Standard and Poor’s downgrades Russia’s credit rating to junk

Clara Weiss

Credit rating agency Standard and Poor’s downgraded Russia’s sovereign debt rating to BB+, or junk status, on Monday. Russia’s debt has not been ranked below investment grade in over a decade.
The downgrade is part of a campaign by the United States, Germany, and their allies to step up economic pressure on Russia in order to force geopolitical concessions from the Putin regime or bring about its collapse. Due to western sanctions, and the fall in the oil price to below $50 per barrel, the Russian economy has moved deeper into recession over recent weeks.
Standard and Poor’s justified its decision by pointing to falling oil prices and the drop in the value of the ruble. In a desperate attempt to strengthen the ruble, the Russian central bank increased interest rates to 17 percent in December. Analysts now expect the Russian economy to contract this year by as much as five percent.
The S&P decision further weakened the ruble. The exchange rate with the dollar rose shortly afterwards from 66.5 to 69.2 rubles. The euro rose from 74.9 to 77.9 rubles. The decline in the rating will produce a further drop in foreign investment in Russia. The ruble already fell by 17.5 percent against the dollar in the first two weeks of the year. The main reason for this was the fall of the price of oil below $50 per barrel. Oil is the most important export for Russia and makes up a large proportion of state income.
According to finance minister Anton Siluanov, the lower oil price will mean that approximately 20 percent of anticipated state finances for this year, i.e. $45 billion, will not materialize, because the state budget had been calculated with an oil price of $100 per barrel.
In response to the economic collapse, the Russian government presented an emergency program on Tuesday that contains spending cuts, above all in social spending.
Leading Russian politicians, including finance minister Siluanov, are now warning of a much deeper crisis than 2008-09. At that time, Russian industrial production fell by 19 percent and GDP fell by 7.5 percent.
Capital outflow reached a new record of $151 billion last year, much higher than during the 2008-09 financial crisis. In comparison to the previous year, the outflow of capital was two-and-a-half times higher. Much of this was withdrawn by oligarchs who wanted to store their wealth safely abroad in the face of the sanctions.
German Gref, head of Russia’s largest bank, Sperbank, warned of a huge crisis in the banking sector. According to calculations from Interfax, around 15 percent of Russian banks will go bankrupt during this year and the next. Such a rate of bankruptcy has not been seen since the 1990s, when the Russian economy sank into chaos after the restoration of capitalism and was ravaged by a financial crisis.
Less than six months after the commencing of the trade war with Russia by the United States and European Union, the sanctions and the collapse of the ruble has resulted in a significant deterioration in the living standards of broad sections of the population.
According to figures from the newspaper gazeta.ru, prices for the most commonly used foodstuffs rose sharply: cabbage by 25 percent, potatoes and sugar by 10 percent, carrots by 13 percent and onions by 14 percent. Bread rose by two percent. According to government statistics, the price for milk products will rise by a further 10-15 percent in the first quarter.
The extent of the deepening of social tensions due to the economic crisis is shown by the example of the industrial region Sverdlovsk in the Urals. The prices of foodstuffs there have risen by 25 percent compared to the prices in January 2014.
Parliamentary deputy Ilya Gaffner from the governing United Russia party cynically told regional television this month that the price rises were really “not that bad.” “We are all Russians and have survived cold and hunger. If there is allegedly not enough money, the people should think about their health and eat a bit less.”
He went on to say, “New Year eating is over, and people have filled their stomachs. Now it is time to think about sporting activities.” A woman in a grocery store subsequently declared, “I have a disabled son and he always asks for sugar. I can’t give it to him, because there is simply no money.”
Gaffner’s arrogant remarks have produced a storm of criticism on the internet. Almost a million people watched the YouTube video containing his statements. In response to his advice to eat less, one commenter retorted that less should be stolen. Gaffner, who is himself responsible for local agricultural policy and owns at least three apartments, is alleged to be jointly responsible for the bankruptcy of several companies and agricultural sites.
With his arrogance and insolence, Gaffner speaks on behalf of a criminal oligarchy that is demanding that the working class, which has been ruthlessly exploited since the dissolution of the Soviet Union, “make sacrifices.”
Finance minister Siluanov, himself one of Russia’s richest men, also declared that in the face of the crisis “Russians” would just have to “eat less, use less electricity.”
The economic crisis and the massive impoverishment of the Russian population are the results of the policies of the western imperialist powers aimed at forcing the Kremlin to make concessions over Ukraine, push forward with social attacks on the Russian working class and, if necessary, bring about the collapse of the Putin regime.
The United States and the EU have raised the possibility of strengthening the sanctions. Responding to the escalation of violence in the Ukrainian civil war, US President Obama threatened to cut Russia off from the SWIFT agreement. The entire Russian market would thereby be isolated from the world financial system. The SWIFT (Society of Worldwide Interbank Financial Telecommunications) system includes over 10,500 banks in more than 200 countries.
Iran was the last country to be removed from SWIFT in 2012, which significantly reduced foreign trade with the country. The head of Russia’s second largest bank VTB, Andrei Kostin, stated that the removal of Russia from SWIFT would signify the ending of all ties between Russia and the United States.
EU ministers were in discussions this week whether further sanctions should be imposed and if Russia should be removed from SWIFT. Removing Russia from the SWIFT system, which is controlled by the United States, has been discussed for months as a potential last resort to bring the Putin regime into line.
However, the bourgeoisie in the EU and the US are divided over their policy towards Russia. France and Italy, and important sections of the German bourgeoisie, have warned against a further escalation of sanctions. One consideration is that Putin, who is desperately seeking a deal with Washington and Berlin, could continue to be of use to imperialism.
As the political scientist Dr. Klaus Segbers from Berlin’s Free University, who advises the government, stated at the start of December in front of a student audience, “We know exactly how we can force concessions from this regime.” It was necessary merely to cancel SWIFT, resulting in the cutting off of the entire population from financing so as to produce a regime change. “The problem is, we don’t know what will emerge after that.”

J&K: Nailing the Lies

Shujaat Bukhari

 

When 46-year-old Liaqat Shah of frontier district Kupwara in Jammu and Kashmir was arrested on March 23, 2013 at the Indo-Nepal border as a “suspected” Hizbul Mujahideen (HM) terrorist, it created a furor in Kashmir. From a commoner to the then Chief Minister Omar Abdullah, the arrest was seen as a concocted story since Liaqat was returning home from the other side of Kashmir along with his family under the rehabilitation policy. The policy, announced by the government, is for the youth who had crossed over to Pakistani side of Kashmir in early 1990s who now want to return home and live a dignified life.

Amidst resistance from the Jammu and Kashmir Police that was in loop in case of his return and pressure mounted by Omar Abdullah, the case was handed over to National Investing Agency (NIA) since people’s faith in Delhi Police has shattered over a period of time. Though Liaqat was granted bail, the investigations were taken up by NIA that finally exonerated Liaqat and recommended punishment for the policemen who had framed him as HM militant who was sent to guide a fidayeen attack in Delhi.

The NIA probe has surely raised the hope for those who have been jailed and condemned, unheard by Delhi Police’s special cell in past over two decades. It has helped to restore faith and credibility in the institution of justice. But Liaqat’s case was a unique case in which the state government took extraordinary interest in seeing that the probe is done by an elite agency such as NIA. It was perhaps about the credibility of the state itself that had unveiled the much ambitious policy for rehabilitation of youth under which more that 300 people crossed back to Kashmir through the Indo-Nepal route that is not designated as per the policy. It was an unwritten agreement between the state and Central government and facilitated duly by the government in Pakistan, that would have come under flak from extremists for draining out the strength for a “cause that needed to be seen as indigenous”. But restlessness among these youth who had been away from their families for long time was increasing and it was difficult for any government to stop them.

However, in the backdrop of Liaqat’s acquittal, the larger issue that merits a debate is how scores of innocent Kashmiris have fallen prey to machinations of certain agencies particularly Delhi Police, which has been framing the young people in false and fabricated cases. When a Kashmiri is arrested or booked in such a case outside the state, it becomes extremely difficult for him and his family to get a defence.

In a hostile environment that works under the smokescreen of so-called national interest it defeats the very logic of civil liberties. Even the lawyers are not prepared to take up the cases fearing reprisals from the agencies that are responsible for these false and concocted cases which finally fail the test of the law. We have seen in the past how a respected journalist Iftikhar Gilani was framed despite being known to the media corps of Delhi as a genuine scribe.

There are ample evidences that suggest how lives of many Kashmiri youth were ruined by the cops who went scot free. To cite a few examples : Only in October 2014, Delhi High Court acquitted Farooq Ahmad an engineer from South Kashmir after 18 years. He had been falsely implicated in Lajpat Nagar blasts of 1996.  Mushtaq Ahmad Kaloo of New Colony, Sopore, accused of conspiring to bomb New Delhi Railway Station in 2006 was acquitted of all charges by Delhi High Court in May 2013. In November 2012, Delhi High Court acquitted Mohmmad Ali Bhat and Mirza Nasir Hussain of Srinagar of all charges leveled against them in Lajpat Nagar blast case of 1996. In April 2014, a Lucknow court acquitted Gulzar Ahmad Wani of North Kashmir along with two others in a bomb blast case of 2000.

In a detailed investigative report in 2012, titled “Framed, Damned and Acquitted”, Jamia (Milia Islamia) Teachers’ Solidarity Association nailed the “lies” in 16 high profile cases and concluded that all those arrested were framed by various security agencies. Most of those framed were Kashmiris. Calling it as “proverbial tip of iceberg” the JTSA maintained that its investigation was purely based on court judgments. “We document here 16 cases in which those accused of being operatives of various terrorist organizations (Al Badr, HUJI, Lashkar-e-Toiba), arrested in main by the Special Cell of Delhi Police, were acquitted by the courts, not simply for want of evidence, but because the evidence was tampered with, and the police story was found to be unreliable and incredulous” reads the preface of 171-page report. In its demand note JTSA had asked the government to take corrective steps to arrest this growing trend.

Among other things it sought public apology from the government and the investigating agency to those who had suffered wrongful arrests, prosecution and incarceration and scrapping/disbanding of the Special Cell of Delhi Police.

Cases like that of Liaqat is an eye-opener in respect of both sides of the story. While it unravels the impunity with which the innocent youth have been framed in fabricated cases and in the manner the mechanism going without any notice so far, it also generates hope that even the sections of the system could work in bringing the justice. It is pertinent to mention that in the case of fake encounter at Pathribal in March 2000, when five Kashmiri youth were branded as foreign terrorists and burnt to death by Army in the aftermath of killing of 35 Sikhs in Chattisinghpora, the Central Bureau of Investigation (CBI) had charged five Army officers with murder. It is a different issue that they got relief from Supreme Court when the CBI’s plea for trying them in civil court was rejected.

Even as it is difficult for these acquitted young men to compensate for the lost glory of their lives, but NIA’s investigation has a potential to set a benchmark for justice in such cases. The circle can only be complete when the fabricators are punished under the law, which they tried to misuse apparently to get rewards and punishments. According to Liaqat’s statement at least 1500 families were discouraged to return after his case. This is how the systems fail when accountability is given a damn by those who think they are above law and have protection in the “national interest”.

Diesel spill in West Virginia leaves 12,000 without water

Clement Daly

About 12,000 people in southeastern West Virginia were left without drinking water after a diesel spill over the weekend. Trucks have been dispatched to provide bulk water to residents of an affected area spanning over 20 miles, from the communities of Renick to Ronceverte, including Frankford, Fairlea, and the City of Lewisburg.
A tanker truck hauling about 7,500 gallons of diesel fuel overturned late Friday night on Route 92, north of Lewisburg in Greenbrier County, West Virginia. Nearly 4,000 gallons of fuel were dumped into the soil and Anthony Creek, a tributary of the Greenbrier River, which serves as a water source for Lewisburg and surrounding areas.
Officials from the U.S. Environmental Protection Agency, the National Guard, the West Virginia Bureau of Public Health and other state and local agencies were at the scene of the accident. Cleanup operations, however, have been slowed due to inclement weather and poor road conditions.
Lewisburg officials closed the city’s water intake early Saturday morning, prior to the spill’s arrival, to prevent the contamination of the distribution system. Customers of the Lewisburg Municipal Water System were warned that the system was operating on reserves and asked to restrict water usage to critical functions. The systems and its reserves ran dry around 3 pm on Sunday.
Schools, restaurants, hotels, and other businesses were ordered closed by the health department unless they provided alternate water plans. The Greenbrier Valley Medical Center cancelled elective surgeries and procedures and has enacted water conservation measures.
The water department turned on the water intakes late Monday after the health department certified tests showing diesel at non-detectable levels. However, the distribution system, with its 135 miles of water mains, has been run dry and it is expected to take up to three days before it is re-pressurized. Residents are under a boil-water advisory for three days after water is restored.
So far no fish kills have been reported, but officials worry about the environmental impact of the spill. Anthony Creek is a popular stream for trout fishing and flows through the Monongahela National Forest before entering the Greenbrier.
Chemical spills and leaks are endemic throughout the US, threatening the health and safety of the population and the quality of the environment. Last week, 40,000 gallons of crude oil were released into the Yellowstone River in Montana from a leaking pipeline forcing some 6,000 residents to rely on bottled water for five days.
In West Virginia, thousands of chemical leaks into the state’s water are reported every year, according to the West Virginia Department of Environmental Protection (DEP). However, as the Charleston Gazette has noted, “DEP inspectors check into each report the agency gets, but the DEP doesn’t keep track of inspector findings in a way that would let anyone know how big each reported spill turned out to be—or what caused it, or whether there was any enforcement action taken, or if precautions were implemented to prevent a recurrence.”
Friday’s accident is the second fuel leak into the Greenbrier in the past year. Last July, a tanker truck carrying 7,800 gallons of diesel overturned and caught fire on a bridge in Bartow, dumping fuel directly into the river.
Just over a year ago, a chemical leak on the Elk River in the state’s capital, Charleston, poisoned the water supply for 300,000 residents after it reached the regional treatment and distribution plant intake. A state of emergency was declared in nine counties, and a ban of tap water usage remained in effect for more than a week in some areas. Hundreds of residents were treated for nausea, skin burns and eye irritation from contact with the spilled coal-cleaning agent MCHM.
Last month federal prosecutors charged the now-bankrupt Freedom Industries, the company responsible for the 2014 leak, and several of its leading executives, with violations of the Clean Water Act.
“Freedom and its officers and agents, including responsible corporate officers, failed to exercise reasonable care in its duty to operate the Etowah Facility in a safe and environmentally-sound manner, in that it failed to comply with applicable law, regulations, and guidelines; failed to follow its own internal operating procedures; and failed to conform to common industry standards for safety and environmental compliance,” the indictment claimed.
Rarely, if ever, are chemical spills and leaks simply accidents. They take place within a definite social context and are the product of neglected and often inadequate infrastructure coupled with reckless operation in the pursuit of profit.

WikiLeaks considers legal action over Google’s compliance with US search orders

Evan Blake

On Monday, lawyers for WikiLeaks announced at a press conference that they may pursue legal action against Google and the US government following revelations that the Internet company complied with Justice Department demands that it hand over communications and documents of WikiLeaks journalists.
More than two and a half years after complying with the surveillance orders, Google sent notifications to three victims of these unconstitutional searches—WikiLeaks investigations editor Sarah Harrison, organization spokesman Kristinn Hrafnsson and senior editor Joseph Farrell. The company informed WikiLeaks that that it had complied fully with “search and seizure” orders to turn over digital data, including all sent, received, draft and deleted emails, IP addresses, photographs, calendars and other personal information.
The government investigation ostensibly relates to claims of espionage, conspiracy to commit espionage, the theft or conversion of property belonging to the United States government, violation of the Computer Fraud and Abuse Act, and conspiracy, which combine to carry up to 45 years in prison. The ongoing investigation into WikiLeaks was first launched in 2010 by the Obama administration, which has so far led to the 35-year sentence for Chelsea (Bradley) Manning.
At the press conference, Hrafnsson stated, “I believe this is an attack on me as a journalist. I think this is an attack on journalism. I think this is a very serious issue that should concern all of you in here, and everybody who is working on, especially, sensitive security stories, as we have been doing as a media organization.”
Baltasar Garzon, the Legal Director for Julian Assange’s legal team, told reporters at the event, “We believe the way the documents were taken is illegal.”
On Sunday, prior to the press conference, Michael Ratner, the lead lawyer of the counsel for WikiLeaks and president emeritus at the Center for Constitutional Rights, penned a letter to Eric Schmidt, the executive chairman of Google, stating, “We are astonished and disturbed that Google waited over two and a half years to notify its subscribers that a search warrant was issued for their records.”
Google claims that they withheld this information from the three journalists due to a court-imposed gag order. A Google spokesperson told the Guardian, “Our policy is to tell people about government requests for their data, except in limited cases, like when we are gagged by a court order, which sadly happens quite frequently.”
In his letter, Ratner reminds Schmidt of a conversation he had with Julian Assange on April 19, 2011, in which Schmidt allegedly agreed to recommend that Google’s general counsel contest such a gag order were it to arise.
The letter requests that Google provide the counsel for WikiLeaks with “a list of all materials Google disclosed or provided to law enforcement in response to these search warrants,” as well as all other information relevant to the case, whether or not Google challenged the case prior to relinquishing their clients’ data, and whether Google attempted to remove the gag order at any point since they received their orders on March 22, 2012.
At the Monday press conference, Harrison noted that the government was not “going after specific things they thought could help them. What they were actually doing was blanketly going after a journalist’s personal and private email account, in the hopes that this fishing expedition would get them something to use to attack the organization and our editor-in-chief Julian Assange.”
The case, Harrison said, pointed to the “breakdown of legal processes within the US government, when it comes to dealing with WikiLeaks.”
Harrison assisted Edward Snowden for four months, shortly after his initial revelations on NSA spying in 2013, helping him leave Hong Kong. She is one of Assange’s closest collaborators, highlighting the inherent value of her personal email correspondence. Through her and her colleagues’ email accounts and other personal information, the Justice Department is seeking to manufacture a case against Assange.
Assange currently faces trumped up accusations of sexual assault in Sweden, along with the threat of extradition to the US. He has been forced to take refuge in the Ecuadorian embassy in London for over two and a half years, under round-the-clock guard by British police ready to arrest him if he steps out of the embassy.
In various media accounts, Google has postured as a crusader for democratic rights. A Google attorney, Albert Gidari, told the Washington Post that ever since a parallel 2010 order for the data of WikiLeaks’ volunteer and security researcher Jacob Appelbaum, “Google litigated up and down through the courts trying to get the orders modified so that notice could be given.”
In reality, the company serves as an integral component of, and is heavily invested in, the military-intelligence apparatus. In their 2014 “transparency report,” Google admitted to complying with 66 percent of the 32,000 data requests they received from governments worldwide during the first six months of 2014 alone, including 84 percent of those submitted by the US government, by far the largest requester.
In his book When Google Met WikiLeaks, published in September 2014, Assange detailed the company’s ties to Washington and its wide-ranging influence on geopolitics.
In a statement published by WikiLeaks, the organization noted that “The US government is claiming universal jurisdiction to apply the Espionage Act, general Conspiracy statute and the Computer Fraud and Abuse Act to journalists and publishers—a horrifying precedent for press freedoms around the world. Once an offence is alleged in relation to a journalist or their source, the whole media organisation, by the nature of its work flow, can be targeted as alleged ‘conspiracy.’”

Will the Genie Want to Go Back?

 D Suba Chandran

Ever since the horrible attack on school children in Peshawar, there have been a series of measures within Pakistan in responding to militancy. A National Plan has been prepared; military courts have been constitutionally set up to deal with the militants; groups have been banned, and recently the government has also decided to freeze the funds of the Jamaat-ud-Dawa (JuD). There is a general perception within Pakistan, that today, the nation does not differentiate between the “good” and “bad” Taliban, leading to a new paradigm involving the State, society and militants.

What is this new paradigm? While many at the civil society level are keen to put the militant genie back into the bottle, does everyone within the Establishment share the same enthusiasm? Is there a section within the political and military Establishments that sees militants in terms of good and bad?

Two more important questions on this issue relate to the capacity of the State to deal with the militants and the willingness of the jihadi groups to be rolled back. Can the State really put the genie back into the bottle? Is the genie willing to get back?

The new paradigm that the civil society is talking about in Pakistan today relates to their own resolve to fight the militants, and that of the State to combat and neutralize them. Three issues are important while discussing this new paradigm in Pakistan. Is the civil society in Pakistan against the violence perpetrated by the militant groups, or against them and their ideology in principle? Is the State’s effort aimed at completely neutralizing the jihadi groups and their ideology, or only focused on bringing them under their own control, as it existed pre-9/11? Finally, is the State capable of creating an environment - social and economic - that would be competitive and not provide any substantial space for the jihadi groups and their ideologies to influence civil society?

Is the civil society only against violence, or against the jihadis and their ideologies?
This is an important question that will have a crucial impact on the future of not only Pakistan, but also the entire region. Pressure from civil society has been one of the most crucial components in the State’s proactive response against the militant groups. How far will the civil society go in pushing the case? Will it call for the complete annihilation of these groups, their infrastructure and their ideologies? Or, will it fall short?

The Peshawar attack undoubtedly has been an important event. The society has been shaken and is angry. Rightly so. But will the same sense of anger prevail against all forms of violence perpetrated by a small fraction in the name of religion? What has been the response of the civil society to the assassination of Salman Taseer, attacks on Imambaras, Shias, Ahmadiyas, etc? Unfortunately, the same sense of anger or condemnations does not exist. And even if it exists, it does not have the same intensity that has forced the government to take proactive measures after the Peshawar attack.

In fact, the attack on school children in Peshawar in December 2014 would not have happened if such resolve existed during the last two decades, when the militant groups were on a rampage against the minority communities in Pakistan. Their ideology would not have found support had the civil society rejected the case against Ahmadiyas and the blasphemy legislations that became a tool in the hands of a select few against the minority communities.

The civil society will find it difficult to succeed in Pakistan if its fight is narrowly focused. Those who are using suicide bombs against the Sufi shrines and school children did not start abruptly. They started decades ago, supported by a section within the civil society, social organisations, political groups and parties, and finally the intelligence and military. The media, even today, perhaps unintentionally (with a section perhaps otherwise) provide the much-needed space for those who support and believe in radical ideologies.

The civil society will also not be able to succeed if it is buoyed by so much anti-West, anti-Indian and multiple other “anti” sentiments. The jihadi groups and their patrons abuse this inherent sentiment to suit their purpose. While some of these sentiments are fed by different groups within the State and vested interests to perpetuate their monopoly, the rest of them have been blown out of proportion by regular ill-informed debates at various levels. Not only in Pakistan, but in the entire South Asian region, there have been such ill-informed debates, at times carefully planted and nurtured by a select few. This vitiates the entire atmosphere and provides the space for hate and anger.

The shift in paradigm will come only when the civil society distances itself from the militant groups and their ideologies. Simply condemning violence alone will not be sufficient. A crucial first step has been taken; now the civil society has to walk the talk in Pakistan.

Is the Establishment aiming at neutralizing the jihadis and their ideology, or does it simply want to bring them under its control?
The State has taken certain crucial measures during the last two months in Pakistan, the most important being the creation of military courts to deal with terrorists, banning certain militant groups and freezing the accounts of some others.

While the State seems to be serious in neutralizing those who have been attacking it, one is not sure whether the intensity and response is the same when it comes to the Afghan Taliban, Haqqani Network and the Lashkar-e-Toiba. Though statements have been made that the distinction between good and bad Taliban now ceases to exist, actions during the last two months have created more confusion than clarity.

The State looks serious in fighting the TTP. The renewed measure as a part of its military offensive in the tribal regions and the neutralization of scores of Taliban militants belonging to the TTP clearly indicates the above.

But why is the State lukewarm in extending the same approach towards the Haqqani network and the Jamaat-ud-Dawa (JuD)? While the TTP is being hounded in the FATA, the State has only frozen the JuD’s bank accounts; Hafiz Saeed is still being provided with State security. From analysts writing for the media in Pakistan to its Supreme Court, many are confused about the State’s approach towards the JuD and Haqqani network.

So, what is the new paradigm as far as the State is concerned in fighting militancy? Is it only fighting those who have turned against it and gone rogue?

Such an approach will backfire. The Establishment seems to be fighting only the symptoms of anti-State activities, and not the reasons that have provided the space for the jihadi groups to find root in Pakistan in the first place. The real problem in this context is the long term perception of India and Afghanistan by the Establishment and the use of proxies. Unless the Establishment changes this basic perception, the larger paradigm that provides a crucial space for jihadi groups is unlikely to change.

Besides the willingness, a larger question is related to the capacity of the State in Pakistan if it decides to fight back. Unlike other States, for example Afghanistan, the capacity of the State in Pakistan has not been questioned. At least, until now. If it leaves the genie to further strengthen and gather a critical mass both inside and outside Pakistan, the question of capacity may also come into to the equation.

Militant Groups in Pakistan: Is the Genie willing to go back?
Perhaps, this is the most important question when people talk about a paradigm shift in Pakistan vis-à-visthe militant groups. True, there may have been external reasons for their emergence a few decades ago. The State may have played a role in creating and nurturing them earlier, to be its proxies to fight the former’s battle both within and outside Pakistan.
Now, there is a realization amongst a section that the above strategy has started backfiring, and there is a roll back. Will the proxies remain committed to their patrons in the changed atmosphere? Or during the process have they developed their own objectives and are fighting their own battles? Certainly the Taliban has turned back and is not willing to go down. How about the JuD and Haqqani network?

The larger problem for Pakistan will not emanate from the Master’s changed heart to put the Genie back in bottle. Rather, it will come from whether the Genie wants to go back. The situation will become worse for the rest of the region if the Genie finds the bottle small, and wants a bigger space!

US stock sell-off in response to Fed policy statement on interest rates

Barry Grey

All three major US stock indexes fell sharply Wednesday in response to the policy statement issued mid-afternoon by the Federal Reserve’s interest rate-setting Federal Open Market Committee (FOMC).
The markets had recorded modest gains prior to the release of the FOMC statement, but declined steeply after it became clear that the central bank had failed to signal a possible delay in its plans to begin raising its benchmark federal funds rate as early as June.
The Dow Jones Industrial Average dropped by 195 points, or 1.13 percent, ending the day below 17,200. The Standard & Poor’s 500 Index fell 27 points, or 1.35 percent, and the Nasdaq declined by 43 points, or 0.93 percent.
These declines followed a broad sell-off the day before, sparked by poor earnings reports and negative forecasts from a number of major companies across many economic sectors, as well as a dismal report on durable goods orders in December. Over the two days, the Dow lost 486 points.
With the soaring US dollar, slumping global demand and plummeting oil prices beginning to seriously impact the sales and profits of major US firms, the Fed has come under increasing pressure from Wall Street to delay any rate hike until the final months of this year or some time in 2016.
So far this week, Microsoft, Caterpillar, Procter & Gamble, DuPont, United Technologies, Pfizer and a number of other large firms have reported major declines in fourth-quarter earnings and/or sharply reduced forecasts for 2015, attributing the negative results at least in part to the impact of the steady rise in the US currency on their exports and overseas operations.
On Tuesday, Microsoft’s stock fell 9 percent, wiping out nearly $35 billion in the company’s market value. Caterpillar stock declined 7 percent.
“The rising dollar will not be good for US manufacturing or the US economy,” Doug Oberhelman, chief executive of Caterpillar, told analysts on Tuesday.
The consumer goods giant Procter & Gamble said it had been hit by the “most significant fiscal year currency impact” in its 178-year history.
The Fed’s plan, announced over a year ago, to begin raising rates from the near-zero level that has prevailed since shortly after the September 2008 financial crash, has been complicated by deflationary tendencies in Japan, Europe and the US itself, and a general slowdown in the world economy. The response of central banks and governments has been to devalue their currencies in an attempt to export the slump to the US.
Last week, the European Central Bank launched a “quantitative easing” plan to purchase 1.1 trillion euros worth of bonds by 2016, diluting the value of the euro against the dollar and other major currencies. On Tuesday, Singapore became the ninth country this month to take action to push down the value of its currency. The others, besides the euro zone, include Denmark, Turkey, India and Canada.
Since June 30, the US dollar has risen 17.7 percent against a basket of international currencies. It has increased by 9 percent over the last three months alone.
Plummeting oil and other commodity prices (oil is down by 57 percent since June), a symptom of stagnating and even negative growth from China and Japan to Europe and much of Latin America, have contributed to extremely low inflation in the US. This is despite headline figures on employment and the gross domestic product that point to relatively solid growth in the US economy.
An index of prices Americans pay for goods and services rose just 0.8 percent during the 12 months ending in December. This is the slowest pace during a period of economic growth in half a century. And on Tuesday, the Commerce Department reported that US durable goods orders fell by 3.4 percent in December, the fourth consecutive monthly decline. The department also reported that US firms broadly cut capital spending in the final three months of 2014.
Under these conditions, the Fed’s announced intention to begin raising rates as early as June, while central banks in the rest of the world are lowering rates or printing huge amounts of currency, tends to push the dollar even higher and heighten deflationary tendencies within the US. Already a number of American firms whose exports are being impacted by the rising dollar are preparing to cut costs and shed jobs. On Wednesday, reports emerged that IBM was preparing a massive layoff.
The Fed pioneered the policies of near-zero interest rates and “quantitative easing” to pump virtually free cash into the banking system and rescue the financial elite. Now, it is trying to wean the US banks and hedge funds off of the narcotic of endless central bank subsidies and restore a more normal interest rate regimen. But it is confronting increasing resistance from Wall Street and major US corporations.
In its statement Wednesday, the Fed hailed the “solid pace” of US economic growth and what it called “strong job gains and a lower unemployment rate.” It did not mention that most of the new jobs are low-paying and many are part-time or temporary. Nor did it note that much of the fall in the official jobless rate is the result of the exit of millions of long-term unemployed workers from the labor market.
The FOMC made clear that the Fed would not raise interest rates at either of its two meetings prior to June—one in March and one in April. It reiterated previous assurances that its timetable for raising rates would depend on economic conditions, that it was not wedded to a definite date, and that it would increase rates only gradually and keep them abnormally low for “some time.”
However, it called the low inflation rate and falling oil prices “transitory” phenomena and said inflation in the US would begin to climb in the mid-term toward the Fed’s target rate of 2.0 percent. Wall Street investors and speculators had been hoping for language suggesting that the deflationary trends might cause the bank to hold off on raising US rates.
At last week’s World Economic Forum in Davos, Switzerland, the divisions within the American and international bourgeoisie over Fed policy emerged in the open. Former US treasury secretary and Obama administration economic adviser Lawrence Summers warned that an early initiation of monetary tightening by the Fed could trigger a full-scale recession, if not depression, in the US and beyond.
“Deflation and secular stagnation [i.e., indefinite recession] are the threats of our time,” Summers, one of the architects of bank deregulation in the US, told a Bloomberg forum.
William White, former chief economist at the Bank for International Settlements, gave vent to his fears over the state of the world economy in an interview with the Daily Telegraph on the eve of the Davos gathering. “We are in a world that is dangerously unanchored,” he said. “We’re seeing true currency wars and everybody is doing it, and I have no idea where this is going to end.”
This week’s developments show that Fed policy is becoming increasingly entangled in the international net of intractable crisis and economic nationalism fueled by its own parasitic efforts to bail out the American ruling class.

Israel threatens war following clashes with Hezbollah

Thomas Gaist

Israeli Prime Minister Benjamin Netanyahu threatened war in Lebanon and Syria on Wednesday, saying that Israel is prepared to act “on all fronts” following an attack that killed two Israeli Defense Forces (IDF) soldiers near Israel’s northern border.
Seven more were wounded in the attack, when anti-tank missiles struck an IDF military vehicle traveling near Har Dov. One Spanish soldier, attached to a UN peacekeeping force and deployed with the IDF troops, was also killed.
The incidents are only the latest in two days of intermittent fighting between the IDF and Hezbollah militants in the Golan Heights, which have seen the contending forces launch missile and artillery attacks across the Lebanese-Israeli border. The clashes are the most significant in the Golan Heights area since the 2006 Israeli-Lebanese war.
The 2006 war was preceded by similar cross-border flareups, which were then seized upon to implement pre-existing war plans. The invasion and air campaign killed at least 1,000 Lebanese, mostly civilians. In close coordination with US government and military, Israeli forces deliberately targeted working class residential areas and essential public infrastructure for destruction.
“To all those who try to challenge us on the north, I suggest you look at what happened in the Gaza Strip,” Netanyahu said on Wednesday, referring to the 2014 IDF onslaught that killed more than 2,000 civilians in the course of two months of bombing and ground assaults targeting densely populated areas.
“We will know how to respond with force to whoever challenges us,” Netanyahu added.
Israel has already launched retaliatory air and ground missions against targets in southern Lebanon, according to IDF officials. IDF and Hezbollah forces continued to exchange rocket fire through Wednesday afternoon, according to Lebanese media, with some 10 Israeli shells slamming into targets near and just south of the town of Shebaa.
The Israeli prime minister threatened Iran as well, saying, “Iran—via Hezbollah—has been trying to establish an additional terrorist front against us from the Golan Heights.”
Israel must “respond very harshly and disproportionately to rocket fire on our sovereign territory,” said Avigdor Lieberman, Israel’s current foreign policy chief and the leading political rival of Netanyahu in upcoming elections.
In official statements Wednesday, US State Department spokespersons backed Israel, giving the standard lies about Israeli “self-defense.”
“The United States strongly condemns Hezbollah’s attack today on Israeli Defense Forces (IDF) near the border between Lebanon and Israel,” said State Department spokesman Edgar Vasquez.
“We support Israel’s legitimate right to self-defense,” State Department spokesman Jen Psaki added.
These statements come amidst indications of tactical divisions between the Obama administration and Israel, as well as divisions within the US ruling class, over policy in the Middle East. Obama has said that he will not meet with Netanyahu when the prime minister visits Washington in March, at the invitation of House Republicans, to seek more backing for new sanctions against Iran.
Whatever these conflicts, they take place amidst a determined campaign by American imperialism to reassert control over the Middle East, which threatens to erupt into a regional civil war, involving Iraq, Syria and Iran.
Tuesday and Wednesday’s clashes may well represent the opening stage of a regional escalation that includes new Israeli military and covert operations in Syria, according to Israeli military experts.
Former IDF general Israel Ziv described the situation as “very flammable,” during an international press conference conducted via conference call Wednesday. “It’s very clear that, very easily from events and retaliation, we will find ourselves in a war,” he said.
According to the Wall Street Journal, Ziv pointedly noted that Israel was close to full scale intervention in the “chaotic situation over there in Syria.”
On January 18, Israeli war planes attacked a convoy of vehicles traveling on the Syrian side of the border, killing several Hezbollah fighters and an Iranian military officer. The Iranian-backed Hezbollah force, apparently targeted for a precision assassination-style strike, was engaged in efforts to drive al-Nusra Front fighters out of the Golan Heights.
The al-Nusra militants are currently participating in the US-organized proxy war against the Syrian government, and enjoy close relations with powerful elements of the Israeli state, according to the Israeli paper Haaretz. In exchange for Israeli military training and weaponry, the al Qaeda-linked al-Nusra Front is providing Israel with intelligence and supporting Israeli efforts to establish a new proxy-army in southern Syria.
At the same time, in the aftermath of the seizure of Yemen’s capital by Houthi Shia militants reportedly aligned with Iran, US and Israeli politicians, military chiefs and commentators have issued increasingly bellicose warnings about growing Iranian power in the Persian Gulf and the Levant, and demanded new US-led military escalations in Iraq, Syria and the Arabian peninsula.
Leading Republican Senator John McCain called on Sunday for fresh US “boots on the ground” in Yemen and a number of countries bordering Syria to meet the threat posed by Iran. McCain’s comments were met with enthusiastic agreement from his Democratic counterpart, Senate Intelligence Committee head Diane Feinstein, who suggested that the Houthi coup in Sana’a was part of plans to establish a new “Iranian crescent” in the region.
In reality, it is the US elite and its junior partners in Israel who are engaged in an aggressive militarist agenda aimed at insuring total domination of the region. This agenda, rooted in the US drive for global dominance, has brought the entire region to the precipice of a generalized conflagration with incalculable consequences.

Syriza hands Greek defence ministry to right-wing nationalist

Robert Stevens

The first meeting of the cabinet named by the Syriza-Independent Greeks (ANEL) coalition government was televised on Wednesday, with Prime Minister and Syriza leader Alexis Tsipras declaring that his government would not come into conflict with the international financial elite.
Syriza would not seek a “mutually destructive clash,” Tsipras said, adding that “our priority is a new renegotiation with our partners, seeking a just, viable and mutually beneficial solution.” He called the coalition a government of “national salvation.”
The most significant appointment was that of Panos Kammenos, the leader of the right-wing nationalist Independent Greeks, who was handed control of the Ministry of Defence. He has built close links to the military in recent years and demanded ANEL be given control over defence during the talks held Monday with Tsipras to form the coalition.
There can be no doubt that in the background the military is considering a possible takeover at some point as the economic crisis deepens and opposition to the new government intensifies in the working class. The implications of a right-wing figure like Kammenos overseeing the military—in a country where, as recently as 1974, a CIA-backed military regime was in power—are ominous.
Syriza is a coalition of pseudo-left forces including Stalinists, Maoists, former PASOK figures and ecological tendencies. One of its leading members is the lifelong Stalinist Giannis Dragasakis, who is to serve as Tsipras’s deputy. Dragasakis is a proponent of public sector “reforms”—that is, job cuts and productivity increases. He recently said, “Even if the debt were zero, we would have problems without the necessary reforms in the state and civil administration.”
While in the Communist Party of Greece (KKE), Dragasakis served as a junior minister for several months in the 1989-1990 “ecumenical” government that the KKE joined alongside the right-wing New Democracy (ND) and the social democratic PASOK party.
The Finance Ministry, charged with overseeing the government’s upcoming negotiations with the European Union (EU) and international banks on repaying Greece’s debts of more than €300 billion, was given to Yanis Varoufakis. Taking over the ministry, Varoufakis echoed Tsipras, declaring: “There won’t be a duel between us and the EU…. There won’t be any threats.”
Varoufakis was recently a professor of economic theory and held a visiting post at the University of Texas. He has authored several versions of “A Modest Proposal for Resolving the Eurozone Crisis,” the first of which was written with former UK Labour Party MP Stuart Holland. The final version, released in July 2013, was published jointly with US economist J.K. Galbraith. In June 2013, Varoufakis and Galbraith wrote an op-ed in the New York Times titled “Only Syriza Can Save Greece.”
They assured the ruling elite internationally that a Syriza government “wouldn’t be a bad thing for Europe or the United States.” Were Syriza to be elected, they wrote, “nothing vital would change for the United States.” They continued: “Syriza doesn’t intend to leave NATO or close American military bases.”
Varoufakis has intimate knowledge of Greek bourgeois politics, having been an economic advisor to PASOK’s former leader George Papandreou for three years to 2006. Papandreou went on to lead the 2009 PASOK government, which imposed the first round of austerity cuts in Greece. PASOK continued this role as part of successive coalition governments before being thrown out of office last week.
Varoufakis is an avowed defender of capitalism and has advocated the reduction of Greece’s corporate tax rate to 15 percent. He told the BBC’s Today programme that Syriza’s aims were for “genuine reforms that we need to implement in this country to put an end to the bureaucracy” and to “create a rational plan for debt restructure.”
Asked if he wanted the banks to write off half of Greece’s debt, as Syriza had previously proposed, he replied, “No, no, no, there is a lot of posturing before every negotiation…there has been a bit of posturing on our side. What really matters is that now we sit down and discuss a way in which the haircut to our debt, the debt write-down is minimised. We don’t want to pay back less than we can.”
Syriza planned to “bind our repayments to our growth,” he added. “We want to make them [Greece’s creditors] partners to our recovery.”
After citing one of the first statements made by Varoufakis in office, that Greeks should live “frugally” in the future, the Financial Times commented, “There would be no explosion in public spending by the new administration, Mr. Varoufakis pledged.”
Tsipras is speaking to two audiences and, in the initial stage of the government, playing a delicate balancing act. Syriza is seeking to assure the EU and global capital of its intention to repay Greece’s debts, while carrying out some immediate measures to placate, and dupe, those who elected it in the expectation that it would carry out progressive social change. Tsipras told his cabinet that ministers “must not disappoint the voters who gave us a mandate.”
Panagiotis Lafazanis, another veteran Stalinist and leader of the party’s “Left Platform,” was handed the Ministry of Productive Reconstruction, Environment and Energy. He announced yesterday that several proposed privatisations would be halted, including the Public Power Corporation and the Independent Power Transmission Operator. The full privatisation of Greece’s biggest and strategically vital port, Piraeus, would be postponed, and 595 public sector cleaners who were fired by the last government under its “mobility scheme” would be rehired.
Most of these measures entail hardly any expense. This was acknowledged by Syriza Deputy Social Security Minister Dimitris Stratoulis, who said: “What we have said during the election campaign will be our guide, starting with measures that do not have a large spending impact.”
However, even these token gestures are too much for the representatives of the financial elite. The head of the euro group of finance ministers, Dutch Finance Minister Jeroen Dijsselbloem, responded to the new government by insisting, “The message ‘we want your support but not your conditions’ won’t fly.”
Greek bank shares suffered their worst one-day loss on record, with the country’s four biggest lenders—Piraeus, the National Bank of Greece, Eurobank and Alpha Bank—plummeting by more than 25 percent.
German Economy Minister Sigmar Gabriel commented that “Citizens of other euro states have a right to see that the deals linked to their acts of solidarity are upheld.”
Syriza knows that this is its responsibility, and it is already preparing for a resurgence of social opposition. This was the real meaning of the first statement of Yiannis Panousis, a former deputy of the Democratic Left, a right-wing split-off from Syriza, who was named an alternate minister in the Ministry of the Interior with a remit for “citizen’s protection.”
In the clearest indication that Syriza will do its utmost to defend the capitalist state, Panousis said, “The police will have weapons at protests, but that doesn’t mean that they will intimidate and terrorise.”
Syriza had previously pledged to abolish riot police units and merge them with the general police force. Panousis’s qualification should be dismissed by workers with contempt, given the brutality that the police have unleashed against protesters over the last five years.
The Greek police force is a well-known bastion of support for right-wing and fascistic parties. Between 40 and 50 percent of police officers reportedly voted for the fascist Golden Dawn party in Sunday’s election, the same percentage as in the 2012 election.

India-Nepal: Disparate Partners in Fuel Diplomacy

 Kalpana Jha

 

At a time when developed countries are expanding fuel diplomacy and exploring alternative options for fuel, Nepal is completely dependent on India for the supply all kinds of fuel such as petrol, diesel, domestic LPG and jet fuel. This issue of energy dependency goes beyond traditional trade and economic relations and has wide-ranging effects on economic growth, peace negotiations, and regional power status.

Therefore, when Indian Prime Minister Narendra Modi agreed to the construction of a new oil pipeline between India and Nepal, it raised new hopes in Nepal for improvement not only in the existing trade relationship but also in the overall bilateral relationship.

However, the plan took a back seat when differences over the tenure of the agreement emerged. What were the factors that laid obstacles to the process for the deal that otherwise appeared to be a win-win solution? How did a simple trade deal rein become a question of Nepal’s independence and sovereignty?

The construction of the oil pipeline has been in discussion for 15 years in the Nepalese sphere. Yet, it was proposed to the Indian government only in 2006, and took momentum only after Modi's Nepal visit when a task-force was formed to decide the operational model of this agreement. A 41-kilometer long pipeline from Raxaul in Bihar, India, to Amlekhjung in Nepal has been planned with the investment of Rs. 200 crore; and an extension of the pipeline to Kathmandu in the second phase. The construction of pipeline will be of great advantage to Nepal. This would not only mean reduction of petroleum products’ costs but also a regulated supply and reduction of adulteration and wastage – an inevitability during transportation via roads.

Problems emerged in this much-awaited venture when the Indian Oil Corporation (IOC) proposed that Nepal should commit to buying petroleum for 15 years from the IOC and the Nepal Oil Corporation insisted on continuing with the provision of the currently existing five-year renewable pact. Since 1974, Nepal has imported fuel from the IOC under a broad five-year supply pact that is renewed on the basis of mutual understanding. The recent update of the pact – effective until 31 March, 2017 – states that the IOC will be the sole exporter of petroleum products to Nepal. Apart from the land-locked geographical status, Nepal’s small market size too is a key factor that determines Kathmandu’s limited or no choice vis-à-vis petroleum trade with any third country except India. The experience of the past four decades is illustrative of this assessment.

In that context, the current proposal that demands that Nepal pledge 15 years of commitment to buy petrol from India alone enunciates the continuity of the long-term monopoly that the IOC has enjoyed in exporting petroleum products to Nepal. Fuel being a political commodity and Nepal being an important part of India's security framework, for New Delhi, this issue isn’t mere about trade. This is also an issue of strengthening India’s influence in Nepal. However, such terms of agreement only has a stifling effect on Nepal's already constricted freedom of choice in energy supply sources. The IOC’s proposed terms not only explains the business environment that exists between the two nations but also reflect the power relations the two nations share. As a result, any pact signed between the two nations automatically translates into an issue of prestige for both sides. For Nepal especially, it is directly related to the sense of autonomy – that it has struggled to retain against its giant neighbours. In such a situation, tying itself with India via one more treaty not only makes Nepal further vulnerable, but any such attempt is perceived as a threat to the country's sovereignty.

India's increased concern is apparent with China’s expanding presence in Nepal. Although China has been supplying fuel to Tibet at nominal rates, the prospects of fuel trade between Nepal and China appear bleak at present. However, China’s rapidly-changing foreign policy is not favourable for India's security interests. Besides, Beijing has taken interest not just in Kathmandu’s constitution-drafting process but also in other areas such as infrastructure, tourism and hydro-power; this has essentially opened up new avenues of interaction between the two nations, including fuel.  Energy is the most important requirement for any country's advancement. Kathmandu therefore views New Delhi’s new terms as just another way for India to assert direct control on energy – by curtailing prospects of exploring alternate energy sources for a substantial period of time.

Given the disparity in market sizes, for India, the energy deal with Nepal is more about asserting influence than about business. Conversely, Nepal, while seeking India’s cooperation to review past treaties and seeking more sovereignty, views the new terms as adding ambiguity to the relationship. This uneasy existence of disparate neighbours manifests serious issues that extend beyond trade, to a dynamic interplay of sentiments of power, prestige and freedom.

Australian Productivity Commission launches wage-cutting review

Mike Head

With Australia’s economic position deteriorating rapidly, the Australian Productivity Commission last week spelled out a central thrust of the program being demanded by the financial elite: systemic wage-cutting to match the levels already imposed on the working class in the US, Europe and elsewhere.
Outlining a Liberal-National government-convened review of the country’s workplace relations system, the commission openly canvasses abolishing penalty wage rates for after-hours work and scrapping the minimum wage. These proposals would impoverish wide layers of workers, who depend on penalty rates to survive, and undercut the wages of all workers, far beyond those on the minimum wage.
This signals an historic assault. Together with the minimum wage, higher rates of pay for working shifts on weekends, public holidays, at night or outside regular hours have existed in Australia for more than a century, as a result of hard-fought battles by the working class.
Prime Minister Tony Abbott, whose government is under intense pressure from big business to slash labour costs, as well as impose outstanding budget cuts to social spending, immediately declared his support for the abolition of penalty rates.
Echoing statements by the Business Council of Australia and the Australian Chamber of Commerce and Industry welcoming the review, Abbott said: “If you don’t want to work on a weekend, fair enough, don’t work on a weekend, but if you do want to work on a weekend and lots of people, particularly young people, particularly students would love to work on the weekend, you want to see the employers open to provide jobs.”
This turns reality on its head, of course. Scrapping penalty rates would force millions of workers, particularly the young, to work at any hour of the day or week on low rates of pay, and this would be compounded by the abolition of the minimum wage. A survey last September found that a growing proportion of young workers were already being compelled to work under such conditions. One in four people aged between 18 and 30 had recently worked “cash-in-hand”—that is, illegally, without penalty rates, holidays or other entitlements. Among all workers, the proportion was 13 percent.
While such conditions have been imposed ad hoc until now, what is now being demanded is the wholesale lowering of wages, including the removal of all legal restrictions, via industrial awards and agreements, on minimal pay rates. Real wages officially fell in Australia last year for the first time in 17 years, as the mining boom began to unravel, but they remain significantly above those in rival countries.
One of the designated benchmarks is the United States, where the Obama administration enforced the halving of wages for new hires in the auto industry. The Productivity Commission contrasted Australia’s poverty-line federal minimum wage of $16.87 an hour for adults with the rate in the US, which stands at roughly half that level. Last year, the Abbott government’s Commission of Audit made exactly the same comparison.
Junior minimum rates are already much lower—down to $6.20 an hour for workers aged below 16 years—but even these levels are now too high as far as the corporate and media establishment is concerned.
One of the Productivity Commission’s suggestions is to ditch the minimum wage in favour of income tax credits. In effect, the government would partly subsidise low wages through the tax system. That would be combined with “targeted” welfare payments, supposedly to prevent lower wages from encouraging jobless workers to try to “stay on welfare.”
In other words, a simultaneous dismantling of welfare entitlements is also being prepared in order to ensure that employers have access to a large pool of desperate unemployed. This is under conditions where more than 777,000 workers are now officially unemployed and the jobless rate is rising.
On penalty rates, the review will “investigate” various policy approaches, including whether the setting of rates should be a “choice for individual enterprises and their employees with less or no role by the regulator.” In plain language, that means scrapping penalty payments and giving employers the ability to dictate low flat-rate wages.
To strengthen the capacity of employers to drive down wages and conditions, the Productivity Commission’s five “discussion papers” also target unfair dismissal laws, which set limited constraints on victimising workers, along with the limited right of workers to take industrial action during brief enterprise bargaining periods. Strikes have already dropped to historical lows, because of the ruthless manner in which the trade unions have enforced the Fair Work industrial laws imposed by the previous Labor government, but an even greater suppression of workers’ resistance is now required by business.
The deepening economic crisis driving this offensive was underscored by last weekend’s Australian Financial Review editorial, which began by declaring that 2015 would be “more difficult than anything we could have imagined … one year ago.” Seven years after the global financial breakdown of 2008, its “shadow” loomed around the world. In Australia, “the prices we earn on huge volumes of mineral exports fell around half last year.” The editorial insisted that “hard economic choices” had to be made, including to eliminate “outdated penalty rates.”
The Australian likewise insisted that the Productivity Commission inquiry “raises the curtain on the next great economic reform debate.” Significantly, it declared that Abbott’s government had “proven timid on workplace reform” compared to the “big changes” made by the Hawke and Keating Labor governments of 1983 to 1996 via their Accords with the trade unions and the introduction of “enterprise-level bargaining.”
Labor Party leader Bill Shorten, a former union leader, and the Australian Council of Trade Unions (ACTU) feigned opposition to the commission’s wage-cutting agenda and accused the Abbott government of preparing “WorkChoices 2.0.” This is a reference to the Howard government’s deeply unpopular WorkChoices individual contract legislation, which became a major factor in the Coalition government’s defeat in the 2007 election.
Labor and the ACTU are seeking to channel the mass discontent to the Liberal-National government behind the return of a Labor government, as they did in 2007. That campaign paved the way for the Rudd and Gillard Labor governments, which only stepped up the assault on jobs and working conditions via the Fair Work laws, with the unions functioning as their industrial police forces.
By 2013, Labor and the unions were already imposing outright wage cuts on workers, including in the auto industry, and that role has since intensified. The Productivity Commission itself drew attention to last April’s stated willingness of a key mining sector union, the Construction Forestry Mining and Energy Union (CFMEU), to accept a new enterprise agreement in Western Australia that reduced its members’ wages by up to 20 percent.
This explicit reference to the CFMEU is a warning that the union leadership will step up its efforts to impose the wage-cutting requirements of the corporate elite, and that this offensive would be once again conducted in the closest partnership with any Labor government that replaced Abbott’s increasingly crisis-ridden Liberal-National government.

Berlin mayor resigns: The end of the era

Emma Bode & Serena Nees

On December 11, 2014, Klaus Wowereit, the Social Democratic (SPD) mayor of Berlin, resigned after 13 years in office. The Wowereit era was marked by sharp social divisions, growing poverty and the further enrichment of the city’s already wealthy upper class. Announcing his resignation, Wowereit declared: “I was mayor at the right time.”
In fact, Wowereit proved invaluable to the German ruling class during a period of worsening international economic and political crisis. He was the architect of a state government that for the first time incorporated the post-Stalinist Party of Democratic Socialism (PDS), which later became the Left Party. From 2001 to 2011 Berlin was ruled by a so called “red-red” (SPD-Left Party) Senate, which enforced tough austerity measures in the face of broad popular resistance. The Senate’s services were openly recognized by the media. One day after the Berlin election in 2011 Zeit online described the red-red coalition just voted out of office as “most likely the only conceivable one that could follow through and sustain such austerity measures.” Any other constellation would have been confronted with “persistent protests by those affected...”
In the middle of 2001 Berlin’s governing grand coalition led by Mayor Eberhard Diepgen (Christian Democratic Union, CDU) broke up following a banking scandal, which had triggered huge popular outrage. The state’s majority-owned Bankgesellschaft Berlin (BBS) group was on the brink of bankruptcy due to speculative financial transactions and dividend guarantees for privileged fund holders. One of the main people behind the scandal was former CDU chairman and CEO of the Berlin Mortgage and Bond Certificate Bank, Klaus-Rüdiger Landowski, a close confidant of Diepgen.
The election of Klaus Wowereit as mayor, after a no-confidence vote against Diepgen and the formation of the red-red state government from October 2001 onwards, coincided with the SPD-Green party government at a federal level under Chancellor Gerhard Schröder (SPD) and Foreign Minister Joschka Fischer (Green Party). The government’s move from Bonn to Berlin had already been in progress for some time following German reunification, and was accompanied by a more assertive German foreign and domestic policy.
For the first time since the end of World War II the German army actively participated in war, first in Yugoslavia and later in Afghanistan. The 9/11 attacks were followed by anti-terror campaigns and the buildup of police and intelligence agencies, while at the same time the anti-welfare Hartz laws led to a drastic intensification of social inequality, with severe consequences for the recently reunified city of Berlin, with already high levels of unemployment, especially in the eastern districts of the city.
The red-red Berlin government supported the policies of the federal SPD-Green Party government and its successor in all respects, proving to be a reliable partner and guaranteeing law and order in the capital.
Although the self-enrichment of the wealthy in Berlin had caused great outrage and contributed to the victory of the SPD and the PDS, the new Senate immediately guaranteed the repayment of the bankrupt BBS group’s debt, allocating large sums from the state budget. Wowereit and his finance minister, Thilo Sarrazin, and Left Party economics minister Harald Wolf recouped the missing public funds from the population, by cutting billions in education, along with job and pay cuts and privatizations.
One of the first measures of the red-red administration was quitting the federal state’s tariff community, which led in turn to massive pay cuts for public service employees. Furthermore, the Senate privatized water companies and sold off state-owned housing concerns to speculators, ended the funding of social housing, and closed numerous libraries, public swimming pools and cultural facilities.
The Hartz laws were implemented promptly and vigorously by the senator for social affairs, Heidi Knaake-Werner (PDS-Left Party). In 2006, Wowereit was appointed chair of the supervisory board of the Berlin-Brandenburg GmbH Airport. After many years of delay, as the budget for the project has multiplied many times over, the airport has still not been completed.
During this time the Left Party, in alliance with the local trade unions, played a special role in gridlocking any resistance. The public service union Verdi and its small army of officials, who are members of either the Left Party or SPD, made sure that strikes by teachers, transport and health employees were regularly sold out. They in turn received political cover from a variety of pseudo-left groups, which promoted the red-red Senate as a left alternative to the grand coalition under Diepgen.
At the same time the red-red Senate increased funding for the police and security services, promoted the construction of a new enormous BND headquarters, and limited the right to demonstrate. By the time of the elections for the House of Representatives in 2011, illusions that the PDS had sought to arouse in 2001, that its coalition government with the SPD represented a “left turn,” were gone. The 22.6 percent of the votes that the PDS won in 2001 decreased to 11.7 percent in 2011. The red-red senate was voted out of office, and the discredited CDU returned to government.
Wowereit’s party and political career was bound up with the decline of the SPD. Since its return to government in 1998 under Gerhard Schröder, the SPD has been at the forefront of an increasingly aggressive foreign policy and brutal attacks on social rights, such as the German army operations in the former Yugoslavia and in Afghanistan, its support for the right-wing coup in the Ukraine, and the Hartz laws and the related Agenda 2010.
In order to distance Wowereit from these right-wing policies the media portrayed him as a charismatic politician from humble beginnings who was popular due to his folksy and often flippant remarks. Wowereit was proud of the description of the capital city which emerged under his regency—“poor but sexy”. His homosexuality was used to provide a certain liberal façade behind which brutal attacks on the social and political rights of the working class were carried out.
Better-off cultural layers, academics, media personalities, start-ups in the creative scene and the alternative economy, and the self-employed formed an important part of Wowereit’s social base. These groups hailed him as he implemented repressive measures against workers, Hartz IV recipients, refugees and minorities.
At the end of the Wowereit era, the number of millionaires is increasing, although many long-established West Berlin companies have withdrawn their headquarters. According to the media the new layer of millionaires are mainly real estate speculators and the wealthy from other states, who have moved their retirement homes to the city of glamor and cultural events.
This is also Wowereit’s heritage, a man who continually sought to promote big spectacles and exhibitions, as well as the restoration of the iconic city palace of the German emperor at the site of the former East German Palace of the Republic.
On the other hand, more and more working families are facing a life in poverty. The unemployment rate remains high at 11 percent, and 17 percent of the population are dependent on miserly Hartz IV welfare benefits. In Berlin almost one in three children is considered poor and every seventh person is at risk of poverty.
According to the figures of the last poverty report, the poverty rate of 21.2 percent is well above the national average of 15.2 percent. The real estate boom is increasing rents dramatically and displacing people from their long time lodgings. Poverty among the elderly and the number of one-euro jobbers and low wage earners is increasing rapidly.
Before Wowereit left office he initiated the next tranche of even more ruthless budget cuts. On December 12, 2014, the day after his resignation, the SPD and CDU adopted a two-year budget for 2014-15, which for the first time makes it illegal for Berlin to take out new loans, thus enforcing the nationally agreed debt ceiling before its constitutional deadline. In recent discussions Wowereit proudly called it a “black zero” budget. The interests Wowereit represents and has always represented were exposed by the report that he is due to become a board member of Berlin’s Association of Berlin Merchants and Industrialists (VBKI). The press release claimed he is due to act “as an ambassador of Berlin’s economy.”
Workers and young people must draw the lessons of the Wowereit era. A red-red coalition is now being discussed as a model on a federal level, and on December 5 Bodo Ramelow became the first elected state premier of the Left Party in Thuringia. Workers can only expect an intensification of attacks on their social and democratic rights from such governments.

Sri Lankan government promises “devolution pact” to woo Tamil elite

Pani Wijesiriwardena

Sri Lankan Prime Minister Ranil Wickremesinghe declared last week that his government would implement the 13th amendment to the country’s constitution. After nearly three decades, the amendment, which provided for the limited devolution of powers to the Tamil elite on a provincial level in the island’s north and east, has never been carried out fully.
Wickremesinghe made the statement on January 19 while explaining the government’s agenda to the first parliamentary sitting following Maithripala Sirisena’s election as president on January 8. Sirisena appointed Wickremesinghe, leader of pro-US United National Party (UNP), as prime minister based on a new ruling coalition, the National Democratic Front, which includes a number of right-wing parties.
Wickremesinghe’s promise to implement the 13th amendment is in the first instance a pitch for the support of the Tamil National Alliance (TNA), the main Tamil bourgeois party. More fundamentally, however, it underscores the shift in foreign policy toward the US and India that was ushered in by Sirisena’s election. India, supported by the US, has repeatedly demanded the amendment’s implementation as part of a “political solution” to the protracted Sri Lankan civil war that ended with the defeat of the separatist Liberation Tigers of Tamil Eelam (LTTE) in 2009.
The presidential election had the character of a regime-change operation backed by both the US and India against former President Mahinda Rajapakse. Sirisena, a key cabinet minister and general secretary of Rajapakse’s Sri Lanka Freedom Party (SLFP), defected to the opposition as soon as the election was announced in a move orchestrated by Wickremesinghe and ex-President Chandrika Kumaratunga. Washington was hostile to Rajapakse’s ties with Beijing in conditions where it is seeking to strategically encircle China as part of the US “pivot to Asia.”
The 13th amendment was introduced in November 1987 under the Indo-Lanka Accord, which provided for Indian “peacekeeping” troops to occupy the island’s north and disarm the LTTE. The amendment, which provided for the devolution of powers to a combined north-eastern provincial council, was aimed at securing the backing of the Tamil elites for the Accord. Eight provincial councils were established across Sri Lanka in 1988 but the north-eastern council was dissolved in 1990 when a UNP government plunged the island back to war.
Sinhala chauvinist parties and organisations have always bitterly opposed the 13th amendment. The Supreme Court ordered the de-merger of the northern and eastern provinces in 2006 on the application of the Janatha Vimukthi Peramuna (JVP). Under pressure from the US and India, the first election for the northern province was held last year, and was won by the TNA. However, Rajapakse’s government continued to effectively rule the province through a military governor, marginalising the TNA-dominated council.
While Wickremesinghe’s promise to implement the amendment will be welcomed by the TNA, as well as India and the US, it will generate sharp tensions within the ruling coalition, which includes the Sinhala supremacist Jathika Hela Urumaya (JHU) and General Sarath Fonseka’s Democratic Party. Fonseka was army chief during the final brutal offensive against the LTTE. The JVP is not part of the ruling coalition but is also supporting the government.
In an effort to placate his Sinhala chauvinist allies, Wickremesinghe declared that the “reform will be introduced preserving the unitary character of the country.” He also indicated that one of the more controversial powers—control of the police—would not be granted to the provinces. He told India’s NDTV television channel there was a “big fear in the country” that provincial “chief ministers may turn the police into their own private army.”
Wickremesinghe’s statement came as his external affairs minister, Mangala Samaraweera, was making his first overseas trip—to India, which welcomed Sirisena’s election. New Delhi is hoping that the new government will enable India to strengthen its position in Colombo at the expense of Beijing, which India has long regarded as a regional rival.
The Modi government is also hoping that the implementation of the amendment will deflect opposition among working people in the southern Indian state of Tamil Nadu to the treatment of Sri Lankan Tamils. The protracted civil war in Sri Lanka and continuing repression and discrimination against Tamils has generated political instability in India.
Wickremesinghe and Samaraweera have both painted devolution as enabling “reconciliation” and democratic rights for Tamils. In fact, the 13th amendment is the means for establishing a power-sharing arrangement with the Tamil elites to facilitate the joint exploitation of the working class. Speaking to a group of journalists in New Delhi, Samaraweera called on the TNA to join the government.
The TNA, along with the JVP, is already part of the National Executive Council established by the government to oversee the implementation of its 100-day program in preparation for parliamentary elections at the end of April.
In his statement to parliament, Wickremesinghe announced that the government will introduce a 19th constitutional amendment to replace the 18th amendment, which gave wide powers to the president to appoint top judges, the election commissioner and other senior officials. The government also plans the “transfer of executive powers to the legislature and the cabinet” currently held by the president.
The government is preparing to release an “interim financial statement” on January 29 to deliver a limited salary increase for public sector employees and tax reductions on some essential items. All this, along with a propaganda blitz over the previous Rajapakse administration’s corruption, is part of the government’s efforts to conceal its real agenda as it prepares for parliamentary elections.
Finance Minister Ravi Karunanayake has already started discussions with the International Monetary Fund (IMF) and promised to meet the IMF’s fiscal targets. The previous government agreed to reduce the budget deficit to 3.8 percent of the gross domestic product in 2016, down from 5.8 percent in 2013.
The new government is seeking to establish the widest possible coalition in anticipation of popular opposition to its agenda of austerity at home and the integration of Sri Lanka into US war plans. While Wickremesinghe is promising to implement the 13th amendment to secure the TNA’s support, his UNP is just as mired in Sinhala chauvinism as Rajapakse’s coalition. As social tensions sharpen, it will inevitably turn to the whipping up of communal tensions as the means to divide the working class.
During the presidential election, the Socialist Equality Party was the only party to fight for the unity of workers—Tamil, Sinhala and Muslim—in a common struggle to oppose the US war drive and secure basic democratic and social rights by abolishing capitalism. The SEP fights for a Socialist Republic of Sri Lanka and Eelam as an integral part of the struggle for a Union of Socialist Republics of South Asia and internationally.

State of emergency declared in eastern Ukraine, as US vows more sanctions against Russia

Niles Williamson

Presaging a further escalation of the conflict in Ukraine, Prime Minster Arseniy Yatsenyuk on Monday declared an official state of emergency in the eastern provinces of Donetsk and Luhansk. He also announced that the rest of the country would be placed on high alert. The eastern Donbass strongholds of separatists opposed to the regime in Kiev that came to power last year after a US- and EU-supported coup have seen renewed hostilities in recent weeks.
Speaking to reporters in New Delhi, India on Sunday, US President Barack Obama blamed Russia for the renewed fighting in eastern Ukraine and vowed to use all options short of war to escalate political and economic pressure on Moscow.
Obama glibly told reporters that the United States has no interest in weakening Russia or devastating its economy. “We have a profound interest, as I believe every country does, in promoting a core principle, which is, large countries don’t bully smaller countries. They don’t encroach on their territorial integrity. They don’t encroach on their sovereignty. And that’s what’s at stake in Ukraine,” he said.
Obama expressed concern over the collapse of a ceasefire agreement signed in Minsk in September, accusing the pro-Russia separatists of fighting “with Russian backing, Russian equipment, Russian financing, Russian training and Russian troops.” To date neither the US government nor the regime in Kiev has provided any solid evidence backing up their repeated claims of direct Russian involvement in eastern Ukraine.
President Obama vowed to “ratchet up” the pressure on Russia and ominously promised that the US government would consider all options “available to us short of a military confrontation” to resolve the ongoing conflict.
At the same time that Obama denounced supposed Russian interference in Ukraine, he reiterated that Washington would continue to give economic support to the Kiev regime, as well as provide equipment and training for its armed forces.
It was announced last week that the United States Army would be sending a contingent of advisers to western Ukraine in the spring to train four companies of the National Guard of Ukraine. At the end of last year, Obama signed the Ukraine Freedom Support Act, which authorizes the president to deliver a large cache of lethal military equipment to the Ukrainian government and implement a new raft of sanctions against Russia at his discretion. (See: US announces plans to deploy military advisers to Ukraine).
Obama’s remarks were part of a coordinated response to a deadly artillery attack in the city of Mariupol on Saturday that struck a residential area, killing 30 civilians and injuring approximately 100 others. An investigation by members of the Organization for Security and Cooperation in Europe (OSCE) concluded that Grad and Uragan rockets were fired into the city from rebel-held territory.
After an emergency meeting of NATO and Ukrainian ambassadors on Monday, NATO General Secretary Jens Stoltenberg blamed Russia for the escalating violence in eastern Ukraine. “We condemn the sharp escalation of violence along the cease-fire line in eastern Ukraine by Russia-backed separatists. This comes at great human cost to civilians,” he told reporters.
After the shelling in Mariupol, the president of the European Council, Donald Tusk, called for new sanctions against Russia after an “urgent” phone call with Ukrainian President Petro Poroshenko. The former Polish prime minister bellicosely tweeted, “Once again, appeasement encourages the aggressor to greater acts of violence. Time to step up our policy based on cold facts, not illusions.”
Responding to the new allegations of support for the anti-Kiev forces in eastern Ukraine and threats of escalating sanctions by European and American leaders, Russian President Vladimir Putin accused the Ukrainian army of operating as a foreign legion for NATO. Speaking to students in Moscow on Monday, he stated that the operations of the Ukrainian army were tied to the “geopolitical containment of Russia” rather than the “national interests of the Ukrainian people.”
Russian Foreign Minister Sergei Lavrov accused the EU and US of using the attack on Mariupol to “whip up anti-Russian hysteria.” He defended the actions of the separatists, saying they were fighting to defend themselves from the Kiev regime’s new offensive. “They started to act...with the goal of destroying Ukrainian army positions being used to shell populated areas,” he told reporters in Moscow.
Alexander Zakharchenko, prime minster of the rebel Donetsk People’s Republic, denied that the separatists were responsible for the attack on Mariupol. “Kiev decided to shift the blame on us for its erroneous fire from Grad multiple rocket launchers at residential areas,” he told reporters.
The effort by the US and EU to maintain economic sanctions against Russia has been showing signs of strain in recent weeks, with some countries, such as France and Italy, pressing for the improvement of diplomatic and economic relations with Russia. Last week, EU foreign policy chief Federica Mogherini published a paper that outlined possible ways to begin improving diplomatic relations with Moscow.
In the wake of the Mariupol attack, Mogherini has called for an extraordinary session of the EU Foreign Affairs Council. The foreign ministers of the 28 EU member countries will convene in Brussels on Thursday to discuss possible new sanctions against Russia.
Fighting has flared up in the east in the last two weeks in the wake of an assault launched by the Kiev regime on separatist-held areas. The pretext for the new attack was the shelling of a commuter bus that killed 13 people in Volnovakha, a small town on the main highway between Donetsk and Mariupol.
Speaking at a rally in Kiev on January 19, President Petro Poroshenko denounced the attack, which he blamed on the separatists, and vowed that his government would “not give away one scrap of Ukrainian land.” That same day the Ukrainian military was authorized by Poroshenko to launch a “massive assault” on separatist-held positions in the east.
The Kiev regime launched an offensive in an attempt to solidify its control over the Donetsk International Airport. In an embarrassing turn of events, pro-Russian separatists succeeded at the end of last week in repelling the attack and dislodging Ukrainian troops and right-wing militia fighters from the airport’s main terminal. The symbolically and strategically important airport, the site of intense fighting between both sides for the last several months, has been nearly completely destroyed by relentless artillery bombardment.
Shelling in Donetsk on Monday damaged a power station at the Zasyadko mine, temporarily trapping 496 miners underground. Temporary power generators were used to bring the mine’s elevators back online and the miners were gradually evacuated.
Pro-Russian separatists have moved to surround the government-controlled town of Debaltseve, where hundreds of Ukrainian soldiers taking part in the renewed offensive have encamped. The town is located on the main highway and rail line connecting the separatist strongholds of Donetsk and Luhansk. At least seven Ukrainian soldiers have been reported killed and 24 wounded in the last day of fighting in the Luhansk region.

US resumes drone strikes in Yemen

Thomas Gaist

Just days after Houthi rebels in Yemen’s capital of Sanaa toppled the US-backed government of Abd Rabbuh Mansur Hadi, Washington has resumed its drone war against the impoverished country, killing a 12-year-old boy and two alleged Al Qaeda militants in a missile strike against a car traveling in the eastern Marib province.
The strike was carried out by the Central Intelligence Agency, US officials told the Wall Street Journal. The CIA administers one of two US targeted killing programs directed against Yemen, with the other managed by the Pentagon’s Joint Special Operations Command (JSOC).
New waves of drone strikes against Al Qaeda in the Arabian Peninsula (AQAP) are currently in preparation, President Barack Obama and US military officials said Sunday. The US has launched hundreds of drone strikes against alleged terrorist targets in Yemen in recent years.
Monday’s strike comes amid indications of preparations for expanded US and NATO military action in Yemen and a growing list of other countries. US Secretary of State John Kerry pointed to Nigeria, Afghanistan, Somalia, Yemen, Libya and the Central African Republic as candidates for new US military operations in remarks at the World Economic Forum in Davos last week.
President Obama announced Monday that he would cut short his visit with Indian Prime Minister Narendra Modi to travel to Riyadh for discussions with Saudi leaders focused on the situation in Yemen and the US-led war in Iraq and Syria.
Obama administration national security official Ben Rhodes told Reuters that the meetings would focus on “the leading issues where we cooperate very closely with Saudi Arabia,” so as to insure “good alignment” with regard to US-Saudi “overlapping interests.”
US efforts to train Syrian opposition fighters are being closely coordinated with the Saudi monarchy, Rhodes said.
In statements on CBS News’s “Face the Nation” program last Sunday, Senators John McCain, a Republican, and Dianne Feinstein, a Democrat, highlighted the bipartisan support enjoyed by the Obama administration as it plans to unleash yet another surge of military violence across broad areas of the Middle East and Africa.
Warning that Iran is “on the move in Bahrain” and is “winning,” McCain called for new training missions, Special Forces deployments, and air and drone campaigns against Iran’s regional allies, including the Syrian government and Yemen-based Al Qaeda in the Arabian Peninsula (AQAP). He also urged an escalation of the war against the Islamic State of Iraq and Syria (ISIS).
“Iran is on the march throughout the region,” McCain said, adding, “The Iranians are now either dominant or extremely influential in Iraq, Lebanon, Syria, Yemen. AQAP and the ISIS in both Iraq and Syria are doing quite well. There is no strategy to defeat them.”
“We need more boots on the ground,” McCain said. “Thousands of young people all over the world” are flocking to the banners of ISIS and similar groups, he warned.
Acknowledging that this was “a tough thing for Americans to swallow,” McCain called for deployment of “Special Forces” and “air controllers,” as well as “intelligence” and “other capabilities” to Yemen and areas along the Syrian and Iraqi borders.
“We can’t train young people in Syria and send them back into Syria to be barrel-bombed by Bashar Assad,” McCain said, making the case for a campaign to “neutralize” Assad’s air forces with the imposition of a “no-fly zone.”
Feinstein repeatedly noted her agreement with McCain during the talk show, warning of the threat posed by growing Iranian power and saying it was necessary to take “a good look at our policy with respect to Yemen.”
She said, “My concern is, where is Iran going? Is Iran trying to begin the development of an Iranian crescent?”
Feinstein claimed Monday that AQAP had already attempted to smuggle four bombs—specially designed to evade metal detectors—into the US mainland. She called for new deployments of Special Forces units to “take out” the group’s leadership and demanded further military aid to US-allied governments in Israel, Saudi Arabia and Jordan.
Asked whether she favored new ground troop deployments, Feinstein avoided a direct answer while clearly implying her support. The US must “relook” at its policy in relation to Syria, she said, expressing agreement with McCain that the US must not “tolerate Assad.”
Speaking on behalf of the Obama administration, White House Chief of Staff Denis McDonough told “Face the Nation” that the Obama administration is preparing to expand military operations aimed at “destroying… manifestations of Al Qaeda” in South Asia, East Africa and North Africa.
McDonough said that the White House has sought to negotiate a “political agreement” with the Houthi militants who have taken control of the Yemeni capital that would allow the US military and CIA to “keep on the offensive against Al Qaeda in the Arabian Peninsula.”
The US embassy in Yemen is being closed to the public and is suspending all consular services for an indefinite period of time, US officials announced Monday. The US embassy is closing because it is now surrounded by “chaos,” an anonymous State Department official told Reuters. The US already carried out a partial evacuation of embassy staff last week.

Syriza forms coalition government with right-wing Independent Greeks

Robert Stevens

It took just hours for the leftist pretensions of Syriza, (the Coalition of the Radical Left) to be exposed following its victory in Sunday’s Greek general election.
Syriza won 36.3 percent of the vote, obtaining 2,246,064 votes, but its final tally of 149 seats fell just short of the 151 needed for an absolute majority in the 300-strong parliament.
On Monday morning, Syriza leader Alexis Tsipras held talks lasting barely an hour with Panos Kammenos, leader of the right-wing, anti-immigrant Independent Greeks (ANEL). Following the talks, Kammenos announced that the Greek government would be a Syriza-Independent Greeks coalition.
Tsipras, seeking to widen support for the coalition, held talks with To Potami leader Stavros Theodorakis on Monday evening. While Theodorakis previously ruled out sitting in a Syriza-led cabinet, he stressed Monday the need for a “patriotic action plan.”
The alliance with ANEL underscores Syriza’s character as a bourgeois party, based on privileged layers of the petty bourgeoisie, which articulates the interests of sections of the Greek capitalist class and international capital.
The Syriza-ANEL government is the fulfilment of the “new patriotic alliance” that Tsipras pledged at his final election rally last week. It is just as committed to the defence of capitalism and its international institutions, including the European Union and NATO, as the discredited conservative New Democracy-led government it has replaced. ANEL arose from a right-wing split-off from New Democracy (ND) in February 2012. It polled just 4.68 percent (13 seats) in the election.
Commenting on Syriza’s programme just days before the election, the Financial Times said the party in government would initially carry out “cost-free, or relatively inexpensive, gesture politics” such as reinstating 595 cleaners fired by the last government. Behind such token gestures, however, the real task of the Syriza government will be to prepare the political and social basis for an even greater onslaught against the working class.
Syriza’s coalition with ANEL was prepared well in advance. In March 2013, Syriza entered into a “front” with ANEL based on efforts to save the Cypriot banks with aid from the European Union (EU).
Following Monday’s talks, the Protothema newspaper reported that “Syriza and ANEL have already reached an agreement on the issue of the Greek president and ANEL’s red lines on national issues will be respected by its leftist coalition partner.”
ANEL’s “red lines” are of a thoroughly reactionary character. Like the National Front in France and similar ultra-right formations, its complaint over EU-dictated austerity is that it has undermined Greek capitalism. Its nationalist and racist policies include demands for the persecution and deportation of undocumented immigrants, under the guise of “national security.”
Syriza’s victory is by no means the popular endorsement claimed by the media and its various pseudo-left apologists. Nearly 40 percent of the electorate did not vote, with turnout at just 63 percent (6.3 million out of an electorate of 9.9 million).
This is extraordinarily low, given the blanket media coverage of the election and its presentation as the most important in Greece’s modern history. The turnout was lower than in the May 2012 election (65.1 percent), when Syriza made its first electoral breakthrough.
Tspiras’s party is the undeserving beneficiary of widespread hostility to New Democracy and especially the social democratic PASOK, which have ruled Greece since the fall of the 1967-1974 military junta.
PASOK was virtually wiped out, managing to win just 13 seats, with 4.7 percent of the vote, only just passing the 3 percent needed for parliamentary representation. Most of Syriza’s support came from layers previously supporting PASOK.
ND finished second with 76 seats, having obtained 27.8 percent of the vote. It will form the parliamentary opposition. The fascist Golden Dawn won 6.3 percent of the vote, securing 17 seats and finishing third. The newly formed populist To Potami (The River) come in fourth, with 6.1 percent of the vote and 17 seats. The Stalinist Communist Party of Greece gained 15 seats, winning 5.5 percent of the vote.
Syriza’s programme has been developed in close collaboration with sections of the ruling elite who disagree with economic policies based solely on austerity, as advocated by Germany under Chancellor Angela Merkel. In the Thessaloniki Programme that Syriza put forward for the election, the party stressed that, as opposed to the ND government’s perspective of building an alliance only “with the German government,” Syriza was “ready to negotiate, and we are working towards building the broadest possible alliances in Europe.”
German government officials have ruled out any easing of the terms of the debt repayment program imposed on Greece by the so-called “troika” (the European Union, International Monetary Fund and European Central Bank). Following the announcement of the election result, Merkel’s spokesman, Steffen Seibert, said, “We believe Greece has accepted terms that are not off the table after the election day.” German Finance Minister Wolfgang Schäuble said, “There are rules, there are agreements. Whoever understands these things knows the numbers, knows the situation.”
A European Central Bank (ECB) official cited in the Wall Street Journal said, “Mr. Tsipras must pay. Those are the rules of the game. There is no room for unilateral behavior in Europe. That doesn’t rule out a rescheduling of the debt.”
Those comments were backed up by ECB executive board member Benoît Coeuré, who told a French radio station, “If he [Tsipras] doesn’t pay, it’s a default and it’s a violation of the European rules.”
But Syriza’s support for the European Central Bank’s quantitative easing policy and its demands for selective debt restructuring have been endorsed by the Financial Times and other representatives of capital.
The White House issued a press release stating that “we look forward to working closely” with the new government. After first dropping on news of the Greek election result, the euro climbed for the first time in three days against the dollar following the announcement of the Syriza-ANEL government. The FTSE 100 stock index finished up 19.57 points, or 0.29 percent.