Sri Lankan president deepens social attacks in interim cost-cutting budget

K. Ratnayake

On Tuesday, Sri Lankan President Ranil Wickremesinghe, who is also the finance minister, presented parliament with an interim budget to cover the rest of the year.

Sri Lankan President Ranil Wickremesinghe arrives at the parliamentary complex in Colombo, Sri Lanka on Aug. 3, 2022. (AP Photo/Eranga Jayawardena) [AP Photo]

The budget, which heaps even greater burdens on the already suffering working people, will cut government expenditure, impose more taxes and speed up the privatisation of state-owned enterprises (SOE) in line with International Monetary Fund (IMF) demands.

Government negotiations with the IMF delegation, which concluded this week in Colombo, had “successfully reached the final stage,” Wickremesinghe said, indicating that even more savage social attacks are being prepared.

Amid the popular anger over the unbearable cost of living, Wickremesinghe contemptuously proposed a cosmetic increase in welfare allowances for the poor, a measure that will do nothing to alleviate their plight.

The interim budget includes:

* An additional 3 percent increase in the value added tax (VAT), lifting it from 12 to 15 percent on all goods and services, effective this week. This comes on top of an increase from 8 to 12 percent in VAT and other tariffs announced on May 31. In August, the government increased electricity charges by about 75 percent, with water tariffs rising by 127 percent for 2 million families this month.

* Restructure of SOEs will be stepped up, beginning with Air Lanka, the Ceylon Electricity Board and the Ceylon Petroleum Corporation. On Monday it was announced that 49 percent of Air Lanka ground-handling and catering will be privatised, with 50 other SOEs targeted for future “restructuring.”

* Twenty percent of shares in state banks will be distributed among depositors and bank employees as a first step in the privatisation of these banks.

* The private sector will also be brought into the country’s railways, long-targeted for privatisation by Colombo.

* In line with the planned destruction of hundreds of thousands of public sector jobs, the retirement age of employees in government and semi government institutions was reduced to 60 years, down from 65 and 62 years, respectively. Those who have already reached the new retirement age must leave at the end of this year.

Wickremesinghe’s so-called concessions to the poor consist of a miniscule lift in monthly Samurdhi payments ranging from 5,000 rupees ($US14) to 7,500 rupees. The pitiful welfare payments are currently received by 1.7 million families. Around 726,000 families already on the Samurdhi waiting list will be temporarily paid 5,000 rupees per month.

Allowances for the elderly, disabled, kidney patients and pregnant mothers were also slightly increased from 5,000 rupees to 7,500 rupees. About 61,000 low-income families will receive a monthly allowance of 10,000 rupees for four months.

These rises will add little to the existing meagre allowances which have been drastically eroded by skyrocketing inflation, officially reported to be 64 percent and food inflation 94 percent in August.

Wickremesinghe proposed to write off 688 million rupees in defaulted farmers’ loans to the banks. This will not alleviate the difficult economic problems confronting farmers who still have to pay interest to the banks and have faced massive increases in the cost of fuel, fertilizers and agricultural inputs over the past five months.

He told parliament that the 2021 budget deficit was 12.2 percent of the GDP but that this would be reduced to 9.9 percent this year, 6.8 percent in 2023 and zero in 2025. These figures point the unprecedented and brutal character of the government social assault on the public sector and the masses.

Addressing a Colombo seminar yesterday, Central Bank Governor Nandalal Weerasinghe praised the president and the finance ministry secretary. The interim budget, he said, was “farsighted,” adding, “in order to come out of this crisis, we have to go through this painful process.” This “painful process,” of course, will not be endured by the rich, but only by workers and the poor, who are being made to pay for the deep crisis of Sri Lankan capitalism.

“[O]ur aspiration is to establish a solid economic foundation by the year 2026,” Wickremesinghe declared. His projection to place the economy on a “solid economic foundation,” mitigating the crisis by 2026, is a sheer fantasy.

Sri Lanka’s economic collapse is the sharpest expression of the global capitalist crisis, set off by the COVID-19 pandemic and intensified this year by the US-NATO proxy war in Ukraine, that is now impacting on the major imperialist centres and backward countries alike.

Wickremesinghe told the parliament that the economic miracle he proposed would only occur, “if we work together in unity with common consent.” He called on MPs to join an all-party government because “this unprecedented situation is the responsibility of us all.” 

The devastating conditions facing millions of Sri Lankans were not created by the working class or the urban and rural poor but are the direct responsibility of Sri Lanka’s ruling elite and its capitalist parties.

Acutely aware that masses will resist the planned social attacks, Wickremesinghe’s appeal for an all-party government is to mobilise Colombo’s entire political establishment to suppress the mass opposition.

The opposition parliamentary parties have not accepted the all-party government invitation from the widely despised Wickremesinghe, not because they disagree with the IMF’s demands, but because they fear he will not be able to suppress the mass resistance.

Wickremesinghe continues to mobilise state forces in an attempt to intimidate ongoing mass struggles.

Yesterday, the government unleashed the police to arrest 28 people attending a student demonstration called by the Inter-University Student Federation. The students were demanding the release of three student leaders detained by police last week under anti-terror laws. The three activists were arrested during a student protest against the government repression, attacks on free education and worsening living conditions.

Students protesting in Colombo on 30 August 2022 [Photo: WSWS]

This week the IMF negotiating team met in Colombo with opposition Samagi Jana Balavegaya (SJB) leader Sajith Premadasa and his allies. Far from disagreeing with the IMF’s austerity plan, Premadasa was demanding from the beginning of last year that the former Rajapakse government seek IMF assistance. The SJB is now campaigning for an election, hoping to come to power and implement the IMF program.

Following Wickremesinghe’s budget speech, Janatha Vimukthi Peramuna (JVP)-led National People’s Power (NPP) parliamentarian Professor Harini Amarasuriya declared that the economic crisis could only be solved by a “stable government.”

Like the SJB, the JVP/NPP is demanding a general election and a new capitalist government to impose the IMF’s measures. Other parliamentary opposition parties, including the Sri Lanka Freedom Party and the Tamil National Alliance, fundamentally agree, insisting that the only solution is drastic austerity.

The main props of the Wickremesinghe regime and Sri Lankan capitalism are the trade unions, who over the previous four months diverted the mass opposition of millions of workers into one-day general strikes in April and May and politically backed the parliamentary opposition. They support the SJB and JVP calls for the interim capitalist government and oppose any independent mobilisation of the working class against the Wickremesinghe regime.

Protest march by Petroleum Corporation workers in Colombo on 22 August 2022 [Photo: WSWS]

Working-class resistance, however, is developing. Last week petroleum, state engineering corporation, government press, and health sector workers began taking industrial action. Fishermen held protests in opposition to oil price hikes, while students held repeated demonstrations in defiance of brutal police measures.

One year since the US military's withdrawal from Afghanistan

Jordan Shilton

Tuesday marked exactly one year since the last detachment of American troops skulked out  of Kabul aboard a C-17 military transporter, bringing to an end close to two decades of US imperialism’s brutal neocolonial occupation of Afghanistan. The weeks leading up to the unceremonious departure, which resembled the flight from the roof of the US embassy in Saigon in 1975, saw Washington’s puppet regime in Kabul disintegrate amid an advance by the Islamist Taliban.

One day after the last American military flight out of Kabul, US President Joe Biden delivered a speech in which he declared, “We’ve been a nation too long at war. If you’re 20 years old today, you’ve never known an America at peace… It’s time to end the forever war.”

The “forever war” Biden was referring to consisted of two decades of bloody counterinsurgency warfare and occupation, during which US imperialism and its NATO allies laid waste to an entire society. The imperialist forces left the country in ruins, with a conservative estimate of between 175,000 and 250,000 Afghans killed during the conflict. These deaths included thousands massacred at wedding parties, in their homes, and in hospitals by barbaric drone strikes. Washington’s corrupt puppet regime, built up with some $80 billion in financial aid, proved to have absolutely no popular support as its leading representatives fled the country.

The Afghan withdrawal represented a debacle for US imperialism, which based its policy throughout thirty years of uninterrupted wars, beginning with the first Gulf War in 1990-91, on the conviction that military force could overcome Washington’s precipitous economic decline. The establishment of puppet governments in “regime change” operations throughout Central Asia and the Middle East was seen as essential in the consolidation of American imperialist hegemony over the Eurasian landmass, which had been opened up for ruthless capitalist exploitation through the Stalinist dissolution of the Soviet Union in 1991 and the restoration of capitalism in China. These aims of imperialist geostrategy were concealed from the public with bogus propaganda claiming that the US and its allies were waging a struggle for “democracy” and the “rights of women” in Afghanistan.

The World Socialist Web Site recognized at the time that far from representing a retreat from large-scale military conflict and an end to “forever wars,” as Biden asserted in his 31 August speech, the withdrawal from Afghanistan marked a shift in imperialist strategy to confront much greater foes. As the WSWS wrote in an initial analysis of the implications of the Afghan debacle: “This has not lessened the danger of war in the least. Indeed, Biden used his speech to insist on US imperialism’s ability to continue murderous ‘over-the-horizon’ attacks on Afghanistan or any other country in the world, while shifting its military might toward far more dangerous confrontations with China and Russia, both nuclear-armed powers.”

Less than two weeks later, in an article marking the 20th anniversary of the still unexplained 9/11 terrorist attacks on New York City and Washington D.C., we stressed: “The debacle of the ‘war on terrorism’ signals no end to US militarism. Rather, as Biden has made clear, the withdrawal from Afghanistan is aimed at shifting US military power toward confrontation with what the Pentagon describes as ‘strategic competitors’ or ‘great power’ rivals, i.e., nuclear-armed China and Russia. In other words, there is a growing threat of a third world war.”

Twelve months on, the correctness of this evaluation of US imperialist policy has been proven beyond doubt. Less than six months after the withdrawal from Kabul, the Biden administration and its European and Canadian allies succeeded in provoking the Russian nationalist regime of Vladimir Putin to launch an invasion of Ukraine, triggering a war for which the NATO powers had been preparing for almost a decade. The Ukrainian army, whose backbone consists of neo-Nazi forces trained and equipped by NATO since the fascist-led 2014 coup in Kiev, has received tens of billions of dollars of high-powered weaponry since February. The Biden administration’s goal is to recklessly escalate the war with Russia, even at the risk of a global conflagration fought with nuclear weapons, with the aim of seizing control of its substantial deposits of natural resources and critical minerals. To this end, the imperialists intend to subjugate Russia to the status of a semi-colony by carving up its vast territory into statelets under the jackboot of imperialist plunder.

Washington has orchestrated a no less provocative escalation of tensions with China over the question of the status of Taiwan, which Beijing considers a province of China and the US wants to transform into an American military base for war with Beijing. The admission by Washington that it is training Taiwanese military forces and the visit of Speaker of the House Nancy Pelosi to Taipei in early August have shattered Washington’s long-standing policy of “strategic ambiguity,” which was based on an agreement with the Chinese regime not to explicitly commit to the defense of Taiwan in the event of a military conflict between Beijing and Taipei. Pelosi’s visit was accompanied by an unprecedented escalation of tensions, as a US navy aircraft carrier and strike group sailed into the region, and the Chinese navy responded by conducting live fire exercises off the coast of Taiwan.

Washington and its European allies, together with their accomplices in the media, never tire of proclaiming their devotion to the cause of “democracy” in Ukraine, the need to protect “human rights” against “Russian aggression,” or the necessity to defend Taiwan against the “authoritarianism” of China. This propaganda onslaught has reached a deafening crescendo over the past six months, with Western political leaders and media outlets desperately trying to portray the corrupt oligarchic regime in Kiev, backed by American and European intelligence and military forces, as the embodiment of democratic values. In a major speech delivered in Poland in March, Biden committed the US and its allies to “decades” of war with Russia, declaring that the Ukrainian regime was engaged in a “great battle for freedom.” German Foreign Minister Annalena Baerbock, speaking one week after the Russian invasion and just days after the German government tripled its military budget in the largest rearmament program since Hitler, stated, “We must stand up to this attack. Human rights are universal.”

The social and economic calamity facing millions of Afghans after two decades of rapacious plunder by US imperialism and its European allies, among them Germany and Britain, provides the best refutation to such fatuous claims. Fully 40 percent of the Afghan population presently lives on less than $1 per day, while a staggering 97 percent have fallen below the poverty line. Wide swathes of the population have been mentally traumatized and thousands physically maimed by the reign of terror experienced by impoverished Afghans at the hands of their US and NATO occupiers between 2001 and 2021.

The history of the Afghan population’s disastrous encounter with American imperialism proves that “human rights” and “democracy” concern the imperialist powers only to the extent that they justify the pursuit of their predatory geostrategic and economic ambitions. The US involvement in Afghanistan began over four decades ago in 1979, when the Carter administration facilitated the arming of Islamist fighters against the Soviet-backed regime in order to plunge the country into a civil war and create the USSR’s “own Vietnam.” The arming of these mujahideen created the conditions for the rise of Osama bin Laden and Islamic fundamentalism across the region, with Washington encouraging Saudi Arabia and Pakistan to train and funnel Islamist fighters into Afghanistan. Even after 9/11, these Islamist fighters were used as proxy forces by the imperialist powers to advance their interests, including during the bloody onslaught on Libya and the war in Syria and Iraq.  Military planners have openly compared the current conflict with Russia in Ukraine with Afghanistan in the 1980s, demonstrating that the imperialists today are no less indifferent to the horrendous consequences of a years-long war on ordinary Ukrainians and Russians than they were about its devastating impact on the Afghan population.

The terrorist attacks of 9/11 were seized upon to justify the launching of the Afghanistan war, which had been planned years in advance of 2001. Pro-war propaganda legitimizing the neocolonial occupation as necessary to bring “democracy” to the Afghan people, defend “women’s rights,” and “fight terrorism” was thoroughly exposed over the subsequent two decades. It was the occupying forces who terrorized the population with counterinsurgency warfare, tortured thousands at Bagram Air Base and other “black sites,” and built a puppet regime based on corruption and self-enrichment.

Even after the withdrawal, US imperialism and their allies continued their vendetta against the Afghan people, whom they blamed for the failure of their efforts to establish a sustainable neocolonial regime in Kabul. In an act of brazen theft, the Biden administration announced in February its decision to steal $7 billion in financial assets belonging to the Afghan Central Bank that were deposited at the Federal Reserve of New York. This action came as the UN warned that up to 23 million Afghans face malnutrition and starvation this year, and up to a million children could die.

The two decades of brutal neocolonial occupation in Afghanistan also produced disastrous social and economic consequences for working people in the US and Europe. The war was used to justify a savage assault on core democratic rights, as intelligence agencies were granted virtually unlimited powers to spy on the population. The brutalization of society, including through the impact on the mental health of thousands of veterans and millions of young people whose entire conscious lives were overshadowed by never-ending wars, has witnessed a surge in gun violence, suicides, drug overdoses, and other social ills. It has helped create the political conditions under which a fascistic figure like Trump could openly plot with broad sections of the Republican Party to overthrow the democratic outcome of a presidential election and establish a personalist dictatorship.

Above all, the ever-more reckless resort to military violence by the ruling elites of North America and Europe expresses the intractable global crisis of capitalism. Decades of uninterrupted wars have exacerbated social inequality as social services and workers’ wages are slashed to cover bloated military budgets. The same indifference shown by ruling circles to human life in the brutal occupation of Afghanistan has found expression in their homicidal policy of mass infection and death during the COVID-19 pandemic. Decades of unending wars have also discredited all institutions of the capitalist state, from the official political parties who supported the wars, to the media who propagandized for them, and the judiciary who allowed war crimes to go unpunished. These processes have revolutionary implications.

Routine COVID testing ended in English hospitals, care homes, prisons and homeless shelters

Robert Stevens

All routine testing for COVID-19 was ended in England at the end of August, even as the disease continues to claim hundreds of lives weekly with tens of thousands of new cases.

The UK Health Security Agency (UKHSA) declared August 24 that all asymptomatic testing in high-risk settings including hospitals, care homes, prisons and homeless shelters would end on August 31. In line with its “Living with COVID-19 strategy, the government’s objectives in this phase of the coronavirus… response are to increasingly enable the management of COVID-19 in line with other respiratory illnesses…”

Free general testing for the entire population ended April 1, but asymptomatic testing remained in place for particularly vulnerable people. The continually evolving virus is now free to circulate in these settings as it is throughout the general population.

The COVID alert system being used by the UK government. Under Level Two, there are ”No or minimal social distancing measures; enhanced testing, tracing monitoring and screening”.

On August 31, the UK’s COVID alert level was downgraded from three to two, following a recommendation by the UK's four chief medical officers. The Level Two alert means that “COVID-19 is in general circulation, but direct healthcare pressures and transmission are declining or stable”. The previous threat Level Three denoted that “a COVID-19 epidemic is in general circulation”. Under Level Two, there are ”No or minimal social distancing measures; enhanced testing, tracing monitoring and screening”.

“The Department of Health said “Severe Covid cases, direct Covid healthcare pressures, direct Covid deaths and ONS [Office for National Statistics] community positivity estimates have decreased.”

The continued danger of danger of COVID to public health was underplayed by the Chief Medical Officers. Even as they declared, “COVID remains present in the community and we may see an increase in cases with BA 4.6 and BA.2.75 circulating”, they concluded, “but do not expect this to lead to an immediate increase in hospital pressures.”

This was said in the week that National Health Service bosses warned that already understaffed/underfunded hospitals would be unable to cope with the ill-health implications of “humanitarian crisis” they face within weeks due to the massive increase in household energy bills.

Due to vaccinations the numbers of deaths has fallen since the height of the pandemic, but hundreds are still dying from COVID with many left debilitated by Long Covid.

The Guardian noted August 24 that all testing was being halted “despite a near doubling in UK deaths from the virus this summer compared with the same period last year.” It reported, “The latest official figures indicate that deaths caused by the latest Covid wave are on the wane. But more than 5,700 Covid deaths have been registered since 8 June – a 95% increase on same period last year when there were 2,936 deaths involving Covid across the UK.”

It added, “Covid cases for the last seven days are running at 40,027, when there were 744 deaths and 6,005 hospitalisations.”

According to the ONS, in the week to August 16, one in 40 people in Scotland were infected with COVID; one in 45 people in England; one in 45 people in Wales; and one in 70 people in Northern Ireland. Things are likely much worse. The recording of daily COVID death tallies and infection numbers were done away with months ago in Britain, with government data on deaths and cases updated infrequently and often with incomplete data.

The UK hit the terrible milestone of 200,000 COVID deaths in July, with more than 3,000 dying in less than two months since. Latest ONS data shows 203,159 deaths, where COVID is mentioned on a victim’s death certificate. This catastrophic loss of life is almost identical per capita to the 1 million plus deaths recorded in the United States under the Trump/Biden administrations. The US population is approximately 333 million now, almost five times that of the UK’s 67.5 million.

Yet COVID is being treated as no worse than a mild seasonal cold, despite its long-term severely debilitating impact. An in-depth piece published by the Financial Times Wednesday was headlined, “The growing evidence that Covid-19 is leaving people sicker” and warned, “The potential impact on heart and brain disease poses challenges to healthcare systems globally.”

It cited the comments of Dr. David Strain, a geriatrician based at the University of Exeter. He had read a study published in Nature in March, which the FT noted, “identified significant brain shrinkage in a cohort of about 400 people aged between 51 and 81 who had recovered from coronavirus.”

Dr. Strain had treated a 64-year-old patient “Less than six months earlier… for Covid-19.” “Now, his deterioration was painful to witness. ‘He came in with a stroke and really bad delirium, a precursor of dementia,’ Strain says. ‘I saw the patient, recognised him [and] recognised the fact that his brain had dramatically aged.’”

The FT commented, “The encounter crystallised Strain’s belief that Covid generated a kind of epidemiological aftershock by leaving people susceptible to a huge range of other conditions, threatening global health systems already struggling with insufficient resources and ageing populations. ‘It made me realise that this is something that we’re going to be facing in a really big way in the near future,’ he says.”

In a stark comparison, Dr Strain said, “The level of damage that’s been done to population health [during COVID], it would be as if everybody suddenly decided to take up smoking in one go.”

Prime Minister Boris Johnson’s government carried out one of the most brutal COVID policies of any government, epitomised by his infamous statement, at the height of the pandemic in October 2020, “No more f***ing lockdowns, let the bodies pile high in their thousands!”.

The Conservative Party leadership candidates: Foreign Secretary Liz Truss and former Chancellor of the Exchequer Rishi Sunak [AP Photo/AP Photo, File]

With Johnson about to be replaced as prime minister by Liz Truss or Rishi Sunak, both have made it known to the Tory Party’s right-wing membership that they never wanted lockdowns and that Johnson badly erred in supposedly kowtowing to scientists!

Truss declared, “I didn’t actually sit on the Covid committee during that time, I was busy striking trade deals around the world.

She added, “My view is we did go too far, particularly on keeping schools closed. I’ve got two teenage daughters and know how difficult it was for children and parents and I would not have a lockdown again… I was very clear in cabinet, I was one of the key voices in favour of opening up.”

Sunak said that “lockdowns could have been “shorter, different, quicker… We shouldn’t have empowered the scientists in the way we did.”

He added that “you have to acknowledge trade-offs from the beginning. If we’d done all of that, we could be in a very different place.” Asked to elaborate, he replied, “We’d probably have made different decisions on things like schools, for example.” He told the Spectator that at one cabinet meeting his opposition to closing schools was voiced and he got “very emotional about it”.

Prominent scientists opposed Sunak’s lies that Johnson slavishly “followed the science”.

Clinical epidemiologist Dr. Deepti Gurdasani tweeted: “we weren’t empowered. The govt (which you are a part of) continued to make policies which had no basis in science, and killed >200,000 people & disabled hundreds of thousands while we screamed helplessly at every step.”

She described Johnson’s decision to delay the first lockdown for weeks as “an action that very likely cost tens of thousands of lives. That’s on you. Do you think SAGE [Scientific Advisory Group for Emergencies] were ‘empowered’ then? They were dismissed. By you [Sunak].

“You can try to revise history all you like – because the dead can’t speak. But there are many who won’t let them be forgotten.”

As infections mount and the full, devastating long-term impact of COVID emerges, the ruling elite in Britain and their counterparts internationally celebrate “living with COVID” as they rip up every significant pandemic protection measure they were forced to enact. The interventions by Truss and Sunak are a sharp warning as to the savage anti-working class agenda of the incoming government.

Eurowings pilots vote to strike as determination of German airline workers to fight grows

Marianne Arens

There is a large and growing willingness to strike among workers in the airline industry in Germany and internationally. At Eurowings, a ballot of Vereinigung Cockpit (VC) pilots’ union members ended Wednesday with an overwhelming vote of 97.7 percent in favour of strike action.

Eurowings is the Lufthansa subsidiary operating vacation flights and short- and medium-haul routes at lower costs than the core Lufthansa brand. The price for this is paid by the staff in the cockpits, cabins and on the ground in the form of significantly worse pay and working conditions.

But the approximately 5,000 pilots of the core brand are also ready to strike, as was demonstrated in a strike ballot at the end of July. At Lufthansa Frankfurt and Munich, 97.6 percent agreed to strike action. At Lufthansa Cargo, the figure was as high as 99.3 percent. VC has announced a 24-hour strike by pilots at Lufthansa and Lufthansa Cargo for today (Friday).

Striking Lufthansa pilots in Frankfurt [Photo: WSWS]

The discontent has very real grounds. In addition to the accumulated loss of wages due to the coronavirus pandemic, inflation has skyrocketed since the start of NATO’s proxy war against Russia in Ukraine. In Germany, inflation has already reached 8.5 percent, is much higher for gasoline and foodstuffs, and is increasingly threatening wages and salaries.

Lufthansa employees have already sacrificed large portions of their income and pension benefits since the beginning of the pandemic. In 2020, Vereinigung Cockpit expressly agreed to this and even proposed some of the sacrifices itself. Staff were placed on short-time work schedules for a long period and recorded salary reductions of up to 50 percent.

The other Lufthansa unions, Verdi, UFO, TGL-IGL and the Austrian ACA, also offered far-reaching concessions at the time—cancellation of vacation and Christmas bonuses, a wage freeze and the waiving of allowances. The givebacks added up to an income loss of no less than €1.3 billion for the Lufthansa workforce. At the same time, Lufthansa cut 32,000 jobs, many of them among pilots.

The same thing happened throughout the airports, at Frankfort Airport provider Fraport, ground services provider WISAG and other companies. Not infrequently, as at WISAG, it was precisely the longest-serving and experienced airport workers who were laid off. When flight operations restarted at the beginning of summer, unprecedented chaos ensued at the airports. Planes could not be checked in, lines formed for hours in front of security stations and hundreds of suitcases were left behind.

The chaos particularly affected Frankfurt Airport. In July, the number of passengers there rose above 5 million for the first time since the pandemic. But to prevent a collapse, Lufthansa was forced to cancel more than 3,000 flights.

To this day, crews and ground workers remain under great and growing work pressure and overtime is piling up. There is a shortage of staff everywhere; sickness levels are high and set to rise again as a result of COVID-19 infections.

The 24-hour warning strike on July 27, in which more than 20,000 Lufthansa ground workers took part, showed just how much things are boiling over. Just one week later, Verdi, the airport’s in-house union, agreed to a filthy sellout. Verdi signed a new contract, which effectively means a loss of real wages, and agreed to a truce preventing further industrial action for the 18-month term of the agreement.

Economically, the corporation has largely recovered from the coronavirus crisis. But the board is determined to ensure the savings from the pandemic become the norm, in the interests of its shareholders and at the expense of the employees.

“The measures, some of them drastic, [have] worked,” cheered the Frankfurter Allgemeine Zeitung on August 31. It added that the business community could “draw confidence” from the fact “that the company was able to return to profitability in the second quarter despite all the not insignificant adversities. The corporation is reducing debt, increasing its capital ratio, and the government’s stake is reportedly below ten percent.” Lufthansa was “moving in the right direction again,” it said.

For the Vereinigung Cockpit union, its first commitment is to the welfare of the company and its shareholders. The VC executive employed the word “strike” only once in its Wednesday press release announcing the results of the strike ballot. And it did this only when assuring the management that VC did not want a strike either. The union writes, “To make it clear: The result is not a decision to strike! It is [sending] a stronger signal, the yellow card, so to speak, to Eurowings.”

VC has been meeting with the company behind closed doors for four weeks, with the seventh round of negotiations being held this week. The union is doing all it can to either avoid industrial action by the pilots altogether, or to isolate it and keep it separate from other workers in the airline and other industries.

Despite inflation of more than 8 percent, from the outset VC has only called for a 5.5 percent wage increase for this year, which amounts to a de facto cut in real wages. It is not demanding “automatic inflation compensation” until next year.

VC has never seriously fought for its original demand for “uniform wage structures in all Lufthansa operations” in the sense that the top wages of long-serving Lufthansa employees should apply to all.

Instead, it has accepted that the number of aircraft guaranteed to be flown exclusively under the terms of the company collective bargaining agreement be limited to 325. At the same time, Lufthansa CEO Carsten Spohr is working to expand Lufthansa subsidiary CityLine2 as a so-called low-cost carrier in European traffic in order to drive budget carriers like Ryanair out of the market. The new Eurowings Discover subsidiary (formerly “Ocean”) is still flying entirely without a labour contract and is another attempt to undermine crews’ previous achievements.

Lufthansa is a complicated corporate entity with numerous subsidiaries that have increasingly poor pay structures and conditions for pilots and flight attendants. At Germanwings, for example, operations ceased two years ago, and employees were either laid off or taken over by Eurowings on worse terms. Other subsidiaries include Austrian Airlines, Air Dolomiti and SWISS.

Industrial action is also brewing at SWISS, which was taken over by Lufthansa after the Swissair bankruptcy in 2003. Pilots there have been working without a contract since April 2022. With a resounding no vote of 80.5 percent, at the end of July, SWISS pilots rejected a new draft contract which their union Aeropers had accepted and put to a vote. Some 1,150 SWISS pilots are Aeropers members and the turnout for the vote was 94.7 percent.

The great willingness to fight is evident everywhere, and, as at SWISS, is increasingly directed against the business-friendly unions. Not only at airports, but also in nursing, local and long-distance transport and at the ports, anger is growing about the untenable conditions. Recently, port workers in Germany went on strike, and like the Lufthansa ground workers, they demonstrated what power the working class could unleash if it united its struggles.

New Zealand universities hit by long-term assault on pay and jobs

John Braddock

The Tertiary Education Union (TEU) recently released a report into funding and salaries in New Zealand’s universities.

While limited in scope, the report commissioned from economic consultants BERL (Business and Economic Research Ltd), provides a glimpse into the long-term assault on the wages and conditions of university staff.

The report constitutes a damning, albeit unintended, indictment of the TEU, which has done nothing to oppose the wave of offensives against public education, staff and students by university administrations and successive governments.

Unitec Institute of Technology Carrington Road Campus, Auckland

The TEU said it commissioned the report, titled Where does the Money Go? Analysis of NZ universities’ financial statements, because it wanted to know where public and private investment in universities was being directed and “identify issues that needed addressing.” BERL’s analysis was based on the annual reports of all eight of the country’s universities since 2008.

The report establishes that overall operating revenue and expenses from 2008–2020 increased faster than inflation, reaching a high point in 2019, prior to the onset of the COVID pandemic. Universities’ total operating revenue grew by 25 percent, government funding by 16.5 percent, student fees revenue by 45 percent and research revenue by 48 percent.

The sector oversaw a significant increase in international students and a drop in domestic students. As is the case throughout the world, international students, who pay much higher, unsubsidised fees in the tens of thousands of dollars, were used as cash cows to prop up the universities. International students became New Zealand’s fourth biggest export earner.

Prime responsibility for this system lies with the 1984–1990 Labour Party government’s “Learning for Life” agenda, which opened the door to a swathe of government funding cuts, abolished free tertiary education and introduced the first student fees, while forcing universities to run on competitive “business” lines and through entrepreneurial activities.

According to BERL, since 2008 access to contestable research revenue and student fee revenue grew faster than government funding, thereby shifting the burdens, financial and otherwise, onto staff and students. While total university operating expenses increased by 18 percent, growth in staff costs and wages, despite an increase in personnel numbers, went up by just 7 percent. Spending increases have centred on property, new buildings and equipment.

The report highlights that average salaries have not kept up with inflation since 2007/8. University of Otago salaries fell in real terms by 10 percent in the 13 years, while at the University of Auckland, the country’s biggest, the decrease was 17 percent.

The TEU contrives to evade its own culpability in this assault. It boasts that the union “negotiated settlements in most years that reflect inflation.” From 2006–08, following two years of unspecified “nationwide action” by TEU members resulting in “tripartite talks,” salary increases of 7.5 percent in 2006 (CPI 3.3 percent), 6.2 percent in 2007 (CPI 2.5 percent) and 5 percent in 2008 (CPI 4.1 percent) were negotiated.

The TEU says nothing about pay settlements or any purported “action” from 2008 to 2020. This was a period, following the financial crisis of 2008, of intense restructuring, with widespread layoffs, soaring student fees and debt, and cuts to admissions, courses and libraries.

The union collaborated in numerous attacks. In March 2010, for example, TEU branch president Megan Clayton declared that she was “reasonably happy” with the way Canterbury University had consulted the union before imposing nearly 100 redundancies.

In 2015, the TEU responded to 300 impending job cuts at Unitec in Auckland by calling on management “to undertake a change in such ways that staff are brought along with the changes; and at a pace that will allow change to bed in.”

With the onset of the COVID pandemic in early 2020, border closures saw international student enrolments cut by more than half. In 2019, New Zealand had about 22,000 full-time international students paying total fees of $NZ562 million. That quickly fell to less than 10,000 students. While applications are now “recovering” with borders reopened, they are running at only 50 percent of pre-pandemic levels.

The financial “hole” produced an immediate and severe assault on jobs. Victoria University of Wellington (VUW) said it expected a $12 million loss and Auckland University anticipated a $30 million loss.

The TEU promptly signaled that it would not oppose the assault. In May 2020, with a hiring freeze already in place, the TEU demanded that union officials be included in all “high level decisions” on the impacts of COVID-19. It called for “all affected parties representing government, sector leaders, unions, staff, students and their communities,” to collaborate on a “nationwide strategy” to address the impact of the travel ban.

The TEU welcomed bogus advice by the Tertiary Education Commission (TEC) that financial impacts would be “managed appropriately” in relation to staff cuts. Then TEU national president Michael Gilchrist declared: “Staff cuts should be the last option considered.”

By March 2021, some 700 jobs had been shed nationwide. At the University of Auckland 300 had signed up for a “voluntary” severance package, at VUW 100 did the same, and at each of AUT, Massey and Lincoln more than 70 staff had already left or were going. Auckland reported paying $44 million in redundancies to staff whose jobs were axed.

New TEU president Tina Smith told Radio NZ the job cuts were “huge” and that “senior academics are being pushed out, shoved out, encouraged to leave because they want them to be replaced by cheaper options.”

The modus operandi of the TEU was shown at VUW, where staff were warned that “extra measures” would be required due to expected losses ballooning to $33.5 million in 2021, adding to a $19 million deficit for 2020. TEU branch president Dougal McNeill—a leading member of the pseudo-left International Socialist Organisation—declared the announcement had left members “prepared to fight.” In fact, the TEU accepted some cuts as inevitable and helped to impose them.

After VUW publicly ruled out “large scale” sackings, the TEU claimed a victory, declaring on Facebook: “The Vic Uni branch has shown how much is achieved when we stand together.” Some 60 “voluntary” redundancies were carried through while the TEU made no attempt to unite staff across universities in a nationwide campaign against the cuts.

The entire trade union bureaucracy, meanwhile, has done nothing to oppose the Ardern Labour government’s decision last October, following demands by big business, the media and university administrations, to ditch virtually all public health precautions and let COVID “rip.” The unions have acted as enforcers of the “return to work” agenda.

The results have been a disaster, including in the universities. In March this year, COVID-19 swept through the halls of residence at VUW. The university reported 648 cases in its 13 live-in premises, making up a quarter of all student residents, many of whom had only arrived a week earlier to begin the year. The administration kept in-person lectures going, with a streaming option made available.

Attacks on jobs in the wider tertiary sector are set to continue. The government is currently restructuring the country’s polytechnic system, merging 16 trades training institutions into a single entity, forecast to save $52 million per annum from 2023.

The polytechnics currently have about 7,800 staff. The TEC recently pointed to a 16 percent decline in enrolments over the past five years and warned that necessary financial results could not be achieved unless a large number of staff left and further job cuts were imposed.

The TEU has moved to channel members into a corporatist “consultation” process which involves making submissions on the proposed “operating structure,” with no campaign to oppose any assault on jobs, wages and conditions.

Euro zone inflation hit new high amid near certain recession

Nick Beams

The escalation of the euro zone inflation rate to 9.1 percent in August, amid forecasts that it will soon hit double digits, makes it a near certainty that the European Central Bank (ECB) will impose a significant interest rate hike when it meets next week.

A cashier changes a 50 Euro banknote with US dollars at an exchange counter in Rome. (AP Photo/Gregorio Borgia, File) [AP Photo]

The inflation spike, which was marginally higher than anticipated, and the moves by the ECB to lift interest rates, take place in conditions where the European economy is heading for a recession, if not already in one.

It has been battered by rising energy and electricity prices, a product of the escalating NATO proxy war against Russia in Ukraine. But one of the significant features of the latest data is that inflationary pressures are spreading more broadly.

The so-called core inflation rate, which strips out volatile energy and food prices, rose to 4.3 percent, up from 4 percent in July.

Reporting on the European inflation, the New York Times noted that in Estonia it had reached 25 percent, with nine countries registering double-digit levels, including Lithuania and Latvia where it is over 20 percent. This is an indication that processes at work in the extremities of the euro zone economy could soon reach the heart.

Responding to the inflation data, German central bank president Joachim Nagel said inflation was “becoming an enormous burden for more and more people.” But this “concern” for the mass of the population was wheeled out to provide the rationale for a tightening of monetary policy which will only accelerate the recessionary trends while doing nothing to bring down prices.

“We need a strong interest rate hike in September. And further interest rate hikes can be expected in coming months,” he said.

In a speech in Berlin on Tuesday, he ruled out any relaxation of the interest rate hikes because of their impact on the economy declaring: “We should not delay further hikes for fear of a possible recession.”

The aim of this tightening, in line with the class war agenda agreed to by central bankers at their Jackson Hole meeting last month, is to contract the economy in order to batter down workers’ wage demands to compensate for the highest inflation in four decades.

Jack Allen-Reynolds, an economist at Capital Economics, told the Financial Times (FT) that inflation was set to hit a headline rate of 10 percent by the end of the year.

“With ECB policy rates a long way below appropriate levels [they are close to zero], it is clear that the bank will raise interest rates by a larger-than-normal increment next week. A 75 basis point hike looks increasingly likely,” he said.

In an article on the European economy this week, headlined “Europe is heading for recession. The only question is how bad it will be,” the Economist said “every single warning light is flashing red.”

According to the article, amid all the confusion about the effects of the COVID-19 pandemic, the impact of the drought across much of the continent and the future of gas supplies there was broad agreement on one thing: recession is coming.

It would be led by Germany, Italy, and central and eastern Europe. According to analysts at JP Morgan Chase, there will be a 2 percent contraction for the overall euro zone in the fourth quarter. Growth rates for France and Germany will be -2.5 percent, Italy -3 percent. It said Italian industry appeared to be in “free fall.”

Italy could also spark a financial crisis as a result of ECB monetary tightening because of the high levels of government debt. ECB officials are fearful that if the yield on Italian government bonds rises too sharply in relation to German debt this could lead to a crisis of the euro zone currency system as took place in 2012.

At its last meeting in July, the ECB put in place a mechanism to try and prevent this; but despite assurances by the central bank’s president Christine Lagarde, there is no guarantee it will work.

If Italian industry is in “free fall,” the situation in Germany is no better.

Earlier this week it was reported that some German companies are halting production because of rising gas and energy costs. Economy minister Robert Halbeck said industry had worked to cut gas consumption and switch to alternatives.

But some companies had stopped production altogether, a situation he described as “alarming.”

“It’s not good news, because it can mean that the industries in question aren’t just being restructured but are experiencing a rupture—a structural rupture, one that is happening under enormous pressure,” he said.

The crisis is hitting middle-sized industrial companies, the so-called Mittelstand, which form a crucial component of the German economy.

According to a poll published on Wednesday by DMB, a lobby group for the Mittelstand, reported by the FT, 73 percent of companies were experiencing “severe strain” with 10 percent saying that in the next six months their “existence is under threat.”

Commenting on the results, DMB head Mark Tenbieg said: “Trust in the economic competence of the government is disappearing and small- and medium-sized enterprises feel they have been left alone by the authorities.”

The recessionary trends are not confined to Europe. The US economy has contracted for each of the past two quarters and there are moves by major companies, including Ford, to cut their labour force.

One indicator of the state of the global economy is the fall in oil prices. They have been in steady decline over the past three months, falling by 8 percent in the first two days of this week. The price of Brent crude, the main international benchmark, dropped by 12 percent in August.

Evercore ISIO analyst Stephen Richardson told the Wall Street Journal: “The oil market is going from recession fears to recession acceptance.”

Edward Moya, senior market analyst at the trading firm Oanda told the Journal: “Energy traders anticipate a brutal period for global growth.

“China factory activity remains depressed and another eurozone record-high inflation reading has raised the prospects of much more aggressive European Central Bank tightening that could trigger a severe recession.”

Russian President Vladimir Putin visits Kaliningrad as Ukrainian counteroffensive falters

Clara Weiss

On Thursday, Russian President Vladimir Putin visited Kaliningrad, a Russian enclave on the Baltic Sea, which is disconnected from Russian-aligned Belarus through the Suwałki Gap that runs along the Polish-Lithuanian border. 

Amidst the imperialist proxy war against Russia in Ukraine, the Suwałki Gap has been the focal point of growing tensions between NATO and Russia. The stretch of land passes through NATO territory, and Lithuania and Poland have both systematically sought to provoke a conflict with Russia over it by first attempting to ban freight deliveries from Russia to Kaliningrad, and, most recently, ceasing to issue visas to almost all Russian citizens. Commentators have long warned that if a direct military conflict between NATO and Russia were to occur in Europe, it would likely start over the Suwałki Gap.

Tensions between the EU and Russia have also soared this week over the move by the EU to make the issuing of visas to Russian citizens a lot more difficult amid the ongoing conflicts over Russian gas supplies to Europe, above all, via the Russian-German Nord Stream pipeline.

Putin’s visit on Thursday was clearly designed to reinforce Russia’s claim to Kaliningrad. It was also one of the rare occasions in which Putin openly spoke on the ongoing war in Ukraine. In a discussion with high school students, he stated that an “anti-Russian enclave” had been created in Ukraine after the 2014 US-backed coup, posing a threat to Russia. The liquidation of this “enclave,” Putin said, was the main goal of what is officially called the “Russian special operation” in Ukraine. “Therefore, our guys who are fighting there are defending both the citizens of the Donbass and Russia itself,” said Putin.

His appearance in Kaliningrad came amid signs that the Kremlin is preparing for a protracted conflict with the imperialist powers which might well transcend the borders of Ukraine.

The Ukrainian army’s counteroffensive to retake Kherson, a strategic city in southern Ukraine, though announced with grand fanfare on Monday, already seems to be faltering. 

In an unusually blunt commentary for the Washington Post, David Ignatius all but acknowledged that the imperialist backers of Ukraine do not even count on its success. The Biden administration has spent over $50 billion since February alone on arming Ukraine, including a package that will provide for weapons deliveries for at least another three years.

Ignatius wrote:

As Ukraine mounts a new counteroffensive in the southern part of the country, Zelensky’s bravado risks setting expectations too high. In truth, Ukraine probably won’t liberate its territory this year, or even next. Still, as Ukrainian forces push toward the Black Sea coast, Zelensky is delivering a defiant response to President Vladimir Putin’s claim that Ukraine is not a real country. Not only can Ukraine survive, it also can regain some of its occupied land.

Ignatius then went on to praise Ukraine’s ability to use US-delivered High Mobility Artillery Rocket Systems (HIMARS) and other precision weapons to hit Russian military headquarters, ammunition depots and other military infrastructure. Above all, however, he stressed the Ukrainian insurgency as a key component of this war, proudly acknowledging that it had been prepared for by Washington over a period of almost eight years. He wrote:

This partisan campaign, like the HIMARS precision fire, is a product of U.S. planning and training of Ukrainian forces. Since 2014, U.S. Special Operations forces have been teaching the Ukrainians how to fight an occupying army—using special units like the ones that were so effective against al-Qaeda and Islamic State fighters.

Ignatius then quoted from an interview with Gen. Richard Clarke, who is about to retire as head of the U.S. Special Operations Command: “What we did, starting in 2014, was set the conditions. When the Russians invaded in February, we’d been working with Ukrainian SOF for seven years. With our assistance, they built the capacity, so they grew and they grew in numbers, but more importantly, they built capability,” in both combat assaults and information operations.

According to Clarke, the SOF brigades were developed systematically in Kherson, Zaporizhzhia and the Donbas, in particular, all areas that are now at the center of the fighting. Ignatius boasted:

This guerrilla war has produced a grim body count among pro-Russian officials in the occupied areas. In the past few weeks, pro-Russian officials have been killed or injured by car bombs, roadside bombs, poison and shotguns.

In other words, the US is not concerned with any actual military “victory” of Ukraine in either this counteroffensive or the war as a whole. Rather, the calculation is that an incredibly high death toll from a protracted war and a US-armed and -trained insurgency will contribute to the destabilization of Russia, facilitating a long-planned regime change operation and the carve-up of the country itself. 

The Putin regime, which emerged out of the Soviet bureaucracy’s restoration of capitalism, is utterly incapable of responding to the threat posed by imperialism other than through a promotion of nationalism, militarism and class war at home against the working class. The invasion itself on February 24, while provoked by imperialism, was a bankrupt and desperate effort to increase its leverage in negotiations with the imperialist powers. But the opposite occurred. The invasion was seized upon by the imperialist powers as a much needed pretext to implement their long-held war plans against Russia and escalate their military build-up for a new imperialist redivision of the world.

In a remarkable essay for the think tank magazine Russia in Global Affairs, Sergei Karaganov, who has long functioned as a foreign policy mouthpiece of the Kremlin, effectively admitted that Moscow had no real plan for the war but now had to prepare for a protracted conflict with NATO. He wrote that the ultimate goals of Russia’s “special military operation” in Ukraine “remained to be determined.” 

In the same breath, he insisted that the officially declared goals of “demilitarizing” Ukraine and turning it into a “neutral state” in the conflict between Russia and NATO were still “realizable.” However, in order to achieve them, “Russia must be politically, morally and economically prepared for a protracted military operation, constantly teetering on the brink of an escalation with the West, including and up to a limited nuclear war.” 

Karaganov then went on to discuss at length the danger that such a protracted war could end, like the First World War, in a revolutionary movement among the masses, or, as he put it “the catastrophe of 1917.” He noted the devastating impact that the “economic war” waged by NATO had on the working population, warning that this could ultimately turn public sentiment against the war.

In order to prevent a repetition of the “catastrophe of 1917,” Karaganov insisted that there had to be a purge within Russia’s political and economic elite. He called for a “complete nationalization of the Russian elites, a pushing out of all comprador and pro-Western elements and sentiments,” as well as the establishment of maximum economic autarky. Russia, he insisted, had to be turned into a “fortress.” 

In a display of the same semi-delusional Great Russian chauvinism that now permeates the Russian state propaganda, Karaganov presented the war as the spearhead of Russia’s supposed mission to save civilization in an anti-Western crusade. He wrote, “We are the civilization of civilizations, the prop of the opposition to neo-colonialism, and the free development of civilizations and cultures.”