Sweden holds largest military exercise in 30 years

Bran Karlsson

“Sweden is at war,” provocatively states the Swedish Armed Forces in one of their announcements for Aurora 23 – Sweden’s largest military exercise since the dissolution of the Soviet Union.

In this photo provided by the Swedish Armed Forces on Aug. 25, 2020, troops prepare in the Baltic Sea region. [AP Photo/Joel Thungren/Swedish Armed Forces]

Aurora 23 began April 17; however, its operations have steadily intensified over the last week, building up to its close today on May 11.

Twenty-six thousand troops are involved in the operation, the largest show of military force in Sweden since 1989, according to the government.

Fourteen other countries have also joined the exercises. While the largest forces have come from the main NATO countries, the United States, UK, Germany, France, and Poland, it is notable that a delegation of soldiers and officers from Ukraine have also participated. 

Finland, which joined the US-led military alliance last month, sent 1,000 troops. Their contingent of American made F-18 fighters played a significant role in the air exercises preparing for war around the Baltic Sea. All the smaller Baltic states located on or near Russia’s border, Lithuania, Latvia, and Estonia, are also participating.

The exercise is being held amid a major escalation in the NATO-Russia war centered in Ukraine.

On Tuesday it was revealed that Britain is preparing to send long-range missiles to Ukraine that would be capable of striking Crimea. The delivery by Britain will likely be followed by other such weapons from the United States and the other NATO powers, potentially including F-16 fighter jets.

The delivery of such offensive weaponry – which US President Biden previously ruled out as impossible, equating it to World War III in March, 2022 – threatens to further escalate the war. It is being given explicitly with the aim of targeting the Crimea – where Russia’s Black Sea naval base has been located in Sevastopol since 1772.

Meanwhile, the United States is directing the Ukrainian armed forces to begin a new counter-offensive against Russia. Hundreds of thousands of Ukrainian and Russian soldiers have died so far from the fighting, according to leaked Pentagon documents from April.

The Aurora war games in Sweden involve a significant focus on operations in and around the Baltic Sea, including various tactical scenarios involving Gotland, the heavily fortified Swedish island in the Baltic. Gotland served as a major Cold War base for the Swedish military, and is located just 300 kilometres from the Russian enclave of Kaliningrad. British Royal Marine commandos have been deployed as part of the exercise, operating out of the amphibious assault flagship HMS Albion. 

The exercises are happening simultaneously with the smaller Formidable Shield 23 – a Scottish and Norwegian-led exercise of air, missile, and naval capabilities in the North Sea and its surrounding coastline. Norway has witnessed a major escalation of American and British troop activities over recent months, especially in its far north where major military exercises were held in March.

Sweden has yet to officially join NATO – being temporarily blocked by the Turkish and Hungarian governments – although it has been officially agreed upon in the Swedish parliament. However, Sweden effectively operates already as a member of NATO, and has long been a close intelligence and military ally of the United States.

The Swedish exercises were meant to demonstrate to Russia this pre-existing military integration with NATO and prepare further for war. As Colonel Anna Siverstig – commander of the Swedish Air Force – stated, “our air force interoperability with NATO is already well established, and this exercise will improve it further.”

The Aurora 23 military exercises have been protested by hundreds of people around Sweden.

In Stockholm, a demonstration was held in April at the beginning of the exercise – with placards reading “NATO’s war will get our children killed for a dollar.” Several hundred protesters also demonstrated in Gothenburg.

The military exercises come amid a deepening cost of living crisis facing the Swedish working class as well as ongoing efforts by the far-right to scapegoat immigrants for the country’s worsening conditions.

Last year Sweden announced it would increase its military budget by 64 percent over five years. Over the past three decades, governments led by the social Democrats and right-wing Moderates have slashed social spending and implemented sweeping privatisations, going a long way to destroy the country’s once much-vaunted social welfare system.

In fact, this year it was revealed that Sweden now has the highest rate of inequality since records began in the 1970s. While Ferraris, Porches and Teslas are common sights in the country’s up-scale neighborhoods, large sections of the population face a cost-of-living crisis that has placed the working class on edge.

In December 2022, inflation rose to a record high of 12.4 percent year-on-year. High energy and food prices only further exacerbate one of the main problems, high rents. 

The Swedish economy is in a recession that is “expected to last until 2025,” according to the Ministry of Finance. It is the only country in Europe in recession.

The news agency Reuters explained, “After years of ultra-low borrowing costs, the pandemic and the Ukraine war have served up a toxic cocktail of high inflation and rapidly rising interest rates to many countries… But in Sweden, the structural problems rooted in its housing market are magnifying the effects.”

Sweden has one of the highest debt levels in the entirety of the European Union – about 200 percent of disposable income per person. Meanwhile, almost two-thirds of Swedish mortgagees have floating rates, meaning they have now increased as central banks internationally have sharply hiked interest rates over the past year.

The right-wing Moderate party-led government, which relies on the support of the fascistic Sweden Democrats for its parliamentary majority, has sought to blame the country’s ills on desperate migrants who fled to Sweden in the 2010’s to escape war and destitution in the Middle East and Africa.

The right-wing ruling coalition just doubled the mandatory income of all job-seeking immigrants coming to Sweden – a move that is expected to bar at least 30 percent of current migrants to Sweden who move with a job in-hand.

Mass protests erupt across Pakistan after military seizes opposition leader Imran Khan

Keith Jones

Pakistani authorities deployed troops to cities across the country Wednesday, amid a second day of mass protests against the violent arrest and detention of former Prime Minister Imran Khan.

Khan was seized by Army Rangers outfitted in riot gear, when he showed up for a court appearance Tuesday, then declared to be under arrest in a separate corruption case.

Khan’s detention immediately triggered mass protests across the country, led by supporters of his Pakistan Tehreek-e-Insaf (PTI) or Movement for Justice.

One protester was killed in Quetta on Tuesday and at least four more Wednesday in Peshawar.

Supporters of Pakistan's former Prime Minister Imran Khan smash a police vehicle during a protest against the arrest of their leader, in Peshawar, Pakistan, Wednesday, May 10, 2023. [AP Photo/Muhammad Sajjad]

In addition to deploying the military to the capital Islamabad and three of Pakistan’s four provinces, Punjab, Khyber-Pakhtunkhwa and Balochistan, the government has suspended mobile data services across the country. This effectively cuts off the vast majority of the population—at 220 million people, Pakistan is the fifth most populous in the world—from access to the internet and social media, so as to suppress information about the protests and the extent of the state repression.

In both Islamabad and Punjab, Pakistan’s most populous province and the traditional political stronghold of the incumbent prime minister, Shehbaz Sharif and his Muslim League (Nawaz), the government has imposed “Section 144” of the Criminal Code, thereby banning any gathering of more than four people and empowering security forces to violently repress protests at will.

At least 1,400 people have been arrested just in Punjab, and hundreds more elsewhere.

The police-military crackdown has thus far failed to quell the protests, which not only target the current coalition government, but also have given voice to mass popular anger against the Pakistani military brass, the backbone of the capitalist state.

“The protests have escalated not just in the federal capital, but also in other parts of the country,” reported Al Jazeera correspondent Osama Bin Javaid around 2 p.m. Wednesday, Pakistan time. “We are hearing reports that at least seven PTI supporters have been killed. We have been seeing pictures of protesters opening fire on security forces and the security forces retaliating.”

At a cabinet meeting Wednesday, Prime Minister Sharif called for protesters accused of involvement in arson and violence to be charged under the country’s draconian, anti-democratic “anti-terrorism” laws. Also yesterday, Khan, who was the country’s prime minister only 13 months ago, appeared at a police headquarters that had been temporarily transformed into a court. He denied the charges against him and expressed concern for his personal safety. But the court brushed all this aside and ordered him held for questioning for eight days.

After a mass movement of workers and rural masses in April-July 2022 chased Sri Lankan President Gotabaya Rajapakse from power, the Pakistani ruling class fears that these protests could trigger a far broader movement in the working class.

For masses of people, including broad swathes of the middle class, the economic situation is increasingly unbearable. Annual inflation now exceeds 35 percent, and the IMF is demanding harsh austerity and privatization measures. As Pakistan teeters on the brink of state bankrutpcy, manufacturers are slashing production because they cannot get dollars to pay for imported parts and raw materials. This further drives up mass joblessness.

To convince the IMF to pay a $1.1 billion tranche of a bailout package first negotiated by Khan, the current Pakistani government is further slashing subsidies. However, despite months of wrangling the IMF has yet to provide the funds. Washington, which dominates the IMF, is demanding geopolitical concessions from Islamabad, including secret arms and munitions shipments to Ukraine, as a precondition for disbursing the funds.

Khan is a right-wing Islamic populist, whose political rise, including his election in 2018, was facilitated by support from the military. Once in office, he and his PTI quickly abandoned their demagogic promises of an “Islamic welfare state” and imposed arguably the most savage IMF structural adjustment program in the country’s history.

However, the military top brass and much of the ruling class soured on Khan after he backtracked, in the face of mass popular anger, on imposing IMF-demanded energy price increases in the first months of 2022. Khan also damaged Islamabad’s already frayed relations with Washington by signaling his willingness to seek closer ties with Moscow in the first weeks of the NATO-instigated Ukraine war.

Since he was ousted as prime minister 13 months ago in a parliamentary regime-change operation orchestrated by the military and encouraged by Washington, Khan has rallied popular support by demagogically casting himself as an opponent of IMF austerity, Washington’s bullying and the machinations of the military.

The PTI’s principal base of popular support is in the urban middle class. Nevertheless, there is great apprehension in ruling circles, that amid acute economic distress, Khan’s calls for elections could create fissures through which the long-suppressed anger and opposition of the masses of workers and toilers could erupt.  

Especially concerning for these elite layers is the destabilizing impact of Kahn’s attacks on the military brass—the bulwark of the Pakistani capitalist state and the linchpin of the reactionary decades-long alliance between the Pakistani bourgeoisie and US imperialism.  

Relations between the Pakistani military and government, on the one hand, and Khan on the other have become ever more fraught in recent months. The decision to seize Khan at the courthouse on Tuesday was apparently triggered by Khan’s decision to again accuse a top military intelligence officer, Major General Faisal Naseer, of being responsible for an assassination attempt last November that left him wounded.

In an editorial Wednesday, Pakistan’s leading English-language daily, the Dawn, expressed grave concern that the military and government’s actions are accelerating the emergence of deep opposition in the working class to the Pakistani capitalist state. “Removing Mr. Khan from the picture solves nothing,” declared the Dawn. “Instead, as the protests yesterday showed, arresting him may have deeply fractured the historic compact between the people and the country’s armed forces.” It continued:

Violence and confrontation are never an answer to political challenges, especially not when the economy is on the ventilator and the people looking to vent their anger over the daily despair that now defines their lives.

The provocation of Mr Khan’s arrest has only led the government and establishment deeper into controversy and will engender even greater public distrust in their policies. This is the last thing the country needs, teetering as it is on the verge of an all-out default. … As long as elections continue to be postponed and the public silenced, continued confrontation will only drive even more wedges between the people and the state.

The military is also in political crisis. On Wednesday it issued a statement denouncing May 9 as a “black day,” in which “attacks were perpetrated on the army’s properties and installations while anti-army slogans were raised.”

“Any further attack,” vowed the statement, “on the army, including all law enforcement agencies, military and state installations and properties will be retaliated severely against the group that wants to push Pakistan into a civil war and has repeatedly attacked them.”

Pakistan’s workers and toilers must oppose the brutal crackdown against the protests. Undoubtedly, the military—which has directly ruled Pakistan with Washington’s support for almost half of the country’s history—is seeking to use the current crisis to expand its repressive reach and political power.

 Above all, the confluence of political, economic and geopolitical crisis underscores the urgency of the working class intervening as an independent political force, rallying the rural toilers behind it, in opposition to imperialism and all factions of the Pakistani bourgeoisie and their political representatives.

An ex-cricket star turned Islamist politician, Imran Khan is a fraud, who during his political career has repeatedly criticized the US, the IMF and military one day only to embrace them the next. He won government in 2018 as an outsider, then immediately promoted a cabal of former members of ex-dictator General Pervez Musharraf’s government to his own. Today, he cries foul over the actions of the National Accountability Bureau, the politically manipulated “anti-corruption” agency. However, when in power he similarly used it to jail and silence his political rivals.  

As for the PPP, the dynastic party led by the Bhutto family and that in an earlier period postured as “left,” for decades, it has done the IMF’s bidding and courted Washington. This included trying to help George W. Bush provide a “democratic” face-lift to Musharraf’s foundering dictatorial regime, then greenlighting Obama’s drone war, which devastated parts of Pakistan’s northwest starting in 2009.

Student debt to soar in Australia as indexation reaches ten-year-high

Sofia Devetzi

Three million university graduates will see their student debt soar this year, as the Australian government pockets a windfall from high indexation. Student debt is set to rise by almost $5 billion from June, further compounding the immense cost of living and housing pressures already felt by young people.

Students at the University of Adelaide [Photo: University of Adelaide]

In Australia, the federal government lends students up to $109,206 to pay for tuition fees (or even more for those studying degrees such as medicine, dentistry or aviation) in a scheme known as the Higher Education Loan Program (HELP). Graduates repay the debt gradually through the taxation system once they earn $48,361 per year—just above the minimum wage—taking a decade, on average, to repay the full amount.

While student loans do not technically accrue interest, the outstanding debt is indexed to inflation on June 1 each year. As inflation has increased, so has indexation, climbing from 0.6 per cent in 2021 to a record 3.9 per cent in 2022. This year, students and graduates will be hit with an indexation of 7.1 percent.

Those with an average outstanding student debt of $24,770 face an increase of $1,759. This means that graduates with taxable income of less than $62,739, will see their debt balance rise, despite making the compulsory repayments.

One arts/law graduate, Zoe, spoke with the Guardian about the $123,000 student debt incurred from her studies. That debt is set to rise by about $9000 next month, meaning that the $10,000 she is estimated to pay back this year—the second biggest expenditure in her life after rent—will scarcely make a dent. In the past five years of working, she has paid off more than $15,000 of her debt, but the total has only reduced by about $4,000.

“It’s a bitter pill to swallow,” she said. “There doesn’t seem to be an end. My rent went up $80 a week in March and everything is more expensive… wages don’t keep up with indexation, why do our debts?”

This is a sentiment echoed across age groups and occupations. As Gemma McWhirter, a 52-year-old school teacher, told the Australian Broadcasting Corporation: “Paying mine off was a case of two steps forward, one step back. It took me 27 years to get rid of the debt.”

While graduates see their loan increase with inflation each year, the government accesses the money to fund the loans at the Reserve Bank cash rate, which currently sits at 3.6 per cent. This discrepancy—with inflation adding roughly double that rate to debt amounts—means that the government will actually profit off student debt, pocketing up to $2.5 billion.

The Labor government has rebuked calls to freeze indexation on student loans this year, with Treasurer Jim Chalmers arguing that the student debt program is fair.

“I understand and obviously listen respectfully when student unions and others raise their concerns,” he said. “But this is an ordinary indexation and in terms of payments and pressure on people, the repayments go up when your salary goes up… That is how the system works.”

Chalmers also touted the fact that graduates only begin to pay back their debt after they earn a certain amount of money, and said that “the arrangements for HECS [the original name of the program] and for university loans and education loans have been unchanged by this government.”

But when Chalmers says Labor has left HECS settings unchanged, he is also referring to the recent measures by the Coalition government that dropped the minimum repayment threshold from $56,000 to $52,000, and then again to less than $46,000. Despite professed objections to this while in opposition, now, once in government, Labor has refused to restore the threshold from this historical low point.

Labor’s attack on tertiary education is not a new phenomenon. It was the Hawke-Keating Labor government that abolished free university tuition and introduced the HECS-HELP scheme in 1989. Since then, tuition fees have only been ratcheted upwards, under the auspices of Labor and Liberal-National Coalition governments alike.

The Labor government of 2007 to 2013 imposed an “education revolution” which forced universities to compete for enrolments while cutting funding by $3 billion in 2012‒13, driving them to become increasingly dependent on full-fee paying international students. That laid the basis for further cuts by the subsequent Coalition governments—the most recent of which exploited the COVID pandemic to eviscerate university jobs and courses, citing the loss of international revenue.

Last year, both major parties marched in lockstep in targeting higher education for steep cuts, with the then-opposition Labor Party helping the Coalition government push its budget through parliament within 24 hours. This will see $3 billion sliced off universities from the 2017‒18 to 2025‒26 period.

It seems that Labor will also leave the Coalition’s notorious “Job Ready Graduates” scheme intact, which massively shifted the cost of delivering a university education from the government and onto students. Course fees for humanities degrees increased 113 percent in an attempt to dissuade students from studying subjects such as history, politics or philosophy—and loading them with massive debt if they chose to do so.

The soaring student debt comes at a time when young people are already facing a crisis in the cost of living and a decrease in real wages. School-leavers struggling with high rent and food costs are increasingly being compelled to drop out of their degrees, or else are drastically cutting back time spent studying to devote more hours to paid employment.

Cost-of-living pressures are also locking people out of postgraduate study, with the minimum PhD stipend sitting at less than $30,000 a year, below most measures of the poverty line.

Outstanding HECS debt lowers a person’s borrowing capacity when they try to take out a home loan, as it is counted like any other financial liability. By increasing the amount of student debt that current and former students acquire, the government is further locking young people out from the housing market.

Speaking to the SBS, student and casual worker Ngaire said that knowing she has so much debt accruing makes owning a home or buying a car seem “really unreachable.” She said having another layer added to the cost of living “makes me feel a lot of dread.” “And I feel a lot of pressure now to go into a job where I can start paying off my HECS debt and get it done quicker.”

The situation facing students in Australia is the result of tertiary education becoming increasingly commodified. As seen most starkly in reforms such as the “Job Ready Graduates” scheme, the sector must serve the profit interests of employers and the capitalist class. The corporatisation of universities and degradation of academic qualities mean that the least profitable aspects are either underfunded or discarded outright, as universities hunt for more savings. And, perversely, the cost of degrees continues to grow while the value of those degrees decrease.

The attacks on students form part of a broader austerity offensive, being taken forward by the federal Labor government, including through its cost-cutting austerity budget. While there are billions of dollars for tax breaks for the wealthy and handouts to the corporations, and billions more for the military in preparation for war, essential services, such as health and education are being slashed.

IMF-dictated debt restructuring will deepen economic instability in Sri Lanka

Saman Gunadasa

The International Monetary Fund (IMF) has demanded that the Sri Lankan government restructure domestic debt as the next step in its brutal austerity program. This means the government must arrange with domestic creditors to restructure their loans so as to reduce the government’s debt burden.

World Bank senior mission chief Peter Breuer, (right) and Masahiro Nozaki, mission chief for Sri Lanka during a media conference in Colombo, Sri Lanka, Thursday, Sept. 1, 2022. [AP Photo/Eranga Jayawardena]

According to the Central Bank, Sri Lanka’s domestic debt is around 15 trillion rupees ($US47 billion), with foreign debt totaling 12.5 trillion rupees. The major domestic lenders to the government are private and public banks (8.5 trillion rupees) with the remainder from non-banking sources.

The Employee Provident Fund (EPF), which is one of these non-banking sources, is the country’s main superannuation fund. It has invested around 95 percent of its 3.5 trillion-rupee fund in government securities.

Domestic debt restructuring will have a detrimental impact on workers’ savings. Apart from retired government employees, who are eligible for a monthly pension, the majority of retirees in Sri Lanka deposit their pension funds in commercial banks and live on the interest payments. Private sector and state enterprise workers accumulate their pensions in the EPF with statutory contributions from employers and employees.

Opposition Samagi Jana Balawegaya (SJB) MP Harsha de Silva told parliament on May 9 that the total US dollar value of the EPF had fallen to $9.5 billion in 2022—down from $15.8 billion at the end of 2021—due to devaluation of the rupee and the negative real interest rate paid per annum.

The main domestic lenders to the Sri Lankan government are the state banks, regarded by working people as the most reliable and stable financial institutions. These banks, including the Bank of Ceylon, the People’s Bank and the National Savings Bank, have lent to the government by buying treasury bills and bonds.

IMF Asia and Pacific Department Director Krishna Srinivasan told a Hong Kong press briefing last week that the Wickremesinghe government had accepted the IMF’s demands for domestic debt restructuring prior to last month’s official approval of a $US3 billion bailout loan. The government is expected to present a comprehensive debt-restructuring framework this month.

Krishna Srinivasan bluntly declared, “When you restructure domestic debt, you have to make sure that you also safeguard financial stability… debt sustainability is quite a big challenge in Sri Lanka.”

Domestic debt restructuring has triggered worried statements from the corporate sector and other sections of the capitalist class, which are concerned about its impact on their assets. This nervousness is reflected in comments from the parliamentary opposition parties, such as the SJB, which have warned the government that it must safeguard the stability of the banking system.

While Sri Lanka’s corporate banks have reaped exorbitant profits during the country’s unprecedented financial collapse, consecutive Colombo governments have imposed the burden of this crisis on working people who have endured untold suffering.

Following the onset of the coronavirus pandemic, the Central Bank provided hundreds of billions of rupees to the corporate banks, which made loans to big business at cut price interest rates.

According to the Central Bank, after-tax profits for the banking industry in 2021 were 172 billion rupees and in 2022, at the height of the economic crisis, over 150 billion rupees. Private banks also reaped the rewards. The Hatton National Bank and Sampath Bank made 15 billion and 13 billion rupees respectively in net profit in 2022.

Attempting to alleviate concerns about the ongoing profitability of the banking sector, the Central Bank has assured local bankers that their profits will be protected from any adverse impact of domestic debt restructuring.

Addressing a public forum on Tuesday, Central Bank Governor Nandalal Weerasinghe declared: “In any kind of debt optimisation, we will ensure and safeguard banking system stability, as well as the protection of public deposits.”

Notwithstanding Weerasinghe’s claims that the Central Bank will protect “public deposits,” the governor’s real concern is the profits of the banking industry, not the depositors of pension funds and smaller savings. There is a real danger that workers’ life savings will be used by the government to restructure and reduce its domestic debt.

On April 21, Bloomberg quoted Suhini Fernando, the chief executive officer of Reliance Capital, a Colombo-based investment consultancy, who said: “One way to push through the debt overhaul would be to restructure bonds held by the nation’s superannuation funds. That would have the least economic impact, while offering a bigger effect on reducing the nation’s gross financing needs as per the IMF parameters.”

In other words, the IMF’s demands for domestic debt restructuring without impacting on the banking capital of big business could be realised by exploiting workers’ pension funds. This would be another component of the “brutal experiment,” previously referred to by Peter Breuer, the IMF’s mission chief for Sri Lanka.

When the Wickremesinghe government and all the opposition parliamentary parties declared that there was no other alternative to IMF austerity, they not only endorsed all the social attacks now being unleashed against working people. They also committed not to “destabilise” corporate profits.

Workers should not be misled by the demands by the parliamentary opposition parties, trade unions and the pseudo-left for “re-negotiation” of the IMF’s demands or the “implementation of austerity measures with the peoples’ consent.” These desperate and cynical calls are designed to dissipate the rising mass anger against the IMF program.

Spain’s union bureaucrats slash real wages, fear revolutionary contagion from France

Santiago Guillen

The eruption of the class struggle in France and across Europe is terrifying Spain’s Socialist (PSOE)-Podemos government and its affiliated trade union bureaucracies, the Podemos-linked Workers Commissions (CCOO) and the social-democratic General Union of Workers (UGT).

Explosive anger is building among workers in Spain as the CCOO and UGT bureaucracies move to endorse contracts with paltry wage increases dwarfed by inflation. The bureaucracies are terrified that mass struggles will erupt at their attempt to slash workers’ living standards. The same conditions driving the revolutionary confrontation between workers and the French President Emmanuel Macron exist in Spain and across Europe, with strikes against austerity and inflation growing in Italy, Germany, Britain and beyond.

The state of discussions within the union bureaucracy was reflected in the comments of UGT General Secretary Pepe Álvarez at the union-sponsored May Day rally in Madrid.

Warning about the possibility of revolutionary contagion from the protests against Macron in France, should mass mobilizations of Spanish workers begin, Álvarez said: “We know how mobilizations begin, but not how they end.”

Speaking of the French union leaders, he continued: “When they began, they didn’t know they were going to take the importance they did.” That is, Álvarez let it be known that French union leaders are surprised and dismayed they are that, having called protests, they no longer know how to call them off due to pressure from below.

This clearly also explains why Spanish union bureaucracies are calling no action against the collapse of workers’ living standards in Spain. They are also terrified of working class anger and of the danger of opposition erupting that they cannot control. For over a year, they have delayed the signing of hundreds of collective agreements to avoid eruptions of strikes demanding higher wages. The number of collective agreements signed in 2022 fell by 70 percent.

The ruling class is very conscious of the union bureaucracies’ role in strangling the class struggle as it wages war against Russia in Ukraine. In an editorial, the economic newspaper Cinco Días praised “the great work done by the Spanish unions, especially the CCOO and the UGT, so that spiraling prices did not cause an environment of mobilizations demanding wage increases.”

The article recognised the importance of the trade unions as the labor police of corporations and banks, recognising that they “agreed to a strong loss of purchasing power' in 2022. Workers had not been called onto the streets to demand wage increases despite the cost of living “skyrocketing, while companies almost doubled profits in 2022 (they rose 91.3 percent, according to data from the Bank of Spain).” In the same year, the article concluded, there were fewer strikes (679) than in 2019 (898), the year before the outbreak of the COVID-19 pandemic.

Indeed, throughout the year, the unions made empty threats of “spring mobilizations,” then “a hot summer” and finally a “winter of discontent” if salaries were not raised. On May Day, CCOO General Secretary Unai Sordo threatened 'an intense process of mobilizations that will take the form of strikes.” Similarly, the UGT’s Álvarez said they would “fill the streets.”

Behind the backs of workers, however, they were negotiating wage increases far below inflation. In 2022, 3,084 collective agreements covering 9 million workers saw their average wage increase by 2.7 percent—only one-third of average inflation that year, which reached 8.4 percent. According to calculations by Oxfam, workers have lost an average of €1,500 a year, or an average of 5.6 percent of their purchasing power.

Now, the Spanish union bureaucracies are making clear they are committed to continuing the plunder of the working class for the next several years. Days after the May Day Rally, the unions signed the fifth Agreement for Employment and Collective Bargaining (AENC) with the main business group, the Spanish Confederation of Employers' Organizations (CEOE).

The AENC is a set out a nationwide framework for contracts and pay raises in over 1,300 collective agreements pending renewal this year, affecting millions of workers. It includes a 4 percent wage increase for 2023, and 3 percent in 2024 and 2025—all below inflation.

Annual core inflation, which strips out volatile fresh food and energy prices, is currently at 6.6 percent. However, the rise in food and energy prices, which disproportionately impact workers who spend much of their budget on food and energy, means real inflation is far higher. Over the past year, food and beverages have risen by 16.5 percent; meat by a record 14 percent; milk, cheese and eggs 24 percent; and legumes and vegetables 22 percent. The average mortgage has risen 54 percent.

If inflation were to continue to run at around 10 percent over the next three years, as it did last year in the euro zone, the AENC would stipulate a staggering 20 percent cut to workers’ real wages.

The unions nonetheless hailed the AENC, with shameless lies claiming that it protects purchasing power. Álvarez (UGT) stated: “it will allow not only to maintain the purchasing power of wages, but to recover it.” Sordo (CCOO) said, “What we are sealing here today is good news,” calling the agreement “a collective success.”

The PSOE-Podemos government also hailed the deal. Yolanda Díaz, deputy prime minister, labor minster and leader of a split-off of the pseudo-left Podemos party, Sumar, thanked “social agents for such an important agreement aimed at protecting the wages of working people.”

These are all lies, especially as the agreement does not even compel management to grant the raises suggested by the AENC. These raises are advisory, not mandatory, and union officials and big business are free to impose even lower wages than those stipulated in the AENC. Nearly seven million workers are not even covered by the AENC, moreover; they are subject to collective agreements signed before, most of them with raises far below inflation.

CEOE president Antonio Garamendi bluntly declared that he hopes the AENC will prevent strikes and “guarantee social peace until 2025.”

On top of this, the PSOE-Podemos government plans to impose mass austerity. It has promised the European Union to impose €24 billion in cuts or tax hikes to slash the public deficit next year to 3 percent of GDP.

There is nothing for workers to negotiate with the CEOE or with the PSOE-Podemos government. They are enemies of the working class, whose living standards they relentlessly attack. No less than Macron—who rams through his cuts in the face of overwhelming popular opposition and mass strikes, counting on the union bureaucracy to block a struggle against the capitalist police-state machine in France—they rule against the population.

While the union bureaucracies in France appeal for “mediation” with Macron to block a political movement to bring down the Macron regime, the Spanish union bureaucracies similarly are complicit in massive attacks on wages, social rights and living standards. Demands by pseudo-left groups for the union bureaucracies to wage a struggle are a dead end.

Australian prime minister hails opening of highly automated grocery warehouse

Paul Bartizan & Martin Scott

Late last month, Prime Minister Anthony Albanese attended the opening of one of the largest and most highly automated grocery warehouses in Australia, at Redbank near Ipswich in the state of Queensland.

Albanese hailed the “extraordinary centre,” claiming it would create 320 “permanent jobs, secure jobs here in Queensland.” The reality is that the facility is part of a $1 billion investment in job-cutting technology by Coles, the second-largest supermarket chain in Australia.

Anthony Albanese and Queensland Premier Annastacia Palasczuk at the opening of Coles’ Redbank warehouse [Photo: @AlboMP]

Once Redbank and a second automated distribution centre (ADC), to be opened next year in Kemps Creek, New South Wales (NSW), are both operational, Coles will close five existing warehouses in the two states, slashing thousands of jobs.

This capital expenditure is, in effect, already paid for, through Coles’ “Smarter Selling” cost-cutting initiative, which is on track to save the company $1 billion over the four years ending this June. As well as cuts on the logistics side, this has involved slashing retail jobs, including through the stepped-up rollout of self-service checkouts.

The Redbank ADC will supply 219 Coles supermarkets across Queensland and northern NSW. It will automatically process four million cases (32 million individual products) per week, twice the capacity of other Coles warehouses. Only 10 percent of products will be touched by human hands, from delivery into the warehouse by suppliers through to automatic loading onto trucks for distribution to supermarkets.

The 34-metre high, 66,000 square metre ADC uses German company Witron Logistik + Informatik equipment. The Redbank facility is the largest of the 93 ADCs around the world using this technology.

Albanese declared that the warehouse was “a great example of investment in new technology and investment in Australia … in order to boost productivity, boost efficiency, lower costs, therefore lower prices and make a difference for people going forward.”

The prime minister’s claim that lower costs for Coles will reduce prices for customers is a lie. Coles is seeking to increase its profitability and gain a competitive advantage over its rivals, Woolworths, Aldi and Metcash.

This is clearly expressed in the financial reports of the major supermarkets. Ongoing cost-slashing measures have not been used to cut shelf prices, but to increase profit margins. This process has been accelerated by increased demand during COVID-19 lockdowns in the early stages of the pandemic, shortages of fresh produce due to floods and surging inflation.

In the second half of last year, as the price of groceries and other basic essentials soared, Coles increased its gross margin by 0.43 percentage points to 26.5 percent and recorded a 10.6 percent rise in before-tax earnings to $991 million.

Woolworths, the other half of Australia’s supermarket duopoly, recorded a 0.48 percentage point gross margin increase to 30.7 percent and $1.439 billion half-yearly earnings before tax, 18.2 percent higher than in 2021.

Like Coles, Woolworths is looking to slash labour costs through the increased use of automation, with a target of $135 million in annual savings.

The company is currently building two sophisticated new distribution centres in Moorebank, southwest Sydney, replacing three warehouses in Minchinbury and Yennora in Sydney, as well as Mulgrave in Victoria. The new facilities will be staffed by around 650 workers, less than half the number employed in the closing centres.

Similar developments are taking place throughout the logistics sector.

Amazon’s 200,000 square metre Kemps Creek distribution centre, opened in April 2022, currently dispatches 100,000 parcels per day but has capacity for many times that amount, despite employing just 1,000 people. This is possible because of the facility’s autonomous mobile robots (AMRs), which transport products from the four-storey warehouse, containing 20 million different lines, to workers for packing.

Major investment is also underway in the transport of goods. Four massive intermodal hubs are being built along the east coast of Australia to reduce freight costs. The $4 billion Moorebank Intermodal Terminal will automate the transfer of shipping containers between trucks and trains.

Darren Searle, CEO of LOGOS, which owns the Moorebank site, explained, “You can get a box from a ship onto a train, delivered to Moorebank into a distribution centre. And then you can get it delivered from the distribution centre to the interstate terminal and delivered interstate and it doesn’t touch a set of hands.”

Albanese’s endorsement of the move by Coles to slash its labour budget is entirely in line with the Labor government’s broader pro-business agenda. When Albanese and Treasurer Jim Chalmers declare that wage growth must be linked to productivity increases, they mean that the only way workers will see even a minimal increase in real pay is through the destruction of jobs and conditions.

Standing alongside Albanese, Coles CEO Steven Cain said, “The jobs that are in here are much more likely to be tech-based as opposed to manual-based, … There’s probably a similar number of people on site to a [standard distribution centre]. However, it’s doing twice as much.”

In other words, productivity has doubled, cutting the overall workforce required in half. Coles warehouses at Heathwood and Forest Lake in Queensland, as well as Eastern Creek, Goulburn and Smeaton Grange in New South Wales will be closed, destroying around 2,000 jobs.

Albanese’s public celebration of the new Redbank facility demonstrates Labor’s support for similar profit-driven, job-slashing, restructuring operations to be carried out across all industry sectors.

Coles’ Smeaton Grange warehouse was the site of a bitter dispute in 2020–2021, in which management locked out the entire workforce for more than three months. Aware that the facility was slated to close within a few years, workers demanded improved redundancy pay as well as a wage increase.

Any struggle by workers against the closure of the plant itself was blocked by the United Workers Union leadership, which insisted from the outset that the destruction of hundreds of jobs was inevitable.

Even the UWU’s meagre claim to be fighting for “fair redundancies” was a lie. The union starved workers out with no strike pay and kept them cut off from the rest of the working class. This brought the workers, who were determined to fight, into conflict with the UWU bureaucracy, repeatedly voting down the virtually unchanged union-management offers, even after the union declared the dispute over.

Eventually, the UWU was able to push through a sell-out deal, but the incipient rebellion of workers against the bureaucracy was taken as a warning by the union, management and the political establishment. The ruling class fears that, as the deepening cost-of-living crisis drives growing numbers of workers to take industrial action, the union apparatus will be unable to keep them under control and prevent the emergence of a broader struggle.

This is the role that unions have played for decades, as an industrial police force of management and governments, shutting down workers’ demands for action and delivering “orderly closures” of workplaces or even entire industries, with no fight to defend jobs. The unions defend the capitalist system, under which every technological development is used to erode workers’ jobs, wages and conditions.

NATO powers move to send long-range missiles to Ukraine

Andre Damon

The UK's Storm Shadow long-range missile. [Photo by Rept0n1x / CC BY-SA 3.0]

On Tuesday, a UK defense official confirmed to the Washington Post that Britain is preparing to send long-range missiles to Ukraine capable of striking Crimea.

The British official who spoke to the Post explained that this action would set the stage for other NATO members to provide long-range missiles of their own.

“It’s a position the United Kingdom can uniquely do… We know that if we give something it makes it slightly easier for others,” he said. “There is definitely a different risk tolerance among different countries. We’re often in an earlier place.”

The Post noted that “Pentagon officials expressed no concern when asked about the prospect of Britain sending long-range missiles to Ukraine.”

This announcement is meant to clear the way for the provision of the long-range ATACMS missile by the United States, as well as the announcement, long in preparation, that the United States would send F-16 fighter jets.

The move by the key US ally marks another action that NATO officials had previously unconditionally ruled out.

In May, US President Joe Biden categorically declared, “We are not going to send to Ukraine rocket systems that strike into Russia.”

The Post made clear, however, that the UK’s weapons systems would be used to attack Crimea. “The distance between Ukrainian-held territory and Sevastopol, Crimea’s largest city and the headquarters of Russia’s Black Sea fleet, is within the range” of the storm shadow long-range missile.

The announcement by the UK follows a pattern set with the decision earlier this year by the NATO powers to send over 200 main battle tanks to Ukraine. In March 2022, Biden ruled out sending tanks to Ukraine:

The idea that we’re going to send in offensive equipment, and have planes and tanks and trains going in with American pilots and American crews, just understand—and don’t kid yourself, no matter what you all say—that’s called ‘World War III.’

In June, French President Emmanuel Macron declared, “We are not entering the war… Thus, it has been agreed not to supply certain weapons—including attack aircraft or tanks.”

After the UK announced that they would send challenger tanks, Macron declared on Twitter, “France will provide light combat tanks” to Ukraine. Just days later, both Germany and the United States announced that they would send their own main battle tanks, the Leopard 2 and the Abrams, to Ukraine.

The United States has moved systematically toward directly endorsing and facilitating attacks on the Crimean peninsula.

In May, Biden announced that the US would send the HIMARS long-range missile launcher, without providing the ATACMS munition capable of striking hundreds of miles deep.

In January, the US announced that it would send the Ground-Launched Small Diameter Bomb (GLSDB) to Ukraine, doubling the range of the munitions that had up to that point been provided for the HIMARS.

In February, US Under Secretary of State for Political Affairs Victoria Nuland openly endorsed Ukrainian strikes inside Crimea. “Those are legitimate targets,” Nuland said. “Ukraine is hitting them. We are supporting that.”

In February, the New York Times reported, “[T]he Biden administration is finally starting to concede that Kyiv may need the power to strike the Russian sanctuary, even if such a move increases the risk of escalation.” The Times added, “The Biden administration is considering what would be one of its boldest moves yet, helping Ukraine to attack the peninsula.”

As it is becoming clear that the upcoming “spring offensive” will lead to only limited military gains, the US and NATO powers are moving rapidly to abandon all remaining restraints on their direct involvement in the war.

Last week, two drones exploded over the official residence of Russian President Vladimir Putin. After the drone strike, US Secretary of State Antony Blinken refused to rule out any effort to assassinate the Russian president, declaring, “We leave it to Ukraine to decide how it’s going to defend itself.”

These statements speak to the enormous recklessness and desperation gripping the US political establishment. This mood was spelled out even more explicitly by pro-war historian Timothy Snyder in what was perhaps the most open call for a NATO war with Russia to date.

In a guest opinion piece in the Times titled “We Forget Nuclear Powers Have Lost Wars,” Snyder concludes, “When Russians talk about nuclear war, the safest response is to ensure their very conventional defeat.” (Without explanation, the headline was changed to “Putin Is Fighting, and Losing, His Last War.”)

Snyder complains that “Americans’ fear of escalation delayed the supply of weapons that could have allowed Ukraine to win last year. One after the other, the weapons systems deemed escalatory have now been delivered, with no negative consequences.”

Demanding the “defeat” of Russia, Snyder makes the following extraordinary statement: “Russia has 11 time zones of space for retreating soldiers and plenty of practice in propaganda refashionings.”

In calling for the “defeat” of nuclear-armed Russia, Snyder declares, “No option is without hazards.” The statement is redolent of the assertion by General “Buck” Turgidson in Dr. Strangelove that “I’m not saying we won’t get our hair mussed” in the event of a thermonuclear war.

The same day as this rant appeared, NATO Secretary-General Jens Stoltenberg gave an interview to the Washington Post in which he made clear that the central aim of NATO in the conflict is recapturing the territories Ukraine lost in 2014, principally the Crimean peninsula.

Stoltenberg declared, “The war in Ukraine has fundamentally changed NATO, but then you have to remember the war didn’t start in 2022. The war started in 2014. And since then, NATO has implemented the biggest reinforcement of our collective defense since the end of the Cold War.”

Stoltenberg continued, “For the first time in our history, we have combat-ready troops in the eastern part of the alliance, the battle groups in Poland, Lithuania, the Baltic countries, actually the whole eight battle groups from the Baltic Sea down to the Black Sea. Higher readiness of our forces. And increased defense spending. Until 2014, NATO allies were reducing defense budgets. Since 2014, all allies across Europe and Canada have significantly increased their defense spending. And we have modernized our command structure, we have more exercises, we have established new military domains like cyber. So in totality, this is a huge transformation of NATO that started in 2014.”

He added, “No other major power has 30 friends and allies as the United States has in NATO. Neither Russia nor China has anything similar. And together, NATO allies represent 50 percent of the world’s military might and 50 percent of the world’s economic might.”

This passage blows apart the narrative by the NATO powers that the conflict was an “unprovoked war.” Instead, it makes clear that the NATO powers provoked and escalated the conflict with the aim of reversing the territorial losses they incurred that year.

FedEx Freight to close 29 locations in fourth round of layoffs

Patrick Smith

On May 2, FedEx announced it would continue its cost-cutting measures by enacting a fourth round of layoffs. The Hill reported that company planned to close twenty-nine locations. When the Memphis, Tennessee newspaper, The Commercial Appeal, asked the company where the closures would take place, a FedEx spokesperson said they did not have “that information to share at this time.”

FedEx Manager of Global Public Affairs and Advocacy Isabel Rollison said the closures would be in effect by August 13, and the company will consolidate its operations into other FedEx locations. Rollins also said FedEx Freight will lay off more workers starting May 28. “Eligible employees will be offered permanent transfer opportunities to other markets with hiring needs.” There were no transfer criteria, and the company didn’t say how many employees they would lay off. 

Rollison cynically added, “FedEx Freight will also maintain health benefits for furloughed employees.” However, she didn’t say how the “furloughed employees” would pay their living expenses, including soaring food, rent, and gas prices. She also failed to indicate how these workers would pay the ever-increasing insurance premiums, co-pays, and deductibles.

A FedEx driver delivers a cart of packages, Thursday, May 6, 2021, in New York. [AP Photo/Mark Lennihan]

The company stated, “We continuously review our network to ensure we have the right design to address changing market dynamics. Through that process, we identified opportunities to consolidate operations in several locations to improve customer service levels and efficiencies with fewer touchpoints while lowering our service cost. Our top priority is to help affected team members find other open positions where possible.”

FedEx Freight announced its first round of layoffs in November of last year, with a second round starting in January. The company then enacted a third round in March. FedEx did not specify the number of workers impacted by layoffs on the prior three occasions.

A month ago, FedEx announced a plan to consolidate FedEx Express, FedEx Ground, FedEx Services, and other FedEx operating companies into what will be called the Federal Express Corporation. According to Reuters, combining these segments is part of an overall plan to save the company $4 billion by the end of 2025.

A direct competitor to United Parcel Service, FedEx's operations are “less efficient,” according to Chief Executive Officer Raj Subramaniam, who said, “We will be leaner, more agile, and better positioned to execute our mission to help customers compete and win with the world’s smartest logistics network.”

Subramaniam, who makes $5,154,870 annually, said FedEx would use a “hybrid” employee and contractor delivery model similar to Amazon and UPS. Of course, these measures would enable the company to avoid paying benefits to contracted workers. The CEO made sure to mention that the company will remain non-union.

According to ZipRecruiter, the average FedEx employee makes just over $45,000 a year. The most significant section of employees, about 23 percent of jobs, earn between $24,500 and $31,999 annually, and 12 percent only make between $17,000 and $24,499 annually. In comparison, founder and Chairman Fredrick Wallace Smith’s estimated net worth is $4.6 billion.

UPS is also planning cuts and has already started by laying off “22.4” workers, a hybrid position created in 2018. These workers share responsibility between working in the warehouse and driving. UPS and the Teamsters are in the process of negotiating a contract for more than 340,000 UPS workers, which expires on July 31. Approximately two-thirds of these employees are part-time and can only survive if they’re living with a parent or roommate.

In late February, 6,000 FedEx pilots began the process of voting to authorize a strike. On April 18, they started voting, and it will conclude on May 17. The union that represents them, the Air Line Pilots Association (ALPA), has been conducting mediated negotiations under terms of the Railway Labor Act (RLA) since October 2022. However, the talks have dragged on since May 2021. The RLA forces negotiations through delays and cooling-off periods with the goal being to prevent strike action. The corporatist ALPA has largely integrated itself with the state apparatus in order to suppress strikes and capitulate to the company.