Ex-Prime Minister Robert Fico wins parliamentary election in Slovakia

Markus Salzmann

Contrary to most predictions, former Prime Minister Robert Fico and his Smer (Direction) party won Slovakia’s parliamentary election last weekend. With almost 23 percent of the vote, or 42 of the 150 seats in parliament, Smer became by far the strongest party, but will have to establish a coalition. Fico was entrusted with forming a government by President Zuzana Čaputová on Monday.

Robert Fico [Photo by Annika Haas (EU2017EE) / CC BY 2.0]

The election in the country of only 5.4 million inhabitants was followed internationally with some apprehension. Fico’s position on the war in Ukraine was a focus of attention. Fico called for an end to arms deliveries to Ukraine and the lifting of sanctions against Russia. In the election campaign, he announced that he would not supply Ukraine with “any more shells” and advocated early peace negotiations.

Fico’s election victory is due to widespread opposition to the war in Ukraine. Back in March, a Globsec poll found that 51 percent of Slovaks blamed the West and Ukraine first and foremost for the war. Further polls showed that 69 percent thought arms deliveries led to an even wider war. Correspondingly, within the last year, support for the country’s NATO membership dropped from 72 to 58 percent and support for European Union (EU) membership from 77 to 64 percent.

The consequences of the war have significantly aggravated the social situation in Slovakia, where almost 500,000 pensioners now live below the poverty line. In 2022 alone, this number increased by 200,000. The minimum pension is around €330 [$US348], with a cost of living that is only slightly below the European average. At the same time, inflation for food and other goods, for example, rose even more than in Poland or the Czech Republic.

The 59-year-old Fico headed the Slovak government from 2006 to 2010 and from 2012 to 2018. In 2018, he had to resign after mass protests against the brutal murder of journalist Jan Kuciak and his fiancée. Kuciak had been researching a criminal gang that siphoned off EU funds on a grand scale and was said to have close ties to the ruling party. The suspicion of having commissioned the murder reached into the highest government circles.

The liberal forces strengthened by the outrage over the Kuciak murder, including Čaputová, who was elected president in 2019, quickly discredited themselves by their support for the Ukraine war, the European Union and market-oriented social policies.

The Progressive Slovakia (PS) party of European Parliament Vice President Michal Simecka, to which Čaputová also belonged before her election as president, came second with 18 percent. She was strongly supported by European media and governments. The PS stands for a decidedly neoliberal economic policy and for a hard line towards Russia, as advocated by the leading EU members.

The Olano party of ex-premier Igor Matovič, which won the parliamentary election in 2020 under the banner of the “fight against corruption,” received only 9 percent in an alliance with two right-wing micro parties.

The entrepreneur Matovič formed a four-party coalition in 2020 that followed a right-wing course, rejected effective protective measures for the population at the height of the pandemic and at the same time pursued social cuts. It unreservedly supported the war against Russia and was one of the first in the EU to supply arms to Kiev.

The coalition lost support in the population and engaged in endless attrition until it finally broke apart in the spring of this year. Matovič was not helped by a plagiarism scandal. Subsequently, President Čaputová appointed a cabinet of experts under the interim prime minister Ľudovít Ódor.

The former governing parties received the payback for their policies on Saturday, winning only 600,000 votes, less than half as much as in 2020. With the exception of the capital Bratislava, the opposition Smer won in all regions.

Peter Pellegrini’s Hlas (Voice) party, a split from Fico’s Smer, came in third with 14.7 percent. Observers believe that cooperation between the two parties is likely after the election. Pellegrini said he could act as a “stabilising element” in a future coalition.

Another possible government partner is the Slovak National Party (SNS) with 5.6 percent. The right-wing extremists under Andrej Danko have openly declared themselves in favour of forming a “bloc.” On immigration and issues regarding foreigners, the ultra-right SNS and Smer advocate the same policies.

The arch-conservative Christian Democrats (KDH) also made it into parliament. So did the neoliberal party Freedom and Solidarity (SaS), which won 6.3 percent.

Fico’s election victory caused considerable consternation in Brussels and Berlin. It is feared that after Viktor Orbán’s Hungary, another EU member will oppose supporting Ukraine and sanctions against Russia. Aleksandar Vučić, the president of Serbia, which is not yet a member of the EU, also has close ties with Moscow.

Fico, like Orbán, will not push his opposition to Brussels too far, however. Economically, Slovakia, home to numerous international car companies, is desperately dependent on the EU.

Fico’s anti-war rhetoric disguises an extreme right-wing policy that has so far been largely noted with favour in the EU. He is a typical Stalinist turncoat, combining his pro-capitalist policies with populist rhetoric.

Fico had started his political career in the Czechoslovak Communist Party, embraced the market economy after the fall of Stalinism and supported the sell-off of public property that plunged many workers into poverty. When the successor to the CP, the SDL, was increasingly discredited as a result of its anti-working-class policies, he founded the Smer-SD in 1999, which has since moved steadily further to the right.

From 2006 to 2010 Fico made pacts with two far-right parties, supported the EU’s disastrous austerity dictates in Greece and passed on the consequences of the economic crisis to his own people. In his second term in government, he also mixed populist rhetoric with a right-wing, EU-friendly foreign policy. Especially on the refugee issue, Fico is fully in line with the EU and wants to close the so-called Balkan refugee route, if necessary, with the help of the military.

Fico has shown no fear of contact with right-wing extremist forces in the past, and there are many indications that a future government will lean even more heavily on them.

Ľuboš Blaha, deputy leader of the Smer, courted favour with the extreme right during the recent election campaign. At an election rally, he declared that they wanted to free the country from “the Euro-American occupation” and a “fascism in rainbow colours.”

Fico’s disengagement from the Ukraine war, while popular, has few practical consequences, as Slovakia has already handed over its main weapons systems and no further deliveries were planned anyway. In addition, Pellegrini, a potential coalition partner, is explicitly in favour of military aid to Ukraine. The head of Hlas maintains close relations with the German Social Democrats (SPD), who advocate an escalation of the war against Russia.

ARES Masters & Training Scholarships In Belgium 2024/2025

Application Deadline: 17th November 2023 at 12pm

Offered annually? Yes

Eligible Countries: Students from African and Developing countries

To be taken in: Belgium

About the Belgium ARES Scholarship: Each year, the Academy of Research and Higher Education (ARES) grants an average of 150 fellowships in the framework of the Masters and 70 fellowships in the framework of the internships to the nationals of the countries of the South.

Eligible Countries: South Africa, Benin, Burkina Faso, Burundi, Bolivia, Cambodia, Cameroon, Cuba, Ethiopia, Ecuador, Guinea, Haiti, Indonesia, Kenya, Madagascar, Morocco, Mozambique, Nepal, Niger, Uganda, Peru, Philippines, DR Congo, Rwanda, Senegal, Tanzania, Tunisia, Vietnam and Zimbabwe

Accepted Subject Areas (Masters): 

• Master of Specialization in Development, Environment and Societies
• Specialization Master in Human Rights
• Master of Specialization in Aquatic Resource Management and Aquaculture
• Master of Specialization in Risk and Disaster Management
• Specialized Master in Integrated Management of Health Risks in the Global South (IManHR)
• Specialized Master in International Development
• Master of Specialization in Transfusion Medicine
• Specialized Master in Microfinance
• Master of specialization in integrated production and preservation of natural resources in urban and peri-urban areas
• Specialized Master in Public Health Methodology
• Master of Science in Public Health – Methods of Research Applied to Global Health
• Master of Science and Environmental Management in Developing Countries
• Specialized Master in Transport and Logistics

Accepted Subject Areas (Training): 

• Internship in control and quality assurance of medicines and health products
• Research Initiation to Strengthen Health Systems
• Internship in Geographic Information System
• Internship in secondary resource development for sustainable construction
• Methodological internship in support of innovation in family farming

Type: Masters, Training

About the Belgium ARES Scholarship: Within the framework of the Belgian policy for development cooperation, the Minister for Development Cooperation and the Directorate-General for Development Cooperation entrust the Belgian Higher Education Institutions with the preparation of Postgraduate Programmes (Advanced Masters) and Training Programmes that are specifically oriented towards young professionals from developing countries.

International Courses and Training Programmes are part of the global study programmes of the Higher Education Institutions. They are open to all students who satisfy the conditions of qualification but aim at proposing training units that distinguish themselves by their openness towards specific development issues.

Eligibility: The following will apply for the selection of holders of scholarships:

1. Originally from a developing country. To be eligible, applicants must reside and work in their own country at the time of filing;
2. Only nationals of the following countries are eligible to apply for scholarships ARES: Benin, Bolivia, Burkina Faso, Burundi, Cambodia, Cameroon, Cuba, Ecuador, Ethiopia ( only for courses in English ), Haiti, Madagascar, Morocco, Niger, Peru, Philippines, DR Congo, Rwanda, Senegal, Vietnam ;
3. Either under the age of 40 for courses and under 45 for training periods at the start of training;
4. Either holds a diploma comparable to a diploma of the second cycle of Belgian university education. However, for certain types of training, different requirements may be set out, which will be specified below;
5. Demonstrates a professional occupation in a developing country of at least two years after completing his / her second cycle or three years after the end of his / her studies when the candidate holds a post-graduate diploma from a university in an industrialized country;
6. Good knowledge of written and spoken French. For courses organized in another language, it is necessary to have a good knowledge of the language of the course, written and spoken. The candidate will also be asked to commit to learning French to participate in everyday life in Belgium;
7. Apply for a single training

Selection Criteria: 

• The academic curriculum
• For courses, priority will be given to candidates who are already holders of a diploma third cycle, save in exceptional circumstances duly justified in the application.
• Priority will be given to candidates who have not already received a grant in Belgium.
• Professional experience
• Belonging to a partner institution: The commitment of the candidate in development activities
• Nationality requirements
• Gender equality
• The future reintegration prospects

Number of Scholarships: Belgium ARES grants 150 scholarships for participation into the masters and 70 scholarships for participation into the training programmes.

Value of Belgium ARES Scholarship: Travel (internal and external), Monthly living allowance, Indirect mission costs, Installation costs, Tuition fees, Registration fee, Insurance costs, Housing allowance, Allowances for dependents, Return fees, In 1st session completion bonus (June).

Duration of Scholarship:  For the duration of the program

How to Apply: Would you like to submit an application form and receive a grant? Are you unsure about your eligibility?

Follow these guides :

• 01/ Procedure for submitting applications
• 02/ Admissibility criteria
• 03/ Application form

It is important to go through the Application requirements and procedures on the Scholarship Webpage (see Link below) before applying.

Visit Scholarship Webpage for details

Important: Applying for a Belgium ARES Masters and Training scholarship is free of charge. ARES does not charge any fee at any stage of the application or selection process. You may raise any question or concern about persons or companies claiming to be acting on behalf of ARES and requesting the payment of a fee by emailing ARES at maryvonne.aubry[at]ares-ac.be.
Any application containing cash will be automatically rejected.

What if UFOs Have Been a Cover for High-Tech—and Human—Defense Research Programs?

John P. Ruehl

A mix of government, private, adversarial, and unexplained objects are filling up an increasingly congested U.S. airspace. Uncovering what fills it should be of greater public interest.

Could the decades-long pursuit of unraveling the UFO mystery potentially function as a cover for advanced government research and testing programs for innovative forms of propulsion and craft design? Moreover, might the recent rollout of official government hearings signal a gradual disclosure of some of those capabilities? This scenario is worth considering, as the process of investigating UFOs comes into sharper public focus.

In 2023, fascination with Unidentified Flying Objects (UFOs) and Unidentified Aerial Phenomena (UAP) has spiked. David Grusch, a former intelligence official who led the analysis of UAPs within the U.S. military, told a Congressional hearing in July that the United States had been collecting non-human craft “for decades.” At the first Republican debate on August 23rd, candidates were asked about the president’s responsibility to provide information to the public about UFOs. And on August 31st, the Pentagon launched a new website providing the public with declassified information about sightings.

Mainstream intrigue surrounding UFOs was born following the 1947 Roswell incident, the crash of what was initially described by the U.S. military as a “flying disc” in Roswell, New Mexico, but later attributed to a weather balloon. To quell public fear and speculation, official government studies to investigate UFO/UAP reports, including Project Blue Book, Project Sign, and Project Grudge, were launched. While the government feared air warning systems could be overwhelmed by reports, it was also wary of Soviet attempts to boost false sightings and promote conspiracy theories that could instigate panic and allegations of a coverup.

During the Cold War, UFO reports became common, often coinciding with missile and rocket tests (a habit which continues today). Several Soviet and U.S. military personnel also testified that UFOs were able to temporarily take control over missile and nuclear facilities. However, in 1997, the CIA revealed that the military had lied to the public throughout the Cold War about many UFO sightings to obscure its black projects and keep Moscow in the dark about technological advancements. Blaming sightings on natural phenomena like ice crystals and temperature inversions fueled public distrust toward the government and its claims about UFOs/UAPs.

Many secret military aircraft were frequently mistaken for UFOs, such as the U-2 reconnaissance plane, introduced in the 1950s, which featured a gray frame that often reflected the sun. The SR-71 “Blackbird” meanwhile started service in 1966 and wasn’t declassified until the 1990s. Its distinctive shape, speed, and altitude capabilities were often mistaken for a UFO. The B-2 Spirit, introduced in the late 1980s, also had a unique aerodynamic design and its ability to control lift, thrust, and drag at low speeds often gave the appearance that it was hovering.

Since the Cold War, secretive experimental military aircraft have continued to generate UFO reports. But unexplained phenomena have also fueled conspiracy theories. In November 2004 off the coast of San Diego, Navy pilots filmed UFOs demonstrating rapid acceleration, physics-defying sudden changes in direction, and other feats in videos eventually released to the public in 2017. And despite formalizing a UFO/UAP reporting process in 2019, Navy pilots and other military personnel who have witnessed them have been hesitant to come forward due to fear of ridicule or professional repercussions.

The U.S. military’s reluctance to disclose UFO/UAP information is often linked to the need to protect classified technology. Military agencies can choose to neither confirm nor deny such information exists. But when the government transparency website, the Black Vault, submitted a Freedom of Information Act request to the Navy for more UFO/UAP videos, it was denied because it would harm national security and “may provide adversaries valuable information regarding Department of Defense/Navy operations, vulnerabilities, and/or capabilities.”

Releasing these videos without additional information may also be an effective way for the U.S. military to hint at its own new technological capacities for various strategic, political, and scientific reasons. Suddenly revealing these technologies could result in rising geopolitical tensions and trigger a reaction, while merely hinting at it may also serve as a deterrence to adversaries. Gradually preparing the public for emerging technologies is equally as important, while encouraging speculation about UFO/UAPs could divert attention away from classified projects.

By clandestinely testing experimental new technologies on their own defenses without resorting to lethal forces, military agencies can also gain valuable insights into their capabilities and vulnerabilities in real-world scenarios.

A 2021 report by the DoD’s intelligence agencies also noted that many UFOs/UAPs were “technologies deployed by China, Russia, another nation, or a non-governmental entity.” The New York Times broke the story days before an updated version was provided to Congress in 2022. An ongoing investigation by The Warzone meanwhile suggests there are a large number of hostile drones mistaken for UFOs/UAPs that the government has until recently failed to confront.

Being unable to properly identify another country’s experimental aircraft, by labeling it a UFO/UAP, would also demonstrate shortcomings in U.S. air defense systems. Similarly, releasing documentation of U.S. surveillance of other countries’ stealth aircraft and other technology would give them a better idea of U.S. military capabilities and would alert these countries that they were being surveilled.

In addition to other countries, companies are also responsible for a significant number of UFO/UAP reports. The first drones were manufactured more than a century ago in the UK and U.S., and the capabilities of the private sector have grown considerably since then. Camouflage technology has made commercial drones increasingly difficult to clearly identify, and hundreds of drones by China’s largest drone maker DJI, were noted to have entered restricted airspace in Washington D.C. in 2022 alone. And, of course, commercial drones can be purchased and used by other governments.

Nonetheless, much of the technological developments concerning advanced aircraft stem from the U.S. military and other agencies. Since the 1970s, NASA has expanded on ideas developed by scientist and engineer Arthur Kantrowitz to use lasers to launch satellites without fuel or an engine, with successful tests carried out in the late 1990s. The U.S. Air Force and NASA have both continued developing this technology in the 21st Century, while NASA has also explored plasma propulsion technology that may have caused numerous UFO/UAP reports.

The U.S. Navy has pushed the boundaries of technology further with the development of laser-induced plasma technology, patented in 2018. This innovation can generate extremely high temperatures in the air, creating plasma that can be harnessed to form intricate shapes and lifelike optical illusions, even simulating aircraft performing seemingly impossible maneuvers. Additionally, the U.S. military has developed the ability to produce sound out of lasers, which would add an additional layer of realism to UFO/UAP sightings.

Over the last few years, increasing attention has also been brought to projects by Salvatore Cezar Pais, an aerospace engineer and scientist who has worked for the U.S. Navy and the U.S. Naval Air Warfare Center Aircraft Division (NAWCAD). Despite lacking empirical evidence and rigorous, peer-reviewed scientific scrutiny, his alleged breakthroughs in propulsion and energy generation would serve as some of the most groundbreaking technological breakthroughs in history.

Pais’s patents with the U.S. Navy relate to the development of advanced propulsion systems that could potentially lead to rapid thrust technology and an abundance of clean energy generation. This includes a “craft using an inertial mass reduction device,” which was patented in 2018, while a patent for a “plasma compression fusion device” was also filed but later appeared to be abandoned. Nonetheless, documents retrieved by The Warzone through the Freedom of Information Act reveal that his inventions are being considered for the Air Force, NASA, and the Defense Advanced Research Projects Agency (DARPA).

Of course, like U.S. President Ronald Reagan’s proposed “Star Wars” missile defense system in the 1980s, Pais’s patents could be designed to bait adversaries into a costly arms race. That is not to say that these countries are not already developing their own fascinating projects. China has been drastically increasing its development of plasma technology in recent years, and alongside the UK, Germany, and Japan, is developing Active Flow Control (AFC) technology to improve aerodynamic performance in aircraft. European entities have also recently made breakthroughs in plasma propulsion technology, which may boost UFO/UAP reports across the continent.

Amid these developments, it remains crucial for the public to stay engaged and informed about UFOs/UAP – the more publicly observed the evidence is, the harder it becomes to manipulate. Considering the history of government audacity in crafting political and war propaganda, we should remain skeptical of the entities shaping narratives about extraplanetary intelligent life.

A shift toward destigmatizing and embracing a public approach to UFOs/UAP, both domestic and foreign, is essential. Alongside the Black Vault, initiatives like the open-data Galileo Project, spearheaded by Avi Loeb from Harvard University’s Astronomy Department, are actively seeking evidence of extraterrestrial life and pushing our understanding of outer space. By involving the public in the search for answers, we can bridge gaps in understanding and move closer to demystifying these phenomena.

UK government prepares to use anti-strike laws against doctors

Robert Stevens

The Conservative government is preparing to use its new anti-strike legislation against National Health Service (NHS) workers in Britain.

Threats to use the Strikes (Minimum Services Levels) Act were ramped up during this week’s annual conference of the Conservative Party. Consultants, senior doctors and radiographers began strike action over three days from Monday.

Striking doctors at the rally in Manchester, October 3, 2023

Hospitals across England saw picket lines mounted by members of the British Medical Association (BMA), which represents junior doctors and consultants. The three-day strike follows earlier walk-outs by medics who are seeking an above-inflation increase to make up for years of pay erosion. Last month, the two groups took joint strike action on one day for the first time. Including this week’s strikes senior doctors have held five days of action, while junior doctors have held 25 days of strikes.

The doctors and radiographers are the last NHS workers involved in industrial action, after a dozen health trade unions reached a sellout agreement detrimental to over 1 million staff.

On the eve of the strike, the leadership of the senior consultants wrote to Health Minister Steve Barclay saying that there was no further industrial action scheduled and that the BMA wanted further negotiations to settle the dispute. The BMA pledged that no further strikes would be called for four weeks to allow time for talks. It added that strikes would be resumed if there were no “credible deal that we can put to our members by November 3”. This offer was reiterated on Tuesday by BMA leaders at a national rally of hundreds of striking doctors held outside the conference centre in Manchester where the Conservatives are meeting.

Consultants are calling for a 12 percent rise for 2023-2024, while their junior colleagues are demanding a 35 percent rise to make up for 15 years of real-terms pay cuts. The government has made a “final” pay offer of a below inflation 6 percent for consultants, and 6 percent plus a lump sum of £1,250 for junior doctors.

The Tory government is working flat out to defeat the doctors strike, not to negotiate and compromise with the Financial Times noting Tuesday, “No direct talks have taken place between [Health Minister Steve] Barclay and the British Medical Association, the doctors’ union, for more than six months”. Replying to the BMA’s letter, the government said there was nothing to negotiate.

Prime Minister Rishi Sunak ensured that the doctors strike featured in his keynote speech ending the Tories conference Wednesday, complaining that “they continue to demand, massive unaffordable pay rises.”

The previous day Barclay said the Tories “have faced opposition from the usual suspects when we are trying to do the best for patients. You probably saw some of them on your way in this morning. The militant BMA leadership – whose strikes have resulted in countless cancelled appointments and pose a serious threat to the NHS’s recovery from the pandemic. Their Consultants and Junior Doctors Committee are relentlessly demanding massive pay rises.”

He pledged the government would “take on” and defeat the doctors. This is to be carried by imposing “work notices” under minimum service levels, forcing NHS workers to break strikes. Last month, after the government finished sham consultations on minimum service levels for ambulance staff, fire and rescue services and passenger rail workers, it launched a new consultation on bringing doctors and nurses under the legislation. The eight week consultation ends November 14, meaning that any industrial action after that date can be targeted. A Department of Health statement updated on October 3 read, “We propose that hospitals will treat people who require urgent or emergency treatment in hospital and people who are receiving hospital care and are not yet well enough or able to be discharged, during the period of industrial action as they would on a non-strike day”. Presently some staff are already exempted from strike action, with trade union agreement, to provide the cover needed to care for patients.

The Strikes Act containing the legislation was passed in July, but almost every trade union that had been involved in a strike wave that began last summer has caved in and accepted a sellout below inflation deal, meaning the government has not yet resorted to using the authoritarian powers. A frothing Tory media is now demanding that it is used against any upcoming strikes by doctors and rail workers.

The Telegraph editorialised Monday under the headline “Time to strike back against the strikers” that “The Government has sought to legislate to ensure employers can insist upon the provision of basic levels of service, but there are no signs of that yet being enforced in any serious way. It’s time it was.”

In response to this offensive, both wings of the BMA leadership are claiming that the government will eventually respond to a few sporadic strikes organised by a self-described “fighting trade union” and to moral appeals. Vivek Trivedi, co-chair of the BMA junior doctors committee told the media Tuesday that “We don’t have to strike ever in the future. We can cancel the rest of this weeks strikes if the government came to the table and put an offer which is credible to our membership to end this dispute, but they are still resolutely ignoring us.”

Vivek Trivedi speaking at the doctors' rally in Manchester

These bankrupt appeals were made even as Trivedi acknowledged, “It’s been more than 140 days since he met with my colleagues and its been 170 days since he met with our consultant colleagues.”

BMA council chair Phil Banfield declared at the rally, “They [the Tories] say the NHS is safe in Rishi’s hands. I say prove it. End the pay dispute here and now. Get round the table and give us a credible offer”

He stated, “The BMA is coming to be at your side in your workplace… we are changing the way we train our reps and activists… we are experts as a professional association, but we are the doctors trade union… we will not just win this dispute but every dispute.”

Phil Banfield speaking at the doctors' rally in Manchester

Such bellicose language is an attempt to restore faith in the BMA after its selling out the junior doctors’ national strike in 2016, leading to an acceleration in attacks on their pay and conditions.

In response a group of “left” forces won leadership positions in the union’s junior doctors’ section. One of their number, Dr. Arjan Singh, told a rally in London in April, “We will not sell you out. There will be no weak or feeble action. To the registrar’s here, this is a new BMA and this is not 2016. This is a BMA that is unashamedly pro-doctor and for you.”

Since that date the union has not wrested a single concession from the government.

Chinese property giant Evergrande another step closer to collapse

Nick Beams

The fate of the highly indebted Chinese property developer Evergrande is hanging in the balance as attempts are made to get its restructuring back on track before liquidation proceedings start in a Hong Kong court on October 30.

A man rides on an electric bike past by a residential buildings under construction in Beijing on June 5, 2023. [AP Photo/Andy Wong]

The restructuring process for the company, which is reported to have the equivalent of more than $300 billion in debts, has been in train for more than a year following its default on bond repayments towards the end of 2021.

Authorities are anxious to avoid a liquidation because it can set in motion a scramble by creditors to grab what they can from the carcass of the failed company. That can lead to unpredictable consequences which can reverberate through the financial system.

It is why considerable effort has been made to try and effect a restructuring.

This effort was derailed last week by two developments: the inability of a subsidiary company to make payment on a bond and the announcement that Evergrande founder and chairman Hui Ka Yun was under investigation by authorities. He potentially faces criminal charges, as yet unspecified, but believed to involve attempts to move money offshore.

Born into rural poverty and raised by his grandmother, Hui, now aged 64, started the company in 1996 and became a multibillionaire on the back of China’s property and real estate boom, rising to a high level within the ruling Communist Party.

In a speech in 2018, he highlighted the intimate connections between the CCP and the financial oligarchy.

With a fortune at that time estimated to be almost $44 billion, he said: “All I have and all that Evergrande Group has achieved were endowed by the party, the state and the whole society.”

In July 2021, he was among the guests onstage at Tiananmen Square during the celebration of the 100th anniversary of the founding of the Communist Party.

Within months of reaching that pinnacle, Evergrande had defaulted on debts and its rapid downward slide was underway.

It was set in motion by a decision of the government in 2020 to clamp down on the easy money policies that had led to the elevation of Evergrande and other property developers.

Evergrande’s business model was not exactly a Ponzi scheme but close to it because it depended on the continual inflow of credit. The scheme worked while the going was good and then failed when it was not. It borrowed money to finance projects with home buyers often paying in advance before the projects were completed. This money, together with borrowed funds, was used to finance other developments.

The model continued to function so long as apartment prices kept rising and credit was freely available.

However, Chinese authorities became fearful that the growth of debt was becoming so great that it might threaten the stability of the financial system. Instituting the new regime, Chinese president Xi Jinping insisted houses were for living in, not for speculation.

There was also a political dimension to the government’s moves as was seen in the simultaneous clamp down on major tech company giants. It reflected the fear that with increased financial power, the oligarchs acquired greater political clout that could undermine the stability of the regime.

As the World Socialist Web Site analysed in 2018, when Xi moved to acquire power beyond the normal two terms as president and rule indefinitely, it was becoming a Bonapartist regime with “Chinese characteristics” seeking to balance between conflicting forces.

Under conditions of slowing growth, it defended the interests of the oligarchy as a whole against the working class, while strengthening the state apparatus against the growing bellicosity of US imperialism. At the same time, it sought to regulate and control the different interests within the oligarchy itself.

Now the growing property market crisis has compounded economic and financial tensions. It would be significant enough if Evergrande were an isolated case. But it is the expression of a crisis throughout the property and real estate sector which, when all its interconnections are considered, accounts for about 25 percent of the Chinese economy.

The impact of Evergrande alone is indicated by the fact that it has acknowledged it still owes the suppliers of construction materials the equivalent of $82 billion.

Since its demise, another major developer, Country Garden, has come under the spotlight after experiencing problems in debt repayments despite being touted as secure. Many smaller developers have gone under.

One of the key questions confronting the government and financial regulators is how far the property crisis will reach into the financial system.

As the New York Times reported recently: “China’s giant banking system, the world’s largest, is heavily exposed to the real estate crisis: nearly 40 percent of all bank loans are related to property. Pressure is building on those banks as dozens of real estate developers have defaulted or missed payments on overseas bonds …”

Parallels have been drawn with the crisis in the US in 2007-2008 which originated in the property market. However, there are significant differences. The US crisis was sparked by speculation in the securities market whereas the problem in China is loans that cannot be repaid.

There is also the added factor of state involvement in the Chinese banking system providing a degree of support.

This is not to say that there not major problems.

As the NYT noted back in January, shortly before stepping down, the then Chinese vice-premier Liu He told the World Economic Forum in Davos there were major problems that could arise from the real estate crisis.

“If not handled properly, risks in the housing sector are likely to trigger systemic risks—that is why prompt steps must be taken to address them,” he said.

One channel through which those risks could emerge is the so-called shadow banking system where problems have already taken place. One of the oldest shadow banks, Xinhua Trust, went bankrupt in May after expectations of government backing failed to materialise.

Another shadow bank, Zhongrong, a trust fund, is on the edge of going under after missing payments to 150,000 investors. It holds $136 billion worth of client investments. In total, the shadow banking system manages around $4.5 trillion.

A recent analysis in the Economist summed up the situation as follows: “The risk of contagion is high because lending by trusts is ubiquitous and investment in them produces tangled ties. They have also lent to local government projects—and now cities and provinces across China are struggling to repay debts, which are estimated to have hit $12 trillion at the end of 2022.”

The policy of the government and financial authorities at this stage appears to be to restructure debts and secure their repayment over a longer term. That, at least, was the strategy with regard to Evergrande which was to have issued new bonds as part of a restructure plan, but that scheme fell apart when a subsidiary defaulted.

The hope in the real estate sector and among its financial backers is that the government will step in directly, but so far there is little sign of this.

As Lestor Ross, the managing director of the Beijing office of the US legal firm Wilmer Hale told the NYT: “The system is carrying this forward, waiting and waiting and waiting for some kind of bailout, and it has not come.”

Germany’s 2024 budget: Armaments über alles

Max Linhof

On Friday, the upper house of the German parliament discussed the 2024 budget, which includes the biggest military budget since World War II and huge cuts in every social sector. It is a far-reaching attack on the working class—including teachers, carers and other public sector workers, children, the sick, those in need of care and refugees. It is the most blatant austerity budget in the history of the Federal Republic of Germany.

Yet the government and the opposition have not even named the true extent of the cuts. The nominal cuts of 6.4 percent or €30.5 billion, which are horrendous in themselves, do not take into account core inflation of 6.1 percent. If this is included, the overall cut in the budget is 11.8 percent.

[Photo: Max Linhof/WSWS]

These cuts are not simply for budget consolidation. They are intended to claw back the hundreds of billions that have been thrown down the throats of the banks and corporations in recent years. Above all, however, arms spending is being massively increased, and every area of social life is being subordinated to war policy.

While cuts are being made rigorously in almost all departments, military spending is increasing rapidly. With the planned €51.8 billion, the defence budget takes up almost 20 percent of the entire federal budget for 2024.

But that is by no means all. In addition to the reported €51.8 billion, there are €19.2 billion from the Bundeswehr (armed forces) “special fund,” as well as billions more hidden in other budgets, such as expenditure for UN missions, Germany’s share in various EU armament expenditures such as the promised arms deliveries to Ukraine, which alone amounted to €17.1 billion from January 24, 2022 to July 31, 2023.

[Photo: Max Linhof/WSWS]

Yet military spending has not only been rising since the Ukraine war. Just as the Bundeswehr “special fund” had been discussed long before the Russian invasion, the arms budget has also been continually raised for years. In order to be able to enforce German economic interests all over the world with tanks and bombers, all social sectors are literally being plundered.

The health budget is being almost completely slashed. From €64.4 billion in 2022 to €24.5 billion in the current year and finally down to €16.2 billion next year. This cut is the result of the “profits before lives” policy: the government has almost completely cut the funds for monitoring and fighting COVID-19, even though the pandemic is currently spreading rapidly again in ever new variants. Moreover, hardly any resources are being made available for research and cures for Long COVID, although hundreds of thousands are suffering from it.

The massively shrunken health budget not only endangers the health of the population but is also a slap in the face of the nurses who have borne the burden of the pandemic and went on strike for months for better working conditions and higher wages and were then rewarded with cuts in real wages. Now health is being cut further.

[Photo: Max Linhof/WSWS]

The federal subsidy for long-term care (previously €1 billion) is being cut and will have to be financed by workers paying higher contributions in future. This is a particular burden on low-income earners, who already have to pay a considerable part of their income for social benefits and are hit hardest by inflation.

The basic child allowance, which was supposed to help children in need participate at least somewhat in education and society, is being brutally cut. Originally planned at €12 billion for 2025, only €2.4 billion are now earmarked. This hits the weakest in society who are dependent on support, especially in a country where a quarter of children and young people are at risk of poverty or social exclusion.

Money for jobseekers and the long-term unemployed will also be reduced, as will the budget for housing and urban development, despite a dramatic housing shortage. The education budget will also be cut, further limiting the educational opportunities of working class children and driving ailing education systems into collapse.

To pay off the national debt, the government is also drawing on a reserve it had been building up since 2015 for asylum policy. While all parties are agitating xenophobically and ranting about upper limits for refugees, the municipalities are systematically deprived of money, provoking problems with accommodation and care. This is then used to justify the inhumane policy of Fortress Europe.

Drastic cuts are also planned in the transport budget, especially for investments in the railway network and freight transport. Instead of the urgently needed €45 billion, the railways will receive less than half that amount, which poses a sustained threat to the restoration of the rail network. A measure that makes it more than clear that even the talk of environmental and climate protection is nothing but wastepaper. Money only flows to the rich and into armaments.

In comparison: the ministries of Education (€20.3 billion), Health (€16.8 billion), Development (€11.5 billion), Economy & Climate (€10.9 billion), Housing (€6.9 billion), Foreign Affairs (€6.1 billion) and Environment (€2.4 billion) together will receive €74.9 billion less than the military budget. The cuts are substantial everywhere.

[Photo: Max Linhof/WSWS]

Large parts of the cuts result from the fact that public employees’ salaries and pensions are not being adjusted to the increased cost of living. For example, in the April wage settlement, federal government employees faced a pay freeze for this year. The increase that will come in 2024, at 5 to 10 percent annually, does not even begin to compensate for the real increase in prices. In this way, armaments and the billions in gifts to the rich are to be financed directly through cuts to the workers.

This is because the Consumer Price Index (CPI) has risen by 17.5 percent between January 2020 and August 2023. The index measures the average price rise of all goods and services that private households buy for consumption purposes. But the two most relevant items for working households are far above average. Food is on average 30.7 percent more expensive and energy costs have risen by as much as 53.5 percent. Fuels such as diesel and gasoline are also about 50 percent more expensive than in 2020.

In this way, billions of euros are diverted from ordinary workers to the state budget, which is then used to enrich the wealthy and put the horrendous rearmament into action. The same aggressiveness with which the federal government is fueling the proxy war against Russia is evident in the budget cuts. Therefore, the struggle against social cuts and wage reductions must be linked to the struggle against war.