Application Deadline: 2nd April 2023 at midnight CET.
Eligible Countries: Students from Developing Countries
To be taken at (country): Switzerland
About Scholarship: The IPCC Scholarship Programme aims to build capacity in understanding and managing climate change in developing countries by providing opportunities for young scientists from developing countries to undertake studies that would not be possible without the intervention of the Fund.
Applications from Least Developed Countries (LDCs) and Small Island Developing States (SIDS) researching topics with the fields of study chosen for the call for applications are given priority.
Eligible Fields: Research proposals are encouraged from, but are not limited to, the following topics: Living soils, biodiversity, regenerative viticulture, agroforestry, water management and terrestrial carbon cycle.
Type: PhD
Eligibility:
The IPCC will accept applications from PhD students that have been enrolled for at least a year or are undertaking post-doctoral research.
Applicants should be citizens of a developing country with priority given to students from Least Developed Countries (LDCs) and Small Island Developing States (SIDS).
Selection Criteria: Applications will be submitted to a two-level selection process. IPCC scientific experts will assess the applications in a first review. The IPCC Science Board will then review the applications and make a final selection of candidates to receive the awards.
Number of Scholarships: Several
Scholarship benefits: Each scholarship award is for a maximum amount of 15,000 Euros per year for up to two years from 2023-2025.
How to Apply: Applicants should register via the application portal here
The day after Prime Minister Benjamin Netanyahu announced he was “pausing” his plans to overhaul Israel’s judicial system—the only arm of the state that his far-right coalition does not control—to prevent “civil war,” opposition leaders Yair Lapid and Benny Gantz entered talks with his government.
While the media portray Lapid, Gantz and the host of former generals, intelligence and security chiefs, the Histadrut labour federation and heads of Israel’s tech sector as leading the movement against Netanyahu’s dictatorial legislation, they are acting swiftly to betray it. Their aim is to agree some cosmetic changes to the planned legislation that will demobilise the largest protest movement in Israel’s 75-year history and prop up the rule of Israel’s oligarchs against the people.
Likud Party leader Benjamin Netanyahu (left) far-right Israeli lawmaker Bezalel Smotrich (right) and Israeli Prime Minister Yair Lapid (centre) and leaders of all Israel's political parties pose for a group photo after the swearing-in ceremony for lawmakers at the Knesset, Israel's parliament, in Jerusalem, Tuesday, November 15, 2022. [AP Photo/Tsafrir Abayov]
These leaders, many of whom have served in previous governments headed by Netanyahu, do not represent a progressive alternative. They have few fundamental policy differences with him. Equally committed to the Zionist project, Jewish supremacy and the suppression of the Palestinians within a system of apartheid rule—along with the enrichment of Israel’s corporate elite—they fear his measures will destroy Israel’s democratic fig leaf and endanger its relationship with the United States that is crucial for the country’s economic and military security. To this end, these forces will readily swallow their dislike of Netanyahu and form a government of national unity, displacing his fascistic partners.
For three months, hundreds of thousands have taken to the streets in protest against Netanyahu’s plans to give his coalition of fascists, racists and religious zealots dictatorial powers by neutering the judiciary.
According to a survey carried out before Netanyahu fired his Defence Minister Yoav Gallant for calling on him to abandon plans that threatened to destabilise the Israel Defence Forces (IDF), a majority of Israeli Jews are opposed to the plans, with 53 percent defining themselves as 'opposed to the reform.' All opinion polls show that the government would lose its majority in the Knesset if fresh elections were held.
As news of Gallant’s sacking was announced Sunday, up to 600,000 turned out to protest and mass strikes broke out, closing universities, schools, workplaces and government operations and grounding flights and shutting ports.
The Histadrut, dedicated to the defence of the Jewish state, had repeatedly refused to call a general strike over the government’s plans. It only did so when it became clear that workers had begun to act independently of the unions. As soon as Netanyahu announced Monday evening that he was “pausing” the legislation till May, Histadrut chief Arnon Bar-David called off the strike.
But Netanyahu, having come under enormous pressure from US President Joe Biden, who had sent several officials to Tel Aviv to urge him to make some concessions to the opposition movement, had to buy off his fascistic coalition partners to remain in power. In return for a short delay, he pledged to establish and fund a new National Guard under the control of the Minister of National Security, Itamar Ben-Gvir, head of Jewish Power and a leader of fascist settlers in the occupied West Bank. The paramilitary force will be allowed to carry guns that will be used not just against Israel’s Palestinian citizens but also against Israeli workers and youth.
Netanyahu insisted he was not abandoning the judicial overhaul and that if no compromise is found by the summer, he would go ahead with it anyway.
Speaking Tuesday, Biden said, “Like many strong supporters of Israel, I’m very concerned. And I’m concerned that they get this straight. They cannot continue down this road. And I’ve sort of made that clear. I — hopeful — hopefully, the prime minister will act in a way that he is going to try to work out some genuine compromise. But that remains to be seen.”
Netanyahu rejected this mealy mouthed appeal, declaring Wednesday, “Israel is a sovereign country which makes its decisions by the will of its people and not based on pressures from abroad, including from the best of friends.'
The day after Netanyahu announced his “pause,” delegations from Lapid’s Yesh Atid and Gantz’s National Unity met representatives from Netanyahu’s Likud party for talks chaired by Isaac Herzog, Israel’s largely ceremonial president. The 90-minute discussions were conducted in “a positive atmosphere” focusing on the mechanisms for negotiations and were aimed at what TV Channel 12 described as fostering a friendly atmosphere.
On Wednesday, Herzog met with representatives from Israel’s Arab parties, Ra'am and Hadash-Ta'al and the Labor Party. While Labor had refused to attend the previous day, it declared that 'precisely because it did not trust Netanyahu,' it would take part in the negotiations.
Gallant, Washington’s favourite interlocutor within the Netanyahu government, is reportedly willing to apologise to Netanyahu over his speech on TV Saturday, when he called for the suspension of the government's planned judicial overhaul citing growing dissent among army reservists. With Netanyahu still to send him a formal letter dismissing him from office, Gantz urged him to keep Gallant in post for the sake of Israel’s security.
But the protesters have vowed to continue their fight and weekly demonstrations until the government abandons its plans to overhaul the judiciary. Some gathered outside the talks. The Black Flags movement said, “There is no talking to a lying son of a liar,” and “We are not ready to talk with the destroyers of democracy until the dictatorial legislation is completely abolished.”
A group of 34 protest organisations wrote to Lapid and Gantz, urging them to pull out of the talks they said were a “deception” and condemned their agreement to hold talks as “shocking and outrageous.” Netanyahu was using the “pause” as a ruse to diffuse the massive protest movement and when the next Knesset session began in May, he would “immediately” resume his “dictatorship laws.” They insisted, “We will not fall for this deception and will continue to fight with all our strength.”
Ben-Gvir has encouraged his supporters, notorious for their attacks on Palestinians, to harass and intimidate the government’s opponents, leading to a series of violent incidents. Ha’aretz reported right-wing activists blocking vehicles amid cheering, deriding drivers as “leftists,” using homophobic slurs and mocking drivers.
To defeat Netanyahu and the self-proclaimed leaders of the protest movement, all of whom are working to shore up the Zionist state as it faces a political explosion, Israeli workers and youth must build their own independent political leadership and adopt a socialist strategy and the methods of the class struggle. They must appeal to Israel’s Palestinian citizens, the Palestinians in the occupied territories and workers in neighbouring countries.
There exists a powerful objective basis for such a movement. As well as the mass movement in Israel, teachers in the occupied West Bank have been on strike since the beginning of February, demanding the Fatah-dominated Palestinian Authority (PA) implement an agreement signed 18 months ago that agreed a pay rise, back pay and union elections. As striking teachers attempt to form their own union, independent of Fatah, the PA has threatened mass firings and arrests. Earlier this month, Palestinian security forces set up checkpoints and roadblocks on the way to Ramallah where a protest rally was to be held.
In Lebanon, there have been repeated strikes and protests over the spiraling economic crisis and plummeting national currency plunging 80 percent of the 6.7 million population into poverty. On Thursday, hundreds of protesters, mainly army retirees, again marched on Beirut’s central bank demanding increased pensions. Conditions are even worse in Syria. It is for this reason that the Arab media have barely reported the mass protests that threaten Israel’s political system.
The eruption of the class struggle in France against President Emmanuel Macron and his pension cuts has staggered Spain’s Socialist Party (PSOE)-Podemos government. It is currently imposing its own pension cuts, designed with the European Union. At the same time, it cynically claims its “social dialogue” with government-affiliated union bureaucracies, like the Podemos-linked Workers Commissions (CCOO) and the social-democratic General Union of Workers (UGT), make mass protests unnecessary in Spain.
Spain’s Prime Minister Pedro Sanchez (PSOE), second left, walks next to Podemos leader Pablo Iglesias, second right, and First Deputy Prime Minister Carmen Calvo, left, at the Moncloa Palace in Madrid, Spain, Tuesday, Jan. 14 2020 [Credit: AP Photo/Manu Fernandez]
In last weekend’s PSOE Federal Committee meeting, Spanish Prime Minister Sánchez said: 'We have ruled using dialogue, reaching great agreements and guaranteeing something very important, social peace,' he declared, citing the pension reform agreed with the European Union and the trade unions over the past weeks as an example.
In reality, the PSOE-Podemos pension cut shows that, to defend living standards, workers in Spain have no choice but to launch a direct political struggle against the capitalist state, as in France.
The PSOE-Podemos pension cut will increase the number of years whose income level is averaged to calculate the amount of the pension a worker receives, from 25 to 29 years of contributions. This will further cut pension levels. Both the CCOO and UGT called the reform “historic.” After the 2008 capitalist crisis, the PSOE government worked with the UGT and CCOO to impose a reform on public pensions to increase retirement age until age 67, hailed as a success of “social dialogue”.
Sánchez repeated his cynical calls for “social dialogue” during a no-confidence vote tabled by the far-right Vox last week, as protests continued to erupt across France’s major cities. Sánchez said the PSOE-Podemos government “is capable of carrying out the reforms that the country needs, guaranteeing something very precious that we lost during the financial crisis and the neoliberal response, which is social peace”.
Days later, during a press conference held in Brussels last Friday, Sánchez cynically criticized the right-wing Popular Party (PP) for calling for Macron-style attacks on workers’ pension. Sánchez claimed that “reforms do not have to cause social pain', stressing that “it is evident that today there is social peace, which is essential for far-reaching reforms, as was the labor reform.”
These reactionary positions endorsing the strangulation of the class struggle are, of course, shared by the PSOE’s coalition partner, the pseudo-left Podemos party. In December, Podemos’ de-facto leader and Minister of Labor, Yolanda Díaz, said in a state visit to Argentina that 'I am a great defender of social dialogue, it is a factor of social peace. We need strong unions to have strong democracies”.
The mind-numbing repetition of “social dialogue” and “social peace” is a sign of fear rather than of strength in the ruling circles. For the past three years, the PSOE-Podemos government has imposed the dictates of the financial aristocracy in close collaboration with the unions. This included the disbursement of massive EU bailout funds to corporations and banks, the imposition of a reactionary labor reform, below-inflation wage increases affecting millions of workers, and Spain’s multi-billion-euro military rearmament plan.
In reality, social anger is reaching explosive levels in Spain, Sánchez’s praise of “social dialogue” and “social peace” notwithstanding. The unions are deeply discredited after decades of social austerity and multi-trillion bank bailouts. Since the 1991 Stalinist dissolution of the Soviet Union, levels of inequality has soared. These are incompatible with democratic forms of rule, as testified most clearly in France, where Macron has torn the “democratic” mask off of the capitalist state, exposing it as a dictatorship of the financial oligarchy.
Under Podemos, Spain’s Ibex stock market index, like other stock markets across Europe, has hit record profits as inflation impoverished workers. As Macron in France, it uses both the union bureaucracies and the police agencies as weapons to attack the working class.
On the one hand, the PSOE-Podemos government has relied on the bureaucracies to act as domestic labour police, to impose salary increases below inflation level, as average prices soared to 8.4 percent. According to the Ministry of Labour, average salaries rose last year by 2.8 percent in 3,084 collective agreements negotiated between the unions and companies, affecting 9 million workers.
Whenever the unions could not prevent strikes, the PSOE-Podemos government resorted to mass violence. Over the past 16 months, it has deployed armoured vehicles against striking metalworkers and 23,000 police against the three-week nationwide truck drivers’ strike. It was the largest police deployment and scabbing operation against a strike in Spanish history.
The government has also repeatedly resorted to minimum service legislation to break strikes, most recently on health workers and airline crew. Aware that the unions are increasingly losing control, the government is now preparing to review the penal code to criminalise protests and strikes.
Last Thursday, the PSOE-Podemos’ delegate of the government of the region of Madrid, Mercedes González, tried to ban a solidarity march with French workers coinciding with mass strikes across the Pyrenees. González is notorious for trying to ban a protest in Madrid in November 2021 in solidarity with 9-day, 22,000-strong strike, of metalworkers in Cádiz.
The PSOE-Podemos government rejected a request for organising a protest – a formality which has increasingly become a means of banning protests, violating the elementary right to freedom of speech and assembly. It then deployed a large police contingent and riot police, who surrounded the protesters and took down the identity of a dozen people before the start of the rally. Podemos has maintained a complicit silence on this.
Moreover, this last weekend, tens of thousands demonstrated in Andalusia, Madrid and the Canary Islands to defend public education.
Across Europe, the ruling classes are increasingly terrified at the objectively revolutionary confrontation emerging between the workers and the capitalist state as real wages collapse, and the COVID-19 pandemic and the NATO war on Russia in Ukraine shake the economy. A wave of strikes against austerity and inflation by millions of workers is exploding across Europe—in Germany, Britain, Portugal, Greece, Belgium, the Netherlands and beyond.
The US Centers for Disease Control and Prevention (CDC) issued new guidelines on Monday that only one shot of the bivalent booster against COVID-19 would suffice for anyone who received their last dose six months or more ago, regardless of their age or medical condition. This also leaves a big question mark over the promised annual COVID boosters that were in discussion as early as September 2022.
Without a doubt, the coronavirus continues to circulate throughout communities across the globe, posing an existential threat to anyone who becomes infected or re-infected with COVID. At the supposedly “low rates” now prevailing in the US, more than 100,000 Americans can be expected to die from COVID every year.
Patients receive intravenous drips in an emergency ward in Beijing, Thursday, Jan. 19, 2023. [AP Photo/Andy Wong]
Additionally, numerous studies have shown that even mild infections can cause serious systemic injuries to a person’s organs, leading to potential lethal consequences later in life. As Dr. Ziyad Al-Aly, clinical epidemiologist at Washington University in St. Louis, Missouri, recently said about the long-term impact of COVID, “This is not something that will go away in a week, in a year, or two, or three. This will reverberate with us for generations.”
The Biden administration and every other capitalist government claimed that a vaccine-only strategy was sufficient to fight the pandemic. Now they are declaring that even this must come to an end. When Biden declared the pandemic over, he really meant that he was ending all efforts to help prevent severe disease and death among the most vulnerable. In May, the entire official COVID pandemic response will come to a halt, and working people will be left to defend themselves, by themselves, against the public health threat posed by the coronavirus.
In a terse statement, the CDC wrote, “At this time, one updated booster dose is recommended for everyone in order to maintain protection from severe illness. Receiving more than one updated booster is not currently authorized by the US Federal Food and Drug Administration.” Meanwhile, only 16.4 percent of all eligible people have received the latest bivalent vaccines and less than 80 percent have even completed the initial two-dose series.
Placing this in context, this will leave in the lurch the 75 million people over the age of 60, the nearly 10 million who are immune-compromised, and fully half the US population that has at least one chronic medical condition. Exactly one year ago the CDC recommended that the immunocompromised and people over age 50 should receive an additional shot if they had received their first booster just four months prior.
The rationale for these earlier decisions was based on their own study that found immunity against the virus waned quickly, leaving people vulnerable to infection, particularly those who were immunocompromised. Follow-on studies with the bivalent boosters have found immunity from these shots also wanes rapidly.
A recent studypublished just this month in The Lancet: Infectious Diseases underscored the important point that although a third mRNA booster dose was “associated with a 26.2 percent reduction in incidence of infection and 75.1 percent reduction in incidence of severe COVID-19 over a year of follow up, protection against infection waned gradually by month after the booster and was negligible by the sixth month.”
The authors concluded, “The booster was associated with considerable protection against infection and high protection against severe COVID-19 among people more clinically vulnerable to severe COVID-19, underscoring the value of booster vaccinations for this population.”
A day after the CDC published its updated guidelines, the World Health Organization’s (WHO) Strategic Advisory Group of Experts on Immunization (SAGE) revised its guidancefor COVID-19 boosters, recommending additional boosters at six months from the last shot only for those at highest risk of death or severe disease from COVID. These include people who are 60 and older or with underlying medical conditions that include pregnancy. Frontline health workers were included as high risk.
Even though the SAGE guidelines are, for lack of a better word, relatively more comprehensive than those of the US CDC, many have taken the WHO to task on its about-face, as the agency issues statements that smack more of political expediency than concern for public health.
To halt the pandemic requires efforts to stop transmission by ramping up surveillance and tracking dashboards and investing in an international strategy to build up pandemic preparedness infrastructure. Instead the WHO writes, “Countries that already have a policy in place for additional boosters should assess the evolving need based on national disease burden, cost effectiveness and opportunity costs.” In other words, public health should take a back seat to financial interests which argue that the cure should not be worse than the disease.
Still, given the international health agency’s recommendations, a federal official speaking under conditions of anonymity told NPR that the FDA is reconsidering offering a second booster to those 65 years of age and older or with immune-compromised systems. The decision could come as early as this week. which would align the US with the approach being taken by Britain and Canada.
Dr. Peter Hotez, co-director of the Texas Children’s Hospital Center for Vaccine Development, observed, “Those doses are going to be expiring and will be thrown out. So, it makes sense to have those shots in arms instead of being tossed in the waste basket.”
Perhaps the most revealing statement to date made by the WHO was at Tuesday’s press briefing, when Dr. Maria Van Kerkhove, Technical Lead on COVID-19, noted, “At the present time, we are still in a Public Health Emergency of International Concern at a global level as well as still a pandemic. The virus is still circulating. [But] we are in a much better situation than we were at the beginning of this pandemic. While we still see a lot of circulation of the virus, we are not seeing the same level of impact. And by impact we mean there is reduced incidence of hospitalizations, ICU admissions and deaths. But the threat isn’t over.”
She added, “We still see between five to ten thousand deaths per week. These are largely among individuals who are of older age, they may not have been vaccinated or received the full number of doses that are required for them at their age. So, the threat remains.”
Van Kerkhove then explained, “One of the big uncertainties we face going forward is the virus itself. It hasn’t settled into a predictable pattern and continues to evolve. Omicron is the variant of concern that remains dominant worldwide and there are still 600 sub-lineages of Omicron that are in circulation … We will continue to see waves of infections [though] the peaks of those infections will not be as large as we saw before and likely will not be because we have population-level immunity that has increased around the world from vaccination and also from past infection.”
She continued:
However, one of the things we are very concerned about is the potential for the virus to change—to become not only more transmissible but [also] more severe. We have to remain vigilant. We have to have systems that are in place to have strong surveillance so that we can track variants that are known to be in circulation and detect new ones so we can have agile systems to scale up or scale down; the need for clinical care; making sure we have good anti-viral [treatments] that are in use and given to patients who need them when they need them to prevent severe disease; and really critically to focus on vaccinating those who are most at risk.
Van Kerkhove then warned that no one can predict how this pandemic will unfold but that all indications were that the virus was here to stay. One of the variants that the WHO is tracking, XBB.1.16, has recently caused a wave of new infections across India. It has a similar profile to XBB.1.5, but with one additional mutation in its spike protein that has been shown in the laboratory setting to cause increased infectivity and pathogenicity.
Meanwhile, as these discussions were taking place, a deadly outbreak of Marburg virus, which causes a disease like the Ebola virus and is just as lethal, has spread from rural districts of Equatorial Guinea and been found in the country’s commercial capital, Bata, raising concerns of a broader outbreak. The outbreak, which began last month, has now been confirmed to be much larger than previously expected with nine laboratory-confirmed cases with seven fatalities. There are also 20 suspected cases, of whom have all died.
In an interview Tuesday with The Associated Press, Ukrainian President Volodymyr Zelensky outlined his motivations for sacrificing likely untold thousands of Ukrainian soldiers in an effort to hold on to the eastern city of Bakhmut. He gave the interview while traveling on a train throughout Ukraine on a PR trip to drum up support for the war.
Through the course of the English-language interview, Zelensky admitted that losing Bakhmut to Russian forces would increase calls for a compromised settlement from both within and outside the country.
Should Bakhmut fall, “Our society will feel tired,” Zelensky said. “Our society will push me to have compromise with them.”
In the interview, Zelensky also made clear the war likely would not continue without US support.
“The United States really understands that if they stop helping us, we will not win,” Zelensky stated when asked about a potential change in US support should Biden lose a re-election bid in 2024.
As Zelensky is well aware, any negotiated compromise over the now 13-months-long war would be politically unacceptable both by the country’s domestic fascist forces such as the Azov Battalion and its primary backer the United States, if it did not include the return of the entirety of Russian-controlled territories.
In October of last year, Zelensky signed a decree that formally ruled out any peace negotiations that involved current Russian President Vladimir Putin. Since then, countless Ukrainian government officials have stated that the war will only end when all of Eastern Ukraine and Crimea are “retaken”.
No serious peace negotiations have taken place since April 2022, when a deal was reportedly in place to end the war but was sabotaged after British Prime Minister Boris Johnson flew to Ukraine in a surprise visit to urge Kiev to continue the war with its nuclear-armed neighbor no matter what.
As the establishment Ukrainian news outlet Ukrainska Pravda reported at the time, Johnson brought two “simple messages” to Kiev:
The first is that Putin is a war criminal; he should be pressured, not negotiated with. And the second is that even if Ukraine is ready to sign some agreements on guarantees with Putin, they are not. We can sign [an agreement] with you [Ukraine], but not with him. Anyway, he will screw everyone over,' is how one of Zelenskyy's close associates summed up the essence of Johnson's visit...
Johnson's position was that the collective West, which back in February had suggested Zelenskyy should surrender and flee, now felt that Putin was not really as powerful as they had previously imagined.
Moreover, there is a chance to “press” him. And the West wants to use it.
Since August, and tens of thousands of lives lost, fighting is still centered on the “meat grinder” of Bakhmut. Russia views the city as essential in order to achieve its stated goals of gaining control over the entirety of the Donetsk and Lugansk provinces. Ukraine and its Western imperialist backers view Bakhmut as an opportunity to weaken Russian forces before a planned offensive this spring. As one Western official stated openly, “Bakhmut, because of the Russian tactics, is giving Ukraine a unique opportunity to kill a lot of Russians.”
For Zelensky and his band of advisors the fact that defending Bakhmut involved sending thousands of troops to certain death is of little importance as long the war’s momentum continues.
When Zelensky visited Washington in December, he obscenely gave a Bakhmut flag to the US Congress and called the city the “fortress of our morale”.
Such enthusiasm is apparently not shared by Ukrainian soldiers who are paying the price for the disastrous imperialist war with their lives.
Earlier in March, Volodymyr, an infantryman from the 93rd Mechanized Brigade, admitted to the pro-government Kyiv Independent he felt ill prepared for the battle and struggled to eat after fighting in Bakhmut for months.
“When they drive us to Bakhmut, I already know I'm being sent to death,” Volodymyr stated bluntly.
While the Western media and NATO have played up Russian losses in the battle, claiming at least five Russian soldiers were killed for every Ukrainian, there is no way to verify this claim. It is clear that Ukrainian forces have admitted to high casualty rates of their own in several interviews.
Valeriy, another Ukrainian infantryman told the Kyiv Independent that “only a few” of the original 27 members of his platoon were not killed or wounded in battle at Bakhmut.
Furthermore, soldiers that do survive the battle often refuse to return and become “refuseniks” now subject to lengthy punitive prison sentences under recent changes to military law made by the Zelensky regime. Vladyslav from the 58th Independent Motorized Infantry Brigade told the Independent that many soldiers in his platoon refused to go to Bakhmut as Russians approached. Moreover, according to the Independent, “During the last rotation in late February, Vladyslav said that only eight out of 25 soldiers in his platoon headed out to Bakhmut – and the rest said they couldn't go because of sudden fever or body pain.”
As Zelensky’s remarks make clear, the Ukrainian ruling class plans to continue the mass slaughter both in Bakhmut and throughout the country during the upcoming offensive, backed by billions in NATO and US weapons.
Earlier this month, the magazine Politico reported that more than 100,000 Ukrainian soldiers have died in the war already. The pre-war population of the country was less than 40 million, out of which over 8 million have since fled, and several million are living in territories controlled by Russia.
After more than two weeks of turmoil following the collapse of the Silicon Valley Bank (SVB) in the US and the forced takeover of Credit Suisse by UBS, some calm has returned to financial markets in the past few days.
How long it might last is another question as the deep sources of structural instability within the financial system come into focus.
Some of them, any one of which could set off another crisis, were outlined in the quarterly report issued by the Bank of England’s (BoE) Financial Policy Committee (FPC) on Wednesday.
The Bank of England has launched a temporary bond-buying programme as it takes emergency action to prevent “material risk” to UK financial stability. [AP Photo/Frank Augstein]
Looking back to the last major crisis, the market freeze of March 2020 when not even US Treasury bonds could be sold for a number of days, the FPC report said “many of the vulnerabilities which had crystallised during previous stress episodes, such as the ‘dash for cash’ in March 2020, remain largely unaddressed and could amplify further sharp adjustments in asset prices.”
Like his counterparts internationally, BoE governor Andrew Bailey insists the UK financial system is “resilient with robust capital and liquidity positions, and well placed to support the economy” as he put in a speech delivered at the London School of Economics on Monday.
But the FPC report paints a somewhat different picture.
Since the UK pensions funds crisis of last September, which was only quelled with a major BoE intervention into bond markets, attention of the FPC has been very much focused on this area.
In light of the bank run on SVB, which led to its closure, the significance of the UK crisis, which threatened major systemic problems, can be seen more clearly. The SVB demise was sparked by the rise in interest rates initiated by the US Fed.
This meant that the market value of the Treasury bonds it had purchased when flush with cash in 2020 and 2021, as a result of the Fed’s ultra easy money policies, fell well below their book value and SVB had to realise the losses when they were sold off to meet the cash demands of customers.
The UK pension crisis was different in form but was sparked by the same cause—higher interest rates initiated by major central banks, in the name of fighting inflation but in reality directed at trying to push back the upsurge of the working class in support of wage demands.
To meet their obligations, pension funds, on the recommendation of financial authorities, had adopted a strategy known as liability-driven investment (LDI) in which they invested heavily in government bonds.
When the short-lived Truss government sought to fund massive tax cuts for corporations and the ultra-wealthy by increasing debt, interest rates on bonds rose sharply and their price fell (the two have an inverse relationship) and the pension funds were faced with major losses on their holdings.
They were forced into a fire sale resulting in a downward price spiral for bonds and a severe increase in interest rates.
To try to prevent a recurrence the FPC recommended that the Pensions Regulator act “as soon as possible” to ensure that LDI funds had sufficient liquidity to meet an increase of 250 basis points (2.5 percentage points) in interest rates without having to sell off bonds. Previously they have been required only to cover a move of 100 basis points. The increase in September was 160 points and occurred at a pace rarely seen before.
But pension funds were by no means the only area of concern.
It pointed to the fast-growing global private credit market where interest rates tend to be higher, meaning that loans are “more vulnerable to a deteriorating macro environment” and stress in this area “could cause a rapid reassessment of risk by investors potentially resulting in sharp revaluations.”
It also called for “urgent work” to be undertaken globally to ensure the resilience of non-bank financial markets, warning that “vulnerabilities” could “crystallise should there be further volatility or sharp movements in asset prices.”
The FPC said the UK banking system was resilient to a wide range of severe economic outcomes, including higher interest rates. But, as with every national financial system, it acknowledged that there was a risk of “spillover” effects from global developments.
“There remain channels through which UK economic conditions could be affected by recent and possible future strains from banks outside the UK,” it said.
One of those channels is the effect of interest rate increases and a credit crunch on the US real estate market, both commercial and residential, where smaller and middle-size banks provide the largest portion of finance.
“Commercial real estate remains a potentially vulnerable sector globally, as higher interest rates reduce property values along with borrowers’ ability to service debt,” the FPC report said.
Asked about possible problems in the US real estate market following the meeting of the Fed’s policy meeting earlier this month, chair Jerome Powell waved aside concerns saying he was “aware” of the concentration of medium-sized banks in this area but did not think it was comparable to other strains on banks.
That may be the case, at least for the present, but financial conditions are changing and the effects of the Fed interest rate increases have yet to fully flow through. And there no doubt that as a result of the turmoil surrounding SVB there will be a credit crunch as banks constrict lending and seek to build up cash buffers.
Powell may not be overly worried, but others are.
An article in the Financial Times (FT) last week reported that even before the SVB failure “strains in the $5.6 trillion market for commercial real estate (CRE) loans have deepened in recent months” because of the Fed’s interest rate increases and “analysts fear any further reduction in lending … could make a perilous situation worse.”
According to analysis by JP Morgan small and medium-sized banks account for 70 percent of all CRE loans and these loans comprise 43 percent of the banks’ total lending as opposed to 13 percent for the big banks.
The FT report cited a note by JP Morgan securitisation analyst Chong Sin. “The collapse of SVB is putting a magnifying glass on regional banks and their commercial real estate loan books remains an area of major concern,” he wrote.
Last week, the Murdoch-owned Australian newspaper published its annual Rich List, which celebrates the exorbitant wealth of the top 250 richest individuals in Australia. Their total combined wealth now exceeds $531 billion, an overall increase of $11 billion in the last 12 months.
Gina Rinehart and Twiggy Forrest
Amid the worst cost-of-living crisis in decades, the Australian celebrated the fact that 8 new billionaires have been added to the list, bringing the overall total to 139. The average wealth of each individual exceeds $2.1 billion and the barrier for entry on the list is $504 million.
As in previous years, the money is highly concentrated among the top ten billionaires, who have a combined wealth exceeding $208 billion. That represents 40 percent of wealth on the list. The top 20, whose wealth exceeds $271 billion, account for more than 51 percent of the total.
Iron ore magnates Gina Rinehart and Andrew Forrest retain the first and second positions respectively. Rinehart’s personal fortune increased by $4.46 billion, bringing it to $37.1 billion. Forrest has $35.21 billion, an increase of $3.44 billion in a single year.
The biggest shift has been in the spaces occupied by the heads of tech companies. The unconstrained growth of financial speculation has seen a meteoric rise in the fortunes of these individuals. Investors, looking for the next Google, gamble on the future profits of tech start-ups, pushing their shares exponentially higher than the net profits of the business.
This makes the companies highly vulnerable to financial instability.
Co-founders of Atlassian, Mike Cannon-Brookes and Scott Farquhar, previously in the fourth and five spots, dropped to sixth and seventh, with a combined wealth total of $31.62 billion. That is a fall of $19.57 billion from last year.
Cliff Obrecht and Melanie Perkins, founders of tech company Canva, broke records last year with a wealth increase of $27 billion, putting them in the number nine and ten spots. While they retained these positions, they have lost $11.52 billion combined, bringing their combined fortunes to $20.26 billion.
The rest of the top ten is rounded out by familiar faces. Mining magnates Clive Palmer and Ivan Glasenberg took the fifth and eighth spots respectively. Spots three and four were held by Anthony Pratt, owner of cardboard and recycling behemoth Pratt Industries and housing mogul Harry Triguboff.
The 2023 Rich List attempts to paint these wealthy individuals as being great contributors to Australian society. In truth, they have a parasitic relationship to the economy at large. All of their fortunes are tied to the speculative and socially-destructive activities of finance capital. While most acute among the tech companies, this is true of all.
The new individuals on the list underscore the further growth of speculative activities.
Twenty-seven-year-old Edward Craven shot to the 68th spot with a fortune of $2.01 billion. He has built one of the biggest online cryptocurrency gambling companies in the world Stake.com. Craven purchased two mansions in Melbourne’s wealthy suburb of Toorak last year, worth a combined $120 million.
James and Robbie Ferguson, also new to the list with a combined wealth of $750 million, established Immutable, a platform for other companies to operate non-fungible token (NFT) businesses.
The additions point to the growing wealth of financial entities that produce nothing of social value, but largely exist as vehicles for stock market speculation and gambling.
Those on the list inhabit a different world to working people. The List does not even reference the deepening social misery of broad sections of the population, upon which the fortunes are ultimately based.
Instead it wallows in the almost ludicrous concerns of the ultra-wealthy. One example of this is an article entitled: “Ever wondered what it costs to run your own superyacht?”
The article centres on Ian Malouf, worth $1.03 billion. He is the owner of a $100 million superyacht whose features include a spa pool, private treatment rooms such as an infra-red sauna, a teppanyaki grill, both an indoor and outdoor gym and an on-board beauty therapist. “The bow is the size of most boats” Malouf boasts.
To answer the question posed in the article Malouf explains, “You could be looking at a payroll of $250,000 per month,” but then with extras, the costs “could be another $300,000.” Malouf concludes by describing how he is “spoilt for choice” in his destinations this year. One of his boats is going to New Zealand and then Tahiti, “there’s Fiji and Whitsundays too,” he says.
Despite being comparatively smaller than the obscene increases of wealth observed in previous editions, the latest rise coincides with the greatest reversal in the living conditions of workers since World War II.
The last twelve months recorded the largest drop in real wages on record. Inflation surged to 7.8 percent in 2022, while nominal wage growth was limited to just 3.3 percent. This means the actual take-home pay of workers decreased by 4.5 percent in value.
The official inflation figures hide the true skyrocketing cost of living, as basic items families need to survive skyrocketed in prices. Over 2022, dairy and related products increased by 14.9 percent, bread and cereal products 12.2 percent and fruit and vegetables 8.5 percent.
The Reserve Bank of Australia responded to the inflationary crisis by hiking interest rates 11 consecutive times, adding a $1,474 increase in monthly repayments on a $750,000 loan. This in turn dramatically pushed rents up. In some areas of New South Wales (NSW) rents increased by 40 percent.
This social crisis is coupled with the complete dismantling by the Albanese Labor government of every public health measure to protect the population from the COVID-19 pandemic. As a result, more than 22,000 people died last year and the overstretched hospitals are at breaking point.
COVID-19 is now barely mentioned by the media. The Rich List is no different, with the only reference being in the past tense, perpetuating the lie that the pandemic is over.
While the billionaires boat around exotic coastlines, workers are faced with continued devastation.
The Albanese Labor government declares there is no money for public health, education or housing. Instead it announced last month a $368 billion nuclear-powered submarine deal to accelerate the US-led war drive against China.
Germany’s ruling traffic light coalition government, consisting of the Social Democrats, Greens and Free Democrats, is escalating its offensive against Russia.
According to an official statement from the Ministry of Defense, “18 Leopard 2 including ammunition and spare parts packages as well as two ‘buffalo’ recovery tanks with their crews trained in Germany arrived in Ukraine on Monday.”
German Leopard 2 main battle tanks on their way to Ukraine. [Photo: Bundeswehr]
This is the first delivery of German battle tanks to Kiev. It has far-reaching historical and political implications. 82 years after Hitler's war of annihilation against the Soviet Union, German tanks are again rolling against Russia.
“In a next step, Leopard 1 A5 will be delivered,” writes the Ministry of Defense. The goal is to provide the first 25 tanks by the summer, to increase them to about 80 by the end of the year, and to at least 100 Leopard 1 A5 tanks in the course of 2024.
Kiev previously received 40 Marder armored vehicles, 34 Cheetah anti-aircraft guns, six Biber bridge-laying tanks, 15 salvage tanks, 14 self-propelled howitzer 2000s, 54 M113 armored troop carriers with munitions and three Badger tankdozers. According to the official list of “military support” for Ukraine, the German government is preparing additional large numbers of tanks and howitzers for export.
The German tank deliveries are part of a comprehensive escalation of the war by the NATO powers. On Tuesday, Ukrainian Defense Minister Reznikov boasted on Twitter that he had “taken a spin” on the Challenger 2 tank. The tanks, supplied by the United Kingdom, “recently arrived in our country,” he said.
In another tweet, Reznikov thanked German Chancellor Olaf Scholz and Defense Minister Boris Pistorius (both SPD) for the German tank deliveries. “Marder is an excellent example of German quality. I've tried it myself. Look forward to taming Leopards soon. I love the way they roar!”
With the tank deliveries, the imperialist powers are pursuing the goal of strengthening the Ukrainian army so that it can repel Russian troops on the front in eastern Ukraine and possibly even go on a counter-offensive. “I'm sure they [the German tanks] can make a difference at the front,” Pistorius explained.
It is clear that the NATO powers can only achieve their goal if they continue to increase their war effort. This is exactly what is currently being prepared behind the backs of the population. On Wednesday, the Budget Committee released a further €12 billion in military aid to Ukraine.
“Almost four billion will be spent on the replenishment of material that the Bundeswehr (German armed forces) has handed over to Ukraine,” Pistorius announced. “And the other part, about eight billion, will go into further support for Ukraine in the next few years through material, weapons and much more.”
Earlier, the Treasury Department had stressed in a letter to the committee that “due to the high material losses of the Ukrainian armed forces… new material supplies are required.” “We need material in the areas of air defense, armored tracked vehicles, ammunition supply for the weapons systems and artillery supplied by Germany,” the letter added. After all, anyone who supplies weapons is “fundamentally under a follow-up obligation” to keep these weapon systems operational in the future.
In other words, German imperialism is preparing for years of an ever-increasing war against the nuclear-armed power Russia – with potentially catastrophic consequences. At the weekend, the Kremlin announced that it would deploy tactical nuclear weapons in Belarus. But despite the growing danger of nuclear escalation, the German government rejects any negotiated solution. Berlin's goal is to subjugate the resource-rich country and install a pro-Western puppet regime in Moscow.
“We are fighting a war against Russia,” Green Foreign Minister Annalena Baerbock told the Parliamentary Assembly of the Council of Europe at the end of January.
When the International Criminal Court (ICC) in The Hague issued an arrest warrant against the Russian president on March 17, the traffic light coalition immediately announced that it would implement it. “We are obliged to imprison President Putin if he enters German territory and to hand him over to the ICC,” said Federal Minister of Justice Marco Buschmann.
It is becoming increasingly clear that the “new epoch” in foreign policy proclaimed by Scholz and the traffic light coalition is not only directed against Russia. The ruling class is using the Russian invasion of Ukraine provoked by NATO to rearm Germany, militarize all of Europe under the leadership of Berlin and re-establish itself as the leading war power after two lost world wars.
On Tuesday, the fourth German-Dutch government consultations took place, which were all about this policy. The focus was on the integration of the Dutch army into the Bundeswehr.
“In three days, we will complete the full integration of all three Dutch army brigades into Bundeswehr structures,” Scholz announced at a joint press conference with the prime minister of the Netherlands, Mark Rutte. It is about “how the European Union can become an actor that is even more capable of geopolitical action than we can perceive today.”
In order to implement the war policy, Europe will be transformed into a veritable war camp. “Together with our European partners, we are trying to expand the production of ammunition in such a way that we can equip all these weapons [for Ukraine] on a regular basis,” Scholz said. “We strive to ensure that there are repair facilities everywhere, in Poland, Slovakia, Romania, so that the weapons heavily used in the war can actually be repaired quickly.”
The war-mongering media outlets are criticizing the government from the right and demanding an even faster and more comprehensive rearmament – up to the acquisition of an atomic bomb. In a commentary, Der Spiegel accused Scholz and the German government of not making themselves independent of the “protective power of the USA” fast enough and “forming a nuclear power out of the Federal Republic.”
“We are not prepared to endure a debate about a European nuclear umbrella. Or, even worse, about the need for a German bomb, if the French are not willing to share their force de frappe with the partners,” the head of the Der Spiegel office in Washington, René Pfister, raged.
The costs of the militarist madness that threatens the existence of the entire planet in the event of a nuclear escalation would be imposed on the working class from a financial point of view. Already last year, when the Bundestag (German parliament) decided on the special fund for the Bundeswehr of €100 billion, there were massive cuts, especially in the health budget. Now the federal government is discussing tripling the special fund and at the same time massively increasing the regular military budget.
The current military report states: “The 100 billion euros alone will not be enough to compensate for all shortages, for which, according to military experts, a total of 300 billion euros would be required… The level of the defense budget must move steadily and in significant steps towards NATO's 2% target… We need more double-digit billions of dollars to replenish ammunition stocks and build ammunition warehouses. These sums are not included in the special fund, but to be financed from the annual defense budget.”
The dimensions of the planned armament are gigantic and only comparable to the armament of the Wehrmacht in the 1930s. As then, the war program requires historical attacks on the working class, and, ultimately, the establishment of a dictatorship. €300 billion corresponds to almost twice the amount that the federal government currently provides for work and social affairs (€166.2 billion), 12 times the health budget (€24.5 billion), and 15 times the education budget (€21.4 billion).
But the same historical crisis of capitalism that drives the ruling class towards world war and fascism also creates the objective basis for the social revolution. In France, millions took to the streets on Tuesday against President Emmanuel Macron's pension reform. And in Germany, too, there is growing resistance to anti-worker policies, which are being worked out by the government in days of behind-the-scenes coalition meetings and implemented in alliance with all of the parliamentary parties and the trade union bureaucracy.
