Credit Suisse taken over amid fears of financial meltdown

Nick Beams

In an emergency action aimed at trying to prevent a meltdown of the European and global financial system, the Swiss government, the Swiss National Bank and the country’s financial authority, FINMA, organised the sale of the beleaguered bank Credit Suisse to UBS.

Credit Suisse bank headquarters in London, Thursday, March 16, 2023. [AP Photo/Frank Augstein]

The decision, in which it overrode through executive action a requirement that shareholders vote on any takeover, was announced by the government at a press conference Sunday evening before Asian markets opened today.

It came after a series of measures last week, including a $54 billion liquidity provision by the central bank for Credit Suisse, later extended to around $100 billion, failed to staunch the flow of money out of the bank, reported to be at least $10 billion per day last week.

Announcing the decision, under which UBS will take over Credit Suisse at a cost of $3.25 billion, Swiss president Alain Berset said: “On Friday the liquidity outflows and market volatility showed it was no longer possible to restore market confidence and a swift and stabilising solution was absolutely necessary.”

He warned that an “uncontrollable collapse of Credit Suisse would lead to incalculable consequences for the country and the international financial system.”

Under the deal, hammered out in series of crisis meetings over the weekend, the Swiss government will provide more than $9 billion to UBS to cover some of the losses it may incur as a result, and the central bank will make available $100 billion to UBS to facilitate it.

However, the Swiss finance minister, Karin Keller-Sutter, claimed it was not a bailout but a “commercial solution.”

In her press conference remarks she pointed to the global implications of the Credit Suisse crisis.

“The bankruptcy would have had huge collateral damage on the Swiss financial market and a risk of contagion internationally. The US and the UK were very grateful for this solution … they really feared a bankruptcy of Credit Suisse.”

The same message was delivered by the financial regulator FINMA. It said Credit Suisse had experienced a “crisis of confidence” and there was “a risk of the bank becoming illiquid, even if it remained solvent, and it was necessary for authorities to take action to prevent serious damage to the Swiss and international financial markets.”

The forced sale of Credit Suisse is the most significant in the banking system since the crisis of 2008 and it is far from clear that further ramifications have been averted. As the Financial Times noted in a comment, “whether it would halt European bank runs is unknowable. Reassurance is a dangerous game in a financial panic. It can easily confirm the fears of investors as allay them.”

While it had been weakened by the tens of billions of dollars in losses resulting from the collapse of Archegos Capital and the Greensill financial firm, as well as low profitability in some of its investment activities, the trigger for its demise did not emerge from within Credit Suisse itself.

Rather, its collapse is an expression of the vast shift in the financial landscape over the past year as central banks, led the US Fed, have rapidly raised interest rates after providing essentially free money for 15 years under various forms of “quantitative easing.”

It was set off by the collapse of the US Silicon Valley Bank, when it was taken over by the Federal Deposit Insurance Corporation on March 10 after a $40 billion bank run.

Credit Suisse then came under intense pressure last week after the Saudi National Bank, one of its backers with 10 percent of its shares, announced it was not going to put in any more capital. The Swiss central bank then offered a $50 billion credit, but this seems to have deepened the crisis rather than alleviating it, leading to the emergency meetings over the weekend.

Credit Suisse has been a globally significant bank for decades, operating in Europe, Asia and the US. At the end of 2022, it had a balance sheet of half a trillion dollars and 50,000 employees around the world, thousands of whom will be laid off because of the USB takeover.

And there are clearly fears that its takeover and the crisis it expresses, will be manifested in other parts of the financial system. Coinciding with the Credit Suisse decision, the Fed and five other major central banks announced measures to increase the flow of dollars into global financial system to ensure adequate liquidity.

The FT reported that one of the concerns of European authorities is that the “heavy losses imposed on Credit Suisse shareholders, and bondholders” holding its debt could “increase stress in bank funding market this week.”

In a joint statement, the central banks said that from today they would hold daily auctions of dollars rather than weekly to “ease strains in global funding markets.”

On the other side of the Atlantic, there are indications that, far from abating, the crisis set off by the SVB collapse is intensifying. When markets open today attention will focus on the First Republic Bank, one of the first to suffer “contagion” from the demise of SVB.

Last week, 11 major banks, spearheaded by JPMorgan Chase and its CEO Jamie Dimon, with the collaboration of US treasury secretary Janet Yellen, decided to deposit $30 billion between them with First Republic to alleviate concerns that, like SVB, it would have problems meeting depositors’ withdrawals.

But so far, at least, the plan does not seem to be working. Despite the $30 billion inflow, shares in the bank plunged more than 30 percent on Friday bringing the total loss since the SVB collapse to more than 70 percent.

First Republic has the same problem as SVB. The market value of its holdings of US treasuries and other financial assets it invested in, when interest rates were near zero, is now below their book value because of the interest rate hikes initiated by the Fed. Meaning, it would incur significant losses if they had to be sold to meet the cash demands of depositors.

Financial analysts are giving First Republic the thumbs down. Julian Wellesley, global analyst at Loomis Sayles, told the Wall Street Journal: “It’s not clear whether its viable as a stand-alone entity.”

Analysts at KBW, a financial firm which monitors bank performance, said the changes in First Republic’s balance sheet over the past week were “staggering” and, together with its decision to suspend the dividend on common stock, painted a “very dire outlook” for the company and shareholders.

In a note on Friday, analysts at the financial firm Wedbush said there would be “minimal, if any” residual value left if the bank ended up being sold because of the markdown in the value of its loans and securities in any sale.

The crisis at SVB, which is clearly present throughout the banking system, especially among the thousands of smaller and middle-sized banks, has prompted calls for the lifting of the level of deposits which are automatically insured from $250,000.

It has found support from growing sections of the political establishment and from banking industry lobbyists.

Democratic Senator Elizabeth Warren, who likes to present herself as some kind of opponent of the ultra-wealthy who would benefit from such a move, told CBS on Sunday she thought lifting the $250,000 cap was a “good move.”

Posing the question of where the new limit should be she said “Is it $2 million? Is it $5 million? Is it $10 million?”

Warren attempted to cloak such a measure, benefiting ultra-wealthy investors (one of the depositors with SVB, the venture capitalist Peter Thiel stood to lose $5 million had the decision not been made to pay uninsured depositors in full), as giving support for small companies and non-profit organisations to pay wages and their utility bills.

Another aspect of the deepening financial crisis, not attracting the same kind of headlines as on the banks but no less significant, is the situation in the $22 billion US Treasury market, the bedrock of the global financial system.

An FT article at the weekend noted that last week the market for US government debt suffered its most volatile period since the crisis of 2008. Daily trading volumes more than doubled “as the failure of SVB sparked a headlong dash into the safety of Treasuries.” So far, analysts have said market functioning has by and large held up. But that could change at any time.

The article cited comments by Priya Misra, head of global rates research at TD Securities who said: “We’re one crisis away from a complete breakdown of Treasury market liquidity.”

French police step up crackdown on protests vs Macron’s imposition of pension cuts

Samuel Tissot

France’s major cites have seen a wave of protests since French President Macron announced his use of the anti-democratic article 49.3 to impose his government’s hated pension reform on Thursday. A wave of strikes is engulfing France’s major industries, including at refineries, airports, waste management facilities and railroads.

Macron rammed through his reform bill over concerns over how a lost vote would impact European financial markets. The reform is viewed as critical by the French bourgeoisie as it will fund a massive €413 billion rearmament of the French military before 2030 and arms deliveries for the war in Ukraine, without increasing tax on the wealthiest sections of society.

The explosive struggle against Macron, the capitalist state, and the war, comes as workers in in Sri Lanka, Greece, and the United Kingdom are engaged in massive strikes opposed to low wages and the impacts of decades of austerity.

Throughout Friday and Saturday major protests involving tens of thousands continued all over France. There were protests both nights in Rennes, Nantes, Bordeaux, Lyon, Nice, and Marseille. A planned protest in the Capitole de Toulouse Friday was cancelled as police blocked off all access to the square.

In Paris, on Friday and Saturday night, many thousands of protesters gathered at Place de la Concorde and Place d’Italie. On Friday morning, students gathered at the Tolbiac campus to defend striking garbage workers at Ivry-Sur-Seine. Demonstrations to demand the release of detained protesters continued in the capital across the weekend.

Protesters gather at Place d’Italie on Saturday evening:

Violent police repression Friday and Saturday night confirmed the PES’ warnings: the French ruling class has spent the last decade constructing a police state and normalizing state violence to violently crackdown on independent opposition to capitalist rule. So far at least 600 people have been arrested across Thursday, Friday, and Saturday’s protests. This includes Chloé Grace, a journalist from LeMediaTV who was arrested while covering Friday evening’s protest at the Place de la Concorde.

Macron and his fascistic interior minister Gérald Darmanin, have clearly instructed cops to crack down on protests with extreme violence. Footage captured by journalists on the ground show heavily-armed police suddenly and brutally assaulting peaceful, unarmed protesters. In every major city, cops with full body armor, gas, batons, riot shields and often assault rifles, have kettled protest groups before repeatedly charging and teargassing them.

After dispersing protests on Friday and Saturday, BRAV police motorcycle units scoured the streets of Paris for suspected protesters who had evaded initial arrests. Dozens of arrested protesters near the Place d’Italie on Saturday were lined up against a building with their hands on their heads. On Saturday night, water cannon were used again, while a canine police unit set dogs on protesters in Lyon.

On Saturday, Paris police released an order that all unregistered gatherings in the city would be “dispersed.” When protesters began gathering at Place d’Italie for a protest called by the CGT (General Confederation of Labor) union’s Île-de-France regional organization, a police statement was released to the media stating, “Due to the presence of many thugs, the organizer calls for dispersal.” This illustrates the traitorous role of the union bureaucracy: when called upon by the state, the bureaucracy blames its supporters and excuses their violent repression by the police.

By the end of the night, police had arrested 67 people on Saturday in Paris and 187 across the country.

Arrested protesters lined up:

BRAV-M units hunt protesters:

Popular outrage at Macron’s cuts and repression is continuing to grow and protesters are attacking offices of officials favorable to Macron’s cruts. On Friday, night protesters in Lyon entered and partially burned the Mayor’s office in the 4th district. On Saturday the offices of Eric Ciotti, president of The Republicans party (LR) who previously voted for the reform, were ransacked by protesters in Nice. In multiple cities, effigies of Macron, Prime Minister Elisabeth Borne, and other officials were burned.

Yesterday, the government announced it was stepping up police measures to protect parliamentarians and state officials who support the pension cuts.

The ruling class is scrambling to try to bring the situation back under control, using the services of the union bureaucracies and capitalist political parties. Today a vote of no confidence in the government will be debated in the National Assembly. The vote, whose outcome is expected to depend on whether the right-wing The Republicans votes against Macron’s government, is being promoted by the union bureaucracies and the pseudo-left parties as a way to defeat Macron without a struggle against the capitalist system.

Jean Luc Mélenchon’s Unsubmissive France (LFI) is showing its true colors as a party of order with extensive ties to the police and state. On Sunday, Mélenchon echoed the media’s denunciations of violence by protesters stating, “We who are fighting against this law have a message to send to our friends. Do not make the struggle invisible through practices that would turn against us.” He had nothing to say on the violent repression of the French police.

LFI parliamentary leader Michael Bompard called on LR deputies, the majority of whom have supported Macron’s pension reform, to vote for the motion of no confidence. He said, “Whatever you think of this reform, what we are asking you is: do you agree with the method [Macron’s use of the 49.3]?”

The union leaderships are trying to channel workers back behind bankrupt parliamentary manoeuvres criticizing Macron not for his reform and his release of violence police repression but for not working more closely with the unions and opposition parties to impose his reform.

Speaking to BFM-TV Sunday, CGT union leader Phillippe Martinez declared, “We played our warning role… I do not understand that the government and especially the President of the Republic do not take into account our alerts.” Martinez emphasized that he opposes calls to bring down the Macron government, declaring, “It is not a question of overthrowing the government, but of voting what the deputies could not do last Thursday.”

Laurent Berger the head of the CFDT union, ordered striking teachers and protesting students to cut their struggle short, insisting, “You must not interfere with the bac [end-of-high-school exams].”

The ruling class is terrified of the growing prospect of a rank-and-file revolt against the union bureaucracies and an uncontrollable social explosion of strikes and protests. On Sunday, Charles de Courson, a right-wing deputy and finance expert who is leading the motion of no-confidence targeting the Macron government in the National Assembly, warned, “Today, the trade unions tell us that they are not sure of being able to keep control of the troops for long, as we used to say. We began to see the first excesses last night. The risk is that the unions will no longer be able to keep control of the movement.”

Courson has been one of the most dedicated servants of capitalist rule in France for over a quarter of a century. Since first being elected in 1993, he has acted as a financial expert for debates over 30 government budget bills, making him one of the principal architects of austerity in France over the last three decades. That such a pillar of reaction as Courson is working with the union leaderships to try to contain and hold back the struggle illustrates the necessity for workers making a complete break with the bureaucracies.

Honduras cuts ties to Taiwan in favor of China

Andrea Lobo

Honduran President Xiomara Castro announced on Tuesday that her government is cutting its diplomatic ties with Taiwan in favor of China.

China’s Foreign Ministry responded by expressing its willingness to establish ties with Honduras “under the One China principle.”

Chinese president Xi Jinping and Honduran president Xiomara Castro [Photo: Kremlin.ru, Office of the President of Taiwan]

Honduras will join Gambia, Sao Tome & Principe, Panama, the Dominican Republic, El Salvador, Burkina Faso, Solomon Islands, Kiribati, and Nicaragua in making the shift in the last ten years.

The decision reduces Taiwan’s diplomatic allies to only 13—a measure of Washington’s falling economic and political influence in Latin America in relation to China, which the Pentagon has branded as the main threat in the region. At the beginning of the millennium, all seven countries on the Central American isthmus recognized Taiwan, now only Guatemala and Belize remain. The rest of those with ties to Taipei consist of Paraguay, a collection of small island nations in the Caribbean and the Pacific, and the Holy See.

In the second largest of the remaining countries, Paraguay, outgoing President Mario Abdo Benítez has warned his successor that it would be a “mistake” to break ties with Taiwan, but last September he asked Taiwan to invest at least $1 billion in the country to fend off internal pressures to make the switch.

A 2021 study in Foreign Policy Analysis found that Paraguay was losing 1 percent of its yearly GDP by maintaining ties with Taiwan.

Honduran Foreign Minister Eduardo Reina explained on television Wednesday that the decision to sever ties to Taipei was based upon economic considerations after Taiwan refused to increase its aid and credit lines. “Cooperation with Taiwan adds up to $50 million [yearly], which is what Honduras collects in taxes in a day,” he said. “The idea is to seek mechanisms for greater investments, trade.”

Reina then claimed that establishing greater economic ties with China is ultimately aimed at meeting the urgent needs of the “Honduran people.” However, the decision doesn’t alter the position of Honduras in world capitalism as a cheap labor platform with close access to the US market.

In the context of a “nearshoring” push by Washington to incentivize corporations to move production from Asia closer to the United States, the drive to compete for Chinese capital will only add to pressures to maintain widespread poverty as a means of keeping wages low. Currently more than seven million of the 10 million Hondurans live under the official poverty line.

Its “left” demagogy notwithstanding, the capitalist Castro administration took this decision at the behest of the Honduran oligarchy. This was shown by the reaction of Armando Urtrecho, head of the main Honduran business organization COHEP, which previously backed ties with Taiwan to maintain US support. Speaking in front of a USAID poster and the US flag at an event Wednesday, Urtecho told reporters that he neither supports nor rejects ties with Beijing.

The United States has historically and hypocritically coerced other countries to maintain diplomatic ties with Taiwan to counter Chinese influence globally, even as Washington itself has formally recognized Beijing and not Taipei since 1979.

The relations between Taiwan and Central America were originally cemented on the basis of anti-communism and blood as Taipei provided aid, arms and military training to a series of US-backed military dictatorships and right-wing movements that carried out murderous repression in the region.

Legislators from both US parties responded to Castro’s announcement with threats. “Honduran President Xiomara Castro is moving her country closer to Communist China while the world is moving away. The Honduran people will suffer because of her failed leadership,” tweeted Republican Senator Bill Cassidy.

Meanwhile, Democrat Bob Menendez, chair of the Senate Foreign Relations Committee, wrote that the decision “will have implications lasting long beyond the current leadership… A decision to recognize Beijing is not about the competition between the US & China, but it is about the kind of future that Hondurans want to build for themselves & their children.”

Republicans and Democrats in Congress have previously threatened to introduce legislation that would cut ties with and aid to governments that switch from Taipei to Beijing. In Honduras, the Obama administration backed a military coup in 2009 that ousted president Manuel Zelaya (2006-2009), Castro’s husband, who had expressed interest to Chinese diplomats in recognizing Beijing, while also increasing economic ties with the Venezuelan government of Hugo Chavez.

But even the coup regime under President Porfirio Lobo (2010-2014) attempted to establish ties with Beijing, which at the time did not seek to disrupt a rapprochement with Taipei. Subsequently, president Juan Orlando Hernández (2014-2022), who will be tried in New York for drug charges next month, agreed to a $300 million loan from Beijing to build the Patuca III dam.

Castro had promised during her electoral campaign to establish ties with Beijing. However, reflecting fears of US reprisals, she said as recently as January 29 that establishing diplomatic ties with China was not a priority. Foreign minister Reina similarly insisted on February 2 that negotiations with China for a new hydroelectric dam did not mean they would establish official ties.

Reina even felt compelled on Wednesday to clarify, “We’re not looking to break our relationship with the United States.”

According to the Honduran Central Bank, 30.9 percent of exports and 31.4 percent of imports are with the United States, compared to 0.2 percent and 17.3 percent, respectively, with China.

The move takes place as the Biden administration rushes headlong to turn Taiwan into a frontline state for a war against China, even as the Pentagon escalates its involvement in the war against Russia over Ukraine.

Biden has effectively ended its “strategic ambiguity,” whereby Washington formally recognized Taiwan as part of China under Beijing’s “One China” policy, while arming and keeping strong relations with Taipei.

Amid frequent visits of top officials between both countries, the White House formally pledged to arm Taiwan and train its troops on US soil, while sharply increasing the presence of US troops in the island.

Last month, Washington canceled a planned diplomatic visit to Beijing and struck down a Chinese “surveillance balloon” and several other unidentified objects to whip up a war frenzy against China. On Wednesday, Australia announced that it will purchase US nuclear-powered submarines as part of the US-led military encirclement of China.

The Xiomara Castro administration, like the other “Pink Tide” bourgeois regimes in Latin American, is entirely committed to defending the capitalist nation-state framework used by the national ruling elites to institutionalize their corrupt deals and by US imperialism to plunder and dominate the region. Consequently, no bourgeois political force offers an alternative to US imperialist oppression and the drive to World War III.

Castro’s recognition of Beijing will only help drag the country and the region further into the looming conflagration between the United States and China, both nuclear powers with the world’s largest economies and militaries.

After nuclear-capable B-52 flies near Russian airspace, British and German warplanes intercept Russian jet over Baltic

Jordan Shilton

In a highly provocative move, British and German fighter jets intercepted a Russian refueling aircraft Tuesday over the Baltic Sea during a routine flight from St. Petersburg to the exclave of Kaliningrad. Coming the same day as the downing of a US drone by Russia, the interception, which was justified by Britain’s royal Air Force as necessary because the Russian plane approached Estonian airspace, underscores that tensions between the NATO imperialist powers and Russia are stretched to breaking point in the Baltic region as well as in Ukraine.

The British and German jets reportedly escorted the Russian plane for several minutes before allowing it to proceed on its way. The operation was the first time that British and German fighter jets collaborated as part of the Baltic air policing programme, which Britain will lead for the coming four months.

A B-52 bomber releases a bomb during a training operation. [Photo: US Department of Defense]

Less than 72 hours before the interception, a US nuclear-capable B-52 bomber came within a few kilometres of Russian airspace in the Gulf of Finland. The incident was clearly pre-planned and aimed as an intimidatory act. The B-52 flew northwards from Poland through Swedish and Finnish airspace before turning back shortly before reaching the Russian island of Gogland, known as Suursaari in Finnish, in the Gulf of Finland. The island, which lies just 40 kilometres off the Finnish coast and less than 200 kilometres west of St. Petersburg, is home to a Russian radar station and helicopter base. On its return flight, the B-52 passed over the Baltic republics.

Although the incident was barely reported outside of the Swedish and Finnish media, military analysts in the region made no bones about its significance. Mika Aaltola, director of the Finnish Institute for International Affairs, commented on Twitter, “The Gulf of Finland is one of Europe’s most strategically important straits, [and one] where Russia has increased its activities, for instance on Suursaari. This is how de facto allies are taken care of and a counter-deterrent message is sent.”

There is much to suggest that the B-52’s flight was a calculated provocation discussed at the highest levels. Immediately prior to the B-52’s flight, Finnish President Sauli Niinistö was in Washington for talks on Finland’s NATO membership with US President Joe Biden. As they met March 9, a story published by the Finnish state broadcaster YLE noted that Russia has stepped up military activity on Gogland significantly since 2014.

The fact that the highly unusual flight hardly received any media coverage makes it all the more sinister. Based on what is known about the flight, there is little doubt that it came perilously close to triggering a Russian response. What precisely would have happened had the B-52 strayed into or too close to Russian airspace? Would Russia have fired on it from its Gogland base? And given the highly tense stand-off in the region involving NATO and Russian land, air, and naval forces, what would have been the response to such an incident?

The flight also occurred shortly after the resumption of talks between Finland, Sweden, and Turkey on the two Nordic countries’ admission into NATO. Although Ankara gave the green light for Finnish membership Friday, Turkey continues to refuse to approve Stockholm’s application, citing Sweden’s support for organisations like the PKK that Ankara views as terrorists. Earlier this week, Swedish Prime Minister Ulf Kristersson acknowledged for the first time publicly that Finland may become a NATO member prior to Sweden due to Turkey’s continued opposition to approving Stockholm’s application. When Finland joins NATO, the military alliance’s border will be significantly extended with Russia, which shares a 1,300-kilometre border with Finland.

Niinistö was in Turkey Friday for talks with Erdogan, who announced following their meeting that Turkey would give its approval to Finland joining NATO.

Finnish and Swedish NATO membership is fully endorsed by the major imperialist powers within NATO as a means to open up a northern front in the war with Russia. American imperialism is already in the process of vastly expanding its presence in the Nordic region, which will give it improved access to the Baltic Sea and Russia’s borders with Norway and Finland. Last June, an updated defence cooperation agreement came into force between the US and Norway that grants American troops unimpeded access to “agreed areas” and places the soldiers under American rather than Norwegian law. Similar agreements are in the works with Finland and Sweden. Strategic locations like the Baltic Sea island of Gotland and an airbase in the Finnish Arctic could become “agreed areas” in agreements with Stockholm and Helsinki.

The dangerous escalation of tensions in the Baltic and High North comes as Washington and its European allies prepare the ground for a further expansion of their involvement in the Ukraine war. Following Russia’s downing of the American drone Tuesday, Polish President Andrzej Duda announced that Warsaw would provide Ukraine with up to 12 MIG-29 fighter jets, with four to be delivered immediately. Slovakia followed suit Friday, committing to send a small number of MIG-29s to its Ukrainian neighbour. Although these announcements stop short of sending modern NATO warplanes to Kiev, a precedent has now been set for more jets to follow.

The increasingly desperate military situation facing Ukraine, which has suffered upwards of 100,000 military deaths since the war began according to a recent Politico report, is increasing the likelihood of a catastrophic escalation culminating in a direct clash between nuclear-armed powers. If the US and its European imperialist allies are to preserve the credibility they have staked on inflicting a devastating military defeat on Russia, they will soon have little choice but to deploy troops of their own on the ground and ship modern NATO warplanes to Kiev.

NATO is in the midst of numerous military exercises across Europe involving many thousands of soldiers. A March 13 press release reported: “In March, 20,000 NATO troops, plus Finland and Sweden, train to defend Norway in exercises ‘Joint Viking’ and ‘Joint Warrior,’ the largest drills in Europe’s Arctic this year. In the Mediterranean, ships, submarines and aircraft from nine NATO Allies conducted anti-submarine warfare drills during exercise ‘Dynamic Manta.’ France is holding its largest military drill in decades as part of ‘Orion 23,’ involving 19,000 Allied troops over three months. Around 600 German troops are practicing defending Lithuania during ‘Griffin Lightning.’ Flying out of Spain, US B-52 bombers hold joint drills with Allied air forces across Europe.”

In June, the German air force will lead Air Defender 2023, the largest military operation in the air since NATO’s founding. More than 10,000 soldiers from 18 countries, including 210 warplanes, will conduct war games in European airspace. Aircraft will operate from bases across Germany, the Netherlands, and Czech Republic between June 12 and 23.

To speak of this coordinated continent-wide military mobilization as separate “exercises” is a distortion of reality. What is increasingly coming into view is the open preparations by the US-led aggressive military alliance for a direct shooting war with Russia, which is brought ever closer due to the deepening crisis of the far-right regime in Ukraine.

Paris police assault garbage workers striking against Macron's cuts

Anthony Torres

For a week now, garbage collectors in Paris and other French cities have been striking against Macron’s pension cuts. As Prime Minister Elisabeth Borne announced plans to impose the cuts without even a vote in parliament, the Paris police prefecture announced they were banning the strike and requisitioning workers to force them back to work. It is critical to mobilize workers broadly to defend the garbage collectors and other workers whose right to strike is under state attack.

The French state is sending heavily-armed riot police to attack strikers, smash picket lines and force workers back to work. This requisition order is a warning to workers across France and internationally that the capitalist state is waging a frontal assault on the right to strike. This right has been constitutionally guaranteed in France since the fall of the Nazi-collaborationist Vichy regime, which outlawed strikes.

On Thursday morning, in a signal that Macron is preparing brutal repression of continuing protests against pension cuts, police assaulted garbage workers’ pickets in the Paris suburb of Ivry.

The government faces explosive mass opposition against its illegitimate pension reform. Millions of people have been demonstrating all over France for several weeks during days of action organized by the trade unions. In a poll published in the Le Journal du Dimanche (JDD), 67 percent of French people are in favor of blockading the country. 62 percent want the mobilization to continue despite the adoption of the pension reform.

Last fall, the government also ordered the requisition of striking refinery workers for wage increases and against inflation, while France faced a fuel shortage that weakened the Borne government. This action followed the precedent of the Sarkozy government's use of the requisition order against refinery workers in 2010 to crush strikes that were eventually isolated by union bureaucracies.

Since March 6, the state, Paris City Hall and the prefecture have been working together to crack down on the garbage strike, while seeking to lay blame on each other for carrying out the measure. Darmanin had specifically asked the PS mayor of Paris, Anne Hidalgo, to requisition the garbage collectors on strike until next Monday to remove the more than 9,000 tons of waste. Private companies that operate in other municipalities have been called in to limit the sanitary risks.

On Wednesday, March 15, Paris police prefect Laurent Nunez asked Hidalgo in a letter to requisition the garbage collectors, raising the risk to public health: 'The concentration of garbage, notably food, in certain streets of Paris, [makes] run risks to the population, in that it hinders the safe path of pedestrians, in particular that of the persons with reduced mobility, poses a problem of public hygiene and favors the proliferation of rats, vectors of diseases transmissible to the man.'

Wednesday evening Hidalgo gave her assent to the requisition but without putting it in place herself. She said it was the state's responsibility to requisition workers: 'It is paradoxical that the state asks local authorities to solve a problem that it has itself created, while the requisition is by right a state responsibility.”

Nunez finally announced this Thursday, March 16, the requisition. The city hall provided this Thursday the list of 4,000 garbage workers, so that the prefecture could proceed to the requisitions.

Defying the requisition order is an offence punishable by six months imprisonment and a fine of 10,000 euros.

In addition to the Paris garbage collectors who were on strike, the three incinerators that burn waste in Paris were stopped because of the strike of the personnel. These are also targeted by the requisition of the striking staff.

Eight buses of gendarmes intervened to smash the strike at the incinerator at Ivry-sur-Seine, including by firing tear gas volleys, after having unblocked another striking incinerator at Vitry-sur-Seine.

Strikers were assaulted, and three were arrested.

The dictatorial policy of the Macron government and ultimately of the financial markets is to impose its massively unpopular policies and rely on the police forces to physically repress workers' opposition. The mounting financial crisis and the NATO-Russia war are being seized upon by governments in France and across Europe to justify systematically repressing workers and attack the right to strike.

Bonn SDG Fellowships 2023

Application Deadline: 3rd May 2023

About the Award: The aim of this funding line is to invite post-doctoral scientists in all areas of specialization that conduct research primarily on a topic addressed in the Sustainable Development Goals (SDGs) as set forth by the United Nations in its Agenda 2030 for Sustainable Development. The scientists should research and teach at the University of Bonn for one or two semesters. The funding is for a period of at least 3 and not more than 12 months. 

The University of Bonn currently has a large number of collaborations with universities and research institutes in Africa, Asia and South America. As shown by the SDG index, implementing the Sustainable Development Goals poses considerable challenges for many countries in these regions. Based on the 17th Sustainable Development Goal, “Partnerships for the Goals”, researchers in the above-mentioned regions are given preference for the Bonn SDG Fellowships. The goal is to support talented researchers and build and strengthen networks through them.  

Type: Fellowship

Eligibility: Post-doctoral scientists (with foreign citizenship), who research or teach at a university or research institute in the above-mentioned regions, and who can demonstrate proven expertise in an area of research from the thematic spectrum of the SDGs.

Selection Criteria:

• The quality of the research project to be worked on during the stay in Bonn
• Work on a topic that contributes to the Sustainable Development Goals (SDGs) as set forth by the United Nations in its Agenda 2030 for Sustainable Development
• Relevance of the research topic to developments in the region of origin
• The fellow’s contribution to academic life in Bonn (e.g. via public lectures, seminars or colloquiums)
• The fellow’s integration into the host institute (place of work, integration into existing teaching and research activities)
• Follow-on value: a plan for future collaboration projects between the fellow and the host institute in Bonn

Eligible Countries: Countries in Africa, Latin America and the South/East

To be Taken at (Country): Germany

Number of Awards: Not specified

Value of Award: The funding can cover the following:

• A travel allowance (depending on country of origin)
• A scholarship of € 3,000 per month (additional funds for family members: up to € 300 for a spouse and € 250 per child)
• A research expense allowance of up to € 500 per month can be submitted to the International Office after the fellowship has been awarded. Information on applying for the allowance will be provided with your fellowship award.

Insurance benefits are not included in the scholarship.

Please note that the International Office cannot provide housing for scholarship recipients.

Duration of Award: The funding is for a period of at least 3 and not more than 12 months. When calculating costs please note the instructions in the financing plan (and use the following Excel table, download here).

How to Apply: Application includes:

• Online form
• Project description (PDF of max. 8 pages), consisting of:

1. An outline of the research project to be worked on during the fellow’s stay in Bonn
2. Reasons for the fellow’s invitation and a description of his or her contribution to research and teaching at the University of Bonn, an outline of the activities through which the fellow will enrich university life at the University of Bonn during his or her stay there
3. An overview of the collaboration between the applicant and the fellow so far
4. An outline of the integration of the fellow into the host institute (place of work, participation in teaching and research activities)
5. An outline of follow-on value: (a) plan for the outcome of the stay, (b) plan for growing the collaboration in the future.

• Fellow’s CV (PDF)
• A financing plan (please use the following Excel table

The application must be submitted by a full-time professor at the University of Bonn together with the fellow.

Electronically via:

 Application form Bonn SDG Fellowships

• It is important to go through all application requirements in the Award Webpage (see Link below) before applying.

Visit Award Webpage for Details

Dag Hammarskjöld Journalism Fellowships 2023

Application Deadline: 24th April, 2023. 

Offered annually? Yes

Eligible Countries: Developing nations of Africa, Asia (including Pacific Island nations), Latin America and the Caribbean.

To be taken at (country): New York, USA

Area of Interest: Journalism

About Fellowship: The Dag Hammarskjöld Fund for Journalists accepts applications from journalists of the developing nations of Africa, Asia (including Pacific Island nations), Latin America and the Caribbean to cover the United Nations General Assembly beginning in September each year. The fellowships offer a unique opportunity for promising young journalists from developing countries to see the United Nations at work and to report on its proceedings for news media in their home countries.

Offered Since: 1961

Type: Professional Fellowship

Eligibility: The Dag Hammarskjöld Fund for Journalists fellowships are open to individuals who:

• Are native to one of the mainly developing countries of Africa, Asia (including Pacific Island nations), Latin America and the Caribbean.
• Currently live in and write for media in a developing country.
• Are between the ages of 25 and 35.
• Have a very good command of the English language since United Nations press conferences and many documents are in English only.
• Are currently employed as professional journalists for print, television, radio or internet media organizations.  Both full-time and freelance journalists are invited to apply.
• Have approval from their media organizations to spend up to three months in New York reporting from the United Nations.
• Receive a commitment from their media organizations that the reports they file during the term of the Fellowship will be used and that they will continue to be paid for their services.

Number of Fellowships: not specified

Value of Fellowship: The Fund will provide: round-trip airfare to New York; accommodations; health insurance for the duration of the fellowship, and a daily allowance to cover food and other necessities. The Fund will not be responsible for other expenses of a personal nature, such as telephone calls.

Duration of Fellowship: first three months of the General Assembly session

How to Apply: Apply here

Visit the Fellowship Webpage for Details

UK budget deepens social catastrophe for workers

Budget day saw Chancellor Jeremy Hunt focus attention on £5 billion of childcare spending here and £4 billionin pension tax giveaways there, when the real story is a more than £80 billion collapse in household incomes over the next two years.

The Chancellor of the Exchequer Jeremy Hunt, accompanied by his ministerial team and watched by his wife and children, leaves 11 Downing Street on his way to deliver the budget. [Photo by Simon Walker/No 10 Downing Street/Flickr / CC BY-NC-ND 2.0]

The Office for Budget Responsibility’s (OBR) Economic and Fiscal Outlook produced alongside the budget—predicts a cumulative 5.7 percent fall in real household disposable income per head in the period 2022-23 to 2023-2024, the largest drop since records began in the 1950s. On average, each person will be £1,200 poorer two years from now, and the population £81 billion poorer. Of course, the impact will not be distributed evenly; the heaviest weight will fall on the working class.

To put this in perspective, real disposable income fell by 1.2 percent in the last two years which have seen record numbers thrown into fuel and food poverty, unable to pay the rent or afford the cost of travel to work. According to the OBR, things are about to get (almost five times) worse.

To enforce rock-bottom wages, Hunt told parliament that brutal financial sanctions on those claiming welfare benefits while unemployed, “will be applied more rigorously to those who fail to meet strict work-search requirements or choose not to take up a reasonable job offer.” Ben Harrison of the Work Foundation commented, “The UK welfare system is already damagingly punitive—of the 1.4 million people in the ‘Searching for Work’ Group of Universal Credit, one in twelve are already living under sanction.”

As wages fall, public services will be cut. Austerity is still being enforced even if the government no longer dares to speak its name and the opposition Labour Party keeps a complicit silence.

According to the New Economics Foundation (NEF), public spending will be cut in real terms by another £21.6 billion by 2027-28, based on Hunt’s plans.

“The hidden cut is a result of the Office for Budget Responsibility assuming inflation will fall well below the Bank of England’s target of 2% from 2024/​25 – including assuming zero inflation in 2025/​26. But if inflation were to fall that low the Bank of England would be expected to step in to maintain inflation at or above the target of 2%. The NEF analysis looks at what would happen if inflation does not fall below the 2% target.”

This would include an £8.8 billion real terms cut to the Department for Health and Social Care and £3.8 billion for the Department for Education. “After adjusting for population growth and a more realistic inflation forecast, the NEF analysis shows that total spending on services in 2027/​28 would be 12% lower compared with 2009/​10 in real terms.”

Adding the cuts announced in last year’s Autumn Statement and the refusal to lift budgets with inflation in the current spending period, the total public service cuts would be £67.6 billion by 2027-28, versus the original 2021 spending review plans.

This is all calculated on the far-from-assured assumption that inflation will be kept to 2 percent from 2024-25.

The latest assault on the living standards of the working class comes after wholesale gas prices—one of the major influences in the world economic crisis—have halved in the last six months and figures have been released showing the UK economy will likely grow in 2023.

As the National Institute of Economic and Social Research (NIESR) reported last month, “The UK is likely to avoid a ‘technical recession’ in 2023. Though, with GDP growth set to remain close to zero in 2023 and real personal disposable income having contracted for four consecutive quarters, it will certainly feel like a recession for many.”

The NIESR explained, “We project that 7 million UK households (1 in 4) will be unable to meet in full their planned energy and food bills from their post-tax income in 2023-24, up from around 1 in 5 in 2022-23.”

What does this apparent contradiction mean? If the economy is growing, albeit glacially, and the working class is losing billions in wages and public services, then somewhere a great fortune is being built on a great crime.

While workers are not even halfway through an accelerating four-year fall in living standards, life for the major corporations and the super-rich is back on track. After total profits (net operating surplus) for private non-financial companies in the UK fell in 2020 to £208 billion, they quickly bounced back to exceed their pre-pandemic total, reaching £216 billion in 2021, and will be higher still for the year just past. Company fortunes were boosted by worker output increasing 1.3 percent per hour worked between 2019 and 2022—even as real wages fell.

From these profits, the shareholders of FTSE100 companies have drawn roughly £157 billion in dividends in the last two years, and can expect a bumper 2023, £85.8 billion, according to projections from investment platform and stockbrokers AJ Bell. They rewarded CEOs with an average pay packet of £3.9 million in 2020-21, an extra £300,000 on the pre-pandemic total.

While the rich get richer, the government is leaning on the working class to fund the one part of the state budget they are happy to increase: military spending. The Department for Defence will gain £11 billion over the next five years, lifting the percentage of GDP spent on the military to 2.25 percent of GDP by 2025, or 2.5 percent “as soon as fiscal and economic circumstances allow,” in Hunt’s words.

Money is being taken out of schools, hospitals and welfare to pay for war.The Resolution Foundation notes in its commentary on the budget, under the heading “Austerity returns”, “The Chancellor chose largely to ignore pressures on public services in this Budget, but unprotected departments face 10 percent cuts to real day-to-day spending per capita by 2027-28 – rising to 14 percent if the newly announced aspiration for defence spending to rise to 2.5 percent of GDP is met over the next parliament.”

Put another way, the £11 billionon the military accounts for substantially more than the combined spend on continuing energy subsidies (£3 billion) and the Chancellor’s “flagship” £5 billion childcare policy. This barely scrapes the sides of the crisis in that sector, where the average cost of a full-time nursery place for a child under two is close to £15,000 a year and only half of local authorities have sufficient provision available.

And because the British ruling class cannot help themselves,£4 billion will be given away to the richest people in the country by scrapping the lifetime allowance limit on pension tax benefits—previously set at just over £1 million—and raising the annual pension contribution which can be made before it is taxed from £40,000 to £60,000—roughly double the average salary.

This gave the Labour Party an opportunity to claim a semblance of difference with the Tories, pledging to reverse the measure. But on all the fundamental issues, there is nothing to tell them apart. Labour leader Sir Keir Starmer responded by complaining the UK was “falling behind our competitors.”

Reviewing the two parties’ economic policies this January, research company Capital Economics concluded, “Labour’s big lead in the polls raises the question of what difference a Labour government would make to the economic outlook. The answer is probably not much. A tight grip on the public finances is likely by whichever party is in charge.”