Israel exonerates its armed forces of war crimes

Jean Shaoul

Israel’s own investigation into last year’s murderous assault on Gaza has predictably concluded that the Israel Defence Force (IDF) had not broken Israeli or international law. No criminal charges or disciplinary action will be taken against those who led air strikes targeting civilians that attracted worldwide condemnation.

The 250-page report published by Israel’s Foreign Ministry argues that Israel’s hands were clean, and that it was Hamas, the Palestinian militant group that rules Gaza, which was responsible for many of the civilian casualties, because its combatants were embedded in Palestinian homes, schools, mosques or United Nations buildings.

The Foreign Office also issued a report, the first by the IDF, showing a breakdown of the number of Palestinians killed during the 50-day war. It claims that 2,125 Palestinians were killed, 761 (36 percent) of whom were civilians, including 369 children and 284 women. This is much lower than estimates by the UN and other credible sources that put the number of civilians killed at 1,483 out of a total of 2,205, including 521 children and 283 women. Last February, Hamas told Associated Press that 400 of its fighters had been killed, a far lower figure than the IDF’s.

The reports stem from a number of investigations carried out by Israel in order to exonerate itself and challenge enquiries by the International Criminal Court or UN into possible war crimes, as they will not investigate if Israel carries out its own criminal investigations. The Military Police, under instructions from the Military Advocate General’s Office, launched 13 criminal investigations, closing nine after claiming there was no evidence of wrongdoing. The military also opened inquiries into 85 complaints about “exceptional incidents.”

The timing of the report, claiming that the IDF had fought a moral, defensive war in accordance with international law and exonerating it of all responsibility for civilian casualties, is not accidental. It comes just days before the UN’s Human Rights Council (UNHCR) is due to publish the findings of its inquiry, with which Israel refused to cooperate, that will in turn form the basis of any investigation into possible war crimes by the ICC currently being sought by the Palestinians.

Crucially, insofar as Israel considers the practice of targeting civilian homes, buildings, and infrastructure and the resultant carnage to be entirely legitimate, it signifies that this will be become the modus operandi for its wars against the Palestinians and across the region. The tacit consent of US imperialism and its European allies to such barbarism signifies that their wars too will also target civilian infrastructure, leading to the wholesale slaughter of defenceless peoples.

Last week, Israel’s Military Advocate General published another report clearing the IDF of blame for one of the most egregious killings of the Gaza war: a missile attack that killed four children and injured a number of others playing on the beach in Gaza. His office said that it was just a “tragic accident” that had targeted a Hamas compound. This was contradicted by eyewitnesses, including international journalists, who described the targeted building as a small and dilapidated fisherman’s hut, with no militants present.

The Military Advocate General ordered a criminal investigation some five months after the incident, saying, “There is a reasonable foundation to suspect that the attack was conducted not in accordance with the rules that bind IDF forces.”

Evidently, the murder of small children is entirely in accordance with IDF rules.

Israel and its backers are going to great lengths to counter all criticism of its conduct towards the Palestinians. Last week, UN Secretary-General Ban Ki-Moon succumbed to pressure and dropped Israel off a blacklist of state armed forces accused of serious violations of children’s rights. According to UN officials, Leila Zerrougui, the UN’s special envoy for children in armed conflict, had recommended that both Israel and Hamas be placed on its annual “name and shame” list of state and non-state parties that recruit, use, kill, maim or commit acts of sexual violence against children, citing the Gaza war as particular cause for concern.

Had Israel been included, it would have joined non-state forces such as Islamic State, Boko Haram and the Taliban as serious violators of children’s rights.

Another report entitled Fragmented Lives by the UN Office for the Co-ordination of Humanitarian Affairs (OCHA) has revealed that Israel killed more Palestinians in 2014 than at any time since the 1967 War: 2,314 Palestinians were killed and 17,125 injured in 2014, up from 39 deaths and 3,964 injuries in 2013. While most occurred during the Gaza War, there was also a sharp increase in fatalities in the West Bank and East Jerusalem, where 58 Palestinians were killed and 6,028 injured. This was the highest number of deaths since 2007 and the highest number of injuries since 2005.

Israel’s security forces increasingly resort to the use of live ammunition, which accounted for almost all the fatalities and 18 percent of the injuries. The report noted that the incidents of settler violence causing Palestinian casualties and injuries had also increased. Israeli authorities were holding up to 24 percent more Palestinians in administrative detention in 2014 than in 2013.

The attempts of the ruling establishment to whitewash its crimes are in sharp contrast to reports by some of its own soldiers and human rights groups. In May, Breaking the Silence, a group of Israeli soldiers, published a report showing how Israel’s lax rules of engagement combined with indiscriminate artillery fire were a major factor in the large number of civilian casualties and the mass destruction in last summer’s war on Gaza.

The human rights group B’Tselem had earlier published a report into 70 air strikes by Israel on homes in Gaza that killed 606 people, including 93 children under five. It accused Israel of breaching international humanitarian law, focusing on ministers, including Prime Minister Binyamin Netanyahu, who authorised the policy of attacking homes.

Last April, following a UN investigation led by a retired British general, UN Secretary General Ban Ki-moon held Israel responsible for the bombing of seven United Nations sites, including five schools, used as civilian shelters during the war in which 44 Palestinians died and 227 others were injured. He condemned the attacks “as a matter of the utmost gravity” and insisted that UN locations were “inviolable.” Acceding to heavy pressure from Tel Aviv and Washington, however, the UN agreed to delay publication until after Israel had completed its own inquiries.

German secret service involved in NSU far-right terrorist attacks

Dietmar Henning

For some time, it has been known that at least 25 secret service undercover operatives were active around the far-right National Socialist Underground (NSU) terrorist group. Now evidence is mounting of direct involvement of the security services in assassinations attributed to the NSU.

Long-suppressed information and investigations suggest a link between two bomb attacks in Cologne attributed to the NSU with the secret service and Cologne’s neo-Nazi scene. This is reported by Stefan Aust and Dirk Laabs, authors of the book “Homeland Security: The State and the NSU murders”, in the Welt am Sonntag. The article is largely based on the records of the victim’s lawyers in the NSU trial, which has been taking place before the Munich Higher Regional Court for over two years.

In January 2001 in a shop in Cologne’s Probsteigasse, the then 19-year-old Mashia Malayeri opened a tin in a Christmas hamper, which someone had left there in December. The tin exploded, severely injuring her. With the help of her father and sister, police developed a photo-fit image of the man who had left the hamper in the shop. Both recalled a young man with long dark blond hair.

In November 2011, when the NSU collapsed, the group had claimed responsibility for the Probsteigasse bombing. However, the photo-fit image bore no resemblance to the two male NSU members, Uwe Böhnhardt or Uwe Mundlos, who had allegedly carried out all ten NSU murders, bombings, and numerous bank robberies. In February 2012, the Federal Criminal Police (BKA) sent the photo-fit image to the Federal Office for the Protection of the Constitution (BfV, the Secret Service) and asked for help in identifying the man. The national intelligence service also sent the image to the state secret service agency in North Rhine Westphalia.

The former head of the state secret service in Düsseldorf, 40 kilometres from Cologne, was Mathilde Koller. She wrote several official statements that the authors Aust and Laabs have now examined. In one of the first, she said the photo-fit image showed “similarities” with a well-known Cologne neo-Nazi, Johann Helfer, called “Helle”.

In a note a week later, she wrote: “Johann Detlef Helfer has worked since 1989 as an undercover operative for the North Rhine Westphalia secret service.” According to the note, Helfer was “directed” towards a leading neo-Nazi in Cologne. According to the two authors, this was Axel Reitz, dubbed “the Hitler of Cologne,” by the local press, who was 16 years younger than Helfer.

Reitz and Helfer together led the neo-Nazi scene in Cologne and were in contact the NSU’s immediate periphery. For example, in September 2004, Reitz received a letter from a Swiss Nazi asking about the health of “comrade Eminger”. André Eminger stands before the court in Munich as a supporter of the NSU. His twin brother is also active in the right-wing scene.

The secret service agent who had driven Helfer to the Probsteigasse shop at the time of the attack has since died. According to Koller, Helfer displayed “affinity with weapons and military exercises.” As a young man, he already had far-right sympathies and was a member of a paramilitary group; he trained with the Bundeswehr (Army) as a sniper and was sent into the reservists association by the intelligence services.

BKA investigators showed the victim’s father and sister two photos of Helfer; however, one was blurred and indistinct, the second was an outdated passport photo. From these, the two witnesses did not recognise Helfer as the culprit.

A picture of Helfer found on the Internet, which the victim’s lawyers showed the two witnesses and is very similar to the 2001 photo-fit image, was different. One of the lawyers wrote to the Munich Higher Regional Court: “Both Mr. Djayad Malayeri (the victim’s father) and Mrs Mahshid Malayeri (her sister) spoke of frightening similarity of the photograph in the file, said to show Johann Helfer, with their recollection of the person who left the gift hamper before Christmas 2000.”

The Attorney General and BKA have so far been inactive. Helfer has apparently still not been questioned. Four months after writing the note to the Attorney General, Mathilde Koller retired “for personal reasons”. She will soon have to publicly testify for the first time about the case to the state parliament’s Committee of Inquiry into the NSU in Düsseldorf.

The Welt am Sonntag article also reports that Helfer had contact with Cologne neo-Nazi Paul Breuer, who belonged to Reitz’s group. A few days before the article appeared in Welt am Sonntag, the Saxony Free Press had reported on new evidence implicating the Hesse state secret service operative Andreas Temme. At the time of the murder of the 21-year-old Halit Yozgat on 6 April 2006, Temme was sitting in his Internet cafe in Kassel.

Temme must now testify again at the NSU trial before the Munich Higher Regional Court. He is to be questioned about a plastic bag, with which another witness saw him enter the Internet cafe on the day of the attack. Temme, who led the undercover operatives, had previously said he did not have this plastic bag.

Significantly, according to investigators, the murders attributed to the NSU were carried out with a silenced pistol wrapped in a plastic bag. The perpetrators reportedly tried to collect the cartridge cases this way, so as not to leave them at the crime scene.

Three years ago, gun shot residue (GSR) had been found on a grey pair of leather gloves recovered from Temme’s childhood home in 2006. Police sent the gloves to the BKA with a request for “urgent processing”. The BKA took their time with the investigation, because traces of GSR were nothing extraordinary for a sports shooter, which Temme was, they said. The result which then followed was dismissed with the same argument.

However, this analysis pointed to a peculiarity. Besides traces of GSR for other types of ammunition, the gloves also had traces of ammunition used in the Ceska pistol used to commit the NSU murders.

New and old findings paint the following picture: Andreas Temme, who was known as “Little Adolf” in his native village, controlled an undercover agent in neo-Nazi circles linked to the NSU. He phoned him on the days of the murders in Kassel, Nuremberg and Munich. When the young Halit Yozgat was shot in his Internet cafe, Temme was present. He carried a plastic bag containing a heavy object. And gunshot residue was found on his gloves from ammunition used at the NSU killings.

Weeks before it was publicly known that Yozgat had also been shot with a Ceska, Temme told this to a colleague. His boss, Gerold-Hasso Hess, had discussed his statement to police with Temme. Hess’ first sentence in a recorded telephone conversation with Temme was, “I tell everyone: If they know that somewhere something like this is happening, please do not drop by”.

The then Hesse state interior minister, now state premier Volker Bouffier (CDU) holds his protective hand over Temme. To date, the Attorney General has withheld 37 files on Temme from the prosecution in the Munich NSU trial, claiming they were “irrelevant.”

“It is is of some relevance whether Temme covered up the crime, or was possibly involved in it,” the Yozgat family’s lawyer, Alexander Kienzle, told the Free Press.

Three quarters of a million private tenants in England living in rundown homes

Dennis Moore

The Citizens Advice Bureaux (CAB) has detailed the increasing numbers of people forced to live in substandard accommodation in the private rented sector in its report, “A Nation of renters: How England has moved away from secure family homes towards run down rentals.”

One of the main sources of data used in the report is the English Housing Survey. The survey is conducted annually by the Department for Communities and Local Government. Considered the only robust source of information on the state of housing in England, it involves the physical inspection of over 6,000 homes. The government is presently considering cutting back the survey in future.

The CAB report examines a number of changes that have taken place over time within the private rented sector. The introduction notes the explosion in the private rental market, explaining, “In the last two decades the private rented sector has gone from a minority tenure representing just a tenth of households, to the mainstream. In 2011/12 it became more common to rent privately than to live in the social rented sector and, by 2013/14, a fifth of households rented privately.”

The report documents that private renters are being forced to live under deplorable conditions in exchange for increasingly exorbitant rents.

There are 120,000 households in England considered to be living in poverty and in an unsafe privately rented home. These unsafe private rented properties are home to over half a million children, 180,000 disabled people and 120,000 people living in poverty. The impact that poor housing has on children’s health is well documented, increasing the risk of ill health or disability by up to 25 percent during childhood.

The average rent being paid on homes deemed to be “unsafe” is £157 a week. A total of £5.6 billion a year is being paid to rogue landlords in rent. A big chunk, £1.3 billion, is paid by the state in the form of housing benefit—meaning that tax payers are subsidising landlords who rent unsafe properties.

There are 740,000 privately rented homes situated across England that are considered unsafe to live in and that fail to meet the minimum legal standard for housing. They contain what is officially known as a Category 1 hazard (a hazard that poses a serious danger to health and safety). Almost one in ten such homes (8 percent) have serious damp, 10 percent posing risks of a serious fall and 6 percent are described as excessively cold.

Damp, and associated problems with condensation, encourages the growth of moulds and mites, increasing the risk of respiratory diseases. These conditions affect children disproportionately.

In the last 10 years there has been a 100 percent increase in the number of households in the private rented sector in England, rising from 2.2 million to 4.4 million. It is now factored in as one of the major contributors to UK consumer spending.

Apart from the insecurity that comes with renting in the private sector, with average tenure lengths far shorter than in other more secure tenures, there are major concerns as to the physical condition of many of these properties. According to official measures, one in three private rented tenancies are classed as “non-decent.” In 2013, an estimated 30 percent (1.3 million) homes in the private rented sector were considered “non-decent,” compared with 15 percent in social housing and 19 percent owner occupied.

The term “non-decent” tends to disguise the harsh, brutal reality of what it means to live on a day-to-day basis in this type of accommodation. This can include not having adequate facilities such as a working kitchen or bathroom. If your home is difficult to keep warm because of lack of thermal integrity, it costs more to keep it warm. This is a constant problem for those on low incomes or benefits, who are often forced to make stark choices between keeping warm and being able to buy food.

The report contains examples of the many problems that individuals living in poor accommodation face. These include those who have asked their local CAB office for help because of problems associated with disrepair due to landlords not carrying out needed upkeep.

To add insult to injury, those renting in the private sector pay far more than in any other tenure, spending on average a third of their income on housing costs. Austerity, cuts and collapsing incomes have meant that a large part of rental costs are being met by housing benefit payments.

In the last seven years the number of those in employment receiving a subsidy towards their rent via housing benefit has risen from one in ten households to one in four. “The number of private rented households receiving housing benefit more than doubled in the last decade from 410,000 to 1.1 million,” the report finds. “Since the recession this growth has been exclusively among working households.”

Confirming that millions now eke out a life on low pay, the report documents that in 2004, “20 percent of private sector housing benefit claimants were in work; by 2013/14 this figure had doubled to 39 percent.”

There has been a marked growth in the numbers of families renting in the private sector.

In 2004 single working age renters constituted the most common household type in this sector. Now over a million families with children are living in a privately rented home, with the report finding, “Half of privately rented households are headed by someone aged 35 and over and couples with children are now the most common family type in the sector.”

The last 30 years have seen a dramatic reduction in the construction of social housing. The decline was spearheaded by the Conservative government of Margaret Thatcher, with its introduction of the Housing Act 1980 that extended the right to buy council homes at generous discounts.

In the following decade, more than a million council homes were sold at an estimated cost in today’s money of more than £60 billion. The majority of these homes were not replaced and since 1990 a further 500,000 homes were sold off at less generous discounts.

Today the reality for many is a housing market dominated by houses that are unaffordable for the majority of first time buyers, with little available affordable rented social housing. The CAB notes that, “65 per cent of private renting households have less than £1,500 in savings. This means the median private renter is less than one twentieth of their way towards saving an average first home deposit.” Only 7 percent of private rented households had savings of over £30,000, just enough for an average deposit, the report reveals.

Millionaires projected to own 46 percent of global private wealth by 2019

Gabriel Black

Households with more than a million (US) dollars in private wealth are projected to own 46 percent of global private wealth in 2019 according to a new report by the Boston Consulting Group (BCG).

This large percentage, however, only includes cash, savings, money market funds and listed securities held through managed investments—collectively known as “private wealth.” It leaves out businesses, residences and luxury goods, which comprise a substantial portion of the rich’s net worth.

At the end of 2014, millionaire households owned about 41 percent of global private wealth, according to BCG. This means that collectively these 17 million households owned roughly $67.24 trillion in liquid assets, or about $4 million per household.

In total, the world added $17.5 trillion of new private wealth between 2013 and 2014. The report notes that nearly three quarters of all these gains came from previously existing wealth. In other words, the vast majority of money gained has been due to pre-existing assets increasing in value—not the creation of new material things.

This trend is the result of the massive infusions of cheap credit into the financial markets by central banks. The policy of “quantitative easing” has led to a dramatic expansion of the stock market even while global economic growth has slumped.

While the wealth of the rich is growing at a breakneck pace, there is a stratification of growth within the super wealthy, skewed towards the very top.

In 2014, those with over $100 million in private wealth saw their wealth increase 11 percent in one year alone. Collectively, these households owned $10 trillion in 2014, 6 percent of the world’s private wealth. According to the report, “This top segment is expected to be the fastest growing, in both the number of households and total wealth.” They are expected to see 12 percent compound growth on their wealth in the next five years.

Those families with wealth between $20 and $100 million also rose substantially in 2014—seeing a 34 percent increase in their wealth in twelve short months. They now own $9 trillion. In five years they will surpass $14 trillion according to the report.

Coming in last in the “high net worth” population are those with between $1 million and $20 million in private wealth. These households are expected to see their wealth grow by 7.2 percent each year, going from $49 trillion to $70.1 trillion dollars, several percentage points below the highest bracket’s 12 percent growth rate.

The gains in private wealth of the ultra-rich stand in sharp contrast to the experience of billions of people around the globe. While wealth accumulation has sharply sped up for the ultra-wealthy, the vast majority of people have not even begun to recover from the past recession.

An Oxfam report from January, for example, shows that the bottom 99 percent of the world’s population went from having about 56 percent of the world’s wealth in 2010 to having 52 percent of it in 2014. Meanwhile the top 1 percent saw its wealth rise from 44 to 48 percent of the world’s wealth.

In 2014 the Russell Sage Foundation found that between 2003 and 2013, the median household net worth of those in the United States fell from $87,992 to $56,335—a drop of 36 percent. While the rich also saw their wealth drop during the recession, they are more than making that money back. Between 2009 and 2012, 95 percent of all the income gains in the US went to the top 1 percent. This is the most distorted post-recession income gain on record.

As the Organization for Economic Co-operation and Development (OECD) has noted, in the United States “between 2007 and 2013, net wealth fell on average 2.3 percent, but it fell ten-times more (26 percent) for those at the bottom 20 percent of the distribution.” The 2015 report concludes that “low-income households have not benefited at all from income growth.”

Another report by Knight Frank, looks at those with wealth exceeding $30 million. The report notes that in 2014 these 172,850 ultra-high-net-worth individuals increased their collective wealth by $700 billion. Their total wealth now rests at $20.8 trillion.

The report also draws attention to the disconnection between the rich and the actual economy. It states that the growth of this ultra-wealthy population “came despite weaker-than-anticipated global economic growth. During 2014 the IMF was forced to downgrade its forecast increase for world output from 3.7 percent to 3.3 percent.”

Greek central bank warns of “uncontrollable crisis”

Robert Stevens

Ahead of today’s meeting of the euro zone’s finance ministers, the Bank of Greece warned that the country faces imminent economic collapse.

Months of talks between the Syriza-led government and its international creditors, the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF), over the terms of an austerity programme broke down acrimoniously at the weekend. The talks, ongoing since February, centred on whether Greece would receive €7.2 billion from the institutions, if Syriza agreed to impose further cuts. On June 30, the existing programme expires, with Athens due to make a payment of €1.6 billion to the IMF.

Athens could be forced into default in weeks since. On Wednesday, Syriza’s top negotiator Euclid Tsakalotos bluntly stated, “At the moment we haven’t got the money,” as Syriza has already repaid more than €13 billion since coming to power. However, Greek Finance Minister Yanis Varoufakis said his government would not table any new proposals at today’s Eurogroup meeting.

Greece’s Central Bank bluntly warned in its regular monthly statement that, “Failure to reach an agreement would... mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and, most likely, from the European Union.”

In stark language, the statement warned that without an agreement, a “manageable debt crisis… would snowball into an uncontrollable crisis, with great risks for the banking system and financial stability. An exit from the euro would only compound the already adverse environment, as the ensuing acute exchange rate crisis would send inflation soaring.”

The bank continued, “All this would imply deep recession, a dramatic decline in income levels, an exponential rise in unemployment and a collapse of all that the Greek economy has achieved over the years of its EU, and especially its euro area, membership. From its position as a core member of Europe, Greece would see itself relegated to the rank of a poor country in the European South.”

The Financial Times noted that this statement was “the first time any Greek authority has publicly broached the possibility the country could face ejection of the 28-country club that Athens joined shortly after its return to democracy in 1981.”

The central bank's intervention was politically directed against Syriza, whose leader, Prime Minister Alexis Tsipras, is demanding a loosening of certain austerity measures demanded by the EU before imposing them on the working class. It points to the support that exists in powerful sections of the Greek capitalist class for a policy of capitulating to the most extreme demands of the EU.

Bank of Greece President Yannis Stournaras led the enforcement of deep austerity as the finance minister (from 2012 to 2014) in the conservative New Democracy (ND) government. He is also a member of the IMF’s Board of Governors.

Syriza issued a statement denouncing Stournaras who “not only exceeded the boundaries of his institutional role, he is attempting to contribute to the creation of an asphyxiating framework in the moves and negotiating abilities of the Greek government.”

Fuelled by intensifying fears over a “Grexit” (Greek exit from the euro zone), the Athens stock market again fell sharply. By closing, it was down 3.15 percent, a 17.3 percent drop just in the last four sessions. Greece’s banks, cut off from international money markets months ago by the ECB and haemorrhaging deposits, fell a further 1.38 percent. Their overall value has plummeted by 27 percent in the last week.

Leaders of Syriza’s Left Platform, an amalgam of pseudo-left outfits who fear that Syriza will lose all credibility if it signs on to the institutions demands, called nationwide demonstrations against the troika Wednesday evening. Speaking to the Guardian, Stathis Kouvelakis, a Left Platform member of Syriza’s Central Committee, said, “Either Tsipras commits political suicide and accepts these measures, or he says the big ‘no’.”

Thousands of people heeded Syriza's call and came out to demonstrate in front of the Greek parliament in Athens. This is only a pale reflection, however, of the opposition to further EU austerity measures that exists in the Greek working class, and that led to the voting out of the previous ND government and the collapse of Greece's long-standing social democratic party, Pasok.

Earlier another Left Platform leader, Stathis Leoutsakos, raised the possibility of the armed forces being mobilised to enforce the edicts of the EU, saying, “The proposals made by lenders can only be passed with tanks and if the lenders want to pass them they have to find the tanks.” He backtracked immediately, adding, “I don’t mean tanks in the classic sense of the word. Today tanks have been replaced by a communications game that they play in great skill in the euro zone.”

As Greece nears default, with the threat of economic chaos across the continent, divisions within the European ruling elite on how to manage an all-encompassing crisis are surfacing.

Greek Prime Minister and Syriza leader Alexis Tsipras received a visit from Austrian Chancellor Werner Faymann yesterday. Faymann speaks for those within ruling circles who want to finalise an austerity agreement by giving Tsipras a few minor concessions, which he could then attempt to sell to the population—even though it elected him based on promises to end all austerity measures.

Faymann trailed his visit by stating he wanted to “avoid a catastrophe.” Of the EU, ECB, IMF demands of Greece, he said, “I know there were a number of proposals, also from the institutions, that I also don’t find in order.”

The institutions are calling for no let up in brutal cuts, but in Greece there is “high joblessness, 30-40 percent (with) no health insurance and then raising VAT on medicines. People in this difficult situation cannot understand that.”

In Athens, he called for a continuation of negotiations stressing, “For Europe to be stronger, it must show solidarity and support to any country which needs it.”

The Guardian described Faymann’s intervention as “a last-ditch attempt to end the standoff with international creditors” before the euro group meeting.

Writing in the Financial Times, columnist Martin Wolf warned, “Neither Greeks nor their partners should imagine a clean break if they leave the euro.” Citing the economic breakdown and resulting mass unemployment in Greece in the last five years, he stated, “Such a brutal adjustment would have shredded the politics of any country. Europeans are now dealing with Syriza because of this calamity.”

A deal being reached “now seems ever more unlikely,” Wolf cautioned, adding, “That would not be the end of the story, however. Europeans will be unable to walk away. Whether Greece stays inside the euro or leaves, much the same challenges will arise. The Europeans would still have to admit that they would not get much of their money back; and they would still have to help avoid a Greek collapse.”

Faymann, Wolf, et al. are at odds with other sections of the Europe ruling elite that are demanding a humiliating total capitulation of Syriza, whose most powerful spokesmen are elements within the German ruling elite.

Andreas Scheuer, secretary-general of the German Christian Social Union, Chancellor Angela Merkel's sister party, said, “The Greek government apparently hasn't realised the seriousness of the situation yet. They are behaving like clowns sitting in the back of the classroom, although they have received explicit warnings from all sides that they might fail to pass to the next grade.”

Last week it emerged that European leaders began discussion on scenarios involving a Greek exit from the euro.

With no agreement expected from today’s meeting, plans are being mooted for another summit of euro zone heads of government on Sunday. According to the FT, citing EU officials, preparations for this “were almost finalised,” with these “included laying the groundwork for capital controls to prevent a meltdown of Greece’s financial sector.”

Wall Street’s legal offensive

Andre Damon

Recent months have seen a series of court rulings reversing penalties imposed on Wall Street in the aftermath of the 2008 financial crash and eviscerating previously existing financial regulations.

On April 3, a US appeals court upheld a December ruling overturning the conviction of two hedge fund executives on insider trading charges. The ruling laid down a novel and narrow definition of insider trading intended to make it virtually impossible to obtain convictions against people who use inside information to rig markets for their own gain.

One month later, a judge ruled that JPMorgan Chase did not have to pay billions of dollars in fines related to fraudulent mortgage-backed securities sold by Washington Mutual, which JPMorgan purchased in 2008.

On Monday, in a ruling likely to have even more far-reaching consequences, a federal judge declared that the Federal Reserve broke the law in September 2008 when it took control of the majority of the stock of the insurance giant American International Group (AIG) and ousted its top management, in return for an $85 billion loan, which soon ballooned to nearly $185 billion.

These rulings are part of an accelerating legal offensive by the American financial aristocracy not only to exonerate itself for criminal actions that triggered the worst economic crisis since the Great Depression, but to assert the untrammeled domination of private capital over the public interest.

It is approaching seven years since the bankruptcy of Lehman Brothers on September 15, 2008 and the government bailout of AIG the following day. The net result of the policies carried out in the ensuing years by Democratic and Republican administrations alike, backed by Congress and the courts, is a massive increase in the wealth of the richest one percent of the population, a further concentration of power among a handful of Wall Street banks, and legal impunity for financial malefactors who are responsible for untold human suffering.

Not one leading banker has been prosecuted, let alone jailed. Rather, financial gangsters are being shielded by the government and vindicated by the courts. Maurice Greenberg, the former CEO of AIG and a major stockholder in the company, who filed the suit that was decided on Monday, is one of the more notorious examples of this breed.

Judge Thomas Wheeler of the US Court of Federal Claims declared in his ruling that the government “carefully orchestrated its takeover of AIG in order to... maximize the benefits to the government and to the taxpaying public.” An unpardonable crime.

(In point of fact, the government bailout of AIG had nothing to do with protecting the interests of the “taxpaying public.” It was driven entirely by a desire to rescue the financial elite and protect its wealth and power).

“The government’s unduly harsh treatment of AIG… was misguided and had no legitimate purpose,” wrote Wheeler. He added that the Fed "possessed the authority in a time of crisis to make emergency loans to distressed entities such as AIG,” but that “there is nothing in the Federal Reserve Act or in any other federal statute that would permit a Federal Reserve Bank to take over a private corporation and run its business as if the Government were the owner.”

The Wall Street Journal hailed the ruling as a “historic victory” for AIG and the “free market.” The newspaper declared that the decision marked the beginning of the “long way back from 2008” and the “government’s retreat to more normal boundaries.”

It quoted a law professor as calling the ruling “a harsh lesson for the government to think twice about interfering in the private sector and the free market.”

In the years leading up to Monday's ruling, Greenberg’s multi-million dollar legal campaign had been widely ridiculed as quixotic, with one commentator referring to it as “an absurdist comedy… worthy of the Marx Brothers or Mel Brooks.”

In 2012, a New York judge threw out a companion lawsuit by Greenberg against the New York Federal Reserve "with prejudice," in a ruling that denounced Greenberg's suit as implausible “on its face.”

Greenberg had been forced out as chairman and CEO of AIG in 2005 after federal regulators revealed that the company was engaged in fraud and tax evasion on a massive scale. AIG paid $1.6 billion to settle multiple charges of accounting fraud and Greenberg paid $15 million to settle Securities and Exchange Commission fraud charges against himself.

AIG played a central role in the 2008 financial crisis. In the decade prior to the crash, major banks made a fortune by bundling poor quality home loans into mortgage-backed securities, which were insured through derivatives contracts with AIG and similar outfits and given top ratings by credit rating agencies such as Moody's and Standard and Poor's.

When the housing market began to decline in 2006-2007, an enormous share of mortgage-backed securities went into default, triggering demands for bond insurers to make good the losses of their clients. AIG faced tens of billions of dollars in claims from its counterparties and was on the verge of collapse in September 2008 when it was rescued by the government.

AIG's bankruptcy would have triggered the collapse of major Wall Street banks and financial institutions, all of which were highly implicated in the sub-prime Ponzi scheme, together with leading banks around the world.

The Federal Reserve and Treasury ultimately lent $182.3 billion to AIG, which passed the money onto its counterparties, including the largest Wall Street banks, at 100 cents on the dollar, securing a “backdoor bailout” of the financial system two weeks before Congress authorized the $750 billion Troubled Asset Relief Program (TARP).

As a condition for disbursing bailout funds, the regulators proposed to the company's board of directors that the Federal Reserve receive 79.9 percent of AIG’S (then-worthless) stock, and charged an interest rate of 12 percent.

Just months after AIG’s bailout, in March 2009, the company became the object of public outrage when it was revealed that it was using taxpayer funds to pay $450 million in bonuses to executives at its London-based financial products unit, which was primarily responsible for the company’s $99.3 billion loss in 2008.

While the ruling by Judge Wheeler did not award Greenberg damages, it agreed with the basic thrust of his arguments. The judge lamented that the government would be allowed to “avoid any damages, notwithstanding its plain violations of the Federal Reserve Act.”

The 2008 crash and subsequent developments have revealed certain fundamental realities about American society. All of the official institutions, including the presidency, the courts, Congress and the financial regulators, have worked single-mindedly to shield the banks and the financial elite and enable them to grow even richer.

So-called “democracy” in America is a façade. The reality is a plutocracy―the rule of the rich. Such a situation can be ended only through the revolutionary action of the working class in the fight for socialism.

Financial markets jittery on eve of Fed statement

Nick Beams

The eyes of financial markets around the world will be turned today towards the statement issued by the US Federal Reserve Board at the conclusion of a two-day meeting, as well as the press conference that will be held by Fed Chairwoman Janet Yellen.

The Fed has already indicated that it intends to lift its base interest rate, now between zero and 0.25 percent, as the first step in a return to a normalised monetary policy regime.

But the size and timing of any increase has yet to be decided. Initially, it was thought that the first increase would occur this month, but that option has been all but ruled out. It is now expected that any rise will be put off at least until September. Last week, International Monetary Fund Managing Director Christine Lagarde called for any such move to be delayed at least until next year.

The concern in financial circles is that a Fed rate rise could set off a financial crisis, especially in so-called “emerging markets,” where much of the inflow of capital in recent years could be reversed.

The expectation of a rate increase, the first since 2006, has already sparked a significant movement of funds. According to a report published in the London-based Daily Telegraph last Friday, $9.27 billion moved out of emerging markets in the week of June 10, a larger outflow than experienced during the “taper tantrum” of June 2013, when the Fed first indicated that it would start to wind back its asset-purchasing program.

Lagarde’s call for the Fed to delay any decision on an interest rate increase reflects the findings of the IMF’s Global Financial Stability Report issued in April, which noted that the asset management industry has $76 trillion of investments and that any tightening by the Fed could cause a liquidity crisis, as investors en masse sought to leave emerging markets.

A financial crisis in these markets, or even significant turbulence, would far outweigh the impact of the Asian financial crisis of 1997-98. Emerging markets now account for more than half of global gross domestic product, a far greater proportion than in the period leading up to the 1997-98 crisis.

But even then, the crisis had significant consequences, leading to the Russian debt default in 1998 and the collapse of the US hedge fund Long Term Capital Management, which threatened the stability of the entire US financial system.

Emerging markets are not the only potential source of turbulence. The violent movements in European bond markets over the past two months may well be the harbinger of a new financial crisis. Towards the end of April, the yield on German bunds—ten-year bonds—was close to zero. Then it underwent a major surge to more than 0.5 percent in May, and last week hit 1 percent, indicating a massive sell-off. (The yield on bonds moves in the opposite direction of the price).

A recent Bloomberg article on BlackRock, the world’s largest hedge fund, with $4.8 trillion of assets under management, an amount equivalent to the gross domestic product of Japan, pointed to a growing air of perplexity in financial circles. “The gyrations gripping the world’s fixed-income market are so great that it’s almost impossible to make sense of them on a historical basis,”Bloomberg wrote, with investors across Europe “ripping up their old models” as they try to analyse the $100 trillion global bond market.

Scott Thiel, a top-level London-based investment officer for the hedge fund, told the news agency: “The German bund market is incalculably volatile. It doesn’t make sense to measure it in traditional respects.”

The rapid movement in the price of bonds since the end of April has led to losses of $640 billion in the holdings of sovereign debt, with the financial firm Citigroup pointing to greater risk in the European government bond market than when Lehman Brothers collapsed in September 2008.

The index of yield volatility on bunds has now reached nine times its average over the past 15 years.

Such violent movements pose the risk of significant losses, which could then set off a chain reaction throughout the financial system as they spread to equities and corporate bond markets, which have also been growing at a record pace.

An article published on the Australian web site Business Spectator last week posed the question: “Will the bond market start the next financial crisis?” A rising interest rate environment has not been seen for nearly a decade, it noted, “and therein lies the greatest risk… If rising yields spur a sell-off in corporate bonds, there is a growing fear that investors who want to sell won’t be able to do so.”

It is an expression of the depth of the economic breakdown and the inherent incapacity of regulations to exercise meaningful control over the vast movement of money that supposed “reforms,” aimed at preventing another meltdown on the scale of 2008, could have, in fact, created the conditions for a new crisis.

Finance houses have been forced to cut back on their holdings of corporate debt, with the result that they may not be able to operate as a buffer for a falling market as they could in the past.

According to Stephen Schwarzman, chairman and cofounder of Blackstone, writing in the Wall Street Journal: “A liquidity drought can exacerbate, or even trigger the next financial crisis. Sellers will offer securities, but there will be no buyers. Prices will drop sharply, causing large losses for investors, pension funds and financial institutions. Additional fire sales will aggravate the decline.”

In recent months, Yellen has given repeated assurances to the financial markets that the Fed will be “patient” and that any increase in rates will proceed gradually, in order to avoid market volatility, or worse.

But events may move out of the Fed’s control, as there exist any number of possible triggers, including a major crisis in Europe. Such a crisis will come a step closer if no agreement is reached at tomorrow’s meeting of the Eurogroup finance ministers, which has been described as the “last opportunity” to avoid a Greek debt default.

Russia threatens response to US military buildup in Eastern Europe

Niles Williamson

President Vladimir Putin told reporters Tuesday that his government would be compelled to direct its military forces at any country engaged in a military buildup against Russia. He was responding to the report last weekend of plans under consideration by the Obama administration to permanently position battle tanks and other heavy military equipment in Eastern Europe, enough to maintain a 5,000-strong force in the Baltic states and other Eastern European NATO members.

The Pentagon’s plan, if approved by Defense Secretary Ashton Carter, would see the positioning of weapons and tanks in Lithuania, Latvia, Estonia, Poland, Romania, Bulgaria and Hungary. This would mark the first permanent deployment of US military equipment to NATO members that were once part of the Soviet Union.

The response of Putin and other Russian officials has made it clear that US plans for a significant military buildup in Eastern Europe have only pushed the two nuclear-armed powers even closer to the brink of war.

While US officials claim that the positioning of weapons is meant only to facilitate military training exercises, a logical interpretation of the deployment of arms to these countries is that the US and its NATO allies are preparing to launch a war against Russia. For its part, the Putin regime is responding accordingly, shoring up its military forces and making its own preparations for war by whipping up reactionary Russian nationalism.

There is nothing progressive about the response of the Putin administration to the aggression of the Western imperialists. Putin has combined saber-rattling and the buildup of Russia’s military forces with repeated appeals for some sort of deal with the US and Europe. Such a policy, sowing illusions in the possibility of accommodation with the rapacious Western imperialists while escalating military tensions, can only lead to disaster for the working class, not just in Russia, but throughout the world.

Speaking at joint press conference on Tuesday with the President of Finland, Pauli Niinistö, Putin told reporters, “We will be forced to aim our armed forces ... at those territories from where the threat comes.”

Responding to repeated claims of Russian aggression, Putin pointed out that it was NATO which had expanded up to Russia’s borders. “It is NATO that is moving towards our border and we aren’t moving anywhere,” he stated. He also cited his opposition to longstanding NATO plans for the construction a missile defense system in Eastern Europe that would be directed at Russia.

In a speech earlier in the day Tuesday at the Army-2015 International Military-Technical Forum, Putin announced plans to expand Russia’s nuclear arsenal by the end of the year. “This year we will supply more than 40 new intercontinental ballistic missiles to our nuclear force,” he announced to those assembled at the newly inaugurated Patriot Park, an hour outside Moscow. He stated that the new ICBMs would “be capable of overcoming even the most technically advanced anti-missile defense systems.”

Putin announced the planned expansion of Russia’s nuclear arsenal a day after Russian military officials made clear they would respond with a military buildup along the country’s western border if the US proceeded with its plans.

Russian army Gen. Yury Yakubov told Interfax on Monday that his government would have no choice but to respond in kind to US plans with a massive build-up of troops, heavy military equipment and missile systems on its western border.

Yakubov stated that the positioning of heavy weaponry, tanks and other military vehicles in the Baltics would be seen as “the most aggressive step since the Cold War.” He made clear that any buildup of equipment or forces in Eastern Europe would result in a reinforcement of Russian troops all along the European border. “Russia won’t have anything else to do but bolster its forces and resources on the western strategic theater of operations.”

According to Yakubov, Russia would respond to US deployments by moving forward with plans to position a new Iskander tactical missile system in its Kaliningrad territory on the Baltic Sea, an enclave surrounded by Poland and Lithuania with no land connection to Russia. He also told reporters that Russia would move to bolster its military forces in Belarus, which borders Poland, Lithuania, Latvia and Ukraine.

“Our hands are completely free to organize retaliatory steps to strengthen our western frontiers,” Yakubov concluded.

Following Putin’s remarks on Tuesday NATO General Secretary Jens Stoltenberg, the former Prime Minister of Norway, denounced Russia for “nuclear saber-rattling.” He told reporters that Russia’s response to the plans to position military equipment in Eastern Europe was “destabilizing and it’s dangerous.”

Stoltenberg made clear that Russia’s proposed counter-measures would do nothing to deter NATO’s war plans. “This is something which we are addressing, and it’s also one of the reasons we are now increasing the readiness and preparedness of our forces. We are responding by making sure that NATO also in the future is an alliance which provides deterrence and protection for all allies against any threat.”

Since the collapse of the Soviet Union in 1991 NATO has been working to build a solid military bloc on Russia’s western border. The Czech Republic, Hungary and Poland joined in 1999; the Baltic states, Bulgaria, Slovakia, Slovenia and Romania in 2004; and Albania and Croatia in 2009. The fascist-led coup in Ukraine last year, backed by the US and Germany, was aimed at pulling that country out of Russia’s sphere of influence and towards the West. The far-right puppet government has dropped Ukraine’s non-aligned status, adopted in 2010, and is moving towards NATO member status.

With the US in the lead, NATO is already engaging in provocative military exercises all along Russia’s western border from the Arctic Ocean to the Black Sea. Numerous “near-miss” encounters between NATO naval vessels and aircraft and Russian aircraft have been reported in recent months. In February US armored personnel carriers were paraded in the Estonian city of Narva, just a few hundred yards from the Russian border.

With the growing buildup of US and NATO forces in Eastern Europe, one misstep by either side could spark a conflict between the two largest nuclear-armed powers on the planet, which would devastate the planet.

The callous and criminal treatment of refugees

James Cogan

It is now apparent, despite the refusal of the Australian government to confirm or deny the allegations, that Australian authorities paid the crew of a refugee boat to take 65 asylum seekers back to Indonesia against their will.

Liberal and Labor governments alike have justified their policy of denying refugees the right under international law to claim asylum in Australia on the grounds that it “saves lives,” by discouraging them from paying “criminal people-smugglers” to transport them on unseaworthy vessels. Refugees are regularly intercepted and condemned to indefinite detention in prison camps on remote Pacific islands, or, “turned back” to “send a message” to future asylum seekers.

The latest incident is a graphic demonstration of the lies and criminality at the heart of Australia’s brutal “border protection” regime.

Evidence compiled by Indonesian police indicates the boat was intercepted by Australian customs in international waters to the north of Australia around May 17. Upon ascertaining that its destination was New Zealand, Australian authorities left the vessel to its fate, regardless of its condition and whether or not it involved “people-smuggling.”

Four or five days later, the boat was re-intercepted by an Australian customs and naval ship. This time, supposedly because it was “unseaworthy,” the vessel was towed for four days to Greenhill Island, off northern Australia. The 65 passengers could not, however, apply for refugee status due to reactionary laws enacted by the former Labor government, which excised the entire Australian continent from Australia’s migration zone—an act without precedent anywhere in the world.

The refugees were then taken back out to sea and transferred onto two small wooden boats, provided by the Australian government, and stocked with limited fuel and supplies. The crew were paid between $US5,000 and $6,000 each to head back to Rote Island, west of Indonesian West Timor.

One boat ran out of fuel. With 71 people crammed aboard, the remaining vessel crashed onto reefs. Refugees were forced to swim for up to 90 minutes to reach the small Landu island, where the alert was raised and a rescue operation organised.

The only reason anything is known about the incident is that the refugees managed, against all the odds, to survive. Everything points to a conscious plan by Australian authorities to ensure that they did not, in fact, live to tell the tale. The police chief of West Timor, General Endang, bluntly described their journey as a “suicide mission.”

There is absolutely no reason to believe this incident is an isolated one. How many other refugees have been forced by Australian authorities onto vessels with inadequate supplies, with crews paid to “turn them back,” and then abandon them on the high seas? How many have not reached shore? The government’s stated policy is to release no information about the cost—in lives or money—of any of the secretive military operations it conducts to persecute refugees.

The entire political establishment is implicated in these crimes. Payments to so-called “people-smuggler” syndicates in Indonesia have been a feature of the “border protection” regime under Liberal and Labor governments since as far back as 2001. While denouncing so-called “people smugglers” as “criminal scum” and “human filth,” Australian authorities have no compunction about paying them to assist in denying refugees their fundamental democratic rights.

The hypocrisy of the Australian establishment is boundless. The government and mass media fraudulently denounce China as a threat to “freedom of navigation” in the South China Sea and threaten to join a US-led military confrontation over the issue. When it comes to the waters north of the Australian continent, however, the government engages in what is tantamount to piracy to seize refugee boats.

Australia’s “border protection” policies have become a model for similar measures against asylum seekers by the European powers in the Mediterranean, by the United States, and by South East Asian countries in response to the recent crisis involving thousands of Bangladeshi and Rohingya refugees trapped at sea.

An Amnesty International report published this week concluded that the world is facing the most serious refugee crisis since the mass displacement of millions during World War II. Well over 50 million people have been uprooted by wars, civil wars, economic collapse and political chaos over the past 15 years—much of it directly caused by US imperialism and its allies, including Australia. Those risking everything to seek sanctuary in Australia have largely come from Afghanistan, Iraq and the war-ravaged Tamil-minority region of Sri Lanka.

The reactionary nature of capitalism and the nation-state system is nowhere revealed more graphically than in the horrific predicament facing refugees. Under conditions of an intractable global economic crisis and mounting social antagonisms, the whipping up of anti-immigrant xenophobia has become the stock-in-trade of politicians around the globe to justify ever-deepening attacks on the democratic and social rights of the entire working class.

Millions of people in America live under the constant fear of being deemed “illegal,” while Washington justifies neo-colonial operations in Central and South America on the grounds of stopping more migrants entering the US or, elsewhere, under the pretext of “protecting” refugees. The European powers are drawing up plans for the military occupation of their former colonies in North and Central Africa under the guise of concerns about stopping desperate people risking their lives crossing the Mediterranean.

In Australia, there is a direct relationship between the persecution of refugees and the country’s participation in the US-led neo-colonial operations in Iraq and Afghanistan, waged since 2001 under the fraudulent banner of the “war on terrorism.” The demonisation of refugees, including as “terrorists,” has been used to justify the casting aside of international laws and conventions, as well as to divert growing popular frustration and anger over escalating economic and social crises.

As the US and Australia have built up their military posture against China in Asia, “border protection” has become the convenient pretext for the surveillance and militarisation of the waters approaching critical sea lanes through Indonesia, such as the Lombok and Sunda Straits. In the event of war with Beijing, US and Australian strategy would see the current operations against refugees seamlessly escalated into a naval blockade aimed at strangling China’s economy.

The working class internationally must take a stark warning from the daily violations of international law meted out against refugees. They demonstrate that the ruling classes everywhere are prepared to trample over the democratic rights of the world’s most vulnerable and desperate people and will not hesitate to use ever more ruthless methods to suppress domestic political opposition to social inequality, austerity and war.

The fight to defend the fundamental democratic right of every person to live and work in the country of their choice, with full rights of citizenship, is inseparable from the struggle for the political independence and international unity of the working class on the basis of a socialist and internationalist program against the capitalist profit system itself.

Indian military raid in Myanmar escalates regional tensions

Deepal Jayasekera

The cross-border raid India’s military’s mounted in Myanmar (Burma) last week has exacerbated geo-political tensions in South Asia, especially after India’s Bharatiya Janatha Party (BJP) government touted the operation as a warning to Pakistan

On June 9 India’s Minister of State for Information and Broadcasting, Rajayvardhan Singh Rathore, announced that the Indian military had mounted a successful cross-border raid early that morning in Myanmar, destroying two camps of anti-Indian, secessionist insurgents. Rathore said the operation had been personally approved by India’s Prime Minister, the self-styled Hindu strongman Narendra Modi, and had killed some 15 separatist insurgents.

The Indian military’s principal target was the National Socialist Council of Nagaland-Khaplang (NSCN-K). But members of several other ethno-nationalist secessionist groups, including the Peoples Liberation Army of Manipur (PLA), the United National Liberation Front (UNLF) and the Manipur Naga Revolutionary Front (MNRF), are also believed to have been killed.

India has said the raid was in retaliation for a June 4 ambush by NSCN-K activists in the Chandel district of the north-east Indian state of Manipur that left at least 20 Indian Army personnel dead.

Myanmar’s military-dominated government approved the Indian raid, quite possibly under heavy pressure from New Delhi. But it is now denying that the incursion into Myanmar ever happened.

On June 10, the Director of the Office of Myanmar President Thein Sein Zaw Htay confirmed the raid, saying the two countries had cooperated in the operation, but that the Myanmar military had not taken part.

However, the BJP government’s jingoistic remarks about the raid quickly proved an embarrassment for Myanmar’s military regime. Myanmar’s constitution forbids the presence of foreign soldiers in Myanmar. Also, the Myanmar government has been negotiating with the NSCN-K to participate in the country’s coming elections.

Subsequently, Myanmar President Thein Sein’s office placed a note on its Facebook page that denied the Indian military had crossed into Myanmar, claiming instead that the Indian military had conducted an operation along the Indo-Myanmar border. The Myanmar Foreign Ministry’s website quoted the stipulation in the country’s constitution that declares “no foreign troops shall be permitted to be deployed in the territory of the (Myanmar) Union.” Later on June 10, the Myanmar government summoned the Indian Ambassador to Yangon, Gautam Mukhopadhyaya, and gave him a dressing-down for New Delhi’s boasting about the military incursion.

In all likelihood India’s military has previously carried out cross-border raids into both Myanmar and Bangladesh, as many of the separatist movements active in India’s north-east have bases in one or both of these countries. However, this is the first such attack that New Delhi has chosen to publicly acknowledge. Its decision to do so is part of the Modi government’s drive to more vigorously assert the Indian bourgeoisie’s interests in the region and lay claim to the status of regional hegemon.

India’s hands have been strengthened by Washington’s aggressive campaign to woo New Delhi, so as to fully integrate it into the US’s strategic drive to isolate and encircle China. This effort has intensified since Modi came to power last year, with the US proposing numerous joint projects for the development of advanced weapons systems and declaring its readiness to assist India in realizing its “Act East policy.” Modi has reciprocated by tilting India ever closer to the US.

The broader implications of last week’s cross-border “anti-terror” operation were emphasized by the Modi government itself. Rathore called it “a message to all countries and organizations who foster terrorism against India, including Pakistan.” Another minister, Prakash Javadekar, said, “This is a lesson and a message to all the terror groups that India will not hesitate in going beyond its geographical borders to eliminate terrorists.”

Over the past two decades, India’s military-security establishment has frequently threatened to launch “hot pursuit” operations across the Line of Control (LoC) that separates the Indian- and Pakistan-held parts of Kashmir, in order to attack anti-Indian Kashmiri insurgents based in Pakistan.

Pakistan, which has fought three declared wars against India since the two countries were created through the 1947 communal partition of the subcontinent, has always warned that any Indian incursion into Pakistan would have devastating consequences.

True to form, Pakistan’s political and military were quick to respond in kind to the provocative statements emanating from New Delhi. This included brandishing the threat of a nuclear conflagration.

Pakistan Prime Minister Nawaz Sharif termed the Indian ministers’ statement “irresponsible and imprudent” and vowed to protect Pakistan’s “vital interests at all costs.”

“We are not Myanmar,” Pakistan’s Minister for Defence Production, Rana Tanveer Hussain, told the Indian English-language daily Hindustan Times.“Don’t you know our military strength? Pakistan is a nuclear nation. India should stop day dreaming.”

Highlighting the across-the-board support of Pakistan’s elite for an aggressive stance against India, the Pakistan Senate, the upper chamber of Pakistan’s parliament, unanimously passed a resolution that declared Pakistan would “never allow its territory to be violated by India under any pretext.” Pakistan’s military is “fully capable of giving a fitting response” to any incursion affirmed the resolution.

Indian Defence Minister Manohar Parrikar responded with further provocative remarks. “Those afraid of India’s new posture are reacting,” claimed Parrikar. “A simple action against insurgents has changed the mindset of the full security scenario in the country.”

Like the US, New Delhi has in recent years developed much closer ties with Myanmar, whose regime it once shunned because it considered it too close to Beijing. For India, Burma is a crucial land-bridge to south-east Asia, a rapidly growing region with which it is anxious to develop closer economic and strategic ties.

Indian National Security Adviser Ajit Doval is expected to visit Yangon shortly for negotiations on increased military ties, including collaboration in operations against the ethno-nationalist separatist groups that challenge Indian and/or Myanmar state sovereignty.

In deference to the Myanmar government’s strong objections to its boasting about last week’s cross-border raid, Indian Defence Minister Parrikar is refusing to provide any further details about it. He has also taken to describing it as an operation carried out “along the India-Myanmar border.”

India’s principal opposition party, the Congress Party, was quick to hail the cross-border raid. It even tried to claim some of the credit, saying the operation was facilitated by a military-security cooperation agreement that India’s Congress Party led United Progressive Alliance government signed with Myanmar in 2010.

India’s media has also warmly applauded the action. However, some prominent media voices have expressed concern that the BJP’s bellicose boasts could undermine ties with Myanmar and further enflame relations with Pakistan.

A New Indian Express editorial called the June 9 operation “a milestone in the history of the Indian state.” It continued, “The message it gives is loud and clear: India can no longer be considered a soft state.”

Continuing in this vein, the New Indian Express chortled, “The Modi government has … proved that India is ready for disproportionate response to provocations. It has also given an unequivocal message to neighbours in particular and the world in general that it will demonstrate zero tolerance to terrorism and insurgency.”

The Hindu, a Chennai-based liberal daily, praised Modi for being ready “to bite the bullet and take tough action when it comes to the killing of Indian soldiers.” But it said that it was “unfortunate that the action in Myanmar has triggered a fresh slide in relations with Pakistan on account of breast-beating and credit-hunting by the Modi government,” and expressed concern New Delhi is alienating Myanmar. “Safeguarding the space to conduct such operations in the future,” declared the Hindu, is “critical for India’s long-term strategy.”

In a development that highlights the increasingly explosive geo-political tensions in the region, some sections of India’s press have accused China’s People’s Liberation Army (PLA) of having relations with the anti-Indian NSCN-K. Beijing has officially ignored these provocative claims, but the state-ownedGlobal Times published an article that dismissed the accusation as “absurd.”