Tag Archives: Wolfgang Schäuble

#ThisIsACoup: Global Anger Erupts Over Germany’s Harsh Austerity Demands

A list of draconian new austerity demands handed to the Greek government in Brussels Sunday ignited a global backlash against Germany, German Prime Minister Angela Merkel and finance minister, Wolfgang Schaeuble.

#ThisIsACoup became the top trending hashtag on Twitter worldwide – and is #1 in Germany and Greece.

The tag was attached to tens of thousands of angry comments denouncing Germany’s aggressive demands that the Greek parliament pass new severe austerity laws within days to raise taxes, privatize public assets and cut back on pensions.

Paul Krugman, the Nobel laureate economist, helped promote the hashtag it on the New York Times website:

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

The weekend showdown came to a head on Sunday night as Eurozone leaders Angela Merkel and President François Hollande of France presented Greece’s prime minister, Alexis Tsipras, with a new ultimatum.

Here are the EU proposals that outraged many around the globe:

The hashtag originated Sunday evening from Sandro Maccarrone, who is a physics teacher in Barcelona, Spain. He tweeted: “The Eurogroup proposal is a covert coup d’etat against the Greek people. #ThisIsACoup.”

Within hours it had been used nearly 200,000 times.

From CommonDreams.org — read more here:

#ThisIsACoup: Global Anger Erupts Over Germany’s Harsh Austerity Demands.

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Dr Schäuble’s Plan for Europe: Do Europeans approve? – Article to appear in Die Zeit on Thursday 16th July 2015

Yanis Varoufakis

Pre-publication summary: Five months of intense negotiations between Greece and the Eurogroup never had a chance of success. Condemned to lead to impasse, their purpose was to pave the ground for what Dr Schäuble had decided was ‘optimal’ well before our government was even elected: That Greece should be eased out of the Eurozone in order to discipline member-states resisting his very specific plan for re-structuring the Eurozone.

  • This is no theory.
  • How do I know Grexit is an important part of Dr Schäuble’s plan for Europe?
  • Because he told me so!

I wrote this article not as a Greek politician critical of the German press’ denigration of our sensible proposals, of Berlin’s refusal seriously to consider our moderate debt re-profiling plan, of the European Central Bank’s highly political decision to asphyxiate our government, of the Eurogroup’s decision to give the ECB the green light to shut down our banks.

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what next for Greece? 3 big questions that can be boiled down to one

Since the Greek people registered their defiant “no to austerity” at last weekend’s plebiscite, like many, I have been struggling to understand what that vote really means and where this is now heading both for Greece and the rest of the Eurozone. In searching for answers I have found that three different questions are inclined to separate out; questions that involve one another in a vaguely hierarchical fashion a little like Russian dolls. I have therefore decided to try to address each of these nested questions in turn beginning with the outermost first.

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1. Whose fault? (and who should pay?)

“The Greeks have been living beyond their means for years,” said one man, visiting Berlin from Osnabrück, Lower Saxony.

“I used to play in a volleyball team in the 1970s and 80s and we traveled all over the world. I’ve been to Istanbul and I’ve been to Brasil and I’ve never seen a country like Greece.

“The people there simply don’t work enough. I’d see them crowding cafes at four o’clock in the morning.”

“I’m completely on the side of the CDU [Christian Democratic Union]. Where has all the money gone? We pay our taxes, they don’t.” 1

The quotes above were part of an article sent to me by a friend living in Germany – a friend who happens to spend the other half of his time living in Greece. The remarks, he says, perfectly exemplify the sorts of opinions he most frequently hears. The Greeks caused the crisis, they should pay what they owe, and follow the rules like the Germans would. It’s all exceedingly simple, and all extremely badly informed.

Like many ‘good Europeans’, the German people are being held hostage to two falsehoods. One is that the crisis came about primarily because of indolence, inefficiency and impropriety. Put baldly, that Greeks are a bunch of lazy tax cheats. The only part missing here is the word untermensch; the tinge of latent bigotry is unmistakeable.

I have argued against this nonsense many times and so it pains me to have to repeat myself at all. But the facts are there for anyone who cares to look. Figures that unequivocally prove that Greeks work extremely hard: harder on average in fact than Germans do. Their productivity is lower and so perhaps there is an issue over efficiency, and tax revenues are indeed harder to secure, but this is very much a problem that gets far worse as you climb the social ladder (as it does in every society).

In any case, none of this was the actual cause of the Greek “debt crisis” – an offshoot of the wider banking crisis – which in fact originated because corrupt government officials negotiated with corrupt EU officials (unless we believe it takes only one to tango), helped along by corrupt men at Goldman Sachs, when Greece signed on to the euro. None of this will come as news to those who have followed the story closely, even if it is suddenly back in the newspapers again:

Goldman Sachs faces the prospect of potential legal action from Greece over the complex financial deals in 2001 that many blame for its subsequent debt crisis.

A leading adviser to debt-riven countries has offered to help Athens recover some of the vast profits made by the investment bank.

The Independent has learnt that a former Goldman banker, who has advised indebted governments on recovering losses made from complex transactions with banks, has written to the Greek government to advise that it has a chance of clawing back some of the hundreds of millions of dollars it paid Goldman to secure its position in the single currency.

The development came as Greece edged towards a last-minute deal with its creditors which will keep it from crashing out of the single currency. 2

Click here to read the full article in yesterday’s [July 11th] Independent.

The second lie is that the Greek people have ever been bailed out at all:

Only a small fraction of the €240bn (£170bn) total bailout money Greece received in 2010 and 2012 found its way into the government’s coffers to soften the blow of the 2008 financial crash and fund reform programmes.

Most of the money went to the banks that lent Greece funds before the crash.

That comes from a Guardian article, which goes on to point out (as many others have previously done):

Less than 10% of the bailout money was left to be used by the government for reforming its economy and safeguarding weaker members of society.

Greek government debt is still about €320bn, 78% of it owed to the troika. As the Jubilee Debt Campaign says: “The bailouts have been for the European financial sector, while passing the debt from being owed to the private sector to the public sector.”3

Yes, more than 90% of the bailout money went straight back to the creditors – much of it German money to prop up German banks.

As Paulo Nogueira Batista, one of the Executive Directors of the IMF, has recently admitted:

“One of the major problems of the programmes that were proposed was that they [“the Troika”] put too much of a burden on Greece and not enough of a burden on Greece’s creditors. So for example, the first programme of 2010 was presented as a bailout of Greece, but in reality it was more of a bailout of the private creditors of Greece. Greece received enormous amounts of money but this money was used basically to allow the exit of, for example, French banks [and] German banks…”

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For a more complete analysis, I refer readers to a previous article based around two excellent documentary films made by Harald Schumann and Árpád Bondy. The second of these, On the Trail of the Troika, was first broadcast on March 9th 2015 on ARD (German Public TV) as Macht ohne Kontrolle – Die Troika and has since been uploaded on youtube with both English and Greek subtitles. It is embedded below:

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Parallel to this overarching question of who is responsible for the debt is the question of who should now repay it. To the (wo)man on the street – and especially those auf der Strasse – this tends to be treated as if it were the self-same question, but it isn’t, and for the simple reason that a debt that cannot be repaid will never be repaid. In ordinary life we know this is true, which is why in our private lives we are disinclined to lend money other than to those we most trust. After all, it is very much the responsibility of every creditor to lend their money wisely, and this applies to banks and global institutions no less than it applies to you and me. But there are also international laws determining the legitimacy of debts.

In the case of Greece (and the other Eurozone debtor nations including Spain and Portugal), it is well known that the debts cannot possibly be repaid (as the IMF has recently conceded – for more information see my update on the previous post). There are also grounds for arguing that much of the debt is odious, and so the Greek government is not only justified but legally sanctioned to repudiate all such illegitimate debt:

A committee convened by the Greek parliament has claimed much of the country’s debt of 320bn euros was illegally contracted and should not be paid.

Following an official parliamentary investigation, speaker Zoe Konstantopoulou described the debt as illegal, illegitimate and odious.

She told the BBC that Greek people “should fight for justice”. 4

Added to this, we also have the postwar precedent set by Greece and Spain amongst others when many nations agreed to the cancellation of German war debts thanks to the London Debt Agreement of 1953:

Needing a strong West Germany as a bulwark against communism, the country’s creditors came together in London and showed that they understood how you help a country that you want to recover from devastation. It showed they also understood that debt can never be seen as the responsibility of the debtor alone. Countries such as Greece willingly took part in a deal to help create a stable and prosperous western Europe, despite the war crimes that German occupiers had inflicted just a few years before.

The debt cancellation for Germany was swift, taking place in advance of an actual crisis. Germany was given large cancellation of 50% of its debt. The deal covered all debts, including those owed by the private sector and even individuals. It also covered all creditors. No one was allowed to “hold out” and extract greater profits than anyone else.

That comes from an excellent article written by Nick Dearden published in the Guardian. As Dearden points out, although this London deal helped pave the way for Germany’s “economic miracle”, the same remedy is entirely withheld from today’s debtor nations whether inside or outside the Eurozone:

The German debt deal was a key element of recovering from the devastation of the second world war. In Europe today, debt is tearing up the social fabric. Outside Europe, heavily indebted countries are still treated to a package of austerity and “restructuring” measures. Pakistan, the Philippines, El Salvador and Jamaica are all spending between 10 and 20% of export revenues on government foreign debt payments, and this doesn’t include debt payments by the private sector.

If we had no evidence of how to solve a debt crisis equitably, we could perhaps regard the policies of Europe’s leaders as misguided. But we have the positive example of Germany 60 years ago, and the devastating example of the Latin American debt crisis 30 years ago. The actions of Europe’s leaders are nothing short of criminal. 5

Unfortunately, today’s neo-liberal belief holds that debt is sacrosanct. So that whereas West Germany was only required to pay for debts out of its trade surplus, and thus its creditors had a vested interest in wishing to see economic growth, the creditors in the current crisis demand their pound of flesh irrespective not only of broader social consequences, but seemingly even of their debtors ability to keep up with repayments.

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2. To Grexit or not to Grexit?

The debate over whether Greece would be better inside or outside of the Eurozone has been ongoing for just as long as the crisis itself. And once again, we can break the argument down into component parts, of which one claim is that the Eurozone per se was an inherently flawed concept that remains utterly unworkable in its current form. This is very possibly the case, although not a subject I feel comfortable discussing – it is beyond my technical understanding. However, whether the Eurozone is ultimately workable or not, and regardless of whatever costs to democracy and national sovereignty might be needed to completely fix it, we can certainly see that this current crisis did not arise from the formation of the monetary union.

Rather, this so-called “debt crisis” began as a banking crisis, and one that can be easily traced back to the American subprime mortgage crisis, the origins of which again, in reality trace back to the financial deregulation begun under Thatcher and Reagan, and then continued by Clinton, Blair and Brown. The subprime mortgage/banking crisis of 2008 never truly ended, and the western financial system only limps on thanks to sporadic bailouts, unlimited QE and zero interest rates. Better understood, and as already discussed above, the so-called bailouts of Greece have been little more than a continuation of the earlier banker bailouts.

Leaving aside the more technical or purely political considerations, the decision facing the Greek government to stay or exit the Eurozone is rather more straightforward. It is a question of economic expediency – and for millions of people, this is quite literally a matter of life and death. So here is what I wrote more than three years ago (it reveals just how little in the debate has actually shifted):

Should the Greeks submit to further the “austerity measures” that have already destroyed their economy and social infrastructure as Angela Merkel and others are demanding, or should they drop out of the Euro and begin tackle their debt crisis by returning to a hugely devalued Drachma? These are the only available choices, as we are all, Greeks included, constantly reminded. […]

So what of the second option – the one that already has the stupid text-style name of Grexit? Should Greece abandon the Euro altogether? Well, firstly, the Greeks cannot be forced to drop out of the Eurozone – or at least there is no recognised mechanism for expelling any member nation. Secondly, it should be noted that the Greek people don’t want to leave the Eurozone. Like most of the peoples of Europe, these days they are broadly enthusiastic about the European project. Added to this, they also clearly recognise the serious risks of trying to suddenly go it alone in such perilous times. Once isolated, the Drachma would be mercilessly attacked by the same predatory banks and hedge funds that are currently threatening to bring down the Euro. The Drachma wouldn’t stand the ghost of a chance.

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?

Yes, Greece could exit, following which it makes perfect sense, of course, to default, and in which case to default absolutely. With financial support offered from elsewhere (the new BRICS bank being the most likely source) they might revert back to the drachma, a move that would instantly improve competitiveness. Grexit would be a shock, but with genuine investment in productive activity and with exports suddenly buoyed by a devalued currency, Greece would survive and steadily grow. Or at least this is how the arguments in favour of Grexit go. And they sound like a pleasant dream. The passing storm, though intense, is quickly over. So if Grexit is so survivable, then what’s been the hold up…? Here is recently ousted Greek Finance Minister, Yanis Varoufakis, laying out the difficulties that would lie ahead:

The threat of Grexit has had a brief rollercoaster of a history. In 2010 it put the fear of God in financiers’ hearts and minds as their banks were replete with Greek debt. Even in 2012, when Germany’s finance minister, Wolfgang Schäuble, decided that Grexit’s costs were a worthwhile “investment” as a way of disciplining France et al, the prospect continued to scare the living daylights out of almost everyone else.

By the time Syriza won power last January, and as if to confirm our claim that the “bailouts” had nothing to do with rescuing Greece (and everything to do with ringfencing northern Europe), a large majority within the Eurogroup – under the tutelage of Schäuble – had adopted Grexit either as their preferred outcome or weapon of choice against our government.

Greeks, rightly, shiver at the thought of amputation from monetary union. Exiting a common currency is nothing like severing a peg, as Britain did in 1992, when Norman Lamont famously sang in the shower the morning sterling quit the European exchange rate mechanism (ERM). Alas, Greece does not have a currency whose peg with the euro can be cut. It has the euro – a foreign currency fully administered by a creditor inimical to restructuring our nation’s unsustainable debt.

To exit, we would have to create a new currency from scratch. In occupied Iraq, the introduction of new paper money took almost a year, 20 or so Boeing 747s, the mobilisation of the US military’s might, three printing firms and hundreds of trucks. In the absence of such support, Grexit would be the equivalent of announcing a large devaluation more than 18 months in advance: a recipe for liquidating all Greek capital stock and transferring it abroad by any means available. 6

All of which supplies reasons enough to be cautious. However, the problem does not end with the reprinting of the drachma. Because by allowing Greece a comfortable ride, whether via any means of exit from the Eurozone or else through debt restructuring, a precedent will be set that those in the other debtor nations would be keen to emulate. Which means that Germany (as well as the EU Commission) have, as Varoufakis very candidly puts it, “an interest in breaking us”:

This weekend brings the climax of the talks as Euclid Tsakalotos, my successor, strives, again, to put the horse before the cart – to convince a hostile Eurogroup that debt restructuring is a prerequisite of success for reforming Greece, not an ex-post reward for it. Why is this so hard to get across? I see three reasons.

One is that institutional inertia is hard to beat. A second, that unsustainable debt gives creditors immense power over debtors – and power, as we know, corrupts even the finest. But it is the third which seems to me more pertinent and, indeed, more interesting.

The euro is a hybrid of a fixed exchange-rate regime, like the 1980s ERM, or the 1930s gold standard, and a state currency. The former relies on the fear of expulsion to hold together, while state money involves mechanisms for recycling surpluses between member states (for instance, a federal budget, common bonds). The eurozone falls between these stools – it is more than an exchange-rate regime and less than a state.

And there’s the rub. After the crisis of 2008/9, Europe didn’t know how to respond. Should it prepare the ground for at least one expulsion (that is, Grexit) to strengthen discipline? Or move to a federation? So far it has done neither, its existentialist angst forever rising. Schäuble is convinced that as things stand, he needs a Grexit to clear the air, one way or another. Suddenly, a permanently unsustainable Greek public debt, without which the risk of Grexit would fade, has acquired a new usefulness for Schauble.

What do I mean by that? Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.

Click here to read Yanis Varoufakis full article.

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3. How well are Varoufakis, Tsipras and Syriza playing their hand?

Because Finance Minister Varoufakis knows the economic field of game theory, lazy pundits have for months opined that he is playing “chicken” or “poker” or some other game. In Heraklion two weeks ago, Varoufakis denied this as he has done many times: “We’re not bluffing. We’re not even meta-bluffing.” Indeed there are no hidden cards. The Greek red lines – the points of principle on which this government refuses to budge – on labor rights, against cuts in poverty-level pensions and fire-sale privatizations – have been in plain view from day one. 7

From a fascinating breakdown of the “Nine Myths About the Greek Crisis” written by fellow economist James K. Galbraith.

As we await the decision of the Eurogroup, much of the mainstream media has been quick to draw attention to what it describes as the Greek government ‘climbdown’. So we hear how they have backed down on taxation, on pensions, on public spending and on privatisation. Following on from the dramatic “OXI” vote of last Sunday, it is quite easy to feel deflated by this. Indeed, the harshest critics of Tsipras (Varoufakis is out of range) – critics both from left and right – say that Syriza have managed to let a ‘no’ slip into a ‘yes’.

But then the voices that dominate the mainstream media have an axe to grind; the usual neo-liberal axe. So when they play up Syriza’s ‘climbdown’ we should look rather carefully into the details (I will offer further thoughts on this at the end). Meanwhile, the alternative voices who say that Greece ought to have followed Iceland’s example are missing a great many points of significant difference between the two nations: the size of populations, the make-up of their respective economies, and the rather important fact that Iceland were never part of the Eurozone or stuck in any kind of currency union.

Professor Steve Keen, who is Head of the School of Economics, History and Politics at Kingston University in London and author of Debunking Economics, put the whole matter into a useful context in an interview he gave on George Galloway’s RT show Sputnik [also July 10th]. Greece’s position is exceptionally weak and isolated, Keen says, so when it comes to Grexit:

“[Syriza] are afraid of the transition. And they are afraid of just how viable they are going to be once they are back on a floating exchange rate again. But I don’t think they’re going to have a choice.”

And as for how well Syriza have played their hand, Keen replies:

“Well, Yanis won’t mind me saying this now. He wrote to me saying they’re basically… we’re being subjected to a putsch. And he said, basically the attitude of the European Union was that they didn’t want Syriza to win, so let’s get rid of them. There was a political campaign right from the outset to break their backs and to either force them to become like the party they replaced [i.e., Pasok] or to drive them out of office. And in that sense the referendum was quite a surprise move – [the opponents of Syriza] weren’t expecting it – and now, of course, they’re treating it as though it didn’t happen… You did well. It’s a pity you voted the wrong way. But apart from that congratulations on winning. Now let’s go back and do exactly what we were doing last week.

But if, as Steve Keen, Yanis Varoufakis and many others fear, the talks do indeed fail, and if only because Germany (principally) refuses to budge, then those who have called for Syriza to look for alternatives sooner will feel vindicated. However, in response to this, it needs to be pointed out that although Syriza may fail to stall a Grexit, during the six months they have unquestionably strengthened their position politically. In Greece, rather than shrinking away, their popularity has grown, which is vitally important if you are keen to maintain your democratic mandate. Outside of Greece, Syriza has also been winning hearts and minds. By contrast, and in spite of whatever else happens next, the reputation of the EU has certainly been damaged. As Steve Keen says:

“They [Syriza] can survive being pushed out of the euro… one thing you can pick up from the Greek reaction to that election was that there’s a sense of pride come back. Because being put through an experience like that – people talk about they’re responsible for the situation [and so] they should pay the price (I’ve heard that amongst some of my Conservative friends recently). They don’t realise just how long the punishment has been. Just how severe and just how demoralising it is to have no sense of a future, which is why the suicide rate has increased by a factor of five or six in Greece since this whole thing began.”

Try again:

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There is, however, an alternative argument against Alexis Tsipras and Syriza that is more incriminatory, and it is one that has followed both since long before the party had even been elected to power. In short, it is the opinion that Syriza itself is phoney, or if not Syriza as a whole, since this is a leftist coalition of different factions, then its leader Tsipras along with former Finance Minister Varoufakis – indeed, some go so far as to insinuate that both Tsipras and Varoufakis have been nothing less than saboteurs…

The World Socialist Web Site calls on Greek workers not to give any political support to Syriza. There is no party in this election that represents the interests of the working class.

That was the position of the International Committee of the Fourth International (ICFI) as outlined on their website wsws.org on the eve of the Greek elections.

Click here to read the full statement.

Having been ignored by the Greek people, the World Socialist Web Site, courtesy of International Committee of the Fourth International, then followed up with this:

It took just hours for the leftist pretensions of Syriza, (the Coalition of the Radical Left) to be exposed following its victory in Sunday’s Greek general election.

On Monday morning, Syriza leader Alexis Tsipras held talks lasting barely an hour with Panos Kammenos, leader of the right-wing, anti-immigrant Independent Greeks (ANEL). Following the talks, Kammenos announced that the Greek government would be a Syriza-Independent Greeks coalition.

Syriza had been caught red-handed, but it gets worse:

Syriza’s coalition with ANEL was prepared well in advance. In March 2013, Syriza entered into a “front” with ANEL based on efforts to save the Cypriot banks with aid from the European Union (EU).

Following Monday’s talks, the Protothema newspaper reported that “Syriza and ANEL have already reached an agreement on the issue of the Greek president and ANEL’s red lines on national issues will be respected by its leftist coalition partner.”

Was this true? Well, yes. In fact, my good friend from Germany who was then living in Naxos told me that people in Greece had been perfectly well aware of this alliance and that no-one was especially bothered. It is a marriage of convenience. But why believe me? This is what Stathis Kouvelakis, a prominent member of Syriza, said of the coalition with ANEL:

This alliance has been, I’m afraid, a forced and quite pragmatic type of choice, devoided of any grand strategic design. And since Syriza’s offer of an alliance with the other force of the radical left has been categorically rejected by the latter, this possibility has been explored since a while and was therefore easy to materialize once the election result was known.

Click here to read more at Richard Seymour’s popular blog Lenin’s Tomb.

Now everyone is perfectly entitled to their opinion about Syriza and Alexis Tsipras. If they believe that they are fakers then they should say so. But there is something deeply self-destructive about certain elements within the left. The reason is simple. For half a century and more as the left has been remorselessly beaten into submission by very powerful corporate and oligarchical interests, this sustained period of bruising defeats has created a feeling of resignation and a loser mentality, creating schisms that were so memorably lampooned by Monty Python’s Life of Brian.

But there’s also another point that desperately needs hammering out, which is the radical left’s obsession with intellectual legitimacy. Marxists, Trotskyists, and even Maoists (the madness of some on the far left simply knows no bounds!) who scrutinise and disparage one another over matters of conjectural doctrine, dismissing rival camps on grounds that alternative interpretations to their own are pseudo- and bourgeois. Meantime, the world moves on, and beyond the narrow confines of these inner party squabbles, there is no effect whatsoever on any practical advancement. The bigger joke being there are few preoccupations even half as petty-bourgeois as splitting hairs over Marx and Engels; one the son of a Jewish lawyer, the other the eldest son of a wealthy German cotton manufacturer.

For few in the proletariat care one jot for the ideological legitimacy of the left (or the right for that matter) – and why would they? They have more pressing concerns like putting food on the table and a roof over their head: a reliable income and fortnight’s holiday abroad are the main concerns of the ordinary Joe. Surely then, those on the left, especially the radical left, ought to strive to put programme above dogma. Since the masses, however miserable, will never be roused and politically animated by dry theory. And isn’t this where the revolution is expected to spring forth from?

For so long as the left keep bickering on about who is more properly socialist, then the right will easily steal in. Because the right, especially at its vilest extremes, is devoid of the same intellectual hang-ups, which is why, even when their closet intention is to coerce and oppress the poor and the workers by means of sectarian division, the right manages to gain so much traction amongst the ranks of the lower classes. The left needs to learn this lesson quickly; those self-aggrandising gangs of thugs like Golden Dawn are sharpening their knives and once Syriza are seen to have failed, the next act may be a diabolically familiar one.

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Additional: Playing the long game

Greece will hold a referendum on a new European Union aid package intended to resolve the country’s debt crisis, Prime Minister George Papandreou says.

That was November 2011 and the BBC news report continues:

Analysts say a referendum could derail the wider deal on the euro debt crisis.

Adding:

Opinion polls in Greece show that most people do not support the austerity deal. 8

Of course, this was a referendum that never actually happened. Instead, and after pressure was applied during the G20 meeting at Cannes, Papandreou quickly backed down:

Speaking after the G-20 meeting in Cannes, US President Barack Obama questioned Prime Minister George Papandreou’s proposal to hold a referendum on the country’s eurozone debt deal and applauded New Democracy leader Antonis Samaras for backing last week’s Brussels agreement.

“We came to Cannes to discuss with our European friends how they will move forward and build upon the plan they agreed to last week to resolve this crisis,” he said.

Obama said the “actions of Papandreou and the referendum issue got a lot of people nervous.” He added that the plan European leaders presented last week is “still the best recipe.” He commended Samaras for saying he would support the bailout after the referendum proposal was dropped.

Dutch Prime Minister Mark Rutte welcomed Papandreou’s decision to withdraw the referendum but warned that the eurozone might lose patience with Athens. “It was a bizarre proposal,” Rutte said. “We think it’s of great importance to the eurozone that we prevent Greece from going bankrupt. But in the end, the euro is more important than Greece’s membership of the eurozone.” 9

It was an episode that led to Papandreou’s resignation and the appointment of former Governor of the Bank of Greece and Vice President of the ECB, Lucas Papademos, as interim Prime Minister. Following which, the “austerity” went on, the “debt crisis” deepened, and still the Greeks were yet to have a real say in what was happening to their country.

Almost four years and multiple general strikes later and the new Syriza-led government finally gave the people of Greece the referendum previously denied them. Although the detailed choice was a complex one, it boiled down to more or less straightforward ‘yes’ or ‘no’ – and not ‘yes’ or ‘no’ to staying within the Eurozone as so many have disingenuously claimed, but a ‘yes’ or ‘no’ to the latest bailout deal and further “austerity”:

In fact, only the “No” can save Greece – and by saving Greece, save Europe. A “No” means that the Greek people will not bend, that their government will not fall, and that the creditors need, finally, to come to terms with the failures of European policy so far. Negotiations can then resume – or more correctly, proper negotiations can then start. This is vital, if Europe is to be saved. If there ever was a moment when the United States should speak for decency and democratic values – as well as our national interest – it is right now. 10

So wrote economist James K. Galbraith prior to last weekend’s momentous referendum. And what he says is correct. The Greeks have indeed voted to stay in Europe and the Eurozone, having never offered Syriza any mandate to leave. As it transpires, they may now be forced out, or at the very least, forced into another general election. Syriza may then be obliged to stand on a ‘we will leave the euro ticket’, which, and as popular as Syriza are, would mean an election that they would currently be unlikely to win.

But then, as my friend in Germany points out, leaving aside the Greek concessions for a moment, this weekend’s deal pivots upon massive debt restructuring/cancellation, which is why Syriza have felt compelled to offer Germany the chance to wrestle some kind of victory, whilst returning to Greece as winners too. If a deal can be struck, then certainly hardliners on both sides will come away disappointed, and this is one reason any deal may very likely fall through.

Discretion is sometimes the better part of valour, and there are many occasions when it is necessary to take a step or two backwards in order to regain your balance again. Perhaps the very best Syriza can achieve right now, given the intransigence and bullying of the anti-deal voices within the Eurogroup, is to play for time. Right now, the banks in Greece desperately need to reopen in order to restore normality. For ordinary life must go on. Meanwhile, agreeing terms on privatisation and so forth is one thing, whereas implementing such deals is another thing altogether, because as my friend in Germany reminded me “… it’s Greece after all.”

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1 From an article entitled “VOX POPS: Greeks ‘living beyond means’ published in The Local on July 10, 2015. http://www.thelocal.de/20150710/germany-has-shown-a-lot-of-patience

2 From an article entitled “Greek debt crisis: Goldman Sachs could be sued for helping hide debts when it joined euro” written by Jim Armitage and Ben Chu, published in The Independent on July 11, 2015. http://www.independent.co.uk/news/world/europe/greek-debt-crisis-goldman-sachs-could-be-sued-for-helping-country-hide-debts-when-it-joined-euro-10381926.html

3 From an article entitled “Where is the Greek bailout money go?” written by Phillip Inman, published in the Guardian on June 29, 2015. http://www.theguardian.com/world/2015/jun/29/where-did-the-greek-bailout-money-go

4 From a BBC news article entitled “Greek debt ‘illegal, illegitimate and odious’” published on June 18, 2015. www.bbc.co.uk/news/world-europe-33179593

5 From an article entitled “Greece and Spain  helped postwar Germany recover. Spot the difference” written by Nick Dearden, published in the Guardian on February 27, 2013. www.theguardian.com/commentisfree/2013/feb/27/greece-spain-helped-germany-recover

6 From an article entitled “Germany won’t spare Greek pain – it has an interest in breaking us” written by Yanis Varoufakis, published in the Guardian on July 10, 2015. http://www.theguardian.com/commentisfree/2015/jul/10/germany-greek-pain-debt-relief-grexit

7 From an article entitled “Nine Myths About the Greek Crisis” written by James K. Galbraith, published by Global Research on July 3, 2015. http://www.globalresearch.ca/nine-myths-about-the-greek-crisis/5460153

8 From an article entitled “Greek crisis: Papandreou promises referendum on EU deal” published by BBC news on November 1, 2011. http://www.bbc.co.uk/news/world-europe-15526719

9 From an article entitled “Leaders relieved referendum dropped, awaiting next steps” published by ekathimerini on November 5, 2011. http://www.ekathimerini.com/137088/article/ekathimerini/news/leaders-relieved-referendum-dropped-awaiting

10 From an article entitled “Nine Myths About the Greek Crisis” written by James K. Galbraith, published by Global Research on July 3, 2015. http://www.globalresearch.ca/nine-myths-about-the-greek-crisis/5460153

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25 lost years in a vicious circle of war: from the fall of the wall to Cold War 2.0 and beyond (absit omen)

On April 19th, James E. Cartwright, a former Marine Corps general, vice chairman of the Joint Chiefs of Staff and commander of the United States Strategic Command, and Vladimir Dvorkin, a retired major general who headed the research institute of Russia’s Strategic Rocket Forces, co-authored an op-ed published in the New York Times entitled “How to Avert a Nuclear War”. It began:

We find ourselves in an increasingly risky strategic environment. The Ukrainian crisis has threatened the stability of relations between Russia and the West, including the nuclear dimension — as became apparent last month when it was reported that Russian defense officials had advised President Vladimir V. Putin to consider placing Russia’s nuclear arsenal on alert during last year’s crisis in Crimea.

Diplomatic efforts have done little to ease the new nuclear tension. This makes it all the more critical for Russia and the United States to talk, to relieve the pressures to “use or lose” nuclear forces during a crisis and minimize the risk of a mistaken launch. 1

I shall return to consider the recent warning put out by Generals James E. Cartwright and Vladimir Dvorkin, but wish first to review just a few of the many foolhardy steps that have led us right back to nuclear confrontation with Russia.

*

Birth pangs of the New Cold War

The world is facing the prospect of major war, perhaps nuclear war – with the United States clearly determined to isolate and provoke Russia and eventually China. This truth is being turned upside down and inside out by journalists, including those who promoted the lies that led to the bloodbath in Iraq in 2003.

These are the words of veteran investigative journalist John Pilger speaking at The Logan Symposium back in December:

You can also read a full transcript of his speech in the form of an article entitled “War by media and the triumph of propaganda”.

As the Berlin Wall came tumbling down on that wintery evening twenty-five years ago, so many (myself included) breathed a tremendous sigh of relief and thereafter fell into a stupor. The peace dividend was coming at last, and we couldn’t go on waiting to enjoy it. Instead, the party started up right there and then, and no-one wished to look back.

But it turned out that there was no peace dividend, for the simple reason that there was no lasting peace. In fact, the western powerbrokers – the undisputed victors of the Cold War – didn’t find the prospect of peace especially attractive. Seeing their main competitor suddenly against the ropes, and thus finding themselves unrivalled, they instead spied an opportunity. The way was temporarily clear for the pursuit of an unassailable global supremacy, and if realising this half-disclosed ambition required more war rather than less, as indeed it would, then so be it – in both military and economic spheres, the unofficial demand was to let battle commence! To maximise success, the empire must be rapidly expanded, and without delay.

Any understanding of the history of the past quarter of a century requires a recognition of this overarching geopolitical thrust for a unipolar world order (one that was openly declared at the turn of the millennium by Washington’s already rampant neo-con faction who named it “Project for a New American Century” or PNAC). It is the same reason why, as The Nation magazine reported back in 2014:

In 2013, elite US forces were deployed in 134 countries around the globe, according to Major Matthew Robert Bockholt of SOCOM [Special Operations Command] Public Affairs. This 123 percent increase during the Obama years demonstrates how, in addition to conventional wars and a CIA drone campaign, public diplomacy and extensive electronic spying, the US has engaged in still another significant and growing form of overseas power projection. Conducted largely in the shadows by America’s most elite troops, the vast majority of these missions take place far from prying eyes, media scrutiny, or any type of outside oversight, increasing the chances of unforeseen blowback and catastrophic consequences. 2

Click here to read more about “America’s Secret War in 134 Countries”.

Here is another empire on which the sun never sets, but the novelty of it is, that this time around the empire pretends to be no empire at all.

*

The road to hell

When the lies have been stacked up so high and for such a long time, it is becomes an exhausting and demanding effort to try to peer beneath them. But we have to keep trying. As a free society we simply cannot afford to let the truth of recent historical events be sacrificed to the memory hole, and a false narrative hoisted in their stead. When truth is discarded to the flames, freedom shrivels with it. This was the main message Orwell was trying to tell us in Nineteen Eighty-Four.

During the twenty-five years since the fall of the Berlin Wall, the West has never stopped the fighting. The peace dividend entirely spent on armaments and bloodshed.

Indeed, it took less than a year following the heady celebrations of November 9th 1989, before George Bush Snr set about launching the first fresh offensive. It happened against our former ally Saddam Hussein when a dispute over oil rights with the neighbouring dictatorship in Kuwait provided the excuse to attack. The First Iraq War (or Gulf War) kicked off under Operation Desert Shield on August 2nd 1990.

As these two despotic regimes butted heads, the average American needed a good reason to get behind a western intervention in favour of either one, and so the world’s largest (as of then) public relations firm Hill & Knowlton were hired – incidentally, H & K are the same firm who ran campaigns to discredit medical research on the dangers of smoking, and who now work for the fracking industry.

Back in 1990, it was Hill & Knowlton who found a fifteen-year-old Kuwaiti girl, known only as Nayirah, who described in the most harrowing details what she personally witnessed in Kuwait City:

“I volunteered at the al-Addan hospital,” she said. “While I was there, I saw the Iraqi soldiers come into the hospital with guns, and go into the room where … babies were in incubators. They took the babies out of the incubators, took the incubators, and left the babies on the cold floor to die.”

As it transpired, however, Nayirah was no ordinary Kuwaiti citizen. She was, in fact, a member of the Kuwaiti Royal Family. Moreover, heartbroken Nayirah was simply acting out her part, having been coached by none other than Hill & Knowlton’s vice-president Lauri Fitz-Pegado, whilst her own father, Saud Nasir al-Sabah, Kuwait’s US Ambassador, was sat listening to her entirely fictitious sob story.

More than anything else, it would be Hill & Knowlton’s elaborate deception that helped propel the West into its first war of the ‘post-wall’ era (if I may coin a useful term). The direct human cost would be more than 20,000 lives.

But the First Iraq War did not last long. It was a blitzkrieg and one that merely whet the appetite of our slavering military-industrial complex. By February 28th 1991, the Iraqis were fleeing Kuwait, and this rapidly retreating convoy offered a tantalising target for the generals. Photojournalist Peter Turnley later wrote:

During the Persian Gulf War, 1991, the pool system created by the military was meant to be, and was, a major impediment for photojournalists in their quest to communicate the realities of war. This fact does not diminish the great efforts, courage, and many important images created by those among my colleagues who participated in these pools. While you would have a very difficult time, now, finding an editor of an American publication who wouldn’t condemn that pool system and its restrictions, most publications and television entities at the time more or less bought the program before the war began. This reality has been far less discussed than the critiques of the pools themselves.

I refused to participate in the pool system. I was in the Gulf for many weeks as the build-up of troops took place, then sat out the air war, and flew from Paris to Riyadh as soon as the ground war began. I arrived at the “mile of death” the morning of the day the war stopped. It was very early and few other journalists were present. It was a scene of incredible carnage. Strewn over this one-mile stretch of highway were cars and trucks with wheels still turning, radios still playing, and there were bodies scattered along the road. Many people have asked, “How many people died during the war with Iraq?” The question has never been well answered. 3

Click here to view a slideshow of Peter Turnley’s Gulf War photographs including those taken of one of the massacres on the so-called “Highways of Death” out of Kuwait City.

How many thousands were killed during this retreat is disputed, but what is known with greater certainty is that although the war was ended, the slaughter was only beginning. After the war, two “no-fly zones” were put in place and these remained until a more intensive “shock and awe” bombing campaign in December 1998 called Operation Desert Fox, which itself cost an estimated two thousand lives. But worse than this ongoing war of attrition were the sanctions which had first been imposed shortly after Saddam’s invasion of Kuwait, and which persisted long after Saddam was deposed. Sanctions being another form of warfare, and costing the lives of many hundreds of thousands more, a disproportionate number of whom were also children.

In 1998, then-US Secretary of State, Madeline Albright, described the United States as “the indispensible nation”, saying: “But if we have to use force, it is because we are America.” 4 Two years earlier, when in the midst of US sanctions, which as US Ambassador to the United Nations she had been in large part responsible for, she was asked “We have heard that half a million children have died, I mean, that’s more children than died in Hiroshima… is the price worth it?” Albright replied bluntly: “We think the price is worth it.” 5

And let us not forget the still rising numbers of casualties who have had their lives ruined because of our extensive use of depleted uranium. I refer you to a short post I wrote about the terrible effects on the residents of Fallujah in particular.

Embedded below is investigative journalist John Pilger’s documentary “Paying the Price – Killing the Children of Iraq” which was produced by Carlton Television and first aired on ITV in 2000:

 

Even before the 2003 war, we were attacking Iraqi civilians with our inhumane economic sanctions. Yet where were the media protesting against this injustice?

So wrote John Pilger in an article entitled “Why we ignored Iraq in the 1990s” which he published in the New Statesman in October 2004 (the ‘Second’ Iraq War now well underway). He continues:

In October 1999, I stood in a ward of dying children in Baghdad with Denis Halliday, who the previous year had resigned as assistant secretary general of the United Nations. He said: “We are waging a war through the United Nations on the people of Iraq. We’re targeting civilians. Worse, we’re targeting children . . . What is this all about?”

Halliday had been 34 years with the UN. As an international civil servant much respected in the field of “helping people, not harming them”, as he put it, he had been sent to Iraq to implement the oil-for-food programme, which he subsequently denounced as a sham. “I am resigning,” he wrote, “because the policy of economic sanctions is . . . destroying an entire society. Five thousand children are dying every month. I don’t want to administer a programme that satisfies the definition of genocide.”

Halliday’s successor, Hans von Sponeck, another assistant secretary general with more than 30 years’ service, also resigned in protest. Jutta Burghardt, the head of the World Food Programme in Iraq, followed them, saying she could no longer tolerate what was being done to the Iraqi people. Their collective action was unprecedented; yet it received only passing media attention.

John Pilger had been one at the forefront of opposing the sanctions against Iraq during the 1990s, but his had been just another voice in the wilderness. The reason was simple as Pilger points out:

“When truth is replaced by silence,” the Soviet dissident Yevgeny Yevtushenko said, “the silence is a lie.” He might have been referring to the silence over the devastating effects of the embargo. It is a silence that casts journalists as accessories, just as their silence contributed to an illegal and unprovoked invasion of a defenceless country. […]

Up to the fall of Baghdad, the misinformation and lies of Bush and Blair were channelled, amplified and legitimised by journalists, notably by the BBC, which defines its political coverage by the pronouncements, events and personalities of the “village” of Whitehall and Westminster. Andrew Gilligan broke this rule in his outstanding reporting from Baghdad and later his disclosure of Blair’s most important deception. It is instructive that the most sustained attacks on him came from his fellow journalists. 6

Click here to read John Pilger’s full article.

In brief, this is how the war party seized power. They have maintained themselves ever since by force feeding the general public, through the conduit of a subservient and compliant media, a diet of poisonous lies and murderous deception. What began with Bush Snr’s “humanitarian intervention” in The Gulf, then after 9/11 became a “war on terror”, has slowly and surreptitiously been morphed again into a series of “humanitarian interventions”.

‘Interventions’ that have helped to spread the ‘terror’ (meaning ‘terrorism’), deliberately so, thanks to support for the al-Qaeda ‘rebels’ first in Libya and later in Syria. Western foreign policy during the last quarter of a century has been ruinous for anyone who dared to step in the way and disastrous for those who wish to have a sustained peace. It turns out that the notorious “highways to death” in Kuwait were to be precursors for a road to hell for the whole world.

And so we leap forward to Ukraine…

*

Kiev as our dubious ally

The name of “our” enemy has changed over the years, from communism to Islamism, but generally it is any society independent of western power and occupying strategically useful or resource-rich territory. The leaders of these obstructive nations are usually violently shoved aside, such as the democrats Muhammad Mossedeq in Iran and Salvador Allende in Chile, or they are murdered like Patrice Lumumba in the Congo. All are subjected to a western media campaign of caricature and vilification – think Fidel Castro, Hugo Chávez, now Vladimir Putin

This is John Pilger again (a decade on), in an article published last May. And Pilger is better informed than most on how bloodthirsty and duplicitous the West’s stop-at-nothing quest for neo-imperialist expansion has been, because he has personally plotted the tracks of its devastation during the last half century from South East Asia to South America, and from the Middle East to Africa. Pilger continues:

Washington’s role in Ukraine is different only in its implications for the rest of us. For the first time since the Reagan years, the US is threatening to take the world to war. With eastern Europe and the Balkans now military outposts of Nato, the last “buffer state” bordering Russia is being torn apart. We in the west are backing neo-Nazis in a country where Ukrainian Nazis backed Hitler. Having masterminded the coup in February against the democratically elected government in Kiev, Washington’s planned seizure of Russia’s historic, legitimate warm-water naval base in Crimea failed. The Russians defended themselves, as they have done against every threat and invasion from the west for almost a century. […]

Like the ruins of Iraq and Afghanistan, Ukraine has been turned into a CIA theme park – run by CIA director John Brennan in Kiev, with “special units” from the CIA and FBI setting up a “security structure” that oversees savage attacks on those who opposed the February coup. Watch the videos, read the eye-witness reports from the massacre in Odessa this month. Bussed fascist thugs burned the trade union headquarters, killing 41 people trapped inside. Watch the police standing by. A doctor described trying to rescue people, “but I was stopped by pro-Ukrainian Nazi radicals. One of them pushed me away rudely, promising that soon me and other Jews of Odessa are going to meet the same fate… I wonder, why the whole world is keeping silent.” 7

And in February, Pilger added a hard-hitting follow-up entitled “Why the rise of fascism is again the issue”. He begins:

The recent 70th anniversary of the liberation of Auschwitz was a reminder of the great crime of fascism, whose Nazi iconography is embedded in our consciousness. Fascism is preserved as history, as flickering footage of goose-stepping blackshirts, their criminality terrible and clear. Yet in the same liberal societies, whose war-making elites urge us never to forget, the accelerating danger of a modern kind of fascism is suppressed; for it is their fascism.

“To initiate a war of aggression…,” said the Nuremberg Tribunal judges in 1946, “is not only an international crime, it is the supreme international crime, differing only from other war crimes in that it contains within itself the accumulated evil of the whole.”

Had the Nazis not invaded Europe, Auschwitz and the Holocaust would not have happened. Had the United States and its satellites not initiated their war of aggression in Iraq in 2003, almost a million people would be alive today; and Islamic State, or ISIS, would not have us in thrall to its savagery. They are the progeny of modern fascism, weaned by the bombs, bloodbaths and lies that are the surreal theatre known as news.

Like the fascism of the 1930s and 1940s, big lies are delivered with the precision of a metronome: thanks to an omnipresent, repetitive media and its virulent censorship by omission.

After first reminding the reader of the secret history behind our interventions in Vietnam, Laos, Cambodia, Kosova, Afghanistan, and Libya, he then returns to Ukraine, writing:

In the 1990s, as former Soviet republics, eastern Europe and the Balkans became military outposts of Nato, the heirs to a Nazi movement in Ukraine were given their opportunity. Responsible for the deaths of thousands of Jews, Poles and Russians during the Nazi invasion of the Soviet Union, Ukrainian fascism was rehabilitated and its “new wave” hailed by the enforcer as “nationalists”.

This reached its apogee in 2014 when the Obama administration splashed out $5 billion on a coup against the elected government. The shock troops were neo-Nazis known as the Right Sector and Svoboda. Their leaders include Oleh Tyahnybok, who has called for a purge of the “Moscow-Jewish mafia” and “other scum”, including gays, feminists and those on the political left.

These fascists are now integrated into the Kiev coup government. The first deputy speaker of the Ukrainian parliament, Andriy Parubiy, a leader of the governing party, is co-founder of Svoboda. On February 14, Parubiy announced he was flying to Washington get “the USA to give us highly precise modern weaponry”. If he succeeds, it will be seen as an act of war by Russia. […]

[At the same time,] The Kiev regime turned on the ethnic Russian population in the east with the ferocity of ethnic cleansing. Deploying neo-Nazi militias in the manner of the Waffen-SS, they bombed and laid to siege cities and towns. They used mass starvation as a weapon, cutting off electricity, freezing bank accounts, stopping social security and pensions. More than a million refugees fled across the border into Russia. In the western media, they became unpeople escaping “the violence” caused by the “Russian invasion”. The Nato commander, General Breedlove – whose name and actions might have been inspired by Stanley Kubrick’s Dr. Strangelove – announced that 40,000 Russian troops were “massing”. In the age of forensic satellite evidence, he offered none. 8

Incidentally, for anyone who believes that talk of a fascist coup in Kiev is merely the repetition of Kremlin propaganda, I direct you to read my earlier posts on the subject, but first to simply reflect upon the image below. It shows the headquarters of the “Euromaidan” protest movement and features as its centrepiece a portrait of Nazi collaborator and mass murderer, Stepan Bandera:

I also recommend watching this excellent overview (embedded below) by psychologist Stanislav Byshok, a leading authority on the rebirth of fascism in Ukraine who co-authored with Alexey Kochetkov Neonazis and Euromaidan: From Democracy to Dictatorship, which provides a comprehensive study of how fascist groups, covertly backed by the US State Department and the National Endowment for Democracy, ousted the elected government and seized power in Ukraine (warning: many of the images are disturbing):

However, as the war drums continue to be pounded hard in America and Britain, strain does appear to be developing between the Nato powers. Especially after German chancellor, Angela Merkel, alongside French president, François Hollande, were able to broker a peace deal between Putin and Ukrainian president Petro Poroshenko. With the fragile ceasefire of the Minsk II accord in place, Der Spiegel also went on the offensive, most especially against neo-con hawk General Breedlove:

On that same day, General Philip Breedlove, the top NATO commander in Europe, stepped before the press in Washington. Putin, the 59-year-old said, had once again “upped the ante” in eastern Ukraine — with “well over a thousand combat vehicles, Russian combat forces, some of their most sophisticated air defense, battalions of artillery” having been sent to the Donbass. “What is clear,” Breedlove said, “is that right now, it is not getting better. It is getting worse every day.”

German leaders in Berlin were stunned. They didn’t understand what Breedlove was talking about. And it wasn’t the first time. Once again, the German government, supported by intelligence gathered by the Bundesnachrichtendienst (BND), Germany’s foreign intelligence agency, did not share the view of NATO’s Supreme Allied Commander Europe (SACEUR).

The pattern has become a familiar one. For months, Breedlove has been commenting on Russian activities in eastern Ukraine, speaking of troop advances on the border, the amassing of munitions and alleged columns of Russian tanks. Over and over again, Breedlove’s numbers have been significantly higher than those in the possession of America’s NATO allies in Europe. As such, he is playing directly into the hands of the hardliners in the US Congress and in NATO.

It wasn’t only General Breedlove who found himself in Der Spiegel’s firing line:

In reporting on the meeting later, the German tabloid Bild reported that [Victoria] Nuland referred to the chancellor’s early February trip to Moscow for talks with Putin as “Merkel’s Moscow stuff.” No wonder, then, that people in Berlin have the impression that important power brokers in Washington are working against the Europeans. Berlin officials have noticed that, following the visit of American politicians or military leaders in Kiev, Ukrainian officials are much more bellicose and optimistic about the Ukrainian military’s ability to win the conflict on the battlefield. “We then have to laboriously bring the Ukrainians back onto the course of negotiations,” said one Berlin official. […]

Nuland has also been open — at least internally — about her contempt for European weakness and is famous for having said “Fuck the EU” during the initial days of the Ukraine crisis in February of 2014. Her husband, the neo-conservative Robert Kagan [co-founder of PNAC], is, after all, the originator of the idea that Americans are from Mars and Europeans, unwilling as they are to realize that true security depends on military power, are from Venus.

When it comes to the goal of delivering weapons to Ukraine, Nuland and Breedlove work hand-in-hand. On the first day of the Munich Security Conference, the two gathered the US delegation behind closed doors to discuss their strategy for breaking Europe’s resistance to arming Ukraine.

On the seventh floor of the Bayerischer Hof hotel in the heart of Munich, it was Nuland who began coaching. “While talking to the Europeans this weekend, you need to make the case that Russia is putting in more and more offensive stuff while we want to help the Ukrainians defend against these systems,” Nuland said. “It is defensive in nature although some of it has lethality.” 9

Of course, the despicable Victoria Nuland and fellow neo-con General Breedlove are the new imperialists. Openly so, even if they do speak from both sides of their dishonourable mouths.

*

Reductio ad Hitlerum

The “coming of Hitler” is a rallying cry of war lovers. It was heard before Nato’s “moral crusade to save Kosovo” (Blair) in 1999, a model for the invasion of Iraq. In the attack on Serbia, 2 per cent of Nato’s missiles hit military targets; the rest hit hospitals, schools, factories, churches and broadcasting studios. Echoing Blair and a clutch of Clinton officials, a massed media chorus declared that “we” had to stop “something approaching genocide” in Kosovo, as Timothy Garton Ash wrote in 2002 in the Guardian. “Echoes of the Holocaust”, said the front pages of the Daily Mirror and the Sun. The Observer warned of a “Balkan Final Solution”. 10

These are words of John Pilger taken from in a short and very pointed article titled “The war lovers” which he wrote nearly a decade ago. The greatest fear at that time was that Bush looked dead set on attacking Iran (Iran having been designated the last to fall on Wesley Clark’s well-known list of neo-con targets), but thankfully history played out differently. Attack on Iran was indefinitely postponed, although if Netanyahu gets his way, it may not be delayed for much longer.

Also at the time of Pilger’s piece, with the neo-cons even more ascendant in Washington, we had the unseemly spectacle of Donald Rumsfeld comparing Hugo Chavez to Hitler. 11 Of course, Chavez had earlier compared Bush to the Devil 12, however the difference was that Chavez had no intention of attacking America (since obviously Venezuela is no position to attack), whereas Washington, as Chavez knew very well, had certainly been behind the coup of April 2002, which briefly succeeded (albeit for less than 48 hours) in toppling his elected government.

As Pilger says, whenever the West starts likening any foreign leader to Hitler, then this marks a point in an escalation that brings us closer to declaring war. Because comparing anyone to Hitler is tantamount not only to saying that such a person is impossible to negotiate with, but that it would be wilfully irresponsible to do so. It would be an act of collaboration, of appeasement. This is unthinkable:

Poor Prince Charles got into terrible trouble last week for stupidly saying something sensible. He was stitched up by the only witness to his perspicacious outburst, 78-year-old Marienne Ferguson. During a tour of the Canadian Museum of Immigration, in Halifax, Nova Scotia, she was telling him how her family had fled Poland in 1939 just as the Germans invaded, when the prince apparently said: “And now Putin is doing just about the same as Hitler.” “I must say I agree with him,” Ferguson later said, as she dobbed him in to the world’s media, heralding headlines proclaiming that “Prince Charles says Putin is like Hitler!”

This is the opening paragraph of a Guardian article written last May by comedian David Mitchell. Mitchell then continues:

I agree with him too – and he’s not the first to say it. He’s echoing the views of former US secretary of state Hillary Clinton, Canadian foreign minister John Baird, Czech senate speaker Milan Stech and German finance minister Wolfgang Schäuble. Vladimir Putin’s current foreign policy towards Ukraine is uncannily similar to Hitler’s behaviour towards Czechoslovakia and Poland in advance of his annexation of those countries in the 1930s. The prince’s comparison is apt and chilling, and the fact that Putin shows no sign of wanting to exterminate an ethnic group, but is content merely to marginalise and harass a sexual orientation, does nothing to undermine it. 13

So Putin is Hitler says Prince Charles. Says Hillary Clinton. Says Wolfgang Schäuble. Says (as we will see) David Cameron along with no lesser authority on fascism than Senator John McCain – someone happy to associate with the likes of Oleh Tyahnybok, the leader of the right wing nationalist party Svoboda…

… and such a friend to Kiev that he was more recently invited to join Poroshenko’s International Advisory Council on Reforms:

“I was honored to be asked to join Ukraine’s International Advisory Council on Reforms, a forum for discussing ways to ensure Ukraine’s territorial integrity and security and support the country’s democratic future in the face of Russian aggression. However, under provisions of the U.S. Constitution concerning the interaction of Members of Congress with foreign governments, I am obligated to decline the invitation.” 14

And so says marvellously perspicacious comedian David Mitchell; let us never forget the heavyweight intellects too.

Come the end of the year, however, and the Guardian’s sister paper, the Observer, was presenting the case with more restraint and a modicum of circumspection – this time it was left to Lincoln Mitchell (no relation I presume) to dish the dirt, while offering an assessment of Putin that is actually more credible:

Following the Russian invasion of Crimea, however, Hitler analogies dominated western perceptions of Mr. Putin. Among those making that comparison were British Prime Minister David Cameron, former Secretary of State Hillary Clinton, Paul Johnson writing for Forbes, and Senator John McCain (R-AZ). Most of these comparisons focused on Hitler’s brutal policies towards Germany’s neighbors in the late 1930s, rather than genocide and mass murder, but a Hitler comparison is always made with the deliberate aim of making the target seem as evil and dangerous. Gradually the Hitler meme faded away; and in recent days the media has been filled with stories about how the Russian economy is in collapse and Putin may not last in power much longer.

Mr. Putin cannot both be Hitler and so weak that a rise in global oil prices threatens his regime. Similarly, he cannot simultaneously both pose a Hitler-like threat yet be unable to maintain his grip on power due to a currency devaluation. The narratives about Mr. Putin that dominated 2014 are thus mutually exclusive, but they are also individually suspect. 15

Truth be told, there are an awful lot of deeply unpleasant world leaders today, just as there were yesterday. Some of these are our allies and some are not – but we pick and choose with little regard for morality or integrity, and according instead to what is more profitable and most expedient. Now if the principle charge to be made against Putin (once an ally but now a foe) is that he is responsible for the oppression of minority groups in Russia, then on that charge he stands justly accused. If you charge that he is a nationalist, this stands too. But if your charge is that he is an incorrigible military expansionist – which is the principle charge in these rather daft comparisons to Hitler – then the facts, duly considered, stand very much against you.

Firstly, and perhaps most importantly, this terrible conflict in Ukraine was started with horribly bloody massacre and the overthrow of an unpopular but still elected government. News of who was really behind that the Maidan “protests” was drip-fed by our media, but prominent amongst the protagonists were the leaders of Svoboda and, worse again, of Right Sector. Thus the so-called Ukraine crisis began with a fascist-led coup and not an invasion. Indeed, there never has been any kind of Russian invasion and there is no verifiable or even convincing evidence that Putin has ever intended one – here is a little more from Der Spiegel:

[But] For months now, many in the Chancellery simply shake their heads each time NATO, under Breedlove’s leadership, goes public with striking announcements about Russian troop or tank movements. To be sure, neither Berlin’s Russia experts nor BND intelligence analysts doubt that Moscow is supporting the pro-Russian separatists. The BND even has proof of such support.

But it is the tone of Breedlove’s announcements that makes Berlin uneasy. False claims and exaggerated accounts, warned a top German official during a recent meeting on Ukraine, have put NATO — and by extension, the entire West — in danger of losing its credibility.

There are plenty of examples. Just over three weeks ago, during the cease-fire talks in Minsk, the Ukrainian military warned that the Russians — even as the diplomatic marathon was ongoing — had moved 50 tanks and dozens of rockets across the border into Luhansk. Just one day earlier, US Lieutenant General Ben Hodges had announced “direct Russian military intervention.”

Senior officials in Berlin immediately asked the BND for an assessment, but the intelligence agency’s satellite images showed just a few armored vehicles. Even those American intelligence officials who supply the BND with daily situation reports were much more reserved about the incident than Hodges was in his public statements. One intelligence agent says it “remains a riddle until today” how the general reached his conclusions. […]

At the beginning of the crisis, General Breedlove announced that the Russians had assembled 40,000 troops on the Ukrainian border and warned that an invasion could take place at any moment. The situation, he said, was “incredibly concerning.” But intelligence officials from NATO member states had already excluded the possibility of a Russian invasion. They believed that neither the composition nor the equipment of the troops was consistent with an imminent invasion.

The experts contradicted Breedlove’s view in almost every respect. There weren’t 40,000 soldiers on the border, they believed, rather there were much less than 30,000 and perhaps even fewer than 20,000. Furthermore, most of the military equipment had not been brought to the border for a possible invasion, but had already been there prior to the beginning of the conflict. Furthermore, there was no evidence of logistical preparation for an invasion, such as a field headquarters. 16

Click here to read the full report in Der Spiegel.

And back to John Pilger:

If Putin can be provoked into coming to their aid, his pre-ordained “pariah” role in the West will justify the lie that Russia is invading Ukraine. On January 29, Ukraine’s top military commander, General Viktor Muzhemko, almost inadvertently dismissed the very basis for US and EU sanctions on Russia when he told a news conference emphatically: “The Ukrainian army is not fighting with the regular units of the Russian Army”.  There were “individual citizens” who were members of “illegal armed groups”, but there was no Russian invasion. This was not news. Vadym Prystaiko, Kiev’s Deputy Foreign Minister, has called for “full scale war” with nuclear-armed Russia.

On February 21, US Senator James Inhofe, a Republican from Oklahoma, introduced a bill that would authorise American arms for the Kiev regime. In his Senate presentation, Inhofe used photographs he claimed were of Russian troops crossing into Ukraine, which have long been exposed as fakes. It was reminiscent of Ronald Reagan’s fake pictures of a Soviet installation in Nicaragua, and Colin Powell’s fake evidence to the UN of weapons of mass destruction in Iraq.

Yes, Russia has covertly backed the anti-government rebels in the East, just as parties within the West (often with ties to George Soros) covertly instigated the “revolution”, then backed the unelected provisional “government”, and since then have cozied up to the partially elected government in Kiev (a government not recognised by the majority in the East). Yes, Putin annexed Crimea, but Russian forces were already based on the peninsula and the seizure was bloodless because the majority of people living in Crimea urgently wanted to be with Russia. After all, if Crimea had stayed within Ukraine, then it would doubtless have been dragged into the civil war too. Instead of relative prosperity, it would presumably have suffered shelling by its own government forces and been raided by their closely-allied fascist brigades.

So if Putin is a villain in this piece, then he is very far from alone – Pilger once more:

The intensity of the smear campaign against Russia and the portrayal of its president as a pantomime villain is unlike anything I have known as a reporter. Robert Parry, one of America’s most distinguished investigative journalists, who revealed the Iran-Contra scandal, wrote recently, “No European government, since Adolf Hitler’s Germany, has seen fit to dispatch Nazi storm troopers to wage war on a domestic population, but the Kiev regime has and has done so knowingly. Yet across the West’s media/political spectrum, there has been a studious effort to cover up this reality even to the point of ignoring facts that have been well established… If you wonder how the world could stumble into world war three – much as it did into world war one a century ago – all you need to do is look at the madness over Ukraine that has proved impervious to facts or reason.” 17

Click here to read John Pilger’s complete article.

*

The fog of war

By February this angle was starting to alter. If the equation Putin equals Hitler now looked flimsy, there were alternative comparisons that might be made to “skilful, ruthless dictators” who are less historically outstanding. To present the case afresh, the Guardian gave the floor to Oxbridge historian Tim Garton Ash, who drew up new parallels as follows:

Vladimir Putin is the Slobodan Milošević of the former Soviet Union: as bad, but bigger. Behind a smokescreen of lies he has renewed his drive to carve out a puppet para-state in eastern Ukraine.

And this “Milošević of the former Soviet Union: as bad, but bigger” (which translates as something akin to ‘Hitler-lite’) must be stopped, of course, because the whole point of comparisons like this is that room for negotiation can again be abruptly closed off:

Preoccupied by Greece and the eurozone, Europe is letting another Bosnia happen in its own front yard. Wake up, Europe. If we have learned anything from our own history, Putin must be stopped. But how? In the end, there will have to be a negotiated solution.

In the end, yes – but not right now. Instead, Garton Ash implores the West to “ratchet up the economic sanctions” (warfare by economic means) as well as ramping up the propaganda (and apologies here for any disturbing images that may be conjured to mind after reading Garton Ash’s next paragraph):

Last year a Russianist of my acquaintance was sitting naked and at ease in the hot tub with a friend of his in Moscow after several vodkas, as is the Russian custom [just so you know], when this highly educated Russian asked: “So tell me, honestly, why do you support the fascists in Kiev?”

We need to counter this propaganda not with lies of our own but with reliable information and a scrupulously presented array of different views. No one is better placed to do this than the BBC. The US may have the best drones in the world, and Germany the best machine tools, but Britain has the best international broadcaster. 18

Propaganda directed towards the Russians (sorry, I mean “reliable information”) is however unlikely to strike such a blow. Most Russians do indeed speak excellent English and would doubtless be lulled by the unimpeachable voice of “the best international broadcaster” were it not for the peculiar fact that history leaves them better equipped at sifting news than those of us who grew up in ‘the free West’ – if your only source of information is Pravda, you soon get wise to “reliable information”!

But never mind, because this latest propaganda offensive, which is what Garton Ash is really announcing in his article, will not be so strictly targeted at the Russian people. Not if the powerbrokers in the West have realised, as they surely must, that most Russians are already a lost cause. No, the latest rounds of propaganda will be disseminated to influence attitudes on the home front in the information war. In fact, reading deftly between the furrowed lines of his agitation, Garton Ash is explaining how brainwashing is good for us – our brainwashing, obviously.

Because propaganda is rather desperately needed if we are to keep these wars going:

So the challenge is to shorten that period and stop the mayhem. To do this Ukraine needs modern defensive weapons to counter Russia’s modern offensive ones. Spurred on by John McCain, the US Congress has passed a Ukraine Freedom Support Act which allocates funds for the supply of military equipment to Ukraine. It is now up to President Obama to determine the timing and composition of those supplies. […]

Only when Ukrainian military defence can plausibly hold Russian offence to a stalemate will a negotiated settlement become possible. Sometimes it takes guns to stop the guns.

Yes, “sometimes it takes guns to stop guns” and especially when you’re dealing with a person like “the Slobodan Milošević of the former Soviet Union: as bad, but bigger.”

Now please let’s remember too that Tim Garton Ash has a prodigious record as warmonger (I’ll bet he was the bully’s mate at school), also leading calls for earlier Nato “interventions” like the one in Kosovo with pronouncements quoted above, but ones I will quote again: that “we” needed to stop “something approaching genocide”. As it transpired, however, Kosovo was just the latest in our production line for wars, sold to a still naive western audience (since this was prior to the Iraq War Part 2) on the tried and tested basis of exaggeration and lies.

More from John Pilger and that same New Statesman article published March 2006:

The “mass graves” in Kosovo would justify it all, they said. When the bombing was over, international forensic teams began subjecting Kosovo to minute examination. The FBI arrived to investigate what was called “the largest crime scene in the FBI’s forensic history”. Several weeks later, having found not a single mass grave, the FBI and other forensic teams went home.

In 2000, the International War Crimes Tribunal announced that the final count of bodies found in Kosovo’s “mass graves” was 2,788. This included Serbs, Roma and those killed by “our” allies, the Kosovo Liberation Front. It meant that the justification for the attack on Serbia (“225,000 ethnic Albanian men aged between 14 and 59 are missing, presumed dead”, the US ambassador-at-large David Scheffer had claimed) was an invention. To my knowledge, only the Wall Street Journal admitted this. A former senior Nato planner, Michael McGwire, wrote that “to describe the bombing as ‘humanitarian intervention’ [is] really grotesque”. In fact, the Nato “crusade” was the final, calculated act of a long war of attrition aimed at wiping out the very idea of Yugoslavia.

Noam Chomsky was another of exceptionally few political commentators to raise questions at the time of Nato’s involvement in Kosovo:

The tumult having subsided, it should be possible to undertake a relatively dispassionate review and analysis of NATO’s war over Kosovo. One might have expected the theme to have dominated the year-end millennarianism, considering the exuberance the war elicited in Western intellectual circles and the tidal wave of self-adulation by respected voices, lauding the first war in history fought “in the name of principles and values,” the first bold step towards a “new era” in which the “enlightened states” will protect the human rights of all under the guiding hand of an “idealistic New World bent on ending inhumanity,” now freed from the shackles of archaic concepts of world order. But it received scant mention.

A rare exception was the Wall Street Journal, which devoted its lead story on December 31 to an in-depth analysis of what had taken place. The headline reads: “War in Kosovo Was Cruel, Bitter, Savage; Genocide It Wasn’t.” The conclusion contrasts rather sharply with wartime propaganda. A database search of references to “genocide” in Kosovo for the first week of bombing alone was interrupted when it reached its limit of 1,000 documents.

As NATO forces entered Kosovo, tremendous efforts were undertaken to discover evidence of war crimes, a “model of speed and efficiency” to ensure that no evidence would be lost or overlooked. The efforts “build on lessons learned from past mistakes.” They reflect “a growing international focus on holding war criminals accountable.” Furthermore, analysts add, “proving the scale of the crimes is also important to NATO politically, to show why 78 days of airstrikes against Serbian forces and infrastructure were necessary.” […]

Despite the intensive efforts, the results of “the mass-grave obsession,” as the WSJ analysts call it, were disappointingly thin. Instead of “the huge killing fields some investigators were led to expect,.. the pattern is of scattered killings,” a form of “ethnic cleansing light.” 19

 

Ostensibly the fight for Kosovo had been a purely “humanitarian intervention” – a phrase that has since taken on a far hollower ring – and for many, especially amongst those notionally of the left, this became adopted as something like an article of faith (we can consider the reasons for this in a moment). In reality, however, the Nato campaign had been just another strategic conflict, and with victory against the Serbs, the West immediately took up an option to annex a new state. Yes, Kosovo was our Crimea, except with land seized for what is now the largest foreign US base set up since the Vietnam War, Camp Bondsteel, by means of a high-intensity bombing offensive. By contrast, the Russians, who already had military presence including a large naval base at Sevastopol, captured Crimea without any bombing whatsoever – no loss of life, because the majority in Crimea, ethnic Russians who had better reason to fear Kiev than the Kremlin, welcomed the transfer of control. 20

Pilger again:

For me, one of the more odious characteristics of Blair, and Bush, and Clinton, and their eager or gulled journalistic court, is the enthusiasm of sedentary, effete men (and women) for bloodshed they never see, bits of body they never have to retch over, stacked morgues they will never have to visit, searching for a loved one. Their role is to enforce parallel worlds of unspoken truth and public lies. That Milosevic was a minnow compared with industrial-scale killers such as Bush and Blair belongs to the former. 21

Click here to read John Pilger’s short article “The war lovers” and here to read Noam Chomsy’s longer “Review of NATO’s War over Kosovo”.

*

All war is an abomination and, as General Smedley Butler very ably dissects in his famous pamphlet, it is always a racket. But worse, war then serves as a putrid breeding ground for further atrocities. For these and other reasons, war ought to be reserved as a desperate fallback and a last resort, but instead, and especially so during this quarter century after the Berlin Wall fell, and since the West was free to operate within a de facto unipolar world order, we have never stopped going to war.

To justify this reign of terror, our propaganda machine has been working tirelessly too. For extended periods, mere recourse to threats of terrorism have served this purpose extremely well, however, whenever those nominally of liberal-leftist persuasion are sworn into office, the humanitarian excuse plays better again. And the advantageous repetition of this alternative catalogue of lies then depends upon the obedience and compliance of those parts of the media also nominally progressive and supposedly speaking from the left:

The Guardian‘s role in the Kosovo campaign, along with its Sunday sister paper, the Observer, was a crucial one—even within the framework of the near unanimous support offered by the media to NATO. The newspapers are widely regarded as the house journals of Britain’s liberal intelligentsia and were previously seen as a forum for dissenting views—including criticism of the military activities of the major powers.

So writes Mike Ingram in an article published by the World Socialist Web Site, continuing:

Like so many former reformists, liberals and pacifists, however, the Guardian and Observer have lurched ever further to the right. Their hawkish stand in defence of NATO’s bombardment of Serbia aided the Blair government in its efforts to both justify the war and intimidate the relatively small numbers of liberals, intellectuals and artists who maintained an oppositional stance.

The Observer editorialised against the war’s opponents, claiming in March last year, “There is no alternative…. We have to live in the world as it is, not some Utopia.” Guardian journalist Jonathan Freedland wrote on March 25, “The old left needs to look at the world that’s actually taking shape. Wednesday’s Lords ruling on Pinochet suggests a new brand of international law, one that doesn’t allow heads of state to kill and maim indiscriminately, even within their own sovereign lands. The night-sky over Belgrade tells the same story. Together they’re making the world a less cosy place for dictators—and safer for the weak and powerless.” Whole articles were devoted to denunciations of those who opposed the war and exposed NATO propaganda, such as the playwright Harold Pinter and journalist John Pilger.

With such a despicable record to defend, the Guardian clearly did not feel it could simply ignore The Hague tribunal’s latest admissions. Instead, it felt obliged to reiterate NATO’s own threadbare rationale for the bombing of Serbia in a pathetic attempt at self-justification. It is to be hoped that those who in the past naively took the newspaper’s claim to editorial integrity at face value will draw the appropriate conclusions from this sorry episode. 22

Click here to read Mike Ingram’s full article.

Admitting to responsibility for any part in the prosecution of illegal (or merely illegitimate) wars would mean accepting a heavy burden of guilt, and the mainstream media (especially those sham left broadsheets with their liberal reputation to uphold) ought to carry that burden. Instead, they would prefer that we forget the key role they had in permitting such carnage. We must not follow them into amnesia.

Neither should we forget any of the atrocities. The “shock and awe” unleashed over Baghdad as well as over the cities of Tripoli and Sirte in Libya, and the daily horrors of our other victims like those in Fallujah, including the babies not yet born, but already poisoned by the Nato’s huge arsenal of chemical weapons – white phosphorous and (worse) depleted uranium.

For whenever the wish is to incite new wars, we must anticipate that this same media will again play along just the same, promulgating official rumours of another foreign menace that has drifted into the neo-imperialist crosshairs. Phrases like “mass graves”, “ethnic cleansing” and even words like “genocide” will be promptly bandied about. But it is war alone that unfailingly produces “mass graves”, whilst “genocide” is a word we reserve and use only when our enemies are doing the slaughtering. The first casualty of war is indeed the truth, and since we are perpetually at war, truth has little part to play in any of the justifications for the West’s ever more capricious response to what is really taking place in the killing fields of today’s constantly expanding warzone.

*

Interlude: so who won the war anyway?

“Two World Wars and One World Cup” goes the stupid football chant: half-jesting, three quarters-jeering. Claiming the bragging rights to results in a war is never a seemly matter; but then this is straight off the Jeremy Clarkson page of humour. Less snide than grand petrolhead poobah, but awash with the same undercurrents of latent bigotry; the pretence is all in the feigning of those chanting that we are actually laughing up the xenophobia itself. It’s clever. It’s post-ironic.

In exchange, the German fans sing back in full-throated unison: “Football coming home”; the English anthem of the Euro ’96 tournament skilfully adapted by deliberately missing out the apostrophe-‘s’ and misplacing the Anglo-Saxon emphasis – after all, we know their English is as immaculate as their football – but to maximise the more Teutonic staccato impact such alterations were demanded. And you have to laugh at the genuine double irony of their gesture: double because it nods to how they recognise that the English imagine they don’t even have a sense of humour… genuinely sophisticated (and typically German!)

All of which is absolute unadulterated silliness: the chant, my analysis, the whole shebang. Silliness because frankly I needed a respite (and perhaps you did too); a break from the unremitting seriousness of thinking and writing about war and its atrocities. For war itself is silly, brutally and horrifically so. A stupendously absurd human folly. Or why else would we find Dr Strangelove so hilarious (I speak personally), if not because it is both one hundred percent believable and one hundred percent pure farce.

On the whole, Hollywood gets war all wrong – just as it gets most other things all wrong – but on this occasion quite deliberately so, because Hollywood is literally in the business of selling, and whenever war becomes one of our primary commodities, then Hollywood pitches war. But Kubrick was a maverick. And he got war consistently right, though differently so in each of his three markedly different war films.

First he presents the tragedy of the First World War in Paths of Glory and next he brought us the farce in his Cold War masterpiece, Strangelove, the ultimate black as pitch comedy, and finally, he brilliantly fused those twin faces into the stunning Vietnam War tragicomedy, Full Metal Jacket. The most lasting evil of warfare is the way it dehumanises, he tells us, the unremitting horror ending in “the thousand-yard stare”, and with it, every evil numbed and absolutely banal. In the film’s final scene, Kubrick sums up perfectly; our heroes marching through the smouldering ruins of Huế (one of the longest and bloodiest battles of the war) singing: “Who’s the leader of the club, that’s made for you and me…      M-I-C– K-E-Y– M-O-U-S-E!

By virtue of such obscene consequences, comparison of war with all other human activities fails. Comparisons with football are as ridiculous as they are dubious, as most football fans know. Yet comparisons to games are inevitable and unavoidable, heinous and sickening as war is, for so long as we continue fighting. For war has so many hallmarks of a game. It has rules and strategies; advances and setbacks; and, most importantly, winners and losers – winning and losing being as determinable outcomes in every war as in any game. So we all-too easily get into the habit of playing at this war game just as little boys like to play cowboys and Indians, or if we are more cerebrally inclined, chess perhaps… these are war games and football is too (most games are war as allegory).

However, this particular English football chant is sillier again, because it also expresses an overarching and rather commonly held English delusion. A national myth that England (meaning Britain, obviously!) somehow singlehandedly won not just the World Cup in 1966 (thanks to a Polish linesman), but also both world wars. And though it is correct to say that Germany was twice defeated, whilst adding that reparations demanded after their first defeat, fuelled a nationalistic fervour for a rematch; with respect to who actually “won the war” – well, that has always been more debatable.

Obviously, no-one dwells very long on claims to victory in World War One in any case: that mud-drenched stalemate of “the war to end all wars”. All that warrants remembrance is how 16 million people lost their lives and 20 million more were wounded, and perhaps that the highpoint was a Christmas truce and truly extraordinary football match (in reality lots of informal games), whilst the vain horrors of trench warfare were temporarily suspended. But after the exchange of gifts, the sing-song and kickarounds, the men trooped across no-man’s land back to their gun emplacements and the thick mud of the long graves where most would perish. Which exemplifies the forlorn stupidity of war again – war being such an idiotic pursuit, and supremely so.

The Second World War, however, presents us with one of those exceptional instances when war itself most likely spared even greater horrors; on this occasion, reversing the otherwise inexorable advance of a truly monstrous ideology. It was the war that saved our humanity and what remained of European civilisation. With this firmly in mind, the bloodiest conflict in all of history must also be judged to have been a necessary evil; indisputedly so.

This is certainly not to say World War Two could not have been avoided. It might well have been if it were not for the failures of those in power, and especially some within the highest echelons of the Anglo-American establishment. Hitler’s rise to power and his subsequent rearmament of his Nazi regime depended upon friendly relations with major industrialists and financiers both in Britain and America. A few had backed him to the hilt. Without such generous support, as well as prior support for Mussolini’s rise in Italy, it is hard to refute the claims that fascism would never have needed defeating at all. But this is counterfactual history, and putting such what ifs also to one side, as the situation stood by the end of the 1930s, Hitler’s war machine was ready to crush all before it; the die had been cast. Leaving all else aside, war had become inevitable.

It is indeed pertinent to ask, therefore, who precisely did win the war against Hitler and fascism? But this involves two questions, not one. Irrefutably, in a vitally importance sense, the winner of World War Two was America, since America was the last major power still standing with its commercial and industrial capacity unscathed. Post-war America was bound to take the lead whilst all other developed nations both in Europe, as well as those in the Far East, lay in ruins. With next to no competition, where else could the world turn to procure its goods? This ensured boom times for those same American industrialists who had collaborated with the Nazi programme, not to mention financiers like Prescott Bush, who had bankrolled Hitler. Now they would reap the rewards not just of German annihilation, but of the annihilation of all of Eurasia. And let’s not pretend that the Second World War was not a racket too – indeed, that it was, provides a central motif for Joseph Heller’s classic anti-war novel, Catch 22 (its other central theme being the inane futility of all wars).

The other half of this same question “who won the war”, when less ambiguously framed, becomes a question regarding which of the Allied forces was most instrumental in defeating Hitler’s Nazi regime. And we love to believe, of course, as the terrace chant goes, that it was plucky little England (…I mean Britain, sorry) ‘who stopped his little game’ – which is also to paraphrase the wonderfully witty lyrics of the Dad’s Army theme tune – itself a wink and a genuine acknowledgement to the bigger, starker truth. Not that there is any doubting the extraordinary heroism of British or other Allied forces, but that flimsy claims to an entirely homemade backs-to-the-wall victory rest very heavily on collective amnesia.

For almost precisely four years following the Dunkirk evacuation in late May 1940 (in truth a desperate and humiliating retreat after the calamitous military failings of our first offensive onto the continent) and up until the heroic success of the Normandy landings in early June 1944, it wasn’t the British, or our Commonwealth allies, or even the mighty Americans, who were spearheading the desperate fight against the Nazi offensive. Instead, the British and Commonwealth forces had been initially redirected to protect the colonies in Africa, the Middle East and Asia, and, in the aftermath of the Japanese sneak attack on Pearl Harbor, the American forces were also helping out with our North African campaign, or else island hopping across the Pacific Theatre. Thus, for the longest span during the war, it was the Russians, with the aid of some logistical support but otherwise alone, who had faced down three-quarters of the entire German military, not to mention the armies of the other Axis powers (neighbours Finland included).

Certainly, they had enjoyed some indirect support, especially during the later stages of the war, by way of strategic bombing raids carried out by British and American pilots. These set back Germany industrial production (though not by much, nor for very long), whilst larger attacks against cities like Hamburg and then Berlin had also dented morale and redirected some of the German forces away from the Eastern Front – of course, the indiscriminate bombing of civilians is not just morally reprehensible, but strictly speaking a war crime, which is why “Bomber” Harris is rightly denounced for his love of setting cities ablaze (the firestorming of Dresden, his farewell atrocity), although he was only doing what the Germans did, and the Americans did (the area bombing of Tokyo also came very late in the war) and were yet to do (testing out their new A-bombs at Hiroshima and Nagasaki)… the rules of war are always infinitely flexible.

The bombs undoubtedly helped to weaken German resistance as the D-Day offensive approached, and then with a great deal of support from the French Resistance, the liberation of Paris and the Low Countries quickly followed, but much of this “Second Front” simply arrived too late to turn the war. And Hitler’s last gasp assault in the Ardennes, which ended with the famous coup de grace at the Battle of the Bulge, had been an ill-advised rearguard response to the Russian victory on the Eastern Front.

I once asked a friend who did wargaming as a hobby, why it was, in light of so many historical precedents of failure, the Germans had countenanced the idea that their own invasion of Russia would be other than disastrous. In reply, he told me how he had re-enacted the German campaign along the Eastern Front on more occasions than any other battle. I was fascinated, he said, that no matter what strategies I tried out, I could never get the Russians to win. Yet in reality, of course, they did win (just as they always do when playing at home) although the human cost of defending their nation is only barely comprehendible. Perhaps the reason my friend could never successfully re-enact the event is because here was a military victory that owed a great deal more to the stubborn endurance and sheer fortitude of the people as it did to the ruthlessness and cunning of the Soviet commanders, or even the ultimate military might of the Red Army.

The siege of the city of Leningrad would endure from September 1941 to January 1944 (872 days in total), and throughout this time its population were not only bombarded by the Wehrmacht but simultaneously starved into submission – Hitler’s plans were not just to conquer his “Lebensraum”, but to eradicate most of the native Untermenschen in the process, clearing the way for an Aryan repopulation. With the city blockaded and encircled by German artillery, those trapped inside were reduced to consuming bread made from sawdust, soup from wallpaper paste, rats and shoe leather.

At Stalingrad, the Russians hunkered down and fought a fierce guerrilla war not so much from street to street as from one building to the next. The death rate was higher still, and here the meat-grinder also kept on turning for nearly six months (Aug 1942 – Feb 1943); the city’s infrastructure likewise pulverised into a wasteland. 23 Yet more than any single battle, it would be the Russian defence of Stalingrad that turned the advantage in favour of the Allies.

By the end of the war, a greater number of Russians (civilians and soldiers) had been killed than people from any other nation – the scale of atrocities committed by the occupying Japanese puts China at a close second. But even compared to the Chinese, Russian fatalities surpass both in absolute terms and by percentage. Britain and America jointly suffered the loss of just a little fewer than one million lives; a figure comparable to Russian deaths at Leningrad alone (as well as those at Stalingrad). In fact, more lives were lost on the Eastern Front than from all of the other fighting during the war. Some 24 million Russian lives, a third of the final total. 24

Yet, after enduring the onslaught of the titanic “Operation Barbarossa” blitzkrieg, then grimly digging in to survive for two more terrible years, the Russians would ultimately succeed not only in halting Hitler’s advance, but in pushing the Eastern Front back from the gates of Moscow and then a thousand miles to Berlin. In short, it was Russia more than any other nation that might justly claim to have “won the war” – they simply had to, because we left them with very little alternative.

With a decimated population and their major cities pounded to heaps of rubble, in another important sense, Russia had been the greatest loser in the war too. So if the peril of history is that it will be forgotten, then let us continue to remember now the huge debt of gratitude owed to the sacrifice of the Russian people. And in the light of such comparatively recent national trauma, with the deaths of 24 million within living memory, we ought to be careful too before insinuating that Russians suddenly hate fascism any less than we do. Seventy years after the defeat of the Nazis, do we dare say so to their faces?

*

The unthinkable climax (absit omen)

Those who remember the last Cold War may have noticed how that gnawing sense of doubt which once lurked at the back of our minds has returned to haunt us. The intimation, though faintly heard, that some day – a day very much like this one – the same faint and insubstantial dread will manifest a solid form and leap out from behind our backs to shout BOO – M! The intimation not merely of one’s own death, but of megadeath: annihilation so complete that our secret, unspoken wish is we don’t survive to see the aftermath. Of course, we did survive all those post-war decades, and twice only by the skin of our teeth (see addendum), but then, when it ended, it was as if we stuffed all our finger-bitten memories into an old suitcase and left them in the attic to accumulate dust…

The fact is that we are still living with the nuclear-strike doctrine of the Cold War, which dictated three strategic options: first strike, launch on warning and post-attack retaliation. There is no reason to believe that Russia and the United States have discarded these options, as long as the architecture of “mutually assured destruction” remains intact.

For either side, the decision to launch on warning — in an attempt to fire one’s nuclear missiles before they are destroyed — would be made on the basis of information from early-warning satellites and ground radar. Given the 15- to 30-minute flight times of strategic missiles, a decision to launch after an alert of an apparent attack must be made in minutes.

Also taken from the warning put out by Generals James E. Cartwright and Vladimir Dvorkin in their recent New York Times op-ed.

It did not take long from the defeat of the Nazis before the Cold War was in full swing. A nuclear arms race, very quickly turning thermonuclear, boosted thanks to the entirely erroneous and scaremongering supposition of the so-called “missile gap”. False intelligence reports indicating that the Soviet Union, not so long since ruined by a Nazi invasion, was somehow in possession of an arsenal of superior killing power. Although chimerical, this “missile gap” was eagerly seized upon, and especially by those in the business of selling arms. The military-industrial complex was about to flourish as never before.

It was Kubrick again, who most brilliantly parodied the sheer paranoia involved in much of the strategy at the height of Cold War tensions during the 50s and 60s. In the utterly insane climax to Dr Strangelove, those gathered in the war room, and abruptly confronted with the prospect of their own annihilation, listen to Strangelove’s plan for survival inside underground bunkers. But even sealed deep underground, the threat of the Red menace looms in a different way. The feckless and licentious General “Buck” Turgidson, played by a deadpan George C. Scott, explains the problem this way:

“We ought to look at this from the military point of view. I mean, supposing the Russkis stashed away some big bombs, see, and we didn’t? When they come out in 100 years, they could take over!”

Concluding with unfailing logic:

“Mr President, we must not allow a mineshaft gap!” 25

Of course, whenever we come to talk about the end of the world, it becomes seriously hard to think straight. The idea itself is inclined to make us go potty. WWIII or WW3. Just the abbreviated monikers are freaky enough to cause a shiver. In full, the Third World War sounds improbably futuristic, as it genuinely will be, in the circumstance of its abominable occurrence. So we all try not to mention that particular war, just as we are disinclined to talk about death more generally, which is similarly hard to imaginatively get to grips with, if not quite so dreadful a prospect.

Talking about death is not polite behaviour, but then talking about WW3 is far worse again, although soon, if we let it, we make the unspeakable impossible to speak about. Then it becomes more literally unthinkable, which it is too, yet by being literally unthinkable it comes to seem absolutely impossible! It is tempting to stop there. Insouciance is appealing, and, after all, the leaders of our nations, crazed as many unquestionably are, are ultimately no less restrained than the rest of us by desires for self-preservation. And who amongst us would be crazy enough to unleash such an almighty and terminal firestorm of “mutually assured destruction”? (The Cold War doctrine nattily abbreviated as MAD).

It is comforting to put our trust in such common sense prevailing, however, memory tugs at my impassivity if I try. For besides the worrying shifts in both military capability as well as in doctrine (something I will briefly return to), recent history also gives cause for greater concern.

Conversely, there are a few I am now hearing who muse upon the imminent prospect of a general war as if its impending outbreak has become a fait accompli. A pair of colleagues at work, for instance, who ordinarily assume a more lackadaisical air, were earnestly discussing the very real likelihood of being conscripted in its event (they are younger than me). When I interjected that if they believed a world war might actually be on the cards, then oughtn’t they to strive harder to avert it, the one replied: “I can’t even persuade them to give me a pay rise.” An amusing retort, I had to admit.

The Doomsday Clock has recently been reset. In January, its committee of keepers took the decision to move its symbolic hands to three minutes to midnight:

The last time the clock read three minutes to midnight was in 1983 when “US-Soviet relations were at their iciest” according to the bulletin. The lowest ever reading was of 11.58 in 1953 when the US decided to pursue the hydrogen bomb, a weapon far more powerful than any nuclear bomb.

The highest reading was 17 minutes to midnight in 1991, when the Cold War officially ended and the US and Russia began cutting their nuclear arsenals. 26

So what, you might say, they are simply telling us what we knew all along. That old Cold War hostilities have been refrozen. Speaking as one whose childhood spanned more than a decade of those old Cold War tensions, this is surely bad enough, but what is worse is that thirty years ago it would have taken a catastrophic accident to have triggered all-out nuclear war. An accident that very nearly happened (twice)…

Well no, in fact, there are also other less infamous incidents when the world came to the brink of a nuclear escalation. One such may have happened during the Six-Day War in 1967, when the USS Liberty, an unarmed America reconnaissance ship, was attacked and nearly destroyed by Israeli forces. As a BBC documentary “Dead in the Water” (2002) revealed, once the attack had been falsely attributed to the Egyptians, the Americans, under the command of President Lyndon Johnson, launched but recalled (just in time) a nuclear-armed aircraft targeted against Cairo:

The deployment of nuclear weapons is officially denied, as indeed is “Operation Cyanide”, the alleged plan that allowed Israel to attack the Liberty, a sitting duck, in order to use the false flag to bring America into the Six-Day War. But then, the official story maintains instead that Israel’s attack was a terrible mistake, and this is completely untenable.

*

Military technologies have since advanced, of course, but so too have the doctrines of war. In fact, during the first Cold War, Soviet leader, Leonid Brezhnev, made a pledge of “no first use” (NFU); a policy that China still maintains today. 27 But with the development of shorter-range “low-yield” tactical nuclear weapons, the idea within military circles has grown that we must keep the option to deploy “sub-strategic” nuclear weapons for battlefield use. And this means that nuclear war has become a great deal more thinkable – with hindsight the old doctrine of MAD doesn’t look half so mad after all. Although as John Pilger exposed in his documentary The Truth Game (embedded below), this doctrine of deterrence had been superseded at least as early as 1983. In fact, his film contains footage of a NATO ‘limited’ nuclear and chemical war exercise in West Germany, which Pilger himself describes as “a dry run for the unthinkable”:

But today we must also speak of other unspeakables. Of the out and out madmen. The neo-cons, those neo-Strangeloves (aka Breedloves), as well as less prominent crazies at or close to the Nato helm:

“This is not about Ukraine. Putin wants to restore Russia to its former position as a great power,” said Anders Fogh Rasmussen, Nato’s former Secretary-General, “There is a high probability that he will intervene in the Baltics to test Nato’s Article 5.”

From a report published in The Telegraph on February 5th, which explains how:

Article 5 states that a military attack on any one Nato country is an attack on all of them, triggering collective mobilization. It has been invoked just once in the 66-year history of the alliance, after the 9/11 terrorist attacks in New York. 28

Thankfully, Fogh Rasmussen is gone. Perhaps some better sense may now prevail, although that will be difficult so long as General Philip Breedlove keeps his post as Nato’s Supreme Allied Commander for Europe (SACEUR).

Moreover, it has become essential that voices within the media do begin to break the silence and speak with honestly about the nature and true cause of this escalating threat. In this respect, the report in Der Spiegel (quoted extensively above) is heartening. Let us pray too that the fragile Ukrainian ceasefire brokered by Merkel and Hollande continues to hold. But still we have the prospect of tensions escalating in the Middle East between Israel, Saudi Arabia, Iran and Syria. All of these need to be defused, which itself relied upon cooperation between the major powers: Russia, China and America. So these are exceptionally dangerous times, but if enough of us choose to make a serious commitment to peace, then I believe that peace can and will ultimately prevail.

The final words I leave with John Pilger, who has a distinguished record of speaking both with honesty and with courage. This is how he finished his speech in December:

In the 18th century, Edmund Burke described the role of the press as a Fourth Estate checking the powerful. Was that ever true? It certainly doesn’t wash any more. What we need is a Fifth Estate: a journalism that monitors, deconstructs and counters propaganda and teaches the young to be agents of people, not power. We need what the Russians called perestroika – an insurrection of subjugated knowledge. I would call it real journalism.

It’s 100 years since the First World War. Reporters then were rewarded and knighted for their silence and collusion. At the height of the slaughter, British prime minister David Lloyd George confided in C.P. Scott, editor of the Manchester Guardian: “If people really knew [the truth] the war would be stopped tomorrow, but of course they don’t know and can’t know.”

It’s time they knew. 29

*

Additional:

‘American Committee for East-West Accord’ discuss Russia, Ukraine and the New Cold War

The following, two-part video roundtable discussion took place in Brussels on March 2, 2015. It featured Gilbert Doctorow, moderator, John Mearsheimer, Stephen Cohen and Katrina Vanden Heuvel. The presentations by the three speakers was followed by discussion with the audience.

The event was organized by the newly created ‘American Committee for East-West Accord’. This was its second event in Brussels. The committee has recently been registered as a non-profit association in New York state. Its next roundtable discussion will take place in Berlin in May on the subject of German foreign policy.

The extract above is quoted from a new website dedicated to the current crisis: http://newcoldwar.org/roundtable-discussion-in-brussels-with-john-mearsheimer-stephen-cohen-and-katrina-vanden-heuvel/

*

Addendum: Memories of an older, colder war

Just inside the backdoor to my best friend’s house, underneath the washing lines close to where the bicycles were propped, and adjacent to the downstairs lavatory, there was a small grey box fitted to the painted exterior brick wall. The box had just one swivel switch with a milled edge that turned a loudspeaker on and the volume up. And whenever this switch was clicked on, the box emitted a continuous ticking tone – on and on like a mysterious telephone receiver eternally left off its hook.

My friend was the eldest son of the village bobby, so his house accommodated the village police station too. Occasionally we played with this little grey box, which was forbidden, but it was too tantalising to leave alone. Because if it were ever to alter its tone, my friend explained, no longer ticking but warbling instead and in some fashion we thankfully never heard, then this was the alarm that signalled we had passed a point of no return. For it meant that World War Three had started.

This box in the corner of his dad’s porch, with a tick that needed to be checked on daily, if not hourly (though, of course, never was), was apparently deemed an efficient way to relay such important news back in the 1970s. But then, under the circumstances, just what was his policeman father supposed to do, had he ever tuned in one morning to hear such strange apocalyptic warbling? I gathered that in such an event, his primary civic duty was to ensure that the church bells were ringing. But then who in the village would possibly have comprehended that church bells were communicating such a dire warning? It hardly mattered. We knew we would soon be dead. The bells were tolling for the loss of all life.

Meanwhile, there was also the then-famous government handbook, Protect and Survive. Maybe you remember it? In the event of all-out nuclear war, the best thing to do, it advised us solemnly but calmly, was to stay indoors and paint the windows white. Following which, we should then set about building our inner shelter. The recommendation was to lay low in a cubby-hole under the stairs for a few weeks. Failing that – for instance, if you lived in a bungalow – the advice was to take some doors off their hinges and lean them against an inside wall. Not an outside wall – you didn’t want to increase your risk of radiation sickness. Oh, and don’t forget the tin opener or the toilet paper… be sure to have ample. Nuclear dens might have sounded like fun, but actually they didn’t. The prospect of nuclear annihilation was nothing like the fear of the bogeyman: even to a child, the danger was palpable. The Cold War was no fun at all.

About the same time, a future friend, who being a decade older than me had already embarked on his economics degree at Sheffield, was selected for a walk-on part in the classic BBC TV docudrama Threads (1984). He was vaporised somewhere around the top of Fargate, he tells me.

Threads was a huge hit, of course. A horror show we could really believe in. Because life at the height of the Cold War meant adjusting one’s sense of everyday reality to accommodate the omnipresence of such a vague, yet inescapable, existential threat. At the backs of our minds, a barely conceivable awareness that all-out thermonuclear oblivion might be around the next bend – or four minutes away to be precise (so make sure you’ve got plenty of that white paint and a decent screwdriver handy). And each time my friend and I played with that little grey switch, turning its volume up and listening for its distantly pulsing mechanical heart, the dread was there, never getting closer or further away, just there, forever. Maybe a nuclear holocaust was about to burst out and devour us all… turn it off!

Meanwhile, behind the threat, a constant danger of sudden and total annihilation was real enough. My parents had lived through the Cuban Missile Crisis in 1962, when Kennedy and Khrushchev played out their notorious game of Russian roulette: Armageddon postponed thanks only to the good sense of the commander of a Soviet submarine, Captain Vasili Arkhipov 30 A little less well-known is that another Soviet officer saved our bacon as recently as September 1983, just a month prior to a top secret military exercise called Operation Able Archer. This involved the mass deployment of Nato troops very close to East European border, and it had caused senior Russian military officers to commence preparations for a counterattack.

Back in September, however, it had been the more mechanistic malfunctioning of one of the Soviet Union’s early warning systems that very nearly triggered doomsday. Fortunately, the cool-headed response of the station’s commanding officer, Stanislav Petrov, had averted catastrophe. 31 Then in November, with the Russians still twitchy, and this huge drill taking place on their frontier, with Margaret Thatcher and German Chancellor Helmut Kohl holed up in bunkers, and Nato simulating the release of its own nuclear arsenal, the Russians collectively maintained their cool once again. All of which passed with the vast majority of folks in Britain (my own family very much included) utterly oblivious to any of it. Which was certainly one less thing to worry about!

Skipping forward to the end of the Cold War, and as The Berlin Wall came tumbling down on that crisp October day in 1989, we might be forgiven for thinking that with the arms race over, soon we would have money and time for far more worthwhile and useful projects. That our grander hopes for a brighter and better future would soon be fulfilled. Yet our individual shares in the peace dividend have instead been frittered away.

Living conditions are worsening. Wages have stagnated. Housing is in increasingly short supply. And more and more of us are being forced to eke out a meagre, if survivable, living. This is intolerable foolishness, and worse, it is foolishness that, if a new Cold War is allowed to build, will only get more foolish and intolerable.

*

1 From an article entitled “How to Avert a Nuclear War”, written by James E. Cartwright & Vladimir Dvorkin, published in The New York Times on April 19, 2015. http://www.nytimes.com/2015/04/20/opinion/how-to-avert-a-nuclear-war.html?_r=1

2 From an article entitled “America’s Secret War in 134 Countries” written by Nick Turse, published in The Nation magazine on January 16, 2014, and originally published at TomDispatch.com.

http://www.thenation.com/article/177964/americas-secret-war-134-countries

3 From an article entitled “The Unseen Gulf War” written by Peter Turnley in December 2002, first published with photographs by The Digital Journalist, and reproduced by Archipelago vol 7. http://www.archipelago.org/vol7-2/turnley2.htm

The article continues:

“That first morning, I saw and photographed a U.S. Military Graves Detail bury in large graves many bodies.

I don’t recall seeing many television images of the human consequences of this event, or, for that matter, many photographs published. A day later, I came across another scene on an obscure road further north and to the east, where, in the middle of the desert, I found a convoy of lorries transporting Iraqi soldiers back to Baghdad. Clearly, massive firepower had been dropped, and everyone in sight had been carbonized. Most of the photographs I made there have never been published anywhere, and this has always troubled me.”

4

“It is the threat of the use of force [against Iraq] and our line-up there that is going to put force behind the diplomacy. But if we have to use force, it is because we are America; we are the indispensable nation. We stand tall and we see further than other countries into the future, and we see the danger here to all of us.”

From an interview Madeline Albright gave in reply to Matt Lauer on NBC’s “Today Show” on February 19, 1998.  http://fas.org/news/iraq/1998/02/19/98021907_tpo.html

5 Taken from an interview Madeline Albright gave in reply to Lesley Stahl‘s question on CBS’s 60 Minutes on May 12, 1996.

6 Taken from an article entitled “Why we ignored Iraq in the 1990s” written by John Pilger, originally published in the New Statesman on October 4, 2004. http://johnpilger.com/articles/why-we-ignored-iraq-in-the-1990s

7 Taken from an article entitled “Break the silence: a world war is beckoning” written by John Pilger, published on May 13, 2014. http://johnpilger.com/articles/break-the-silence-a-world-war-is-beckoning

8 Taken from an article entitled “Why the rise of fascism is again the issue” written by John Pilger, published on February 26, 2015. http://johnpilger.com/articles/why-the-rise-of-fascism-is-again-the-issue

9 From an article entitled “Breedlove’s Bellicosity: Berlin Alarmed by Aggressive NATO Stance on Ukraine” published in Der Spiegel on March 6, 2015. http://www.spiegel.de/international/world/germany-concerned-about-aggressive-nato-stance-on-ukraine-a-1022193.html

10 From an article entitled “The war lovers” written by John Pilger published on March 23, 2006. http://johnpilger.com/articles/the-war-lovers

The same article was republished by News Statesman as “John Pilger doesn’t buy the sales pitch of political war lovers” on March 27, 2006.  http://www.newstatesman.com/node/152875

11

Defense Secretary Donald H. Rumsfeld likened Venezuelan President Hugo Chavez to Adolf Hitler, reflecting continuing tension in relations between the United States and the Latin American government. […]

“He’s a person who was elected legally — just as Adolf Hitler was elected legally — and then consolidated power and now is, of course, working closely with Fidel Castro and Mr. Morales and others.”

From an article entitled “Rumsfeld Likens Chavez To Hitler” written by John Kreiser from Associated Press, published by CBS news on February 3, 2006. http://www.cbsnews.com/news/rumsfeld-likens-chavez-to-hitler/

12

Brandishing a copy of Noam Chomsky’s Hegemony or Survival: America’s Quest for Global Dominance, the president of Venezuela, Hugo Chávez, cemented his reputation as Washington’s chief irritant yesterday with a fiery performance at the United Nations.

In a 15-minute address to the annual gathering of international leaders in New York, President Chávez said he could still “smell sulphur” left behind by the “devil”, George Bush, who had addressed the chamber 24 hours before.

His speech, which veered between a rousing appeal for a better world and a florid denunciation of the US, included the claim that President Bush thought he was in a western where people shot from the hip: “This is imperialist, fascist, assassin, genocidal, the empire.”

Mr Chávez complained that his personal doctor and head of security had been prevented from disembarking at New York airport by the American authorities. And then he coined the phrase that will now forever be etched into UN history as one of the more colourful criticisms levelled at the US president from his own turf: “This is another abuse and another abuse of power on the part of the devil. It smells of sulphur here, but God is with us and I embrace you all.”

He went on to accuse the US of double standards on terrorism. “The US has already planned, financed and set in motion a coup in Venezuela, and it continues to support coup attempts in Venezuela and elsewhere … I accuse the American government of protecting terrorists and of having a completely cynical discourse.”

From an article entitled “Chávez attacks ‘devil’ Bush in UN speech” written by Ed Pilkington, published by the Guardian on September 21, 2006. http://www.theguardian.com/world/2006/sep/21/usa.venezuela

Not that the UN assembly was entirely in disagreement: after a sharp intake of breath, many delegates laughed and applauded:

Delegates and leaders from around the world streamed back into the chamber to hear Mr Chávez, and when he stepped down the vigorous applause lasted so long that it had to be curtailed by the chair. [Ibid.]

13 From an article entitled “Poor Prince Charles – it must be grim being haunted by Nazis at every turn”, written by David Mitchell, published in the Guardian on May 25, 2014. http://www.theguardian.com/commentisfree/2014/may/25/prince-charles-putin-hitler-david-mitchell

14 From a statement made by John McCain released on May 14, 2015. http://www.mccain.senate.gov/public/index.cfm/press-releases?ID=48d5a75f-9c4a-44db-8908-02dccbbbcc71

15 From an article entitled “Is Vladimir Putin a Wimp or a Russian Hitler?” written by Lincoln Mitchell, published in the Observer on December 26, 2014. http://observer.com/2014/12/is-vladimir-putin-cool-or-hitler-or-both/ 

16 From an article entitled “Breedlove’s Bellicosity: Berlin Alarmed by Aggressive NATO Stance on Ukraine” published in Der Spiegel on March 6, 2015. http://www.spiegel.de/international/world/germany-concerned-about-aggressive-nato-stance-on-ukraine-a-1022193.html

17 Taken from an article entitled “Why the rise of fascism is again the issue” written by John Pilger, published on February 26, 2015. http://johnpilger.com/articles/why-the-rise-of-fascism-is-again-the-issue

18 From an article entitled “Putin must be stopped. And sometimes only guns can stop guns” written by Tim Garton Ash, published in the Guardian on February 1, 2015. www.theguardian.com/commentisfree/2015/feb/01/putin-stopped-ukraine-military-support-russian-propaganda

19 From an article entitled “A Review of NATO’s War over Kosovo” written by Noam Chomsky, published by Z Magazine in April–May, 2001.  http://www.chomsky.info/articles/200005–.htm

The piece continues:

“Most killings and burnings [were] in areas where the separatist Kosovo Liberation Army [KLA-UCK] had been active” or could infiltrate, some human-rights researchers reported, an attempt “to clear out areas of KLA support, using selective terror, robberies and sporadic killings.” These conclusions gain some support from the detailed OSCE review released in December, which “suggests a kind of military rationale for the expulsions, which were concentrated in areas controlled by the insurgents and along likely invasion routes.”

The WSJ analysis concludes that “NATO stepped up its claims about Serb ‘killing fields’” when it “saw a fatigued press corps drifting toward the contrarian story: civilians killed by NATO’s bombs.” NATO spokesperson Jamie Shea presented “information” that can be traced to KLA-UCK sources. Many of the most lurid and prominently-published atrocity reports attributed to refugees and other sources were untrue, the WSJ concludes. Meanwhile NATO sought to deny its own atrocities, for example, by releasing a falsified videotape “shown at triple its real speed” to make it appear that “the killing of at least 14 civilians aboard a train on a bridge in Serbia last April” was unavoidable because “the train had been traveling too fast for the trajectory of the missiles to have been changed in time.”

The WSJ analysts nevertheless conclude that the “heinous” crimes, including the huge campaign of expulsion, “may well be enough to justify” the NATO bombing campaign, on the principle of retrospective justification.

20 According to the 2001 census 1,450,400 (60.4%) of the 2,401,200  living in Crimea are ethnic Russians. This compares with 576,600 (24.0%) Ukrainians and 245,200 (10.2%) Crimean Tatars. Data from wikipedia. http://en.wikipedia.org/wiki/Demographics_of_Crimea#Ethnicities_.26_languages

21 From an article entitled “The war lovers” written by John Pilger published on March 23, 2006. http://johnpilger.com/articles/the-war-lovers

The same article was republished by News Statesman as “John Pilger doesn’t buy the sales pitch of political war lovers” on March 27, 2006.  http://www.newstatesman.com/node/152875

22 From an article entitled “War crimes tribunal report shows Western powers exaggerated Kosovo victims of ethnic cleansing” written by Mike Ingram, published by the World Socialist Web Site on August 22, 2000. http://www.wsws.org/en/articles/2000/08/koso-a22.html

23 It is believed that between 1.1–1.3 million civilians died during the siege of Leningrad.  http://en.wikipedia.org/wiki/Effect_of_the_Siege_of_Leningrad_on_the_city#Civilian_casualties

A further 1,017,881 Soviet soldiers were reported killed, captured or missing. http://en.wikipedia.org/wiki/Siege_of_Leningrad#Lifting_the_siege

At Stalingrad, the USSR reportedly suffered 1,129,619 total casualties;[96] 478,741 personnel killed or missing, and 650,878 wounded or sick. http://en.wikipedia.org/wiki/Battle_of_Stalingrad#Casualties

24 http://en.wikipedia.org/wiki/World_War_II_casualties#Human_losses_by_country

25 General “Buck” Turgidson’s fuller quote is:

“Yeah, I think it’d be extremely naive of us to imagine that these new developments [i.e., the end of civilisation!] are gonna cause any change in Soviet expansionist policy. I mean, we must be increasingly on the alert to prevent them from taking over other mine shaft space in order to breed more prodigiously than we do thus knocking us out through superior numbers when we emerge. Mr President, we must not allow a mineshaft gap!”

 

26 From an article entitled “Doomsday clock: We are closer to doom than at any time since the Cold War, say scientists” written by Tom Bawnden, published in The Independent on January 22, 2015.

27 http://www.nuclearfiles.org/menu/key-issues/nuclear-weapons/issues/policies/no-first-use_1995-04-05.htm

28 Taken from an article entitled “Putin could attack Baltic States warns former Nato chief” written by Ambrose Evans-Pritchard, published in The Telegraph on February 5, 2015. http://www.telegraph.co.uk/news/worldnews/europe/russia/11393707/Putin-could-attack-Baltic-states-warns-former-Nato-chief.html

29 Taken from a speech and article entitled “War by media and the triumph of propaganda” written by John Pilger, delivered at The Logan Symposium on December 5, 2014 and published here: http://johnpilger.com/articles/war-by-media-and-the-triumph-of-propaganda

30

“The nature of the threats was dramatically underscored last October, at the summit meeting in Havana on the 40th anniversary of the Cuban missile crisis, attended by key participants from Russia, the US, and Cuba. Planners knew at the time that they had the fate of the world in their hands, but new information released at the Havana summit was truly startling. We learned that the world was saved from nuclear devastation by one Russian submarine captain, Vasily Arkhipov, who blocked an order to fire nuclear missiles when Russian submarines were attacked by US destroyers near Kennedy’s “quarantine” line. Had Arkhipov agreed, the nuclear launch would have almost certainly set off an interchange that could have “destroyed the Northern hemisphere,” as Eisenhower had warned.”

From Confronting the Empire delivered by Noam Chomsky at the III World Social Forum, on February 2, 2003. http://www.chomsky.info/talks/20030201.htm

31

“MOSCOW – It was just past midnight as Stanislav Petrov settled into the commander’s chair inside the secret bunker at Serpukhov-15, the installation where the Soviet Union monitored its early-warning satellites over the United States. Then the alarms went off. On the panel in front him was a red pulsating button. One word flashed: “Start.” It was Sept. 26, 1983, and Petrov was playing a principal role in one of the most harrowing incidents of the nuclear age, a false alarm signaling a U.S. missile attack… Petrov’s role was to evaluate the incoming data. At first, the satellite reported that one missile had been launched – then another, and another. Soon, the system was “roaring,” he recalled – five Minuteman intercontinental ballistic missiles had been launched, it reported. Despite the electronic evidence, Petrov decided – and advised the others – that the satellite alert was a false alarm, a call that may have averted a nuclear holocaust. But he was relentlessly interrogated afterward, was never rewarded for his decision and today is a long-forgotten pensioner living in a town outside Moscow. He spoke openly about the incident, although the official account is still considered secret by authorities here… “I had a funny feeling in my gut,” Petrov said. “I didn’t want to make a mistake. I made a decision, and that was it.” Petrov’s decision was based partly on a guess, he recalled. He had been told many times that a nuclear attack would be massive – an onslaught designed to overwhelm Soviet defenses at a single stroke. But the monitors showed only five missiles. “When people start a war, they don’t start it with only five missiles,” he remembered thinking at the time. “You can do little damage with just five missiles.”

Extract from “I Had A Funny Feeling in My Gut” written by David Hoffman of Washington Post Foreign Service, published on Wednesday, February 10, 1999; Page A19. http://www.washingtonpost.com/wp-srv/inatl/longterm/coldwar/shatter021099b.htm

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Filed under analysis & opinion, Iraq, John Pilger, Kosovo, Kuwait, Noam Chomsky, Russia, Serbia, Ukraine, 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.

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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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Filed under analysis & opinion, austerity measures, Cyprus, debt cancellation, did you see?, Germany, Greece, Ireland, neo-liberalism, Spain

Greece’s new Finance Minister Varoufakis tells German counterpart Schäuble to “expect a frenzy of reasonableness”

On the latest leg of his whistle-stop European tour, Greek Finance Minister, Yanis Varoufakis, today met with his German counterpart, Wolfgang Schäuble, in Berlin to continue talks on Greece’s debt. This was an extraordinary occasion and the press conference that followed their historic meeting can be watched on the video embedded below.

Varoufakis begins his main statement at 23:30 mins. In it, he outlines the forgotten reasons why Greece has been in an economic crisis for the last five years and highlights the serious implications were his government to fail in bringing about the urgent and radical economic reforms that are necessary to save the nation. But his tone throughout is very much one of reconciliation and so, for instance, he explains at some length why Tsipras’ decision to visit the war memorial immediately following his victory should not be misconstrued in petty nationalist terms (as so many in the media were quick to do) but understood correctly as “an act of defiance against the resurgence of Nazism” in Greece:

Here is my own transcript of Yanis Varoufakis’ full statement:

Ladies and gentlemen,

This morning – earlier today – I had the opportunity, the pleasure and the joy to outline to Minister Schäuble our government’s priorities for a functioning Greece in a prospering democratic European economic and monetary union. As Doctor Schäuble said, we didn’t reach an agreement, it was never on the cards that we would. We didn’t even agree to disagree from where I’m standing – from where I’m standing we agreed to enter into deliberations as partners with a joint orientation towards a European solution for European problems. A solution that is going to put, first and foremost, the interests of Europe at the helm. We didn’t discuss Greece’s debt schedule for repayments. We didn’t discuss a haircut. We set the scene for deliberations that will lead an approach that will put an end to this never-ending – seemingly never-ending – crisis that began in Greece then unfortunately spread out to the rest of the Eurozone.

Greece’s economic woes have been occupying the headlines for far too long. They have been begetting indignity in my nation, and frustration in this country as well as across Europe. It is time to draw a line. To put an end to it. My fellow Greeks wish nothing more than to end the gross indignity, and I’m sure that the people of Germany too would like to get on with concerns other than how to negotiate the latest twists and turns of the Greek saga. Some in Europe are tempted to imagine that the solution lies in separation. Thankfully, today I did not just visit the Finance Minister of Europe’s powerhouse economy, above all else I visited a European statesman for whom European unity is a lifelong project, and whose work and efforts to unify Europe I have been following with great interest since the 1980s.

Today my message to Minister Schäuble was that in our government – in this government – he has a potential partner in the search for European solutions to a variety of problems afflicting not only Greece, but the Union more broadly. Starting at home where one ought to start, our government will stop at nothing to combat not only corruption, tax evasion, tax immunity, inefficiency and waste, but also a whole political economy underpinning the ethos and the conventions of crippling rent seeking. In this endeavour, I told the minister, we need our partners’ technical, moral, political and institutional support.

Over the last five years, since Greece’s flimsy business model broke down, too much time, and too many hopes, lives even, have tragically been wasted. In 2010, Greece and Europe missed the splendid opportunity to come to terms with the facts. Instead, we treated an insolvency issue as if it were a problem of illiquidity. Therefore, the largest loan in history was granted to the most insolvent of European nations on condition that it shrinks its income. And to sell this grand error to voters in Greece, to voters in this country, in every corner of Europe, a list of reforms was announced that was just a fig leaf for in the end reforming very little that mattered. This could not end well. It is the reason we are here. It is the reason why the Greek people swept over the dominant parties in Greece and elected us. It is why we have been on the road in the last few days deliberating with our partners for the purpose of forging a common and European plan for putting things first – for putting things right.

My message to my German counterpart and to the people of Germany is simple. From our government you can expect a frenzy of reasonableness. You can expect proposals that are aimed, not at promoting the interests of the average Greek, but of promoting the interests of the average European: the average German, Slovak, Finn, Spaniard, Italian and so on. You can expect from us an unwavering commitment to telling it as it is, without any tactical stratagems or subterfuge. You can expect from us sound macroeconomic analysis and a readiness to implement efficient microeconomic reforms that work. These are our commitments. We are a government that hasn’t even been sworn in yet. What we request at this stage is perhaps the most precious of commodities: time. A short space of time during which our government can present to our partners, to the International Monetary Fund, to European Central Bank, to the European Commission, comprehensive proposals as well as a roadmap for the very short term – we call this “a bridging programme” – for the medium term, and indeed for the long term.

Europe is I believe at a crossroads. Europe must strike a balance between continuity and a need for respecting European agreements, and the necessity of evolving the rules. We must respect established treaties, agreements and processes, without crushing the fragile flower of democracy with a sledgehammer that takes the form of statements such as “elections do not change anything”.

When I visited Paris the other day I said that we were returning to one of Greece’s spiritual homes. Today we returned to another one of our spiritual homes. For almost two centuries the land of Goethe, Beethoven, Hegel, Kant has been a source of inspiration to Greeks whether they are rightists, leftists, centrists or simply intellectually curious Greeks. But there is more than that to the bonds binding our nations. As finance minister in a government facing, from day one, emergency circumstances caused by a savage debt deflationary crisis, I feel that the German nation is the one nation in Europe that can understand us better than anyone else. No-one understands better than the people of this land how a severely depressed economy combined with a ritual national humiliation and unending hopelessness can hatch the serpent’s egg within its society. When I return home tonight I shall find myself in a parliament in which the third largest party is not a neo-Nazi party, it is a Nazi party.

When our Prime Minister laid the wreath at the iconic memorial site immediately after his swearing in, that was an act of defiance against the resurgence of Nazism. German must and can be proud of the fact that Nazism has been eradicated here. But it is one of history’s most cruel ironies that Nazism is rearing its ugly head in Greece, a country which put up such fine struggle against it. We need the people of German on our side. We need the people of Germany to help us in the struggle against misanthropy. We need our friends in this country to remain steadfast in Europe’s post-war project that is: never again to allow a 1930s-like depression to divide proud European nations. We shall do our duty in this regard, and I am convinced that so will our European partners. Thank you.

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Additional:

Back in 2011, Yanis Varoufakis presented a very interesting TEDx talk entitled “A Modest Proposal for Transforming Europe” in which he outlined his own vision for a new kind of decentralized system that will be needed to transform the European Union before it crashes altogether:

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On February 7th, the Keiser Report returned to the victory of Syriza, warning Greece to beware bureaucrats and bankers bearing bailouts. In the second half, Max Keiser spoke with Kerry-Anne Mendoza about her new best-selling book, Austerity: The demolition of the welfare state and the rise of the zombie economy:

Click here to watch on the Russia Today website

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Filed under analysis & opinion, debt cancellation, Germany, Greece, Max Keiser