Nervous market response to sanctions on Russia

Nick Beams

Global stock markets have fallen in the wake of the decision by Russia to order troops into the Eastern Ukrainian separatist republics of Donetsk and Lugansk after recognising their independence and the initiation of the first round of economic sanctions by the US and other major powers. Markets have not dropped sharply, at least, not yet.

In the US, following falls in Asia and, after an initial decline, flat markets in Europe, the major market indexes all recorded a decline of more than 1 percent. The S&P 500 index dropped by 1 percent taking it into correction territory—recording a 10 percent fall from its high on January 3. The Dow was down 1.4 percent and the NASDA dropped 1.2 percent, taking its decline for the year to 14 percent.

The US market has been showing increased volatility since the start of the year because of the surge in inflation, now running at more than 7 percent, which has prompted moves by the Fed to tighten its monetary policy, starting with an interest rate increase when it meets in the middle of next month.

Traders work on the New York Stock Exchange floor in New York CIty, January 25, 2022. (AP Photo/Ted Shaffrey)

But in a perverse way—an expression of the short-term time horizon on which financial speculation operates—the Ukraine crisis may have worked to soften the initial market fall. This is because it is seen to make a first interest-rate hike of 0.5 percentage points less likely due to the worsening geo-political situation. An interest rate rise of 0.25 percentage points has already been priced in as 100 percent certain.

Further market falls are expected in the next days and weeks with the Wall Street Journal reporting that investors are “scooping up at a record pace options contracts that would pay out if the recent declines in stock and bond markets worsen.”

The most immediate effect of the US-Russia conflict is the impact on energy prices. The price of oil is approaching $100 a barrel, a level it last reached in 2014, with predictions that it could go to $120 or even $150.

According to Mark Zandi, chief economist at Moody’s Analytics, the price of oil is probably up by $10 to $15 per barrel because of the conflict and, if the increases are sustained, this could add at least half a percentage point to the inflation rate.

“My sense is it really complicates the Fed’s efforts to rein inflation and get back to full employment,” he told the business channel CNBC.

The complications arise from the fact that in previous periods of geo-political turbulence, such as that which occurred in 2014 when Russia took back Crimea, inflation was low, the Fed acted as the backstop for the financial system through the provision of ultra-cheap money.

Now the Fed is moving to tighten monetary policy because of rising prices and is starting to remove some of the financial support it provided previously. But such has been the dependence of the financial markets on the flow of virtually free money that even a relatively small adjustment, as compared to what took place in the past, can have significant consequences. The fear is that it could set off major financial turbulence and a global recession.

“The Ukraine situation has become more tense when the markets are already in a potentially unstable condition because of rapid global inflation and rate-increase expectations in the US,” Takahide Kiuchi, executive economist at Nomura Research Institute, told the WSJ.

JPMorgan’s chief economist Bruce Kasman told CNBC that the rise in the oil price made things more complicated for the Fed and there was a scenario where “the growth hit starts to get more substantial.”

He said the fact that the Fed was tightening under conditions of rising oil prices magnified the “negative supply shock,” a situation which has not been seen since the days of Fed chair Paul Volcker in the 1980s.

It is a measure of the dependence of the financial markets on cheap money that Volcker lifted interest rates to as high as 20 percent in 1981, inducing the deepest recession to that point since the 1930s. Now his actions are being recalled under conditions where the rate rises being contemplated are only a tiny fraction of those carried out 40 years ago.

It remains to be seen how the effect of sanctions will play out and their impact on the global financial system and the world economy more broadly. But there are warnings of a major downturn.

According to a report in the WSJ, the UK National Institute for Economic and Social Research had made calculations based on a cut in Russian oil and gas exports, either because of sanctions imposed by the West or retaliation by Moscow.

It said major interruptions to supplies would lower global growth this year by just under 1 percentage point and would lead to a 1.7 percentage point cut in eurozone growth.

“The broad implications ... are somewhat reminiscent of the 1970s energy crisis,” it said. “Higher prices and supply limitations severely disrupted economic activity in the global economy and led to higher inflation.”

Even if oil and gas exports are not directly hit—Biden has said the measures will target Russia’s financial sector and President Vladimir Putin’s inner circle—they could still have an effect on major global firms.

According to a report in the Financial Times, “some of the world’s biggest oil companies and commodity traders are at risk of disruption to their business operations in Russia,” if the threat of imposing “unprecedented” sanctions is carried out.

Major oil companies, including BP, Shell and ExxonMobil, have deep ties with Russian oil companies and are involved in joint projects. Commodity traders, the FT report noted, such as Glencore, Vitol and Trafigura “all have important business relationships in the country.”

The possibility of a blowback from the imposition of sanctions was reflected in their announcement. Among the measures announced by Biden were sanctions on the raising of Russian foreign debt. Following Biden’s statement, there was a hasty clarification from the White House that they would only be applied to new debt and not on trading in the secondary market.

No doubt the experience of 1998 was recalled when the hedge fund Long Term Capital Management collapsed because of its heavy involvement in bets in the Russian financial monetary and financial system. Its demise threatened to spark a crisis in the US financial system and it had to be bailed out by the New York Federal Reserve.

Bipartisan congressional war consensus emerges, bringing together progressive “left” and Republican right

Eric London

On Tuesday, US President Joe Biden and leading NATO powers escalated the war provocations against Russia by announcing the imposition of substantial economic sanctions in response to Russian President Vladimir Putin’s recognition of the independence of Donetsk and Lugansk from Ukraine.

In the United States, a bipartisan consensus is emerging for even greater military and economic pressure to be brought to bear against Russia, increasing the risk of a war between nuclear-armed powers. This consensus has brought together a broad spectrum of the political establishment, from the Republican right to the so-called “progressive” wing of the Democratic Party.

This ruling class consensus is part of an attempt by the Biden administration to effect a new “national unity” aimed at securing American imperialism’s interests abroad, controlling the domestic political crisis and distracting from growing inflation and a daily US COVID-19 death toll of over 2,000 people.

US Senator Bernie Sanders speaks to reporters on December 15, 2021, in Washington. (AP Photo/Jacquelyn Martin)

Democrats and Republicans alike are expressing criticism that the Biden administration had been insufficiently ruthless in measures taken against Russia.

Ultra-right Republican Senator Ted Cruz (R-Texas) declared, “Biden-Harris officials are to an enormous extent directly responsible for this crisis. He and his administration instead settled for an endlessly deferred and wholly un-credible strategy of responding to Putin’s aggression after an invasion.”

A leading Trump supporter in the House, Representative Jim Banks (R-Indiana), said that he is “still hopeful that President Biden will show the backbone that’s been missing all along and we’ll hit Putin where it counts, by restoring the Trump sanctions on Nord Stream 2.”

Anti-Trump Republicans were less critical of Biden and equally enthusiastic about a belligerent policy towards Russia. MSNBC’s Andrea Mitchell welcomed former Trump national security advisor John Bolton on her program yesterday, providing him a chance to demand Biden take an even more aggressive stance toward Russia.

NBC wrote that Senator Lindsey Graham (R-South Carolina) has “been on the phone ‘all morning’ working with Democrats on an emergency supplemental funding package” aimed at expanding sanctions, as well as military aid for the Ukrainian government.

Biden faces substantial pressure from within the Democratic Party as well. Representative Jim Hines (D-Connecticut) stated that Biden was wrong for not immediately calling Russia’s actions in Donetsk and Lugansk an “invasion,” tweeting, “If you know the history of aggressive dictators, you know it’s critical not to lose clarity. Putin is invading Ukraine. Full stop. He’s done it before, and he will do it again if we don’t impose full sanctions.”

Senator Bob Menendez (D-New Jersey) similarly declared, “I think we can stop equivocating as to whether we have an invasion or not. I think the West, the United States has to make it very clear to Putin that the consequences begin now.”

Three of the Democrats who were part of the Munich delegation were former CIA, military and State Department officials, including Elissa Slotkin of Michigan, Jason Crow of Colorado and Tom Malinowski of New Jersey. Slotkin, a longtime CIA and National Security Council official, emphasized the broader geopolitical issues in the Ukraine confrontation, tweeting, “Make no mistake: this is about more than just Russia and Ukraine. China is watching our every move to see if the international community will stand up against Putin’s aggression. This is a moment to show that we won’t let them rewrite the next century.”

Democrats and Republicans are working together to force the Biden administration to launch more aggressive sanctions. In an article titled “Biden faces bipartisan calls for more punishing Russian sanctions,” NBC reported yesterday that “lawmakers across the political spectrum called on President Biden to impose crushing new sanctions,” including Biden’s “Democratic allies in Congress,” as well as the Republican minority.

In the House, Democrats and Republicans are introducing the SUPPORT Act to assess how American imperialism can provide weapons to a Ukrainian military. Representative Raja Krishnamoorthi (D-Illinois) said, “We need to get ready to assist our Ukrainian friends secure their sovereignty if the Russians invade, and second, we need to send a strong message to the Russians and others that the costs of invading Ukraine will be prohibitive.” The Ukrainian military includes neo-Nazi outfits like the Azov Battalion.

In the Senate, a similar bill introduced by Senator Menendez is sponsored by 80 percent of Senate Democrats, including self-described “progressives” like Chris Murphy of Connecticut and Jeff Merkley of Oregon.

A bipartisan delegation of Democratic and Republican Representatives returned from the Munich Security Conference this weekend and issued a joint statement calling for emergency legislation to further fund Ukraine’s military. The statement, signed by 21 senators and representatives, reads:

“It now appears increasingly likely that Russian forces will initiate hostilities against a free and peaceful Ukraine. We as a bipartisan delegation will bring home the same unity and resolve we have seen among our Atlantic allies against Russian aggression. We pledge to work toward whatever emergency supplemental legislation will best support our NATO allies and the people of Ukraine and support freedom and safety around the world. No matter what happens in the coming days, we must assure that the dictator Putin and his corrupt oligarchs pay a devastating price for their decisions.”

The delegation’s emphasis on the “unity” of the Republican and Democratic delegations underscores a fundamental purpose of the present drive to war. Racked by immense internal divisions that are exacerbated by the worsening coronavirus pandemic, spiraling inflation and the ongoing threat of fascist coup plotting at home, the American ruling class is attempting to use a foreign conflict to suppress social discontent at home.

As Representative Betty McCollum (D-Minnesota) said at a press conference held by the Munich congressional delegation: “We’re bicameral, we’re bipartisan, we’re united. NATO’s united, the EU’s united and we’re ready to do what it takes if Russia walks away.”

A particularly important role in the bipartisan warmongering is being played by the self-styled progressive Democrats.

Senator Bernie Sanders issued a belligerent statement yesterday in support of Biden’s sanctions against Russia, placing blame entirely on Russia for the present crisis and making no reference to the role of NATO and the United States:

“Vladimir Putin’s latest invasion of Ukraine is an indefensible violation of international law, regardless of whatever false pretext he offers. There has always been a diplomatic solution to this situation. Tragically, Putin appears intent on rejecting it. The United States must now work with our allies and the international community to impose serious sanctions on Putin and his oligarchs.”

Sanders himself voted to support the 1999 US war against Serbia, which was also “an indefensible violation of international law,” and the Clinton administration’s claims of genocide were also false. The same is true of the US invasion of Afghanistan, which Sanders also voted to support.

In the House, Democratic Socialists of America member Jamaal Bowman (D-New York) shared a tweet from former US Ambassador to Russia Michael McFaul comparing Putin to Hitler, denouncing Russia for “taking territory from smaller powers,” and calling for the US “to respond now. Right now.” Declaring his support for these threats, Bowman stated, “Absolutely devastating.” Alexandria Ocasio-Cortez (D-New York) has not issued a single tweet opposing Biden’s war provocations.

Ukraine’s President Zelensky calls for “war coalition in the parliament”

Clara Weiss

As the US and EU announced far-reaching sanctions on Russia on Tuesday, further escalating the conflict, Ukraine’s President Volodymyr Zelensky called for a “war coalition” in Ukraine’s parliament and began reviewing proposals to sever diplomatic ties with Russia.

On Monday, Russian President Vladimir Putin had recognized the separatist enclaves in Donetsk and Lugansk, which declared themselves “People’s Republics” in the wake of the US-backed 2014 coup in Kiev, as “independent” and ordered that Russian troops be sent into the area. The Russian parliament approved the deployment of Russian armed forces on Tuesday. Speaking at a press conference, however, Putin said his order did not mean that “the troops will go there right away.”

In response to questions from journalists about the 2015 Minsk Agreement, he insisted that Kiev had de facto sabotaged and ignored the agreement for many years, including by assassinating one of the signatories of the agreement, a separatist leader from Donetsk. He also insisted that, given its Soviet-era nuclear infrastructure, Ukraine could easily acquire nuclear weapons should it decide to do so. This weekend, Ukraine’s Zelensky threatened at the Munich Security Conference that unless the “territorial integrity” of his country be guaranteed, they would revoke the 1994 Budapest Agreement in which Ukraine gave up its nuclear arsenal, then the third largest in the world.

Secretary of State Antony Blinken, right, and Ukraine's Foreign Minister Dmytro Kuleba after a news conference at the State Department in Washington, Tuesday, February 22, 2022. (AP Photo/Carolyn Kaster)

Putin stressed again that any settlement of the conflict would require a significant demilitarization of Ukraine, as the missiles currently stationed there would enable NATO to hit targets deep in Russia’s territory.

On Tuesday, Moscow announced it would evacuate all its diplomats from Ukraine.

In Kiev, the move by Putin on Monday has been seized on by the oligarchy and the far right to further escalate the conflict and prepare the grounds for open war. Ukraine’s Foreign Ministry, which is headed by Dmitry Kubela, a participant in the right-wing protests that led up to the 2014 coup, submitted a formal proposal to Zelensky to sever diplomatic ties with Russia. Kubela who was on a visit to Washington, added that he had always felt that “this should have been done already back in 2014.”

Two parliamentary deputies, Oleksiyh Honcharenko from the “European Solidarity Party” of former President Petro Poroshenko, and Olga Savchuk, a deputy of the neo-Nazi Svoboda party, presented similar bills to the parliament. They will now be reviewed by parliamentary commissions, while Zelensky stated that he would consider the proposal by the Foreign Ministry.

The fascist deputy Savchuk also presented another proposal in parliament, calling for the closure of Ukraine’s borders with both Russia and Belarus and the proclamation of a state of war in Donetsk and Lugansk. Savchuk is a prominent member of the neo-Nazi Svoboda party, which openly glorifies the Nazi collaborator Stepan Bandera, as well as the Waffen SS Galicia Division.

The Svoboda party played an important role in the 2014 coup and then formed part of the government of Arseniy Yatsenyuk that emerged from it. The head of Svoboda’s parliamentary faction, Oleh Tyahnibok, recently stated that Russia had to be “dismembered” into “20 national states” in order for the Crimean peninsula to return to Ukraine—which is the stated aim of Ukraine’s official military strategy .

In yet another example of the intimate ties between Ukraine’s far right and the American state, Savchuk is an alumna of the US Congress’s Open World Leadership Center, which boasted in 2019 that she had been elected to Ukraine’s parliament.

Poroshenko’s European Solidarity party too has extensive ties to both the US and EU, as well as the far right in Ukraine. Poroshenko has repeatedly addressed far-right rallies directed against Zelensky and any negotiated settlement of the conflict in East Ukraine.

The former Ukrainian president, whose net worth is around $1.5 billion, recently returned to Ukraine where he was able to avoid arrest in a treason case thanks to the direct intervention of the US and Canada. He has since conducted a campaign attacking the Zelensky government from the right and accusing it of being insufficiently “decisive” in the conflict with Russia. Over the past weeks, Zelensky has repeatedly rejected claims by the Biden administration that a Russian invasion was “imminent” and denounced the US war propaganda as “hysteria.”

In a hint that powerful factions of the American state and intelligence agencies are now moving against Zelensky, the campaign against him has now been taken to the pages of the New York Times. On Monday, the outlet, which functions as little more than a press agency for the CIA during war crises, published a comment by Ukrainian journalist Olga Rudenko on Monday under the title “Ukraine’s President is in over his head.” Rudenko, who recently completed a fellowship at the University of Chicago’s Booth School of Business, a hub for the US business and political elite, wrote that “Mr. Zelensky’s behavior” was “odd to the point of erratic.”

She then acknowledged that Zelensky, should he make any “concessions to Russia particularly over the conflict in eastern Ukraine,” would face “hundreds of thousands of people” on the streets and suffer the same fate as Yanukovich who was overthrown in 2014. What Rudenko, of course, did not say, is that the alleged “revolution” of 2014 was carried out by fascist thugs that were then funded and have since been further armed and built up by the American state.

Zelensky’s response to the pressure from the far right and Washington has been to call for a “war coalition” with these neo-fascist forces and to step up war preparations. On Tuesday evening, he held a closed meeting with all parliamentary factions. At the meeting with Poroshenko’s European Solidarity faction, Poroshenko reportedly presented proposals for a significant buildup of the military capabilities of Kiev and troop deployments to the north and northeast of the country.

After these meetings, Zelensky made an address to the nation. In a statement that was clearly addressed first and foremost at his critics among the oligarchs and neo-fascist bands, he said, “All Ukrainian politicians must now be state actors, and leave their ambitions aside, for the sake of our state. Everyone understands that we now need a war coalition in the parliament, unity, and quick and important decisions for the economic stability and military defense capability of our state. Today, all politicians and parties have just one color: Blue-yellow [the colors of the Ukrainian national flag].”

Making clear that his government was preparing for war against Russia, Zelensky insisted in the address that Russia had “unilaterally” reneged on the Minsk Agreements and stated, “We will not give anyone anything [of our territory]. We are people not of 2014 but of 2022. We are a different people now, we have a different army.” Indeed, the imperialist powers have pumped billions into Ukraine’s military since 2014. Since 2020, Ukraine is also an “Enhanced Opportunities Partner” of NATO, which involves “enhanced access to interoperability programs and exercises, and more sharing of information.”

Zelensky told the Ukrainian people that they must all now be prepared for “hard labor” every day in order to safeguard the country and concluded his speech with the nationalist “Slava Ukraini” greeting, which, while now common place in Ukrainian politics, is closely associated with the fascist politics of the Organization of Ukrainian Nationalists and the Ukrainian Insurgent Army in the 1930s and 1940s.

That evening, Zelensky also signed a decree calling for the mobilization of all military reservists but said there was no need yet for a general mobilization. He will be meeting with representatives of Ukraine’s business elite to discuss large-scale investments into the further buildup of Ukraine’s armed forces.

The military conflict in East Ukraine meanwhile continued to escalate. In Donetsk, a blast on a highway killed three civilians on Tuesday, according to separatist authorities. Another major blast occurred in the city center Wednesday night with no casualties reported. The separatist authorities described the blast which occurred at the city’s television center as a “terror attack.” In Lugansk, two civilians were reportedly killed when a Ukrainian shell hit a car.

According to Russian news reports, over 100,000 refugees from East Ukraine have now arrived in Russia; 30,000 of them are children.

EU countries impose sanctions on Russia over Ukraine crisis

Johannes Stern & Alex Lantier

European governments are responding to Moscow’s recognition of the independence of parts of eastern Ukraine with sanctions, threats and an escalation of the war drive against Russia.

On Monday, European Council President Charles Michel and European Commission President Ursula von der Leyen condemned “Russian aggression against Ukraine” in an official statement.

“The decision of the Russian Federation to recognize as independent entities and send Russian troops to certain areas of Ukraine’s Donetsk and Luhansk oblasts is illegal and unacceptable”, the statement declares. “It violates international law, Ukraine’s territorial integrity and sovereignty, Russia’s own international commitments and it further escalates the crisis.”

High Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell, left, French Foreign Minister Jean-Yves Le Drian, second left, facing with German Foreign minister Annalena Baerbock, second right, and Italian Foreign minister Luigi Di Maio, attend a meeting before phone call with their other G7 counterparts at Quai d'Orsay foreign ministry, in Paris, France, Monday, Feb. 21, 2022. (AP Photo/Michel Euler)

Both presidents welcomed “the steadfast unity of Member States and their determination to react with robustness and speed to the illegal actions of Russia in close coordination with international partners.”

At an extraordinary meeting in Paris, European Union (EU) foreign ministers adopted a package of sanctions against Russia. The measures include placing on the EU sanctions list the 351 members of the Russian parliament who voted for the recognition of the Luhansk and Donetsk People’s Republics. A further 27 individuals and entities that contribute to undermining “the territorial integrity, sovereignty and independence” of Ukraine are further targeted for sanctions.

In addition, the Russian state’s access to EU financial markets will be curtailed and EU trade with the breakaway regions restricted. Individuals and entities placed on the EU sanctions list will have all assets held in the EU frozen. In addition, listed individuals will no longer be allowed to enter the EU and no business may be conducted with those affected. According to the current French presidency of the EU Council, the new EU sanctions against Russia are to come into force as early as this Wednesday.

“This package of sanctions has been approved by unanimity,” said the EU’s High Representative for Foreign Affairs and Security Policy Josep Borrell after the meeting of foreign ministers. “It will hurt Russia and it will hurt a lot and we are doing that in strong co-ordination with our partners, the US, the UK and Canada with whom I have been in close contact.”

Von der Leyen welcomed the German government’s decision to put the Nord Stream 2 permitting process on hold. “Nord Stream 2 must be looked at completely anew from the point of view of supply security for all of Europe,” she said. After all, she said, the crisis shows that Europe is still far too dependent on Russian gas.

As other European leaders have, von der Leyen threatened further steps. “If the Kremlin continues to escalate this crisis, then we will not hesitate to take further measures,” she said. “The European Union stands united and is prepared to act swiftly.”

Apparently, the EU is discussing possible sanctions against the Russian president himself. “Mr. Putin is not on the list of those sanctioned,” Borrell said Tuesday evening after the special meeting of EU foreign ministers in Paris. The decision was made, he said, because there was a need to have further measures in reserve.

At the same time, the EU is increasing its support for the anti-Russian regime in Ukraine and increasing its NATO deployments in eastern Europe. On Tuesday, several EU states announced plans to mobilize their joint cybersecurity unit. “In response to Ukraine’s request, [we] are activating [a] Lithuanian-led cyber rapid-response team, which will help Ukrainian institutions to cope with growing cyber-threats,” the Lithuanian Ministry of Defence tweeted.

The EU’s cybersecurity rapid response team was established in 2019 and consists of Estonia, Croatia, Lithuania, Poland and Romania.

German Defense Minister Christine Lambrecht on Tuesday visited German NATO troops in Lithuania, which have been reinforced in recent days by 350 soldiers and about 100 vehicles and weapons systems. “Russia is acting as an aggressor here. And it is uncertain at this hour how far the Russian side will push its aggression. We stand here vigilant and ready to defend ourselves,” she threatened. “Unfortunately, the diplomacy of the last weeks and months has not been able to prevent this blatant breach of our European peace order.”

The arguments advanced by EU leaders for pursuing an escalating military confrontation with Russia are steeped in lies and hypocrisy. Above all, it is not Russia but the NATO powers that are pursuing an aggressive global military and economic policy, seeking to isolate Russia and reduce it to a semi-colonial status, totally subordinated to the political and military concerns of the NATO imperialist powers.

The current crisis represents the culmination of the war drive with which the NATO imperialist powers reacted to the Stalinist bureaucracy’s dissolution of the Soviet Union in 1991. Freed of the military-political obstacle posed by the Soviet Union, the NATO powers attacked Iraq, Yugoslavia, Somalia, Afghanistan, Iraq again, and then Libya and Syria. The wars left these countries shattered, costing trillions of dollars and millions of lives.

After Russian warships based in the port of Sevastopol in Crimea deployed off the Syrian coast to prevent US, French and other NATO warships from bombing Syria in September 2013, the NATO powers turned violently against Russia. They backed the Maidan protests and supported a putsch led by Ukrainian neo-fascists in Kiev in 2013 to install a NATO puppet regime in Ukraine. The separatists in Donetsk and Luhansk rebelled against far-right, anti-Russian militias sent by the Kiev regime to attack and terrorize Russian-speaking inhabitants.

As the Ukrainian armed forces, led by fascistic units like the Azov Battalion, now bomb Donetsk and Luhansk, this conflict has re-erupted, but the NATO powers are now pursuing it on a far larger scale, working to break diplomatic relations with Russia and create the grounds for war.

In its editorial, the French daily Le Monde denounces those who do not support a major escalation of sanctions against Russia, writing: “They want to believe that, as Russia was de facto present in the Donbas since 2014, it is not strictly speaking an invasion. This reaction is not up to task of facing the aggression now underway. It legitimizes the 2014 intervention. It does not take into account the profound ambitions of the Russian president: to re-establish a division of the European continent into spheres of influence based on his own criteria.”

The power that intervened in Ukraine in 2014 was not primarily Russia, however, but Washington and Berlin. When Le Monde denounces the “2014 intervention,” it attacks Russian aid to forces in Donetsk and Luhansk, but falsely treats the Kiev regime as an entirely legal entity by simply passing over in silence the fact that it was installed through an illegitimate, far-right coup.

Based on this political distortion, Le Monde interprets the Russian intervention in east Ukraine in the most incendiary way possible, as an all-out invasion. From this it concludes that Russian concerns can play no role in the division of military influence between the capitalist powers in Europe, that is, in practice, that the NATO powers will brook no Russian objections to NATO’s placing weapons and troops on its very borders.

In this crisis, the geopolitical appetites of the NATO powers intersect with their attempts to impose reactionary health and social policies amid mounting working class opposition at home.

At the heart of the EU powers’ war drive against Russia is a political campaign to bury reporting of the COVID-19 pandemic. As 6 million people fall ill and more than 20,000 die every week in Europe, governments across the continent are moving to eliminate all remaining public health measures to stop the spread of the virus, a policy already adopted in Britain. Yet the pandemic increasingly is falling out of the news, as officials and pundits insist it must take a back seat to the war crisis NATO is inciting against Russia over Ukraine.

This was crassly laid out this weekend by Munich Security Conference chairman Wolfgang Ischinger, who called to abandon public health measures on COVID-19 and focus on war: “We cannot just postpone world politics. Security challenges don’t do social distancing.”

Germany: The far-right murders of Hanau, two years on

Marianne Arens

Last Saturday, the mass murders of February 19, 2020 were commemorated in the German city of Hanau. The case has never been completely clarified and raises questions that extend far beyond the crime itself.

The ceremony at the Hanau cemetery was broadcast live on Hesse television with a public commemoration in the neighbouring cities of Offenbach and Dietzenbach. In the afternoon and evening, the bereaved families, friends and supporters demonstrated through Hanau, gathering at the crime scenes at the times the murders took place.

In the late evening of February 19, 2020, nine people were shot dead in quick succession. The perpetrator, Tobias Rathjen (43), a racist known to the authorities, had posted a misanthropic confession on the internet shortly before the crime. Nevertheless, he succeeded in visiting one crime scene after the other, at each murdering complete strangers.

The victims of the Hanauer Massacre, mural under the the Friedensbrücke (Peace Bridge) in Frankfurt am Main

On Hanau’s Haymarket, Rathjen first shot a young father named Kaloyan Velkov (33), who was hosting at the La Votre bar, before killing worker Fatih Saraçoğlu (34) in broad daylight and proceeding to murder the owner of the Midnight bar across the street, Sedat Gürbüz (29). From the Haymarket, Rathjen drove 3 kilometers to the neighborhood of Hanau-Kesselstadt, where he first shot young Vili Viorel Păun (22), a courier service driver who had followed Rathjen’s car and had tried several times to reach the police. Rathjen got out, approached Vili’s car and shot him through the windshield.

In Kesselstadt, Rathjen proceeded to shoot dead five more people: at a kiosk he shot the bricklayer Gökhan Gültekin (37) and Mercedes Kierpacz (35), a single mother who was there to get pizza for her two children. Ferhat Unvar (22), a young heating and gas technician, was shot behind the kiosk counter and bled to death from his wounds. In the adjacent Arena bar, the killer finally struck down Hamza Kurtović (22), a warehouse clerk, and shot Said Nesar Hashemi (21), a machine operator at Dunlop. Three others were seriously injured. Finally, the perpetrator drove home unmolested, where he shot his mother and then himself.

Even today, two years later, many questions remain unanswered: Why was the killer, a right-wing extremist known to the police, in possession of multiple firearms? How was it possible that he could continue his killing spree unopposed over such a long time period? Why was the emergency hotline unavailable? And why were the most important details ultimately determined by the bereaved families and not by the state authorities?

Tobias Rathjen had drawn attention to himself in the months before the crime by writing several letters to the attorney general and to the Hanau prosecutor’s office. The letters contained paranoid fantasies, but also references to his website. There, on February 13, 2020, six days before the night of the killing spree, he posted a long document with fascist extermination fantasies and videos that should have raised immediate alarm. But nothing happened and the string of murders took its course.

In the months leading up to the crime, Rathjen had participated in multiple combat trainings in Slovakia as well as other firearms courses. Indeed, he was only one of many: According to the report from the Verfassungsschutz (Office for the Protection of the Constitution, the German intelligence agency), as of the end of 2020 there are at least 1,200 right-wing extremists known to the authorities to be legally in possession of firearms in Germany. In this regard, Serpil Unvar, the mother of the murdered Ferhat, said, “It is hard to imagine that no German intelligence noticed who was training for combat with firearms. The perpetrator trained a great deal to kill our children professionally.”

Other tips should have alerted the authorities at an early stage. Since 2017, there had been two incidents in the immediate vicinity of the perpetrator’s home: A man in full combat gear had insulted Hanau youths as “kanaks” (a racist slur for people of Middle Eastern origin), threatened them with an assault rifle and announced that there would be “dead bodies.” The police, who were alerted, did not take any action, refrained from establishing the identity of the gunman, and instead threatened the bring charges against the young people.

The events of February 19 and thereafter were traumatic for the victims’ families. After the murders, parents and relatives were not informed, they were not allowed to approach the crime scenes and they were not allowed to see their slain children. Instead, the police gathered them in a police hall in Hanau-Lamboy, where they had to wait until the next morning before they learned the identities of the slain.

Those desperate families suffered dismissive, indifferent treatment from the authorities. Piter Minnemann, a survivor of the Arena Bar massacre, approached a group of police standing near the scene of the shooting, “Come quickly, we’ve been shot at, people are dying in there!” As he reported, “They didn’t listen to me at all.”

When Mercedes Kierpacz did not come home, her family, wracked with anxiety, waited for hours outside the cordoned zone in their car. Around two o’clock in the morning, they were rudely apprehended by several armed police officers. The patrol did not react to the father’s insistence: “Listen, I am Mercedes’ father.” The policemen drew his weapon and at gunpoint ordered everyone to get out and put their hands on the car. Only when another officer intervened and said, “These are the relatives,” did they let the family be, without apologizing, merely stating, “False alarm.”

Vili Viorel Paun’s parents also waited, filled with anxiety. It was not until the following noon that they went to the police, only to learn there that their son had been dead for hours. Not a word was said about Paun’s futile attempts on the night of the crime to alert the police and stop the perpetrator. Only much later did the parents find this out themselves. Vili Viorel Paun had tried three times to reach the emergency number but could not get through and his emergency calls were not registered.

Immediately after the first murders at Haymarket, other witnesses informed the police about the murderer’s license plate number. Nevertheless, it took five hours, until three in the morning, for the police to forcibly enter the perpetrator’s house in Hanau-Kesselstadt.

The victims’ bodies were taken to Frankfurt and autopsied there without the relatives being informed, let alone giving their consent. The reports stated untruthfully that the families had “not been reached.” The bereaved families had no chance to see their slain loved ones before the postmortem. “We were deprived of the right to say goodbye with dignity,” said one relative.

The many details combine to form a clear picture: Survivors and relatives had to deal with a police force whose conduct was biased, sloppy and at times racist. In the case of Vili Viorel Paun, the death certificate was in the name of his father, Nicolescu Paun. As Hamza’s father, Armin Kurtović, reported, his son was described in the death certificate as “Oriental-Southern,” although he was dirty-blond, blue-eyed and fair-skinned. “For eight days we didn’t know where he was,” Kurtović said.

After the murders, several survivors even received a “danger address,” i.e., an official statement from the police that the authorities considered the addressees to be a possible source of danger.

Voices from the demonstration against the right-wing terror in Hanau, February 21, 2020

Many rightly criticize the structural racism evident in Hanau. But it is more than that. The attack on the Hanau Nine was an attack on the working class. Hanau and especially Hanau-Kesselstadt are mainly inhabited by working class families originally from Kurdistan, Turkey, Bosnia, Bulgaria and Romania, whose children were born and raised in Germany. They work in construction or at Dunlop, at Opel, at the Rhine-Main Airport, or in the banking metropolis as care workers, in sanitation or in the supplier industry. Most of them know each other and meet after work, while shopping, at schools or sports. Rathjen’s fatal shots were directed against this international, proletarian community.

And here lies the key to understanding the unanswered questions. To this day the entirety of official politics is directed against this social class. The interests of the ruling classes, their profit-before-lives policy in the pandemic, and especially their policies of crisis and war are not compatible with the needs of working people. As the WSWS has previously stated, “The very existence of an alert and potentially rebellious working class poses a constant threat to the ruling politicians.”

The established parties have systematically created a political climate that boosts the extreme-right-wing party Alternative for Germany (AfD) and encourages violent right-wing extremists. This is particularly evident in the German state of Hesse. Right-wing extremist networks reaching far into the state apparatus are protected at the highest levels and hidden from public view. When the National Socialist Underground (NSU) shot Halit Yozgat in April 2006 in the city of Kassel, an agent of the state Verfassungschutz (State Office for the Protection of the Constitution), Andreas Temme, was personally present. An internal report on the NSU findings by the Hesse intelligence service has been sealed to the public for the next 30 years.

The 2019 murder of District President Walter Lübcke (Christian Democrats, CDU) in the city of Kassel is likewise far from resolved. Just like the Hanau murders, it is portrayed as the work of a “lone wolf” perpetrator, the fascist Stephan Ernst.

Hate mail from the organization NSU 2.0, threatening representatives of left-wing politics and culture currently being adjudicated at the regional court in Frankfurt, are being dealt with in a similar manner. The only person accused is 54-year-old Alexander M. from Berlin, also called a “lone wolf” perpetrator. Minister of the Interior Peter Beuth (CDU) claims: “Hessian police officers were at no time senders or participants in the NSU 2.0 threat mail series.” This is a proven lie. Less than an hour before the lawyer Seda Başay-Yildiz received the first threatening letter, there had been no less than 17 queries from three databases from a service computer in the 1st Police Station in Frankfurt.

In the case of the Hanau murders, Interior Minister Beuth also explicitly praised the “professional work” of the police on the night of the crime. However, in June 2021, the same interior minister had to disband the elite unit of the Frankfurt police (Specaleinsatzkommando, SEK) because at least 20 of its officers had frequented chats with right-wing extremist content, where they had shared Nazi symbols and agitated against civilians. Thirteen officers of this SEK unit were on duty and on the scene in Hanau on the night of the crime.

Russia sends troops into East Ukraine, Biden announces sanctions

Clara Weiss

Events in the war crisis over Ukraine between Russia and NATO overtook each other on Monday. The day began with news that two reconnaissance-sabotage units of the Ukrainian army had crossed into Russia’s Rostov region and ended with Russian President Vladimir Putin ordering Russian troops to enter the East Ukrainian separatist republics of Donetsk and Lugansk which he had just recognized as “independent.”

Members of the 82nd Airborne Division of the U.S. Army clean weaponry ahead of deployment to Poland from Fort Bragg, N.C. on Monday, Feb. 14, 2022. (AP Photo/Nathan Posner)

Amid a barrage of war propaganda in the Western media and belligerent speeches by US President Joe Biden and Secretary of State Antony Blinken, fighting between the American-funded Ukrainian army and pro-Russian separatists in the East Ukrainian Donbass has escalated since Thursday. There have been thousands of violations of the ceasefire that was brokered in 2015.

The civil war erupted in the wake of the February 2014 coup in Kiev, which had been heavily funded and backed by the US and was effectively carried out by far-right forces like the Right Sector and the Azov Battalion. The conflict has already claimed over 14,000 lives and left at least 3.5 million people in need of humanitarian assistance—almost a tenth of Ukraine’s population.

Since Thursday, civilian infrastructure across Donetsk, including kindergartens and schools, has been subject to shelling. According to the separatists in Donetsk, one civilian was killed in Monday’s shelling by the Ukrainian military.

On Friday, separatists in Donetsk and Lugansk initiated the mass evacuation of the civilian population to Russia, excluding men aged 18 to 55. So far, at least 49,000 people have reportedly arrived in Russia, most of them in the Rostov region. Kilometer-long lines of cars waiting to cross the border have been reported since Friday.

Up to 700,000 women, children and elderly people may be evacuated from Donetsk alone. With most of these people already completely impoverished before they were forced to flee, they are now faced with the loss of virtually all of their belongings and a catastrophic social and public health situation in Russia, where over 150,000 new COVID-cases are being reported every single day.

As the fighting continued to escalate over the weekend, the separatist authorities called upon all men capable of carrying arms to take weapons into their hands.

On Monday afternoon Moscow time, it was reported that the Russian secret service FSB, along with troops from the interior ministry, opened fire and killed five Ukrainian soldiers, while taking one captive. Russian news had also reported on Friday that Ukrainian bombshells had exploded in Rostov near the border with Ukraine.

Also on Monday afternoon, Putin convened an extraordinary session of Russia’s National Security Council, arguing that the situation in the Donbass had become “critical.” The meeting was also attended by the heads of the separatist so called “People’s republics” of Donetsk (DNR) and Lugansk (LNR). Both were formed by pro-Russian separatists in the wake of the 2014 coup in Kiev. At the meeting, one leading Russian official after another argued in favor of Russian recognition of these republics as “independent.”

Late Monday evening Moscow time, Putin gave an hour-long address to the nation. Beginning with an anticommunist tirade in which he denounced the 1917 October Revolution and claimed that Ukraine was a “creation” of “Bolshevik, Communist Russia,” Putin devoted much of the speech to glorifying the Tsarist Russian Empire and various Tsarist generals.

He pointed to the systematic encirclement of Russia by NATO, complaining that US President Bill Clinton responded “extremely coolly” when he asked him in 2000 whether or not the US would support Russia’s accession to NATO. The Russian president then discussed at length the implications of the US-backed coup of 2014 for Russia, which, in his words, had turned Ukraine de facto into a “colony” and “puppet” of the US.

Putin noted that Ukraine’s adoption of a new military strategy in March 2021 meant that the country was openly preparing for war with Russia. With the US and NATO ignoring Russia’s demands for security guarantees and de facto arming Ukraine, Russia, he said, had a “knife at its throat.” Putin also alleged that a “genocide” against Russians was taking place in East Ukraine and argued that the Kiev government has de facto ignored the Minsk Agreements of 2015.

On that basis, Putin claimed that recognizing the separatist territories of the self-proclaimed Donetsk and Lugansk “People’s republics” was the only way to safeguard Russia’s security interests.

Right after the speech, Putin signed two decrees recognizing the DNR and LNR as “independent” and calling for the preparation of treaties of friendship between the republics and Russia. The decrees also stated that, until such an agreement would be signed, the Russian Ministry of Defense would provide troops to both republics “to safeguard peace.” Shortly thereafter, Putin gave the order to send Russian troops into Donetsk and Lugansk.

Putin’s speech led to the most severe collapse on the Russian stock market—by over 14 percent—since the 2008 world financial crisis. Since Monday was a holiday in the US, most of the sell-off was driven by European and regional, including Russian, investors. Some of Russia’s biggest companies and banks, including the state-owned oil company Rosneft and Sberbank, lost between 21 and 25 percent of their value. On international markets, the Brent oil price rose above $97 per barrel, the highest price since 2014.

US President Biden immediately denounced Putin’s move as a violation of Ukraine’s sovereignty and territorial integrity and signed a decree prohibiting any trade with the DNR and LNR. In the decree, he described the recognition of the DNR and LNR as an “an unusual and extraordinary threat to the national security and foreign policy of the United States.” Everyone who engages in trade with or donates to the authorities of the DNR and LNR will henceforth be banned from entering the US.

So far, the Houthi rebels in Yemen, who have been engaged in a year-long civil war with US-backed Saudi Arabia, have endorsed Russia’s recognition of the DNR and LNR. Nicaragua’s Daniel Ortega indicated that he supported Putin’s decision but has not officially recognized the separatist republics.

US officials announced that more sanctions will be forthcoming on Tuesday. The EU and UK also announced severe sanctions, as did Japan and Australia.

In a brief address to the nation, Ukraine’s President Volodymyr Zelensky, who had already spoken with Biden, claimed, in clear defiance of his government’s saber rattling and official military strategy, that it was only interested in “peace.” He insisted that Putin’s recognition of the DNR and LNR constituted a threat to Ukraine’s territorial integrity and that Ukraine was entitled to “self-defense” under these conditions.

Monday’s escalation comes after weeks in which the US and NATO recklessly ratcheted up tensions with Russia, including by sending 5,000 troops of the 82nd Airborne Division to Poland and 300 Javelin missiles to Ukraine, and unleashing a torrent of war propaganda in the media.

The unfolding war crisis is the culmination of the decades-long effort to encircle Russia and subjugate the entire former Soviet Union as part of the attempts of US imperialism to maintain its global hegemony.

Fundamentally, the drive to war is rooted in the decline of US imperialism and the profound crisis of the world capitalist system, which has been severely accelerated by the COVID-19 pandemic. Sitting on top of a social powder keg, the US ruling class, in particular, has been driven into a war frenzy, desperate to find a path to divert the immense social tensions outward and close ranks within the ruling class.

The dynamics unleashed by these processes are rapidly spinning out of control. In its statement from February 14, the International Committee warned, “War with Russia in Ukraine, however it begins or whatever the course of its initial stages, will not be contained. It will follow an uncontrollably expansive logic. Every state in the region will be drawn into the conflict. The Black Sea, which laps across the shoreline of seven countries, will be transformed into a cauldron of escalating conflict, sweeping across Transcaucasia, the Caspian Sea region, Central Asia and beyond.”

Johnson government adopts “dying with COVID” strategy for the UK

Thomas Scripps

Britain’s government has finalised its “living with COVID” strategy. Speaking to parliament yesterday, Prime Minister Boris Johnson made clear this should properly be called a plan for workers “dying with COVID”. He announced:

• From today, the end of guidance that school staff and students test twice weekly.
• From this Thursday, the end of the legal requirement to self-isolate after a positive test, routine contact tracing and self-isolation support payments.
• From March 24, the end of COVID sick pay provisions.
• From April 1, the end of free testing for the general public.

Every word uttered in defence of this murderous policy is based on a lie. Johnson told the BBC on Sunday, “We are now one step closer towards a return to normality and finally giving people back their freedoms while continuing to protect ourselves and others.”

Prime Minister Boris Johnson (centre) speaking at Monday's Downing Street press conference with (right) Sir Chris Whitty and (left) Sir Patrick Vallance (screenshot from video/Boris Johnson/Twitter)

The Conservative government’s strategy is based on the removal of all protections and will not lead to “normality”.

Scientific Advisory Group on Emergencies (SAGE) member Professor Robert West told Times Radio that the government had decided to “abdicate its own responsibility for looking after its population,” adding, “It looks as though what the Government has said is that it accepts that the country is going to have to live with somewhere between 20,000 and 80,000 COVID deaths a year and isn’t really going to do anything about it.”

Medium-term scenarios outlined on February 10 by SAGE in a universally ignored briefing raise even graver concerns. Professor Maggie Rae, President of the Faculty of Public Health, called the ending of free testing “incomprehensible”. There is no sound scientific or medical basis for the government’s policy.

Johnson blurted out his real motivation in his BBC interview. “We need people to be much more confident and get back to work… We don’t need to keep spending at a rate of £2 billion a month [on testing].”

The super-rich view any public health response to the pandemic as a state-subsidised interruption of the flow of profits, which must end. Their “new normal” does not mean doing away with the virus, but with the victims of the virus who will be forcibly exposed to COVID-19 in their workplaces.

The “work till you drop” drive has reached such a pitch that Britain’s 95-year-old monarch has been enlisted as the royal face of the campaign. “Queen vows to carry on working with Covid,” cheered the Daily Telegraph; “Queen, 95, hit by Covid… but she vows to work on,” the Sun; the Mirror reported, “Queen gets Covid but she carries on”; the Metro ran the inevitable “Queen keeps calm and carries on”; and the Daily Mail touted “Queen’s Covid example to us all”.

The boardrooms and their media outposts have worked themselves into such a frenzy that no one in the corporate media has asked whether risking the life of the head of the British state at a time of extreme political crisis, including within the monarchy, is a good idea.

The second lie is that COVID-19 can now be managed by, in Johnson’s words, “encouraging personal responsibility.” He added cynically, “It’s very important we should remain careful”.

How, exactly? Interviewed on Sky News yesterday, Business Minister Paul Scully said that for people who contracted COVID, “like any transmissible illness you’d stay at home… but it’ll be down to themselves or down to their employer.” In fact, it will be entirely “down to their employer” with workers doubly pressured by having no access to even limited sickness and self-isolation payments.

Without free testing, moreover, most people will have no way of knowing whether or not they even have a COVID infection. The virus will be allowed to run rampant.

Enter the third lie, that the combination of the Omicron variant and the vaccination programme have ended any serious threat from COVID. The UK is “in a different world,” Johnson said Sunday. “I want to be able to address the problems of the pandemic with a vaccine-led approach.”

It is Johnson and his supporters that are living “in a different world” or trying to sell the myth of one. Omicron is still taking a significant toll on health and lives, with the long-term implications still unknown. Vaccinations, a vital tool in the fight against COVID-19, are being continually undermined by the removal of other public health measures, allowing the virus to circulate and new variants to develop.

As the government’s Chief Scientific Officer Sir Patrick Vallance admitted yesterday, there is “no guarantee” that the next variants will be less severe. “We expect there to be further variants and they could be more severe.”

More than 1,000 cases of the more transmissible BA.2 subvariant of Omicron had already been detected in the UK by the start of this month. Preliminary results from a study at the University of Tokyo suggest it may be more severe and resistant to treatments. Deltacron, a hybrid of the more deadly Delta and Omicron variants, has also been confirmed in the UK.

Even with additional shots, immunity from vaccination is waning. A recent study of triple-jabbed people by the US Centre for Disease Control found that protection against hospitalisation fell from 91 percent during the first two months to 78 percent after four. For protection against visits to urgent care and emergency departments, it fell from 87 percent to 66 percent. After more than five months, effectiveness fell to 31 percent, though the researchers note the estimate was “imprecise because few data were available”.

Plans for a fourth jab in the UK, announced by Health Secretary Sajid Javid yesterday, are being limited to people aged 75 and over, the immunosuppressed and residents in old age care homes.

As SAGE advisor Professor West told Times Radio he would be “very surprised” if the “living with COVID” strategy would be cost effective, given the economic costs of Long COVID and hospital admissions. But this underestimates the brutality of what is planned.

From the beginning, the government’s preferred “herd immunity” policy has been to trade the lives of the old and the clinically vulnerable off against the profits of the rich. Its attacks on social security payments and underfunding of the National Health Service show it has no intention of caring for the aged and infirm. Seeing them die is seen as a positive boon, as Johnson made clear in October 2020 with his infamous declaration, “No more fucking lockdowns. Let the bodies pile high in their thousands!”

Johnson is given a free hand to act by the Labour Party and the trade unions. He made his statement to a parliamentary chamber that looked half asleep.

Labour leader Sir Keir Starmer raised some pro-forma concerns, to be forgotten in a week’s time, advancing Labour’s obscenely-named plan to “live well with COVID”, framed as a more responsible version of the government’s policy. He said, in reference to testing, “If you’re 2-1 up with ten minutes to go you don’t sub off one of your best defenders.”

The UK is not “2-1 up”, it is 180,000 lives down.

Trades Union Congress General Secretary Frances O’Grady agreed with Johnson, that “We are all looking forward to getting on with our lives,” before appealing to his criminal government to “put the country and public health first” by maintaining free tests and improving sick pay. This is something neither she nor any union leader has any intention of fighting for.

Johnson’s announcement applies specifically to England, with the devolved governments of Scotland, Wales and Northern Ireland following their own timescales. But whatever political points they try to score today over the Tories, they will follow suit in short order, as they have done throughout the pandemic.