10 Mar 2023

Pacific Island of Vanuatu devastated by twin cyclones

John Braddock


The small Pacific nation of Vanuatu, 2,600 kms north east of Sydney, is under a state of emergency after two cyclones and two earthquakes hit in as many days last week.

Satellite image of path of Judy and Kevin cyclones that swept through Vanuatu, March 4 and 6, 2023. [Photo: Zoom Earth]

Tropical Cyclone Kevin built to a category four on March 4 as it passed the capital Port Vila and travelled south-east. Wind gusts reached up to 230 kilometres an hour in the early morning hours.

Hundreds of people were in emergency evacuation centres as destructive winds and heavy rainfall hit. No casualties were immediately reported but a number of properties were flattened and many homes and businesses reported power outages.

Initial reports from Vanuatu’s National Disaster Management Office indicated about 80 percent of the country’s population of 320,000 has been affected, including 125,500 children. Many still remain without power, clean water or telecommunications.

Cyclone Kevin came just two days after category four Cyclone Judy, that caused widespread damage and flooding. Cyclone Judy battered Port Vila the previous Wednesday, cutting power and forcing some residents to evacuate.

Port Vila experienced the full force of Kevin’s winds. Evacuations took place in the capital. Vanuatu journalist Dan McGarry told Radio NZ Port Vila had been “badly knocked about.” Fuel was in short supply and a boil water order was in effect. UNICEF's Eric Durpaire said: “It’s crazy, Vanuatu is used to natural disasters, but I think this is the first time it has had two cyclones back to back.”

Devastated Vanuatu village. [Photo: @KatiegIFRC]

Prime Minister Ishmael Kalsakau announced a state of emergency last Friday, saying the cyclones had created a “sad state of affairs.” He called on local authorities to “support the communities in their clean-up and prevent the spread of diseases.” Boats were advised to avoid going to sea and a red alert was in effect for Tafea province, home to just over 30,000 people.

As with all such “natural disasters,” the twin cyclones are exposing the consequences of mass poverty and the lack of basic infrastructure. Thousands of people who live in makeshift shanty towns will be homeless in coming weeks and months and left to fend for themselves.

Up to two thirds of the population relies on subsistence agriculture of yams, taro and sweet potato and face the destruction of their crops. According to McGarry, vulnerability to the impact of the cyclones was most evident in poorer communities, many in rural areas. “The most vulnerable are those living in impromptu housing… they’re the ones who lost their houses and had their belongings destroyed,” he said.

Dickinson Tevi, secretary general of the Vanuatu Red Cross Society, noted that medical centers, hospitals, and schools have been affected. “Some children may not be able to go to school for weeks, maybe months,” he said.

Making matters worse, the island of Espiritu Santo was rocked by twin earthquakes as residents began to clean up Cyclone Judy’s damage. The first, a magnitude 6.5 earthquake, struck around 90 km from the city of Luganville at 5 a.m. on Friday, while a second 5.4 magnitude tremor was felt at 6.30 a.m. The island of 40,000 residents reported no casualties, but with communications down the situation remains unclear.

Spread across 13 principal islands, Vanuatu is in the Pacific “Ring of Fire,” where tectonic plates collide, and experiences frequent seismic and volcanic activity.

As the cyclone system moved away from Vanuatu, Fiji was the next hit. Fiji’s National Disaster Management Office on Monday reported flash flooding in the West, North & Central Divisions. Schools were closed on Tuesday due to continuous rain, flooding, and disruptions to public transport. Heavy rain and flood warnings remain in place for Fiji.

While the damage from the twin cyclones was reportedly not as bad as Cyclone Pam in 2015, which devastated Vanuatu, Climate Change Minister Ralph Regenvanu has now invoked the Disaster Risk Management Act to extend a six-month state of emergency to cover the entire nation.

McGarry has previously noted that Pacific governments are increasingly quick to invoke extraordinary emergency powers “to secure themselves in positions of increasing impunity.” Vanuatu’s Disaster Risk Management Act has been used by successive governments, but the constitution requires that a state of emergency extension may only be made by parliament, and only for three months. The state of emergency has never been debated in parliament, McGarry reported.

Cyclones Judy and Kevin hit Vanuatu late in the region’s cyclone season, which stretches from November to April, but the coincidence of two such events occurring at the same time is extremely rare. They followed Cyclone Gabrielle, which hit New Zealand on February 13 and left large parts of the North Island, including the major city of Auckland, in a state of devastation after unprecedented flooding, affecting hundreds of thousands of people.

Cyclone Gabrielle also followed similarly catastrophic flooding in California in January and in Lismore, Australia last year. While individual extreme weather events cannot be traced directly to global warming, a UN Intergovernmental Panel on Climate Change report (2022) found that catastrophic flooding is becoming more likely.

The report noted that small islands such as those in the Pacific are “increasingly affected by increases in temperature, the growing impacts of tropical cyclones (TCs), storm surges, droughts, changing precipitation patterns, sea level rise (SLR), coral bleaching and invasive species.”

A 2018 communiqué by the Pacific Islands Forum declared climate change as the “single greatest threat to the livelihoods, security and wellbeing of the peoples of the Pacific.” According to the UN World Risk Index, Vanuatu is more vulnerable to natural disasters than any other country on the planet. The 10 most vulnerable countries also include the Philippines, the Solomon Islands, Tonga and Papua New Guinea. Yet the populations of these countries lack basic protection against disasters.

The regional imperialist powers, Australia and New Zealand, which have maintained neo-colonial control over the region for over a century, keeping Pacific nations in a state of impoverishment and backwardness, have done nothing to mitigate the increasingly existential threats of climate change.

Last week, Vanuatu’s United Nations representative said that 105 states, including Australia, had co-sponsored a bid to have the International Court of Justice rule on the legal obligations that states have to respond to climate change.

A General Assembly vote would seek a formal opinion from the international legal body on what “legal obligations” countries have in countering climate change. Any ruling, however, will not be binding. The initial bid did not have signatures from China or the United States, nor Indo-Pacific powers such as Indonesia and India.

As has become usual with such disastrous events, the response of the major powers is not to address the urgent needs of the population but to utilise them to boost their diplomatic and geo-strategic interests and push back against China, including despatching military hardware and personnel.

Canberra has sent the naval ship HMAS Canberra to Port Vila with more than 600 Australian Defence Force personnel on board along with supplies. A small, 12-strong Australian rapid assistance team is in the country and Australian Air Force aircraft are conducting aerial surveillance. France has meanwhile mobilised military assistance from its base in New Caledonia.

Whatever aid funding is allocated to the disaster-affected region will be a miserable pittance compared to what is required. New Zealand’s Foreign Affairs Minister Nanaia Mahuta has announced an “initial” financial contribution of just $150,000, along with an Air Force transport plane containing some supplies.

The earthquake disaster in Turkey and Syria and the role of German imperialism

Ela Maartens


In an earlier comment, the World Socialist Web Site described the major earthquake disaster that shook large areas of southern Turkey and northern Syria in early February as “a devastating indictment of world capitalism.” While governments worldwide expend enormous resources on rearmament and war, they are neglecting the most urgent needs of the broad masses of the population. The victims of the earthquake are being given only paltry handouts.

Aerial photo shows the destruction in Kahramanmaras, southern Turkey, Wednesday, Feb. 8, 2023. [AP Photo/Ahmet Akpolat]

German imperialism is playing a particularly vile role in this regard. To date, the German government has pledged just 108 million euros to support those in the affected region. Compare this sum to the 100 billion euros made available virtually overnight to finance the biggest military rearmament in Germany since Hitler, announced a year ago by Chancellor Scholz (SPD) in his infamous “new foreign policy era” speech. The sum allocated for extra spending on the German army is almost a thousand times more than the money allotted for the earthquake victims in Turkey and Syria!

Almost a fortnight ago, both Foreign Minister Annalena Baerbock (Green Party) and Interior Minister Nancy Faeser (SPD) travelled to the earthquake region to feign sympathy for the victims.

“Our sympathy is not exhausted in words,” declared Baerbock, adding that such sympathy would not abate even if the catastrophe and its consequences were replaced by other headlines in the news.

Her colleague Faeser laid it on even thicker: “It tears our hearts to see the inconceivable devastation and endless suffering this earthquake has caused in Turkey and Syria.” It was very important for the German government to provide immediate and comprehensive assistance in close coordination with the Turkish authorities, the Interior Minister said.

Who are Baerbock and Faeser trying to kid with their crocodile tears? The German government is coldly abandoning the people in Turkey and Syria to their fate. The special funding provided by the government to escalate NATO’s war against Russia in Ukraine would be sufficient to repair the worst of the earthquake damage and also provide considerable reconstruction aid.

According to the World Bank, the material damage caused by the earthquake, which caused countless people to lose all their belongings, amounts to at least 34.2 billion US dollars (about 32.4 billion euros) for Turkey. For Syria, the property damage is estimated at around 5.1 billion US dollars (around 4.8 billion euros), although this figure is provisional. The reconstruction costs for both countries are estimated to be about double that sum. Although severe aftershocks may still increase the property damage (and also the human suffering), even then the 100 billion euros would probably not be exhausted.

The sum pledged so far by the German government to earthquake victims is merely a drop in the ocean, at the same time the ruling class in Germany is demanding even more for rearmament. More and more heavy weapons are being delivered to Kiev for the NATO war against Russia, as Scholz revealed in his government statement on the anniversary of his “new era” speech.

Far more serious than the material damage is the human tragedy of the disaster: According to current estimates, 53,000 people have died so far. In Turkey, 45,089 deaths have been confirmed and 8,476 in Syria. More victims are being added every day, and the number of unreported cases is likely to be far higher than the official figures for both countries. Meanwhile, an entire region suffers from homelessness, hunger and adverse climate conditions. Many have to hold out in emergency shelters or even in tents.

Many people in Germany want to help their relatives in the affected region in Turkey, but the German Foreign Office’s supposedly “simplified, pragmatic visa procedure” reads like a bad joke. In cooperation with the Ministry of the Interior, this procedure is supposed to enable relatives from the disaster area to travel to Germany quickly.

The list of required documents, which according to the Foreign Ministry have been reduced “to a minimum,” is utterly cynical in view of the situation on the ground. In order to go through the procedure successfully, earthquake victims are expected to submit the following documents:

  • Official application form
  • Valid Turkish passport
  • Health insurance for the Schengen area
  • Biometric passport photo
  • Letter of commitment from a first or second degree relative
  • Copy of the identity card/passport and, if applicable, the residence permit of the inviting person
  • Proof of residence (which must have been in the earthquake area at the time of the disaster)
  • Proof of relationship
  • Written description of the emergency situation
  • Signatures/notarised consent of parents in the case of minors

The Foreign Office’s requirements are not only an extra affront for traumatised people from the Turkish earthquake region trying to save their lives; the actual and bureaucratic hurdles simply make it impossible to fulfill the requirements of the visa process.

A special arrangement for those who have lost their travel documents in the rubble of their former homes—which is likely in the vast majority of cases—has been ruled out by the Foreign Office. In such cases, those affected must rely on the (unlikely) cooperation of the Turkish authorities.

In addition, the declaration of commitment of the relatives in Germany must be sent as a copy to an existing address to the applicant in Turkey—a completely hopeless undertaking in view of the destruction on the ground. The same applies to the copy of the inviting person’s identity document.

In the meantime, families in Germany have set off by car to the dangerous earthquake region to bring their relatives the required documents in person. The route from Berlin to the completely destroyed city of Gaziantep in Turkey is no less than 3,635 km.

Moreover, many families of Turkish origin in Germany do not know whether and for how long they will be able to bear the financial burden (currently up to 500 euros per person per month) that comes with the declaration of commitment. The scurrilous demand to describe the personal plight of the applicant in writing shows the utter indifference with which the German ruling class regards the earthquake region.

About 20 million people in Turkey have been affected by the earthquake, according to the German Foreign Office, but only 1,097 three-month visas have been issued so far under the “simplified” procedure for Turkish citizens. Just 159 persons, about half of them from Syria, have received a visa for the purpose of family reunification.

Earthquake victims in Syria are excluded from the ostensibly “simplified” visa procedure. They have been allowed their own ostensibly simplified procedure for permanent residence in Germany, but in fact the hurdles are even higher than for those trying to migrate from Turkey.

Those who want to take advantage of the visa procedure must, in addition to having the financial means to travel to Lebanon, Jordan or Istanbul, embark on a journey that was already almost impossible before the earthquakes. (The German embassy in Damascus remains closed.) Only in exceptional cases is it even possible to cross the Syrian-Turkish border.

The German ruling class bears a massive share of responsibility for the fact that Syria has been plunged into an even deeper social catastrophe by the earthquakes and that necessary aid has failed to arrive. Since 2011, it has supported the war for regime change in Syria, a war which has cost the lives of hundreds of thousands and forced millions to flee with large parts of the country destroyed.

At that time, the then German government led by Angela Merkel supported EU sanctions against Syria, which have been extended every year since. According to the aid organisation Malteser International, these sanctions make it even more difficult to deliver aid today to the earthquake zone.

The German Foreign Office boasted at the beginning of February that the sanctions took into account the need to avoid “negative consequences of any kind for the civilian population.” This is a blatant lie. As a result of the sanctions, direct bank transfers, for example, which could be used to support relatives on the ground, are prohibited. Nor can any sort of medical care in hospitals be guaranteed because equipment, spare parts or medicines cannot be paid for by bank transfer.

European Union ramps up ammunition production and organizes war economy

Johannes Stern


The meeting of European Union defence ministers in Stockholm on Wednesday was dominated by NATO’s escalation of the war with Russia. The aim was to quickly provide the Ukrainian army with massive amounts of ammunition in order to repel the Russian army on the front in eastern Ukraine and to move on to the counter-offensive.

German Defence Minister Boris Pistorius, right, talks to soldiers during a visit to Bundeswehr tank battalion 203 at the Field Marshal Rommel Barracks in Augustdorf, Germany, Wednesday, February 1, 2023. [AP Photo/Martin Meissner]

Significantly, Ukrainian Defense Minister Olexiy Resnikov also attended the meeting. He called on the EU member states to provide Ukraine with 1 million rounds of ammunition worth €4 billion so that Kiev can “continue to defend itself.”

The EU ministers agreed in Stockholm to supply Kiev ammunition. Josep Borrell, the EU’s foreign policy chief, called it a “fundamental agreement on a procedure.” He proposed initially to release €1 billion from the so-called European Peace Facility in order to supply Ukraine with rounds of ammunition from its own stockpiles.

At the same time, further steps are already being prepared behind the scenes. “In order to help Ukraine, the EU must make fresh money available, and quickly,” said Estonian Defence Minister Hanno Pevkur. After the meeting, Swedish Defence Minister Pal Jonson promised, “We will act quickly to meet Ukraine’s demand for ammunition.”

NATO Secretary General Jens Stoltenberg, who attended the meeting, said that work was underway to massively ramp up ammunition production. “NATO countries have reached agreements with the defense industry to increase production,” and several NATO countries have already agreed on “joint projects for the procurement of various types of ammunition, but also for the storage of ammunition,” he announced in Stockholm. “The demand is enormous and the current consumption and production rate of ammunition is not sustainable.”

According to reports, about 300,000 155 mm artillery shells are produced in Europe every year. That is about as many as the Ukrainian army shoots within three months. In order to meet demand, replenish their own stockpiles and prepare for a long and comprehensive war against Russia, the European states are in the process of organizing a veritable war economy.

This goal was openly formulated in Stockholm. To ramp up capacity, the arms industry should switch to the “war economy mode,” demanded EU Commissioner Thierry Breton. Borrell said the same thing. He said he was sorry to say so, but a “war mentality” is needed. After all, we are in “times of war.”

German Defense Minister Boris Pistorius (Social Democrats) began by saying that he “definitely does not adopt the concept of the war economy.” The EU and Germany are “not at war” and “war economy” would mean “that we subordinate everything to the production of weapons and ammunition.”

In fact, that is exactly what is happening. And Pistorius left no doubt about this in his further remarks in Stockholm. Among other things, he called it “worthwhile” to subsidise the defence industry at the ramp-up of ammunition production. “In fact, the arms industry is making real money, that’s macabre, but in times of war it’s just like that, demand rises, and then sales also rise,” he cynically explained. That is why “it is all the more important that we now react flexibly.”

German imperialism in particular is driving the massive rearmament in Europe and the transition to a war economy. In his government statement on the first anniversary of his declaration of a “new epoch” for German foreign policy, Chancellor Olaf Scholz told the German parliament last Thursday that he and Pistorius were currently talking to the defense industry “about a real lane change to a fast, predictable and efficient procurement of armaments for the Bundeswehr and other European armies.” This requires “an ongoing production of important weapons, equipment and ammunition” and “long-term contracts and down payments to build up manufacturing capacity” and “an industrial base here in Germany.”

Behind the backs of the population, these plans are being aggressively pushed forward. Last November, representatives of the arms industry met in the Chancellery with the relevant top officials of the federal government for an “arms and ammunition summit” to increase production. According to reports, Germany plans to spend €20 billion on ammunition alone in the next few years.

In doing so, the same corporations that played a central role in the war economy of the Nazis and rearmed the Wehrmacht for the Second World War within a few years are once again rubbing their bloody hands. Shortly before the notorious summit in the Chancellery, Rheinmetall announced the acquisition of its Spanish competitor Expal Systems for €1.2 billion. With an annual turnover of €400 million, Expal Systems is one of the largest ammunition producers in Europe.

Since then, one announcement has followed another. Rheinmetall is currently setting up a new ammunition production facility for the so-called Mittelcaliber cannon rounds (20 to 35 millimeters) at the Unterlüss site in the Lüneburg Heide, a rural area in northern Germany. For safety reasons, the planned annual capacity is secret, but the goal is “to set up the ammunition supply in Germany again in principle independent of foreign production facilities,” said a company spokesman.

The Unterlüss site, where thousands of forced labourers were employed during the Second World War, is already the largest Rheinmetall ammunition site, covering over 55 square kilometres. Currently, large-caliber ammunition is being produced there, including for the Leopard tank, which the Bundeswehr (German army) is supplying to Ukraine. Previous production levels are being massively ramped up.

When Pistorius visited the plant at the end of February, Rheinmetall CEO Armin Papperger boasted that production had been doubled and in some cases trebled, especially in Unterlüss. They are operating “on full steam” and will increase the production with another shift even more, he commented. Pistorius praised the arms industry and declared that the “new epoch”—a euphemism for the return of German militarism—was “not possible” without it.

In order to defeat nuclear-armed Russia—after the terrible crimes of two world wars—in a third attempt, German imperialism is even planning the production of battle tanks directly in Ukraine. “We are ready to build a plant for the production of the Panther in Ukraine,” Papperger recently announced in the Handelsblatt. So far, the pledges of battle tanks have increased Ukraine’s “clout,” but they are “not enough.” “Russia has vastly greater reserves.” Further “help” is therefore necessary, also and especially with battle tanks,” he continued.

The cost of the insanity of war, which is already claiming the lives of hundreds of Russian and Ukrainian soldiers every day and threatens the survival of all humanity in the event of a nuclear escalation, is also borne financially by the working class. Already last year, when the German army special fund of €100 billion was decided, there were massive cuts to health and social affairs. Now Pistorius is calling for an additional €10 billion a year in the war budget, which will lead to further attacks.

But in Germany and throughout Europe, resistance is growing to this ultra-militaristic and reactionary policy, which is being pursued by the entire EU. Tens of thousands of public service workers are currently participating in warning strikes in Germany every day. On Thursday, 120,000 postal workers voted for an all-out strike. In France, several million took to the streets on Wednesday against the planned pension reform, and in Greece hundreds of thousands protested after the deadly train disaster. In other European countries, major strikes and protests are also developing.

Biden’s $1 trillion budget for world war

Patrick Martin



President Joe Biden speaks about his 2024 budget proposal at the Finishing Trades Institute, Thursday, March 9, 2023, in Philadelphia. (AP Photo/Evan Vucci)

The White House unveiled its budget request for the 2024 fiscal year Thursday, with the largest ever proposed spending on the military. It is a $1 trillion budget for world war. The Biden administration wants the resources to fight Russia in Ukraine, intensify its buildup towards war with China in the Far East and sustain US military aggression in the Middle East. 

Besides $842 billion for the Pentagon, which will undoubtedly be pushed even higher in Congress, there is $24 billion for the Department of Energy, which maintains the US nuclear arsenal, and $20 billion for military-related programs in the State Department, CIA and other agencies, bringing the total official military spending to $886 billion.

To this must be added the real cost of the war in Ukraine, which is listed as only $6 billion for the 2024 fiscal year, which begins October 1. In the previous fiscal year, the Biden administration requested $6.9 billion but ended up spending $114 billion. Given that there is no sign of the war ending—on the contrary, it is escalating rapidly—the cost of US support for the otherwise bankrupt regime in Kiev is likely to surpass the current level. This would swell total military outlays well above the $1 trillion mark.

Since Biden took office, the budget for the Pentagon alone has jumped from $718 billion in fiscal 2022, the first full year of his administration, to $816 billion last year. The $842 billion requested for this year could rise past the $900 billion mark once Congress and lobbyists for the weapons manufacturers have their say. Congressional Republicans have already denounced the budget for providing too little funding for the military.

The name “Department of Defense” is itself a gross distortion since there is not an inch of American soil that needs to be defended against an external enemy. It is rather the world which is under threat from the Pentagon. The US government maintains a global military presence without precedent in history, with more than 700 US bases worldwide, compared to one each outside their own borders for its main targets, Russia and China.

The department should be renamed the Department of Maintaining America’s Global Empire, or perhaps more simply, the Department of World Destruction. Some $38 billion of the Pentagon budget will go to nuclear weapons modernization, bringing the total spending this year on the US nuclear arsenal, to carry out the worldwide annihilation of civilization and perhaps all life on the planet, to more than $60 billion.

Much of the “non-military” budget also contributes to the US capacity to wage war around the world. One White House statement declares that the budget “invests in key technologies and sectors of the U.S. industrial base such as microelectronics, submarine construction, munitions production, and biomanufacturing.” It also includes “the recapitalization and optimization of the four public Naval Shipyards to meet future submarine and carrier maintenance requirements.”

Much of last year’s $250 billion CHIPS Act was funding routed through the Department of Commerce to underwrite the transfer to the United States of production of key semiconductor chips that are vital for high-tech weapons.

The Energy Department budget will support “the strong technical and engineering foundation” for the anti-China AUKUS agreement between the United States, Australia and the United Kingdom. Biden will host British Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese at an AUKUS summit in San Diego on Monday.

There are billions more in the budget for police repression, including $25 billion for Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE), and $14.5 billion for other anti-immigrant activities of the Department of Homeland Security, including immigration courts and the vast network of detention facilities. Tens of billions more go to the FBI and other Justice Department agencies, and in grants that go directly to state and local police departments.

Military violence and police repression constitute the bulk of the $1.7 trillion in discretionary spending, the amount that Congress must authorize and appropriate each year, as opposed to automatic outlays from the Treasury for interest payments and entitlement programs like Social Security, Medicare and Medicaid.

The budget request issued Thursday by the Biden administration is a political perspective, not just a spending plan. It is shared by both capitalist parties, Republican and Democrat, whatever their tactical differences about where and how much to spend. American imperialism seeks to maintain its global domination, and it is now focused on defeating what it regards as its main adversaries, Russia and above all China.

The proxy war against Russia in Ukraine is only the antechamber to an even greater conflict with China, which now takes the form of a rapid military buildup towards what one top general suggested would be open warfare by 2025. The corporate media is doing its part to suppress popular opposition to these wars, seeking to shift public opinion with a propaganda blitz over Russia’s reactionary invasion of Ukraine, and whipping up hysteria over alleged Chinese “spy balloons” and the social media app TikTok, depicted as a nefarious scheme by Beijing to collect intelligence on ordinary Americans.

It was noteworthy that in Biden’s first campaign-style appearance to “sell” his budget to the public, he made no mention of military spending, instead greatly exaggerating the level of spending on health care, education and other social welfare programs, which will inevitably be slashed rather than increased in the course of budget negotiations with the Republicans. 

This was accompanied by populist demagogy over proposals to raise taxes on corporations and the super-rich, which he knows will go nowhere in Congress. The White House could not get a few hundred billion in tax increases on the wealthy through a Democratic-controlled Congress in 2021-2022. To suggest that a Republican-controlled House of Representatives will pass $5 trillion in such levies on the financial aristocracy is a blatant lie.

Biden proceeds like a crude carnival barker, holding up the shiny objects of tax increases for the wealthy and increases in social spending, which are popular among working people, to distract from the real essence of his program, which is to continue and escalate the war with Russia in Ukraine and to prepare the impending war with China.

This is the central axis of the policies of the Democratic Party, a party of Wall Street and the military-intelligence apparatus, which has long ago abandoned any genuine connection to policies of social concessions to working people. Biden’s only dispute with the Republicans is over whether to target Russia or China first. But this conflict is secondary. Both parties uphold the worldwide interests of the American oligarchy.

Demise of crypto firm FTX brings down a bank

Nick Beams


The demise of Sam Bankman-Fried’s crypto firm FTX and his associated company, Alameda Research, has claimed its first banking system victim with the announcement by the San Diego-based Silvergate Capital on Wednesday it was ceasing operations and going into liquidation.

Slivergate CEO Alan Lane, second from right, is applauded as he rings the New York Stock Exchange opening bell before his bank's IPO begins trading, Thursday, Nov. 7, 2019. [AP Photo/Richard Drew]

The collapse of the bank is significant because it was a major conduit for the flow of funds into the crypto market from the regular financial system. According to the Federal Deposit Insurance Corporation, it is the first bank failure since 2020 when four banks went under.

And it may not be the last. According to Hilary Allen, a law professor at American University who has testified before Congress on FTX, the Silvergate collapse could put “even more pressure on banks to demonstrate that their dealings with crypto are safe and sound.”

The crypto world has assiduously promoted that claim, that it is independent of and an alternative to the banking and financial system. The rapid rise of Silvergate and now its precipitous decline is a further exposure of this fiction.

Announcing the decision to cease activity and try to repay its depositors, the company statement said: “In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of bank operations and a voluntary liquidation of the bank is the best path going forward.”

The most significant “recent” industry development leading to its demise was the collapse at the end of last year of Bankman-Fried’s crypto empire which, as he himself even made clear, was essentially a Ponzi scheme dependent on the continued inflow of money.

Silvergate was an essential component of this mechanism. In a statement issued before his operation collapsed, when he was touted as the poster boy for crypto, Bankman-Fried wrote in a comment, prominently featured on Silvergate’s website: “Life as a crypto firm can be divided up into before Silvergate and after Silvergate. It’s hard to overstate how much it revolutionised banking for blockchain companies.”

In the wake of the liquidation announcement, there was a round of tut tutting.

Democrat Senator Sherrod Brown, the chair of the Senate Banking Committee said: “Today, we are seeing what can happen when a bank is over-reliant on a risky, volatile sector like cryptocurrencies. When banks get involved with crypto, it spreads risks across the financial system and it will be taxpayers and consumers who pay the price.”

Democrat Senator Elizabeth Warren, always eager to pose as a defender of consumers, tweeted that Silvergate’s activities had been “risky, if not illegal” and claimed the failure was “disappointing but predictable.”

If that was the case, then the question immediately arises: why was nothing done?

Silvergate was not some fly-by-night operation. Its move into banking for crypto, which started in 2013 but then accelerated after 2016, was approved by the US Federal Reserve.

According to Silvergate president Ben Reynolds, in comments cited by the Financial Times (FT) back in December Alan Lane, the chief executive and mastermind of the crypto strategy, “started seeing that companies like Coinbase were getting kicked out of banks” and saw an opportunity.

“Alan went to the Federal Reserve and said we want to provide basic banking services to Bitcoin companies and they said OK.”

Besides being regulated by the Fed, Silvergate was listed on the New York stock exchange.

The story of the rise and rise of Silvergate is an expression of processes throughout the US financial system, developing over many years, but intensified by the pumping in of trillions of dollars of ultra cheap money into the financial system by the Fed after the financial crisis of 2008, and then further accelerated with onset of COVID-19 in 2020.

Silvergate began as a small lender financing small real estate deals in southern California and holding less than $1 billion in assets. After its major turn to crypto in 2016 it surged. By 2019 it had become the largest crypto currency bank in the US with 1600 major operators in the crypto world using it to shift billions of dollars a month.

As clouds began to gather over Silvergate, following the demise of FTX at the end of 2022 and the charging of Bankman-Fried with criminal offences, the FT reported last December: “Deposits surged from roughly $2 billion in 2020 to more than $10 billion in 2021. By this year (2022), total assets had leapt to $16 billion. Barely 10 months after listing on the New York stock exchange at the end of 2019, at $12 a share, Silvergate’s share price had climbed to more than $200.”

The article characterised its rise, in the words of a former employee, as “a tiny real estate lender that went all-in on crypto.”

But this is much too narrow a focus. Silvergate’s rise is not the story of one little firm that got too big, but was an outcome of the $4 trillion poured into financial markets after the market freeze of March 2020, which sent Wall Street to record highs as well as the major crypto currency, Bitcoin.

After the FTX collapse, money started leaving the bank. In January it was reported that customers had withdrawn more than $8 billion, forcing Silvergate to sell securities, incurring a loss of $718 million, far exceeding the total profit it has made in the previous 10 years.

With the collapse of Silvergate attention is naturally turning to the position of other banks, not only those involved directly in the crypto market but others that cashed in on the Fed’s cheap money regime and whose position has been weakened as a result of continuing interest rate hikes.

The same day as the Silvergate demise was announced, the Silicon Valley Bank launched a more than $2 billion share sale to try to shore up its position which has been hit by losses on Treasury bonds and mortgage-backed securities, whose prices fall as interest rates rise.

The bank has lost around $1.8 billion on the sale of some $21 billion worth of securities. It has also been hit by the cash shortages of start-up companies it has financed in the high-tech sector. Of the three major Wall Street indexes, the tech-heavy NASDAQ has suffered the biggest decline.

Yesterday, shares of SVB, the parent of Silicon Valley Bank, fell more than 60 percent as part of a broader market decline in which the four biggest banks saw $47 billion wiped off their market value.

One of the issues which arises from the Silvergate liquidation is that assurances from endangered companies that their position is “sound” are generally worthless.

As FTX tanked at the end of last year, Silvergate CEO Lane issued a public letter saying short sellers were spreading “speculation” and “misinformation” and the bank had conducted “significant due diligence on FTX and its related entities.” Less than three months later the bank was liquidated.

The rise and fall of Silvergate is not a history of a company that got too big, but rather of how the policies of the Fed in supplying trillions of dollars of essentially free money created a financial minefield, sections of which are now starting to blow up.

9 Mar 2023

Danish parliament votes to abolish public holiday in order to finance military spending increase

Jordan Shilton


Denmark’s coalition government of the Social Democrats and two right-wing parties rammed a proposal through parliament last week to abolish a public holiday so as to secure additional funding for the country’s armed forces. The campaign to scrap the public holiday has gone hand-in-hand with a massive propaganda campaign to portray Denmark as under immediate threat from a Russian attack and therefore forced to arm itself to the teeth.

Mette Frederiksen [Photo by Sandra Skillingsås / CC BY-ND 4.0]

Prime Minister and Social Democrat leader Mette Frederiksen repeatedly declared in the lead-up to the vote that the decision to abolish great prayer day (store bededag), which has been a public holiday in Denmark since the 17th century, was necessary due to “war in Europe.” Speaking after the parliamentary vote, she declared that the decision was appropriate given the “security policy situation,” and would allow the government to spend more on defence.

The proposal was introduced last December in the coalition agreement for the current Social Democrat/Liberal/Moderate government. Negotiations on the agreement lasted for well over a month following the November 1 general election and resulted in the first coalition government between parties from the traditional “left” and “right” blocs in over four decades. While the Social Democrats have long led the “left” or red bloc, the Liberals are Denmark’s largest right-wing party. The Moderates are a new creation of former Liberal Prime Minister Lars Loekke Rasmussen, a close ally of Anders Fogh Rasmussen, who supported the war in Iraq and went on to become NATO secretary-general with backing from the United States.

The government claims it can save 3.2 billion kroner (about €400 million) by adding a day to the working year. Some 700 million kroner of this total will be raised by annulling an automatic increase in state benefits in 2026, rather than increasing them in line with the 0.45 percent pay rise workers will receive to compensate for having to work an extra day. This freeze will hit pensioners and students, among others. The money is intended to help the government reach the NATO target of spending 2 percent of GDP by 2030, three years ahead of the timetable agreed by the Social Democrat minority government and several opposition parties immediately after Russia’s invasion of Ukraine.

The move remains deeply unpopular and was never raised during last year’s election campaign. On 5 February of this year, a demonstration of 50,000 people in Copenhagen, the largest demonstration in the capital in over a decade, organised by the main trade union federation FH, protested the abolition of the public holiday. The sentiment dominating the demonstration was that workloads in the public sector were already so great following decades of austerity that the loss of a holiday was intolerable.

During the intervening month, a systematic effort to whip up militarism and portray Denmark as a frontline state under immediate threat of attack has been under way. On 15 February, the Danish government announced it would participate in the European Sky Shield Initiative, a German-led plan for continent-wide air defence systems. While initial focus will be on short- and medium-range surface-to-air missiles, reports noted that ballistic capabilities could be added in the future, i.e., the capability to fight wars with nuclear weapons.

Over the weekend, public broadcaster DR carried a prominent report on a military exercise by the Home Guard, a division of the armed forces consisting primarily of volunteers, on the island of Bornholm, in preparation for a Russian invasion. Bornholm lies in the Baltic Sea and is Denmark’s most easterly point. The as yet unexplained destruction of the Nord Stream pipeline, which veteran journalist Seymour Hersh exposed as a US-led operation, took place a few kilometers off the Bornholm coast.

The Royal Danish Air Force is currently involved in joint exercises with the US. The manoeuvres, scheduled to run from 6 to 16 March, involve Lockheed Martin’s F-35 fighter jet, which is due to replace Denmark’s fleet of F-16s in stages over the next three years. Lars Loekke Rasmussen’s Liberal government agreed to the purchase of 27 F-35s in 2016 at an estimated cost of €2.8 billion, making it the largest single defence purchase in Denmark’s history.

Denmark currently spends around 1.4 percent of its GDP on defence. To hit the 2030 target, defence spending will need to grow by close to 50 percent, when economic growth is taken into account. To fund this major hike, the government is planning a comprehensive attack on public spending and moves to increase labour productivity.

Two days after last Tuesday’s parliamentary vote to abolish the public holiday, the government tabled a plan to reform master’s degree programmes at Denmark’s universities. The reform will see half of all master’s degrees cut from two years to one, with most of those impacted expected to be in the social sciences and humanities. A heavier focus will be placed on vocational degrees and other forms of training. One of the goals of the reform is to increase overall labour market participation by 6,000 workers.

There is no principled opposition to the undermining of workers’ social and democratic rights to pay for the militarisation of society. Several parties voted against the proposal to scrap store bededag in parliament and backed the protests, including on the “left” the Socialist People’s Party and the Red-Green Alliance, and, on the right, the Conservatives and Liberal Alliance, the far-right Danish People’s Party and Denmark Democrats, and the New Right. But they have all endorsed in one way or another increased military spending and back the US-led war on Russia.

The Socialist People’s Party (SF) supported the initial defence agreement from March 2022 that committed Denmark to reaching the 2 percent target for defence spending by 2033. Frederiksen’s minority Social Democrat government was only in a position to lead the talks on that deal because SF and the Red-Green Alliance (RGA), known as the Unity List in Danish, secured a parliamentary majority for the Social Democrats between 2019 and 2022. The RGA is Denmark’s principle pseudo-left party, including among its members the Pabloite Socialist Workers Party. At its latest congress in May 2022, the RGA abandoned its call for a withdrawal from NATO.

As for the right-wing and far-right parties, their main criticism was that the abolition of store bededag was an attack on the church and on “Danish tradition,” and that savings should be found elsewhere to finance the military spending increase.

Recent events in Denmark are part of a more general trend across Europe. In neighbouring Sweden, the right-wing government, which relies on support from the fascistic Sweden Democrats to remain in power, is implementing a 64 percent hike in defence spending by 2028, which will be funded through attacks on public services and social spending. In France, mass protests have developed against President Emmanuel Macron’s drive to undermine workers’ pension rights so as to help fund a massive €400 billion investment in the military. In Germany, the Social Democratic-led government introduced the Bundeswehr (armed forces) special fund of €100 billion and is now preparing the way for even higher defence spending increases. Meanwhile, it slashed the health care budget by two-thirds in a single year and is in the process of imposing a below-inflation pay agreement on public-sector workers.

Ongoing warning strikes in Germany’s public sector

Gustav Kemper & Max Linhof


Public sector workers in several federal states in Germany have been continuing to take part in warning strikes since Monday. Like last week, strikes in Berlin, Saxony, Baden-Württemberg, Hesse and Mecklenburg-Western Pomerania affected refuse collection, hospitals, nurseries, public transit. On Wednesday, around 70,000 employees nationwide took part in the warning strikes in day care centers and social facilities.

A section of Tuesday’s demonstration in Berlin [Photo: WSWS]

While there is enormous anger and willingness to fight among workers, who are not prepared to accept further cuts to real wages, the service sector union Verdi is doing everything to prevent a broad mobilization. It is organizing the warning strikes strictly separately and with about as much impact as a pinprick. In the background, the union bureaucrats have long been working on a deal with the employers that will mean severe cuts to wages.

This became clear in Berlin, for example, where on Monday and Tuesday workers at the municipal cleansing service (BSR), the water utility company (BWB), many hospitals, the municipal nurseries and the job centres went on strike. On both days, Verdi had moved the two central strike rallies to outside BSR headquarters, which is so remote and hard to get to the public would not notice or be able to participate.

As a result, only 400 workers (mainly from BSR and BWB) came to the rally on Monday and just 250 on Tuesday. Even though there was a large presence of Verdi shop stewards and officials, conversations with ordinary workers revealed the enormous anger about the cuts in real wages, their willingness to fight and dissatisfaction with Verdi’s limited actions.

“The offer from the federal and local governments is laughable,” said one 40-year-old BSR worker, for example. “Five percent over three years, and apprentices are supposed to get just half.” Adding that this did not even begin to compensate for inflation, they said, “More are participating in the strike now, many service segments are coming together now.”

Nurse Marianne [Photo: WSWS]

In nursing, low wages are already leading to permanent understaffing on the wards, making work unbearable for the remaining staff. “At the moment, we have a minimum staffing of one registered nurse for every five patients, and often it is even more,” said Marianne, for example, who works as a nurse in the neurological early rehabilitation unit of the Jewish Hospital. There should be one nurse for three patients, she says, “then they could really be cared for in a patient-oriented way, the way they actually need it.”

“We are here to put more pressure on the upcoming negotiations, but I don’t have much hope that anything will happen,” says another health care worker. “Without a big strike, nothing will be achieved. Although there aren’t many of us here, it’s good that we now have strikers from many service segments, nurses from hospitals, refuse workers, Berlin water utility workers, educators, people from administration.”

WSWS supporters distributed the article “ Governments make provocative offer to German public sector workers ” and discussed the perspective of a Europe-wide strike and a socialist program against cuts in real wages and the pro-war policies of all governments.

The strikes in Germany are part of an explosive movement of the working class across Europe. In France, millions are striking against pension cuts; in Greece, hundreds of thousands have been striking and protesting amid a surge of anger over the deaths of 57 people in the February 28 train crash. In Britain, hundreds of thousands have been striking against wage cuts and attacks on the right to strike.

“It’s actually right that people should unite internationally,” Matti, a 25-year-old worker at the water company, said in response. “I’m not in the union,” he continued, “but I’m still striking today with my colleagues. I don’t want a representative who sits on the employer’s lap during negotiations and then presents us with a fait accompli. I noticed that during the last strike. The energy that is generated is dissipated in small actions. I’m of the opinion that if you’re going to go on strike, you have to use all your strength.”

A section of Monday’s rally [Photo: WSWS]

His colleague, Klaus, 35, also saw a clear connection between the cuts in real wages and the German government’s pro-war policy: “It is right when you say that the city administration is trying to save on wage costs in the public sector to compensate for the increased costs of the war in Ukraine. That’s been the case throughout history—workers are being asked to pay for the war. It’s the same in every country.”

Turkish bourgeois opposition names Kılıçdaroğlu presidential candidate amid earthquake disaster

Barış Demir & Ulaş Ateşçi


As Turkey goes to the elections amid the earthquake disaster, the bourgeois opposition coalition named “Nation Alliance” (Table of Six) has chosen Republican People’s Party (CHP) leader Kemal Kılıçdaroğlu as President Recep Tayyip Erdoğan’s opponent in the presidential elections.

Kemal Kılıçdaroğlu [Photo by Cumhuriyet Halk Partisi / CC BY 3.0]

After the cabinet meeting on Monday, Erdoğan announced they would take “an election decision on Friday, March 10, based on the authority granted by the Constitution” to hold presidential and parliamentary elections. The proposed date is May 14. Although Erdoğan had already announced his candidacy, he is in fact constitutionally barred from seeking a third term in office.

While the bourgeois and pseudo-left parties are starting to focus on the election agenda, millions are still grappling with the disastrous consequences of the earthquake, and the devastation caused by the government’s failure to enforce safety regulations despite scientists’ warnings.

After the devastating February 6 earthquakes in Turkey and Syria centered in Kahramanmaras, the total death toll in the two countries has reached 55,000. The real toll is thought to be over 150,000. This historic disaster, which directly affected tens of millions of people, came on top of a deepening cost of living crisis and growing class struggles in Turkey and internationally.

In Turkey, where real annual inflation has long been above 100 percent, and nearly 90 percent of the population lives below the poverty line, class tensions have intensified in the wake of the recent earthquake disaster. All factions of the ruling class agree that a social explosion must be prevented or suppressed at all costs.

Kılıçdaroğlu’s candidacy comes in this context, after a political crisis brought his “Nation Alliance” to the brink of disintegration. At a meeting last week, members of the six-party alliance, with the exception of the far-right Good Party, agreed that the leader of the CHP, the largest party in the alliance, should be its presidential candidate.

Good Party leader Meral Akşener left the table demanding the Nation Alliance run Ekrem İmamoğlu or Mansur Yavaş, the candidates who won the 2019 local elections in Istanbul and Ankara, defeating candidates of Erdoğan’s Justice and Development Party (AKP). CHP Istanbul Mayor İmamoğlu and Ankara Mayor Yavaş rejected Akşener’s call, however, supporting Kılıçdaroğlu’s candidacy. In 2019, both İmamoğlu and Yavaş had been backed by the main pseudo-left parties.

After closed-door negotiations, an “interim solution” was agreed upon: İmamoğlu and Yavaş became vice presidents, and the six parties met again on Monday, with the Good Party present. On Monday evening, in front of the headquarters of the Islamist Felicity Party in Ankara, the party leaders announced Kılıçdaroğlu’s candidacy and the 12-point “Roadmap for the Transition to a Strengthened Parliamentary System.”

Leaked reports imply that the candidacy crisis may have been caused by factions of the ruling elite, such as the construction oligarchs, who were massively enriched under Erdoğan’s government, seeking assurances from Akşener as part of a possible new government.

Ultimately, the promotion of the Nation Alliance reflects the desire of the US and European imperialist powers and powerful sections of the Turkish bourgeoisie to replace Erdoğan with a more loyal and controllable government amid NATO’s war against Russia and growing class struggles. The Good Party broke away from Erdoğan’s ally, the fascistic Nationalist Movement Party (MHP), after the NATO-backed coup against Erdoğan on July 15, 2016. This was the basis of its alliance with the CHP.

There is a long history of significant conflicts between the Erdoğan government and its US-led NATO allies. Tensions stemming from critical geopolitical disagreements, notably Ankara’s improving ties with Moscow amid US preparations for war against Russia last decade, erupted during the failed coup attempt in 2016.

These tensions have only increased since then. The Erdoğan government represents a faction of the Turkish bourgeoisie, which is deeply tied to imperialism, but it has not fully supported NATO’s war escalation against Russia. It is embroiled in an ongoing dispute to oppose the admission into NATO of Sweden and Finland, who have given limited indications of support for Kurdish nationalists even as Ankara prepares another major military offensive against US-backed Kurdish nationalist militias (YPG) in Syria.

Significantly, in an interview with the New York Times before the 2020 elections, US President Joseph Biden openly declared his support for the bourgeois opposition alliance against Erdoğan. It is no coincidence that Kılıçdaroğlu, now the official candidate of the “Nation Alliance,” has traveled to major NATO countries such as the US, the UK and Germany in recent months, meeting with top members of the political and financial elite.

The “road map” announced by the Nation Alliance does not pretend to present any solution to the fundamental democratic and social problems facing millions of working people. It focuses on how to share the positions of the bourgeois ruling apparatus, such as the vice presidency and the distribution of ministries. Moreover, this alliance, though it claims to “defend democracy,” does not even object to Erdoğan’s unconstitutional candidacy.

The Nation Alliance speaks, first and foremost, for a faction of the ruling class oriented towards NATO and the European Union. Moreover, it is an alliance including openly right-wing parties, just like the rival AKP-MHP “People’s Alliance” led by Erdoğan.

In addition to the CHP, the Nation Alliance includes the far-right Good Party, which broke away from the MHP; the Islamist Felicity Party, from which the AKP emerged; and the Future Party of former prime minister Ahmet Davutoğlu and the DEVA party of former economy and foreign minister Ali Babacan, which broke away from the AKP. The sixth member of the alliance is the Democrat Party, also a right-wing party.

The record of the parties in this alliance sharply demonstrates that it is no alternative to Erdoğan’s People’s Alliance, but a rival that is at least as hostile to the working class and basic democratic rights.

The Turkish pseudo-left tendencies play a destructive role, by presenting this right-wing, pro-imperialist alliance as a progressive alternative to Erdoğan’s reactionary government.

The Kurdish-nationalist Peoples’ Democratic Party (HDP), whose 6 million voters could well swing in the election results, has welcomed Kılıçdaroğlu’s candidacy and invited him for a private meeting.

Erkan Baş, the leader of the Workers’ Party of Turkey (TİP), a party of the HDP-led Labour and Freedom Alliance, with four deputies in parliament, posted on his social media account, “I congratulate the Presidential candidate of the Nation’s Alliance, CHP President Kemal Kılıçdaroğlu and wish him success.” The Left Party, part of a pseudo-left alliance called the Socialist Power Union, reacted the same way.

The Socialist Equality Group, the Turkish section of the International Committee of the Fourth International, rejects the hypocritical and reactionary fraud in which the pseudo-left parties enthusiastically participate. This bourgeois alliance, which includes the CHP, the traditional party of the Turkish bourgeoisie, as well as openly right-wing extremists and Islamists, is as hostile to the basic democratic and social aspirations of the working class and youth as the Erdoğan government.

The electoral policy of the pseudo-left, based solely on Erdoğan’s defeat, serves to drive the masses behind another right-wing faction of the bourgeoisie and distract them from the revolutionary struggle, in conditions where the rising cost of living and unbearable living conditions in the wake of the COVID-19 pandemic and NATO’s war against Russia are pushing the working class into growing struggles all over the world.