, Lydia Borland, and Dickstein Shapiro LLP; the latter recently added to its lobbying staff former CIA Director Porter Goss. Other lobbying firms hired by Turkey are: Goldin Solutions, Alpaytac, Finn Partners, Ferah Ozbek, and Golin/Harris International. According to U.S. Justice Department records, Turkey pays these lobbying/public relations firms around $5 million a year. Furthermore, several U.S. non-profit organizations serve as fronts for the Turkish government to promote its interests in the United States and take Members of Congress and journalists on all-expense paid junkets to Turkey. Among the U.S. lobbyists for Turkey, perhaps the most questionable is Porter Goss, CIA Director from 2004 to 2006, who has agreed to sell his soul and possibly U.S. national secrets for a fistful of Turkish Liras.”

*

Timeline for Israel from 2007

McClatchy, October 7, 2007:

http://www.mcclatchydc.com/news/nation-world/world/article24470350.html

Nearly a month after a mysterious Israeli military airstrike in Syria generated political aftershocks from Washington to North Korea, the Israeli government lifted its official veil of secrecy Tuesday. […]

Israel lifted its ban on reporting that the attack took place after Syrian President Bashar Assad told the British Broadcasting Corp. that Israeli jets had hit an “unused military building.” But Israeli officials refused to say anything about the attack, and almost no one who’d be expected to know — from government officials to former intelligence officers — is talking.

BBC news, April 23, 2008:

The Golan Heights had been captured by Israel during the Six-Day War in June 1967 and occupied ever since – in 1981, this became a de facto annexation under the illegal Golan Heights Law. Then, in April 2008, following secret peace negotiations with Syria, reports were leaked that Israel was prepared to withdraw from occupied Syrian Golan.

http://news.bbc.co.uk/1/hi/world/middle_east/7362937.stm

Israel has passed a message to Syria that it would withdraw from the Golan Heights in return for peace, according to a Syrian government minister.

The expatriates minister, Buthaina Shaaban, said the message had been passed on by Turkish Prime Minister Recep Tayyip Erdogan.

She said Mr Erdogan had informed the Syrian President Bashar Assad of the offer by telephone on Tuesday morning.

The office of Israeli Prime Minister Ehud Olmert has declined to comment.

Israel and Syria remain technically at war although both sides have recently spoken of their desire for peace.

The Syrian government has insisted that peace talks can be resumed only on the basis of Israel returning the Golan Heights, which it seized in 1967. […]

In an interview with Al-Jazeera television, Ms Shaaban said the offer had come from the Israeli prime minister.

“Olmert is ready for peace with Syria on the grounds of international conditions, on the grounds of the return of the Golan Heights in full to Syria,” she said. The Syrian newspaper, al-Watan, carried similar news on its website on Wednesday. […]

Mr Olmert’s office did not deny the Syrian reports, choosing only to state that they “refuse to comment on the matter”. […]

The former US President, Jimmy Carter, who held talks with the Syrian leader recently has said he believes “about 85%” of the differences between Israel and Syria have already been resolved, including borders, water rights, the establishment of a security zone and on the presence of international forces.

“[Mr Assad said] the only major difference in starting good-faith talks was that Israel insisted that there will be no public acknowledgment that the talks were going on when Syria insisted that the talks would not be a secret,” Mr Carter said earlier this week.

Mr Carter said it was now “just a matter of reconvening the talks and concluding an agreement” between the neighbouring countries.

[bold emphasis as original]

BBC news, May 21, 2008:

http://news.bbc.co.uk/1/hi/world/middle_east/7412247.stm

Israel and Syria have said they are holding indirect talks to reach a comprehensive peace agreement.

Israeli Prime Minister Ehud Olmert’s office said both sides were talking “in good faith and openly”.

The Syrian foreign ministry also confirmed the Turkish-mediated talks, the first since 2000. […]

The Syrian foreign minister, Walid Muallem, said Israel had agreed to withdraw from the Golan up to the armistice line of 1967.

Israel has refused to comment on the claim, although a spokesman for Mr Olmert said the current talks were being carried out with the failure of the previous ones in mind, and that the talks had recently gathered momentum.

The US and the EU have welcomed news of the talks, and both have praised Turkey’s role as facilitator.

[bold emphasis as original]

Haaretz, May 9, 2010:

But then we had the three-week long air offensive Operation Cast Lead (Dec 27, 2008 – Jan 18, 2009) ostensibly to stop Palestinian rocket attacks and to disable Hamas (with their leadership ties in Syria). This so-called “Gazan War” would cost the lives of more than 1,400 Palestinians, the vast majority of who were unarmed civilians including many hundreds of children. The massacre also signalled the ending of peace talks with Syria. The following extracts are drawn from a thoughtful article written by Zvi Bar’el.

http://www.haaretz.com/print-edition/opinion/the-missiles-are-coming-1.289149

No doubt, Israel is threatened, but so are Syria, Lebanon, the Gaza Strip and the West Bank. It’s enough to listen to Israel’s threats to “take Syria back to the Stone Age,” “destroy Lebanon’s civilian infrastructure” or smash Hamas to understand that the style of the Israeli threat approaches that of Iran. If anyone should be waking up in the morning in a cold sweat, it’s the Lebanese, Syrians and Gazans, not the Israelis.

Nevertheless, even though Syria has suffered military blows from Israel, it continues to act “impudently,” and Lebanon, which was pounded in war, has stepped up its threats. Operation Cast Lead in Gaza did not stop Hamas from arming itself. And in the West Bank, the occupation forces have not completely neutralized the threat. […]

“[Syrian President Bashar] Assad wants peace but doesn’t believe [Prime Minister Benjamin] Netanyahu,” Baidatz told the Knesset’s Foreign Affairs and Defense Committee. But his words were lost in the alarming description of the number of missiles in Hezbollah’s hands. Because even though we understand weapons, and we consider Hezbollah leader Sheikh Hassan Nasrallah a household name, and we assemble and dismantle centrifuges every day, we lose our way when it comes to the peace process.

Baidatz didn’t explain how it’s possible to gain Assad’s confidence, and he wasn’t asked, just as he wasn’t asked whether returning the Golan Heights to Syria under agreed conditions could neutralize the Syrian-Lebanese-Hezbollah threat. These questions are too dangerous to ask to someone from the army – he just might propose a diplomatic solution.

The Times of Israel, July 1, 2013:

http://www.timesofisrael.com/we-have-no-beef-with-israel-syrian-islamist-rebel-group-says/

A Syrian rebel group operating along the Israeli border in the Golan Heights said it has no quarrel with Israel, and that its fight is with President Bashar Assad, not the Jewish state — and it will remain that way.

The Jewish Press, February 24, 2014:

http://www.jewishpress.com/news/breaking-news/report-commander-of-syrian-rebels-trained-in-israel/2014/02/24/

Abdul-Ilah al-Bashir, the new commander of the Free Syrian Army, secretly trained in Israel last year after being admitted into to the country for medical treatment, according to the Arabic language Al-Ahd website. He was transferred to a hospital in Israel after he was wounded in a military operation. Rumors spread that he died and was buried in Syria, allegedly to distract attention from his training in Israel.

Haaretz, March 16, 2014:

http://www.haaretz.com/news/diplomacy-defense/1.580169

The Syrian opposition is willing to give up claims to the Golan Heights in return for cash and Israeli military aid against President Bashar Assad, a top opposition official told Al Arab newspaper, according to a report in Al Alam.

The Times of Israel, August 13, 2014:

http://www.timesofisrael.com/syrian-rebel-commander-says-he-collaborated-with-israel/

A Free Syrian Army commander, arrested last month by the Islamist militia Al-Nusra Front, told his captors he collaborated with Israel in return for medical and military support, in a video released this week.

Haaretz, December 7, 2014:

http://www.haaretz.com/news/diplomacy-defense/.premium-1.630359

Reports by UN observers in the Golan Heights over the past 18 months reveal the type and extent of cooperation between Israel and Syrian opposition figures. The reports, submitted to the 15 members of the UN Security Council and available on the UN’s website, detail regular contacts held on the border between IDF officers and soldiers and Syrian rebels.

The Guardian, December 7, 2014:

http://www.theguardian.com/world/2014/dec/07/israeli-jets-bomb-syria-says-damascus 

Syria accused Israeli jets of bombing two installations inside the country on Sunday, one near the capital, Damascus, and the second in a town near the Lebanese border. […]

Israel has carried out several air strikes in Syria since the revolt against Bashar al-Assad began in March 2011. Binyamin Netanyahu has repeatedly threatened to take military action to prevent Syria from transferring sophisticated weapons to its ally Hezbollah. In June, Israel struck targets inside Syria, including a military installation, following a cross-border attack that killed an Israeli teenager. Israel said at the time that it had struck nine military targets inside its northern neighbour and had confirmed “direct hits”.

The Times of Israel, June 29, 2015:

http://www.timesofisrael.com/yaalon-syrian-rebels-keeping-druze-safe-in-exchange-for-israeli-aid/

Defense Minister Moshe Ya’alon said Monday that Israel has been providing aid to Syrian rebels, thus keeping the Druze in Syria out of immediate danger. […]

“We’ve assisted them under two conditions,” Ya’alon said of the Israeli medical aid to the Syrian rebels, some of whom are presumably fighting with al-Qaeda affiliate al-Nusra Front to topple Syrian President Bashar Assad.

*

Update:

On the day Russia launched air strikes [Wed Sept 30th] the WSJ published the following:

Wall Street Journal, September 30, 2015:

http://www.wsj.com/articles/putin-seeks-parliaments-approval-for-use-of-force-outside-russia-1443600142

Russia launched airstrikes in Syria on Wednesday, catching U.S. and Western officials off guard and drawing new condemnation as evidence suggested Moscow wasn’t targeting extremist group Islamic State, but rather other opponents of Bashar al-Assad’s regime. […]

Secretary of State John Kerry met with Russian Foreign Minister Sergei Lavrov and said he raised U.S. concerns about attacks that target regime opponents other than Islamic State, also known as ISIS or ISIL. In Syria’s multi-sided war, Mr. Assad’s military—aided by Iran and the Lebanese Shiite group Hezbollah—is fighting both Islamic State and opposition rebel groups, some of which are supported by the U.S. and its allies.

Mr. Kerry said the U.S. and Russia need to hold military talks as soon as possible and Mr. Lavrov said he agreed. […]

Among seven areas that Syrian state media listed as targets of Russian strikes, only one—an area east of the town of Salamiyah in Hama province—has a known presence of Islamic State fighters. The other areas listed are largely dominated by moderate rebel factions or Islamist groups, such as Ahrar al-Sham and the al Qaeda-affiliated Nusra Front.

In other words, “rebel” factions or “Islamic groups” now deemed “moderate” include al-Qaeda in Syria (aka Jabhat al-Nusra or Nusra Front).

*

The timelines above are abridged and rearranged versions of the single line produced by Kevin Borge. The ones above also include a number of additions and extensions to Borge’s original.

Click here to read the original timeline for the Syrian War published by Global Research on August 29th.

 

* Here is a graphic showing polling figures for a range of ten questions taken from the same Washington Post article:

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Filed under al-Qaeda & DAESH / ISIS / ISIL, analysis & opinion, Britain, Israel, Jordan, Kuwait, Libya, Qatar, Saudi Arabia, Syria, Turkey, UAE, USA

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

*

“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!

*

 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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