Archives: Articles

By Ed Vulliamy

Classified documents and research show that British, American and French governments were negotiating to cede ‘safe area’ town to Serbs

The fall of Srebrenica in Bosnia 20 years ago, prompting the worst massacre inEurope since the Third Reich, was a key element of the strategy pursued by the three key western powers –Britain, the US and France – and was not a shocking and unheralded event, as has long been maintained.

Eight thousand Bosnian Muslim men and boys were killed over four days in July 1995 by Bosnian Serb death squads after they took the besieged town, which had been designated a “safe area” under the protection of UN troops. The act has been declared a genocide by the war crimes tribunal in The Hague, and the Bosnian Serb leaders Radovan Karadžic and General Ratko Mladic await verdicts in trials for directing genocide.

Blame has also been placed on Dutch troops, who evicted thousands seeking refuge in their headquarters, and watched while the Serbs separated women and young children from their male quarry.

But a new investigation of the mass of evidence documenting the siege suggests much wider involvement in the events leading to the fall of Srebrenica. Declassified cables, exclusive interviews and testimony to the tribunal show that the British, American and French governments accepted – and sometimes argued – that Srebrenica and two other UN-protected safe areas were “untenable” long before Mladic took the town, and were ready to cede Srebrenica to the Serbs in pursuit of a map acceptable to the Serbian president, Slobodan Miloševic, for peace at any price.

But as they considered granting Srebrenica to the Serbs, western powers were also aware, or should have been, of the Bosnian Serb military “Directive 7” ordering the “permanent removal” of Bosnian Muslims from the safe areas. They also knew Mladic had told the Bosnian Serb assembly, “My concern is to have them vanish completely”, and that Karadžic pledged “blood up to the knees” if his army took Srebrenica.

Robert Frasure, a US diplomat working as an international representative, reported to Washington that Miloševic would not accept a peace map unless the safe areas were ceded to the Serbs. His boss, Anthony Lake, the US national security adviser, favoured a revised map that ceded Srebrenica, and the US policy-making Principals Committee urged that UN troops “pull back from vulnerable positions” – ergo, the safe areas.

France and Britain agreed, with UK defence secretary Sir Malcolm Rifkind arguing that the safe areas were “untenable”, as defended in 1995. As Mladic’s troops advanced on Srebrenica, the west failed to heed warnings of the town’s imminent fall. Once it had, says General Van der Wind of the Dutch defence ministry, in an exclusive interview with the Observer, the UN provided 30,000 litres of petrol, used by the Serbs to drive their quarry to the killing fields and plough their bodies into mass graves.

As the killing hit full throttle, top western negotiators met Mladic and Miloševic but did not raise the issue of mass murder, even though unclassified US cables show that the CIA was watching the killing fields almost “live” from satellite planes.

The shocking findings of high-level willingness in London, Washington and Paris to cede Srebrenica were collated over 15 years by Florence Hartmann, a former Le Monde correspondent, for a book, The Srebrenica Affair: The Blood of Realpolitik. Hartmann worked as a spokeswoman for the prosecutor at the international criminal tribunal for the former Yugoslavia between 2000 and 2006. Her previous book, Paix et Châtiment (Peace and Punishment), published in 2007, carried an account of a decision by the tribunal not to release crucial documents on the massacre to the Bosnian government in its unsuccessful attempt to sue Serbia for genocide at the international court of justice down the road in The Hague.

In August 2008, the tribunal indicted Hartmann for breach of confidentiality and summoned her for trial. In September 2009, she was convicted of contempt of court and fined €7,000. She deposited the fine in a French bank account, but the tribunal deemed the money unpaid and sentenced her to seven days’ imprisonment, ordering France to transfer her to The Hague. France refused.

Ed Vulliamy is a writer for the Guardian and Observer, and author of Amexica: War Along the Borderline

Saturday 4 July 201520.55 BSTLast modified on Sunday 5 July 2015

 

 

By Seumas Milne

It’s now clear that Germany and Europe’s powers that be don’t just want the Greek government to bend the knee. They want regime change. Not by military force, of course – this operation is being directed from Berlin and Brussels, rather than Washington.

But that the German chancellor Angela Merkel and the troika of Greece’s European and International Monetary Fund creditors are out to remove the elected government in Athens now seems beyond serious doubt. Everything they have done in recent weeks in relation to the leftist Syriza administraton, elected to turn the tide of austerity, appears designed to divide or discredit Alexis Tsipras’s government.

They were at it again today, when Tsipras offered what looked like almost complete acceptance of the austerity package he had called a referendum on this Sunday. There could be no talks, Merkel responded, until the ballot had taken place.

There’s no suggestion of genuine compromise. The aim is apparently to humiliate Tsipras and his government in preparation for its early replacement with a more pliable administration. We know from the IMF documents prepared for last week’s “final proposals” and reported in the Guardian that the creditors were fully aware they meant unsustainable levels of debt and self-defeating austerity for Greece until at least 2030, even on the most fancifully optimistic scenario.

That’s because, just as the earlier bailouts went to the banks not the country, and troika-imposed austerity has brought penury and a debt explosion, these demands are really about power, not money. If they are successful in forcing Tsipras out of office, a slightly less destructive package could then be offered to a more house-trained Greek leader who replaced him.

Hence the European Central Bank’s decision to switch off emergency funding of Greece’s banks after Tsipras called the referendum on an austerity scheme he had described as blackmail. That was what triggered the bank closures and capital controls, which have taken Greece’s crisis to a new level this week as it became the first developed country to default on an IMF loan.

The EU authorities have a deep aversion to referendums, and countries are routinely persuaded to hold them again if they give the wrong answer. The vote planned in Greece is no exception. A barrage of threats and scaremongering was unleashed as soon as it was called.

One European leader after another warned Greeks to ignore their government and vote yes – or be forced out of the eurozone, with dire consequences. Already the class nature of the divide between the wealthier yes and more working-class no camps is stark. The troika’s hope seems to be that if Tsipras is defeated by fear of chaos, Syriza will split or be forced from office in short order. The euro elite insists it is representing the interests of Portuguese or Irish taxpayers who have to pick up the bill for bailing out the feckless Greeks – or will be enraged by any debt forgiveness when they have been forced to swallow similar medicine. The reality is the other way round.

Not only has no German or any other EU taxpayer taken any loss bailing out Greece. The real fear in Brussels and Berlin is not that people in countries such as Spain and Portugal who have taken the brunt of eurozone austerity will oppose relief for ravaged Greece – but that they’ll want an end to austerity and their own debts written off as well.

That’s what they call “moral hazard”. But it has nothing to do with morality and everything to do with a dysfunctional currency union, a destructive neoliberal economic model enforced by treaty and an austerity regime maintained to ensure a return to profitability on corporate terms.

That’s why Merkel and the ECB mandarins want Greece’s surrender. Upstart democratic governments that challenge austerity must be crushed: the real risk of contagion is as much political as financial. This is, after all, a system where unelected institutions and other states have the power to override elected governments – in fact to impose not only policies but effectively governments too, as we may be about to see in Greece. Anti-democratic firewalls are built into Europe’s institutions.

The achilles heel of Syriza has been its simultaneous commitment to ending disastrous austerity and remaining in the euro. That has reflected Greek public opinion. But there was never going to be an honourable compromise with the creditors, or much mileage in trying to persuade the authorities they were good Europeans. For the euro elite, the dangers of Grexit are outweighed by the risk that larger states could follow a successful Greek stand against austerity.

Tsipras and Syriza’s determination to stay in the eurozone come what may has seriously weakened Greece’s hand. The economic dislocation of jumping off the euro train would doubtless be severe in the short term, though the costs of permanent austerity would almost certainly be greater thereafter.

But Syriza insiders say there is little preparation for what anyway may be forced on them. The relentless pressure of the EU bureaucracy demands a strong and clear-headed response. Right now, for example, that means the Athens government immediately taking control of its banks, currently shutting down all transactions.

Syriza’s’ achilles heel has been its commitment to ending austerity while remaining in the euro

The worst outcome of this crisis would be for Syriza to implement the austerity it was elected to end. A yes vote in next weekend’s referendum, if it goes ahead, would probably lead to the government’s fall, and almost certainly new elections. But even a no vote, which would offer the best chance for Greece, would need to be followed by more radical measures if the government was going to strengthen its negotiating hand or prepare the ground for euro exit.

The real risk across Europe is that if Syriza caves in or collapses, that failure will be used to turn back the rising tide of support for anti-austerity movements such as Podemos in Spain, or Sinn Féin in Ireland, leaving the field to populists of the right.

Either way, any Greek euro deal that fails to write off unrepayable debt or end the austerity squeeze will only postpone the crisis. If the Syriza government survives, it will have to change direction. Its fate, and its chaotic confrontation with the eurozone’s overlords, is going to shape all of Europe’s future.

Seumas Milne is a Guardian columnist and associate editor. He was the Guardian’s comment editor from 2001 to 2007 after working for the paper as a general reporter and labour editor.

1 July 2015

 

By Ambrose Evans-Pritchard

Rarely in modern times have we witnessed such a display of petulance and bad judgment by those supposed to be in charge of global financial stability, and by those who set the tone for the Western world.

The spectacle is astonishing. The European Central Bank, the EMU bail-out fund, and the International Monetary Fund, among others, are lashing out in fury against an elected government that refuses to do what it is told. They entirely duck their own responsibility for five years of policy blunders that have led to this impasse.

They want to see these rebel Klephts hanged from the columns of the Parthenon – or impaled as Ottoman forces preferred, deeming them bandits – even if they degrade their own institutions in the process.

If we want to date the moment when the Atlantic liberal order lost its authority – and when the European Project ceased to be a motivating historic force – this may well be it. In a sense, the Greek crisis is the financial equivalent of the Iraq War, totemic for the Left, and for Souverainistes on the Right, and replete with its own “sexed up” dossiers.

Does anybody dispute that the ECB – via the Bank of Greece – is actively inciting a bank run in a country where it is also the banking regulator by issuing this report on Wednesday?

It warned of an “uncontrollable crisis” if there is no creditor deal, followed by soaring inflation, “an exponential rise in unemployment”, and a “collapse of all that the Greek economy has achieved over the years of its EU, and especially its euro area, membership”.

The guardian of financial stability is consciously and deliberately accelerating a financial crisis in an EMU member state – with possible risks of pan-EMU and broader global contagion – as a negotiating tactic to force Greece to the table.

It did so days after premier Alexis Tsipras accused the creditors of “laying traps” in the negotiations and acting with a political motive. He more or less accused them of trying to destroy an elected government and bring about regime change by financial coercion.

I leave it to lawyers to decide whether this report is a prima facie violation of the ECB’s primary duty under the EU treaties. It is certainly unusual. The ECB has just had to increase emergency liquidity to the Greek banks by €1.8bn (enough to last to Monday night) to offset the damage from rising deposit flight.

In its report, the Bank of Greece claimed that failure to meet creditor demands would “most likely” lead to the country’s ejection from the European Union. Let us be clear about the meaning of this. It is not the expression of an opinion. It is tantamount to a threat by the ECB to throw the Greeks out of the EU if they resist.

This is not the first time that the ECB has strayed far from its mandate. It forced the Irish state to make good the claims of junior bondholders of Anglo-Irish Bank, saddling Irish taxpayers with extra debt equal to 20pc of GDP.

This was done purely in order to save the European banking system at a time when the ECB was refusing to do the job itself, betraying the primary task of a central bank to act as a lender of last resort.

It sent secret letters to the elected leaders of Spain and Italy in August 2011 demanding detailed changes to internal laws for which it had no mandate or technical competence, even meddling in neuralgic issues of labour law that had previously led to the assassination of two Italian officials by the Red Brigades.

When Italy’s Silvio Berlusconi balked, the ECB switched off bond purchases, driving 10-year yields to 7.5pc. He was forced from office in a back-room coup d’etat, albeit one legitimised by the ageing ex-Stalinist EU fanatic who then happened to be president of Italy.

Lest we forget, it parachuted in its vice-president – Lucas Papademos – to take over Greece when premier George Papandreou merely suggested that he might submit the EMU bail-out package to a referendum, a wise idea in retrospect. That makes two coups d’etat. Now Syriza fears they are angling for a third.

The creditor power structure has lost its way. The IMF is in confusion. It is enforcing a contractionary austerity policy in Greece – with no debt relief, exchange cushion, or offsetting investment – that has been discredited by its own elite research department as scientifically unsound.

The Fund’s culpability in this fiasco is by now well known. As I argued last week, its own internal documents show that the original bail-out in 2010 was designed to rescue the EMU banking system and monetary union at a time when it had no defences against contagion. Greece was sacrificed.

One should have thought that the IMF would wish to lower the political temperature, given that its own credibility and long-term survival are at stake. But no, Christine Lagarde has upped the political ante by stating that Greece will fall into arrears immediately if it misses a €1.6bn payment to the Fund on June 30.

In my view, this is a discretionary escalation. The normal procedure is to notify the IMF Board after 30 days. This period is a de facto grace period, and in a number of past cases the arrears were cleared up quietly during the interval before the matter ever reached the Board.

The IMF could have let this process run in the case of Greece. It has chosen not to do so, ostensibly on the grounds that the sums are unusually large.

Klaus Regling, head of the eurozone bail-out fund (EFSF), entered on cue to hint strongly that his organisation would trigger cross-default clauses on its Greek bonds – 45pc of the Greek package – even though there is no necessary reason why it should do so. It is an optional matter for the EFSF board.

He seems to be threatening an EFSF default, even though the Greeks themselves are not doing so, a remarkable state of affairs.

It is obvious what is happening. The creditors are acting in concert. Instead of stopping to reflect for one moment on the deeper wisdom of their strategy, they are doubling down mechanically, appearing to assume that terror tactics will cow the Greeks at the twelfth hour.

Personally, I am a Burkean conservative with free market views. Ideologically, Syriza is not my cup tea. Yet we Burkeans do like democracy – and we don’t care for monetary juntas – even if it leads to the election of a radical-Left government.

As it happens, Edmund Burke would have found the plans presented to the Eurogroup last night by finance minister Yanis Varoufakis to be rational, reasonable, fair, and proportionate.

They include a debt swap with ECB bonds coming due in July and August exchanged for bonds from the bail-out fund. They would have longer maturities and lower interest rates, reflecting the market borrowing cost of the creditors.

Syriza said from the outset that it was eager to work on market reforms with the OECD, the leading authority. It wants to team up with the International Labour Organisation on Scandinavian style flexi-security and labour reforms, a valid alternative to the German-style Hartz IV reforms that have impoverished the bottom fifth of German society and which no Left-wing movement can stomach.

It wished to push through a more radical overhaul of the Greek state that anything yet done under five years of Troika rule – and much has been done, to be fair.

As Mr Varoufakis told Die Zeit: “Why does a kilometer of freeway cost three times as much where we are as it does in Germany? Because we’re dealing with a system of cronyism and corruption. That’s what we have to tackle. But, instead, we’re debating pharmacy opening times.”

The Troika pushed privatisation of profitable state assets at knock-down depression prices to private monopolies, to the benefit of an entrenched elite. To call that reforms invites a bitter cynicism.

The only reason that the Troika pushed this policy was in order to extract money. It was acting at a debt collector. “The reforms were a smokescreen. Whenever I tried talking about proposals, they were bored. I could see it in their body language,” Mr Varoufakis told me.

The truth is that the creditor power structure never even looked at the Greek proposals. They never entertained the possibility of tearing up their own stale, discredited, legalistic, fatuous Troika script.

The decision was made from the outset to demand strict enforcement of the terms agreed in the original Memorandum, which even the last conservative pro-Troika government was unable to implement – regardless of whether it makes any sense, or actually increases the chance that Germany and other lenders will recoup their money.

At best, it is bureaucratic inertia, a prime exhibit of why the EU has become unworkable, almost genetically incapable of recognising and correcting its own errors.

At worst, it is nasty, bullying, insistence on ritual capitulation for the sake of it.

We all know the argument. The EU is worried about political “moral hazard”, about what Podemos might achieve in Spain, or the eurosceptics in Italy, or the Front National in France, if Syriza is seen to buck the system and get away with it.

But do the proponents of this establishment view – and one hears it a lot – really think that Podemos can be defeated by crushing Syriza, or that they can discourage Marine Le Pen by violating the sovereignty and sensibilities of a nation?

Do they think that the EU’s ever-declining hold on the loyalty of Europe’s youth can be reversed by creating a martyr state on the Left? Do they not realize that this is their own Guatemala, the radical experiment of Jacobo Arbenz that was extinguished by the CIA in 1954, only to set off the Cuban revolution and thirty years of guerrilla warfare across Latin America? Don’t these lawyers – and yes they are almost all lawyers – ever look beyond their noses?

The Versailles victors assumed reflexively that they had the full weight of moral authority on their side when they imposed their Carthiginian settlement on a defeated Germany in 1919 and demanded the payment of debts that they themselves invented. History judged otherwise.

Ambrose Evans-Pritchard is International Business Editor of The Daily Telegraph. He has covered world politics and economics for 30 years, based in Europe, the US, and Latin America. He joined the Telegraph in 1991, serving as Washington correspondent and later Europe correspondent in Brussels.

19 June 2015

By Mark Weisbrot

You can ignore all the talk of a “Grexit,” the bluff and bluster of right-wing German ideologues such as Finance Minister Wolfgang Schäuble who would celebrate it, and repetitive, stubbornly dire warnings that time is running out. Did you notice that the much-hyped June 5 deadline for the Greece’s payment to the International Monetary Fund (IMF) came and went, Greece didn’t pay and nobody fell off a cliff? Trust me, this is not a cliffhanger.

Although there have been numerous references to game theory in the ongoing commentary, it’s really not necessary if you look at the revealed preferences of those whom the Syriza government is polite and diplomatic enough to call its European partners. Take partner-in-chief German Chancellor Angela Merkel: If there’s one thing she doesn’t want to be remembered as, it’s the politician who destroyed the eurozone.

Of course, we don’t know if a Greek exit would do that, but there’s a chance that it could. Even if the European Central Bank would be able to contain the resulting financial crisis, it is possible that Greece would, after an initial shock, ultimately do much better outside the euro, which might convince others to want to leave. Whatever the probability of that scenario, Merkel is, like most successful politicians, a risk-averse creature who won’t roll those dice.

And there is an elephant in the room that she is not going to ignore: the United States. There are scattered press reports that Barack Obama’s administration has put pressure on Merkel to reach an agreement with Greece, but the importance of that has been vastly understated. Unless it is a request that could get a German government voted out of office — such as George W. Bush’s bid for support of his invasion of Iraq in 2003 — something that is strategically important to Washington is extremely likely to find agreement in Berlin. And in this case, Merkel and Obama are basically on the same page.

The politics of empire are much more important than any economic concerns here. For the same reasons that the United States intervened in Greece’s civil war (1946 to ’49) and supported the brutal military dictatorship (1967 to ’74) — with all the murder, torture and repression that these involved — Washington does not want to have an independent government in Greece.

Europe is the United States’ most important ally in the world, and Washington doesn’t want to lose even a small piece of it, even little Greece. Everybody knows that if Greece leaves the euro and needs to borrow hard currency for its balance of payments, it will get some from Russia and maybe even China. Greece could leave NATO. Greece could participate in Russia’s proposed gas pipeline project, which would make Europe more dependent on Russia — something that American officials warned against, drawing a sharp rebuke from Greece’s energy minister, who rightfully told them it was none of their business.

It would be nice to think that the worst features of U.S. foreign policy have changed since the collapse of the Soviet Union, but they have not. The Cold War never really ended, at least insofar as the U.S. is still a global empire and wants every government to put Washington’s interests ahead of those expressed by its own voters. The current hostilities with Russia add a sense of déjà vu, but they are mainly an added excuse for what would be U.S. policy in any case.

Once we take all these interests into account and where they converge, the strategy of Greece’s European partners is pretty clear: It’s all about regime change. One senior Greek official involved in the negotiations referred to it as a “slow-motion coup d’état.” And those who were paying attention could see this from the beginning. Just 10 days after Syriza was elected, as I noted previously, the European Central Bank cut off its main line of credit to Greece and then capped the amount that Greek banks could lend to the government. All the hype and brinkmanship destabilize the economy, and some of this is an intentional effect of European authorities’ statements and threats. But the direct sabotage of the Greek economy is most important, and it is remarkable that it has gotten so little attention.

The unannounced objective is to undermine political support for the Syriza government until it falls and get a new regime that is preferable to the European partners and the U.S. This is the only strategy that makes sense, from their point of view. They will try to give Greece enough oxygen to avoid default and exit, which they really don’t want, but not enough for an economic recovery, which they also don’t want.

So far, the damage to the Greek economy has been quite significant. The IMF projected growth of 2.5 percent this year, and now the economy is in recession.

According to leaked documents published by The Financial Times on June 5, the European officials’ negotiating position is a primary budget surplus of 1 percent of GDP in 2015 and 2 percent of GDP in 2016. This represents a climb down from the ridiculous goals that the IMF previously put forth, which called for primary surpluses at “above 4 percent of GDP” for “many years to come.” But with the economy in recession and the current primary surplus at negative 0.67 percent of GDP, the current proposed targets would stifle Greece’s recovery, perhaps even prolong the recession and maintain depression levels of unemployment.

Another sticking point in the current negotiations has to do with debt relief. Even the IMF now recognizes that Greece’s current debt burden is unsustainable, but the European officials are not budging. This pretty much guarantees more crises down the road, which is a major drag on recovery. Who wants to invest or even consume very much with inevitable financial crises on the horizon?

The European officials’ demand for further pension cuts is even more difficult to justify, given what Greece has already done. Besides raising the retirement age by five years (from 60 to 65), The Financial Times reports, “main pensions have been slashed 44 to 48 percent since 2010, reducing the average pension to 700 euros a month … About 45 percent of Greek pensioners receive less than 665 euros monthly — below the official poverty threshold.”

European officials are making more demands for labor law reform, on the dubious theory that further weakening labor’s bargaining power and driving down wages (as if 26.6 percent unemployment doesn’t do that enough) will increase competitiveness enough to spur an export-led recovery.

So we see the ugliest of scenarios playing out: The people primarily responsible for Greece’s deep and prolonged depression and high unemployment are pushing policies that would extend the crisis and worsen its impact on those who have suffered the most — not to mention subvert the will of the electorate.

So far, the government is hanging in there, with the latest polls showing Tsipras’ approval rating at 66 percent. It’s impressive that so many Greeks still understand who is responsible for the crisis, in spite of the balance of media prejudice against the government. It’s vitally important, because Greece’s adversaries are counting on being able to deceive them.

Mark Weisbrot is co-director of the Center for Economic and Policy Research in Washington, D.C. and president of Just Foreign Policy.

12 June 2015

By Joseph Stiglitz

The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.

Of course, the economics behind the programme that the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.

It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europe’s leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5% of GDP by 2018.

Economists around the world have condemned that target as punitive, because aiming for it will inevitably result in a deeper downturn. Indeed, even if Greece’s debt is restructured beyond anything imaginable, the country will remain in depression if voters there commit to the troika’s target in the snap referendum to be held this weekend.

In terms of transforming a large primary deficit into a surplus, few countries have accomplished anything like what the Greeks have achieved in the last five years. And, though the cost in terms of human suffering has been extremely high, the Greek government’s recent proposals went a long way toward meeting its creditors’ demands.

We should be clear: almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors – including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems. The IMF and the other “official” creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece.

But, again, it’s not about the money. It’s about using “deadlines” to force Greece to knuckle under, and to accept the unacceptable – not only austerity measures, but other regressive and punitive policies.

But why would Europe do this? Why are European Union leaders resisting the referendum and refusing even to extend by a few days the June 30 deadline for Greece’s next payment to the IMF? Isn’t Europe all about democracy?

In January, Greece’s citizens voted for a government committed to ending austerity. If the government were simply fulfilling its campaign promises, it would already have rejected the proposal. But it wanted to give Greeks a chance to weigh in on this issue, so critical for their country’s future wellbeing.

That concern for popular legitimacy is incompatible with the politics of the eurozone, which was never a very democratic project. Most of its members’ governments did not seek their people’s approval to turn over their monetary sovereignty to the ECB. When Sweden’s did, Swedes said no. They understood that unemployment would rise if the country’s monetary policy were set by a central bank that focused single-mindedly on inflation (and also that there would be insufficient attention to financial stability). The economy would suffer, because the economic model underlying the eurozone was predicated on power relationships that disadvantaged workers.

And, sure enough, what we are seeing now, 16 years after the eurozone institutionalised those relationships, is the antithesis of democracy: many European leaders want to see the end of prime minister Alexis Tsipras’ leftist government. After all, it is extremely inconvenient to have in Greece a government that is so opposed to the types of policies that have done so much to increase inequality in so many advanced countries, and that is so committed to curbing the unbridled power of wealth. They seem to believe that they can eventually bring down the Greek government by bullying it into accepting an agreement that contravenes its mandate.

It is hard to advise Greeks how to vote on 5 July. Neither alternative – approval or rejection of the troika’s terms – will be easy, and both carry huge risks. A yes vote would mean depression almost without end. Perhaps a depleted country – one that has sold off all of its assets, and whose bright young people have emigrated – might finally get debt forgiveness; perhaps, having shrivelled into a middle-income economy, Greece might finally be able to get assistance from the World Bank. All of this might happen in the next decade, or perhaps in the decade after that.

By contrast, a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands. Greeks might gain the opportunity to shape a future that, though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present.

I know how I would vote.

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University.

29 June 2015

By Paul Krugman

It has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency — above all, the kind of fiscal and banking union that, for example, ensures that when a housing bubble in Florida bursts, Washington automatically protects seniors against any threat to their medical care or their bank deposits.

Leaving a currency union is, however, a much harder and more frightening decision than never entering in the first place, and until now even the Continent’s most troubled economies have repeatedly stepped back from the brink. Again and again, governments have submitted to creditors’ demands for harsh austerity, while the European Central Bank has managed to contain market panic.

But the situation in Greece has now reached what looks like a point of no return. Banks are temporarily closed and the government has imposed capital controls — limits on the movement of funds out of the country. It seems highly likely that the government will soon have to start paying pensions and wages in scrip, in effect creating a parallel currency. And next week the country will hold a referendum on whether to accept the demands of the “troika” — the institutions representing creditor interests — for yet more austerity.

Greece should vote “no,” and the Greek government should be ready, if necessary, to leave the euro.

To understand why I say this, you need to realize that most — not all, but most — of what you’ve heard about Greek profligacy and irresponsibility is false. Yes, the Greek government was spending beyond its means in the late 2000s. But since then it has repeatedly slashed spending and raised taxes. Government employment has fallen more than 25 percent, and pensions (which were indeed much too generous) have been cut sharply. If you add up all the austerity measures, they have been more than enough to eliminate the original deficit and turn it into a large surplus.

So why didn’t this happen? Because the Greek economy collapsed, largely as a result of those very austerity measures, dragging revenues down with it.

And this collapse, in turn, had a lot to do with the euro, which trapped Greece in an economic straitjacket. Cases of successful austerity, in which countries rein in deficits without bringing on a depression, typically involve large currency devaluations that make their exports more competitive. This is what happened, for example, in Canada in the 1990s, and to an important extent it’s what happened in Iceland more recently. But Greece, without its own currency, didn’t have that option.

So have I just made the case for “Grexit” — Greek exit from the euro? Not necessarily. The problem with Grexit has always been the risk of financial chaos, of a banking system disrupted by panicked withdrawals and of business hobbled both by banking troubles and by uncertainty over the legal status of debts. That’s why successive Greek governments have acceded to austerity demands, and why even Syriza, the ruling leftist coalition, was willing to accept the austerity that has already been imposed. All it asked for was, in effect, a standstill on further austerity.

But the troika was having none of it. It’s easy to get lost in the details, but the essential point now is that Greece has been presented with a take-it-or-leave-it offer that is effectively indistinguishable from the policies of the past five years.

This is, and presumably was intended to be, an offer Alexis Tsipras, the Greek prime minister, can’t accept, because it would destroy his political reason for being. The purpose must therefore be to drive him from office, which will probably happen if Greek voters fear confrontation with the troika enough to vote yes next week.

But they shouldn’t, for three reasons. First, we now know that ever-harsher austerity is a dead end: after five years Greece is in worse shape than ever. Second, much and perhaps most of the feared chaos from Grexit has already happened. With banks closed and capital controls imposed, there’s not that much more damage to be done.

Finally, acceding to the troika’s ultimatum would represent the final abandonment of any pretense of Greek independence. Don’t be taken in by claims that troika officials are just technocrats explaining to the ignorant Greeks what must be done. These supposed technocrats are in fact fantasists who have disregarded everything we know about macroeconomics, and have been wrong every step of the way. This isn’t about analysis, it’s about power — the power of the creditors to pull the plug on the Greek economy, which persists as long as euro exit is considered unthinkable.

So it’s time to put an end to this unthinkability. Otherwise Greece will face endless austerity, and a depression with no hint of an end.

29 June 2015

By Robert Stevens

The Syriza government imposed capital controls Sunday and announced the closure of Greek banks after the European Central Bank (ECB) said it would freeze the emergency loans it had been making to keep the country’s banks afloat.

The ECB’s decision, backing the refusal of the European Union (EU), led by Germany, to soften its demands for even harsher attacks on Greek workers and pensioners than those proposed by Syriza, led Athens to take the emergency measures. A run on Greek banks by depositors mushroomed over the weekend after talks to avert a Greek default broke up and Syriza leader and Greek Prime Minister Alexis Tsipras announced a referendum for July 5 on the EU’s package of austerity measures.

The referendum, far from an exercise in democracy, is a cynical attempt to shift the onus for the catastrophe engulfing the Greek working class from Syriza to the population itself, and provide a fig leaf for Syriza’s capitulation to the drive by the international banks to reduce the working class to destitution.

The likelihood that Greece will default Tuesday on a €1.6 billion loan payment to the International Monetary Fund (IMF), and that the so-called “troika”—the EU, IMF and ECB—will end its bailout program the same day, has intensified fears of a chain reaction sell-off on global stock and bond markets, a downward spiral for the euro currency and renewed speculation against the sovereign debt of other highly indebted euro group countries such as Spain, Portugal and Italy.

US President Barack Obama called German Chancellor Angela Merkel on Sunday to urge an agreement that would keep Greece in the euro zone. US Treasury Secretary Jack Lew on Saturday called IMF Managing Director Christine Lagarde and the finance ministers of Germany and France with the same message. Lew called for a “sustainable solution” that would include potential debt relief for Greece.

William Dudley, president of the Federal Reserve Bank of New York, called the Greek crisis a “huge wild card.” He warned that a Greek exit would establish a “huge precedent” that euro membership was reversible.

Tsipras made his Sunday announcement that Greece’s banks would be closed Monday in a brief address on national television. The stock markets will also be closed, financial sources said.

Speculation is rife that the banks could stay closed until next Sunday’s referendum, or even longer. The Financial Times reported: “Officials said the bank closure would last for several days and would be accompanied by limits yet to be announced on bank transfers abroad and withdrawals from cash machines.” There were reports that after the banks reopen, ATM withdrawals will be limited to €60.

Following the ECB’s announcement that it was freezing its emergency loan program to Greece’s banks, the Bank of Greece was forced to deny rumours that its governor, Yannis Stournaras, threatened to resign if capital controls were not imposed.

In the early hours of Sunday, Greece’s parliament voted to support the government’s call for a referendum. To obtain a “yes” vote, Syriza had to pass a 151-seat threshold in the 300 strong parliament. In a roll call ballot after 14 hours of debate, the proposal passed by 178 votes for to 120 against. Two deputies were absent.

Syriza won with the support of the Independent Greeks (Anel), its right-wing coalition partner, giving a total of 161 votes. In addition, the deputies of the fascist Golden Dawn voted in favour of the government.

Voting against the referendum were the conservative New Democracy and the social democratic PASOK, which, after having imposed a succession of austerity programmes from 2010 until Syriza’s election in January, were for the immediate acceptance of the new cuts being demanded. Their opposition to the referendum was supported by To Potami (the River), a pro-EU formation, as well as the Stalinist Communist Party of Greece (KKE).

Prior to the vote, Central Committee member Yiannis Gkiokas said the KKE opposed both the proposals “of the lenders and also the proposal of the government of 47 pages that has had details added to it during this whole period.”

The talks in Brussels that collapsed Friday centred on Athens receiving €7.2 billion in remaining loans attached to its previous austerity programme. In addition to the €1.6 billion payment due Tuesday to the IMF, Athens must repay Treasury bills worth €2 billion on July 10 and on July 20 bonds worth €3.5 billion are due for repayment to euro zone countries.

There is an extraordinarily reckless character to the actions of the EU, ECB and IMF, which have deliberately collapsed the economy of an EU member state, with incalculable financial and political implications, in order to underscore their insistence that there is no alternative to austerity. In a phone conversation Saturday with Tsipras, Merkel reportedly said the referendum would be over whether Greece would have “the euro or the drachma.”

Following the collapse of the talks, German Finance Minister Wolfgang Schäuble told reporters, “Greece will experience acute difficulties.” The BBC noted that he then “shrugged his shoulders.”

On Sunday, asked by Germany’s ZDF television news whether there was a possibility of preventing Greece’s default on Tuesday and its exit from the euro, Schäuble replied, “I don’t think so. It was incredibly ambitious as it was… and that anything should happen now is really ruled out, but Tsipras knew that yesterday.”

Lagarde told the BBC Saturday evening that “legally speaking, the referendum will relate to proposals and arrangements that are no longer valid.” She added that if Greece did not make its payment on June 30, it “no longer has access to funding.”

In an article on Sunday headlined “Markets’ Greek debt crisis calm set to shatter,” the Financial Times warned: “Escalation in the Greek debt crisis over the weekend is widely expected to trigger a sharp reaction when financial markets open on Monday, shattering the relative calm that has prevailed in recent weeks.”

It added, “With the European Central Bank refusing to expand its emergency loans to Greek banks, and creditors rejecting a bailout extension for the country, investors will be urgently assessing whether the fallout will be limited to Greece—or become a global event.”

In the hours leading up to the parliamentary vote on holding the referendum, tensions rose as people queued in their thousands to withdraw deposits from ATMs, with the Guardian noting that parliamentary deputies themselves were queuing up. Armed police patrolled the various ATMs.

Many people have already withdrawn their life savings and are storing the cash at home. Between Monday and Wednesday last week, some €2 billion was withdrawn (about 1.5 percent of total household and corporate deposits held by the banks as of end-April).

The last time capital controls were imposed in an EU country was in Cyprus, where bank withdrawals were limited to €300.

On Sunday, Greek Finance Minister Yanis Varoufakis released the text of his statement to a meeting of the Eurogroup finance ministers held on Saturday. This made clear the cynical calculations behind the referendum initiative.

Varoufakis said the scale of the austerity being demanded of Syriza was a step too far, threatening the imminent downfall of his government and an eruption of popular opposition. He said if the proposals were accepted and Syriza tried to get them “through Parliament tomorrow, we would be defeated in parliament with the result of a new election being called within a very long month—then, the delay, the uncertainty and the prospects of a successful resolution would be much, much diminished.”

Varoufakis warned: “[E]ven if we managed to pass the institutions’ proposal through parliament, we would be facing a major problem of ownership and implementation. Put simply, just as in the past the governments that pushed through policies dictated by the institutions could not carry the people with them, we too would fail to do so.”

Translated, Tsipras and Varoufakis have posed a referendum as a gun to the head of the Greek working class. If the vote is in favour of accepting the terms of the institutions, then Syriza can claim to have been presented with a fait accompli. If the vote goes against, they will proceed with their own austerity measures in the hope that this will be acceptable to the EU, ECB and IMF.

29 June, 2015
WSWS.org

 

 

Israeli forces boarded and commandeered the Marianne on Monday, one of four boats that were bound for Gaza in the latest attempt to break the tight Israeli siege of the occupied territory.

At around 2 am Gaza time Marianne was surrounded by three Israeli navy boats while in international waters more than 100 miles off the coast of Gaza, organizers Freedom Flotilla III said in a press release.

“After that we lost contact with the Marianne and at 05:11 am (Gaza time) the IDF [Israeli army] announced that they had ‘visited and searched’ Marianne,” the press release states. “They had captured the boat and detained all on board ‘in international waters’ as they admitted themselves. The only positive content in the IDF announcement was that they still recognize that there is a naval blockade of Gaza, despite the Netanyahu government’s recent denial that one exists.”

Organizers called the seizure of the boat and its passengers an “act of piracy.”
Israel’s Haaretz reports that the boat is being towed to Usdud (Ashdod), a port in present-day Israel, where the passengers “will be interrogated before being escorted to Ben Gurion Airport and flown out of Israel.”

The 18 passengers aboard the Marianne include Basel Ghattas, a Palestinian citizen of Israel and member of the Israeli parliament, former Tunisian president Moncef Marzuki, Spanish member of the European Parliament Ana Miranda and Professor Robert Lovelace, retired chief of the Ardoch Algonquin First Nation in Canada.

Many Palestinians in had eagerly awaited the flotilla, hoping that it would call international attention to the siege which Israel imposed eight years ago

Three other boats – Rachel, Vittorio and Juliano II – that also made up the flotilla have headed back to their ports of origin.

In total, 47 passengers from 17 countries were aboard the boats, which carried medicines, solar panels and above all a strong message of solidarity for the 1.8 million Palestinians still besieged in Gaza one year after Israel began its 51-day destructive assault that killed more than 2,200 people.

An independent UN Human Rights Council inquiry into the attack, published last week, found extensive evidence of war crimes approved by Israel’s leaders at the “highest level.”

Violence incitement
Ghattas joined the flotilla despite violent threats and incitement from fellow lawmakers in Israel to lift his parliamentary immunity so that he could be prosecuted.

Yair Lapid, head of Israel’s purportedly centrist Yesh Atid party, for instance denounced the flotilla as a “provocation against the state of Israel.”

“This is a flotilla of a group of terror supporters a heinous flotilla that needs to be stopped,” Lapid added. “We need to act against the flotilla the same way we do when dispersing a violent protest and these guys need to all be arrested.”

In a Huffington Post column on Sunday, Ghattas defended his right to take part in the flotilla.

Bigots in “a discriminatory Jewish state as a white Southern extremist in a Confederate state, seek to diminish the rights of Palestinian citizens of Israel and their representatives in the parliament,” Ghattas writes.

“More than anything, it is obvious that the situation of Palestinians in Gaza will inevitably lead to another round of bloody war, perhaps even more horrifying than the one we had less than one year ago,” Ghattas adds. “Still, my very outspoken colleagues in the Knesset would not even consider lifting the blockade as a means to avoid future war.”

“No siege on Gaza”
In a statement Monday, Israeli Prime Minister Benjamin Netanyahu justified the seizure of the Marianne, claiming that the “flotilla is nothing but a demonstration of hypocrisy and lies that is only assisting the Hamas terrorist organization and ignores all of the horrors in our region.”

Netanyahu insisted that “preventing entry by sea was done in accordance with international law and even received backing from a committee of the UN Secretary General.”

“Israel is the only democracy that defends itself in accordance with international law,” Netanyahu insisted, adding that “there is no siege on Gaza.”

The fact that 18 civilians aboard a yacht cannot sail to Gaza, and that there has been virtually no reconstruction in Gaza since Israel’s attack last year would tend to undermine Netanyahu’s contention.

According to Haaretz, after boarding the boat, Israeli army gunmen were “to hand out a letter issued by the Prime Minister’s Office, welcoming [the captives] to Israel and wondering why they sailed to Gaza and not Syria.”

“Perhaps you meant to sail somewhere else nearby – Syria, where Assad’s regime is massacring his people every day, with the support of the murderous Iranian regime,” the letter would reportedly state.

Netanyahu’s statement did not specify which UN “committee” he was talking about, but this was a likely reference to the 2011 “Palmer report” commissioned by UN Secretary General Ban Ki-moon into Israel’s attack the previous year on the Mavi Marmara.
Turkey rejected the report into the assault that killed 10 of its citizens on the Mavi Marmara in international waters and imposed sanctions on Israel.

The inquiry was heavily criticized for bias. The four-member committee that wrote the Palmer report was chaired by former New Zealand Prime Minister Geoffrey Palmer and vice-chaired by former president of Colombia Alvaro Uribe, a notorious human rights abuser close to Israel.

The inquiry commissioned by Ban was in addition to an official UN Human Rights Council fact-finding mission which found that Israel’s attack on the 2010 flotilla was illegal.

Determined
“It is disappointing that the Israeli government chose to continue the absolutely fruitless policy of ‘no tolerance,’ meaning it will continue to enforce an inhumane and illegal collective punishment against 1.8 million Palestinians in Gaza,” flotilla organizers said in their statement.

“Israel’s repeated acts of state piracy in international waters are worrying signs that the occupation and blockade policy extends to the entire eastern Mediterranean.”
They also urged governments”to ensure that all passengers and crew from the Marianne are safe, and to strongly protest against the violation of international maritime law by the Israeli state.”

“We call on all civil society organizations to condemn the actions of Israel,” the statement concludes. “People all over the world will continue to respond and react to this injustice, as will we, until the port of Gaza is open and the siege and occupation is ended.”

30 June 2015

By Robert Barsocchini

The UN has now released its investigation into Israel’s 2014 massacre in Gaza. While the report covers crimes committed by both Israel and the comparatively defenseless resistance bands in the Gaza refugee ghetto, international law experts remind that this does not mean there is any equivalence between the “sides” or the gravity of their violations:

“George Bisharat, a professor at the University of California, Hastings College of the Law who has an expertise in law and politics in the Middle East, said that it is ‘sheer nonsense‘ to equate the crimes allegedly committed on both sides.”

It is important to keep in mind, Bisharat continues, that “the gravity of Israel’s violations of international law are far greater than those of the Palestinians.”

“Katherine Gallagher, senior staff attorney at the Center for Constitutional Rights agreed, saying, ‘certainly the commission sought to present a holistic picture but just because it’s holistic doesn’t mean it’s an equal picture.’

‘The number of civilians killed in Gaza was simply unprecedented — this is a traumatized society facing its third military assault in five years and living under blockade,‘ Gallagher said.”

The UN finds that the Israeli massacre killed 1,462 Palestinian civilians, including over 500 children, and 2,100 Palestinians total, while 67 Israeli soldiers and six civilians, including 1 child, were killed. Thus the ratio of Palestinian to Israeli children killed in what Western media, to disguise the reality of the situation, calls a “war”, was about 530 to 1.

The report offers firsthand accounts (see link for more) of people effected by the massacre:

“I was sitting with my family at the table, ready to break the fast. Suddenly we were sucked into the ground. Later that evening, I woke up in the hospital and was told my wife and children had died,” Tawfik Abu Jama told the inquiry.

On 20 July the father of eight lost 26 family members, including all of his children and his wife, in a single bomb attack.

Another account:

“I saw my family all ripped to pieces…”

Another:

“I am 52 years old and I have lost everything I cared for. In only a few minutes, they killed everyone and everything that was dear to me. They killed my dream, and my daughter’s dream who wanted to be a doctor.”

The UN reports that the explosive devices Israel illegally plants and detonates in Gaza can “tear off limbs hundreds of meters from the blast site.”

“The shock waves create thousands of pounds of pressure per square inch”, while “the injury threshold is 15 pounds per square inch.”

The US is the world’s biggest arms trafficker and provides most of those weapons. Israel is the biggest recipient of US aid, and the amount has been increased by Obama after each of Israel’s massacres against Gaza since Obama has taken office, which include Cast Lead, Pillar of Cloud, and 2014’s Solid Cliff.

Georgetown University international law expert Dr. Noura Erakat reminds that the responsibility “to preserve protection for civilians rests upon the shoulders of citizens, organizations, and mass movements who can influence their governments enforce international law. There is no alternative to political mobilization to shape state behavior.”

The US has a long and shameful history, extending to its origins and beyond and continuing today, of carrying out and supporting countless massacres. We cannot undo these crimes, but we can easily choose to stop allowing them today by, for one, following Erakat’s advice and mobilizing to cut off support for Israel until it decolonizes and stops occupying Palestine, ends its illegal blockade of Gaza, and stops carrying out aggression and massacres. Ceasing to enable these crimes is both legally required of us and would be helpful for the health of Israeli society.

Author focuses on force dynamics, national and global.
26 June, 2015
Countercurrents.org