South Africa: Corruption scandal threatens Ramaphosa’s presidency and the ANC’s grip on power

Jean Shaoul

A damning parliamentary report into the theft of a vast sum of cash at President Cyril Ramaphosa’s game farm recommended an investigation by parliament. It could lead to his impeachment, if two-thirds of the legislators vote against him, making him the first South African president to face impeachment.

Ramaphosa with American President Joe Biden, September 2022. [Photo: The White House]

It threatens both his grip on power, just two weeks before he is due to be re-elected as ANC leader, and that of the ruling African National Congress (ANC) which faces elections in 2024. Last year’s local elections saw the ANC lose its majority amid increasing anger over its corrupt rule.  

The report published on Wednesday concluded that Ramaphosa may have broken the law over a scandal that has been simmering since June. It involves the circumstances surrounding the theft in 2020 of at least $500,000 stashed away, supposedly in a sofa, at his Phala Phala game reserve.

It raised questions about why he was keeping such a large sum of money—variously estimated at between $500,000 and $5 million—at his farm; whether he was holding undeclared foreign currency and evading taxation; why he had failed to inform the police about the robbery and whether he had misused official resources by asking a senior bodyguard to track down the culprits, who then appeared to have been paid off. Ramaphosa faces two other investigations, one by the national prosecutor’s office and another by the public protector, a corruption watchdog.

It has prompted calls from the main opposition parties as well as the faction within the ANC supporting the former President Jacob Zuma for him to step down. The National Assembly is due to meet Thursday to discuss the report and decide whether to move an impeachment hearing. This would require at least 30 ANC members to vote with the 170 opposition members from 13 different parties. That is not inconceivable, given the opposition to Ramaphosa from the Radical Economic Transformation (RET) faction, which is close to Zuma, who was forced to step down in 2018 over allegations of corruption and nepotism.

Zuma faces corruption charges relating to a 1999 arms deal in a trial scheduled for next year. Last year he served two months of a 15-month prison term for contempt of court for a separate legal matter before being released on medical parole, since rescinded by the high court.

Ramaphosa, a former leader of the National Union of Mineworkers of South Africa (NUM), the country’s largest and most powerful trade union, had played a key role in tying black South African workers behind the ANC’s cynical slogan of “black empowerment” which is aimed at creating a thin layer of black capitalists. In 1991, he was elected General Secretary of the ANC and together with the South African Communist Party worked to suppress workers’ struggles and prevent them taking a revolutionary approach to ending the hated apartheid regime, thereby ensuring the survival of South African capitalism.

Ramaphosa was one of the chief beneficiaries of black empowerment, becoming one of South Africa’s richest men and a director in a major mining corporation. It was in this capacity that he demanded a police clampdown on striking miners, precipitating the Marikana massacre of 34 striking miners, shot dead in 2012 at a mine owned by the Lonmin group. It was in the aftermath of this murderous action, carried out with the full backing of the Congress of South African Trade Unions-(COASTU) affiliated NUM, that “the butcher of Marikana” was elected as the ANC’s general secretary in 2017. He was elected amid widespread disgust with the ANC that had presided over one of the most socially polarised countries in the world, with a then unemployment rate of 28 percent.

Mine workers sing as they wait for the start of commemoration ceremonies near Marikana in Rustenburg, South Africa, Tuesday, August 16, 2022. South Africa marks on Tuesday 10 years since the Marikana massacre, where 44 people were killed during a mine strike at a platinum mine near Rustenburg, North West province in August 2012. [AP Photo/Themba Hadebe]

His election promises to root out corruption were a feeble attempt to restore the flagging fortunes of the ANC that has now been blown apart. The South African economy had tanked after years of looting by the corrupt Zuma regime. With the selection of Ramaphosa, a former union leader, the ruling class cynically expected that the working class would welcome him with enthusiasm.

Since then, Ramaphosa has done everything he could to prop up South African capitalism, cutting corporate taxation as he drove down workers’ pay, reneging on public sector wage deals and slashing living standards. Inflation is at its highest rate since the rise in global food prices in 2008-09, running at an annual rate of 7.7 percent in October with basic foods prices increasing by 12 percent over the last year. A loaf of white bread now costs 16.18 rand compared with 13.55 a year ago and the price of fuel has risen by 56.2 percent from last year.

The rand has fallen from 15 to the US dollar in December 2021 to 17 this week as the South African central bank, along with its counterparts across the world, discussed further interest rate hikesa move that will exacerbate the economic crisis engulfing the already heavily indebted country.

South Africa is the most unequal society on the planet. A staggering 33 percent of workers have no jobs, the third highest unemployment rate in the world, while 30.3 million of the country’s 59 million population live in poverty and 13.8 million face food scarcity. The government’s response to the COVID-19 pandemic that saw more than 102,000 people lose their lives—if official figures are to be believed—served to exacerbate social and economic suffering.

All this has earned Ramaphosa the undying hatred of South African workers, to the extent that hewas booed off the stage by striking gold miners at Sibanye-Stillwater at this year’s May Day’s rally in Rustenburg, the centre of the country’s mining region where he was COSATU’s guest of honour. There have been strikes and protests over the skyrocketing cost of living, power outages for up to 10 hours a day and widespread unemployment that have made living conditions intolerable, forcing COSATU and the South African Federation of Trade Unions, two of the largest trade union federations, to call a “mass stay away” of non-essential workers in August demanding the ANC take action.

Ramaphosa was initially set on resigning following the scathing outcomes of the report but made a U-turn, apparently after discussions with his legal team and close allies, who fear both asocial explosion and the loss of their own privileged positions if he is ousted.

Even if he survives a parliamentary vote, his position is widely seen as untenable, precipitating elections for a new leader at the ANC meeting later this month and for the presidency by the National Assembly. The South African rand has fallen sharply amid fears of the instability that could hold back the “reforms” demanded by the international financial institutions and markets as the country debt rises to 84 percent of GDP.

Without Russian gas imports, France prepares winter power cuts

Samuel Tissot

On Thursday, French Prime Minister Elisabeth Borne distributed instructions to regional political leaders to prepare the country for regular electricity outages in coming weeks and months. This includes contingency planning for a total blackout of the French power grid.

The government’s circulation of the document is a tacit admission that the energy “sobriety” campaign called for by President Emmanuel Macron on July 14 has failed, and that large parts of France face significant electricity and heating cut-offs this winter.

The coal power plant of Saint Avold will reopen this winter after having been closed earlier, in Saint-Avold, eastern France, Thursday, September 8, 2022. French President Emmanuel Macron had previously called for a sharp 10% reduction in the country's energy use to avoid the risk of rationing and cuts this winter, amid tensions with supplier Russia over the war in Ukraine. [AP Photo/Jean-Francois Badias]

High energy prices in Europe are primarily a consequence of NATO’s war against Russia in Ukraine. While EU governments attempt to shift the blame to Putin for Europe’s energy shortage this winter, it was their own decision to cease Russian gas and oil imports in the spring, bowing to US and NATO demands.

The instructions were distributed while Macron was in the United States on a state visit. Despite complaining about the ruinous impact of the US’s nationalist economic policy on French energy prices, Macron reiterated his government’s continued commitment to fight NATO’s war in Ukraine against Russia. This includes continuing ongoing sanctions against Russia, even if this means the French population goes cold this winter.

The energy rationing measures circulated in the French government’s plan have not been known in France since the aftermath of the Second World War.

Sixty percent of the population live in areas that will be subject to alternating power cuts where electricity will be shut off during peak hours. The regions impacted by this will alternate day-by-day, but it is estimated that each outage will affect four million people. The outages will be announced to the impacted population at 5 p.m. the day before.

While French government spokesperson Olivier Véran stated that, “We are not in a disaster movie,” he went on to explain that there will be likely be periods this winter where people “cannot withdraw cash” and traffic lights will stop working.

On Wednesday, Christel Heydemann, general manager of Orange, France’s largest telecommunications provider, warned that during periods of electricity cuts all phone and internet signal would be lost, preventing even emergency calls.

The government is instructing local authorities to supply critical infrastructure such as hospitals, fire stations and prisons with emergency generators in order to continue functioning during down periods.

Schools in regions impacted by power cuts will also be shut. This exposes the hypocrisy of the Macron government’s support for imperialist war on Russia in Ukraine. The same government that forced children and teachers back into packed classrooms amid the free spread of COVID-19 in the name of protecting children’s educational continuity and mental health, is forcing children to stay home and freeze to support the war effort in Ukraine.

The inter-ministerial crisis unit is also preparing contingency plans for a total blackout, which is possible if average energy consumption cannot be further cut down, or if demand spikes due to prolonged cold weather.

Given the density and interconnectivity of energy lines in Paris, government officials have said it is likely the capital will not be subject to rolling power cuts. As one official explained, “You can’t cut off Le Bon Marché [department store] without cutting off the Necker hospital.” This means smaller cities, towns, and rural areas would shoulder the brunt of the cuts.

Although the government’s measures are being prepared for peak energy consumption in January and February, the energy crisis is already having an impact on the French economy. Compared to November last year, 7 percent less energy was consumed in France. This is mostly due to cuts in industrial production as electricity costs increase, according to the Network of Electricity Transport.

In the new year, French consumers will also see their bills increase by fifteen percent. This is due largely to energy companies’ price-gouging expensive US liquefied natural gas exports to Europe and France, which replace Russian gas.

While the primary cause of the energy shortage in France is the cessation of Russian gas and oil imports, the crisis has been exacerbated by the flagrantly inadequate maintenance of France’s nuclear power plants. In early November, only 30 of France’s 56 reactors were connected to the electricity grid. Repairs and safety checks on the remaining reactors are not expected to be totally completed until 2025.

While the German Federal Office for Civil Protection and Disaster Assistance stated that it is “considered unlikely that targeted power cuts will occur regionally,” large surges in demand during cold periods could lead to similar measures being put in place in Germany and other parts of Europe previously dependent on Russian energy imports.

The energy crisis in France and Europe is ultimately a product of class rule. Chasing its share of the spoils of victory over Russia in Ukraine, and using the war as an excuse to kickstart its own re-militarization, the European bourgeoisie decided to subordinate the health and well-being of the working population to its geo-strategic aims.

In September, the EU’s voluntary policy became irreversible following the bombing of the NordStream pipeline, which strategically benefited US imperialism by ensuring continued European reliance on its gas supply. The bombing was blamed on the UK, the principal US ally in Europe, by the Russian government.

Nonetheless, as energy companies in France and across Europe continue to achieve record profits in 2022 through price hikes, no significant action has been taken to protect energy supplies for the mass of the population this coming winter.

Just as it handed trillions to the banks and corporations and sacrificed nearly 2 million lives to COVID-19 to appease the markets, the EU is handing billions to the Ukrainian government while forcing its population to freeze this winter.

High excess mortality as coronavirus death rates rise in Germany

Tamino Dreisam

Excess mortality has reached record levels in Germany and coronavirus deaths are higher than in any previous year. Nevertheless, governments of all parties at federal and state level have declared the pandemic over and lifted the last remaining protective measures.

According to a press release from the German Federal Statistical Office (Destatis), average excess mortality so far in 2022 is 9 percent, meaning deaths this year are 9 percent higher than the median of the last four years, 2018-2021.

Throughout most of the summer, excess mortality was in double digits: 9 percent in June, 12 percent in July, 11 percent in August and 10 percent in September. In October, excess mortality reached a record 19 percent. Calculations by the EuroMOMO network show that there is a similar trend in other European countries.

A total of 92,000 people died in Germany in October, 14,560 more than the average per month for the last four years. The high number of additional deaths can be attributed in significant part to those dying as a result of infection with the coronavirus. According to the Robert Koch Institute, 4,334 people succumbed to the virus in October, significantly more than in the same period in pandemic years 2021 (2,493 deaths) and 2020 (1,482 deaths).

Hospital Diakovere Henriettenstift in Hannover, Germany [Photo by Michał Beim / CC BY 4.0]

Compared to previous pandemic years, excess mortality this year can no longer be readily attributed to deaths resulting directly from infection with the virus. In 2020, excess mortality was almost entirely consistent with the number of reported coronavirus deaths. In 2021, this was still largely the case. By 2022, these accounted for just under half of the excess mortality.

However, several scientists believe that a crucial proportion of the higher excess mortality is due to indirect consequences of the pandemic, such as hospitals and hospital staff being overloaded.

For example, Jonas Schöley of the Max Planck Institute for Demographic Research (MPIDR) in Rostock, Germany, notes that in the autumn of 2022, “only about half [of excess mortality] can be explained by registered COVID mortality.” For the remainder, “it is still open what the reason is.” However, he believes, “it is plausible that we will see more indirect effects in 2022.”

Schöley points to the example of England and Wales. There, excess mortality is also caused by ambulances being delayed for more than 10 minutes. This is a consequence of the overloading of the health care system and thus indirectly of the coronavirus pandemic.

Speaking to Der Spiegel magazine, Carsten Tschöpe, a cardiologist and head of the cardiomyopathy unit at Berlin’s Charité hospital, pointed out the potentially serious long-term consequences of a COVID infection. With the blood vessels, SARS-CoV-2 attacks “a very central structure of the body.” There is no organ in the human body that was not dependent on blood vessels, he said. “The organs lose parts of their function when they are no longer sufficiently supplied with blood. This causes global damage throughout the body.” According to the magazine, Tschöpe was convinced “that COVID late effects also contributed to the 19 percent excess mortality in October.”

Other scientists also cite the earlier-than-usual onset of the flu epidemic and the circulation of other respiratory illnesses as possible contributors to the high excess mortality. The flu epidemic had been absent in recent years due to existing pandemic measures around the world. Once these were lifted, the flu wave returned particularly aggressively, creating a “twindemic” in which dangerous dual infections from COVID-19 and influenza are also possible.

Regardless of the exact different direct triggers for high excess mortality, the deeper cause lies in the subordination of public health to private profit, which found its sharpest expression in the response to the pandemic by all governments. Worldwide, life expectancy fell because of the pandemic—by nearly half a year in Germany, where more than 158,000 people officially succumbed to the virus.

And the situation is worsening with each passing day. About 1,000 people in Germany are dying from the virus every week, while even more infectious variants are spreading. On Bavarian Radio, Federal Health Minister Karl Lauterbach (Social Democratic Party, SPD) warned of a winter wave—but is doing nothing to avert it.

On the contrary, federal and state governments are ending the last remaining measures. A week ago, Bavaria, Baden-Württemberg and Schleswig-Holstein lifted the quarantine requirement, and other states have already announced their intention to follow suit. Because of this decision, the Kieler Nachrichten already reported that teachers who are coronavirus-positive but have no symptoms of the disease will have to continue teaching.

Bavaria and Schleswig-Holstein also plan to lift the requirement to wear a mask on public transport in a few weeks. In March, Bremen senator (state minister) and chairwoman of the state transport ministers, Maike Schaefer (Greens), also advocates a nationwide abolition of the requirement to wear a mask on public transport. She told the dpa news agency, “My goal is for the federal states to agree on a uniform approach here.” For the upcoming special conference of department heads, Bremen had therefore submitted a motion to abolish the mask-wearing requirement for public transportation nationwide when the “Deutschlandticket” (enabling local and regional travel over the summer for just €9 a month) was introduced at the beginning of March.

The reckless approach of governments at all levels in lifting the remaining coronavirus protections despite the enormous excess mortality illustrates the indifference of the ruling class to human life. It deliberately pursues policies that place profits above human lives and aim to reduce life expectancy. If the ruling elites get their way, health and welfare spending will be reduced not only through direct budget cuts, but also by perpetuating the pandemic and thus mass death.

Sri Lankan president hints at dangers of conflict in Indian Ocean

Pani Wijesiriwardena

Sri Lanka is coming under intensifying pressure to line up more fully with the US-led confrontation with China in the Indo-Pacific along with allies such as Japan and Australia, and its chief strategic partner in the region, India.

Top US and Indian officials have held talks with leaders of the Sri Lankan government during recent months to further the campaign. Samantha Power, the chief of United States Agency for International Development (USAID) visited Colombo in mid-September, offering a pittance in aid, while seeking stronger strategic ties with Sri Lanka.

Sri Lankan President Ranil Wickremesinghe arrives at the parliamentary complex in Colombo, Sri Lanka on Aug. 3, 2022. [AP Photo/Eranga Jayawardena]

As reported by the Sunday Times, India’s Research and Analysis Wing (RAW) head Samant Kumar Goel, landed in Colombo on November 27, met with President Ranil Wickremesinghe and engaged in “wide-ranging talks.”

Meanwhile, Sri Lankan Foreign Minister Ali Sabry arrived in the US on November 29 where he has held talks with USAID chief Power and will meet US Secretary of State Anthony Blinken and members of Congress. China will undoubtedly be a central topic.

President Wickremesinghe highlighted the geopolitical dilemmas confronting Sri Lanka in a speech on November 11 to officers graduating at the Kothalawala Defence University. “You are living in a different world than what we were born earlier. When we were born, there was no tussle for the Indian Ocean. At one stage no one wanted it. Today it is not so…

“In the 70s, when I became a minister all these were not required. Most people were not focusing on the Indian Ocean, but on the Pacific and the Atlantic. Today it is not so. Today the total competition in the world has gone from US and Russia to US and China. So, what happens in Russia is only a side show. What happens in this area is far more important. So, we have to be ready for it.”

Wickremesinghe reiterated the government’s stance, saying: “Sri Lanka’s position is we are not involved in big power rivalry. We don’t want big power rivalry. Whether the US is in the Indian Ocean we have no objections. We have no objections to Japanese or Chinese or others being in the Indian Ocean as long as there is no rivalry.”

Regardless of Wickremesinghe’s comments, the Indian Ocean and broader Indo-Pacific region are at the centre of the mounting US-led provocations and conflict with China. Even as it wages war against Russia in Ukraine, the US is consolidating alliances throughout Asia, building up military forces throughout the region and vilifying China across a range of issues that could provide the pretext for war.

The US has forged a close strategic partnership with India transforming it into a frontline state of US war drive against China. India’s regular naval war games with US, known as the “Malabar exercises,” which started in 1992, have been expanded and now involve all members of the Quadrilateral Security Dialogue, or Quad, a quasi-military alliance of the US, India, Japan and Australia.

In a particularly provocative step, the latest Malabar exercises were conducted in the East China Sea, from November 8 to 15. After the naval exercises ended, the US and India held their annual bilateral military games known as “Yudh Abhyas” from November 15 to December 2. This year’s military drill involved high-altitude exercises, just 100 kilometers from the Line of Actual Control, the border between India and China, where a military stand-off continues after clashes in May 2020.

Sri Lanka is attempting to maintain an increasingly difficult balancing act. Amid a profound economic and social crisis, the Wickremesinghe government cannot afford to alienate China, which is the country’s main creditor. As a part of talks with the International Monetary Fund for debt restructuring, the government needs to negotiate relief in relation to Chinese loans.

At the same time, while Sri Lanka officially remains non-aligned, the government is seeking to avoid a confrontation with US imperialism. Following the end of the island’s protracted communal war against the separatist Liberation Tigers of Tamil Eelam (LTTE) in 2009, the government of President Mahinda Rajapakse came under relentless pressure from Washington to end its ties with China. The US used the threat of prosecutions over war crimes and when that was ignored, engineered the ouster of Rajapakse in the 2015 election and the installation of a pro-US government of President Maithripala Sirisena and with Wickremesinghe as prime minister.

Wickremesinghe, who is well known for his pro-American orientation, has formally maintained a “neutral” stance even while leaning towards Washington. During his November 11 speech, Wickremesinghe said that Sri Lanka’s “future depends on its ability to maintain freedom of navigation” in the Indian Ocean. The US repeatedly uses the banner of “freedom of navigation” to mount naval provocations against China.

At the same time, Sri Lanka has significant military ties with the US, including an Acquisition and Cross-servicing Agreement that allows the American navy access to Sri Lankan ports for refueling and other supplies. The Pentagon is assisting the Sri Lankan military to establish a Marine Corps and donated former US Coast Guard cutters to the Sri Lankan navy. The US and Sri Lankan militaries conduct limited joint exercises but this year some 50 Sri Lankan military personnel took part in the US RIMPAC exercises—the world’s largest naval drills.

As it accelerates its preparations for war against China, the US cannot tolerate the “neutrality” of the Wickremesinghe regime. Sri Lanka is strategically placed across the major Indian Ocean sea lanes connecting Europe, the Middle East and Africa with East Asia, including China. US-backed UN Human Rights Council resolutions passed recently are aimed at intensifying pressure on Colombo. While Washington is not concerned about Wickremesinghe’s loyalty, he is heavily dependent on the party of the Rajapakses which has in the past built ties with China.

Fascism: Israeli Style

Melvin A. Goodman

Photograph Source: eddiedangerous – CC BY 2.0

Israelis dismiss charges of “apartheid against Palestinians” as anti-Semitic propaganda, but Benjamin Netanyahu’s new government will confirm the apartheid nature of the regime, and will provide hints of fascism, Israeli-style.  Netanyahu is not a fascist, but he is a racist and he is considering appointing to his government people who are dangerous racists.  No government in Israel over the past seven decades has had government appointees so alien to the ideals that accompanied the creation of Israel.

The new minister for national security (formerly internal security) will be Itamar Ben Gvir, who will control the Border Patrol units in the West Bank that have participated in numerous violent acts against innocent Palestinians.  Ben Gvir is an acolyte of Meir Kahane, a fascist who committed numerous crimes against Israelis before he was assassinated.  Ben Gvir’s party, Jewish Power, will control the Ministry for Development of the Negev and the Galilee.  His party’s new Ministry of Heritage will be responsible for historical and archeological sites in the West Bank.

The new minister for finance will be Bezalel Smotrich, who will try to control the West Bank Civil Administration that is currently directed by the Defense Ministry.  Smotrich and Ben Gvir will do their best to limit the powers of the Defense Ministry, particularly on the West Bank.  Their policies will undermine Israeli relations with those Arab states that recognize Israel, particularly the UAE, Bahrain, and Morocco.  According to Yossi Alpher, a distinguished Israeli security analyst, they may even try to annex the West Bank while the global community is concentrating on Ukraine, Russia, and Iran.

The mainstream media have downplayed the arrest records of both Ben Gvir and Smotrich, which reflects their fascist actions over the past decades.  Netanyahu himself is currently on trial on multiple charges of corruption, and he is expected to weaken Israel’s judicial branch in order to escape conviction for corruption.  Alpher believes that the Netanyahu government will try to reduce the power of the High Court of Justice.  Netanyahu’s highest priority, like that of his good friend Donald Trump, is staying out of jail.

A new deputy minister in the office of the President, Avi Maoz, is dedicated to bolstering Jewish identity among Israelis and is a strong opponent of Israeli Jews who are not Orthodox.  He is anti-LGBTQ, and against women serving in the military.  References to “Jewish identity” and “heritage” point to fascist policies, according to Alpher.

What does this mean?  Well, at a minimum the new coalition government will try to legalize at least 70 illegal settlements or “outposts,” which are currently a violation of Israeli law and have at least 25,000 occupants.  Palestinians in East Jerusalem will be policed in a more militant and violent fashion.  Law enforcement generally will be politicized, and fascists will be in greater control of the day-to-day workings of the government.  It can be expected that Area C of the West Bank, which represents more than 60% of the West Bank and is under some Palestinian control, will face de facto annexation.  There are more than 200,000 Palestinian residents in Area C; they will presumably face greater pressures to emigrate.

Israeli policy toward Gaza is worse, but rarely gets discussed in the international press.  In addition to using overwhelming military force against the Palestinians in Gaza, Israel has limited their use of electricity; forces sewage to be dropped into the sea; makes sure that water remains undrinkable; and ensures fuel shortages that cause sanitation plants to be shut down.  Gaza is essentially an outdoor prison, and Netanyahu will continue the policies of enforced desperation among the innocent civilians who must try to live in these conditions.  If there is another Intifada, Israel has only itself to blame.

It is long past time for the U.S. government and the Jewish diaspora in the United States and Europe to press the Israelis for a more humane policy toward its Palestinian community as well as the need for a more centralist representation in their new coalition government.  No Israeli government in recent years has been prepared to stop the violence against the Palestinians in the occupied territories.  No U.S. government in recent years has done anything to put pressure on the Israelis.  Meanwhile, Israelis receives more military aid from the United States than any government other than Ukraine.  Israelis play tough; it’s time for the United States to do so as well.

Macron warns of “fracturing” of NATO alliance on state visit to Washington

Alex Lantier

French President Emmanuel Macron’s three-day visit to Washington revealed the bitter economic and geopolitical rivalries tearing apart the NATO alliance as it wages war on Russia in Ukraine.

On Wednesday, Macron publicly attacked the $430 billion Inflation Reduction Act (IRA) passed by the US Congress this year. Some $370 billion of IRA funding will subsidize production in the United States or North America—but not in Europe—of advanced green technologies, as corporations worldwide retool to shift to electric cars, make more advanced electronics, and cut greenhouse gas emissions amid the climate crisis. Macron warned that such protectionist US policies, which threaten to exclude European products from US markets, could “fracture” the NATO alliance.

French President Emmanuel Macron speaks as he is welcomed to the U.S. Capitol by Speaker of the House Nancy Pelosi, D-Calif., during his state visit to Washington, Thursday, Dec. 1, 2022 [AP Photo/J. Scott Applewhite]

Thursday, however, Macron held a friendly press conference with Biden in which he called on the United States and France to fight as “brothers in arms” in Ukraine. Maintaining total silence on the impact of the war, which threatens to provoke a catastrophic energy crisis in Europe this winter, Macron then signed a bellicose Joint Statement aligning France with Biden’s aggressive policies against Russia and China.

Macron’s performance must be taken as a warning on the mortal political and economic crisis of world capitalism. Deeply-rooted economic conflicts that twice in the 20th century exploded into world wars between the United States and Germany, conflicts aggravated today by climate change and the COVID-19 pandemic, are erupting to the surface of political life. Moreover, the NATO powers are finding no way to paper over their differences beyond escalating military threats against major nuclear-armed powers.

Arriving in Washington, Macron made clear that his visit is part of a struggle between American and European capitalists over control of global markets. Criticizing the IRA at a lunch Wednesday at the US Congress on climate and biodiversity issues, he said: “This is super-aggressive for our companies.”

Macron added, “I don’t want to become a market for American products, because I have the exact same products as you. I have a middle class that needs to work, and people who need to find work. And the consequence of the IRA is that you may solve your problems, but you are going to make mine worse. I am sorry to be so blunt.”

Speaking later on Wednesday at the French embassy in Washington, Macron again raised the IRA and said: “The choices made … are choices that will fracture the West.”

Macron stated that the mounting US war threats against China, notably over Taiwan, are also aimed at European interests. He said, “We should not fool ourselves, there is a risk here: the United States is looking after first of all the United States—which is normal, we do the same for ourselves—and then to its rivalry with China. And in this, in some sense, Europe and thus France are treated as a variable it can use to adjust its policies.”

Despite mounting conflicts between Berlin and Paris, Macron was also speaking for powerful factions of the ruling class in Germany, the European Union’s (EU) hegemonic power. The German news magazine Der Spiegel aired some of these issues in an article titled, “Why there is a threat of a trade war between the United States and the European Union.”

Der Spiegel noted that the IRA continues former US President Donald Trump’s threats of massive US tariffs against German cars. The IRA, it wrote, “stipulates that [subsidized] products must be of North American origin, suspiciously recalling the ‘America First’ strategy. European politicians are looking across the Atlantic with horror. … Even the Chancellor is angry. During his last trip to Asia, Olaf Scholz constantly called for ‘more free trade’ and ‘great progress’ on globalization. Neither the content nor the timing of the US initiative correspond to his remarks.”

Noting the likelihood of flight of auto, battery and high-tech production facilities from Europe to America, Der Spiegel wrote: “Europe is in systemic competition not only with China but also to some extent with America, says Joe Kaeser, the longstanding boss of Siemens … Given how the US government is encouraging investment in America via the Inflation Reduction Act, [Kaeser added,] it is unsurprising that there is ‘flight of capital and production facilities out of Europe and into the dollar.’”

The flight of production facilities out of Europe is accelerated by the mounting energy crisis caused by the US-led war on Russia in Ukraine. Washington demanded that the EU cut off Russian natural gas imports, and Biden invited Scholz to Washington, warning him that the US government would know how to “bring an end” to EU imports of Russian gas via the Nord Stream pipelines in the Baltic Sea. In September, the two Nord Stream pipelines suddenly blew up in massive explosions whose authors remain unidentified, but the event proved very lucrative for US imperialism.

Energy costs in Europe have surged, as US companies demanded ruinous prices for US liquefied natural gas (LNG) exported to Europe to replace Russian gas. This summer, US LNG exports had risen 15-fold over their levels a year earlier, and they surged again after the Nord Stream bombing.

The NATO war in Ukraine not only threatens to bankrupt European firms with energy-intensive operations, however. In line with the global rise in prices for food, energy and other vital products, it is setting into motion a new, catastrophic social crisis for the working class in Europe.

As Macron arrived in Washington, Le Monde reported on orders his government is sending police authorities across France to prepare for unprecedented electricity cutoffs. The plan calls for rolling blackouts hitting 6 million people at a time (9 percent of the French population), mainly from 8 a.m. to 1 p.m. and 6 p.m. to 8 p.m. Subways and trams would shut down, and schools—without heating or light—would close. Cell phone coverage and the functioning of emergency call numbers for fire, police and medical services could also break down.

Le Monde added that the Macron government is also preparing for a “blackout scenario” of a longer collapse of the electricity grid, “but without believing in it,” the newspaper claimed.

Under these conditions, Macron’s pledging that the French people will serve as Biden’s “brothers in arms” in wars around the planet is politically criminal. Macron no doubt hopes European financial aristocrats will thus get a share of the spoils from NATO’s plundering of Russia, China, and the world. The criminality of this calculation is compounded by Macron’s blatant disregard for its impact on the health and livelihood of working and toiling people in France and across Europe.

The only way forward against this policy is the building of an international movement among youth and workers, uniting strikes against inflation that are erupting in America, Europe and around the world against imperialist war and the capitalist system.

The Stalinist bureaucracy’s dissolution of the Soviet Union in 1991 not only paved the way for NATO to wage bloody wars in resource-rich countries from Iraq and Yugoslavia to Afghanistan, Libya and Syria. It threw Eurasia open to US and European corporations and vastly exacerbated the geopolitical rivalries of world capitalism. Washington uses these wars not only to plunder weaker and poorer countries, but also to put its European imperialist rivals on rations.

OECD forecasts worsening global economic outlook

Nick Beams

The Organisation for Economic Cooperation and Development (OECD), a grouping of 33 major economies, has forecast a worsening outlook for the global economy in a report issued last month.

But despite slowing growth and cuts in real living standards, the organisation insists the tightening monetary policies of central banks, aimed at suppressing wage demands by dampening the economy, or even inducing a recession, must continue.

[Photo: OECD]

The focus of the report was on the energy crisis, which it blamed on Russian “aggression,” completely ignoring the fact that the Ukraine war is being driven by the US and its NATO allies as they seek to dismember Russia and accelerate war preparations against China.

In its editorial introducing the report, the OECD said inflation was on the rise because of the COVID-19 pandemic. It had much more prevalent following the Russian invasion, such that because of the surge in prices “real wages are falling in many countries, slashing purchasing power.”

It stated that “fighting inflation,” the code phrase used by all capitalist economic institutions for further cuts in real wages, “has to be our top priority right now.”

The OECD claimed the policy was enjoying “some progress” as there was an easing of price rises in the US, while insisting that “monetary policy should continue to tighten in the countries where inflation remains high and broad-based.”

Furthermore, it wants a two-pronged attack. It was essential that government fiscal policy worked “hand-in-hand with monetary policy.”

If fiscal policy added to inflationary pressures, the editorial said, it would lead to even higher interest rates.

Accordingly, that meant “policy support to shield families and firms from the energy shock should be targeted and temporary… without adding to inflationary pressures and increasing public debt burdens.”

But overall, nothing substantial should be done since “energy prices are likely to remain high and volatile for some time” and “untargeted measures to keep prices down will become increasingly unaffordable, and could discourage the needed energy savings.”

There is a clear parallel here with the response to COVID. While some limited mitigation measures were put in place, they were abandoned in the face of the “let it rip” agenda. On energy prices, the policy is the same—limited “targeted” measures to try to assuage popular anger while pursuing a “let it rip” policy on price hikes and the profit gouging by the major energy corporations and the commodity speculators.

In its analysis of the state of the global economy, the OECD report painted a picture of a steadily worsening situation.

The significant tightening of global financial conditions was “weighing on interest-sensitive spending and adding to the pressures faced by many emerging-market economies.”

While labour market conditions remained “generally tight”—a situation which the central banks want to change with the higher-interest regime—“wage increases have not kept up with price inflation, weakening real incomes despite the actions taken by governments to cushion the impact of higher food and energy prices on households and businesses.”

It said global GDP growth was projected to be 3.1 percent in 2022, around half the pace in 2021, and was expected to slow further to 2.2 percent next year.

Global growth, such as it is, was becoming “increasingly imbalanced with the major Asian emerging market economies accounting for close to three-quarters of global GDP growth in 2023, reflecting their projected steady expansion and sharp slowdowns in the United States and Europe.”

But uncertainty about even this outlook remained high because “the risks have become more skewed to the downside and more acute.” One of those risks is that higher interest rates “slow growth by more than projected, with policy decisions difficult to calibrate given high debt levels and strong cross-border trade and investment links that raise the spillovers from weaker demand in other countries.”

Summing up the outlook, the OCED said the world economy was facing “a period of weak growth and persistent inflation, with elevated downside risks. Tighter monetary policy and higher real interest rates, elevated energy prices, weak household income growth and declining confidence are all expected to take their toll of growth, especially in 2023.”

The best prospect it could offer was a “mild recovery,” projected to get underway in most countries in 2024.

Besides the worsening prospects for the real economy, there are major problems in the financial system.

The OECD warned that a “sharp increase in interest rates” could jeopardise the ability of households and companies to service their debts, “potentially leading to defaults and bankruptcies, and to corrections in house prices.”

It said stress tests put in place after the global financial crisis of 2008 had helped improve the resilience of the banking sector. “Nonetheless, many banks could still face substantial losses if a larger-than-expected downturn occurred, especially in emerging-market economies where banks are particularly sensitive to shocks and have lower capital ratios than in advanced countries.”

Major problems could also erupt in non-bank financial institutions, the size of which has rapidly expanded in the last decade-and-a-half, as a result of rising interest rates.

“Repricing of stretched asset valuations could lead to disorderly market corrections and investor outflows,” it stated. And for “institutions that are highly leveraged, or which are subject to severe liquidity mismatches, such as open-ended funds [those where investors can withdraw their funds on a daily basis], the impact could be particularly large.”

Commenting on the OECD report, Financial Times columnist Martin Wolf sought to place it in a wider context, invoking the definition of “polycrisis” advanced by economic historian Adam Tooze in which “economic and non-economic shocks” are entangled “all the way down.”

He referred to the shocks emanating from the pandemic, the energy shock resulting from war, itself a breakdown in relations among great powers, slow growth, rising inequality, over reliance on credit, the decade of ultra-low interest rates that have led to financial fragility worldwide and the added threat of climate change.

Economists, among others, Wolf wrote, had to cease being confined to “silos,” think “systematically” and recognise “how the economy is interconnected with other forces” and that “navigating today’s storms compels us to develop a wider understanding.”

But such understanding will never be found in any of the institutions of capitalist society, much less a solution advanced to resolve “polycrisis”—or breakdown as it might be more accurately described. This is because it is rooted in the profit system to which they are dedicated to defending and maintaining at all costs.

And so, in the end, as the OECD report makes clear, the only “solution” they advance is deeper attacks on the working class.

Australia: Labor’s new anti-strike industrial relations bill approved by parliament

Martin Scott

The Labor government’s “Secure Jobs, Better Pay” bill will become law, after receiving the approval of the House of Representatives this morning. The legislation was passed by the Senate Thursday night, after Minister for Workplace Relations Tony Burke won the support of independent Australian Capital Territory Senator David Pocock in negotiations over the weekend.

Tony Burke holding a newly-printed copy of the “Secure Jobs, Better Pay” bill [Photo: Tony Burke]

The new laws will grant the pro-business Fair Work Commission (FWC) increased powers to shut down industrial disputes, ban strikes and impose the wage- and condition-slashing demands of big business on workers through arbitration.

The bill is also aimed at expanding the reach of the trade unions, upon which Labor is depending to suppress opposition to its agenda of cuts to wages and social spending. The laws are intended to help the unions reverse a profound decline in membership, which plummeted from 45.6 percent of workers in 1986 to just 14.3 percent in 2020. Just 5 percent of workers aged 15‒19 and 6 percent of those aged 20‒24 are union members.

Pocock called for minor changes to the legislation, exempting small businesses with 15‒20 employees from multi-employer bargaining, as well as the establishment of a committee to review welfare payments prior to annual budget announcements.

These concessions, along with hundreds of other amendments made to the initial 250-page bill since it was introduced on October 27, are an indication of the determination of Burke and the Labor government to put this legislation in place before the end of the year. This is also reflected in the fact that three additional sitting days were added to the parliamentary calendar to ensure there would be time to pass the bill.

This urgency stems from Labor’s recognition that class tensions are already mounting, as workers confront skyrocketing prices and interest rates. More than 128,000 working days were lost to strikes in the June quarter, more than four times the average over the past ten years.

These strikes involved almost 74,000 workers, the most since December 2005. The majority of these workers are nurses, teachers and public sector workers. They have been forced onto the frontline of the COVID-19 pandemic and languish under the lowest wages in the country. It is of considerable significance that these workers are also the most highly unionised workers. Union coverage, in other words, decreases wages, it does not increase them.

Under these conditions, the government is concerned that the measures previously relied upon to suppress workers’ struggles are no longer sufficient and must be strengthened.

The Fair Work Act (FWA), introduced by the previous Labor government in 2009, already grants the FWC sweeping powers to deny workers the right to take industrial action.

Two weeks ago, the FWC ordered a six-month suspension of all industrial action over an almost four-year enterprise bargaining dispute at tugboat operator Svitzer. The company, which has an effective monopoly over towage at Australia’s ports, threatened to indefinitely lock out its workforce in response to limited stoppages and work bans by workers. They were protesting a company offer of a provocatively tiny 1.5 percent wage rise, following a 4-year wage freeze.

Openly acknowledging that this was a premeditated and conscious manoeuvre engineered to prevent workers from striking, the FWC delivered the company what it sought—a free hand to proceed with business as usual, while workers were stripped of any right to oppose Svitzer’s vicious attacks on their pay and conditions.

Under the existing laws, the industrial court and the federal government are empowered to shut down industrial action on the basis that it might possibly cause harm to the economy. Whether this action was initiated by workers or the employer, and whether there was any intention of it going ahead, the outcome will always be that workers are stripped of their basic rights, while no restrictions are placed on the operations of the company.

Labor’s new legislation will allow the FWC to intervene in this manner in any dispute it declares “intractable,” even if there is no possibility of broader economic damage. With no legal right to strike, workers will then have their wages and conditions decided in backroom negotiations between management and union bureaucrats, or directly imposed by the FWC.

But the bill contains additional provisions designed to prevent disputes even reaching that stage. Under the new legislation, union-management conciliation conferences will be required before a strike vote is held, creating the conditions for sell-out deals to be struck before workers are able to disrupt profits for even a minute.

The union bureaucracies not only support and enforce these anti-strike laws—the maritime unions hailed the Svitzer ruling as a “victory”—they were instrumental in drafting both the 2009 legislation and the new amendments. The Australian Council of Trade Unions (ACTU) is a vocal supporter of the bill, and enlisted its members into a campaign on social media and in public meetings to lobby Pocock for his vote.

The legislation will also introduce substantial changes to the Better Off Overall Test (BOOT) for enterprise agreements, which already does nothing to prevent employers from slashing wages and conditions. The test merely requires that workers will not be worse off than if they were employed under an industrial award setting out the bare minimum wages and conditions permissible in a sector.

Under the new legislation, the FWC will be able to approve agreements that could leave workers earning less than the award if their circumstances change after the agreement is approved. While workers will be able to ask the FWC to reapply the BOOT, this will require that they monitor every roster change and calculate the implications. The revised BOOT could also be used to employ new workers under substantially reduced conditions than existing staff.

The most discussed feature of the new industrial relations legislation is the expansion of multi-employer bargaining. While limited provisions for enterprise agreements covering workers at multiple companies already exist, they have almost never been used. The proposed legislation provides for three types of multi-employer bargaining, all of which will require workers to be union members.

The “supported bargaining” stream is an overhaul of existing, but never used, “low-paid bargaining” provisions. This is intended to bring highly exploited layers of workers, such as those in aged-care, early childhood education and cleaning, under the controlling hand of the trade union bureaucracy.

This will also draw these workers, who are presently covered by minimum-wage industrial awards, into the enterprise bargaining system. For three decades this has served as the primary mechanism through which corporations, with the full cooperation of the unions, have forced workers to trade away conditions including penalty rates and overtime pay for minor increases in base wages.

The most controversial component of the bill is the “single-interest employer bargaining” stream, which could cover any business, as long as the operations of employers covered under a single agreement are ruled “reasonably comparable” by the FWC.

Major corporations and business lobbyists, under the phoney guise of protecting small business, have objected to this section of the bill. At the heart of this is a disagreement among sections of the corporate elite over whether the unions and enterprise bargaining are still the most effective means of driving down wages and increasing “productivity.”

A submission to the Senate committee by the Australian Resources and Energy Employer Association noted: “Less than half of resource sector workplaces are covered by an in- term enterprise agreement… Unions have attempted to organise those workplaces for many years.”

While industrial action will be possible under these two streams, workers will have to give employers five days’ notice, rather than the three required under single-employer enterprise agreements.

The third form of multi-employer bargaining is “cooperative workplace bargaining,” for which employers and unions must apply jointly. Workers in this stream will have no legal right to take industrial action.

The rationale behind multi-employer bargaining as a means of wage and class suppression is clearly expressed in a submission to a Senate committee report on the bill by Chris F Wright, a University of Sydney academic. Wright notes that in Denmark, where multi-employer bargaining is common, strikes are far less frequent. He writes: “Considering the relative sizes of their workforces, Australia lost about 10 times as many days to industrial action as Denmark in 2021.”

This is in line with statements made by ACTU secretary Sally McManus, who said in October that unions “don’t want to see more strikes,” and remarked approvingly that the bill “adds more red tape” to prevent workers taking industrial action.

Wages are also rising more slowly in Denmark than in Australia, according to Wright: “Over the past year average Denmark wages climbed 2.5% compared to a similarly- calculated 3% in Australia.” 

Far from Labor’s cynical claim of “getting wages moving,” the new legislation is aimed at suppressing wage growth and further eviscerating workers’ already limited rights. It is the latest chapter in escalating anti-strike laws implemented by successive Labor governments over the past four decades.

This began with the Accords implemented by the Hawke and Keating Labor governments between 1983 and 1996, with the full support of the unions. These brought harsh cuts to real wages and working conditions as well as the introduction of enterprise bargaining and the limitation of strikes to bargaining periods. The Accords also enshrined the relationship of the union bureaucracies with finance capital through the introduction of compulsory superannuation.

This was a critical turning point in the transformation of the unions and Labor from organisations that had previously sought limited gains for workers into agents of endless corporate cost-cutting and restructuring aimed at driving up profits of “Australian” businesses to make them “internationally competitive.”

The eager support of the union bureaucracies for the latest anti-strike bill should serve as a warning for the working class. It makes clear that these fetid organisations, just as they have been since the 1980s, are determined to continue and deepen their role as the enforcers of the government and the corporate elite, and the primary organs of class suppression.

The bulldozing of the industrial relations legislation through parliament, with the wholehearted support of the union apparatuses, will benefit only the profits of the major corporations. It highlights just what forces workers are pitted against. This is a conspiracy of the entire political establishment, the state apparatus in the form of the courts, the highly paid union apparatuses and the massive corporate conglomerates against workers in every section of industry and employment.