Gold price surging to new record highs calling into question role of the dollar

Nick Beams

The continued surge in the price of gold—it hit a record high of more than $2,700 per ounce last week and has risen 40 percent in the past year—has raised issues about what this signifies for the future of the dollar-based international monetary system.

Gold bars [AP Photo/Seth Wenig]

The role of the dollar as the global currency gives the US “exorbitant privilege” as it allows the running up of government debt in a way not possible for any other country.

Donald Trump, for one, recently pointed to the significance of dollar dominance, saying that losing it would be the equivalent of losing a war. These views are shared no less in the Democratic Party.

In a comment published in the Financial Times last week, well-known financial analyst and commentator Mohammed El-Erian indicated that there were deeper forces at work than market fluctuations and immediate geo-political issues.

“Something strange has happened to the price of gold over the past year,” he wrote. “In setting one record level after the other, it seems to have decoupled from its traditional historical influencers, such as interest rates, inflation and the dollar. Moreover, the consistency of its rise stands in contrast to fluctuations in pivotal geopolitical situations.”

El-Erian listed a number of factors which are raised as explanations for the continued rise in the price of gold over the past year.

These include: the general rise in asset prices; increased purchases of gold by central banks; loss of confidence in US management of the global order; the US weaponisation of tariffs together with its progressive abandonment of a cooperative rules-based system, and the search for a payments system outside the dollar arising out of the ejection of Russia from the Swift international payments system at the start of the Ukraine war.

The search for an alternative system of payments was a key agenda item at the three-day summit of the BRICS (Brazil-Russia-India-China-South Africa) coalition held in Kazan, Russia last week at which representatives of some 36 countries were present. Whether by accident or design, the BRICS summit was held at the same time as the IMF-World Bank gathering in Washington.

The level of attendance at the BRICS conference reflected the fear in many countries that the freezing of Russian dollar assets by the US and its European allies could be used against any country that crosses their path.

The summit endorsed the use of “local currencies in financial transactions between BRICS countries and their trading partners” and decided to “study the feasibility of establishing an independent cross-border settlement and depositary infrastructure, BRICS Clear.”

How far such an initiative can go remains to be seen—there are significant divisions among the countries involved, but the fact that alternatives to the dollar-based system are even being discussed is significant.

There is also recognition of the shift in financial circles. Last Thursday at a conference in Beijing, the Hong Kong unit of the global bank HSBC announced it was “formally joining” China’s Cross-Border Interbank Payments System (CIPS). David Liao, the co-chief executive of the bank’s China territory business, said the dominant role of the dollar was being “diluted.”

Commenting on the attempts to shift away from the dollar, El-Erian noted, correctly, that “no other currency or payment system is able and willing to displace the dollar at the core of the system.

“But an increasing number of little pipes are being built to go around this core; and a growing number of countries are interested and increasingly involved.”

In this context what was happening to the gold prices was not just unusual in terms of traditional economic and financial influences. It was the expression of a “broader phenomenon which is building secular momentum.”

As a defender of the present financial and political order, this is what led El-Erian to his central concern, to which he said western governments should pay more attention.

“As it develops deeper roots, this risks materially fragmenting the global system and eroding the influence of the dollar and the US financial system. That would have an impact on the US’s ability to inform and influence outcomes and undermine its national security.”

There is also an even deeper significance to the gold price surge going beyond the position of the US as the dominant imperialist power, decisive as that question is.

It is an initial expression of an emerging crisis in the whole monetary and value system of global capitalism which can only be grasped when placed in its historical context.

At the Bretton Woods conference of 1944, the leaders of the soon to be victorious imperialist powers came together to fashion a new international monetary system, acutely aware that a return to the chaos of the 1930s marked by tariffs, currency blocs and the lack of an international payments system would lead to a crisis and spark social revolution by a resurgent working class.

In media commentary on its 80th anniversary, the Bretton Woods gathering is being lauded as a model of global cooperation to which there should be a return in the face of the present deepening economic and political crises.

In fact, it was far from that. The US used its dominant economic might to fashion an international monetary system based on the dollar. It rejected a proposal by the chief British negotiator, John Maynard Keynes, for the establishment of an international currency, bancor. Just as the US fought to advance its interests, Keynes’ proposal was intended to defend the position of a declining British empire and curb the dominance of the US.

The overwhelming economic might of the US ensured that it prevailed, but at the same time it had to make concessions in the form of a guarantee that US dollar holdings could be converted to gold as an ultimate store of value at the rate of $35 per ounce.

The Bretton Woods system, however, was based on a profound contradiction. The dollar became the international currency and to ensure sufficient liquidity there had to be an outflow of dollars from the US.

Moreover, to prevent the world economy, and ultimately the US, from plunging back into depression, with the revolutionary upheavals that would have produced, the defeated imperialist powers had to be revived. This was the basis of the US Marhsall Plan of 1947 through which it reconstructed the war-torn economics of Western Europe

The new system was able to operate for barely a quarter of a century.

It broke down when the US balance of trade turned negative because of the increased competition on world markets from its rivals, whose revival it organised. US gold holdings became vastly outweighed by the dollars circulating in the rest of the world. This led to the decision by President Nixon on August 15, 1971 to remove the gold backing from the US dollar.

The dollar continued to function as the global currency, but it now operated as a fiat currency, no longer backed by gold as a store of value but by the power of the US state.

The theoretical issue which arose was what was the nature of this money, and could this system continue indefinitely. Bourgeois political economy generally ignored these questions so long as the system continued to function—money was simple a technical device.

Such conceptions had been refuted by Karl Marx in the opening chapters of his masterwork Capital. There he explained that money had not somehow been invented but was an objective product of the commodity system of production, that is, production for a market upon which the capitalist system was based.

In a system of social production, of which capitalism was the most highly developed form, the value of each commodity was ultimately determined by the amount of socially necessary labour contained in it. And this value had to find independent material expression in the form of another commodity, the money commodity, which for historical reasons and its physical properties was gold.

In the wake of the collapse of the Bretton Woods system, various critics of Marx, including some self-styled Marxists, maintained that the continued operation of the monetary system on the basis of a fiat currency and credit, not backed by gold, had refuted his analysis.

Insofar as they even considered the question of the value represented by this paper money, created by a printing press or in today’s conditions by the press of a computer button, it took the form of a circular argument.

The dollar was a store of value and the basis of the financial system because it was sought after in order to conduct trade and other transactions, and it was sought after to perform these functions because it was a store of value.

Marx’s analysis did not stop at the opening chapters of Capital. He later explained that credit, being similarly a social form of wealth, could displace gold and usurp its position. It was “confidence in the social character of production that makes the money form of products [that is the expression of their value in gold] appear as something merely evanescent and ideal, as mere notion.” (Marx, Capital Volume 3, Penguin, 707-708)

No doubt this usurpation has lasted far longer than Marx anticipated.

The mounting storms in the financial system, especially since the 2008 crisis, show that fundamental contradictions in the capitalist mode of production and its monetary system are coming to the surface.

The rise in the price of gold reveals that a fiat currency, based on the economic and financial power of a state, cannot continue to function as world money indefinitely. Not when that state, the US, has lost the economic power it once had, is in debt to the tune of $36 trillion, must raise more debt simply to pay the interest on past debt (now around $1 trillion a year) and is now the most indebted nation in history.

North Korean troops deployed to Russia, as US/NATO ramps up Ukraine war

Peter Symonds

Amid claims by Ukraine and South Korea that North Korean soldiers had been sent to Russia to fight Ukrainian forces, Russian President Vladimir Putin indirectly acknowledged their presence in comments to the media last Thursday.

North Korean soldiers march during a mass military parade in Pyongyang in 2012 [AP Photo/Ng Han Guan, File]

When questioned about a video released by South Korean intelligence purportedly showing North Korean soldiers training in the Russian far east, Putin stated that “he never doubted at all that the North Korean leadership takes our agreements seriously.”

Putin was referring to the “comprehensive strategic partnership” agreed during his visit to North Korea in June that provides for “mutual assistance in the event of aggression against one of the parties.” An article in the treaty obligates North Korea and Russia to provide “military and other assistance without delay by mobilizing all means in its possession” in the event that the other is invaded.

The agreement was ratified on Thursday by Russian lawmakers. Commenting on the mutual assistance clause, Putin said: “What and how we will do is our business within the framework of this article.”

The terms of the treaty have led to speculation that North Korea troops will be deployed to the Kursk region of Russia as part of a counter-offensive effort to dislodge Ukrainian forces that seized a part of the region in an offensive beginning in August.

Putin provided no details concerning the presence of North Korean troops in Russia, nor did he attempt to refute the various claims by South Korea, Ukraine and the US that up to 12,000 North Korean special forces troops have been shipped to the Russian far east for training and that several thousand have already been moved to the battle zone in Kursk.

On Friday Ukrainian President Volodymyr Zelenskyy claimed that the North Korean soldiers were expected to be sent to “combat zones” as soon as October 27 or 28. He branded the move as “a clear escalation by Russia” and called on Ukraine’s backers to put pressure on Moscow and Pyongyang with a “strong response” to “North Korea’s actual involvement in combat.”

US Defence Secretary Lloyd Austin weighed in, declaring the involvement of North Korean troops was “a very, very serious issue” if they are co-belligerents, “if their intention is to participate in this war on Russia’s behalf.” He warned that “it will have impacts not only in Europe, it will also impact things in the Indo-Pacific.”

John Kirby, White House national security spokesman, commenting on the dispatch of North Korean soldiers, declared: “We do not yet know whether these soldiers will enter into combat alongside the Russian military, but this is certainly a highly concerning probability.” He then warned, however, that North Korean troops were “fair game” if deployed in fighting against Ukrainian forces.

The condemnations of North Korea’s deployment of troops to Russia are entirely hypocritical. Over the past two years, the US and its NATO allies have been waging war against Russia, supplying Ukraine with tens of billions of dollars of increasingly sophisticated and deadly military hardware along with training and intelligence. The Ukrainian invasion of Kursk was undoubtedly planned and prepared with the direct assistance of NATO and the US in particular.

While there is nothing progressive in the 2022 Russian invasion of Ukraine, the primary responsibility for the war rests with US imperialism that deliberately goaded the Putin regime into acting by threatening to incorporate Ukraine into the NATO military pact. Washington has recklessly proceeded to escalate the war, crossing all of its own “red lines,” as it seeks to fracture and subordinate the Russian Federation to its economic and strategic interests.

US and NATO advisers, intelligence agents and special forces troops are undoubtedly already present in Ukraine. In his comments, Putin declared that NATO officers and instructors were directly involved in the Ukraine war. “We know who is present there, from which European NATO countries, and how they carry out this work,” Putin said.

The presence of North Korean troops in Russia is already being used as the pretext to push ahead with plans to openly deploy NATO troops to Ukraine. Lithuanian Foreign Minister Gabrielius Landsbergis told the POLITICO website on Sunday that it was time for European countries to revisit French President Emmanuel Macron’s idea of sending troops to Ukraine first mooted in February.

“If information about Russia’s killing squads being equipped with North Korean ammunition and military personnel is confirmed, we have to get back to ‘boots on the ground’ and other ideas proposed by Macron,” Landsbergis declared.

In an interview published on October 1 in the German newspaper Berliner Zeitung, Benjamin Haddad, the French minister for European affairs, declared: “President Macron has said on several occasions that we must not exclude anything.” Asked if “the French position remains that the deployment of ground troops to Ukraine is not ruled out,” Haddad replied “Yes.”

The condemnation of North Korea’s deployment of troops is accompanied by denunciations of its provision of weaponry for Russian forces. South Korean intelligence claims that North Korea had sent 13,000 containers worth of artillery shells, antitank rockets and missiles to Russia as the war has dragged on.

Even if true, North Korean munitions pale alongside the provision of not only munitions, but main battle tanks, long range missiles, drones and fighter aircraft by the US and NATO to Ukraine. As part of his recent European trip, US Defence Secretary Austin make an unannounced visit to Kyiv, his fourth, where he announced another $400 million package of US weapons for Ukraine.

It should also be noted that while South Korean intelligence tracks North Korean military assistance to Russia, South Korea itself is providing large quantities of munitions indirectly to Ukraine via the US. Last December, South Korea’s Hankyoreh newspaper reported that Seoul had sent at least 500,000 155mm shells to the US to restock Washington’s supplies that had been seriously depleted as a result of shells sent to Ukraine. A Washington Post article reported that the Pentagon was seeking a further 330,000 shells as Ukraine was expending around “90,000 or more a month.”

The potential involvement of North Korean troops in fighting against Ukrainian forces again underscores the fact that the US/NATO war against Russia, as well as the US-backed Israeli genocide in Gaza and widening war in the Middle East, are two fronts in what is rapidly emerging as a world war between nuclear armed powers.

Austin’s warning that the North Korean deployment will not only affect Europe, but “impact things in the Indo-Pacific,” simply reflects the growing discussion in US strategic and military circles of the global character of the unfolding wars. Indeed, US imperialism is seeking to bring Russia to its knees as it wages an economic war against China and escalates its military provocations and preparations for conflict with what it regards as the chief threat to its global hegemony.

After the migration pact: EU states outdo each other with anti-refugee policies

Gregor Link

The adoption of the so-called “migration pact” in April has prompted the European Union and leading EU states to escalate their anti-refugee and anti-migrant policies and attack the democratic rights of workers across the board. While the Italian government under the fascist Giorgia Meloni is acting as a spearhead in some respects, a race has long since broken out among the European powers to see who is taking the toughest and most criminal actions against migrants.

A general view of a migrant processing center at the port of Shengjin, northwestern Albania, Wednesday, Oct. 16, 2024, as the first group of migrants intercepted in international waters arrived Wednesday. [AP Photo/Vlasov Sulaj]

At an extraordinary special meeting on Tuesday evening in Rome, the Italian cabinet issued a decree that enshrines in law the government’s definition of “safe” countries of origin and which comes into force immediately. The Meloni government is thus overruling a court judgement that declared the transfer of refugees to Albania to be unlawful. In future, Italy will operate two large detention centres on Albanian territory where asylum seekers will be held under inhumane conditions.

In this way, Italian officials are to decide on up to 36,000 asylum applications per year “in a fast-track procedure” outside the EU. Those who are rejected are to be deported from Albania. An article in Der Spiegel describes the project as “Meloni’s mini-Guantánamo” and states that many EU states regard the measure as a “role model.” Alongside the US torture prison in Cuba, the concentration camp-like conditions of refugee centres such as Moria (Greece) are likely to serve as a model that could soon prevail everywhere at Europe’s external borders.

A few days earlier, EU Commission President Ursula von der Leyen (Christian Democrat, CDU), who works closely with Meloni at EU level, announced a new draft law on the deportation of migrants. According to Der Spiegel, the planned proposal from Brussels is intended to “effectively streamline the return process” and aims to “ensure that every EU country recognises the decision on deportation in another member state.” This requires a “new legal framework in the EU to improve our ability to act.” Von der Leyen went on to explain that, in addition to existing migration agreements with Tunisia, Libya and Turkey, the EU was seeking further similar “partnerships” with West African states such as Mauritania, Mali and Senegal.

Meanwhile, European governments are outdoing each other with reactionary moves against refugees and democratic rights. According to an article in Le Monde, the far-right French government recently appointed by President Emmanuel Macron is seeking a new law that would allow refugees to be detained for up to 210 days instead of the current 90 days. The government under Prime Minister Michel Barnier and Interior Minister Bruno Retailleau also announced this week that border controls with Belgium, Luxembourg, Germany, Italy and Switzerland would be extended until at least April 30, 2025. Similar border controls within the Schengen area were recently reintroduced by Germany, Austria, Norway and Denmark.

Meanwhile, the Polish government under former EU Council President Donald Tusk is taking even tougher action against immigrants than its predecessor government of the PiS party. It recently authorised the use of firearms in certain cases of “irregular” border crossings. Tusk also announced a “temporary territorial suspension of the right of asylum,” particularly with regard to Belarus and Russia. The plans are a clear violation of international and European treaties and the Polish constitution.

In the style of an exemplary fascist, Tusk declared, “We are fortifying the border and when it comes to illegal migration, I will be absolutely tough and ruthless, even if I get beaten up for it, and will not recognise and implement any European ideas that endanger our security. I am talking about the migration pact here, no one will force me to do so.”

In fact, brutal and illegal measures such as those announced by Tusk form the very essence of the so-called migration pact and are its desired outcome. In an article on the adoption of the Common European Asylum System (CEAS), the World Socialist Web Site wrote:

With the final adoption of the CEAS on April 10, the European Parliament has effectively suspended the right to asylum and turned the immigration policies of the extreme right into law. The measures adopted provide for Europe’s external borders to be hermetically sealed off. This means that refugees will have to undergo their asylum procedure outside the EU in closed, militarily guarded detention centres.

Interior Minister Nancy Faeser (Social Democrat, SPD) boasted that Germany would lead the way in implementing the migration pact and announced a “security package” of new legislative proposals, including additional powers for security authorities and stricter rules on residency rights. In addition, refugees who are required to leave the country and have already been registered in another EU country will have their social benefits cancelled in the future.

At the weekend, Chancellor Olaf Scholz travelled to Istanbul to negotiate accelerated returns with Turkish President Recip Erdoğan in exchange for further arms deliveries. Since 2016, there has been an informal agreement between the EU and Turkey to prevent refugees in Turkey from travelling to Europe. Most recently, the Turkish government deported 50,000 refugees back to Syria. Following the meeting, Erdoğan signaled that he was “open” to shielding the EU states from refugees from Lebanon as well.

Back in September, Scholz and Kenyan President William Ruto signed another comprehensive migration deal in Berlin, which offers Germany access to “qualified labour” but is also intended to speed up deportations and support Ruto’s government. For months, the corrupt Kenyan government has been bloodily suppressing mass protests demanding Ruto’s resignation and the cancellation of austerity measures imposed by the International Monetary Fund (IMF). Ruto, whose police have killed at least 39 protesters and have been notorious for years for extrajudicial killings, spoke to the press about the deal with Germany as a “win-win result.”

In July 2023, the EU concluded an agreement with the right-wing Tunisian government of Kais Saied, which, among other things, provided for the Tunisian border regime to be financed with €105 million to prevent refugees from crossing the Mediterranean.

Since summer 2022, the Moroccan government of King Mohammed VI has been acting as Europe’s brutal “gatekeeper” at Spain’s external EU border in agreement with the PSOE-Podemos government in Madrid. The agreement includes Spain recognising Morocco’s sovereignty over the formerly Spanish-occupied territory of Western Sahara. According to the Moroccan armed forces, around 87,000 migrants were stopped in 2023, a sharp increase compared to around 56,000 between January and August 2022. The EU provided Morocco with €1.2 billion between 2014 and 2022, including hundreds of millions for the purpose of taking action against migrants.

In June 2022, Moroccan “security forces” drove refugees from the war-torn regions of the Sahel and Sudan from the Spanish border at gunpoint, killing at least 23 people. In 2023, more people than ever before died in the Atlantic Ocean trying to reach Spanish territory. As the Austrian Kronen Zeitung reports, citing high-ranking EU representatives, the previous agreement was nevertheless to be deepened this year by a “migration pact,” the main features of which were agreed between the EU and Morocco in December last year. In January of this year, Spain’s Supreme Court condemned the authorities’ decision to send dozens of unaccompanied minors from the Spanish exclave of Ceuta back to Morocco in May 2021 as “illegals.”

The EU has also been working closely with authorities and paramilitary forces in Libya for years, overseeing a system of serious human rights violations. For example, a recent EU communication boasts of operationally training border guards from the Libyan Ministry of the Interior as part of the European Union Border Assistance Mission to Libya (EUBAM Libya). The so-called “Libyan Coast Guard” has been supported by the EU for years with equipment and funding worth millions of euros.

The InfoMigrants website has compiled eyewitness reports according to which refugees in Libya are “confronted daily with physical and sexualised violence, forced labour, exploitation, arbitrary detention and extortion.” Even the spokesperson for the United Nations Human Rights Office, Liz Throssell, spoke to Deutsche Welle in July of “widespread human rights violations against migrants, refugees and asylum seekers in Libya,” including torture, forced labour, extortion, starvation under intolerable detention conditions, mass displacement and human trafficking. This happened “on a large scale and with impunity, with both state and non-state actors often working together.”

Following the migration deals with Turkey, Tunisia, Libya and Morocco, the EU also signed an agreement with Lebanon in May this year, which stipulates that the country will prevent Syrian refugees from travelling to Europe in return for a financial injection of €1 billion. Amidst Israel’s escalating military strikes against Lebanon, aid organisations are warning that this agreement was also paving the way for further human rights violations.

German parliament’s plan for hospital reform paves the way for closures

Markus Salzmann

Last week, a so-called Hospital Reform program was adopted in the Bundestag. The bill will facilitate the widespread closure of clinics and significantly worsen the provision of general healthcare.

German Health Minister Karl Lauterbach prior to the weekly cabinet meeting at the Chancellery in Berlin, Germany, Wednesday, February 1, 2023. [AP Photo/Michael Sohn]

The ruling coalition of the Social Democratic Party (SPD), Greens and Free Democratic Party (FDP) prevailed in the vote. Voting in favor of the bill were 374 deputies, with 285 against and one abstention. The opposition parties—the Christian Democratic Union (CDU), Christian Social Union (CSU), the far-right Alternative for Germany (AfD), the Left Party and deputies of the Alliance Sahra Wagenknecht (BSW)—had announced their intention to oppose the bill prior to the vote.

All the opposition parties basically agree on the need to reduce the number of hospitals and care services. Disagreements about the issue mainly concern financing, with some of the parties of the opinion that the new measures do not go far enough. The reform still has to pass Germany’s second house, the Bundesrat. Although it does not require approval in principle, it can be delayed in the Bundesrat mediation committee.

Germany’s Health Minister Karl Lauterbach (SPD) left no doubt about the objective of the reform. In an interview with Bild am Sonntag, he stated, “It is quite clear that in ten years at the latest we will have a few hundred hospitals less.” Allegedly, there is “no medical need” for these clinics. According to Lauterbach, one in three beds already lie empty, and there are not enough staff.

In fact, the vacancy rate is not due to a lack of medical demand. It is due to the disastrous austerity policies of recent decades, which have ensured that many clinics today suffer from an acute shortage of staff and serious financial problems. According to current estimates, there could be around 80 clinic insolvencies by the end of the year. This has been a long time coming and could have been prevented with appropriate public funding.

The reform that has now been adopted is accelerating the process of closure. The key points of the law are flat-rate fees and service groups. The flat-rate fees supplement expands the flat-rate payments that continue to apply. In the future, up to 60 percent of hospital financing will be based on these flat rates, the exact amount of which is determined by the hospital’s facilities. For this purpose, 65 service groups (such as cardiology, oncology) have been defined. Treatments can only be billed if the clinic has been assigned to the corresponding service group and has the prescribed, usually very expensive, equipment and appropriately qualified personnel.

Cost pressure and chronic underfunding remain and are being enshrined in law because flat rates per case will continue to exist and, in addition, the conditions for reserve funding must be met. Furthermore, the years 2023 and 2024 have been set as index years for the reserve budget. This means that the budget will not be adjusted even if the number of cases increases.

Numerous experts point out that the combination of flat rates per case and reserve financing is insufficient to finance the number of hospitals necessary to meet demand. The chairman of the German Hospital Federation (DKG), Gerald Gaß, noted that “neither the basic care hospitals in rural areas are stabilized, nor the concentration of highly specialized treatments in centers” are being supported.

Large parts of the reform’s financing remains unclear. What is clear, however, is that a large share of the costs will be covered directly by statutory health insurance contributions, i.e., by the insured. It is assumed that the compulsory contribution rate will increase by at least 0.8 percent in the coming year. However, depending on the health insurance company, the increase could be much higher.

At the same time, the reform increases pressure on hospitals to make cuts. To this end, the hospital reform allows different hospitals to merge by the end of 2030 without any proper legal review. This is stated in the final amendments to the law proposed by the government. Around 50 changes were made to the law right up to the end.

In future, an exception to merger control under the Act against Restraints of Competition (GWB) is to be regulated for the merger of clinics. This is intended to achieve the goals of the hospital reform program more quickly. In the past, mergers have enabled providers to close or merge individual areas and thus save on personnel. However, some mergers were rejected for antitrust reasons. Mergers in the hospital sector are now being fully deregulated.

This will further increase the number of layoffs at hospitals. Already, the tense financial situation is leading to more and more layoffs at hospitals, while doctors and nursing staff are already working at their limits.

Recently, the Jewish Hospital Berlin (JKB) laid off 74 nursing assistants, some of whom have been employed there for over 30 years and make up almost 20 percent of the nursing staff. The management of the JKB justified this step with a deteriorating economic situation.

With the entry into force of the GKV Stabilization Act, which was passed in 2022, the financing of nursing staff is to be reorganized. Nursing assistants without appropriate training are no longer to be retained, although they carry out important tasks such as providing meals, cleaning and relieving the workload of nursing professionals.

According to press releases, the JKB wants to compensate for these services in part by external providers whose employees are not subject to JKB contracts. Cynically, management recommended that the dismissed employees apply to the external service provider. However, the majority of the work will certainly be passed on to the remaining nursing staff.

This is an example of the role played by the Verdi public service trade union. In January, Verdi announced that it had “fought” for a contract that would improve working conditions for employees. It allegedly included significantly improved staffing levels and a compensation system offering compensation in the form of compensatory days off or bonus payments. In fact, as in other clinics, this is nothing more than window dressing to pacify the employees at JKB.

The Regioned clinics in Bavaria are another example. Here, redundancies are pending after three sites are taken over by the Sana clinic group. The exact number of redundancies has not yet been officially announced, but it is estimated to be between 150 and 200.

At Gesundheit Nord, a municipal hospital group, 120 physician posts are to be cut—80 of them at the Bremen-Mitte clinic and 40 at the Bremen-Ost clinic. Once again the poor economic situation was cited as the reason. Bremen’s senator for health, Claudia Bernhard (Left Party), is considered a strict advocate of radical austerity measures in the healthcare sector and explicitly supports Lauterbach’s hospital reform.

Pro-EU forces in Moldova claim victory in questionable vote

Andrea Peters

The tiny European state of Moldova is increasingly being drawn into the maelstrom of NATO’s war against Russia. On Monday, the US-allied government of Maia Sandu claimed victory in a referendum held the day before over whether the country should join the European Union. According to the Central Election Commission, 50.39 percent of voters supported and 49.61 percent opposed EU ascension. Slightly more than half of those eligible to cast a ballot did so.

German Chancellor Olaf Scholz, left, listens to Moldova's President Maia Sandu, right, during a press conference at the Presidential Palace in Chisinau, Moldova, Wednesday, Aug. 21, 2024. [AP Photo/Aurel Obreja]

The validity of the vote is highly questionable. Until about 2 a.m. on October 21, news reports had indicated that, with nearly 94 percent of the votes counted, the proposal that Moldova change its constitution and join the EU was going down to defeat by a clear, if relatively small, majority. The situation then changed dramatically over the course of several hours. Ballots received from Moldovans elsewhere in Europe and in North America were included in the count, which tipped the scales in the opposite direction and delivered the pro-EU camp a razor-thin victory. The outcome was decided by just 10,564 ballots.

Shortly thereafter, Moldova’s president, a former World Bank economist, declared the matter resolved. The country’s voters had resisted, she said, an “unprecedented” Russian-organized campaign of election interference, which included: disinformation, vote buying, cyberattacks, and even the preparation of an armed insurrection. Such claims, for which no concrete evidence has been presented, are about as dubious as Israel’s insistence that every hospital, school and refugee camp it bombs is a Hamas command center.

Within a day the US State Department congratulated “the Moldovan people for making their voices heard in record numbers,” insisted that, “the Government of Moldova and the Central Election Commission ensured the election was well-managed and competitive,” and applauded the country for preventing “unprecedented Russian efforts to deny the Moldovan people their right to choose their own future.” European Parliament President Roberta Metsola thanked the nation for its “bravery” and stated, “Well done Republic of Moldova!”

Moldova’s Central Election Commission has already rejected as “unfounded” a challenge to the results presented by the leader of the country’s Communist Party, which claimed that it has information about violations at polling stations abroad.

Even if one were to accept the idea that Moldova’s overseas embassies and the US and EU’s spy agencies treated the country’s ballot boxes with the utmost honor, the fact that the Moldovan diaspora from western Europe and North America played the decisive role in determining the outcome of the vote is of major political significance. While there are hundreds of thousands of poor Moldovans spread out across these regions, the population is highly stratified, and it is unlikely that the cleaners, domestic workers, and other low-paid employees laboring 10 hours and more a day made there way to a balloting location. Rather, it would have been the most well-to-do, most secure, most successful at finding a comfortable place for themselves in the west who voted. That is, a demographic that will overwhelmingly support EU membership from the standpoint of its material interests.

Furthermore, two large populations were essentially excluded from the voting process. Approximately, 150,000 Moldovans live in Russia. Only 10,000 ballots were distributed there and only two polling locations opened, both in Moscow.

There were also no voting booths in the Moldovan region of Transnistria, a breakaway republic allied with Moscow and in which it has 1,500 troops stationed. Transnistria is home to around 367,000 thousand Moldovan citizens, many of whom also Russian passport holders.

Anyone in this area who wanted to cast a ballot had to cross the internal border into Moldova proper. According to the authorities in the breakaway republic, the government in Chisinau did not even propose having balloting happen in their region and also rejected out of hand the validity of any referendum organized by local agencies.

Despite their claims of victory, the US, the EU and the Sandu government face a crisis in Moldova, which they attempt to manage through a combination of bluster, lies, manipulation, violence and repression. There is widespread and growing opposition to the war, hatred of NATO, suspicion of the US and EU’s real aims, fear over what will happen to the tiny dependency of a country, and general sympathy for Russian people in Moldova, which is surrounded on three sides by Ukraine. Nine percent of Moldova’s population of 2.6 million identify as Russian, many speak Russian as a first, second, or third language, Russian is a common lingua franca is many parts of the country. The population as a whole is a patchwork of different peoples, languages, religions, and ancestries.

The country, among the poorest in Europe, is crippled by inflation, which daily erodes real wages. The poverty rate stands at 13.3 percent, and the minimum wage amounts to about $283 a month. One quarter of those aged 15-34 are neither employed nor pursuing an education. Life expectancy at birth is just 68.6 years, and the population is shrinking at a faster rate than everywhere else on the continent due to emigration, low birth rates and high mortality.

President Sandu barely managed to eek out a pro-EU result in Sunday’s vote. Surveys conducted by right-wing Western research institutes have insisted for years that there is substantial support for joining hands with Brussels. The right-wing International Republican Institute, for instance, recently put the number at 63 percent. However, as one specialist on the region told the AP on Monday, they “overestimated the pro-EU feeling.”

Moldova’s leader herself also failed to win a personal victory this past weekend, winning only 42 percent of the vote in the presidential election that took place simultaneously with the referendum. Her leading opponent, Aleksandr Stoianoglo, with a more pro-Russian orientation, garnered 26 percent of the ballots. Even these numbers understate the depth of the skepticism towards Sandu, as there were 11 candidates in this first round of presidential voting and many anti-EU forces advised a boycott. In short, it is very unclear as to whether Moldova’s current president will hold onto power after the run-off election scheduled for November 3.

Presiding over an explosive combination of economic discontent and anti-war moods, President Sandu has increasingly turned to authoritarian methods. In November 2023, two days before balloting was to begin for local elections, a leading opposition party was banned, resulting in 600 candidates being kicked out of the race. In May of this year, she forced through her choice for prime minister, despite not having the necessary parliamentary votes. Evgenia Gutul, the elected governor of Gagauzia—home to an ethnic minority of Turkic-Christian people, who have raised objections to federal cultural policies downgrading the status of the Russian language in Moldova—is facing charges of being a Muscovite stooge.

This spring, the government in Chisinau pushed through amendments to the criminal code that provoked condemnation from Amnesty International. Authorities changed the definition of treason to include acts that occur during peacetime, and any action can now be deemed treasonous even if it does not cause direct harm to the state. In another major change, assisting a foreign state, foreign organization, undefined “unconstitutional entity”, or their representatives, in carrying out “hostile activities against the security of the state” including “through disinformation campaigns” is a new form of “high treason.” In short, anyone identified as being pro-Russian is a traitor.

The US State Department is already gearing up for the prospect that the widespread opposition existing in Moldova to President Sandu will manifest. In its October 22 press release applauding the country’s recent pro-EU vote but clearly worried about the November 3 presidential election, the American agency stated, “The United States remains concerned Russia will again attempt to prevent Moldovans from exercising their sovereign right to choose their own leaders.” In other words, if the vote does not go the way Washington wants, it will be declared illegitimate.

The geostrategic location of Moldova has placed the country at the center of the US and EU’s war calculations and efforts to break-up and subjugate Russia. In late May, US Secretary of State Antony Blinken promised a $135 million aid package to support Moldova’s energy security and counter Russia. NATO runs many programs in the country and is centrally involved in training its military. Among the efforts that the alliance lists on its country page for the Black Sea nation is, “support for the training of public information specialists within the country’s armed forces”—in other words, experts in pro-American propaganda.

Writing for the Center for Strategic and International Studies in June, Daniel Runde and Thomas Bryja declared, “Now is the time for the West to ‘go big’ on Moldova.”  “U.S. policymakers should view Moldova’s current pro-Ukrainian government and path to economic resilience as critical to Ukraine’s success in the war, given that the alternative—a pro-Russian or corrupt Moldovan leader—could thwart Moldova’s aspirations of Western alignment, leave Ukraine cornered, and ultimately dim Kyiv’s prospects for survival,” they added.

Scandal exposes bankruptcy of Turkish healthcare system, killing at least 12 newborns

Barış Demir

In recent weeks, Turkey has witnessed a scandal involving the killing of at least 12 babies as part of the subordination of the health system and public health to capitalist profit, which has sparked widespread public outrage.

The existence of a gang in Istanbul, working in partnership with people at the 112 Emergency Call Centre and hospitals, who refer emergency infant patients to the neonatal units of private hospitals with which they have prior arrangements has become a hot topic in the media and on social media.

Health Ministry building, Ankara [Photo by Sabri76 / CC BY 1.0]

47 suspects, 22 of whom have been arrested, are accused of causing the deaths of at least 12 babies and making unjust profits from the Social Security Institution (SGK). It was announced that the licences of 10 private hospitals had been revoked as part of the investigation. The indictment against the gang was finalised on October 16.

What the investigation has revealed is not just the criminal acts of malicious individuals. It also exposes the nature of the current healthcare system, which is increasingly being hollowed out in a capitalist system where profit comes before human life.

On Tuesday, the Turkish Medical Association (TTB) and the Istanbul Medical Association (ITO) held a detailed press conference on the issue. TTB Central Council President Dr. Alpay Azap said, “At the point we have reached, the health system has completely collapsed. It hurts us all to realise this in a very painful way with the infant deaths... What has happened is the inevitable result of the policies that have been implemented.”

Azap continued his speech as follows: “Problems in the health system cannot be solved with a band-aid approach. The health system has to be rebuilt... We know that this problem cannot be solved by temporary measures, by saying that it is the work of a group of people who have no morals and no conscience. We will do our best to change this system. An equal, qualified, free and accessible health system is possible.”

President Recep Tayyip Erdoğan went to great lengths in a speech on Tuesday to conceal his government’s undeniable responsibility for the crime.

Erdoğan claimed that they had carried out a health revolution since 2002, that the incident had nothing to do with the health system and tried to portray the perpetrators as “a few rotten apples”.

Erdoğan responded to criticism of the government’s policies that have rendered the public health service dysfunctional and subjected the public to private health facilities by saying, “The fact that the opposition and the opposition media... are targeting us, our ministries, our health system and even our health workers as a whole is a great lack of awareness on the part of our country’s politics and media.”

In reality, the almost complete subordination of healthcare to the capitalist market is the material basis for the formation of such criminal structures. The Erdoğan government has culminated the process of privatisation of healthcare, which was initiated by its predecessor governments and which is one of the most important social attacks of the bourgeoisie on the working class worldwide in the last decades. It therefore bears the political responsibility for such crimes.

Contrary to Erdoğan’s claims of a “health paradise”, his Justice and Development Party (AKP) has accelerated the process of transferring public services to the control of big banks and corporations since it came to power in 2002. The 2003 “Health Transformation Programme” was a major turning point in the transformation of health services. Implemented for more than 20 years, this programme turned hospitals into capitalist commercial enterprises and patients into “customers”.

According to the Ministry of Health’s 2023 Yearbook, there are 1,566 hospitals in Turkey, including 933 public, 68 university and 565 private hospitals. In 2002, there were 1,156 hospitals, including 836 public, 50 university and 270 private hospitals. According to the data, the number of public hospitals increased by 12 percent, while the number of private hospitals increased by 110 percent. The share of private hospitals among the total number of hospitals increased from 23 to 36 percent. In addition, Turkey’s population, which was around 68 million in 2002, had increased to more than 85 million by 2023, by 25 percent.

In 2023, the proportion of intensive care beds in the private sector was 36 percent, in line with the hospital ratio. On the other hand, the figures for neonatal intensive care beds, considered a very profitable area, show that today 7,144 (52.3 percent) of the total number of 13,657 such places are in private hospitals. According to the Ministry of Health, the number of neonatal beds in the private sector was only 1,420 (38 percent) in 2008.

The criminal nature of the “profits before lives” policies of capitalist governments around the world found its sharpest expression with the outbreak of the COVID-19 pandemic. Government policies have led to an excess of deaths approaching 30 million worldwide. These policies have been driven not by the fight against a preventable disease to protect public health, but by the impulse to prevent the disruption of global supply chains and financial markets.

The deaths of millions of people abandoned to their fate in the face of the pandemic, especially the elderly and those in need of care, were welcomed by the ruling class as it meant a reduction in social spending.

According to latest health ministry data 102,000 people in Turkey have died from COVID-19. However, Güçlü Yaman, who prepared reports on “excess deaths” in the TTB Pandemic Working Group, had identified more than 335,000 excess deaths due to the pandemic by the end of 2023.

IMF forecasts low growth and calls for unending government spending cuts

Nick Beams

The reports prepared by the International Monetary Fund (IMF) for its meeting in Washington this week point to a global economy marked by low growth for the foreseeable future, heightened risks of financial turbulence, the rise of tariffs and other restrictions on international trade and mounting problems caused by the rise of government debt.

Pierre-Olivier Gourinchas, Chief Economist of the International Monetary Fund at April 16, 2024, news conference. [AP Photo/Jacquelyn Martin]

The opening paragraph of the World Economic Outlook (WEO) report said the global economy had shown “resilience overall” in the face of a once-in-a-century pandemic, the eruption of conflict, food and energy crises and increased expenditures by governments. The supposed resilience is a reference to the fact that, despite the highest inflation in four decades, it has been reduced by increasing interest rates without causing a global recession.

But probing the content of the report reveals a different picture.

It noted that the “level of uncertainty surrounding the outlook is high” and the “return of financial volatility over the summer has stirred old fears about hidden vulnerabilities.”

One of the key areas of concern is the rise of trade restrictions. According to the report, while global trade as a share of world GDP had not declined amidst “ongoing geopolitical tensions,” there were “signs of geo-economic fragmentation” as increasing amounts of trade took place within geopolitical blocs rather than between them.

These concerns were highlighted by a modelling exercise in which it sought to calculate the effects on growth if tariff increases—such as those that have been foreshadowed by Donald Trump in the US—were to hit a “sizable swath” of world trade by the middle of next year. Such measures would reduce global growth by 0.8 percentage points next year and 1.3 percentage points in 2026.

The IMF forecast 3.2 percent growth in the world economy both for this year and next. It warned that in the major economies there was an uptick in 2022 but growth “markedly slowed in 2023 and is expected to remain steady, oscillating between 1.7 and 1.8 percent until 2029.” In other words, in the best-case scenario, the major economies will be just ticking over.

On the financial front, the Global Financial Stability Report, said immediate risks had been contained. But it warned that accommodative financial conditions that had kept near-term risks at bay also facilitated “the buildup of vulnerabilities—such as lofty asset valuations, the global rise in private and government debt and the increased use of leverage [debt] by financial institutions.” This raised the risk of future financial instability.

While institutions like the IMF have a vast array of data and information, they have no real idea when and how such instability could arise.

As the report acknowledged, the market turmoil in early August “when stock market volatility spiked in both Japan and the United States and global asset prices declined significantly” provided a “glimpse of the violent reactions that can ensue when spikes in volatility interact with the use of leverage by financial institutions to create nonlinear market reactions and hasten selloffs.”

In other words, because the financial system is so highly dependent on debt and so much of it is involved in the refinancing of debt on a daily basis, relatively small movements in financial and economic conditions can produce a disproportionate, nonlinear reaction.

In the case of the August turmoil, it was a combination of a slightly lower-than-expected increase in US jobs numbers and a move by the Bank of Japan to lift interest rates marginally into positive territory, which impacted so-called carry trades in which money borrowed in Japan is used to finance deals in the US.

The August events were another example, it said, of how nonbank financial institutions [NBFIs] can transmit stress through the financial system as “the rapid unwinding of leveraged positions [that is, financial market bets and trades financed by debt] can generate liquidity imbalances that increase volatility.”

The problem facing would-be regulators is that they have no real idea about what is going on in this area of the system as NBFIs, dependent on debt, play an ever increasing role.

In the words of the report: “Data gaps, which hinder authorities’ ability to assess the vulnerabilities associated with nonbank leverage and to identify large and concentrated positions, present a key challenge in addressing these issues.”

Underscoring these growing concerns, the report said that, due to the increasingly significant role of private credit in financial markets, enhanced reporting requirements to improve the assessment of risks were “imperative.”

The Fiscal Monitor Report detailed the rise in government debt which it said would reach $100 trillion this year and was set to rise in the future.

Outlining the policy measures that had to be undertaken, the IMF’s economic counsellor Pierre-Olivier Gourinchas said that “fiscal space” was the key to financial stability and that after years of loose fiscal policy it was now time to “stabilise debt dynamics and rebuild much-needed fiscal buffers.”

Translated into ordinary English, this means that government spending—above all, that directed at social services—must be cut, as military spending is on the rise everywhere.

“The path is narrow,” he warned, and “unduly delaying adjustment increases the risk of disorderly market-imposed adjustments, while an excessively sharp turn would be self-defeating and hurt economic activity.”

His “solution” to this dilemma was “credible multiyear adjustments without delay.” That is, the implementation of years of austerity to enact “disciplined” fiscal adjustment.

The class struggle barely rates a mention in official IMF reports but is always on the mind of its policy framers.

In his policy stipulations, Gourinchas emphasised the need for “structural reforms”—the hardest of all to implement, he said—as “the only way we can address the many challenges we face” arising from lower growth.

But “structural reforms” in a capitalist economy are never about lifting productivity and production per se, such as through the rational use of new technologies. Productivity increases in the system of private ownership of the means of production is always about lifting profit rates at the expense of the working class whose labour is the source of all profit.

Consequently, as Gourinchas acknowledged, “while structural reforms are as urgent as ever, they often face significant social resistance.” The IMF devoted a whole chapter of its WEO report to factors that shape the social acceptability of reforms. However, a clear message from that analysis was “better communications can only go so far.” It was necessary to build trust between the government and the people through the implementation of “proper compensatory measures.”

But this was just another form of window dressing because, as the political economy of the past four decades and more reveals, the near universal hostility to governments and the entire political establishment is a result of the attacks on the social position of the working class and the youth, which have been central to all past “reforms.”

Today, under conditions of slowing growth, deepening financial instability and mounting government debts, these attacks are being intensified and will be imposed through the increased use of force of the state.

The Fresh Voices Fellowship For Writers 2025

Application Deadline:

The application deadline for the  Fresh Voices Fellowship For Writers 2025 is November 1, 2024

Tell Me About The Fresh Voices Fellowship For Writers:

The Fresh Voices Fellowship supports one or more emerging Black, Indigenous, Latinx, Asian, or another writer of colour who does not have an MFA and is not currently enrolled in a degree-granting creative writing program.

Which Fields are Eligible?

Writers

Type:

Fellowship

Who can Apply For The Fresh Voices Fellowship For Writers?

Also, the eligibility criteria include:

• Must be an emerging writer of colour (Black, Indigenous, Latinx, Asian, or other).
• Must not hold a Master of Fine Arts (MFA) degree.
• Must not be currently in a degree-granting creative writing program.

Which Countries Are Eligible?

Black, Indigenous, Latinx, Asian Indegenes 

Where will the Award be Taken?

Remote

How Many Awards?

Not specified

What is the Benefit of the Award?

In addition, applicants will benefit the following:

• A $2000 stipend
• Publication in a print issue of Epiphany
• A one-year subscription to Epiphany
• A close relationship with the editorial team and participate in the editorial and publication process of a small non-profit literary magazine
• The opportunity to contribute an online essay series during their fellowship 

How Long Will the Award Last?

1 year

How to Apply:

To apply for the Fresh Voices Fellowship, submit a 5-page sample of previously unpublished work that best represents your writing style. Include a synopsis if you’re submitting a novel excerpt. More details can be found on the Fresh Voices Fellowship page.