A new turn in China’s Evergrande crisis

Nick Beams

The crisis of the massively indebted Chinese property developer, Evergrande, has entered a new stage with the direct involvement of Chinese regulatory authorities in what appears to be an effort to ensure an orderly re-organisation of its international obligations and eventually a wind up of the company.

The move was precipitated by a company announcement to the Hong Kong stock exchange on Friday evening that it may not be able to meet a demand for repayment of a $260 million debt.

“In the event that the group is unable to meet its guaranteed obligations or certain other obligations it may lead creditors to demand acceleration of repayment,” it said. “In the light of the current liquidity status of the group, there is no guarantee that the group will have sufficient funds to perform its financial obligations.”

China Evergrande Centre [Wikimedia Commons]

This was a warning that failure to meet the payment would lead to a rush by creditors to secure what they could from the cash-strapped company leading to full-scale liquidation. If that took place, it could have contagious effects on the rest of the highly-indebted Chinese property development sector.

Accordingly, following the announcement, Evergrande’s founder and major shareholder, the multi-billionaire Hui Ka Yan, was called to a meeting by the Guangdong provincial government to discuss the company’s situation.

Evergrande’s position worsened when investors reported that they had not received payments on bonds after the expiration of a 30-day grace period on Monday, effectively meaning it was in formal default.

The crisis emerged last September, when Evergrande began missing debt obligations and only came up with the money during a 30-day grace period, thereby avoiding a declaration of default. It has since been living a hand-to-mouth existence as far as its cash flow is concerned.

It has raked up money by sales of assets and through the sale of shares at vastly deflated prices by Hui, under pressure from the central government, who has then put the money into the company.

Following the meeting with provincial government authorities, Evergrande announced on Monday that “in view of the operations and financial challenges” the board had set up a risk management committee.

Its members include representatives from state-owned companies, including Guangdong Holdings. This is an investment company controlled by the provincial government and China Cinda Asset Management Company, which is one of China’s largest managers of distressed assets.

Hui and Evergrande’s chief financial officer Pan Darong are also on the new management committee and will “play an important role in mitigating and eliminating the future risks of the group,” the company statement said.

Any pretence by Evergrande that its executives remain in control is exposed by the fact that state authorities have the majority of seats in the new management authority. The operation has been described by the Financial Times as a “slow motion collapse” of Evergrande as authorities seek to find third parties to take over its projects.

In response to the latest developments, China’s central bank repeated an earlier statement criticising the company for “poor management” and pursuing “blind expansion.”

This is something of a cover-up because Evergrande’s modus operandi was very much in line with the promotion of highly indebted property development sanctioned by the central government which is the characteristic of many other developers.

In August last year, however, the central government became increasingly concerned that the model it had promoted was leading to the creation of a financial crisis throughout the property sector. The sector has been estimated to account for up to 30 percent of the Chinese economy when flow-on effects are taken into account.

In an effort to bring the debt bubble under control, authorities instituted what became known as a “three red lines” policy, restricting credit, leading to a crisis for Evergrande as well as others.

Besides heavy borrowing, Evergrande financed itself with prepayments from purchasers of apartments that were then used to finance further expansion—in effect receiving interest-free cash from buyers in what amounted to a kind of Ponzi scheme.

The move to set up a debt management team has been broadly welcomed in financial circles. Citigroup issued a note to clients saying the “managed restructuring” of Evergrande had officially started.

“We see this is as a positive development, and the uncertainty associated with the debt resolution of the second largest developer in China has been finally removed,” it said.

This claim may be somewhat premature. As an article in the Wall Street Journal noted: “The process of thrashing out a restructuring is still in its very early stages.”

Evergrande has had conversations with offshore creditors but has not begun formal talks with them about what a restructuring process would look like, it said.

Debt restructuring processes are never simple because they generally require the agreement of all parties involved over what losses they will take. It can fall apart if some creditors decide they are better off if they pursue their claims independently.

The Chinese government is treading a fine line. It is opposed to organising a bailout because this would cut across its efforts to reduce debt accumulation in the property sector, setting a precedent for other companies that may well go the same way as Evergrande.

As Andrew Lawrence of TS Lombard, a long-time property sector analyst told the Wall Street Journal: “Evergrande has definitely pushed it further than most, but there are a lot of developers out there that share the same model. It’s been a massive boom and they’ve over traded in order to get bigger.”

While opposing bailouts, the central government does not want to precipitate a sudden collapse because of the possible flow-effects to the rest of the financial system, notwithstanding claims by financial authorities that they have the Evergrande situation under control.

There are thousands of Chinese property development companies with at least 100 listed on the Hong Kong stock exchange with a combined market value of $242 billion. Among the biggest names in trouble is Sinic Holdings Group, which failed to repay $250 million in bonds last October.

Other defaulters include Modern Land (China), Fantasia Holdings and China Fortune Land Development.

The offshore borrowing of the property development companies is only the tip of a very much bigger debt iceberg. As the Journal reported, according to the Japanese financial firm Nomura, as of last June overall borrowings were in excess of $5 trillion.

The crisis in the property development market is now starting to make its effects felt throughout the economy. According to a report in the Australian Financial Review, China’s top 100 property developers made a combined $118 billion from sales in September, down 36.2 percent year-on-year, following a 20.7 decline in August.

Construction starts fell 33.14 percent year-on-year in October, following a 13.54 percent fall in September.

The Financial Times has reported that sales of urban plots of land have fallen sharply in recent months causing problems for local government authorities which use the revenue from such sales to finance infrastructure projects.

According to Nomura, last year sales of land generated the equivalent of $1.31 trillion for local governments, more than 30 percent of their total revenue.

The decline in property could make it increasingly difficult for the central government to achieve its growth targets and the growth rate could drop below 5 percent.

As Larry Hu, chief China economist at Macquarie told the FT: “The biggest growth headwind will be the property downturn. The tumbling property sector poses significant contagion risk for the Chinese economy.”

COVID-19 spreads through New Zealand schools and childcare centres

Tom Peters & Rachel Costello

In New Zealand, COVID-19 has spread into well over 130 schools and early childhood education centres (ECEs) since the outbreak of the highly infectious Delta variant began in August.

The figure was only revealed by the Ministry of Education (MOE) on December 2, with a spokesperson telling the New Zealand Herald that 56 ECEs and 75 schools in Auckland have experienced positive cases among staff or students. The vast majority of affected ECEs and several of the schools have not been publicly named.

Not included in the MOE figures are more than 15 affected schools outside of Auckland, including in Bay of Plenty, Waikato, New Plymouth, Rotorua, Northland and Nelson. Every week there are multiple new reports of cases in schools.

Four schools that recently reported COVID-19 cases: Maungatapu Primary School in Tauranga; Whenuapai School in West Auckland; St Anne's Catholic School in Manurewa; Enner Glynn School in Nelson. (Images from Google Streetview)

The trade unions, NZEI Te Riu Roa and the Post-Primary Teachers’ Association, have not published any reports about which schools and ECEs have had cases of coronavirus. While keeping such information from teachers and parents, they have worked closely with the Labour government to enforce its reopening policies.

Auckland is the centre of New Zealand’s outbreak, with about 6,000 active cases of COVID-19. There are more than 300 additional cases spread across other parts of the country. Cases have shot up since the Labour Party-led government abandoned its previous elimination strategy more than two months ago, and began to reopen ECEs, schools and businesses in Auckland.

On December 3, the New Zealand government lifted what remained of the lockdown in Auckland, allowing all businesses and public buildings to reopen.

The MOE’s belatedly released and incomplete figures expose the false claims, made by the government and the media, that reopening education during the outbreak can be done safely. Several news reports quote a standardized email that schools are sending to parents with the reassuring message: “Based on international and local evidence and experience, the risk of COVID-19 transmission within school settings is considered low.”

In fact, the evidence shows the exact opposite. Schools are hotbeds for the spread of COVID-19 among children, staff, their families and the wider community, especially under conditions where no one under 12 can be vaccinated.

In the UK, the reopening of schools has produced a disaster: 115 children have died from COVID-19 and 77,000 aged 2 to 16 have suffered from the debilitating condition known as Long COVID, including 14,000 who have had symptoms for longer than 12 months. In the US, by the end of November, 23,000 children had been hospitalized and more than 700 had died.

Reports from South Africa indicate that the new Omicron variant is disproportionately infecting children, with a concerning increase in hospitalisations for those under five years old.

There are few mitigation measures in New Zealand schools. While teachers must be vaccinated, there is no such requirement for eligible students or parents. Currently in Auckland, masks are only mandatory for students above Year 4, while for much of the rest of the country, masks are not required.

Children under 12 cannot be vaccinated. Nationwide, about 74 percent of the population is fully vaccinated, 88 percent of eligible people. This leaves about a million people unvaccinated.

A teacher in Gisborne told the WSWS that she was concerned that the MOE had downplayed “the effect that Covid can have on a child and a [childcare] centre.” She said parents able to stay home should be told that they “must have their children at home.” The Tairawhiti region that includes Gisborne has a vaccination rate of 67 percent (80 percent of those eligible), one of the lowest in the country.

The MOE says that going forward, under the new so-called “traffic light” public health framework, schools are unlikely to close if they get cases of COVID-19. According to a list shared in the Teachers Advocacy Group (TAG) on Facebook, out of 38 schools and ECEs where students or staff tested positive during November, 22 remained open and 16 were closed temporarily (usually just for a few days).

The TAG is a forum, independent of the unions, for ECE teachers, parents and supporters to share information and raise concerns. One member recently thanked the TAG for publicising positive cases in schools, saying it was “one of the reasons why I didn’t send my child back to school.” Had they done so, “I would be isolating right now because one of the cases is in his class.”

Another teacher contacted the group saying that she was refusing to go back to work until there was more clarity. Her child had recently become severely ill with a different virus and she was unwilling to “take any chances.”

TAG founder, researcher and teacher Susan Bates, sent the WSWS some findings from a recent survey she conducted on Facebook, which attracted 446 responses from ECE teachers:

Nearly half, 49 percent, did not feel safe in their workplace, a further 16 percent were unsure, leaving just 35 percent who felt safe.

60 percent said they had no input into their service’s COVID response and protocols.

Only 47 percent felt that enough information had been provided to them; 31 percent said not enough had been provided, and 22 percent were unsure.

Asked if they were aware which of their centre’s families were most at risk from COVID, 53 percent said yes and 47 percent were not aware.

Only 18 percent said that their centre had an air filter, one of the recommended mitigations for COVID-19, and 27 percent didn’t know.

67 percent of respondents said most activities with children could be conducted outdoors, which reduces the risk of transmission, but 33 percent said this was not possible at their centre.

One respondent commented in their survey: “I’m very disappointed with the decisions of the government and my employer, putting business before health and safety.” The person said that parents were not being told of positive cases in ECEs and had “a false belief of safety.”

Another comment stated: “No one listens to [ECE] teachers or cares about the risks to us or the children and [the authorities] are hiding ECE COVID cases.” A further respondent criticised the “vague and often very late announcements” about the protocols for ECEs, which was contributing to parents becoming stressed and hostile.

One respondent called for government funding for centres to have air filters and ventilation. The government announced only last week that it was ordering air purifiers and carbon dioxide monitors for schools, but it is not clear if these will be available for ECEs.

Schools are due to close at the end of next week for the summer holidays. In the meantime, with the full support of the pro-capitalist trade unions, the government is determined to keep them open, placing children at risk so that their parents can keep working, generating profits for the ruling class. Over the holidays, the virus will spread further as families travel around the country.

PSOE-Podemos government, Spanish trade unions agree to savage austerity

Santiago Guillen

Spain’s Socialist Party (PSOE)-Podemos government is set to close the year with a battery of European Union (EU) austerity measures agreed to by the trade unions.

In July 2020, then-Podemos leader and deputy prime minister of the PSOE-Podemos government, Pablo Iglesias, endorsed an EU bailout funneling €750 billion to the banks and corporations. The fund was engineered as COVID-19 spread throughout Europe, killing hundreds of thousands, due to the ruling class’s herd immunity policy prioritising profits over lives.

Iglesias described the fund as “a good agreement for the European Union (EU) and for Spain, and it is a breath of fresh air for the European project.” He added, “There is no doubt that today, one of the most brilliant pages in EU history has been written.”

Spain's Prime Minister Pedro Sanchez (PSOE), second left, walks next to Podemos leader Pablo Iglesias, second right, and First Deputy Prime Minister Carmen Calvo, left, at the Moncloa Palace in Madrid, Spain, Tuesday, Jan. 14 2020. (Image Credit: AP Photo/Manu Fernandez)

He then claimed that bailout funds would not be tied to austerity, as the EU “seems to have learned the lessons after the previous crisis, this time we will not have austerity, but an ambitious plan of fiscal stimuli.” Unsurprisingly, the PSOE-Podemos government said nothing about the conditions to which Madrid committed in order to obtain EU funding. However, it sent letters to the EU pledging major labour, pension and spending reforms.

The WSWS’s warning that Podemos’ claims there would be no EU austerity were a fraud has been fully vindicated.

On November 15, the government and the General Union of Labor (UGT) and Workers Commissions (CCOO) unions reached an agreement on pensions. It is an assault on the public pensions system, favouring its privatisation. It will extend the retirement age to 67, increase workers’ social security contributions (a de facto paycut), promote company pensions and slash future pensions by linking their amounts to the increases in life expectancy. Future workers retiring will see their pensions cut by up to an estimated 20 percent, or 300 euros for the youngest workers.

The agreement is based on the so-called Intergenerational Equity Mechanism (MEI) that is fraudulently presented as current workers contributing to the “baby boom” generation, those born after 1947, who are now retiring.

It will entail employers and workers increasing social contributions by 0.6 percent to Social Security for 10 years. This will provide money to the Reserve Fund, used to guarantee the payment of future pensions, and which is currently practically exhausted after successive PSOE and right-wing Popular Party governments systematically misused these funds for other purposes. Workers will assume 0.1 percent, which is a disguised wage cut under conditions of rampant inflation levels of 6 percent.

In turn, employers will assume 0.5 percent. This has led them not to support this agreement, to which the unions have reacted by cynically claiming the agreement as a great victory for workers.

Secretary General of the UGT Pepe Álvarez declared, “The doomsayers, those that don’t dare to tell the pensioners and workers of our country what they would do, which is to increase the retirement age and lower the pensions, have seen that there is another formula … one that allows us to guarantee the future for current generations and pensioners.”

Álvarez, however, is lying through his teeth. To start, the rise in contributions, according to calculations by the research group on Pensions and Social Protection of the University of Valencia and Extremadura, will barely amount to about 2 billion euros a year, of which employers will contribute slightly more than 1.6 billion euros.

This is ridiculous when compared with the €30 billion profits that Spain’s listed companies earned just in the first half of this year; or the €212 billion that all businesses obtained in 2020 despite the COVID-19 pandemic. This is thanks to the herd immunity policy implemented by the PSOE- Podemos government that has cost the lives of over 105,000 people in Spain alone.

This figure is also completely insufficient to guarantee the future payment of pensions. Next year, Social Security will have a deficit of €50 billion. The government and trade unions are fully aware of this and are leaving the door open to new rounds of pensions cuts in the coming years.

The government and the unions are simultaneously negotiating with employers for changes in the 2012 labor reform passed by the right-wing Popular Party (PP). Podemos claimed that the repeal of that reform was one of its fundamental objectives when it entered government.

Even before negotiations started, the new Podemos leader and Labor Minister Yolanda Díaz stated, “Technically, can the labor reform of the Popular Party be repealed? No.” She added, “One thing is the political fetish and another is what we are going to do, which is to change the PP’s framework of labor relations, which has been deeply damaging.” The central point of the PP’s reform, mass cuts to severance pay, will be untouched. Díaz herself declared, “We are not going to touch the severance pay. It is a balanced reform.”

Another of the proposed measures to limit the number of temporary contracts to 15 percent, in a country where one out of every four contracts are of this type, was also removed from discussion. Podemos thus guarantees employers that they will continue to have legal mechanisms to fire at low cost and continue to exploit workers on precarious, temporary contracts.

As with pensions, what Podemos and the trade unions seek in these talks is that the employers make minor, face-saving concessions in front of workers to avert an eruption of working-class anger.

At the same time, Podemos has showered the unions with money. Díaz nearly doubled the capitalist state’s payoffs to the unions since Podemos took office. On November 2, she pledged €17 million in subsidies in the 2022 budget.

The role of the unions was made clear by UGT leader Pepe Álvarez. He warned that “if the employers’ association is not aware of the protest moment that Spain is experiencing, many more situations will be experienced, such as those of the protests over the provincial metal agreement of Cádiz.” CCOO Secretary General Unai Sordo called for calm, asking “to let the negotiation run its course” because it is “complex but not impossible” and calling for an “exercise of prudence.”

Along similar lines, Enrique de Santiago, general secretary of the Stalinist Communist Party, now integrated in Podemos, appealed to the workers who maintained a militant 9-day indefinite strike in the metal sector in Cádiz to “have confidence in the work this government is doing. Obviously, the economy in this country is not intervened by the State and depends on the decisions of private companies.” In other words, they trust the government that sends hundreds of policemen and a 15-ton armoured vehicle tank to try to break their strike.

Eighteen coal miners and villagers massacred by Indian army in Nagaland

Kranti Kumara

Indian Army and paramilitary forces killed 18 civilians, including at least 6 coal miners, in the northeastern state of Nagaland last weekend.

The wanton massacre of poor workers and villagers is the direct outcome of the regime of military impunity and terror that has been in force in much of India’s northeast under the Armed Forces (Special Powers) Act or AFSPA since 1958. Under the AFSPA, security forces in areas the central government declares “disturbed” have the “right” to shoot and kill anyone they claim is breaking the law or threatening public order, to conduct warrantless searches, and to detain people on mere suspicion.

The security forces’ killing spree began late afternoon Saturday, when an Indian Army Special Forces unit ambushed a pick-up truck near Oting, a Nagaland village close to India’s border with Myanmar, that was conveying coal miners to their homes after a day of hard work. Six of the miners died on the spot. Two others were critically wounded.

Indian courts continue to sanction open-ended imprisonment without trial

The military would subsequently claim the deaths were the outcome of a case of “mistaken identity” and that they had set up an ambush for separatist insurgents fighting for an independent “Nagalim” based on an “intelligence tipoff.” Neither the military nor India’s far-right Bharatiya Janata Party (BJP) government, which has issued a hollow “apology” for the coal miners’ deaths, questions the military’s right under the AFSPA to use deadly force without warning.

In two subsequent shooting incidents both directly tied to the first, the Indian Army killed a further 10 people. Eight of these died on Saturday, while two others succumbed Sunday to gunshot wounds from the previous evening. One of the victims had accompanied a local BJP official who was investigating reports that shots had been fired near Oting. The other nine were part of a large group of Oting villagers who went looking for the coal miners when they did not return from work.

These subsequent deaths arose from the Army Special Forces’ attempts to cover up their murder of the coal miners. According to the BJP official and the Oting villagers, when they came upon the slaughter site, military personnel were in the process of removing the corpses and dressing them in khaki-coloured clothes with the intent of claiming their victims were insurgents.

When the villagers realized what was happening, they set fire to three military vehicles. The soldiers, who were from the 21 Para (Special Forces), responded by firing indiscriminately at the villagers. According to the police report, the soldiers fled the scene “even firing in the coal mine hutments” as they retreated. In the melee, one soldier was killed. All told, the India Army killed 16 people and a further 14 were seriously injured. One soldier was killed in the clash with the villagers and a couple more injured.

Fearing further protests from a population that has repeatedly taken to the streets to demand the repeal of the AFSPA, the authorities invoked the draconian Section 144 of the Criminal Code Sunday. It bans all gatherings and restricts vehicle movement to emergency vehicles and those carrying essential commodities. The Nagaland state government also suspended mobile Internet and data services and bulk SMS for the entire Mon district to which Oting village belongs.

Nevertheless, there was a further bloody incident on Sunday. When the Konyak Union, which styles itself as the “apex body of the Konyak Naga tribe,” postponed a mass funeral for the military’s victims, hundreds of angry demonstrators attacked its offices in Tiru and the nearby camp of the Assam Rifles, a heavily armed paramilitary force long involved in counterinsurgency operations.

According to the state government report: “After almost an hour into the melee, the second round of continuous firing by the Assam Rifles resulted in the mob running for safety and protection. After the firing ceased, one protestor by the name of Leong of Chi village was confirmed to be dead on the spot and six others sustained bullet wound injuries.” One of the wounded subsequently died. Local media report two Assam Rifle soldiers also died; however this has not been picked up by the national press.

Nagaland’s state government is a two-party coalition, with the BJP serving as the junior party of the Nationalist Democratic Progressive Party (NDPP). State Chief Minister and NDPP leader Neiphiu Rio has announced a measly Rs. 500,000 ($6,750) in compensation to the families of the deceased. While shutting down the “internet” and imposing other “law and order” measures, Rio and his government, in a transparent attempt to deflect mass anger over the Indian Army’s actions, is now calling on the BJP-led central government to withdraw the AFSPA.

“AFSPA,” the Chief Minister demagogically declaimed, “gives powers to the Army to arrest civilians without any arrest warrant, raid houses and also kill people. But there is no action against the security forces.”

Nagaland, a small state with a population of just 2.25 million, has been ravaged for decades by atrocities committed by the Indian army, the Assam Rifles and other heavily armed paramilitary forces as they seek to ensure the Indian state’s unfettered dominance of the resource-rich and strategically significant northeast. As elsewhere in the region, the people of Nagaland have been subject simultaneously to neglect, brutal exploitation and repression by India’s capitalist ruling elite.

Much of the northeast’s population is comprised of tribal peoples and religious minorities. Christians, for example, make up close to 90 percent of Nagaland’s population.

Undoubtedly, the Narendra Modi-led BJP government’s relentless promotion of Hindu supremacism has increased tensions, fear and alienation in the northeast. The region has repeatedly been swept by mass protests against the BJP government’s anti-Muslim Citizenship Amendment Act, which for the first time makes religion a criterion for determining citizenship and threatens to strip millions of Muslims living in the northeast of their citizenship rights.

The BJP government has also been conspicuous in its brutal treatment of Rohingya refugees, who have sought refuge from persecution by the Myanmar government in India’s northeastern states and Bangladesh. Modi’s chief henchman, Home Minister Amit Shah, has repeatedly labelled these helpless victims a “security threat” who, along with other Muslim migrants, should be thrown into the Bay of Bengal.

While fuelled by genuine popular grievances, the various tribal-based secessionist movements that have arisen in the northeast over the past six decades offer no progressive alternative to Indian capitalism. Championing exclusivist national-ethnic demands, they have frequently clashed with each other. Many have subsequently been incorporated into the mainstream of establishment politics, becoming regional props of Indian bourgeois rule.

In 2015, the BJP government signed a “framework peace agreement” with the National Socialist Council of Nagaland. However, talks toward implementing that deal have stalled due to continuing differences, and a minority continues to wage an insurgency with the aim of creating a sovereign Nagalim out of Nagaland, and parts of several neighbouring northeastern states and Myanmar.

At its adoption in 1958 under Prime Minster Jawaharlal Nehru’s Congress Party government, the AFSPA was aimed at an earlier Naga separatist political movement and insurgency. Ultimately it came to be employed against ethno-secessionist movements in all seven states that today comprise the northeast, giving the military vast arbitrary powers, which it has used with impunity in ruthlessly suppressing opposition to the Indian state.

In 1991, it was invoked in Jammu and Kashmir—India’s lone Muslim majority state till it was stripped of that status in a 2019 constitutional coup—and for the past three decades it has provided pseudo legal-constitutional cover for savage state repression, including murder, torture, forced disappearances, and phony “encounter killings.”

Not least among the AFSPA’s many outrageous antidemocratic provisions is the stipulation that military personnel cannot be prosecuted for crimes committed in government-declared “disturbed areas.”

In addition to Nagaland, it is currently in force in the northeast in the states of Assam, Manipur (apart from its principal city, Imphal), and parts of Arunachal Pradesh.

Human Rights Watch, in a report published in 2008 on the 50th anniversary of the AFSPA’s adoption, documented some of the gruesome acts of mass killing, rape, disappearances, and torture committed under its provision of blanket immunity. It also emphasized that civilians have been the principal victims of these crimes.

Whilst there have been mass protests for many years against the AFSPA in the northeast, the Indian military has bitterly opposed calls for its withdrawal or repeal and central governments, whether led by the Congress Party or BJP, have hastened to reassure the top brass that that is not in the cards.

Biden threatens economic sanctions and a repositioning of NATO troops in meeting with Putin

Clara Weiss

The UK-Russian confrontation in the Black Sea: An ominous warning At a two-hour video conference call with Russia’s President Vladimir Putin on Tuesday, US President Joe Biden threatened Russia with “strong sanctions” and the repositioning of NATO troops in case of a war between Russia and Ukraine. It was the second meeting of both presidents this year following a summit in June, at which Biden appeared trying to ease tensions with Russia as part of his administration’s efforts to focus its war preparations on China.

Since then, however, military tensions between NATO and Russia have grown significantly, even as the US has escalated its war drive against China. Over the past month, the US has sent several warships to the Black Sea in what Putin has described as a “serious challenge” to Russia’s security interests. The EU and NATO have also provoked a geopolitical crisis on the Polish-Belarusian border, where thousands of refugees from the Middle East have been trapped.

President Joe Biden meets with Russian President Vladimir Putin, Wednesday, June 16, 2021, in Geneva, Switzerland. (AP Photo/Patrick Semansky)

While the regime of Alexander Lukashenko has begun deporting many of these refugees, the US and EU imposed new sanctions on Belarus last week which are expected to deal a serious blow to the country’s economy. Despite simmering tensions with the Kremlin, Minsk is the only state remaining in Eastern Europe that maintains extremely close economic and military ties with Russia.

These provocations have come after three decades, in which NATO has continuously pushed closer to Russia’s borders and staged two coups in Ukraine in 2004 and 2014, to bring pro-Western governments to power. While Putin has described any further military buildup of Ukraine by the alliance as a “red line,” Biden has explicitly rejected acknowledging such “red lines” by the Kremlin.

The meeting was preceded by numerous threats against Russia from Biden, as well as Germany’s new Foreign Minister Annalena Baerbock, and a drum beat of war propaganda in the American and European press. The Washington Post and New York Times published reports this weekend alleging that Russia was planning an “invasion” of Ukraine with some 175,000 troops. As in all such war propaganda in previous years, these reports were based on leaks from anonymous intelligence officials.

At the meeting, which was described as “tense” by both sides, Biden threatened Putin with “strong economic and other measures in the event of military escalation” and “reiterated his support for Ukraine’s sovereignty and territorial integrity.” Putin reportedly refused to promise that Russia would pull its troops from the border with Ukraine (the exact number of which the Kremlin has never confirmed). He blamed NATO for the crisis, asking again and again without success, for guarantees from NATO that it would respect Russia’s security interests.

Earlier reports by CNN and Bloomberg indicated that US and EU officials are considering cutting off Russia from the SWIFT agreement. This step has been floated since 2014 as the “nuclear option” in the ongoing economic warfare against Russia. The SWIFT (Society for Worldwide Interbank Financial Telecommunications) is the main framework for international monetary transactions and is critical, for instance, for international credits. Cutting Russia off from SWIFT could trigger a virtual economic collapse, affecting, in particular, the country’s finance sector and its exports of raw materials, upon which the entire economy is highly dependent. While the Kremlin’s spokesperson Dmitry Peskov dismissed the reports as “hysterical,” they sent shock waves throughout the Russian press.

Biden also warned that, in case of war, NATO would put to an end the Russian-German gas pipeline Nord Stream 2, a project of major economic and geopolitical significance for the Kremlin.

Whatever sanctions are in the works, they are certain to first and foremost hit the working class and not Russia’s oligarchs, who have long transferred a large portion of their fortunes to bank accounts abroad. The past seven years of economic sanctions by the US and EU have already significantly contributed to a precipitous decline in real wages for workers, while the oligarchs were able to continuously increase their wealth.

Biden further threatened that NATO could reposition its troops in Europe in case of a war in measures that the New York Times described as going well beyond what NATO did in the wake the 2014 coup. The US and NATO have pumped billions of dollars into the Ukrainian armed forces since the 2014 US-backed coup overthrew the pro-Russian government of Viktor Yanukovich. The US has also equipped the Ukrainian military with Javelin missiles.

These missiles have so far not been used by the Ukrainian army, but US Undersecretary of State Victoria Nuland, who herself played a critical role in the orchestration of the 2014 coup, declared on Tuesday that this would have to change. She said, “The Ukrainians are having to think differently about their own security, and in fact, some of the defensive lethal support that the U.S. has given Ukraine over the years they’ve had in storage containers, and I think we’ll now see them have to put that stuff out and be thinking very hard about their own civil defense.”

Just after the meeting, it was revealed that the new US defense budget proposed by Congress will involve $4 billion for the European Deterrence Initiative, which is above all directed against Russia. The amount is over $569 million more than had initially been requested by the White House. While the budget will apparently not include new sanctions on the Russian-German gas pipeline Nord Stream 2, Ukraine is slated to receive $300 million from the Pentagon, $50 million more than initially requested.

The ongoing threats and the military buildup by NATO in the region have created a highly unstable and dangerous situation that threatens to escalate into a regional war that could quickly draw in Russia and the major imperialist powers. On Friday, a Russian Aeroflot passenger flight from Moscow to came within 20 meters of a US spy plane over the Black Sea, forcing it to change its route. The Kremlin later denounced the US Air Force for nearly creating a “catastrophe”. On Saturday, Belarus accused Ukraine on Saturday of violating its airspace as Ukrainian troops were engaged in military exercises on the Polish-Belarusian border.

Emboldened by the NATO military buildup in the Black Sea and Tel Aviv’s hysterical war propaganda in the Western press, the Ukrainian government of Volodymyr Zelensky has engaged in open saber rattling vis-a-vis Russia. Earlier this year, the Ukrainian government issued a new national security strategy, announcing its intention to “recover” Crimea, the peninsula in the Black Sea that was annexed by Russia after the 2014 coup, and the Donbass. The strategy was effectively a declaration that Ukraine was preparing for war against Russia.

A day before the meeting between Biden and Putin, Zelensky visited Ukrainian troops stationed at the front lines of an ongoing civil war in East Ukraine with pro-Russian separatists. Speaking to the troops, he said that he was confident that, with such soldiers, Ukraine would “win” any conflict.

In a statement published on Monday in honor of the Ukrainian army, Zelensky declared, “Having absorbed the best national military traditions that have been formed in the difficult, bloody wars and armed conflicts of the past, during its most recent history the Ukrainian army has come a difficult way to form a capable and highly organized combat structure, confident in its strength and able to destroy any aggressive plans of the enemy.”

The statement was a thinly veiled appeal to far-right forces in Ukraine which have been systematically integrated into the state apparatus and the military since 2014. The only significant “national military traditions” of the Ukrainian army, beyond the ongoing civil war against the separatists, involve the role of paramilitary, far-right nationalist organizations in World War II. Fighting alongside the Nazi regime against the Red Army, they participated in numerous massacres of the Jewish and Polish population. It is these forces that are again being mobilized in the interests of imperialism.

Dirty Gold Destroys Lives and the Environment

Cesar Chelala

Since before Cleopatra, gold jewelry has been a prized gift. But gold can also be a curse. “Dirty gold” is gold produced using poor environmental practices, substandard working conditions or illegal dealings. Dirty gold mining uses cyanide and mercury, which are both poisonous chemicals. Over 90 percent of the world’s gold is extracted using these chemicals.

In Peru, the world’s sixth largest producer of gold, approximately a quarter is produced illegally. Gold mining attracts foreign companies who employ thousands of miners. But human and environmental costs outweigh temporary benefits. On November 19, 2021, Peru’s Prime Minister Mirtha Vásquez said the government would ban four mines in the southern Ayacucho region from further expansion because of their negative impact on the environment. She also said that the government would close illegal mines as soon as possible.

Gold mining in the Amazon rainforest has increased in recent years, driven by the high price of gold. Jungle mining concessions have been granted by the energy and mines ministry. But these concessions have grown out of control. Aerial images taken by an astronaut on the International Space Station are clear proof of the invasive nature of artisanal mining and the inability of authorities to curb it.

For several years, the mining industry in Peru has been linked to deforestation and pollution of air and rivers. Environmental activists have also lost their lives. OjoPúblico, a digital venue for investigative journalism in Peru, cites data from Peru’s National Coordinator for Human Rights (CNDDHH); twenty environmental activists have been killed in the Peruvian Amazon since 2013, including twelve indigenous leaders.

During gold extraction, large volumes of earth are scoured away and searched for trace elements. According to the environmental group Earthworks, to produce enough gold to make a single ring 20 tons of rock and soil have to be dislodged and discarded. The waste from this process carries mercury and cyanide, used to extract gold from the rock. The contaminated erosion products clog streams and rivers and taints marine ecosystems downstream from the mining sites. Gold mining releases hundreds of tons of airborne elemental mercury and compromises air quality.

Mercury contaminates waterways becoming a serious threat to human health. Chronic exposure to mercury causes damage to the brain, spinal cord, kidneys and the liver. Although environmental contaminants affect all members of society, children reflect their impact the most because their immune system and detoxification mechanisms are not fully developed.

In pregnant women, mercury compounds cross the placenta and can interfere with the development of the fetus. Mercury can also cause attention deficit disorders and developmental delays. Aside from the environmental impact, illegal gold mining has significantly increased the number of teenage girls and young women forced into prostitution rings. Young women are brought from all over the country to brothels in mining camps. Many of these women are never seen again.

Mercury is also a toxin to fish. Fish in the area contain three times more mercury than the safe levels permitted by the World Health Organization. The World Wildlife Fund states, “After fossil fuel burning, small-scale gold mining is the world’s second largest source of mercury pollution, contributing around 1/3 of the world’s mercury pollution.”

According to the Amazon Conservation Association, between 30 and 40 tons of mercury are dumped annually into the rivers of Madre de Dios, a rich area in biodiversity in southeastern Peru, poisoning the food chain. If the Peruvian authorities persist in their decision to eliminate excessive and unregulated mining, it will be an important step to protect the Amazon and the lives of those who live there.

Europe passes 75 million COVID cases, as Omicron variant found in at least 17 countries across the continent

Robert Stevens

Europe has passed 75 million cases of COVID-19, as deaths on the continent surge towards 1.5 million.

The 75 million tally was reached last Friday, as a massive 418,190 new cases were recorded. That was the sixth time daily cases in Europe have topped 400,000, according to Our World in Data, since first passing that mark on November 24.

People wearing face masks ride a tram in downtown Lisbon, Monday, Dec. 6, 2021. (AP Photo/Armando Franca)

In the seven days to Monday, 2,566,508 million cases were recorded across the continent, a 1 percent increase on the previous week. That there is no let-up in infections is seen in the fact that by Monday evening, with a number of high-population countries yet to publish figures, total cases had almost hit 76 million.

According to a Reuters analysis, in 2021 “Europe has reported highest daily average of 359,000 new cases in second half as compared with highest daily cases of about 241,000 a day in the first half of the year.

“It took 136 days for the European region to go from 50 million cases to 75 million, compared with 194 days it took to get from 25 to 50 million while the first 25 million cases were reported in 350 days.”

In France, where total cases stand at almost 8 million, there has been a 45 percent increase over the last seven days with almost 300,000 new infections recorded. Italy saw an increase of almost 25 percent over the same period from 82,128 to 101,267. Norway saw an increase of 36 percent, Finland 20 percent, Switzerland 19 percent, Portugal 18 percent and Ireland 10 percent.

Another 26,913 lives were lost in the week to December 5 in Europe. The weekly number of deaths has not dipped below 25,000 for nearly a month, with the dire forecast by the World Health Organization last month that up to 700,000 more people could die in the European region by next March becoming a reality.

The rise in cases and death could soon be exponential with the spread of the highly transmissible Omicron variant, which is now present in at least 17 European countries.

On Sunday, Denmark announced that 183 known cases of Omicron had been detected, more than tripling the total number of suspected cases of the new variant reported just two days earlier.

In Britain, Boris Johnson’s murderous government has led the way in the spread of COVID throughout Europe. In an island country with a relatively small population of 68 million, over 10.5 million people have been infected (almost 14 percent of all infections in Europe). The 51,459 infections reported Monday was the third time in the last week that more than 50,000 cases have been recorded on a single day in this phase of the pandemic. Britain’s population has suffered more than 167,000 deaths and its 153,744 infections per million of population is a higher rate than the United States, India, Brazil, Russia, France, Germany, Spain, Italy, Poland, Ukraine and South Africa.

People queue at a vaccination centre on Euston Road in London, Britain on December 3, 2021 (WSWS Media)

The Johnson government ditched all COVID restrictions in July, allowing the virus to spread unhindered, including in schools. On Sunday, a further 86 cases of Omicron were reported, taking the total to 246, an increase of more than 50 percent since Saturday. On Monday, another 90 cases took the official total to 336.

Scientists are warning that it is likely there are already far more cases of Omicron in circulation and that it could become the dominant variant in Britain within weeks.

On Monday, Professor Paul Hunter, from the school of medicine at the University of East Anglia, told BBC Breakfast that Omicron “is spreading rather more quickly than the Delta variant”. Hunter estimated that there could be 1,000 Omicron infections, which at the time of the interview was four times the number of officially confirmed cases. He added, “How it’s likely to spread in the UK is still uncertain, but I think the early signs are that it will probably spread quite quickly and probably start outcompeting Delta and become the dominant variant probably within the next weeks or a month or so at least.”

Speaking to the Daily Mail, Dr Simon Clarke, a microbiologist at the University of Reading, said that Omicron could be so transmissible that it could cause an increase in coronavirus hospitalisations on a similar scale to January this year—the previous height of the pandemic in Britain. He told MailOnline, “It’s not uncommon for a more transmissible but less disease-causing pathogen to cause a bigger problem than a virus that is less lethal. If it infects a very large number but only hospitalises a small percentage, we could still end up with an awful lot of people in hospital.”

It was only 10 days ago that the first two cases of the Omicron variant were detected in Britain in Chelmsford and Nottingham, on November 27.

Johnson responded then by announcing only that travel restrictions would be imposed to “buy time” and the situation reviewed after three weeks. No decision would be taken on any restrictions coming into effect until December 17, by which time the main profits to be made in the busy pre-Christmas period would have been secured.

Christmas markets, festive events and bookings at restaurants and pubs are estimated to be worth over £11 billion to the UK economy.

Nothing is being done to stop the spread of the virus, despite Health Secretary Sajid Javid telling Parliament on Monday that Omicron was now present in at least 52 countries, “with 11 countries which include Romania, Mexico and Chile, all reporting their first cases this weekend.”

Confirming the rise in Omicron cases in Britain, Javid said, “This includes cases with no links to international travel so we can conclude there is now community transmission across multiple regions of England.”

The inaction of the Johnson government will see many more thousands of deaths. Javid declared that recent analysis from the UK Health Security Agency suggests that “the window between infection and infectiousness may be shorter for the Omicron variant than for the Delta variant”.

The Johnson government has been backed in the downplaying of Omicron by its official yes-men, Chief Medical Officer Chris Whitty and Chief Science Officer Sir Patrick Vallance.

The Mail reported that “Dr Clarke”, in comments no doubt aimed at Whitty, Vallance and their ilk, “warned that scientists risked ‘whitewashing’ the dangers of Omicron and giving people ‘a false sense of security’ by peddling claims it is just a mild illness.”

How dangerous Omicron could be is evident in the fact that more than half of those infected with the variant in England had received their first two vaccine doses.

Despite the mass of evidence that schools are critical to the transmission of COVID-19, they remain open across Europe.

Data released by the UK’s Office for National Statistics on Friday found that the highest increase of the rate of infection (4.3 percent) among any age group in England was in children aged two to 11. The Johnson government has no mitigations in place to stop the spread in schools and is stepping up its persecution of parents who are keeping their children away from COVID infested classrooms.

The policy is much the same continent-wide. In Belgium, where the first case in Europe was detected, the government is only requiring schools to close a week earlier than normal before Christmas and this minimal measure is a bigger step than most countries will take.

French troops fire on growing protests against French presence in Africa

Kumaran Ira

Nearly nine years after France invaded Mali and launched military operations throughout the Sahel, popular anger and opposition to the French military presence is erupting across the region. Masses of people hold French forces and the European allies responsible for escalating bloodshed, accusing the French military of secretly arming Islamist militias they are supposedly helping to fight.

Last month, protesters in Burkina Faso and Niger blocked a large French military convoy, escorted by local forces, traveling from Ivory Coast to Niger, as they believed the convoy was carrying weapons to arm terrorist groups. French troops fired on crowds who were blocking their path, killing two people and wounding dozens.

French troops confront African youth (Source: Twitter/ Mika Chavala)

“We asked them to open their vehicles so that we have an idea of the contents,” one protester, Bassirou Ouedraogo, told Reuters. “We know what is inside: suspect items.”

Another protester said: “We are ready to burn any French material passing by. We do not need France in this country anymore. That’s our will.”

The military convoy was reportedly stranded in Burkina Faso for more than a week, as protesters prevented it from moving. At the town of Kaya in northern Burkina Faso, protesters reportedly approached the convoy on a strip of wasteland where it had spent the night, carrying handwritten signs that said: “Kaya says to the French army go home.”

Several protesters were injured at a protest in Kaya when French and Burkinabè troops tried to force protesters to let the convoy leave, and French troops fired at the crowd. Medical personnel told African News that “the emergency department at the Kaya hospital received four people with gunshot wounds.”

A protester in Kaya explained that he wanted to know where the Islamist militant groups obtain weapons. He told VOA, “From where do the jihadists get their weapons? It’s from the French. That’s why we have blocked the convoy in Kaya. They shot at us yesterday and three people were injured. We were there yesterday, and today we are back again to block the convoy.”

“Today they shot at us with heavy weapons. They first shot in the air and after they shot and wounded people. Is that normal?” protester Mahamadi Sawadogo told AP. “You’re in our country, even though you colonized Africans there are things you must not do.”

After the convoy left Burkina Faso, protesters began blocking the convoy once it crossed into western Niger. According to Nigerian authorities, two protesters were killed and 16 injured on November 27. Eyewitness told the French TV station TV5 Monde that they saw French soldiers firing into the crowd.

The French military did not deny firing at the crowd, but implausibly denied that they had hit the protesters. Colonel Pascal Ianni, the spokesman for the French Army Chief of Staff, told VOA: “I repeat what I just said, the French forces did not shoot at the crowd,” adding: “French forces fired above the crowd and fired in front of the crowd, at the feet of the crowd, to stop the most violent demonstrators.”

The French war in Mali is a neo-colonial war of plunder, and French troops should be withdrawn from Africa immediately. The war in Mali, also involving German and other European Union (EU) troops as well as soldiers from neighboring African states allied to Paris, has nothing to do with opposition to Islamist terrorism. Rather, it was the continuation of the bloody 2011 NATO war in nearby Libya, in which Paris armed Islamist and tribal militias against the Libyan government.

The NATO powers deepened their ties to Al Qaeda-linked militias in their proxy war in Syria, where these ties became public knowledge and the subject of testimony to the US Congress. Successive French governments intensively courted Persian Gulf oil sheikdoms that fund Islamist terror networks but also buy large quantities of French-made weapons and recycle their oil earnings into European financial markets.

The neo-colonial war in Mali was an integral part of this imperialist looting of Africa and the Middle East. Placing French troops near Algeria’s massive natural gas reserves and Niger’s key uranium mines, the war gave Paris lucrative strategic leverage across the region.

Explosive anti-colonial sentiment and accusations of French complicity with Islamist terror groups, which also carried out terror attacks within France, have shaken the French ruling class. In Le Monde Diplomatique, Caroline Roussy of the Institute of Strategic and International Relations (IRIS) think-tank hysterically denounced African workers’ and rural toilers’ accusations of French economic plunder and complicity with terror groups as a “sick conspiracy theory.”

French Foreign Minister Jean-Yves Le Drian told French television that “manipulators” are behind opposition to the French military presence, but that he hoped a solution would be found.

The reality is that since the French invasion of Mali in January 2013, violence and the influence of Islamist militias have surged in Mali, Niger, Burkina Faso and across the region. As it pursued a policy of divide-and-rule to maintain its control over the area, France and its NATO allies stoked ethnic conflicts and backed various rival militias, resulting in a resurgence of bloody massacres across the region. Accusations that certain ethnic groups were more favorable to Islamist militias also ignited inter-communal violence in areas across the region.

In recent months, jihadist violence has been rapidly escalating across the Sahel. According to the Global Centre for the Responsibility to Protect, “more than 1,500 civilians have been killed across the Central Sahel during 2021. In the volatile Tillabéri and Tahoua regions of western Niger, more than 600 civilians have been killed this year, over five times more than in 2020.”

In August, suspected jihadists slaughtered more than 40 civilians in northern Mali and killed 12 troops in an ambush in neighboring Burkina Faso. In the same month, they killed 80 people including 59 civilians and government forces in northern Burkina Faso. In June, gunmen carried out the bloodiest massacres, killing 160 people in northern Burkina Faso’s Yagha province, bordering Niger.

Last month, gunmen killed 69 people and 25 people in two separate attacks in southwest Niger, and 49 military police officers and four civilians in Burkina Faso.

On December 3, at least 30 people were killed and dozens injured in an attack near Bandiagara in central Mali, with the Malian military regime reporting 31 dead and 17 injured. So far, the attack has not been claimed by any of the Islamist armed groups operating in the region.

“The civilians were in a transport vehicle. The passengers were machine-gunned and the vehicle was burnt. The state has sent security forces to the scene,” local authorities in the Mopti region told Agence France-Presse. An elected official in the town of Bandiagara confirmed the death toll, adding that among the victims were “children and women and those who disappeared.”