Tag Archives: IMF

Defend the Greek workers! Oppose the diktat of Schäuble and Merkel!

By Partei für Soziale Gleichheit
July 14, 2015
World Socialist Web Site

 

The Partei für Soziale Gleichheit (PSG—Socialist Equality Party) denounces the agreement forced on Greece by German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble at Sunday’s euro group summit. We call upon workers in Germany and throughout Europe to declare their solidarity with the workers in Greece and organize mass resistance to the policies of the German government.

The new austerity demands, to which the government of Greek Prime Minister Alexis Tsipras capitulated on Monday morning, go far beyond the measures the Greek population rejected, by a large majority, in the referendum held just one week before. For millions of Greeks, the implementation of these measures means poverty, unemployment, disease and even death. Greece will be transformed into a de facto protectorate of Germany and the most powerful European financial interests.

The troika (European Union, European Central Bank and International Monetary Fund) is returning to Athens and will dictate government policy. The role of parliament is to be reduced to rubber-stamping austerity measures and signing off on automatic budget cuts. State property valued at €50 billion will be transferred to a fund, to be sold off to the highest bidder, modeled on the Treuhandanstalt, set up in 1990 to liquidate state property in East Germany.

The agreement amounts to a carte blanche for the ruthless exploitation and plundering of the Greek working class.

Even establishment commentators could not overlook the agreement’s undemocratic character. In the Financial Times, Wolfgang Münchau accused Greece’s creditors of reverting to “the nationalist European power struggles of the 19th and early 20th century” and transforming the euro zone into a system “run in the interests of Germany” and “held together by the threat of absolute destitution for those who challenge the prevailing order.”

Paul Krugman in the New York Times accused the euro group of “pure vindictiveness, complete destruction of national sovereignty, and no hope of relief.”

The brutal actions of Schäuble and Merkel recall the darkest chapter in German history. Less than seventy-five years have passed since Hitler’s Wehrmacht occupied Greece, established a brutal regime of terror, and ruthlessly plundered the country. The imposition of high occupation costs, the export of virtually all of Greece’s industrial goods, and the theft of machinery and vehicles led to a famine that took the lives of hundreds of thousands of people.

The Wehrmacht responded to resistance from partisan fighters by massacring the inhabitants of numerous villages, including Distomo, Lingiades and Kommeno. At least 30,000 civilians fell victim to these reprisals. Eight thousand Jews were deported and murdered, and the Jewish community in Thessaloniki, one of the world’s oldest, was completely wiped out. None of the victims were ever compensated, and virtually none of the perpetrators were punished.

Schäuble and Merkel are now walking in the footsteps of their predecessors. The German ruling class is spewing forth all the undigested filth of the past. Their arrogance suggests that they see themselves, once again, as Europe’s master race.

The politicians are supported by a spineless press, for which no cliché or prejudice is too cheap to be hurled at the Greek people. The media spread propaganda and do everything in their power to confuse and mislead the public.

The government also relies on historians such as Jörg Baberowski of Humboldt University, who falsifies history to trivialise German crimes in World War II. It is backed by economists, who declare the impoverishment of the Greek working class a historical necessity, and political scientists, such as Herfried Münkler, who formulates the political arguments for German hegemony in Europe.

All of the parties represented in the German parliament support the government. The Social Democratic (SPD) chairman Sigmar Gabriel has led the way, seeking to outdo Schäuble and Merkel from the right.

They are all convinced that history has been forgotten. But they are deceiving themselves. The working class of Greece, Germany and Europe cannot and will not allow them to repeat Germany’s historic crimes.

The German government is pursuing two goals in its aggressive actions in Greece. It intends to set an example to intimidate all resistance to its austerity course in Europe and Germany. And it seeks to strengthen its hegemonic domination of Europe.

By the time of the 2008 financial crisis, the government had decided that Germany could no longer maintain its dominance through compromises and financial assistance. Germany had to become, in the words of Münkler, Europe’s “taskmaster,” instead of its “paymaster.” Early last year, leading government officials demanded that Germany play a role in Europe and the world that corresponded to its actual influence.

This new great power politics was first tested out in Ukraine, where the German government backed the pro-Western coup that has driven the country to civil war and brought NATO to the brink of a military confrontation with nuclear-armed Russia. These same policies are being continued in what amounts to a civilian coup in Athens.

The face of the European Union has been transformed in the process. It is becoming ever more obvious that the EU is not a mechanism for the peaceful coexistence of Europe’s peoples, but rather an instrument for the predominance of the most powerful imperialist powers and the ruthless exploitation of the working class. Masses of people now view the EU with a mixture of disgust and hatred.

The more openly Germany uses the EU to attain the position of a world power, the more intense the national conflicts within Europe become—above all between Germany and France. Prior to Sunday’s summit there were sharp exchanges between Berlin and Paris, which, due to domestic political considerations, was favoring a more conciliatory course towards Greece. The French government eventually submitted to Germany’s dictates because it fears the threat from its own working class much more than it fears German hegemony. These tensions, however, will flare up again, as will the developing conflict between the US and Germany over who will control Europe.

It is the task of the working class in Germany and throughout Europe to oppose these dangerous actions, which threaten to plunge the working class into desperate poverty, and the continent, once again, into war and dictatorship. To this end, it is vital to draw the lessons of the events in Greece and the role played by Syriza.

It is hard to find a parallel in history to the cowardly and shameful betrayal carried out in the past few days by Tsipras and his government. Elected in January on the basis of a promise to end austerity, Tspiras’ party made one concession after another to Berlin and Brussels.

Finally, it organized a referendum, hoping that a majority would favour the EU-backed austerity measures. Confronted, instead, with an overwhelming majority against austerity, it capitulated completely to the German diktat within a week. Even a right-wing bourgeois government would not have gone so far.

This surrender confirms the PSG’s assessment that Syriza is not a left, and certainly not a socialist, party, but rather a pseudo-left organization representing wealthy, selfish middle class layers primarily concerned with their own well-being. They have nothing but contempt for the working class, which they fear. Their capitulation is grist for the mill of far-right extremists such as Golden Dawn, which, from a reactionary, nationalist standpoint, poses as a more determined opponent of the dictates of Brussels and Berlin than does the supposedly “left” Syriza.

What is true for Syriza also applies, as well, to its international co-thinkers, including the Left Party in Germany and Podemos in Spain.

The Left Party bears immense responsibility for the fate of Greece. In February, it voted for the “aid program” for Greece, including the austerity measures attached to it. Occasionally it criticizes the policies of the German government, in order to maintain a shred of credibility, but it has done absolutely nothing to support the Greek workers.

It has refused to organize a single demonstration in their defense. If the Left Party assumes power in Berlin, it will pursue the same course as Syriza. This has already been proven by its record in power at the state level.

The Left Party works closely with the trade unions, which have sought to aid the German government by shutting down and selling out strikes by train drivers, postal and daycare workers, hospital employees and other professionals.

The working class of Germany must rise to the defense of its class brothers and sisters in Greece. The PSG calls upon all workers involved in social struggles, all young people and the entire working population: Support the Greek workers! Organize solidarity strikes against the dictates of Schäuble and Merkel! Break with the Left Party and the SPD and organize independently!

The fundamental question is the necessity of building a revolutionary leadership—in Greece, Germany and throughout the European continent. Join the PSG, the German section of the International Committee of the Fourth International, and build sections of the ICFI all over Europe that will fight for the unity of the European working class and the establishment of the United Socialist States of Europe!

 

 

Greek government approves brutal austerity measures in proposal to EU

By Alex Lantier
July 10, 2015
World Socialist Web Site

 

Greece’s Syriza-led government agreed to a massive new €13 billion (US$14.34 billion) package of austerity measures yesterday evening, less than a week after Sunday’s landslide “no” vote in a referendum on European Union (EU) austerity.

The proposal would be the deepest package of cuts since the EU austerity drive began in Greece in late 2009. It goes well beyond the proposed €8 to 9 billion in cuts initially demanded by the EU in talks with Syriza.

The 13-page proposal was submitted to the EU, International Monetary Fund (IMF) and European Central Bank (ECB) before the midnight deadline previously set by the institutions. In exchange for cuts, the Greek government is reportedly asking for a €53.5 billion ($59.2 billion) loan to the Greek state and some form of debt restructuring, allowing it to avoid state bankruptcy and remain in the euro currency area.

The austerity measures reportedly include sharp increases in the regressive VAT sales tax and an increase in the retirement age to 67 by 2022. The elimination of additional payments to the poorest pensioners will take place by the end of 2019, a year earlier than previously scheduled.

Plans for the privatization of state assets, including ports and airports, will go forward. The proposal also includes a reported increase of the corporate tax to 28 percent, rather than 29 percent, a reduction requested by the IMF.

In proposing the new austerity package, Syriza has with extraordinary rapidity repudiated the vote in Sunday’s referendum, which Syriza itself had called and presented as a model of democratic accountability. More than 61 percent of the population rejected precisely the measures that the government has now adopted.

Even as Syriza officially called for a “no” vote, Tsipras had no intention of fighting EU austerity. The prime minister expected to lose the vote and, in response, abandon office and leave it to another government to impose the cuts. (See also: Tsipras petitions EU for new austerity deal)

Following the vote, the Syriza-led government has moved as quickly as possible to reach an accommodation with the pro-austerity parties within Greece and approve a deal that would be acceptable to the European banks.

The measures were finalized in discussions between Greek Prime Minister Alexis Tsipras, Deputy Prime Minister Yiannis Dragasakis, Finance Minister Euclid Tsakalotos and Economy Minister Giorgios Stathakis—all from the ruling Syriza (“Coalition of the Radical Left”) party—and adopted by the Greek cabinet on Thursday.

The government is planning to seek a vote in the Greek parliament today, relying on support from the openly pro-austerity New Democracy and PASOK parties. On Saturday, eurozone finance ministers are scheduled to meet to review the proposal, followed by a meeting Sunday of the EU leaders.

The new austerity proposal was rushed through amidst threats from European officials to entirely cut off funding for Greece and force the country out of the eurozone. In response to these threats, Syriza continually refused to take any measures that would threaten capitalist property relations and rejected any appeal to workers throughout Europe for a common struggle against austerity.

It is uncertain whether an agreement will be approved by the EU, even on the surrender terms being offered by Syriza. Sections of the European ruling class are discussing forcing Greece to default on its debts, expelling it from the euro zone, and pushing it through a drastic economic crisis by forcing it to restore a devalued national currency.

German Finance Minister Wolfgang Schaeuble said yesterday that any significant restructuring of Greece’s debt was unlikely, as this would violate EU rules.

Other European officials have indicated a desire to reach agreement with the Greek government. Syriza members told the Guardian that French finance ministry officials had worked with Greek Finance Minister Tsakalotos to rewrite the austerity package Athens was proposing, in order to make it acceptable to the EU.

Donald Tusk, the chair of the EU summit, urged European officials to take certain measures to allow Greece to pay back its debt. “The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors,” Tusk said.

Germany has also come under pressure from the Obama administration to ensure that Greece is not pushed out of the eurozone. On Wednesday, US Treasury Secretary Jack Lew publicly intervened to push for an agreement on austerity between Greece and the EU and call for some form of “debt restructuring.”

Criticizing those who “create more of these kind of life-and-death deadlines,” Lew said they were creating far greater economic and political risks, including a broader financial panic across southern Europe and the possible splitting of Europe. The US wants to ensure that Greece remains within NATO and continues to support the campaign of military and economic aggression against Russia.

With Greece’s banks still closed and depositors limited to €60 in daily cash withdrawals amid the crisis, the Greek economy is rapidly grinding to a halt.

The National Confederation of Hellenic Commerce released a report Wednesday that found that consumption had fallen 70 percent since the closure of Greece’s banks, costing €1.2 billion to the economy. Greeks are reportedly stocking up on key medicines as well as non-perishable foods, such as rice and pasta, fearing a possible collapse of supplies of imported food and medicine.

Planned US Coup in Greece?

By Stephen Lendman
July 08, 2015
Global Research

 

alexis-tsiprasWashington’s geopolitical strategy when bullying fails is either assassinating independent leaders, color revolutions, military coups or naked aggression.

If Moscow-based independent investigative journalist John Helmer is right, Greek Prime Minister Alexis Tsipras is a marked man and SYRIZA governance on thin ice showing cracks:

 ”(a) putsch in Athens to save allied Greece from enemy Russia is in preparation by the US and Germany, with backing from the non-taxpayers of Greece  – the Greek oligarchs, Anglo-Greek shipowners, and the Greek Church.”

“At the highest and lowest level of Greek government, and from Thessaloniki to Milvorni, all Greeks understand what is happening. (Sunday) they voted overwhelmingly to resist.”

“According to a high political figure in Athens, a 40-year veteran, ‘what is actually happening is a slow process of regime change.’ “

Wherever neocon Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland shows up (Hillary Clinton’s handpicked choice for the job), trouble usually follows.

Helmer says she’s “in charge of warmaking in Europe.” Her notorious involvement in Ukraine’s February 2014 coup is well documented.

According to Helmer, she gave Tsipras two ultimatums in Athens last March – surrender to Troika demands and remain allied with US-dominated NATO’s anti Russian agenda.”

Her spokeman Mark Toner said Washington is “focused on, frankly, the opposite (of Sunday’s referendum), which is finding a path forward that allows Greece to continue to make reforms (more austerity), return to growth (by letting Troika bandits rape its economy and population), and remain in the Eurozone.”

Since the 19th century, Greece had five military coups or attempted ones. Junta dictatorship ruled from 1967 – 1974. Another one can’t be ruled out.

Over five dozen former high-ranking military officials fired a shot across the bow declaring their “oath to the Fatherland and the Flag. By choosing isolation, we place the Fatherland and its future in danger,” they warned.

They publicly called for a “yes” vote ahead of Sunday’s referendum. Will not getting it mobilize them along with other Greek dark forces, Washington and Brussels to oust Tsipras forcibly or otherwise?

Grexit “will make our country weaker,” they claimed – even though Greeks weren’t asked about it and most oppose the idea. “We will lose allies that have stood by our side. We will lose the strength we gain from associations and groupings to which we belong historically and culturally,” the former military officials said.

Ties to Washington and Brussels run counter to what best serves long-suffering Greeks.

Will conditions be made worse than ever by greater austerity if coup rumblings become reality? Is this US/Eurogroup’s Plan B?

Helmer cited political sources in Athens saying Tsipras and other SYRIZA officials acted preemptively to prevent one – replacing military and intelligence leadership with their own “but not radically.”

Moscow remains skeptical about Tsipras withstanding Washington/Brussels pressure – especially given dominant Germany’s hardline position.

He faces enormous pressure. His six months in office shows he promises Greeks one thing and does another.

He agreed to nearly all Troika demands. Not good enough. They want total surrender. Germany’s Merkel and France’s Hollande told him to capitulate fully for further bailout aid.

Greek banks remain closed. They’re close to collapse. The ECB raised the amount of collateral they must post for further emergency loans.

Does Finance Minister Varoufakis’ resignation signal Tsipras’ capitulation to follow – negating popular opposition to austerity he pledged to support?

Hollande spoke for himself and Merkel saying Tsipras must “offer serious, credible proposals” for bailout help – code language for demanding unconditional surrender, a Greek Versailles.

He and new Finance Minister Euclid Tsakalotos are heading to Brussels for further talks. Hardline Troika officials intend cutting them no slack.

Will Tsipras cave to their demands and betray millions of Greeks in the process? Given his record so far in office, it’s hard imagining otherwise. Hopefully he’ll surprise but don’t bet on it.

Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net.

His new book as editor and contributor is titled “Flashpoint in Ukraine: US Drive for Hegemony Risks WW III.”

http://www.claritypress.com/LendmanIII.html

Visit his blog site at sjlendman.blogspot.com.

Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.

It airs three times weekly: live on Sundays at 1PM Central time plus two prerecorded archived programs. 

Greece — The One Biggest Lie You Are Being Told By The Media

By Global Research News
Global Research, July 05, 2015
Truth and Satire, July 3, 2015

 

No to blackmail and austerityBy Truth and Satire

Every single mainstream media has the following narrative for the economic crisis in Greece: the government spent too much money and went broke; the generous banks gave them money, but Greece still can’t pay the bills because it mismanaged the money that was given. It sounds quite reasonable, right?

Except that it is a big fat lie … not only about Greece, but about other European countries such as Spain, Portugal, Italy and Ireland who are all experiencing various degrees of austerity. It was also the same big, fat lie that was used by banks and corporations to exploit many Latin American, Asian and African countries for many decades.

Greece did not fail on its own. It was made to fail.

In summary, the banks wrecked the Greek government, and then deliberately pushed it into unsustainable debt … while revenue-generating public assets were sold off to oligarchs and international corporations. The rest of the article is about how and why.

If you are a fan of mafia movies, you know how the mafia would take over a popular restaurant. First, they would do something to disrupt the business – stage a murder at the restaurant or start a fire. When the business starts to suffer, the Godfather would generously offer some money as a token of friendship. In return, Greasy Thumb takes over the restaurant’s accounting, Big Joey is put in charge of procurement, and so on. Needless to say, it’s a journey down a spiral of misery for the owner who will soon be broke and, if lucky, alive.

Now, let’s map the mafia story to international finance in four stages.

Stage 1: The first and foremost reason that Greece got into trouble was the “Great Financial Crisis” of 2008 that was the brainchild of Wall Street and international bankers. If you remember, banks came up with an awesome idea of giving subprime mortgages to anyone who can fog a mirror. They then packaged up all these ticking financial bombs and sold them as “mortgage-backed securities” for a huge profit to various financial entities in countries around the world.

A big enabler of this criminal activity was another branch of the banking system, the group of rating agencies – S&P, Fitch and Moody’s – who gave stellar ratings to these destined-to-fail financial products. Unscrupulous politicians such as Tony Blair joined Goldman Sachs and peddled these dangerous securities to pension funds and municipalities and countries around Europe. Banks and Wall Street gurus made hundreds of billions of dollars in this scheme.

But this was just Stage 1 of their enormous scam. There was much more profit to be made in the next three stages!

Stage 2 is when the financial time bombs exploded. Commercial and investment banks around the world started collapsing in a matter of weeks. Governments at local and regional level saw their investments and assets evaporate. Chaos everywhere!

Vultures like Goldman Sachs and other big banks profited enormously in three ways: one, they could buy other banks such as Lehman brothers and Washington Mutual for pennies on the dollar. Second, more heinously, Goldman Sachs and insiders such as John Paulson (who recently donated $400 million to Harvard) had made bets that these securities would blow up. Paulson made billions, and the media celebrated his acumen. (For an analogy, imagine the terrorists betting on 9/11 and profiting from it.) Third, to scrub salt in the wound, the big banks demanded a bailout from the very citizens whose lives the bankers had ruined! Bankers have chutzpah. In the U.S., they got hundreds of billions of dollars from the taxpayers and trillions from the Federal Reserve Bank which is nothing but a front group for the bankers.

In Greece, the domestic banks got more than $30 billion of bailout from the Greek people. Let that sink in for a moment – the supposedly irresponsible Greek government had to bail out the hardcore capitalist bankers.

Stage 3 is when the banks force the government to accept massive debts. For a biology metaphor, consider a virus or a bacteria. All of them have unique strategies to weaken the immune system of the host. One of the proven techniques used by the parasitic international bankers is to downgrade the bonds of a country. And that’s exactly what the bankers did, starting at the end of 2009. This immediately makes the interest rates (“yields”) on the bonds go up, making it more and more expensive for the country to borrow money or even just roll over the existing bonds.

From 2009 to mid 2010, the yields on 10-year Greek bonds almost tripled! This cruel financial assault brought the Greek government to its knees, and the banksters won their first debt deal of a whopping 110 billion Euros.

The banks also control the politics of nations. In 2011, when the Greek prime minister refused to accept a second massive bailout, the banks forced him out of the office and immediately replaced him with the Vice President of ECB (European Central Bank)! No elections needed. Screw democracy. And what would this new guy do? Sign on the dotted line of every paperwork that the bankers bring in.

(By the way, the very next day, the exact same thing happened in Italy where the Prime Minister resigned, only to be replaced by a banker/economist puppet. Ten days later, Spain had a premature election where a “technocrat” banker puppet won the election).

The puppet masters had the best month ever in November 2011.

Few months later, in 2012, the exact bond market manipulation was used when the banksters turned up the Greek bonds’ yields to 50%!!! This financial terrorism immediately had the desired effect: The Greek parliament agreed to a second massive bailout, even larger than the first one.

Now, here is another fact that most people don’t understand. The loans are not just simple loans like you would get from a credit card or a bank. These loans come with very special strings attached that demand privatization of a country’s assets. If you have seen Godfather III, you would remember Hyman Roth, the investor who was carving up Cuba among his friends. Replace Hyman Roth with Goldman Sachs or IMF (International Monetary Fund) or ECB, and you get the picture.

Stage 4: Now, the rape and humiliation of a nation begin. For the debt that was forced upon them, Greece had to sell many of its profitable assets to oligarchs and international corporations. And privatizations are ruthless, involving everything and anything that is profitable. In Greece, privatization included water, electricity, post offices, airport services, national banks, telecommunication, port authorities (which is huge in a country that is a world leader in shipping) etc.

In addition to that, the banker tyrants also get to dictate every single line item in the government’s budget. Want to cut military spending? NO! Want to raise tax on the oligarchs or big corporations? NO! Such micro-management is non-existent in any other creditor-debtor relationship.

So what happens after privatization and despotism under bankers? Of course, the government’s revenue goes down and the debt increases further. How do you “fix” that? Of course, cut spending! Lay off public workers, cut minimum wage, cut pensions (same as our social security), cut public services, and raise taxes on things that would affect the 99% but not the 1%. For example, pension has been cut in half and sales tax increase to more than 20%. All these measures have resulted in Greece going through a financial calamity that is worse than the Great Depression of the U.S. in the 1930s.

Of course, the ever-manipulative bankers demand immediate privatization of all media which means that the country now gets photogenic TV anchors who spew propaganda every day and tell the people that crooked and greedy banksters are saviors; and slavery under austerity is so much better than the alternative.

If every Greek person had known the truth about austerity, they wouldn’t have fallen for this. Same goes for Spain, Italy, Portugal, Ireland and other countries going through austerity.The sad aspect of all this is that these are not unique strategies. Since World War II, these predatory practices have been used countless times by the IMF and the World Bank in Latin America, Asia, and Africa.

This is the essence of the New World Order — a world owned by a handful of corporations and banks.

So, it’s time for the wonderful people of Greece to rise up like Zeus and say NO (“OXI” in Greece) to the greedy puppet masters, unpatriotic oligarchs, parasitic bankers and corrupt politicians.

Dear Greece, know that the world is praying for you. Vote NO to austerity. Say YES to freedom, independence, self-government, and democracy. Yes, democracy, the word that was invented by YOU!

P.S. (You can also watch this video where John Perkins – author of “Confessions of an Economic Hit Man” – talks about exploitation of Latin American and Asian countries using the same tools of debt-austerity-privatization. He used to do this for a living!  

Copyright Truth and Satire, 2015

Greece’s Syriza government signals pension cuts

By Christoph Dreier
April 25, 2015
World Socialist Web Site

 

https://anticap.files.wordpress.com/2012/06/greece-austerity.jpg

image from: anticap.wordpress.com

At Friday’s meeting of European finance ministers in the Latvian capital of Riga, no agreement was reached with the Greek government on the repayment of loans. Greek Finance Minister Yanis Varoufakis made clear, however, that his government was ready to impose extensive pension cuts and labour market “reforms” in order to reach an agreement with the troika (European Union, International Monetary Fund, European Central Bank).

Even before the finance ministers’ meeting, Varoufakis published a comment on his blog in which he made far-reaching concessions to the troika. He assured it that negotiations since Syriza’s election victory in January had already brought “much convergence” between Greece and its “European partners.” The remaining differences, he said, were “not unbridgeable.”

He went on to assert that the Syriza-led government would promote entrepreneurialism, create an independent tax commission, continue the privatization of state property and “rationalize the pension system (for example, by limiting early retirement).”

The elimination of early retirement benefits is one of the central demands of the troika. The retirement age was already raised to 67 in 2012. Numerous exemptions, however, have allowed most workers to retire earlier. The “limiting” of exemptions means nothing less than the blanket enforcement of the higher retirement age.

Such a lengthening of the work life of Greek citizens amounts to a massive pension cut. And with the official jobless rate at 25 percent, few workers are able remain employed until they reach 67. Entire families already depend on a single pension to survive.

Syriza (Coalition of the Radical Left) previously declared pension cuts a “red line” that it would not cross. The fact that Varoufakis threw this line overboard in the run-up to the finance ministers’ meeting made clear that there were no limits to the attacks on the working class the supposedly “left” government was prepared to carry out in order to reach a deal with the troika.

Prime Minister Alexis Tsipras, the leader of Syriza, added his own assurances that his government would adhere to the reactionary policies of the EU. At an EU summit on Thursday, he signed onto the so-called “ten-point plan” for immigration policy. The plan provides for the ramping up of police and military operations to block migrants from reaching European shores and lays the foundations for a large-scale military intervention in Africa.

At the meeting, Tsipras met with German Chancellor Angela Merkel for over an hour. The German newspaper Die Zeit reported that Merkel insisted Greece quickly implement the demanded reforms, while Tsipras protested that his country had already made “enough sacrifices.”

Tsipras expressed the hope that Greece and the EU could still come to an agreement by the end of April. Greece urgently needs an outstanding tranche of loans amounting to over 7.2 billion euros. In order to pay back wages and meet loan commitments, the Syriza-led government has already plundered the public treasury.

After the meeting in Riga, Varoufakis said it was necessary for a deal to be reached quickly. “We agreed that an agreement will be difficult,” he said, “but it will happen and it will happen quickly because that is the only option we have.”

Despite the groveling of Syriza, EU representatives showed little willingness to compromise. Eurogroup president Jeroen Dijsselbloem said after the meeting that there could be no paying out of loans if the Greek government did not submit a detailed “reform” program. Everyone was certain, he said, that the time for an agreement was running out. The responsibility for that lay with Greece.

Dijsselbloem added that “significant differences remain” between the EU ministers and Greece. Austrian Finance Minister Jörg Schelling reproached the Greek government for presenting no concrete proposals. He said, “I strongly urge that we now get something on the table that can be decided upon.”

Reuters reported that the Slovenian finance minister, Dusan Mramor, met with Varoufakis behind closed doors and suggested a “Plan B.” The Greek finance minister later called him “anti-European.”

According to those present, the finance ministers’ meeting became hostile. As Varoufakis, in a conference call, clarified the details of loan payments in the coming week, one of his interlocutors denounced him as a “time-waster, gambler and amateur.”

Tsipras was also rebuffed. French President François Hollande warned him to speed up the imposition of social cuts. After a short meeting with Tsipras, he said, “Greece must continue to provide the necessary information and show that it can make decisions about reforms.”

EU officials have made it more than clear that they are not prepared to make any concessions and intend to make an example of Greece. The social assault is to be carried out whatever the cost and serve as a model for the entire continent.

EU, Syriza prepare to suppress popular opposition to austerity in Greece

By Kumaran Ira
April 20, 2015
World Socialist Web Site

 

https://ianweir20.files.wordpress.com/2013/09/color-greece-austerity-web.jpg

Photo credit: anticap.wordpress.com

This weekend’s meeting of the International Monetary Fund (IMF) and World Bank in Washington focused on the Greek debt crisis, amid fears in financial circles of a Greek default or exit from the euro, and of rising working class opposition in Greece. The “Troika” of the European Commission (EC), European Central Bank (ECB), and IMF are seeking to create the political conditions for Syriza to continue imposing austerity.

After the meeting, ECB president Mario Draghi called for resuming talks with Syriza to avoid a Greek default. He said, “The short-term danger of contagion is difficult to assess, but we have enough buffers in place. And even though they were designed for different circumstances, they are sufficient. But we are entering uncharted waters.”

His uncertain and pessimistic appraisal of the situation notwithstanding, Draghi praised Syriza and his informal talks with Greek Finance Minister Yanis Varoufakis in Washington. He said there had been progress in “formulating a well-functioning policy dialogue” in talks with Syriza.

Draghi was praising Syriza’s capitulation to the EU’s austerity agenda and its coordination with the EU to impose new attacks on the working class. As Syriza negotiates the next tranche of €7.2bn in loans from Greece’s Eurozone partners, the Troika is pressing Syriza to present detailed plans for labor market reforms and cuts to pensions.

Behind the scenes, collaboration is developing between Syriza and the EU, designed to massively escalate attacks on the working class.

Dutch Finance Minister Jeroen Dijsselbloem, the president of the euro group who has distinguished himself by his aggressive threats against Greece, said: “Let’s not go into a game of chicken to see who can stick it out longer. We have a joint interest to reach an agreement quickly,” he said.

“We have been worried about previous payments they were to make and yet they managed it, so I don’t know when it becomes really dangerous. But I think it is in our joint interest to stay away from that point,” he added.

As Greece teeters on the edge of bankruptcy, Syriza and ruling circles internationally are preparing for a brutal confrontation with the working class.

Already on Thursday, around 4,000 mine workers employed by Canadian-owned Eldorado Gold mine in northern Greece staged a demonstration in Athens, protesting Syriza’s decision to revoke the company’s licence. Workers fear a shutdown of the mine and the loss of all their jobs. The march was the first major labor protest since Syriza came to power. The miners waved banners reading “Yes to mines, yes to growth,” and chanted slogans, forcing police to shut down major roads.

“The honeymoon is over. We’re done with the period when Greek public opinion would agree with everything that the government does,” said Nikos Marantzidis, a professor at the University of Macedonia.

Syriza is now preparing to take the explosive step of cutting off pensions as well as wages for Greek public-sector workers. After repaying almost €2 billion in loans to the IMF in March and April, it needs to pay IMF €950 million euros by May 12, and plans to tap the Greek public sector’s remaining cash reserves, for a total of €2 billion.

This is reportedly not enough for Athens to meet both its debts to the IMF and its wage and pension bill. According to Reuters, “Without a political agreement with the euro zone next week, Athens is likely to have to choose between making wages and pension payments to its people or reimbursing the IMF.”

Whatever the short-term outcome of the financial crisis—whether it be a Greek default or exit from the euro (“Grexit”)—Syriza and its EU partners are preparing for savage repression against the workers. They are discussing the imposition of de facto military dictatorship in Greece.

Syriza has made clear that it wants to strengthen the police and that the false, pseudo-left rhetoric on which it was elected will not prevent it from mounting police crackdowns. Last week, after Public Order Minister Yiannis Panousis issued a call for law and order, Syriza ordered police to smash an occupation of university buildings in Athens by a handful of anarchist protesters.

Yesterday, Financial Times columnist Wolfgang Münchau wrote a comment titled, “Greek default necessary but Grexit is not,” warning that he had “never seen European financial officials so much at a loss.” While advocating deeper social cuts, Münchau was deeply concerned about the implications of a Greek default or exit from the euro zone: “Grexit would bring incalculable economic risk to the country itself, and would harm the EU’s geopolitical ambitions and its global reputation.”

He continued, “My understanding is that some eurozone officials are at least contemplating the possibility of a Greek default but without Grexit [Greek exit from the euro]. The complexity is severe, and they may not have had the time to work it out. But it may be the only way to avert utter disaster.” He warned that a decision not to pay pensions and public sector wages will be “politically suicidal for the Syriza-led government.”

Whatever happened, Munchau wrote, Athens needs time to prepare military-style measures: “Both Grexit and the option of a default inside the euro zone would stretch the resources of even the most organised government. It would require military-style preparation: exchange controls, temporary closure of land borders and airports, overnight bank recapitalisation, and logistical planning to convey money from A to B on D-Day. Is the Greek government really so smart it can just wait until the fateful moment arrives, and then manage this whole process in real time with no script?”

In fact, Syriza has been preparing for scenarios of Greek default or Grexit since Tsipras began touring international capitals and financial centres, two years ago, as he was groomed to be an acceptable Greek prime minister to Washington and the EU. Discussions of such a scenario appeared in the right-wing Greek daily Kathemerini, which said that if Athens decided to default or exit the euro, it would seek to do so over a weekend, when global stock markets are closed. It wrote that Greece would “deploy its military as soon as early morning Saturday and close its borders, preparing to stamp euros as drachma as an interim solution once a public announcement has been made.”

Outgoing Greek Finance Minister Filippos Sachinidis said he doubted whether, under these conditions, “we will be able to continue functioning as a modern democracy.”

Asked about such events by Time magazine, Tsipras replied: “We have a plan. There is a team of economists who lay out the plans, update and communicate them … I would not like to talk about them.” He added, “We are fully aware of the consequences. We are fully aware of the consequences that it will have on the country and Europe in general.” That is, while the bourgeois media and political circles were aware of the plans, Syriza’s voters and workers in Greece and internationally were to be kept in the dark.

The comments now circulating in the financial press are a warning to the working class. Those who doubt that a pseudo-left party such as Syriza is capable of brutal repression against the working class are deluding themselves.

Economic stagnation, financial parasitism dominate IMF-World Bank meeting

By Nick Beams and Barry Grey
April 18, 2015
World Socialist Web Site

 

The spring meeting of the International Monetary Fund and World Bank being held in Washington this weekend takes place under conditions of continuing stagnation in the real economy, combined with unprecedented levels of financial parasitism and social inequality.

Stock prices in the US, Europe and Asia have hit record highs and global corporations have amassed a cash hoard of some $1.3 trillion, fuelled by cheap credit from central banks and government-corporate attacks on workers’ wages and living standards. Yet the IMF warns in its updated World Economic Outlook published this week that the world economy will remain locked in a pattern of slow growth, high unemployment and high debt for a prolonged period.

In a marked shift from previous economic projections, the IMF acknowledges that there is little prospect of a return to the growth levels that prevailed prior to the 2008 financial crash, despite trillions of dollars in public subsidies to the financial markets. This amounts to a tacit admission that the crisis ushered in by the Wall Street meltdown nearly seven years ago is of a fundamental and historical character, and that the underlying problems in the global capitalist system have not been resolved.

A sample of headlines from articles published in the past week by the Financial Times gives an indication of the deepening malaise. They include: “An economic future that may never brighten,” “IMF warns of long period of lower growth,” “Europe’s debtor paradise will end in tears,” “QE raises fears of euro zone liquidity squeeze,” and “Global property bubble fears mount as prices and yields spike.”

The IMF report focuses on a sharp and persistent decline in private business investment, particularly in the advanced economies of North America, Europe and Asia. It concludes that “potential growth in advanced economies is likely to remain below pre-crisis rates, while it is expected to decrease further in emerging market economies in the medium term.”

It goes on to note, “Unlike previous financial crises, the global financial crisis is associated not only with a reduction in the level of potential output, but also with a reduction in its growth rate… Shortly after the crisis hit in September 2008, economic activity collapsed, and more than six years after the crisis, growth is still weaker than was expected before the crisis.”

This is a stunning confirmation of the analysis of the 2008 crash made by the World Socialist Web Site and the International Committee of the Fourth International. On January 11, 2008, nine months before the Lehman Brothers bankruptcy, the WSWS published a statement that began:

2008 will be characterized by a significant intensification of the economic and political crisis of the world capitalist system. The turbulence in world financial markets is the expression of not merely a conjunctural downturn, but rather a profound systemic disorder which is already destabilizing international politics.

The IMF report adds, “These findings imply that living standards may expand more slowly in the future. In addition, fiscal sustainability will be more difficult to maintain as the tax base will grow more slowly.” The meaning of this euphemistic language is that there is no end in sight to the global assault on the living standards and democratic rights of the working class.

The policies of austerity that have already thrown countless millions into poverty are not temporary. They will continue as long as capitalism continues.

The IMF’s updated Global Financial Stability Report, also released this week, acknowledges that central bank policies of holding interest rates close to zero and pumping trillions of dollars into the banking system by means of “quantitative easing,” i.e., money-printing, are having little impact on the real economy. Rather, they are increasing financial risk. According to the report, financial risks have risen in the six months since the last assessment in October 2014.

The IMF’s World Economic Outlook devotes an entire chapter to the slump in private investment. It notes that private investment in the major capitalist economies—the fundamental driving force of global growth—remains at historic lows. As a percentage of gross domestic product, it is below the level experienced in the aftermath of any recession in the post-war period.

But the report, setting the tone for the discussions this weekend among world finance ministers, central bankers and their myriad economic advisers, skirts the colossal role of financial speculation and parasitism in the investment slump and the crisis as a whole. All over the world, banks and corporations are using their massive profits and cash holdings to increase stock dividends and jack up their share prices by buying back their own stock, rather than investing in production. The speculative frenzy is compounded by near-record levels of corporate buybacks and mergers.

All of these activities are entirely parasitic. They add nothing to man’s productive forces. On the contrary, they divert economic resources from productive activity to further enrich a tiny global aristocracy of bankers, CEOs and speculators.

The IMF-World Bank meeting takes place amidst an exponential growth of financial parasitism, the likes of which has never been seen in the history of the capitalist system. In the past year alone, according to an article published this week in the Financial Times, some $1 trillion has been handed back to shareholders—many of them multi-billion dollar hedge funds and investment houses—in the form of buybacks and increased dividends.

Over the past decade, S&P 500 companies have repurchased some $4 trillion worth of shares. Major companies, including Apple, Intel, IBM and General Electric, play a central role in the ongoing buyback frenzy.

Last week alone, three corporate takeovers totalling over $105 billion were announced, including Royal Dutch Shell’s purchase of Britain’s BG Group. The value of all takeovers announced this year to date is more than $1 trillion, setting the pace for 2015 to be the second biggest year for mergers and acquisitions in history.

The result is massively inflated stock prices, the proceeds from which go overwhelmingly to the rich. Over the past year, the German DAX index has risen by 24 percent, the French CAC has increased 16 percent and Japan’s Nikkei has soared 36 percent.

Bank profits are also up. This week, JPMorgan Chase, Citigroup and Goldman Sachs all beat market expectations, announcing near-record profits for the first quarter of 2015, mainly on the basis of speculative trading activities.

As the real economy is starved of resources, leading to lower wages, declining job opportunities, rising unemployment and the substitution of casual and part-time employment for full-time jobs, fabulous fortunes are being accumulated on the financial heights of society.

The unprecedented degree to which the world economy is wedded to financial parasitism is an expression of the moribund state of the capitalist system.

There is another significant aspect to this weekend’s gathering that points to future developments. For seven decades, the IMF and the World Bank have formed two pillars of the economic hegemony of the United States. But the post-war regime is now cracking.

This week, Chinese authorities announced that some 57 countries—37 from Asia and 20 from the rest of the world—had signed up to the Beijing-backed Asia Infrastructure Investment Bank. The Obama administration bitterly opposed its strategic allies joining the bank, but the floodgates opened after Britain decided to join despite objections from Washington that the bank would undermine US-backed global financial institutions.

The fracturing of the global post-war economic order under conditions of deepening crisis is a sure sign that the major capitalist powers are determined to assert their own economic interests, if necessary against the US. Not only are the economic conditions of the 1930s returning, so are the political and economic divisions that led to world war.

 

 

IMF warns of slow growth, high unemployment

By Barry Grey
April 11, 2015
World Socialist Web Site

 

4e907-global-unemploymentThe International Monetary Fund warned Wednesday that the world economy would remain locked in a pattern of slow growth, high unemployment and high debt for a prolonged period. The forecast, contained in the organization’s updated World Economic Outlook (WEO), marks a shift from previous economic projections in acknowledging that there is little prospect of a return to the growth levels that prevailed prior to the 2008 Wall Street crash.

Parts of the semi-annual WEO were released ahead of the report’s formal issuance this coming Tuesday. The publication of the economic update is timed to coincide with next weekend’s spring meetings of the IMF and World Bank in Washington.

The document’s grim analysis amounts to a tacit acknowledgement that the crisis ushered in nearly seven years ago by the financial meltdown is of a historical and fundamental character, and that the underlying problems in the global capitalist system have not been resolved.

The report focuses on a sharp and persistent decline in productive business investment, particularly in the advanced economies of North America, Europe and Asia, and concludes that “potential growth in advanced economies is likely to remain below pre-crisis rates, while it is expected to decrease further in emerging market economies in the medium term.”

The report adds, “These findings imply that living standards may expand more slowly in the future. In addition, fiscal sustainability will be more difficult to maintain as the tax base will grow more slowly.”

While pointing to a number of factors behind the global slowdown, including an aging population in the advanced economies and declining productivity rates, the IMF overlooks the colossal role of financial parasitism in diverting resources from the productive forces—including, above all, the international working class.

This omission is all the more glaring in light of this week’s developments. European stock markets hit record highs, Asian markets soared, and three mega-merger deals were announced, including two totaling $100 billion in a single day.

These examples of wealth-creation for the corporate-financial elite, entirely divorced from and at the expense of productive investment, illustrate the manner in which the world’s capitalist governments and central banks are financing a bonanza for the rich and super-rich, while the real economy remains mired in slump and the living standards of the vast majority of the planet’s people are driven down.

Speaking Thursday before the Atlantic Council, a Washington DC international affairs think tank, IMF Managing Director Christine Lagarde said, “Six months ago, I warned about the risk of a ‘new mediocre’—low growth for a long time. Today, we must prevent that new mediocre from becoming the ‘new reality.’”

She pointed to “what I have called the ‘low-low, high-high’ scenario: the risk of low growth-low inflation, and high debt-high unemployment persisting for a number of advanced economies.”

Lagarde warned that subnormal growth increased the risks of a new financial breakdown. “This means that liquidity can evaporate quickly if everyone rushes for the exit at the same time—which could, for example, make for a bumpy ride when the Federal Reserve begins to raise short-term rates.”

She also noted that 2015 would likely mark the fourth consecutive year of below-average trade growth.

Her prescriptions for accelerating growth by increasing demand and productive investment were tailored to the interests of big business and hostile to those of the working class. She stressed the need for “structural reforms” in labor markets—a euphemism for stripping workers of whatever job protections remain in place—and removing energy subsidies in oil-importing emerging economies.

The IMF report and Lagarde’s statements echo the warning issued last week in a Financial Times column by Lawrence Summers, Harvard economics professor and former US treasury secretary. Alluding to the concurrence of ultra-low interest rates, soaring stock markets and underlying deflation in the real economy, Summers wrote:

“We may be headed into a world where capital is abundant and deflationary pressures are substantial. Demand could be in short supply for some time. In no big industrialized country do markets expect real interest rates to be much above zero in 2020 or inflation targets to be achieved.”

In the World Economic Outlook, the IMF predicts that, in the advanced economies, growth in “potential output,” i.e., output consistent with stable inflation, will average 1.6 percent a year between 2015 and 2020, much lower than the average growth rates before the 2008 crash, when potential output expanded at 2.25 percent.

The IMF forecasts an even sharper decline in growth in emerging markets such as China, India, Brazil and Russia, with potential output overall set to fall from 6.5 percent a year between 2008 and 2014, to 5.2 percent over the next five years.

Alluding to the depth and scope of the current crisis, the document states: “Unlike previous financial crises, the global financial crisis is associated not only with a reduction in the level of potential output, but also with a reduction in its growth rate… Shortly after the crisis hit in September 2008, economic activity collapsed, and more than six years after the crisis, growth is still weaker than was expected before the crisis.”

In a chapter entitled “Private Investment: What’s the Holdup?,” the document explains that business investment in the advanced economies declined, on average, by 20 percent during the six years after the onset of the financial crisis, twice the average decline of 10 percent during the six years following historical recessions.

It really is no mystery why productive investment has fallen so sharply in the current crisis. Reflecting the immense decay of capitalism as a whole, and, in particular, American capitalism, the corporations have hoarded the trillions they accumulated by slashing jobs and cutting wages and benefits on the one hand, and speculating with the virtually free cash from the central banks and profiting from the inflation of stock prices on the other.

Instead of investing this money in production, they have used it for parasitic purposes such as stock buybacks and mergers and acquisitions. These activities create no real value, but they add to the fortunes of the financial elite. Corporate buyouts, in fact, shrink the productive forces by consolidating facilities and slashing jobs.

This explosion of parasitism was in full swing this week as European stocks climbed to new records, and Japan’s Nikkei index topped 20,000 for the first time in 15 years on Friday, before falling back to 19,907.

The Stoxx Europe 600 index rose 4.49 points Thursday to close at 409.15, surpassing the previous peak of 405.50 reached at the height of the dot-com boom in March 2000. The benchmark index is up more than 19 percent so far this year.

Germany’s DAX index, which hit a record earlier this year, is up 24 percent so far in 2015. Major indexes in France and Italy have recorded gains of more than 20 percent.

In Asia, Japan’s Nikkei has risen 14 percent and Hong Kong’s Hang Seng has climbed 14 percent.

On Wednesday, meanwhile, Royal Dutch Shell confirmed it had agreed to buy Britain’s BG Group for some $70 billion in the biggest deal in the energy sector in more than a decade. This takeover is expected to usher in further mergers and consolidations in the oil and gas industry, resulting in thousands of job cuts.

The same day, Mylan, one of the biggest generic drug groups, announced a bid to buy Perrigo, a maker of cough medicine and allergy remedies, for $28.9 billion. Already, in the first three months of 2015, the total value of health industry deals surpassed $95 billion, a 70 percent increase from the same period a year ago. The day before, the Dutch package delivery company TNT Express agreed to be bought by FedEx for $4.8 billion.

The value of all takeovers announced thus far in 2015 is more than $1 trillion. At the current pace, the volume of mergers and acquisitions for the full year will exceed $3.7 trillion, making it the second biggest year in history after 2007—the year before the financial crash.

Wall Street bankers are raking in millions from these deals. On Wednesday alone, Goldman Sachs helped organize the Shell-BG and Mylan-Perrigo deals, totaling $100 billion. The bank could pocket over $50 million from the Shell takeover alone.

European Union press Syriza to deepen its austerity program for Greece

By Robert Stevens
March 7, 2015
World Socialist Web Site

 

240a4-6a00d8341d417153ef017ee3f50e8c970d-800wiAfter the Syriza-led government’s decision to sign the February 20 Eurogroup statement and capitulate to European Union (EU) demands for more austerity in Greece, EU officials are stepping up their threats against the country.

Since then, the “troika”—the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF)—have insisted that until Syriza begins actively imposing austerity, it will not receive another cent in loans.

This week Greece paid back €300 million to the IMF, but by the end of the month it must pay a further €1.5 billion. An additional €4.5 billion in maturing Treasury bills (T-bills) is due to be paid this month. More than €6 billion in debt repayments to the IMF falls due in August, immediately after the four month austerity extension expires. All told, Greece must pay back a total of €22.5 billion to its creditors in 2015.

Greece cannot meet these repayments, and without external funding, a default on its debt of around €320 billion is again a possibility.

Bloomberg reported the analysis of Nicholas Economides, a professor at New York’s Stern School of Business, who said, “Greece has already run out of money and lives with emergency compulsory borrowing from pension funds and from European agricultural support money in transit to farmers. Unless there are new loans from Europe or alternatively the ECB allows Greek banks to buy more Greek debt, Greece will default at the end of March.”

The Economist noted, “Syriza’s climbdown in late February has bought time but it has not brought any money from Greece’s creditors. None will be available until the government shows that it is sincere in its promise to complete the reforms that creditors still insist upon.”

This week Spain’s finance minister, Luis de Guindos, said he believed Greece would be unlikely to access capital markets by June and will require further loans of between €30 billion and €50 billion from its European creditors.

Since Syriza’s election in January, the European Central Bank has tightened the screws. The ECB no longer accepts Greek sovereign bonds as collateral for loans and banks are forced to rely on the emergency liquidity assistance (ELA) scheme, which has a high interest rate and will only be available temporarily. The ECB has also limited the amount of short-term T-bills that Athens can issue.

As a result, Greece’s banks are more or less insolvent with even more deposits withdrawn from them in December and January (€17 billion) than at the height of the euro zone financial crisis in May and June 2012. According to official figures, outflows from the banks continue, with a weekly rate of between €2 billion and €3 billion withdrawn in the first three weeks of February.

Tax revenues are down €2 billion in January and February, compared with 2014. Under these conditions it is impossible for Greece to pay for any extended period the €4.5 billion monthly bill for the wages of public sector workers and state pensions.

On Thursday, the ECB refused to countenance a relaxation of the rules that have cut off funds to Greek banks. ECB head Mario Draghi said the bank would only lend further funds to Greece if it was able to satisfy the Eurogroup, IMF and ECB of its strict adherence to the February 20 agreement.

In a desperate response Friday, Prime Minister and Syriza leader Alexis Tsipras contacted European Commission President Jean-Claude Juncker to request an emergency meeting. Juncker gave Tsipras short shrift. He advised Tsipras that any further discussion would have to wait until after Monday’s meeting of the euro zone’s finance ministers.

Juncker gave an interview Wednesday to Spain’s El Pais. Tsipras “still has to tell the Greeks that he is going to have to break certain promises,” he said.

With Syriza having already signed off on everything demanded by the troika, including a clause that the government make no “unilateral” moves to implement any of the programme it was elected on, it is functioning as a tool of the EU’s austerity agenda. According to a S ü ddeutsche Zeitung report, Juncker and Tsipras were in “permanent telephone contact.”

The February 20 agreement was conditional on Syriza supplying the Troika with a list of “reforms” that must first be approved by them and then implemented.

For discussion at Monday’s meeting, Greek Finance Minister Yanis Varoufakis presented a list of seven measures that his government proposes to immediately carry out, to tackle the “humanitarian crisis” and “alleviate extreme poverty.” They are highly targeted measures, introducing food allowances for 300,000 households, the reconnection of domestic electricity supplies and some free electricity for 150,000 households, and a rent allowance for fewer than 30,000 households.

Syriza’s initial budget to deal with the social crisis, outlined in its Thessaloniki election programme was €1.8 billion—a figure barely enough to scratch the surface of the staggering social devastation caused by five years of brutal cuts in living standards.

Now, following a month of negotiations with the troika, the total cost allotted is just €200 million, or 11 percent of the Thessaloniki programme. Even this must be approved next week by the troika. Varoufakis’s letter assures them that it will be “fiscally neutral,” with €200 million of savings to be made elsewhere.

According to excerpts of an interview with Tsipras to be published in Saturday’s Spiegel, he said on Friday, “The ECB has still got a rope round our neck.”

Tsipras added that if the ECB refuses Athens permission to issue additional short-term treasury bills, “the thriller we saw before February 20 will return.”

None of this pathetic posturing will wash with the representatives of the ruling elite. Speaking on Friday to the influential German business daily Handelsblatt, Klaus Regling, head of the European Stability Mechanism, which facilitates the EU’s loan agreements, said, “The new Greek government’s communication has, at times, been irritating in recent days.”

He warned, “Greece must pay back these loans in full. That’s what we expect and nothing has changed in that regard.”

Even as the representatives of the global financial aristocracy demand that Greece be bled white, the conditions facing millions worsen. Unemployment is entrenched, and rose again in December to 26 percent, more than double the euro zone’s average of 11.3 percent. The number of jobless has barely shifted since reaching a record level of 27.9 in September 2013.

Hundreds of thousands of people rely on food banks and soup kitchens to get a regular meal, with many people requiring handouts three times a day. Others resort to scavenging.

Speaking to the Daily Telegraph, a priest at a church involved in food distribution in west Athens said, “The local councils can’t cope, so people come to us for food. We’re feeding 270 people and it is getting worse every day. Today we discovered three young children going through rubbish bins for food. They are living in a derelict building and we have no idea who they are.”

Last month, two teachers alerted Athens City Council that they were being asked to teach starving children. One of the teachers reported that one of the pupils involved had not eaten for two days.

Fifty Years of Imperial Wars: Results and Perspectives

By James Petras
March 2, 2015
Dissident Voice

 

unclesam_lind_pdOver the past 50 years the US and European powers have engaged in countless imperial wars throughout the world. The drive for world supremacy has been clothed in the rhetoric of “world leadership”, the consequences have been devastating for the peoples targeted. The biggest, longest and most numerous wars have been carried out by the United States. Presidents from both parties direct and preside over this quest for world power. The ideology which informs imperialism varies from “anti-communism” in the past to “anti-terrorism” today.

Washington’s drive for world domination has used and combined many forms of warfare, including military invasions and occupations; proxy mercenary armies and military coups; financing political parties, NGO’s and street mobs to overthrow duly constituted governments. The driving forces in the imperial state , behind the quest for world power, vary with the geographic location and social economic composition of the targeted countries.

What is clear from an analysis of US empire building over the last half century is the relative decline of economic interests, and the rise of politico-military considerations. In part this is because of the demise of the collectivist regimes (the USSR and Eastern Europe) and the conversion of China and the leftist Asian, African and Latin American regimes to capitalism. The decline of economic forces as the driving force of imperialism is a result of the advent of global neoliberalism. Most US and EU multi-nationals are not threatened by nationalizations or expropriations, which might trigger imperial state political intervention. In fact, MNCs are invited to invest,trade and exploit natural resources even by post-neoliberal regimes. Economic interests come into play in formulating imperial state policies, if and when nationalist regimes emerge and challenge US MNCs as is the case in Venezuela under President Chavez.

The key to US empire building over the past half-century is found in the political, military and ideological power configurations which have come to control the levers of the imperial state. The recent history of US imperial wars has demonstrated that strategic military priorities – military bases, budgets and bureaucracy – have expanded far beyond any localized economic interests of MNCs. Moreover, the vast expenditures and long term and expensive military interventions of the US imperial state in the Middle East has been at the behest of Israel. The take-over of strategic political positions in the Executive branch and Congress by the powerful Zionist power configuration within the US has reinforced the centrality of military over economic interests

The ‘privatization’ of imperial wars – the vast growth and use of mercenaries contracted by the Pentagon- has led to the vast pillage of tens of billions of dollars from the US Treasury. Large scale corporations which supply mercenary military combatants have become a very ‘influential’ force shaping the nature and consequences of US empire building.

Military strategists, defenders of Israeli colonial interests in the Middle East, mercenary military and intelligence corporations are central actors in the imperial state and it is their decision-making influence which explains why US imperial wars do not result in a politically stable, economic prosperous empire. Instead their policies have resulted in unstable, ravaged economies, in perpetual rebellion..

We will proceed by identifying the changing areas and regions of US empire building from the mid 1970’s to the present. We then examine the methods, driving forces and outcomes of imperial expansion. We will then turn to describe the current ‘geo-political map of empire building and the varied nature of the anti-imperialist resistance. We will conclude by examining the why and how of empire building and more particularly, the consequences, and results of a half century of US imperial expansion.

Imperialism in the post Vietnam Period: Proxy Wars in Central America, Afghanistan, and Southern Africa

The US imperialist defeat in Indo-China marks the end of one phase of empire building and the beginning of another: a shift from territorial invasions to proxy wars. Hostile domestic opinion precluded large scale ground wars. Beginning during the presidencies of Gerald Ford and James Carter, the US imperialist state increasingly relied on proxy clients. It recruited, financed and armed proxy military forces to destroy a variety of nationalist and social revolutionary regimes and movements in three continents. Washington financed and armed extremist Islamic forces world-wide to invade and destroy the secular, modernizing, Soviet backed regime in Afghanistan, with logistical support from the Pakistan military and intelligence agencies, and financial backing from Saudi Arabia.

The second proxy intervention was in Southern Africa, where the US imperial state financed and armed proxy forces against anti-imperialist regimes in Angola and Mozambique, in alliance with South Africa.

The third proxy intervention took place in Central America, where the US financed, armed, and trained murderous death squad regimes in Nicaragua, El Salvador, Guatemala and Honduras to decimate popular movements and armed insurgencies resulting in over 300,000 civilian deaths.

The US imperial state’s ‘proxy strategy’ extended to South America: CIA and Pentagon backed military coups took place in Uruguay (General Alvarez), Chile (General Pinochet) Argentina (General Videla), Bolivia (General Banzer) and Peru (General Morales). Empire building by proxy, was largely at the behest of US MNCs which were the principal actors in setting priorities in the imperial state throughout this period.

Accompanying proxy wars, were direct military invasions: the tiny island of Grenada (1983) and Panama (1989) under Presidents’ Reagan and Bush, Sr. Easy targets, with few casualties and low cost military expenditures: dress rehearsals for re-launching major military operations in the near future.

What is striking about the ‘proxy wars’ are the mixed results.The outcomes in Central America, Afghanistan and Africa did not lead to prosperous neo-colonies or prove lucrative to US multi-national corporations. In contrast the proxy coups in South America led to large scale privatization and profits for US MNCs.

The Afghan proxy war led to the rise and consolidation of the Taliban “Islamic regime” which opposed both Soviet influence and US imperial expansion. The rise and consolidation of Islamic nationalism in turn challenged US allies in South Asia and the Gulf region and subsequently led to a US military invasion in 2001 and a prolonged (15 year) war (which has yet to conclude), and most probably to a military retreat and defeat. The main economic beneficiaries were Afghan political clients, US mercenary military “contractors”, military procurement officers and civilian colonial administrators who pillaged hundreds of billions from the US Treasury in illegal and fraudulent transactions.

Pillage of the US Treasury in no way benefited the non-military MNCs. In fact the war and resistance movement undermined any large scale, long-term entry of US private capital in Afghanistan and adjoining border regions of Pakistan.

The proxy war in Southern Africa devastated the local economies, especially the domestic agricultural economy, uprooted millions of laborers and farmers and curtailed US corporate oil penetration for over two decades. The ‘positive’ outcome was the de-radicalization of the former revolutionary nationalist elite. However, the political conversion of the Southern African “revolutionaries” to neoliberalism did not benefit the US MNCs as much as the rulers turned kleptocratic oligarchs who organized patrimonial regimes in association with a diversified collection of MNCs, especially from Asia and Europe.

The proxy wars in Central America had mixed results. In Nicaragua the Sandinista revolution defeated the US-Israeli backed Somoza regime but immediately confronted a US financed, armed and trained counter-revolutionary mercenary army (the “Contras”) based in Honduras. The US war destroyed many of the progressive economic projects, undermined the economy, and eventually led to an electoral victory by the US backed political client Violeta Chamorro. Two decades later the US proxies were defeated by a de-radicalized Sandinista led political coalition.

In El Salvador, Guatemala and Honduras, the US proxy wars led to the consolidation of client regimes presiding over the destruction of the productive economy,and the flight of millions of war refugees to the United States. US imperial dominance eroded the bases for a productive labor market which spawned the growth of murderous drug gangs.

In summary, the US proxy wars succeeded, in most, cases in preventing the rise of nationalist-leftist regimes, but also led to the destructive of the economic and political bases of a stable and prosperous empire of neo-colonies.

US Imperialism in Latin America: Changing Structure, External and Internal Contingencies, Shifting Priorities and Global Constraints

To understand the operations, structure and performance of US imperialism in Latin America, it is necessary to recognize the specific constellation of competing forces which shaped imperial state policies. Unlike the Middle East where the militarist-Zionist faction has established hegemony, in Latin America the MNCs have played a leading role in directing imperial state policy. In Latin America, the militarists played a lesser role, constrained by (1) the power of the MNC, (2) the shifts in political power in Latin America from right to center-left, (3) the impact of economic crises and the commodity boom.

In contrast to the Middle East, the Zionist power configuration has little influence over imperial state policy, as Israel’s interests are focused on the Middle East and, with the possible exception of Argentina, Latin America is not a priority.

For over a century and a half, the US MNCs and banks dominated and dictated US imperial policy toward Latin America. The US armed forces and CIA were instruments of economic imperialism via direct intervention (invasions), proxy ‘military coups’, or a combination of both.

US imperial economic power in Latin America ‘peaked’ between 1975-1999. Vassal states and client rulers were imposed via proxy military coups, direct military invasions (Dominican Republic, Panama, and Grenada) and military-civilian controlled elections.

The results were the dismantling of the welfare state and the imposition of neoliberal policies. The MNC-led imperial state and its international financial appendages (IMF, WB, IDB) privatized lucrative strategic economic sectors, dominated trade and projected a regional integration scheme which would codify US imperial dominance.

Imperial economic expansion in Latin America was not simply a result of the internal dynamics and structures of the MNC but depended on (1) the receptivity of the ‘host’ country or more precisely the internal correlation of class forces in Latin America which in turn revolved around (2) the performance of the economy – its growth or susceptibility to crises.

Latin America demonstrates that contingencies such as the demise of client regimes and collaborator classes can have a profound negative impact on the dynamics of imperialism, undermining the power of the imperial state and reversing the economic advance of the MNCs.

The advance of US economic imperialism during the 1975-2000 period was manifest in the adoption of neoliberal policies, the pillage of national resources, the increase of illicit debts and the overseas transfer of billions of dollars However, the concentration of wealth and property, precipitated a deep socio-economic crises throughout the region which eventually led to the overthrow or ouster of the imperial collaborators in Ecuador, Bolivia, Venezuela, Argentina, Brazil, Uruguay, Paraguay and Nicaragua. Powerful anti-imperialist social movements especially in the countryside emerged in Brazil and the Andean countries. Urban unemployed workers movements and public employees unions in Argentina and Uruguay spearheaded electoral changes, bringing to power center-left regimes which ‘re-negotiated’ relations with the US imperial state.

US MNC influence in Latin America waned. They could not count on the full battery of military resources of the imperial state to intervene and re-impose neoliberal clients because of its military priorities elsewhere: the Middle East, South Asia and North Africa.

Unlike the past, the US MNCs in Latin America lacked two essential props of power: the full backing of the US armed forces and powerful civilian-military clients in Latin America.

The US MNCs’ plan for US centered integration was rejected by the center-left regimes. The imperial state turned to bilateral free trade agreements with Mexico, Chile, Colombia, Panama and Peru. As a result of the economic crises and collapse of most Latin American economies, “neoliberalism,” the ideology of imperial economic penetration, was discredited. Neoliberal advocates marginalized.

Changes in the world economy had a profound impact on US-Latin America trade and investment relations. The dynamic growth of China and the subsequent boom in demand and the rising prices of commodities, led to a sharp decline of US dominance of Latin American markets.

Latin American states diversified trade, sought and gained new overseas markets, especially in China. The increase in export revenues created greater capacity for self-financing. The IMF, WB and IDB, economic instruments for leveraging US financial impositions (“conditionality”), were sidelined

The US imperial state faced Latin American regimes who embraced diverse economic options, markets and sources of financing. With powerful domestic popular support and unified civilian-military command, Latin America moved tentatively out of the US sphere of imperialist domination.

The imperial state and its MNCs, deeply influenced by their “success” in the 1990s, responded to the decline of influence by proceeding by ‘trial and error,’ in the face of the negative constraints of the 21st century. The MNCs backed policymakers in the imperial state continued to back the collapsing neoliberal regimes, losing all credibility in Latin America. The imperial-state failed to accommodate changes – deepening popular and center-left regime opposition to “free markets” and the deregulation of banks. No large scale economic aid programs, like President Kennedy’s effort to counter the revolutionary appeal of the Cuban revolution by promoting social reforms via the ‘Alliance for Progress”, were fashioned to win over the center-left,probably because of budget constraints resulting from costly wars elsewhere.

The demise of neoliberal regimes, the glue that held the different factions of the imperial state together, led to competing proposals of how to regain dominance. The ‘militarist faction’ resorted to and revived the military coup formula for restoration: coups were organized in Venezuela, Ecuador, Bolivia, Honduras and Paraguay … all were defeated, except the latter two. The defeat of US proxies led to the consolidation of the independent, anti-imperialist center-left regimes.Even the “success”of the US coup in Honduras resulted in a major diplomatic defeat,as every Latin American government condemned it and the US role,further isolating Washington in the region.

The defeat of the militarist strategy strengthened the political-diplomatic faction of the imperial state. With positive overtures toward ostensibly ‘center-left regimes’, this faction gained diplomatic leverage, retained military ties and deepened the expansion of MNCs in Uruguay, Brazil, Chile and Peru. With the latter two countries the economic imperialist faction of the imperial state secured bilateral free trade agreements.

A third MNC-military faction, overlapping with the previous two, combined diplomatic-political accommodations toward Cuba, with an aggressive political destabilization strategy aimed at “regime change” (coup) in Venezuela.

The heterogeneity of imperial state factions and their competing orientations, reflects the complexity of interests engaged in empire building in Latin America and results in seemingly contradictory policies, a phenomenon less evident in the Middle East where the militarist-Zionist power configuration dominates imperial policy-making.

For example the promotion of military bases and counter-insurgency operations in Colombia (a priority of the militarist faction) is accompanied by bilateral free market agreements and peace negotiations between the Santos regime and the FARC armed insurgency (a priority of the MNC faction).

Regaining imperial dominance in Argentina involves: (1) promoting the electoral fortunes of the neoliberal governor of Buenos Aires Macri; (2) backing the pro-imperialist media conglomerate Clarin, facing legislation breaking up its monopoly; (3) exploiting the death of prosecutor and CIA-Mossad collaborator Alberto Nisman to discredit the Kirchner-Fernandez regime; (4) backing New York speculators’ (vulture) investment fund attempting to extract exorbitant interest payments and, with the aid of a dubious judicial ruling, blocking Argentina’s access to financial markets.

Both the militarist and MNC factions of the imperial state converge in backing a multi-pronged electoral and coup approach, which seeks to restore a US controlled neoliberal regimes to power.

The contingencies which forestalled the recovery of imperial power over the past decade are now acting in reverse. The drop in commodity prices has weakened post neoliberal regimes in Venezuela, Argentina, and Ecuador. The ebbing of anti-imperialist movements resulting from center-left co-optation tactics has strengthened imperial state backed right-wing movements and street demonstrators. The decline in Chinese growth has weakened the Latin American market diversification strategies. The internal balance of class forces has shifted to the Right, toward US backed political clients in Brazil, Argentina, Peru and Paraguay.

Theoretical Reflections on Empire Building in Latin America

US empire building in Latin America is a cyclical process, reflecting the structural shifts in political power, and the restructuring of the world economy – forces and factors which ‘override’ the imperial state and capital’s drive to accumulate.Capital accumulation and expansion does not depend merely on the impersonal forces of “the market” – because the social relations under which the “market” functions, operate under the constraints of the class struggle.

The centerpiece of imperial state activities-namely the prolonged territorial wars in the Middle East – are absent in Latin America. The driving force of US imperial state policy is the pursuit of resources (agro-mining), labor power ( low paid autoworkers), markets (size and purchasing power of 600 million consumers). The economic interests of the MNCs are the motives for imperial expansion.

Even as, from a geo-strategic vantage point, the Caribbean, Central America as well as South America are located most proximate to the US, economic not military objectives predominate.

However, the militarist-Zionist faction in the imperial state, ignore these traditional economic motives and deliberately choose to act on other priorities – control over oil producing regions, destruction of Islamic nations or movements or simply to destroy anti-imperialist adversaries. The militarists-Zionist faction counted the “benefits” to Israel, its Middle East military supremacy, more important than the US securing economic supremacy in Latin America. This is clearly the case if we measure imperial priorities by state resources expended in pursuit of political goals.

Even if we take the goal of “national security”, interpreted in the broadest sense, of securing the safety of the territorial homeland of the empire, the US military assault of Islamic countries driven by accompanying Islamophobic ideology and the resulting mass killings and uprooting a millions of Islamic people, has led to “blowback”: reciprocal terrorism. US “total wars” against civilians has provoked Islamic assaults against the citizens of the West.

Latin America countries targeted by economic imperialism are less belligerent than Middle Eastern countries targeted by US militarists. A cost/benefits analysis would demonstrate the totally “irrational” nature of militarist strategy. However,if we take account of the specific composition and interests that motivate particularly imperial state policymakers, there is a kind of perverse “rationality”. The militarists defend the “rationality” of costly and unending wars by citing the advantages of seizing the ‘gateways to oil’ and the Zionists cite their success in enhancing Israel’s regional power.

Whereas Latin America, for over a century was a priority region of imperial economic conquest, by the 21st century it lost primacy to the Middle East.

The Demise of the USSR and China’s conversion to Capitalism

The greatest impetus to successful US imperial expansion did not take place via proxy wars or military invasions. Rather, the US empire achieved its greatest growth and conquest, with the aid of client political leaders, organizations and vassal states throughout the USSR, Eastern Europe, the Baltic States the Balkans and the Caucuses. Long term, large scale US and EU political penetration and funding succeeded in overthrowing the hegemonic collectivist regimes in Russia and the USSR, and installing vassal states. They would soon serve NATO and be incorporated in the European Union. Bonn annexed East Germany and dominated the markets of Poland, the Czech Republic, and other Central European states. US and London bankers collaborated with Russian-Israeli gangster-oligarchs in joint ventures plundering resources, industries, real estate, and pension funds. The European Union exploited tens of millions of highly trained scientists, technicians, and workers – by importing them or stripping them of their welfare benefits and labor rights and exploiting them as cheap labor reserves in their own country.

“Imperialism by invitation” hosted by the vassal Yeltsin regime, easily appropriated Russian wealth. The ex-Warsaw Pact military forces were incorporated into a foreign legion for US imperial wars in Afghanistan, Iraq and Syria. Their military installations were converted into military bases and missile sites encircling Russia.

US imperial conquest of the East, created a “unipolar world” in which Washington decision-makers and strategists believed that, as the world’s supreme power, they could intervene in every region with impunity.

The scope and depth of the US world empire was enhanced by China’s embrace of capitalism and its ruler’s invitation to US and EU MNCs to enter and exploit cheap Chinese labor. The global expansion of the US empire, led to a sense of unlimited power, encouraging its rulers to exercise power against any adversary or competitor.

Between 1990 and 2000, the US expanded its military bases to the borders of Russia. US MNCs expanded into China and Indo-China. US backed client regimes throughout Latin America dismantled the national economies, privatizing and denationalizing over five thousand lucrative strategic firms. Every sector was affected: natural resources, transport, telecommunications, and finance.

The US proceeded throughout the 1990s to expand via political penetration and military force. President George H. W. Bush launched a war against Iraq. Clinton bombed Yugoslavia and Germany and the EU joined the US in dividing Yugoslavia into ‘mini states’

The Pivotal Year 2000: the Pinnacle and Decline of Empire

The very rapid and extensive imperial expansion, between 1989-1999, the easy conquests and the accompanying plunder, created the conditions for the decline of the US empire.

The pillage and impoverishment of Russia led to the rise of a new leadership under President Putin intent on reconstructing the state and economy and ending vassalage.

The Chinese leadership harnessed its dependence on the West for capital investments and technology, into instruments for creating a powerful export economy and the growth of a dynamic national public-private manufacturing complex. The imperial centers of finance which flourished under lax regulation crashed. The domestic foundations of empire were severely strained. The imperial war machine competed with the financial sector for federal budgetary expenditures and subsidies.

The easy growth of empire, led to its over-extension. Multiple areas of conflict, reflected world-wide resentment and hostility at the destruction wrought by bombings and invasions. Collaborative imperial client rulers were weakened. The world-wide empire exceeded the capacity of the US to successfully police its new vassal states. The colonial outposts demanded new infusions of troops, arms and funds at a time when countervailing domestic pressures were demanding retrenchment and retreat.

All the recent conquests – outside of Europe – were costly. The sense of invincibility and impunity led imperial planners to overestimate their capacity to expand, retain, control and contain the inevitable anti-imperialist resistance.

The crises and collapse of the neoliberal vassal states in Latin America accelerated. Anti-imperialist uprisings spread from Venezuela (1999), to Argentina (2001), Ecuador (2000-2005) and Bolivia (2003-2005). Center-left regimes emerged in Brazil, Uruguay and Honduras. Mass movements, in rural regions,among Indian and mining communities gained momentum. Imperial plans formulated to secure US centered integration were rejected. Instead multiple regional pacts excluding the US proliferated-ALBA, UNASUR, CELAC. Latin America’s domestic rebellion coincided with the economic rise of China. A prolonged commodity boom severely weakened US imperial supremacy. The US had few local allies in Latin America and over ambitious commitments to control the Middle East, South Asia and North Africa.

Washington lost its automatic majority in Latin America: its backing of coups in Honduras and Paraguay and its intervention in Venezuela (2002) and blockade of Cuba was repudiated by every regime, even by conservative allies.

Having easily established a global empire, Washington found it was not so easy to defend it. Imperial strategists in Washington viewed the Middle East wars through the prism of the Israeli military priorities, ignoring the global economic interests of the MNC.

Imperial military strategists overestimated the military capacity of vassals and clients, ill-prepared by Washington to rule in countries with growing armed national resistance movements. Wars, invasions and military occupations were launched in multiple sites. Yemen, Somalia, Libya, Syria, Pakistan were added to Afghanistan and Iraq. US imperial state expenditures far exceeded any transfer of wealth from the occupied countries.

A vast civilian-military-mercenary bureaucracy pillaged hundreds of billions of dollars from the US Treasury.

The centrality of wars of conquest, destroyed the economic foundations and institutional infrastructure necessary for MNC entry and profit.

Once entrenched in strategic military conceptions of empire, the military-political leadership of the imperial state fashioned a global ideology to justify and motivate a policy of permanent and multiple warfare. The doctrine of the ‘war on terror’ justified war everywhere and nowhere. The doctrine was ‘elastic’ – adapted to every region of conflict and inviting new military engagements: Afghanistan, Libya, Iran and Lebanon were all designated as war zones. The ‘terror doctrine’, global in scope, provided a justification for multiple wars and the massive destruction (not exploitation) of societies and economic resources. Above all the “war on terrorism” justified torture (Abu Gharib) and concentration camps (Guantanamo), and civilian targets (via drones)anywhere. Troops were withdrawn and returned to Afghanistan and Iraq as the nationalist resistance advanced. Thousands of Special Forces in scores of countries were active, purveying death and mayhem.

Moreover, the violent uprooting, degradation and stigmatization of entire Islamic people led to the spread of violence in the imperial centers of Paris, New York, London, Madrid, and Copenhagen. The globalization of imperial state terror led to individual terror.

Imperial terror evoked domestic terror: the former on a massive, sustained scale encompassing entire civilizations and conducted and justified by elected political officials and military authorities. The latter by a cross section of ‘internationalists’ who directly identified with the victims of imperial state terror.

Contemporary Imperialism: Present and Future Perspectives

To understand the future of US imperialism it is important to sum up and evaluate the experience and policies of the past quarter of a century.

If we compare, US empire building between 1990 and 2015, it is clearly in decline economically, politically and even militarily in most regions of the world, though the process of decline is not linear and probably not irreversible.

Despite talk in Washington of reconfiguring imperial priorities to take account of MNC economic interests, little has been accomplished. Obama’s so-called “pivot to Asia” has resulted in new military base agreements with Japan, Australia, and the Philippines surrounding China and reflects an inability to fashion free trade agreements that exclude China. Meantime, the US has militarily re-started the war and reentered Iraq and Afghanistan in addition to launching new wars in Syria and the Ukraine. It is clear that the primacy of the militarist faction is still the determinant factor in shaping imperial state policies.

The imperial military drive is most evident in the US intervention in support of the coup in the Ukraine and subsequent financing and arming of the Kiev junta. The imperial takeover of the Ukraine and plans to incorporate it into the EU and NATO, represents military aggression in its most blatant form: The expansion of US military bases and installations and military maneuvers on Russia’s borders and the US initiated economic sanctions, have severely damaged EU trade and investment with Russia. US empire building continues to prioritize military expansion even at the cost of Western imperial economic interests in Europe.

The US-EU bombing of Libya destroyed the burgeoning trade and investment agreements between imperial oil and gas MNCs and the Gaddafi government. NATO air assaults destroyed the economy, society, and political order, converting Libya into a territory overrun by warring clans, gangs, terrorists and armed thuggery.

Over the past half century, the political leadership and strategies of the imperial state have changed dramatically. During the period between 1975-1990, MNCs played a central role in defining the direction of imperial state policy: leveraging markets in Asia; negotiating market openings with China; promoting and backing neoliberal military and civilian regimes in Latin America; installing and financing pro-capitalist regimes in Russia, Eastern Europe, the Baltic and Balkan states. Even in the cases where the imperial state resorted to military intervention, Yugoslavia and Iraq, the bombings led to favorable economic opportunities for US MNCs. The Bush Sr regime promoted US oil interests via an oil for food agreement with Saddam Hussein in Iraq.

Clinton promoted free market regimes in the mini-states resulting from the break-up of socialist Yugoslavia .

However, the imperial state’s leadership and policies shifted dramatically during the late 1990’s onward. President Clinton’s imperial state was composed of long-standing MNC representatives, Wall Street bankers, and newly ascending militarist Zionist officials.

The result was a hybrid policy in which the imperial state actively promoted MNC opportunities under neoliberal regimes in the ex-Communist countries of Europe and Latin America, and expanded MNC ties with China and Viet Nam while launching destructive military interventions in Somalia, Yugoslavia, and Iraq.

The ‘balance of forces’ within the imperialist state shifted dramatically in favor the militarist-Zionist faction with 9/11: the terrorist attack of dubious origins and false flag demolitions in New York and Washington served to entrench the militarists in control of a vastly expanded imperial state apparatus. As a consequence of 9/11, the militarist-Zionist faction of the imperial state subordinated the interests of the MNCs to its strategy of total wars. This in turn led to the invasion, occupation and destruction of civilian infrastructure in Iraq and Afghanistan (instead of harnessing it to MNC expansion). The US colonial regime dismantled the Iraqi state (instead of re-ordering it to serve the MNC). The assassination and forced out-migration of millions of skilled professionals, administrators, police and military officials crippled any economic recovery (instead of their incorporation as servants of the colonial state and MNC).

The militarist-Zionist ascendancy in the imperial state introduced major changes in policy, orientation , priorities and the modus operandi of US imperialism. The ideology of the “global war on terror” replaced the MNC doctrine of promoting “economic globalization”.

Perpetual wars (“terrorists” were not confined to place and time) replaced limited wars or interventions directed at opening markets or changing regimes which would implement neoliberal policies benefiting US MNCs.

The locus of imperial state activity shifted from exploiting economic opportunities, in Asia, Latin America and the ex-Communist countries of Eastern Europe to wars in the Middle East, South Asia and North Africa – targeting Muslim countries which opposed Israel’s colonial expansion in Palestine, Syria, Lebanon and elsewhere.

The new militarist-power configuration’s conception of empire building required vast – trillion dollar – expenditures, without care or thought of returns to private capital. In contrast, under the hegemony of the MNCs, the imperial state, intervened to secure concessions of oil, gas and minerals in Latin America and the Middle East. The costs of military conquest were more than compensated by the returns to the MNC. The militarist imperial state configuration pillaged the US Treasury to finance its occupations, financing a vast army of corrupt colonial collaborators, private mercenary ‘military contractors’ and, soon to be millionaire, US military procurement (sic) officials.

Previously, MNCs directed overseas exploitation led to healthy returns to the US Treasury both in terms of direct tax payments and via the revenues generated from trade and the processing of raw materials.

Over the past decade and a half, the biggest and most stable returns to the MNC take place in regions and countries where the militarized imperial state is least involved: China, Latin America, and Europe. The MNCs have profited least and have lost most in areas of greatest imperial state involvement.

The ‘war zones’ that extend from Libya, Somalia, Lebanon, Syria, Iraq, Ukraine, Iran, Afghanistan, and Pakistan are the regions where imperial MNCs have suffered the biggest decline and exodus.

The main “beneficiaries” of the current imperial state policies are the war contractors and the security-military-industrial complex in the US. Overseas the state beneficiaries include Israel and Saudi Arabia. In addition Jordanian, Egyptian, Iraqi, Afghani, and Pakistani client rulers have squirreled away tens of billions in off-shore private bank accounts.

The “non-state” beneficiaries include mercenary, proxy armies. In Syria, Iraq, Libya, Somalia, and Ukraine tens of thousands of collaborators in self-styled “non-governmental” organizations have also profited.

The Lost-Benefit Calculus or Empire-Building under the Aegis of the Militarist-Zionist Imperial State

Sufficient time has passed over the past decade and a half of militarist-Zionist dominance of the imperial state to evaluate their performance.

The US and its Western European allies, especially Germany successfully expanded their empire in Eastern Europe, the Balkans and the Baltic regions without firing a shot. These countries were converted into EU vassal states. Their markets dominated and industries denationalized. Their armed forces were recruited as NATO mercenaries. West Germany annexed the East. Cheap educated labor, as immigrants and as a labor reserve, increased profits for EU and US MNCs. Russia was temporarily reduced to a vassal state between 1991-2001. Living standards plunged and welfare programs were reduced. Mortality rates increased. Class inequalities widened. Millionaires and billionaires seized public resources and joined with the imperial MNCs in plundering the economy. Socialist and Communist leaders and parties were repressed or co-opted. In contrast, imperial military expansion of the 21st century was a costly failure. The ‘war in Afghanistan’ was costly in lives and expenditures and led to an ignominious retreat. What remained was a fragile puppet regime and an unreliable mercenary military. The US-Afghanistan war was the longest war in US history and one of the biggest failures. In the end the nationalist-Islamist resistance movements – the so-called “Taliban” and allied ethno-religious and nationalist anti-imperialist resistance groups – dominate the countryside, repeatedly penetrate and attack urban centers and prepare to take power.

The Iraq war and the imperial state’s invasion and decade long occupation decimated the economy. The occupation fomented ethno-religious warfare. The secular Ba’thist officers and military professionals joined with Islamist nationalists and subsequently formed a powerful resistance movement (ISIS) which defeated the imperial backed Shia mercenary army during the second decade of the war. The imperial state was condemned to re-enter and engage directly in a prolonged war. The cost of war spiraled to over a trillion dollars. Oil exploitation was hampered and the US Treasury poured tens of billions to sustain a “war without end’.

The US imperial state and the EU, along with Saudi Arabia and Turkey financed armed Islamic mercenary militias to invade Syria and overthrow the secular, nationalist, anti-Zionist Bashar Assad regime. The imperial war opened the door for the expansion of the Islamic-Ba’thist forces-ISIS into Syria. The Kurds and other armed groups seized territory, fragmenting the country. After nearly five years of warfare and rising military costs the US and EU MNCs have been cut off from the Syrian market.

US support for Israeli aggression against Lebanon has led to the growth in power of the anti-imperialist Hezbollah armed resistance. Lebanon, Syria, and Iran now represent a serious alternative to the US, EU, Saudi Arabia, Israeli axis.

The US sanctions policy toward Iran has failed to undermine the nationalist regime and has totally undercut the economic opportunities of all the major US and EU oil and gas MNCs as well as US manufacturing exporters. China has replaced them.

The US-EU invasion of Libya led to the destruction of the economy and the flight of billions in MNC investments and the disruption of exports.

The US imperial states’ seizure of power via a proxy coup in Kiev, provoked a powerful anti-imperialist rebellion led by armed militia in the East (Donetsk and Luhansk) and the decimation of the Ukraine economy.

In summary, the military-Zionist takeover of the imperial state has led to prolonged, unwinnable costly wars which have undermined markets and investment sites for US MNCs. Imperial militarism has undermined the imperial economic presence and provoked long-term, growing anti-imperialist resistance movements, as well as chaotic, unstable and unviable countries out of imperial control.

Economic imperialism has continued to profit in parts of Europe, Asia, Latin America, and Africa despite the imperial wars and economic sanctions pursued by the highly militarized imperial state elsewhere.

However, the US militarists’ seizure of power in the Ukraine and the sanctions against Russia have eroded EU’S profitable trade and investments in Russia. The Ukraine under IMF-EU-US tutelage has become a heavily indebted, broken economy run by kleptocrats who are totally dependent on foreign loans and military intervention.

Because the militarized imperial state prioritizes conflict and sanctions with Russia, Iran, and Syria, it has failed to deepen and expand its economic ties with Asia, Latin America and Africa. The political and economic conquest of East Europe and parts of the USSR has lost significance. The perpetual, lost wars in the Middle East, North Africa, and the Caucuses have weakened the imperial state’s capacity for empire building in Asia and Latin America.

The outflow of wealth, the domestic cost of perpetual wars has eroded the electoral foundations of empire building. Only a fundamental change in the composition of the imperial state and a reorientation of priorities toward centering on economic expansion can alter the current decline of empire. The danger is that as the militarist Zionist imperialist state pursues losing wars, it may escalate and raise the ante, and move toward a major nuclear confrontation: an empire amidst nuclear ashes!

James Petras was Director of the Center for Mediterranean Studies in Athens (1981-1984) and adviser to Prime Minister Andreas Papandreou (1981-84). He resigned in protest over the PM expulsion of leading trade unionists from PASOK for organizing a general strike against his ‘stabilization program’. Petras is co-author of Mediterranean Paradoxes: The Politics and Social Structure of Southern Europe. His latest books include Extractive Imperialism in the Americas: Capitalism’s New Frontier (with Henry Veltmeyer) and The Politics of Empire: The US, Israel and the Middle East. Read other articles by James, or visit James’s website.