Hostages and families clash with Netanyahu

Jean Shaoul

Recently released hostages and families of hostages still held in Gaza vented their anger over Prime Minister Benjamin Netanyahu’s refusal to make the safety and release of the remaining 138 hostages a priority.

Emerging from a tense and angry meeting with members of the “war cabinet” on Tuesday afternoon, they denounced the government, saying it had no plan to secure the release of the remaining hostages and that its tactics were endangering their lives. Some reportedly told Netanyahu to step down, echoing the now daily calls for his resignation.

While 110 captives were returned to Israel, of whom 86 are Israelis and 24 are foreign citizens, under a seven-day ceasefire, an estimated 138 hostages remain, of whom 117 are men and 20 women. While 11 are foreign nationals or holding dual citizenship, the rest are Israelis, of whom most are thought to be soldiers.

Israeli Prime Minister Benjamin Netanyahu attends a press conference with Defense Minister Yoav Gallant and Cabinet Minister Benny Gantz in the Kirya military base in Tel Aviv, Israel, Saturday, October 28, 2023. [AP Photo/Abir Sultan]

Since the “operational pause” ended on Friday morning, Israel has resumed its savage aerial bombardment, targeting Khan Younis, Gaza’s second city in the south, with a renewed ferocity ahead of an expected ground attack, as Israeli tanks approach the city from the north.

The UN said “some of the heaviest shelling in Gaza so far” took place between Sunday and Monday afternoon. On Monday, it was reported that Israel had prepared plans to flood Hamas’s network of tunnels under the Gaza Strip with water pumped from the Mediterranean Sea.

Such a move, aimed at driving Hamas’s fighters above ground, is to be carried out with no consideration for the safety of the remaining hostages, who have been cynically employed to justify the genocidal assault on Gaza. The truth is that Netanyahu and his fascist allies could not care less whether the hostages live or die. “Bring them home” is a useful slogan, but the real goal is mass murder and ethnic cleansing, whatever collateral damage this might involve.

Largely ignored by Netanyahu and his cabinet of war criminals, the families, who had only been granted one meeting since the October 7 incursion, had been demanding an urgent meeting to discuss what the government was doing to secure the safe return of the remaining hostages. Netanyahu was finally forced to agree a meeting on Monday.

This followed a small rally—joined for the first time by families of some of the captives—on Saturday evening outside Israel’s military headquarters in Tel Aviv to protest the resumption of the bombardment of Gaza they blamed for halting the release of the captives still held by Hamas. The protest was a breakoff from the regular gathering calling for the Netanyahu government to prioritise and secure the release of hostages, which takes no position against the slaughter in Gaza.

The meeting in Herzylia, attended by Netanyahu, Defence Minister Yoav Gollant and opposition leader Benny Gantz, as well as Gal Hirsch, Netanyahu’s coordinator for captives and missing persons, confirmed that the hostages are viewed as cannon fodder in the wider cause of Zionist expansionism “from the river to the sea,” and American imperialism’s domination of the resource-rich region.

The war cabinet kept the former hostages and families waiting 45 minutes after the arranged time. According to one of the attendees, “There was great disrespect at the entrance and there was a camera in the room, despite promises of a sterile meeting.” She said it was “turbulent and tense.” Their phones were taken away so they could not record what was said. Many families left in disgust even before the meeting started.

Netanyahu’s pro-forma responses prompted a furious response, with people shouting and screaming that they wanted all the hostages brought back and that the prime minister should resign.

One of the former hostages explained that Netanyahu “didn’t respond to the questions that were posed—instead, he read from prepared remarks on a piece of paper.” She added that “Netanyahu stated that it wasn’t feasible to bring everyone back, and questioned whether any of us thought that if such an opportunity was available, anyone would reject it.” Some of the families were so outraged that they got up and left the meeting mid-stream.

Bashir Alziadana, one of Israel’s Bedouin citizens whose brothers remain in captivity after two other relatives were released, said, “We asked if returning the captives is the primary goal now, and I didn’t leave with a clear answer.”

As reported by Channel 12, Sharon Cunio, one of the released hostages, whose husband David and other relatives are still held captive, told the war cabinet, “You are putting politics above returning the hostages.” Ha’aretz reported that another hostage who had been held separately from her husband challenged Netanyahu, saying, “He was taken to the tunnels, and you talk about flooding the tunnels with seawater.”

Another person said, “Gallant informed us that Hamas only responds to the use of force, insinuating that any cessation in the hostage release stages was purely Hamas’ decision. The discussions were truly distressing, and those who attended were visibly upset about the divisions made between various groups and categories. Netanyahu’s reply was curt, and he seemed detached from the conversation.”

Gallant’s response was met with anger from the mother of one of the hostages, who said: “I’m not prepared to sacrifice my son for your career… My son did not volunteer to die for the homeland. He was a civilian abducted from his home and his bed… Promise me that you’ll get back my son and all the other hostages, alive.”

While the Israeli media carried reports of the families’ meeting with the war cabinet, they were low-key and headlined the hostages’ mistreatment in line with government’s attempts to portray the Palestinians in general and Hamas in particular as monsters to justify their extermination.

While some of the hostages reported that they had been denied adequate food and water and kept in horrible conditions underground and without access to the news, it was clear they were unaware of both Israel’s denial of all supplies of food, fuel, power and even water and its carpet bombing of Gaza.

Further fueling the families’ anger are the almost daily revelations indicating that the Netanyahu government possessed detailed advance knowledge of the Hamas battle plan for the October 7 attack, but took the decision to stand down the military and intelligence forces to create a pretext for its ethnic cleansing of Gaza.

On Monday, Ha’aretz reported that just hours before the October 7 attack, Israel’s security forces, having received warnings that Hamas was trying to stage an attack inside Israel, could have prepared at least partially for the possibility of an incursion from Gaza. Although the Gaza Division’s Northern Brigade had approved the staging of the SuperNova music festival in the Kibbutz Re’im parking lot, was responsible for its security, and its commander was aware of the warnings, the military had not informed either the organisers or the thousands of party-goers about the threat or demanded that the event be shut down. Even the army units on duty in the area at the start of the Hamas attack were unaware that the music festival was taking place.

The organisers said that if they had received a warning even an hour beforehand, they could have evacuated the festival in time. The army’s failure to warn the organisers led to the deaths of 360 attendees in a shoot-out between the Palestinian infiltrators and the Israeli military, and the capture of at least 40 hostages.

It also now appears that some of those in the know sought to take advantage of the inevitable military repercussions by selling their shares on the Tel Aviv stock exchange. Reuters news agency reported on a detailed study by two US professors, who wrote, “Days before the attack, traders appeared to anticipate the events to come.”

They cited short interest in the MSCI Israel Exchange Traded Fund (ETF) that “suddenly, and significantly, spiked” on October 2, based on data from the Financial Industry Regulatory Authority (FINRA). They added, “And just before the attack, short selling of Israeli securities on the Tel Aviv Stock Exchange (TASE) increased dramatically.”

UK homelessness figures rise amid council funding crisis

Charles Hixson

Homeless charities and local housing authorities in the UK are struggling with record numbers of people unable to balance the costs of renting a property with increasingly expensive food, energy and other basic needs.

As of March, 104,510 English households, including 131,000 children, were in temporary accommodation, a 10 percent increase on the previous year and an all-time high.

Between April 2022 and March 2023, English councils supported 298,430 families (1.2 percent of all households) to relieve or prevent homelessness, a 6.8 percent annual increase.

Even when temporary accommodation is available, families with children often spend years living in situations which threaten their health, according to Just Fair. Patricia Leatham, who became homeless after her mother’s death, spoke of moving into housing without proper heating—a leaky, mouldy and damp place with open wires. She struggled to make it liveable for herself and her son, who desperately needed Wi-Fi for school. “That’s it”, she said, “they’ve given you somewhere to live and you can’t say no.”

This misery stands in the shadow of the monumental residences of the rich. Perhaps the most obscene example is at Embassy Gardens in Nine Elms, southwest London, where, 10 storeys up, sits the “Sky Pool”, described as the world’s first swimming-pool bridge, connecting two sections of the luxury development.

Nine Elms [Photo by sludgegulper / Wikimedia / CC BY-SA 2.0]

Part of a 230-hectare area stretching from Vauxhall Cross to Battersea Power Station, the Vauxhall Nine Elms Battersea (VNEB) development was described two years ago by Guardian writer Oliver Wainwright as taking “the inequities of the real estate-industrial complex to extremes. It is a place where penthouses with private chapels and running tracks loom above crumbling council estates across the railway line, where scores of flats lie empty, held by secretive shell companies in off-shore tax havens, and where the division between absentee investors and owner occupiers confined to poor doors couldn’t be more stark.”

The VNEB was touted as an “opportunity area” and described by former prime minister Boris Johnson as “the greatest transformational story in the world’s greatest city.” Responding to criticisms that the VNEB encourages separateness and absentee ownership, Ravi Govindia, Conservative leader of Wandsworth Council from 2011-22, proclaimed, “London is an international city. It has always had people who didn’t live in their homes for 365 days a year.”

In what was known as Billionaire’s Row in Bishop’s Avenue in the Borough of Barnet, north London, only ruins remain after nine Saudi-owned mansions were abandoned in the early 1990s. By 2014, investigative reporters found the buildings overgrown with vegetation, their swimming pools and ballrooms in a state of advanced decay. The number of long-term empty homes in England has increased by 60,000 since 2018, and now stands at over a million properties.

Architects have suggested that up to 300 homes could be built on one site. The owner of the current property is a registered company from the Isle of Man, whose beneficial owner is listed as a Cypriot businessman with a Dubai address. Russell Curtis, director of architecture firm RCKa, asked, “Is it right that there should be land like this sitting in a ridiculously expensive part of London that is unused?” The waiting list for housing in Barnet has more than tripled in the last decade to over 3,000 households.

The Conservative government is waging a war on the homeless, most notoriously with former Home Secretary Suella Braverman’s proposals to ban tents in urban areas, and description of living on the streets as a “lifestyle choice”.

According to housing charity Crisis and real estate firm Zoopla, only 4 percent of English properties (and 2 percent of London’s) are affordable at the government-set housing allowance rates, which were frozen in 2020. Deborah Garfield, policy manager at the homelessness charity Shelter, observed that social housing stock in England had fallen by 14,100 in the last year alone.

The spiraling housing crisis spurred 158 local councils—more than half of England’s local government organisations—to meet in an emergency summit hosted by Eastbourne Borough Council and the District Councils Network on October 31. Participants reported that more than 20 councils were on the verge of bankruptcy and were overwhelmed by the cost-of-living crisis and the sharp rise in evictions, as well as the shortage of social housing.

In a letter to Tory Chancellor Jeremy Hunt, councillors insisted they would have to start withdrawing services, and requested a meeting in advance of his Autumn Statement. The Local Government Association (LGA) predicted that councils in England faced a funding gap that would reach £4 billion over the next two years, an additional £1 billion on its July forecast. Its analysis showed that “by 2024/25 cost and demand pressures will have added £15 billion (almost 29 per cent) to the cost of delivering council services since 2021/22.”

Hunt was forced to make a gesture, ending the three-year freeze on the local allowance housing cap. The allowance will finally cover the cheapest 30 percent of market properties simply by providing 1.6 million households some £800 in additional support each year.

A homeless man sleeping in a shop doorway in Romford, London, December 2022

Housing charities Shelter and Crisis criticized the delay until April 2024, with the latter adding that councils faced immediate financial collapse. The Salvation Army warned that Hunt’s measures would fail to stop the widening poverty gap, and St. Mungo’s predicted a difficult winter with record numbers of rough sleepers.

Jonathan Carr-West of the Local Government Information Unit accused Hunt of simply “tinkering around the edges”. “Each year citizens are paying more and getting less from their councils, and without significant structural changes to the way funding is allocated it is difficult to imagine these dire straits ending.”

In London alone, 4,068 slept on the street in summer (June to September), over 25 percent more than the previous winter. The Big Issue warned that the recent Home Office decision to reduce support for asylum seekers after their claims are processed from 56 to seven days could drive as many as 6,900 onto the streets nationwide by year’s end.

Many rough sleepers are killed by entirely treatable diseases. A new study by University College London, published by the Bureau of Investigative Journalism, shows that a homeless person dies every seven hours. Some 25 percent of these are under 40, succumbing to tuberculosis, COVID-19, pneumonia, diabetes, gastric ulcers.

Invisible People, a US-based group which reports on the “growing homeless crisis, affordable housing, and the criminalization of homelessness”, noted this month of the situation Britain that crowded conditions in shelters and transitional accommodation cause these diseases to spread, as well as “formerly eradicated plagues, diseases and viruses.”

Giant Chinese property developer Evergrande given stay of execution

Nick Beams

The ultimate fate of the bankrupt Chinese property developer Evergrande continues to hang in the balance after a Hong Kong judge granted the company a stay of execution on a move by one of its creditors to liquidate it.

On Monday Judge Linda Chan said liquidation proceedings would be held over until January 29 next year to give the failed company more time to come up with a restructuring plan that met the agreement of creditors.

Residential buildings developed by Evergrande in Yuanyang [Photo by Windmemories/Wikimedia Commons / CC BY-SA 4.0]

The suspension of proceedings, which came as a surprise to other creditors many of whom would have opposed it, came as the company that brought the liquidation petition, Top Shine Global, said it would not oppose the move.

Evergrande’s lawyers said in court the company was considering a deal that involved giving “certificates” to creditors which would “neither be a share nor a bond but a right to distribution based on certain assets.”

The certificates would allow creditors to be repaid money when some of Evergrande’s assets were sold.

One of the lawyers representing other creditors, Neil McDonald, said the adjournment had come as a “surprise.” He had been expecting that the company would have been wound up at Monday’s hearing and only heard about the change 15 minutes before it began.

Judge Chan’s decision clearly reflects fears in legal and financial circles about the liquidation of Evergrande which has $300 billion in debts. In a liquidation process there is always a scramble by creditors to grab what they can with the possibility of legal suits and counter suits with unknown consequences in a collapse of this colossal size.

Judge Chan indicated that there was still a way to go before a deal might be agreed to.

She said “crucial details” of the new plan were missing and Evergrande should have “direct discussion with relevant authorities” to make sure it was “doable.” Evergrande’s lawyer said: “We will try our best.”

Chan was referring to the situation which developed in September when a deal with offshore creditors collapsed when the company’s founder, chairman and chief shareholder Hui Ka Yan was detained by Chinese authorities because of as yet unspecified financial irregularities.

According to company filings, Hui has paid himself and his wife more than $7 billion in dividends since the company went public in 2009.

The deal had been more than a year in the making, involving a series of complex negotiations. After the detention of the company chief, however, Evergrande said it could not go ahead because of new regulations which prevented it from issuing notes that would facilitate the restructuring.

The liquidation of Evergrande, which seems at this stage to be the most likely outcome, would bring little or no return for its creditors. Analysts have said they anticipate a recovery rate of below 5 percent on its debts.

While domestic creditors will get little, the Chinese government will be anxious to insure than foreign creditors can agree to some kind of restructuring because liquidation will cast a pall over the raising of credit by Chinese companies in international markets.

The government will also be concerned about the political consequences. There are an estimated 1.5 million homebuyers who have paid the company for their still unfinished apartments. When Evergrande’s problems first surfaced there were angry protests outside its offices that rang alarms bells in Beijing which is acutely sensitive to signs of social protest and discontent.

There are concerns that an Evergrande liquidation could call into question the position of other highly indebted real estate developers.

Among those is Country Garden which was touted as an exemplary real estate firm, but it too has defaulted on loans. The group has said it will not be able to meet all its overseas debt repayment obligations. It has total liabilities of around $200 billion of which some $11 billion are international debts.

It has been reported that most of the top ten real estate developers in China have been experiencing sharply falling sales.

According to estimates by Bloomberg, more than half of the biggest 50 developers in 2020 have defaulted. It has said that Chinese developers have defaulted on around $115 billion of $175 billion of outstanding offshore loans since 2021.

There are also significant domestic financial ramifications involving the so-called shadow banking system, estimated to be around $3 trillion, and which is exposed to the crisis in the property sector.

In a letter to investors last month, Zhongzhi, one of the larger companies in the system, revealed that it confronted a shortfall as high as $34.6 billion and was “severely insolvent.”

Its problems first came to light back in August when it missed payments on several products. It blamed its problems on the 2021 death of its founder and the departure of “multiple senior executives” after which it said “internal management ran wild.”

“The group’s investment products have defaulted one after the other, and we deeply apologise to investors,” it stated. Most of those investors are high-wealth individuals so it is considered very unlikely that there will be state intervention. The amount involved is large but is small relative to the entire trust industry. But it is nonetheless a warning as to how quickly events can turn and companies that had seemed to be secure turn out to be a house of cards.

The crisis in real estate development and associated financial interests is bound up with the boarder structural shift which the Xi Jinping regime is trying to effect in the Chinese economy.

The real estate boom began in the aftermath of the 2008 financial crisis when the government initiated a massive infrastructure and real estate development program based on stimulus spending, estimated to be around $500 billion and an expansion of credit.

The result was that real estate and construction, together with its associated industries, is estimated to account for between 25 and 30 percent of the Chinese economy.

The troubles for the real estate sector began in mid-2020 when the government introduced new regulations, dubbed the “three red lines,” which restricted access to credit. It was aimed at lessening the dependence on real estate and infrastructure development.

The result has been a marked slowdown in growth, which has been reflected in the rise of unemployment, particularly among youth aged 16 to 24 years old where it is running at more than 20 percent. As a result, the government has halted the publication of youth unemployment figures.

Worse may still be to come. In a speech to bankers in Hong Kong last week, the governor of the central bank, Pan Gongsheng, warned that the economy was on a “long and difficult journey” away from its reliance on property and infrastructure investment.

In a sign of the political sensitivity of the government to the prospect of lower growth, the Chinese transcript of Pan’s speech omitted the phrase “long and difficult.”

The official growth target for this year is just 5 percent, one of the lowest levels in decades. After the lifting of COVID restrictions at the start of the year there was increase in consumer spending. But since then, consumer confidence has fallen, investment is down, and export earnings have been described as “disappointing.”

Minor measures have been introduced to try to stabilise the property market but there is no stimulus package in sight and the focus will be on what growth target the government sets for 2024 and how it intends to achieve it.

Yellow bankruptcy auction raises $1.9 billion for Wall Street

Alex Findijs

Yellow Corp. trailers at a YRC Freight facility on July 28, 2023, in Richfield, Ohio. [AP Photo/Sue Ogrocki]

The bankruptcy auction of freight company Yellow was completed on Monday, with what formerly had been the third-largest less-than-truckload carrier in the US selling its real estate assets for nearly $2 billion. This sale has generated significantly more revenue than required to pay back Yellow’s extensive debt, which totaled nearly $1.6 billion, including a $700 million loan from the United States government.

According to industry publication Freight Waves, several rival freight companies snatched up large swathes of Yellow’s 170 terminals across the country. XPO purchased 28 terminals for $870 million; Estes Express, which had offered $1.525 billion for all of Yellow’s terminals, purchased 24 for $248.7 million; Saia purchased a further 17 for $235.7 million; and Knight-Swift purchased 13 for $51.3 million, while several other companies purchased a handful of terminals each.

XPO is seeking $585 million in senior unsecured shares and a further $400 million in senior secured debt to finance the purchase and to refinance existing debts. Saia saw a significant increase in volume, up 18 percent over last year in quarter four, after Yellow’s bankruptcy as it absorbed much of Yellow’s volume. It has increased its workforce by 1,000 to 13,000 along with its bid for Yellow’s terminals to meet this new demand.

Court documents show that Yellow still retains 46 terminals that remain to be sold. Objections to auction sales may be made through this Friday and the bankruptcy court is expected to hold a hearing to finalize the sale of terminals on December 12.

In addition to Yellow’s terminals, it also owns 12,000 tractors and 35,000 trailers that will be sold in separate auctions through auction houses Nations Capital, Ritchie Brothers and IronPlanet. Liquidating Yellow’s rolling stock is expected to take up to six months and could generate millions in additional funds.

The auction of Yellow’s terminals comes after a bidding war between Estes Express and Old Dominion, which had both offered at least $1.5 billion to take over all of Yellow’s terminals. Estes Express’s most recent bid of $1.525 billion was accepted as a “stalking horse bid” which meant that it set the floor for all additional bids.

Yellow’s management will be pleased with their decision to auction their terminals separately, however, as they have raised substantially more money than Estes offered. With $1.9 billion raised, and with additional terminals and assets up for sale, Yellow will not only be able to pay off its immediate debt obligations, it will be able to consider payments to unsecured creditors.

The largest of these unsecured creditors is the Teamsters Central States Pension Fund. Tom Nyhan, executive director of the Central States, Southeast and Southwest Areas Pension Fund, said he believes they are owed almost $5 billion because Yellow withdrew from the fund prematurely. Yellow’s sale is incapable of raising enough funds to pay the pension fund what it is owed, and it is unclear how the Teamsters might seek legal action over the outstanding funds.

Yellow’s auction also disrupts a last minute offer by auto shipping company Jack Cooper to purchase Yellow and revive the company. Jack Cooper, whose main customers are Ford, General Motors and Stellantis, offered nearly $2 billion to purchase Yellow, repay its debts and fund the resumption of its operations, potentially rehiring thousands of the 22,000 Teamsters whose jobs were eliminated by Yellow’s bankruptcy.

Jack Cooper’s offer received support from the Teamsters and from several US senators, including Elizabeth Warren and Bernie Sanders. In a letter authored by Democratic Senator from Ohio Sherrod Brown, the senators argued that, “At the end of the day, there are thousands of American families that want to see the company’s doors reopen. Treasury needs to be clear-eyed that union families and the strength of our economy rely on jobs like the ones that were lost.”

A major obstacle to the plan was the request by Jack Cooper for the US Treasury to extend the due date of a $700 million Cares Act loan by two years to 2026. The US Treasury was reportedly reluctant to do so. According to a report by the Wall Street Journal, Treasury officials argued that Congress would have to vote to extend the loan.

Yellow’s demise and dismemberment has been, and will continue to be, a massive payday for Wall Street at the expense of the livelihoods of its 30,000 employees. Major creditors MFN, a Boston-based hedge fund that purchased a significant stake in the company as it was declaring bankruptcy, and Citadel, a private equity firm that purchased $500 million of Yellow’s debt from Apollo Global Management, will reap a healthy payout from the auction. The two investment firms made a joint offer to take over as “debtor-in-possession,” meaning they would fund Yellow’s final operations as it prepared for auction in exchange for oversight of the liquidation process. They and other creditors will take home a sizable cut of Yellow’s sale, recouping not just their investments but the interest on their loans.

Blame for Yellow’s bankruptcy has been placed on corporate management for their inability to manage the company’s massive debt. But blame also lies with the Teamsters, who gave billions of dollars in concessions to Yellow and refused to mount any resistance to the elimination of the jobs for 22,000 of its members. Yellow ultimately declared bankruptcy because it could not meet the demands of Wall Street that it force workers to pay for its debt. Wall Street investors, as well as the United States government which held a 30 percent stake in the company, decided that it was more financially beneficial to allow the company to perish than to make any effort to save the jobs lost. Even months after Yellow declared bankruptcy, former Yellow workers have found it difficult to find work elsewhere.

The bankruptcy of Yellow is a warning to the working class globally that the capitalist class is willing to put thousands of jobs to the sword to maintain the flow of profit. Tens of thousands of jobs were sacrificed to generate profit for Wall Street, with billions of dollars generated to satiate the demands of finance capital that the working class pay for its profits.

Spain: Trade unions support Telefónica’s scheme to lay off a third of its workforce

Santiago Guillen

Last week, Spanish multinational telecommunications company Telefónica announced its intention to layoff over 5,000 workers across Spain. This represents a third of its 16,000 staff.

These layoffs come after 11,300 workers were made redundant in 2015, 2019 and 2021, on top of 6,830 redundancies between 2011 and 2013. In 12 years, Telefónica has destroyed more than half its workforce. In 1992, 74,437 people worked at Telefónica, 60,000 more than those employed three decades later.

Telefónica headquarters in Madrid, Spain [Photo by Luis García / CC BY-SA 3.0]

Telefónica is the fifth largest telecommunications company in the world and the second largest in Europe, behind only Vodafone, with operations across Europe and Latin America. In Spain, it is the fourth largest corporation by revenue and market presence, behind textile company Inditex (Zara, Bershka, Massimo Dutti, Pull&Bear and Lefties) led by billionaire Amancio Ortega, and banks Santander and BBVA.

Unlike the last three rounds of layoffs in 2015, 2019 and 2021, implemented through so-called voluntary resignations and early retirements, Telefónica will return to the redundancy scheme it used in 2011, known by its Spanish acronym ERE (Expediente de Regulación de Empleo). This enables companies to carry out collective dismissals based on so-called “objective” reasons, such as economic downturns, technical innovations, organisational changes and productivity increases.

It allows companies to slash severance pay and saves them money by not having to continue paying for health insurance and pension plans. And, unlike voluntary resignations, workers cannot refuse their dismissal.

The announced job destruction has little to do with the company’s economic results between 2013 and 2022. Throughout this period, Telefónica has achieved profits of 32 billion euros. Meanwhile, the average salary per employee has decreased in this period by 2,000 euros.

Last June, Telefónica announced accelerated growth during the second quarter of the year reaching a net income of €462 million, 44.5 percent more compared to the same period in 2022. This ERE will allow Telefónica to save between 200 and 400 million euros in wages.

Telefónica claims that the ERE seeks to resolve a “functional surplus” of workers who are no longer necessary, either due to technical improvements or due to the disappearance of services such as copper-based telephone wiring. However, this process must be placed in the context of the drive for profit by telecommunications companies throughout Europe, where up to 100,000 layoffs are expected in the coming years.

This is a sector with fierce competition between companies, especially due to the appearance of low-cost operators. One result is a bidding war to lower prices for customers and increase market share. To this must be added multimillion-dollar investments by companies into fibre optics and 5G.

The announced layoffs seek to put all these costs on the backs of the workers, by reducing the workforce and wages, and increasing precarious work conditions. This is the reason why Telefónica prefers to make redundancies rather than retrain workers in other positions. In this way, companies such as Telefonica plan to expand their profits.

Telefónica’s announcement is part of a global offensive against telecommunications workers. British company BT Group (the former British Telecom) has announced it will cut its workforce by between 40,000 and 55,000 employees this decade, slashing between 30 percent and 42 percent of its workforce. Finnish company Nokia will lay off 14,000 people and British Vodafone will make 11,000 layoffs, 10 percent of its workforce. The Swedish Ericsson will lay off 8,500, Virgin Media 02 (Telefónica's subsidiary in the United Kingdom) will lay off 2,000, whilst Deutsche Telekom and the Swedish Telia have announced 1,650 and 1,500 job losses, respectively.

The global character of the capitalist offensive against workers shows that jobs and living conditions can be defended only through an internationally coordinated struggle by telecommunication workers across all companies to oppose the race to the bottom. But the pro-capitalist trade unions are opposed to any such global struggle.

In Spain in recent decades they have refused to organise any fight against Telefónica’s mass dismissals or against the more than 4,000 jobs destroyed by Vodafone and Orange, two of the largest operators in Spain.

Two of Spain’s main trade unions, the Sumar-linked Workers Commissions (CCOO) and the social-democratic General Union of Workers (UGT), have made clear they have no intention of challenging Telefónica's ERE. As of writing, they have called no protests or any other significant action. Instead, they have made clear they accept the savage redundancy scheme.

UGT, the largest trade union within Telefónica, has stated that “any redundancy plan will be linked to the signing of a new Agreement... with a minimum duration of 3 years that protects the workforce and their working and economic conditions”. In other words, UGT accepts the ERE in exchange for some symbolical concessions which will not prevent new dismissals from being repeated in the future.

From CCOO, the person responsible for Union Action in the telecommunications sector, Ramona Pineros, assessed the layoffs positively. He agreed with the company’s claims by stating that “it is true that...there are a lot of jobs that have stopped having activity”.

Rejecting any alternative or protest, he summed up perfectly the role of the unions. Their role is not to defend jobs, but to work with companies to slash them. He said that “our job, in this case, will be to achieve the best conditions for the people who take advantage of the dismissal.”

The unions have also whipped up a nationalist frenzy, seeking to minimize attacks against “their own” workers, favouring attacks against those of other countries. This doomed perspective serves to divide workers along national lines, giving the companies a free hand to implement their corporate agenda.

When Vodafone announced 11,000 layoffs in May, the aforementioned Ramona Pinero of CCOO described the news as a “probe balloon” saying that “the explanation they give has given some peace of mind.” The Spanish unions claimed to have received guarantees that no layoffs would be made in Spain among the 11,000 the company intends to carry out worldwide, ensuring that these would be imposed in the United Kingdom, Italy, Germany, India, Egypt and Hungary.

If unions act in practice as a sub-department of human resource management, specialising in policing the workforce, the role of the pseudo-left Sumar embodied by its leader and Minister of Labor Yolanda Díaz is not very different.

Minister of Labor Yolanda Díaz [Photo by U.S. Department of Labor / CC BY 2.0]

In an interview with La Sexta on Monday, Díaz said, “When I have the ERE on my table, I’m going to evaluate it and meet with the parties to learn about it”. Díaz knows fine well that her ministry has no veto power over an ERE, thanks to the right-wing Popular Party’s labour reform in 2012, that she herself expanded last year. This year, 25,000  collective dismissals took place through EREs compared to 24,215 last year, without either Díaz or Sumar opposing the measures.

Venezuela claims oil-rich territory controlled by Guyana as Pentagon carries out flight operations

Andrea Lobo

In a speech on Tuesday, Venezuelan President Nicolás Maduro presented new official maps of the country including the Essequibo, an area the size of Greece that represents two-thirds of the territory claimed by neighboring Guyana. He announced “immediate” plans to exploit the region’s large oil, gas and mineral deposits.

Essequibo River highlighted [Photo: WikiCommons]

The speech took place after a referendum Sunday in which, according to Venezuelan authorities, more than 95 percent voted for turning the territory into a new Venezuelan state, rejecting a contested 1899 arbitration in Paris that drew the existing border, and opposing the jurisdiction of the International Court of Justice. 

“Now we really are going to recover Venezuela’s historic rights in Guayana Esequiba,” proclaimed Maduro.

Ahead of the vote, the UN-administered ICJ had ordered Venezuela to refrain from taking any actions until it rules on the border dispute, which could reportedly take years. 

For centuries the border dispute was driven by ambitions by the British colonial authorities in British Guiana to control gold deposits found in what was the Spanish Viceroyalty of New Granada, and Gran Colombia after that. 

At the end of the 19th century, as the new imperial power in the region, the US administration of Grover Cleveland backed the Venezuelan claim against Britain ahead of the 1899 international arbitration, which ruled in favor of Britain amid evidence of pro-British complicity of the judges.

After a series of coups and conspiracies by the MI5 and CIA against the bourgeois nationalist Cheddi Jagan and his People’s Progressive Party—at the time oriented to the Stalinist and Castroite leaderships—Guyana was granted “independence” in 1966. 

Today, oil deposits found only in 2015 off the shore of the Essequibo and a global context marked by preparations for a new redivision of the world through war have reignited the border dispute over the sparsely populated and remote jungles west of the Essequibo River, which Venezuela considers the natural border. 

The Biden administration responded initially to the referendum by posing as a peaceful bystander, with the US State Department calling for “a peaceful resolution of their dispute,” while also hypocritically calling on Venezuela to respect the 1899 ruling.

Since its birth, however, Guyana has been treated by US imperialism as an enclave ruled by puppets of transnational corporations, as evidenced by the hated agreement in 2019 to let a consortium led by US conglomerate ExxonMobil keep 50 percent of the proceeds from its Shabroek offshore oil block. 

US imperialism has been the main player stoking tensions in recent years, by building up the tiny and largely volunteer Guyanese military, and chiefly by frequent deployments of US troops to Guyana and Caribbean waters claimed by Venezuela, ostensibly for “exercises.” 

The Obama, Trump and now Biden administrations, meanwhile, imposed a devastating sanctions regime aimed at provoking a military overthrow of the Maduro government. Combined with a fall in oil prices, corruption and mismanagement, the sanctions plunged Venezuela into a crisis that shrank the economy by over 80 percent and triggered an exodus of over 7 million Venezuelans. 

In the most provocative move yet, the US Southern Command conducted flight operations over Guyana on Thursday, while posting a statement claiming to uphold “its commitment as Guyana’s trusted security partner.” 

This took place shortly after Guyanese President Irfaan Ali denounced Maduro for attempting to annex the territory and calling on the US to help “deter” Venezuela. 

Even as Washington supports and arms Israel’s ethnic cleansing of Palestine, US Secretary of State Antony Blinken insisted in a call with Ali on Thursday that he could count on the United States’ “unwavering support for Guyana’s sovereignty.”

Amid its proxy war against Russia in Ukraine and support for Israel as part of plans for a broader war in the Middle East, the Biden administration is eager to secure the Stabroek block, which is producing 600,000 barrels per day (bpd) of oil, and is expected to double this amount by 2027. By comparison, Venezuela has been producing less than 800,000 bpd. 

More broadly, US imperialism seeks to keep key resources in the region, particularly the world’s largest oil deposits in Venezuela’s Orinoco Belt, out of the hands of its main geopolitical rivals—China and Russia. 

As summarized in October by US Southern Command chief Laura Richardson, a few weeks after a visit to Guyana: 

“I worry about the extraction of these resources from these reserves of heavy crude oil, light sweet crude that was discovered off the shores of Guyana, the largest growing economy, 25 percent GDP growth anticipated for Guyana over the next 25 years. You have 60 percent of the world´s lithium in the lithium triangle, Argentina, Bolivia, Chile, and copper, gold. We have the Amazon. So the resources are so rich. And when you look at the strategic competition globally but then also in this hemisphere you want to make sure that adversaries and strategic competitors aren´t trying to go there for nefarious reasons to extract. This hemisphere has the potential to feed and fuel the world.

For its part, the Maduro administration is responding to both growing social opposition from below, amid a deepening economic and humanitarian crisis, and the intensified pressures from US imperialism. 

The Maduro and Biden administrations reached a deal in October for a license allowing Venezuela to sell oil, gas and gold in return for freeing so-called “political prisoners” and allowing the US-backed opposition candidates to run in general elections in 2024. While Washington said Maduro had until late November to fulfill these conditions, the US State Department declared this week that conditions have not been met but the licenses remain valid, suggesting ongoing talks.

Behind the nationalist rhetoric to be defending the “Fatherland” and the calls for “national unity,” the Maduro regime speaks for a section of the Venezuelan ruling class hoping to reach a new agreement with US imperialism on how to divide the profits from the exploitation of Venezuelan workers. It seeks to use its ties to China and Russia as leverage for this, as demonstrated by plans by Maduro to visit Moscow later this month, and the fact that Venezuela had continued exporting most of its oil to China despite US sanctions.

In this process, however, Maduro is following the same reactionary path as the Putin government when invading Ukraine in 2022 or the Iraqi Hussein government when invading Kuwait in 1990, which US imperialism exploited to carry out long-planned military operations against its targets. 

Despite the threats from the Pentagon, the Venezuelan Bolivarian Armed Forces have begun explicit preparations for a military takeover of the territory, including building roads and bridges on the northern end of the border, while Maduro said corporations operating in Essequibo have three months to leave. On Thursday, the Venezuelan Minister of Defense Vladimir Padrino announced the designation of generals who will be in charge of the “Operational Zone for the Integral Defense of Guyana Esequiba.” 

Notably, the Lula da Silva government in Brazil has carried out its own military buildup along its borders with Venezuela and Guyana. Representing the regional power ambitions of the Brazilian oligarchy, Lula is effectively warning Caracas that it needs its permission to act. 

As demonstrated by the history of Guyana and similar disputes across South America since colonial times, it is through borders and nation states that imperialism exploits the workers and peasants and controls the resources, with the help of the local ruling elites.

Exposing the Pan-South-American pretensions of Hugo Chavez and his Bolivarianism, which were once combined with limited social reforms, the dead end of all bourgeois nationalist movements is being clearly revealed by the development of the crisis of global capitalism, with Latin America being increasingly dragged into a third world war.

Australian government rams through detention and citizenship-stripping laws

Mike Head

Scenes in the Australian parliament on Wednesday made a farce of any pretence of democracy. In fact, the real face of parliament was on display, spearheaded by a Labor government in imposing deeply reactionary laws.

Intent on proving itself more draconian than the Liberal-National Coalition, the Labor government again joined hands with the Coalition to push through two sweeping detention and citizenship-cancellation bills, overturning fundamental legal and democratic rights, without hardly a semblance of debate.

Both bills are blatant efforts to flout rulings by the country’s highest court that it is unconstitutional, even under Australia’s colonial-era 1901 Constitution, to punish people by executive decree without a judicial process, whether it be to detain them or strip them of citizenship.

Asylum seekers protesting at the Villawood detention centre in Sydney, 2011. [Photo by Adam.J.W.C. / CC BY-ND 2.5]

One bill, to impose a new regime of potentially indefinite “preventative detention” on immigration detainees, was rammed through the lower house, the House of Representatives, in less than 20 minutes late on Wednesday night. Despite objections, the government prevented any debate at all, including by abruptly adjourning the assembly just before 10 p.m.

That was after Labor and the Coalition had teamed up in the Senate to push the bill through that house on Tuesday in about three hours. These moves prevented any examination of the government’s 70 pages of amendments to enact the new detention powers, accompanied by an “explanatory memorandum” of nearly 150 pages.

All the more extraordinary was that Prime Minister Anthony Albanese’s government had issued ultimatums demanding that both bills be passed by Thursday. It threatened to keep parliament sitting, beyond yesterday’s holiday shutdown, unless and until that was done.

Members of the House of Representatives were then suddenly told on Tuesday that the bill would be dealt with on Wednesday night, leaving some MPs unable to get back to Canberra in time for the unexpected session.

Under the bill, an unknown number of the 150 or so immigration detainees that the government was forced to release from indefinite detention by a November 8 High Court ruling can be locked way again.

All that is required is for them to have been previously convicted, in either a foreign or domestic court, of what is classified as a “serious violent or sexual offence” and for the immigration minister and a court to decide that there is just “a high degree of probability” that “the offender poses an unacceptable risk of seriously harming the community by committing” such an offence.

This amounts to punishment for a thought crime, based on an accusation of what the person might do in the future, not on what they have actually done. On this basis, people can be re-detained for three years at a time, possibly for the rest of their lives.

Even the information being used to justify their detention can be kept secret from them, shielded by a government claim of “public interest immunity.” That would doubtless cover dubious accusations by police or intelligence agencies.

Such “preventative detention” powers were introduced in 2005 by the previous Coalition government, with Labor’s total backing, for use against people convicted of vaguely-defined terrorism-related offences.

As the WSWS has warned throughout the “war on terrorism” proclaimed by US President George W. Bush in 2001 to justify the invasions of Afghanistan and Iraq, such unprecedented measures, introduced on the false pretext of combatting terrorism, are being extended to cover much wider offences.

The bill also introduces stronger police powers and harsher imprisonment terms, of up to five years, for breaching any of the many electronic shackling, curfew and other restrictions imposed on released detainees by the legislation that Labor and the Coalition rushed through parliament last month.

Further, the bill provides the government and a judge to alternatively place someone under a “community safety supervision order.” That is a potentially even harsher regime of constant ankle bracelet monitoring, curfew and house arrest than in the initial shackling bill.

Labor’s new citizenship-stripping bill was likewise pushed through the Senate in just three hours on Wednesday, a day before the government’s deadline.

This bipartisan bill hands amorphous and politically-loaded powers to judges to revoke citizenships, thus depriving people of basic civil and democratic rights. Acting on a government application, they can rule that a person’s “serious offences” have “repudiated their allegiance” to Australia by rejecting “Australian values.”

The bill describes these values as consisting of “values, democratic beliefs, rights and liberties that underpin Australian society.” Yet, the bill itself overrides “democratic beliefs, rights and liberties.”

The “serious offences” listed in the bill include terrorism-related acts, advocating mutiny, treason, espionage, foreign interference and foreign incursion.

Because of the broad legal definition of terrorism, a person could lose their citizenship for supporting the right of people in Gaza to resist the ongoing Israeli genocide. Likewise, the extensive “foreign interference” offences could cover anti-war and anti-government activists.

So far, citizenship-stripping legislation has been restricted to dual citizens—those holding citizenship of another country. But that covers millions of Australians in an increasingly diverse population. Moreover, the High Court rulings striking down the previous legislation do not prevent any extension to sole citizens.

On both fronts, successive Coalition and Labor governments fought tooth and nail, all the way to the High Court, to defend their previous arbitrary powers to detain people or revoke their citizenships. Now the two ruling parties have teamed up to restore such powers, despite both bills likely to be challenged as unconstitutional as well, according to legal experts.

This entire bipartisan political operation over the past month has been accompanied by a foul witch hunt by the Labor government, the Coalition and the media against formerly indefinitely detained refugees and immigrants, effectively depicting them all as murderers and rapists.

Some of the most vulnerable members of society, brutalised by years in detention, often after fleeing wars or persecution, are being vilified and victimised by the government and the complicit media in order to justify police-state measures.

Five ex-detainees have been arrested already, amid a hue and cry by the media and political establishment alleging that they have committed crimes since being released, but without any proven evidence, let alone convictions by a court of law. The principle of innocent until proven guilty has been thrown out the window!

For example, one of those arrested and promptly demonised by media headlines is a 45-year-old Sudanese refugee, accused by the Australian Federal Police of allegedly failing to comply with a curfew and stealing luggage at an airport. No details have been reported.

In court, a magistrate was told that the refugee is “a diagnosed schizophrenic, requires medication for HIV and suffers from diabetes, high cholesterol and high blood pressure.” No doubt, being incarcerated indefinitely would have contributed to those mental and physical health problems.

There is a chilling connection between this witch hunt-inflamed operation and the same bipartisan line-up to back the Israeli genocide in Gaza. Both bills set precedents that can pave the way for broader use against the deepening opposition to this barbaric agenda and the other US-led or supported wars being waged or prepared against Russia and China.

There is mounting working-class hostility toward the government and the ruling class as a whole, fueled by a mounting cost-of-living crisis and the resurgence of the unchecked COVID-19 pandemic.

Under these conditions, the Labor government and the Coalition are lurching further and further toward authoritarian methods of rule, as is occurring in the US, the UK, across Europe and in Argentina. This week’s proceedings in parliament must be taken as a warning of that.