German Chancellor Scholz insists on debt brake: Austerity for rearmament and war

Peter Schwarz

German Chancellor Olaf Scholz (Social Democrats, SPD) has commented twice at length on his policies in recent days. On May 11, he answered questions from the moderators and the audience for 75 minutes in the “RND vor Ort” (RND on the ground) talk series, and on May 13, the news magazine Stern published a long interview with the chancellor.

German Chancellor Olaf Scholz, rides on an armored military vehicle during the Lithuanian-German military exercise 'Grand Quadriga' at a training range in Pabrade, north of the capital Vilnius, Lithuania on Monday, May 6, 2024. [AP Photo/Mindaugas Kulbis]

Scholz made two things clear in particular: Despite the growing opposition to the wars in Gaza and Ukraine, he remains adamant about supporting these wars with all available means. And he is determined to impose the exploding costs of military madness through social spending cuts, falling real wages and mass layoffs on the working population.

In the RND talk, he clearly answered “no” to the question of whether there was a red line for Germany vis-à-vis Israel. He avoided a direct answer, but repeated the stereotypical formula: “Israel has the right to defend itself and to combat Hamas,” which the German government has so far used to justify all the war crimes of the Netanyahu regime.

Scholz also supported the violent suppression of pro-Palestinian protests in Germany. “We have very clear laws concerning gatherings, we also have a lot of things that are forbidden, the security authorities have to take action against that,” he replied to related questions.

As for the war with Russia, the chancellor boasted that Germany was Ukraine’s biggest supporter in all of Europe and the second largest in the world after the US. The military aid provided and pledged so far alone amounts to €28 billion. In the Stern interview, he accused other European countries of not keeping pace. Germany has supplied “Patriot air defence systems, main battle tanks, multiple rocket launchers, other heavy equipment,” he said. “Unfortunately, there are not enough imitators yet.”

After being silent on the question for weeks, Scholz also fully committed himself in the Stern interview to complying with the budgetary debt brake for the coming year.

Bitter recriminations between the ministries have raged for weeks because Finance Minister Christian Lindner (Free Democratic Party, FDP) has insisted on compensating for the already existing budget shortfalls, the exploding costs of war and rearmament as well as all other additional expenses by savings elsewhere in order not to exceed the new debt limit of 0.35 percent of GDP required by the Basic Law.

Lindner strictly rejects an increase in revenues, for example through a tax on the assets of the now 226 German billionaires, or on speculative profits from shares and real estate. On the contrary, he wants to further reduce taxes. Some representatives of the Social Democrats (SPD) and Greens have therefore proposed suspending the debt brake once again as in 2023 or changing the corresponding provisions in the constitution, which the FDP categorically rejects. Time is running out as the cabinet intends to adopt the 2025 budget on July 3.

The chancellor has now given Lindner his backing and strengthened his hand. The financial framework for the federal budget is determined by tax revenues and the Basic Law, he told Stern. The limits stated by the minister of finance were agreed with him.

Massive social spending cuts

What this means can be easily anticipated: huge cuts in spending on social programmes, environmental protection, infrastructure and other areas that serve the interests of society and not the enriching of the few.

The holes in the federal budget are huge and getting bigger every day. There is already a gap of €30 billion compared to the three-year financial plan adopted in 2023. On Thursday, it increased by another €11 billion. The new tax estimate showed that due to the sluggish economy, tax revenues are much lower than assumed half a year ago. By 2028, the federal government, federal states and municipalities will lack more than €80 billion compared to last November’s estimate. Almost half of this is attributable to the federal government.

Commenting on the tax estimate, Finance Minister Lindner said, “We must say goodbye to unrealistic wishes and press ahead with the consolidation of the budget. This requires discipline and willpower.”

Many expenses cannot be reduced. In the current year, for example, the federal government is paying almost €37 billion for debt servicing alone, as much as for education, research and health combined, due to increased interest rates. In 2022, it was €15 billion. And the enormous costs of war and rearmament are tearing another deep hole in the federal budget. All parties in the SPD/Green/FDP coalition agree that NATO’s 2 percent target must be met, and support for Ukraine and Israel must continue.

Scholz made clear in the Stern interview that this means further cuts elsewhere: “Everyone feels the financial consequences of the Ukraine war, the costs for refugees, arms deliveries and reconstruction aid. Anyone who says that this is hardly noticeable in the budget is mistaken.”

The rest of the interview served mainly to throw sand in the readers’ eyes. For example, Scholz claimed that “neither will we sin against social cohesion nor will we refrain from stimulating growth.” He also claimed that he will not agree to a further increase in the retirement age.

Scholz knows that these are lies. Fulfilling these promises would be equivalent to squaring the circle. It is obvious that the planned savings in the budget can only be achieved by means of massive social cuts.

The SPD hides behind the FDP in time-honoured fashion in order to prepare social attacks that it has itself planned. The governments of Willy Brandt and Helmut Schmidt already used this method in the 1970s. The FDP and its boss Lindner, who celebrated a three-day luxury wedding on the island of Sylt two years ago, embody a layer of social climbers who can’t satiate their greed as they demand that the poor continually tighten their belts.

In recent weeks, the FDP initially presented a 12-point paper and then a 5-point paper calling for tax cuts, a cut in the Citizens Benefit, a moratorium on social benefits, the abolition of retirement at 63 for those who have worked for 45 years, a cut in pensions and further social cuts. SPD politicians such as Labour Minister Hubertus Heil have declared their outrage publicly with these demands—in order to implement them later.

There is no other party in Germany that is responsible for such drastic social cuts as the SPD. In 2003, the SPD-led government of Gerhard Schröder created a huge low-wage sector with the Agenda 2010. As a result, 8.4 million people earn less than €14 per hour in Germany today. In 2006, SPD Labour Minister Franz Müntefering initiated the gradual increase in the retirement age from 65 to 67.

Social cuts are just one front in the war against the working class. Real wages have fallen massively in recent years because the unions have stifled all collective bargaining and agreed to deals far below the rate of inflation. In the automotive, parts supplier, chemical, and other industries, and in retail and other economic sectors, one wave of layoffs follows another.

War and class warfare

The wars in Ukraine and the Middle East, the preparations for war against China and the class war against the working class are inextricably linked. They are two sides of one and the same coin. As was the case before the First and Second World Wars, global capitalism is stuck in a dead end from which the ruling class finds no way out—except war at home and abroad.

The British weekly the Economist recently published an editorial that admits this with remarkable frankness. At first glance, the global economy looks reassuringly resilient, it says. However, if you take a closer look, you can see fragility:

For years the order that has governed the global economy since the Second World War has been eroded. Today it is close to collapse. A worrying number of triggers could set off a descent into anarchy, where might is right and war is once again the resort of great powers.

The article points to the increase in sanctions and competitive subsidies, the fragmentation of global capital flows, and the loss of authority of international institutions such as the WTO, the IMF and the International Court of Justice. It draws a direct parallel to the two world wars:

So far fragmentation and decay have imposed a stealth tax on the global economy: perceptible, but only if you know where to look. Unfortunately, history shows that deeper, more chaotic collapses are possible—and can strike suddenly once the decline sets in. The First World War killed off a golden age of globalisation that many at the time assumed would last for ever. … Today a similar rupture feels all too imaginable.

The crisis has already reached a stage where government decisions appear like sheer madness. They escalate the war against Russia, even if they risk a nuclear catastrophe that would leave nothing left of Europe. After the devastating wars in Afghanistan, Iraq, Libya and Syria, they have set the Middle East ablaze again. They are preparing a war against the nuclear-armed power China and aggravating trade war, even though this imposes self-inflicted wounds.

The European Union is considering imposing high punitive tariffs on Chinese products, following the US. The consequences would be devastating, as China would respond with countermeasures and the trade war would continue to escalate.

Above all, the German car industry would be hit hard. Tens of thousands more jobs would be at risk. For example, every second Mercedes of the S-Class built in Germany and every second BMW of the seven-Series are exported to China, while conversely the electric version of several models (BMW X3, Mini, Smart) are largely produced in China.

But the crisis has long since reached a stage where the rulers are no longer able to make rational decisions. They are driven by objective social contradictions over which they have no control. Capitalist private property and the nation-state on which it is based are incompatible with the global character of modern production. To defend their profits, wealth and privileges, they rely on the re-division of the world through war, intensified exploitation and dictatorship.

The differences between the parties melt away. Whereas the SPD used to advocate social reforms and the Greens environmental protection and pacifism, today they are pioneers of social cuts, militarism and state rearmament. The same applies to the Left Party and the trade unions, which have degenerated into co-managers and a type of corporate police force.

US drug overdose deaths top 100,000 for third consecutive year

Kate Randall

US drug overdose deaths decreased slightly in 2023, according to preliminary statistics released this week by the Centers for Disease Control and Prevention (CDC), a 3 percent drop from 2022, when 111,029 died. The US, however, continues to be devastated by a drug overdose epidemic, with the CDC data showing that 107,543 people died from a drug overdose last year.

This Feb. 19, 2013 file photo shows OxyContin pills arranged for a photo at a pharmacy in Montpelier, Vermont. [AP Photo/Toby Talbot]

Americans are still dying at near-record rates, fueled by a toxic supply of drugs dominated by the synthetic opioid fentanyl and deaths resulting from the use of opioids combined with stimulants like methamphetamines and cocaine. The CDC cautioned that the data compiled by the National Center for Health Statistics are incomplete and subject to change.

Since 2020, at least 1.2 million Americans have died from COVID-19 and there are currently more than 786,000 active cases of the disease in the US, according to Worldometer. Stress and isolation in the early days of the pandemic certainly led to an increase in drug overdose deaths. Less talked about, however, is the continued economic and social impact of the pandemic, with job and wage losses, and cuts to public education, healthcare and other social programs, including the shuttering of drug treatment programs.

Since 2021, the first year when the impact of the pandemic registered in drug overdose deaths, overdose fatalities have remained above the 100,000 mark. CDC data show that drug overdose deaths in the US stood at 106,699 in 2021, 111,029 in 2022, and 107,543 in 2023, according to preliminary data. While Biden administration officials touted the supposed “flattening” of drug overdose deaths in 2022, preliminary figures for 2023 are in fact higher than in 2021.

The surge in fatal drug overdoses over the past five years originated in the opioid epidemic, which saw a rapid increase in the overuse and abuse of opioids beginning in the 1990s. Purdue Pharma’s introduction of OxyContin, an extended release form of the semi-synthetic opioid Oxycodone, is the most well-known contributor to the opioid crisis. The company pushed the highly addictive drug to doctors and pharmacists as a miracle pain reliever that would not lead to addiction.

Entire communities in Appalachia, the Northeast, Midwest and elsewhere were consumed by addiction and death as a network of opioid “clinics” as well as pharmacies pushed OxyContin, egged on by the marketing campaigns of the Sackler family of Purdue Pharma, who were well aware of the drug’s potential for abuse.

Since 2000, more than 300,000 people have died in the US from prescription opioids. No Sackler family members have been jailed for their marketing and sale of the highly profitable OxyContin, which have led to what amounts to mass murder.

Many of those addicted to Oxycontin and other semi-synthetic opioids in the early 2000s subsequently turned to less expensive heroin and then fentanyl, which is 20 to 40 times more potent than heroin and 100 times more potent than morphine. A new form of illicit synthetic opioids may be even more powerful than fentanyl and require more doses of naloxone to reverse an overdose.

The changing landscape of overdose deaths has seen the number of deaths from fentanyl and other synthetic opioids, which still account for the majority of fatal overdoses, decline slightly from 76,226 in 2022 to 74,702 last year.

Since illegal forms of fentanyl began to predominate about a decade ago, the drug has accounted for a surge in overdose deaths. The number of prescription opioid pain pills distributed between 2011 and 2019 plummeted nearly 45 percent between 2011 and 2019, but fatal overdoses continued to rise to record levels. 

Since illicit fentanyl’s introduction, it has been mixed with other drugs like heroin, cocaine or marijuana. Now, cocaine and stimulants like methamphetamines are increasingly being mixed with fentanyl. In 2023, about one in three fatal overdoses involved stimulants, while one in four involved cocaine. The US counties that received the most doses of prescription opioids per capita in 2006-2013 later saw the highest death rates from heroin and fentanyl.

Daniel Ciccarone, a researcher at the University of California at San Francisco School of Medicine, who studies overdose trends, told the Washington Post, “We created a huge cohort of people dependent on opioid pills and when we pulled back on those, we created a heroin wave—and that quickly got replaced by fentanyl, and then people really started dying.”

According to the CDC’s preliminary data, several US states saw drug deaths decline by 15 percent, including Nebraska, Kansas, Indiana and Maine. The Pacific Northwest fared much worse, with Washington, Oregon and Alaska seeing increases of least 27 percent over the previous year.

The hundreds of thousands of people lost to fatal drug overdoses has caused a grim ripple effect in the US population. According to a 2023 survey published in the American Journal of Public Health, more than 4 in 10 Americans, or about 125 million people, personally know someone who has fatally overdosed. The study found 19 percent knew one person who had died of an overdose, 18.9 percent knew 2 to 5 people, and 4.5 percent knew 6 or more who died.

The study projected that more than 40 million adults have had their lives disrupted by overdose loss, and 12.5 million are still feeling a “significant or devastating effect” from the death of a loved one.

The Biden administration has described the slight decrease in drug overdose deaths as evidence of the success of federal efforts to help prevent deaths and treat addiction. “This progress over the last 12 months should make us want to reinvigorate our efforts knowing that our strategies are making a difference,” Deb Houry, CDC chief medical officer, said in a statement.

In reality, the Biden administration spends a pittance on drug treatment programs, seeking only $8.1 billion in the fiscal year 2025 budget to support mental health and substance use services across the entire US. This is in line with the administration’s ending of the COVID-19 public health emergency, which has resulted in millions losing Medicaid coverage, along with cuts to child care and other vital social programs.

Even relatively inexpensive programs that could save lives—such as universal and free distribution of naloxone, or syringe exchange programs—have not been federally funded and have come under attack by conservative and Christian fundamentalist forces that claim they promote drug use.

By contrast, Biden signed legislation in April that provides $95 billion more for the US-NATO war against Russia in Ukraine, the Israeli military’s genocidal slaughter in Gaza, and for preparing Taiwan as a military base against China.

White House efforts to reduce overdose fatalities—to the extent that they exist—are concentrated on the Democrats anti-immigrant, “border control” policies, shifting blame for the opioid crisis from the US ruling class and its corporate sponsors to the Mexican drug cartels sourcing drug-making chemicals from China.

Ukrainian oligarch and former Zelensky backer Kolomoisky charged with attempted murder

Jason Melanovski

In an indication of intensifying conflicts within the Ukrainian ruling class, oligarch and billionaire Igor Kolomoisky has been charged in a decades-old attempted murder case as the crisis-ridden Zelensky regime abandons its former associate and financial backer amidst ongoing military setbacks.

Ukraine President Volodymyr Zelensky speaks during a meeting with U.S. Secretary of State Antony Blinken in Kiev, Ukraine, Tuesday, May 14, 2024. [AP Photo/Ukrainian Presidential Press Office]

Last week, Ukraine’s Prosecutor General’s Office reported that “a well-known businessman suspected of legalizing property obtained fraudulently, was notified of the suspicion of having committed another crime related to the organization of a contract killing.”

According to the allegations, in 2003, Kolomoisky ordered the killing of a corporate lawyer who had refused Kolomoisky’s attempts to overturn an unfavorable shareholders’ decision as Kolomoisky attempted to take control of the Dniprospetsstal steel plant in Zaporizhzhia. 

Criminal thugs later tracked the lawyer down in the Crimean city of Feodosia and “beat the man with a metal rod and stabbed him in the chest, stomach and back, but his wife prevented the attackers from killing him and doctors managed to save his life,” according to Ukrainian authorities.

Kolomoisky had already been in jail since last September, when he was arrested on charges of fraud and alleged money laundering from Ukraine’s largest bank, PrivatBank.

Prior to his downfall, Kolomoisky served as a close financial backer and associate of Ukrainian president and former comedian Volodymyr Zelensky, even prior to his presidential run in 2019.

In 2014, he was an important supporter within the Ukrainian oligarchy of a Western-backed coup that overthrew elected President Viktor Yanukovych and replaced him with an anti-Russian regime that quickly moved to incorporate the country into NATO.

As the WSWS noted at the time, in return, Kolomoisky “was named head of Dnepropetrovsk Regional Administration. The region was central to the former Soviet Union’s military (including nuclear and space) sectors. Kolomoyskyi, a metals, banking and media tycoon, is variously rated as the second or third richest person in Ukraine, with his net value estimated at up to $6.5 billion. Co-founder of the PrivatBank, he has extensive interests in aviation, media, finance, oil, metal, petroleum and ferroalloys.”

However, Kolomoisky later came into conflict with the US-aligned regime of President Petro Poroshenko, who nationalized PrivatBank after Kolomoisky and Gennadiy Bogolyubov, the co-owner of the bank, were accused of embezzling $5.5 billion.

In the 2019 presidential elections, Kolomoisky served as the most powerful backer of Zelensky’s rise and it was widely expected that PrivatBank would be eventually returned to Kolomoisky.

While Poroshenko was the favored candidate of the United States, his political support had crumbled throughout the country due to his militaristic, nationalist policies and the ongoing impoverishment of the Ukrainian economy. Zelensky easily defeated Poroshenko, winning over 73 percent of the vote.

Central to his election victory was that the Russian-speaking Zelensky campaigned at the time on a platform promising to end the civil war in Donbass that had claimed the lives of over 14,000, and criticized the far-right Ukrainian nationalism of the Poroshenko regime. For this, Zelensky was widely viewed with distrust and suspicion by the American ruling class following his landslide election.

In addition to his suspect business practices and undermining of the Poroshenko regime, Kolomoisky made himself a target of Ukraine’s Western backers when he proposed, following Zelensky’s election, that the country should snub the International Monetary Fund (IMF) and default on its massive external debt. 

In February 2020, under pressure from both the United States and the IMF, Zelensky began to cut ties with Kolomoisky when he replaced his then Chief of Staff Andriy Bohdan with Andriy Yermak, who remains in the position to this day.

Bohdan had served as a lawyer for Kolomoisky before becoming Zelensky’s chief of staff. He later fell out of Zelensky’s inner circle as Kolomoisky had repeatedly pressured the Zelensky government and Ukraine’s National Bank to return PrivatBank, drawing the ire of Western imperialism.

That same month, Ukrainian intelligence raided the offices of the Kolomoisky-owned television station 1+1. The search came after recordings of then-Ukrainian Prime Minister Oleksiy Honcharuk stating that Zelensky had a “very primitive understanding of the economy” were leaked on YouTube, reportedly by 1+1 Media Group staff linked to Kolomoisky.

Last September, on the day of his first arrest for fraud, Zelensky’s lone comment on the fate of his former political mentor was, “I thank Ukrainian law enforcement officials for their resolve in bringing to a just outcome each and every one of the cases that have been hindered for decades.”

Whatever the motivations behind Kolomoisky’s arrest for murder, it is clear that he has a long and interconnected history with both the Ukrainian oligarchy that rose to power following the mass privatization that followed the dissolution of the Soviet Union as well as with Western imperialism itself. 

Claims that the Western-backed Zelensky regime and its intelligence services are just now becoming aware of Kolomoisky ordering a single hit 20 years ago have no credibility. As a businessman, Kolomoisky reportedly kept a shark tank in his office to intimidate visitors and, like all oligarchs throughout the former Soviet Union, likely killed more than just a few rivals while amassing their mega fortunes. His criminal conduct in no way distinguished Kolomoisky from any other oligarch in Ukraine or, for that matter, Russia. The oligarchy in both countries emerged as a new ruling class out of the Stalinist restoration of capitalism, itself a historic crime and giant exercise in social plunder.

Kolomoisky’s arrest indicates an intensification of the factional struggle within the Ukrainian ruling class in which the US and other imperialist powers have long directly intervened. It takes place just as Russian forces are advancing in the Kharkov region . As it is clear that the country is facing a military catastrophe, the US chairman of the Joint Chiefs of Staff has now openly announced that NATO will “eventually” deploy troops to Ukraine.

More than ever before, Zelensky is now personally involved in the battlefield success of the war given that he only recently removed General Valery Zaluzhny as his commander-in-chief and replaced him with Oleksandr Syrsky, who holds the reputation as a “butcher” due to his proclivity to needlessly sacrifice his own troops in battle. 

Significantly, US Secretary of State Antony Blinken’s surprise visit to Ukraine this week takes place a week following Kolomoisky’s arrest for the attempted murder.

In March 2021, Blinken announced the official public designation of Kolomoisky as an “oligarch” due to “ involvement in significant corruption.” According to Blinken’s declaration, “This designation reaffirms the U.S. commitment to supporting political, economic, and justice sector reforms that are key to Ukraine’s Euro-Atlantic path.”

Accordingly, during his visit to Kiev this week Blinken agreed with the Zelensky regime that the lack of weapons is to blame for the military setbacks.

“We’re rushing ammunition, armored vehicles, missiles, air defences—rushing them to get to the front lines to protect soldiers, to protect civilians,” Blinken said at his press conference and announced an additional $2 billion more in aid.

Blinken also voiced support for Zelensky to remain as president indefinitely, stating, “We’re working with the government and civil society groups to shore up Ukraine’s election infrastructure,” Blinken said in a speech at the Kiev Polytechnic Institute on Tuesday.

Blinken stated that elections would only be held once Ukraine had regained all of its lost territory—which will likely never happen—stating, “That way, as soon as Ukrainians agree that conditions allow, all Ukrainians—all Ukrainians including those displaced by Russia’s aggression—can exercise their right to vote.”

Macron declares state of emergency in New Caledonia as riots erupt over voting change

John Braddock

French President Emmanuel Macron declared a state of emergency in the Pacific colony of New Caledonia on Wednesday after three young indigenous Kanaks and a police officer were killed in riots that began on Monday. A second police officer was reported dead on Friday. More than 200 people have been arrested and more than 300 injured in the capital Nouméa and surrounding areas.

French gendarmes patrol Noumea, New Caledonia, May 16, 2024, following protests over voting reforms. The Macron government has imposed a state of emergency that will continue for at least 12 days [AP Photo/Cedric Jacquot]

The rioting erupted as the French National Assembly pushed through a constitutional amendment to allow French residents who have lived in New Caledonia for 10 years since 1998 the right to vote in provincial elections and for the local Congress, or parliament.

Pro-independence leaders claim that “unlocking” the electoral system will dilute the vote held by Kanaks, who make up 41 percent of the population, in favour of those more likely to uphold France’s colonial rule over the South Pacific territory.

The riots followed weeks of unrest and rising tensions with demonstrations involving tens of thousands both for and against the measure. On April 13 as many as 58,000 pro-independence and 35,000 pro-France marchers took part in competing protests in Nouméa, under heavy security surveillance with police reinforcements from France.

Over two days and nights rioters torched vehicles and businesses and looted stores. Schools were shut and a curfew put in place in the capital. On Tuesday security forces regained control of Nouméa’s prison, which holds about 50 inmates, after an uprising and escape attempt by prisoners.

Radio NZ (RNZ) reported Thursday night that France’s high commissioner Louis Le Franc claimed that despite the emergency crackdown some 3,000-4,000 rioters were still “in action” on the capital’s streets and another 5,000 in the Greater Nouméa area.

Shops are now running out of food and hospitals are calling for blood donations. A second police officer died on Thursday, victim of a reported “friendly fire” incident. According to RNZ, thousands of guns are circulating in the local community in defiance of bans.

Earlier Le Monde reported that Le Franc said the situation was “insurrectional,” and could take on “a form of civil war.” A prominent New Caledonia anti-independence figure, former minister Sonia Backès, similarly declared there was a “civil war” and called for the army to intervene.

France’s security measures are however in line with repressive police-state assaults by the Macron government on workers and students in mainland France. Prime Minister Gabriel Attal declared that the 12-day state of emergency “will allow us to roll out massive means to restore order.” It gives authorities extensive powers to ban gatherings, impose travel bans, house arrests and searches.

Le Monde also reports that anti-independence New Caledonian residents have formed “armed militias” and that “unverifiable rumours backed up by photos of pick-up trucks with smoked windows, speak of punitive expeditions in which young Kanaks are supposedly [being] hunted down. A verified video broadcast… showed a white man deliberately shooting at two young Kanak men walking along the road in the Magenta district.”

By Friday 1,000 extra security personnel had been dispatched from Europe—taking the number of police and gendarmes on the island from 1,700 to 2,700. Troops are securing ports and the international airport. The local government has banned TikTok claiming it had previously helped rioters organise and attract “troublemakers” to the streets.

Ten people, alleged members of a pro-independence group known as The Field Action Coordination Unit, are under house arrest. Overseas Territories Minister Gérald Darmanin denounced the group as “radical and violent leaders,” committed to “looting, murder and violence.” He told AFP: “The (French) state will regain total control.”

The last time Paris took similar measures was in January 1985, during violent conflicts between authorities and the pro-independence movement that spanned most of the 1980s. In 1986, French elite troops brutally put down an insurrection on the island of Ouvéa, massacring 19 Kanaks.

The current restricted voting law is a product of the 1998 Nouméa Accord, brokered by the then Socialist Party government in Paris as a “compromise” between the pro-independence and anti-independence factions to maintain French control over its strategically important colony.

While setting out a long-term process for a series of three independence referenda, the agreements gave limited influence to a privileged Kanak layer, led by the Front de Libération Nationale Kanak et Socialiste (FLNKS). Seeking a larger slice of the economic pie and greater political say, the indigenous elite is now part of the establishment with a vested interest in maintaining the existing voting arrangements.

The Macron government is determined to impose the voting change as it tightens Paris’ grip on the colony. As the United States and its allies prepare for war against China, French imperialism is seeking to play a role in the militarisation of the Pacific. New Caledonia hosts a major military base and holds nearly a quarter of the world’s reserves of nickel, essential in the manufacture of stainless steel and in the defence industry.

Visiting Nouméa last July, Macron bluntly told those in favour of “separatism” they should accept the pro-France victory in the final independence referendum in 2021, which was boycotted by pro-independence parties during the COVID pandemic.

On Tuesday, France’s lower house voted 351 in favour and 153 against the constitutional change, which still requires a two-thirds majority of both houses to pass. Macron said he would delay the process and invite representatives of the territory’s parties for talks to reach a negotiated settlement. However, he insisted that agreement be reached by next month or he would sign it into law.

New Caledonia’s parties have issued a joint statement calling for “calm and reason.” On Wednesday, pro-independence leader Daniel Goa called on people to “go home” and condemned looting. But he added: “The unrest of the last 24 hours reveals the determination of our young people to no longer let France take control of them.”

Protest in Nouméa, New Caledonia, April 2024 [Photo: CCAT]

The explosive tensions that have erupted in the riots are in fact more deeply rooted than unresolved frustrations over independence. The crisis comes at a time of escalating economic turmoil and social discontent. Unemployment registered 10.8 percent in 2023, but among youth is 26 percent, mainly affecting young Kanaks.

An economic crisis looms as the country’s nickel mining and smelting industry, which until recently employed a quarter of the total workforce, is in sharp decline. Amid plummeting world prices, it faces competition from Indonesia and China that are producing much cheaper nickel. Last month the giant Koniambo plant was idled as its major financier Glencore seeks a potential buyer for its 49 percent shareholding.

The local government led by President Louis Mapou—a pro-independence Kanak politician from the National Union for Independence, part of FLNKS— which shares office with two anti-independence parties, is at loggerheads over measures to impose the growing cost of living crisis. Differences over tax policies, especially on fuel, have seen protests and blockages resulting in fuel depots becoming inaccessible and service stations facing fuel shortages.

The unrest in New Caledonia has implications for the entire region, which is sitting on a social tinderbox. January saw a wave of riots in Papua New Guinea amid escalating living costs and social discontent wracking the Pacific’s largest country and one of the world’s most impoverished.

Vanuatu Prime Minister Charlot Salwai sharply criticised Macron, saying the crisis could have been avoided “if the French government had listened, and not proceeded to bulldoze the Constitutional Bill.” He affirmed the support of the regional Melanesian Spearhead Group, which he chairs, for the FLNKS position opposing the bill.

The local imperialist powers, Australia and New Zealand, are backing France, which is an important ally in the US-led war preparations against China. New Zealand Foreign Minister Winston Peters, cancelling the New Caledonia leg of his latest Pacific tour, said “the escalating situation and violent protests in Nouméa” were “of serious concern across the Pacific Islands region.”

Australian Prime Minister Anthony Albanese said his government was “monitoring” the situation and warned Australians to “stay safe.” He airily declared: “Australia values very much our relationship with both New Caledonia and the French state.”

In fact, last year the Albanese government supported France by abstaining on a number of United Nations decolonisation resolutions. According to the DevPolicyBlog, in October Australia’s UN representative objected to a call on administering powers to terminate military activities and eliminate military bases. Australia believed, she said, “in the sovereign rights of nations to defend the Territories they administer.”

Australian government debit system a “vehicle for financial abuse” of welfare recipients

Vicki Mylonas

A recent investigation by the Guardian shows that the federal government’s Centrepay bill-paying scheme has exposed thousands of welfare recipients to financial harm, with consumer advocates stating it has become a “vehicle for financial abuse.”

This includes $174 million taken from Indigenous clients by the now-defunct funeral insurance group Youpla, and at least $700,000 handed over to utility companies from the accounts of people who were no longer customers.

Unemployed workers registering for social welfare outside Centrelink office in Sydney, Australia, 2020.

Gas and electricity provider AGL is now the subject of a federal court case brought by the national energy regulator over its alleged abuse of the Centrepay scheme.

The company was first warned that it was engaging in “serious non-compliance,” including “failure to cancel a Deduction after a Customer ceased to be an ongoing customer,” in 2013, by Services Australia—the government agency that handles welfare payments.

Yet the practice continued. Between December 23, 2016 and October 14, 2021, AGL allegedly received more than $700,000 in overpayments from around 575 Centrepay users who were no longer customers.

This was despite the fact that, according to court documents seen by the Guardian, Services Australia sent daily reports to the company throughout this period, detailing Centrepay deductions and the AGL account numbers they pertained to.

In one case, a Centrepay user stopped being an AGL customer in February 2018, but a further 74 deductions, totaling $6,800, were made until December 2020. In another, AGL received 100 Centrepay payments from a former customer, depriving them of $4,111 in welfare payments between January 2017 and December 2020.

AGL has denied that it “did not take proper steps” to prevent overpayments such as these, claiming the company did not have the authority to cancel deductions. Instead, customers were told “from time to time, albeit not on a systematic basis” that they should notify Services Australia when they closed their account with AGL.

In other words, vulnerable people, using Centrepay in the hope that it would help them manage their extremely limited financial resources, were on their own. Compounding this, many Centrepay users are in remote areas, without ready access to online portals through which adjustments to automated payments could be made.

Origin Energy and Ergon Energy have also been found to have received payments from Centrepay users who were no longer customers. It is not clear how much the two utility companies have received in overpayments or how many Centrepay users have been affected.

Also unknown is whether these practices are ongoing, because Services Australia has not audited AGL or Ergon’s use of Centrepay in the past two years.

Initially limited to rent and utility bills, the Centrepay scheme was subsequently expanded to include retail and other services, with more than 15,000 companies now approved for Centrepay. Dozens of these businesses continue to be included in the scheme, despite being under investigation, or even having been penalised for, questionable conduct and potential breaches of consumer protection laws.

There are “more and more predatory practices emerging in what was originally designed to be a really safe model,” according to AnglicareNT financial counsellor Caitlin Bender, while lawyer Mark Holden has said that businesses “are financially motivated to take advantage of Centrepay to deduct as much Centrelink as possible.”

Some of the most egregious abuses of the Centrepay scheme have emerged from its expansion to include “rent-to-buy” appliance sellers, which particularly target remote Aboriginal communities. Some 122 of these operations remain connected to the scheme despite having previously been sanctioned by the Australian Securities and Investments Commission (ASIC) for predatory conduct.

An ASIC spokesperson said the regulator had raised this multiple times with Services Australia, but remained concerned that some of these businesses “provide consumer leases which may place customers into financial hardship,” with deductions for consumer goods “prioritised over essentials such as rent and food.”

In one example reported by the Guardian, an indigenous welfare recipient signed a contract to purchase a TV with a business using Centrepay for $86 a fortnight. She was not given a copy of this contract, nor was she provided with any records of the progress of her repayments. After she was threatened with court action when the automatic payments were interrupted, her legal advocates discovered that the business had deducted almost $6,500 for a TV worth only $1,400.

Centrepay is heavily targeted towards the most vulnerable and oppressed sections of the population, including in indigenous communities and other remote areas, with high levels of unemployment and social disadvantage, and where local access to shops and banking is extremely limited. Of the 620,000 users of the system, almost one third are Indigenous.

The Financial Rights Legal Centre says Aboriginal people in remote locations are being forced to seek emergency food relief because, after Centrepay deductions, there is not enough left of their welfare payments to live on. In one example, an Aboriginal woman with a long history of homelessness was paying more than $400 a fortnight to retail stores for items she no longer possessed.

The Centrepay scheme was introduced by the Liberal-National government of John Howard in 1998, and has been continued and expanded by every government since, including the Labor governments of Kevin Rudd, Julia Gillard and Anthony Albanese.

Ostensibly, it is a “financial management tool” that allows welfare recipients to have certain expenses deducted from their payments before the money enters their bank accounts. In reality, its purpose is to ensure that landlords, utilities and other businesses get the first cut of the pittance from which the unemployed, elderly, disabled, or otherwise disadvantaged are forced to eke out an existence.

For a single person, the Jobseeker payment amounts to just over $380 per week, far below the Henderson poverty line of $609 (before housing costs). Despite the soaring cost of living and the recommendation of its own Economic Inclusion Advisory Committee, the federal Labor government did not increase the Jobseeker rate in Tuesday’s budget, in line with its broader austerity agenda.

NATO-backed protests in Georgia raise prospect of another “color revolution” in south Caucasus

Andrea Peters

Protests against the final passage of a “foreign agents law” in the country of Georgia erupted again this week in the capital city, Tbilisi. The bill, which requires that organizations that receive more than 20 percent of their funding from overseas register as representing the interests of a foreign power, was approved on its final reading this Tuesday in a parliamentary session held under heavy guard. While President Salome Zourabichvili will veto the measure, its supporters have enough votes to overturn her decision.

Demonstrators watch as police leave an area around the Parliament building during an opposition protest against "the Russian law" in the center of Tbilisi, Georgia, on Monday, May 13, 2024. [AP Photo/Zurab Tsertsvadze]

Opponents claim that the law is the handiwork of the Kremlin. The Russian government implemented a similar measure several years ago, and the ruling Georgian Dream (GD) party is labeled as pro-Moscow. Demonstrators are holding aloft signs that read, “F**k Putin,” “Slaves,” “Russians.” The US and the EU have both denounced the country’s government for allying itself with Russia.

This week’s mass gatherings, according to Western press reports, are in the “tens of thousands.” Video clips show riot police, outfitted with batons, shields, and tear gas, pushing back against crowds and violently dragging people away. Several dozen have been arrested, including two US citizens and one Russian citizen. Demonstrators have blocked major intersections and set up encampments in the city center. Students at numerous universities staged a one-day strike on May 14.

The same day, demonstrators attempted to breach barriers and enter the parliament building, where a physical fight involving a dozen or more lawmakers had broken out. They intended to join the fray in an effort to stop or reverse the vote on the law.

Events unfolding in the small but geo-strategically important south Caucasus nation bear the markings of a looming “color revolution.” Over the course of the 2000s, US and NATO-backed demonstrations in former Soviet-sphere countries, always labeled as “pro-democracy” movements, repeatedly overthrew governments deemed to be aligned with Russia. These operations adopted different colors, with Georgia itself having a “Rose Revolution” in 2003.

The “color revolutions” were invariably based on privileged layers of the middle class and brought to power an openly pro-NATO faction of the oligarchy which subsequently implemented devastating market reforms and oppressed all opposition. Georgia’s “Rose Revolution” president, Mikheil Saakashvili, ultimately had to flee to Ukraine to evade charges of corruption and the violent abuse of prisoners. There he was protected by Kiev’s far-right government, which was brought to power through similar events.

The protests in Tbilisi, which have been ongoing for weeks, come in the lead-up to parliamentary elections in October. The NGOs, opposition parties, and “civil society” activists orchestrating the street demonstrations seek to press Georgian Dream into retreat and a more subservient relationship with the US or, should that not work, to drive it from power. Speaking to CNN, former Georgian Ambassador to the EU Natalie Sabanadze stated, “If this government doesn’t withdraw this bill now, when they still have the chance, it will be hard for them to get to the elections. It’s a spiral at the moment.”

The US and the EU have responded ferociously to the passage of the foreign agents law, which could expose much of Georgia’s network of “civil society,” “pro-democracy,” “human rights” organizations to be US and EU-funded fronts.

US Assistant Secretary of State Jim O’Brien warned Tuesday that the country had now reached a “turning point” and implied that it will no longer be considered an American ally. In an admission of the fact that the US has spent billions of dollars meddling in Georgia, O’Brien indicated that Washington is preparing to cut off financing for the current government, which is “now regarded as an adversary and not a partner.”

The EU, which Georgia has been seeking to join, indicated that it will halt the process of admitting the south Caucasus nation to its rank.  EU foreign policy chief Josep Borrell and Enlargement Commissioner Oliver Varhely declared in a statement that the law is “not in line with EU core norms and values.”

UK Minister for Europe Nusrat Ghani, promised—as if it were up to her—that the people of Georgia will “rally against this law as long as it takes.” She warned, menacingly, that the bill against foreign agents was an “existential threat” to the country’s survival.

In an extraordinary breach of diplomatic protocol, the foreign ministers of Latvia, Lithuania, Estonia, and Iceland—countries that do nothing that they are not told to do by Washington and Brussels—went to Tbilisi on Wednesday and joined the marches. Estonian Foreign Minister Margus Tsahkna boasted of his presence there, posting footage of himself striding along with protesters on his X page. This would be the equivalent of Belarusian Foreign Minister Sergei Aleinik showing up at the antigovernment demonstrations in Washington and taking selfies.

The ruling Georgian Dream (GD) party, after years of attempting to ingratiate itself with Washington and Brussels while still retaining ties with Russia, finds itself trapped. Prime Minister Irakli Kobakhidze, who blamed NATO expansion for provoking the war in Ukraine, refers to the Western alliance as the “global party of war.” He expresses fears within the Georgian ruling elite, which are held more broadly in the population, of what is in store for them.

However, as over a decade of ever-closer relations with the White House and the EU show, if Georgian Dream could come to some sort of livable arrangement with the US and is allies, it would. And the US continues to try to establish its control over the “pro-Russian” forces in the south Caucasus. Assistant Secretary of State O’Brien, who arrived in Tbilisi this week, sought to meet with the party’s billionaire financier, Bidzina Ivanishvili. He has thus far reportedly been turned down.

The ruling party has long tried to chart a middle road between the US and Russia, but the basis for such a balancing act has been almost completely undermined by the escalating conflict between NATO and Russia in Ukraine and the preparations for a direct conflict against Iran in the Middle East.

In the fall of last year, the country’s security services reported uncovering a plot, funded by the West, to overthrow the government. The “foreign agents law” emerges within this context. Its immediate targets are organizations and forces tied to the US and NATO, which sections of the Georgian elite fear are preparing to dispense with them.

This does not, however, make the bill any less reactionary. Similar measures have been used to target socialists and other groups deemed to be too left-wing. Currently, Ukrainian Trotskyist Bogdan Syrotiuk—a fighter against imperialism and both Russian and Ukrainian nationalism—is jailed in Ukraine on trumped-up charges of being a “foreign agent” of the Kremlin.

However, the protests in Georgia are devoid of progressive content. The slogans advanced at the demonstration—for “freedom,” “democracy,” a “European future,” and against “Russian slaves”—amount to the demand that Georgia transform itself into a complete puppet of the American and European ruling classes and that it become yet another staging ground for war against Russia.

This can only result in catastrophe. The future that awaits Georgia in the event of another imperialist-backed “revolution” can be seen in Ukraine, where a far-right, CIA-run government has driven the population into a bloodbath in the West’s proxy war against Russia. All opposition to the government is violently suppressed. Fascist hagiography has become the ideology of the Ukrainian state.

The interest of the US and its NATO allies in Georgia has nothing to do with democracy and everything to do with advancing its strategic and economic interests in an emerging new imperialist re-division of the world. For decades, Western militaries and spy agencies have been building up ties with the country. In 2015, a NATO Joint Training and Evaluation Center was established there. In 2018 the US Army set up the Georgian Defense Readiness Program. American military leaders have spoken repeatedly about the centrality of the country to their war aims.

The region is also valuable as a mean of circumventing Russian control over major trade and energy routes. Western powers have been centrally involved in financing several critical projects—the building of a deeper water Black Sea port at Anaklia, the construction of an electrical line from Georgia to the EU that would deliver renewable-resource electricity to the European market, and the laying of an east-west fiber optic cable that ties together Asia and Europe, bypassing Russia.

The social and political character of the Tbilisi demonstrations is further revealed in the absence of slogans having to do with poverty, inequality, job security, overwork, inflation, or any of the other problems that occupy the overwhelming majority of the working class. These issues are not raised because for those on the streets they are not a major concern.

The anti-Russian sentiment spewing out of protesters is also bound up with middle-class resentments over the huge influx of well-to-do Russians into the country after the start of the Ukraine war. Tens of thousands have emigrated to their southern neighbor over the last two years, driving up prices and for real estate and luxury items. The layers coming to just 3.7 million have resources; they could not have emigrated unless they worked for foreign firms, had ample savings in foreign accounts, or had the connections necessary to set themselves up comfortably in a new country. In other words, they have already achieved what Georgia’s middle class, stuck in a country with a Gross National Income per capita that is among the lowest in Europe, seeks—or if they have it, they want more of it.

While economic and social demands are absent from the demonstrations, militaristic patriotism abounds. A May 10 article in Radio Free Europe (RFE/RL) noted, for instance, “Georgian flags are ubiquitous at the demonstrations,” The US-funded news service went on to highlight the political outlook of law student Zviad Tsetskhladze, “who helped start the student marches” and “is one of the leaders of a youth group called Dafioni (‘Sunset’), which has come to prominence during these protests.”

“The group,” reports the press outlet, “raised eyebrows at one early protest by having members swear an oath to “defend Georgia’s statehood… In Tsetskhladze’s Facebook profile photo, he is wearing camouflage military gear, complete with a balaclava” and reports that he “love(s) military stuff.” He described fellow students as supporters of pro-Western and “libertarian” parties.

And amidst mass demonstrations throughout the world in opposition to the brutality of the Zionist state and its backers on both sides of the Atlantic, the protesters in Tbilisi have nothing to say about the mass arrest and beating up of pro-Palestinian demonstrators around the world, much less the slaughter of an entire people in Gaza.

Rather, the demonstrators in Tbilisi chanting the worn-out formulas of “democracy” and demanding a “European path” are celebrating those directly responsible for genocide. These positions are not actually in contradiction with one another. The efforts to install a pliant pro-NATO government in Georgia is a necessary component of the emerging new imperialist world war, which has already transformed Ukraine and Palestine into killing fields.