Record global stock prices reflect growth of financial parasitism

Nick Beams

This week has seen global stock prices approach record highs under conditions where the German government took the unprecedented step of issuing bonds at a negative yield. The two interrelated developments point to an explosive growth of financial parasitism.

World equity markets are close to their highest levels in history, as measured by the FTSE All-World Index. The FTSE 100, Britain’s index of leading shares, surpassed its previous high, achieved at the end of 1999 on the eve of the bursting of the dot.com share market bubble, to join Wall Street’s Dow and the German DAX in record territory.

This is an extraordinary phenomenon given that large areas of the global economy, most notably Europe and Japan, are either stagnant or in recession; China and the so-called “emerging markets,” which have been the main centre of global growth, are slowing down; and the much-vaunted US growth is still below historical trends.

All of the major reports on the state of the world economy in the recent period—from the World Bank, the International Monetary Fund, and the Organisation for Economic Cooperation and Development—have downgraded previous growth projections and warned that the economy is increasingly characterised by a vicious cycle.

Investment has fallen to historic lows because of the lack of demand and profit opportunities. The decline in investment is leading, in turn, to a further decline in demand and profit expectations.

Notwithstanding these powerful trends, the stock markets continue to power on, providing a graphic demonstration of the degree to which the accumulation of wealth by global financial elites has become divorced from the actual process of production.

One of the main factors boosting Wall Street in recent days was the estimation, following the testimony by US Federal Reserve Chairwoman Janet Yellen to the US Congress, that the central bank was in no hurry to start lifting official interest rates, ensuring that the flow of cheap money into financial markets would continue.

European markets also took heart from Yellen’s remarks and were boosted as well by the approach of the European Central Bank’s money-printing “quantitative easing” (QE) program, slated to begin next week.

In addition, they were warmed by the news that the European Union and the financial oligarchy it represents had obtained the Syriza-led Greek government’s abject capitulation, including the renunciation of the pseudo-left party’s election promises to fight the EU’s austerity program. The Greek developments, ensuring the further impoverishment of the Greek working class, was a source of satisfaction not only because of its implications for Greece, but also for the message they sent across Europe that any demand for an end to austerity would meet the same fate.

The emergence of negative bond yields, underscored by the German government’s issuance of five-year notes at a negative rate, signifies that the bond market is being transformed into a gigantic Ponzi scheme, in which the ability to make money depends on the continuous flow of new cash—largely emanating from central banks—into the financial system. It is increasingly operating according to the “bigger fool” principle. While it may be considered foolish to invest in a high-priced bond that offers a negative yield, speculators bet that there is an even bigger fool who will buy the bond when its price rises even further.

When negative yields first made their appearance, it was thought they were a transitory phenomenon, the result of the search for a “safe haven” for cash. But now they are becoming a permanent feature of the financial landscape.

Besides Germany, five-year bonds issued by Denmark, Finland, the Netherlands and Austria, as well as corporate bonds issued by Nestlé and Shell, have come with negative yields.

The immediate impetus for the growth in negative yields is the decision by the European Central Bank to begin bond purchases from March 1 at the rate of €60 billion per month for at least the next 16 months.

Speaking to the Financial Times, Divyang Shah, a global strategist at IFR Markets, said: “It should not be ruled out that, once the ECB QE program begins, we will see German 10-year yields trade through zero and into negative territory.” Swiss 14-year bonds were already trading at negative yields, so such an outcome could not be ruled out, he said, adding that “instead of safe haven-related demand we have QE-related demand.”

The yield on the German 10-year bond yesterday touched a record low of 0.28 percent, with 10-year yields in France, Portugal and Spain also falling to record levels.

The truly explosive growth of financial parasitism, expressed in the negative yield phenomenon, is highlighted by data compiled by JPMorgan Chase. It estimates that in the past year alone the value of negative-yielding bonds in Europe has escalated exponentially—from $20 billion to $2 trillion, a hundred-fold increase. It is calculated that at least one-third of all European bonds now show negative yields. Nothing remotely resembling this has been seen in economic history.

One of its immediate effects is to destroy the financial modus operandi of pension funds and insurance companies. Throughout their history, they have invested in government debt in order to secure a steady and safe rate of return over the long term, often under legal requirements to do so. However, this strategy is increasingly unviable, and in order to meet their commitments, they are being forced to make riskier investments or join the bond market speculation.

The rise of financial parasitism has decisive economic and political implications. As the whole of economic history demonstrates, and the events of the past decade have again revealed, the maintenance of this house of cards cannot continue indefinitely.

A major bankruptcy, produced by a sudden shift in the value of one or another of the major currencies, for example, (such as took place earlier this year with the dramatic leap in the value of the Swiss franc), a corporate default, a sudden shift in sentiment due to an interest rate rise, or one of any number of seemingly accidental events can trigger a chain reaction that brings the entire rotten financial edifice crashing down.

Furthermore, because trillions of dollars have been injected into the financial system by central banks over the past six years, the consequences have the potential to be even more serious than those that followed the collapse of Lehman Brothers in September 2008.

The consequent closures, sackings and mass unemployment and the intensification of the assault on social services will fuel the eruption of social and political struggles that will be met with an immediate and ruthless response from the financial oligarchy. That is the lesson of Greece.

Acutely aware that they have no economic solution to the crisis of the profit system, the ruling elites in every country have spent the past six years boosting police and security forces to deal with the inevitable outbreak of mass struggles.

The international working class must likewise make its own preparations. They centre on the fight for an independent socialist and internationalist program aimed at the overthrow of the financial oligarchy, and the construction of a revolutionary party to lead this struggle.

Chicago’s Abu Ghraib

Andre Damon

In April 2004, the world was shocked and horrified by the release of photographs of sadistic torture carried out by US military personnel at the Abu Ghraib prison in Iraq. Detainees at the prison, most of them locked up for opposing the US military occupation, were beaten, tortured, sexually assaulted and killed.

At the time, the World Socialist Web Site explained that the crimes revealed in the photos and the psychology underlying them could be understood only in relation to the brutality of social relations in the United States, together with the dirty colonial aims of the war itself.

The WSWS further warned that “such a military, accompanied by a growing army of professional ‘civilian’ mercenaries, represents a danger not only to oppressed peoples in the Middle East, Central Asia and elsewhere, but to the democratic rights of the population in the US.”

A decade later, this assessment has been fully borne out. On Tuesday, theGuardian newspaper revealed the existence of what it describes as a “black site” on the West Side of Chicago, where police detain, beat and torture prisoners, while keeping their whereabouts secret from their families and attorneys.

The newspaper writes: “The Chicago police department operates an off-the-books interrogation compound, rendering Americans unable to be found by family or attorneys while locked inside what lawyers say is the domestic equivalent of a CIA black site.”

Among those detained at the facility was Brian Jacob Church, one of the “NATO 3” who were entrapped by Chicago police in 2012 in connection with protests against the US-led military alliance, which was meeting in Chicago.

Church was taken to the secret facility and handcuffed to a bench for 17 hours. Along with two other protestors, he was set up by police on terrorism charges and subsequently sentenced to five years in prison.

Vic Suter, another participant in the protests, said that she was taken to the facility and interrogated while shackled to a bench for eighteen hours before she was allowed to see a lawyer.

The Guardian writes that detainees taken to the facility report having been beaten and otherwise tortured by police. In 2013, one detainee was found unconscious in an interview room at the facility. He later died.

On Thursday, the Intercept corroborated the Guardian’s account, interviewing another torture victim at the facility who was handcuffed across a bench and hit in the face and groin until he agreed to provide false testimony to police.

The revelations follow the report last week by the Guardian that Richard Zuley, one of the lead torturers at the Guantanamo detention center, used similar techniques to secure false confessions from murder suspects when he was a detective with the Chicago Police Department.

Chicago has a long history of police violence. It is also the political home of Barack Obama and has been run since 2011 by Rahm Emanuel, Obama’s former White House chief of staff.

The Obama administration, far from repudiating the horrific and criminal actions of its predecessor, has deployed the apparatus of police violence ever more directly against the American people. A series of events has marked the ever more open application within the borders of the United States of the murderous methods of the “war on terror” tested out and perfected in Afghanistan, Pakistan, Iraq, Libya, Syria, Somalia and Yemen.

· In September 2010, the Obama administration ordered raids on the homes of leaders of the Anti-War Committee and the Freedom Road Socialist Organization in Minneapolis and Chicago on charges of “providing material support to terrorism.”

· In May 2012, Chicago police arrested the “NATO 3,” charging them with conspiracy to commit terrorism.

· In March 2013, US Attorney General Eric Holder declared that the president had the right to kill American citizens without a trial or any legal due process, including within the borders of the United States.

· Just one month later, in April 2013, the city of Boston was placed under de facto martial law following the Boston Marathon bombings, with residents told to “shelter in place” while armored vehicles and helicopters patrolled the streets and police carried out warrantless house-to-house searches.

· In June 2014, the American Civil Liberties Union released a report entitled “War Comes Home: The Excessive Militarization of American Policing.” The ACLU reported that the Defense Department had transferred $4.3 billion in military hardware, including armored vehicles, helicopters, and belt-fed machine guns, to local police departments.

· In August 2014, the authorities responded to protests against the police murder of unarmed teenager Michael Brown with a military/police crackdown. Hundreds of peaceful protesters were arrested, shot with rubber bullets or exposed to tear gas, and over a dozen members of the press were detained.

The Obama administration is presently seeking a new Authorization for Use of Military Force, nominally to fight the Islamic State of Iraq and Syria (ISIS), but with no geographical boundaries defined. On Wednesday, three Brooklyn residents were arrested in connection with this new war on ISIS, clearly raising the potential for this second “war on terror” to become an occasion for police-military operations within the US “homeland.”

These developments express the growing convergence of militarism abroad with an attack on democratic rights within the US. What tie these two processes together are the class interests of the financial aristocracy and the criminal methods it employs in the defense of its wealth and power.

In pursuit of these aims, the ruling class seeks to mobilize the most backward and reactionary sections of the population, including sadistic prison guards and fascist-minded police detectives. But the ultimate responsibility for these crimes rests with forces at the highest levels of the state.

It is worth recalling that late last year the Senate released a report implicating the Bush administration in a brutal torture regime carried out at Guantanamo and CIA “black site” torture centers throughout the world. Far from anyone being held accountable for these crimes, those who ordered and carried them out have defended their actions, while the Obama administration has sought to block any prosecution of those responsible.

The actions of the ruling class express the basic character of American capitalism, which is based on parasitism, fraud, criminality and an economic order in deep decline. The American ruling class has no response to the crisis of its system and the inevitable growth of social opposition other than violence and repression.

Record utility shutoffs in New York

Steve Filips

Utility shutoffs in New York State have risen by double digits in 2014, driven by a dramatic rise in electricity and fuel prices, adding further proof that millions of people are struggling with basic necessities five years into the so-called economic recovery.

The Public Service Commission (PSC) reports that as of November 30, over 1.2 million residential customers were more than 60 days behind in their bills, and that nearly 277,000 residential electric and gas customers had their service disconnected for non-payment in 2014.

Last winter rates shot up during the record cold and the spike in fuel costs, but have not come down correspondingly since the fall in oil and gas prices.

National Grid, which provides gas and electric service to much of upstate New York, terminated service for over 62,000 customers during the first 10 months of 2014, up 25 percent from all of 2013. Statewide, terminations are up 14 percent in 2014 over the previous year. In June and July 2014, National Grid was terminating 80 customers an hour.

In the comment section on an article last month on Syracuse.com about National Grid’s 25 percent increase in shutoffs, one worker wrote, “...Their bills are overwhelming (we are a family of 8), so we worked out payment arrangements to help with a $495 electric bill from this winter. When my husband switched jobs—leaving us without a paycheck for almost a month—they absolutely refused to help us in any way, shape, or form. Thankfully my parents helped us out.”

Once service has been disconnected it is very difficult to have it restored. In addition to having to pay all past due amounts, families are forced to pay an assortment of late fees, collection fees, disconnection fees and reconnection fees. On top of this, interest of 18 percent is charged on all past due amounts. Often the interest and fees total more than the outstanding debt. Making things even more difficult, utilities demand huge security deposits on top of all other payments.

The PSC does not report it, but tens of thousands of residents remain without service in the current frigid winter, and service cutoffs are continuing.

New York State, like most states, has changed its laws, which used to prohibit disconnections during the winter months. Instead, utilities must attempt to contact an adult in the home. If they determine that health or safety would be jeopardized, the customer is referred to a local social service agency, but service is still cut off after 15 business days.

According to the US Energy Information Administration, New York has consistently had some of the highest utility costs in the entire nation. For example, National Grid charged its residential customers $316 million in March 2014, a 56 percent increase from the previous March.

The burden of these costs has been borne by the working class, while some corporations have received massive subsidies as incentives to relocate or remain in New York.

New York Utility Project (NYUP), a consumer advocacy group, states that, “New York’s industrial customers’ rates are 11% lower than the national average, while New York’s residential rates are more than 60% higher than the national average.”

PSC chairperson Audrey Zilberman, in a press release last winter, explained, “The unusually cold weather that has gripped the region has caused energy supply prices to surge in New York State and throughout the Northeast.” This has led to the current shutoffs and has further strained the finances of struggling families.

The high rates being charged residential customers also exposes the lie that deregulation and privatization of the utilities lead to lower rates and better service.

The New York Power Authority (NYPA), a quasi-public agency that has 16 electric generating facilities, once provided low cost energy to residential customers, but has since allocated that energy mostly to corporations.

The largest subsidy is for $5.6 billion for a 30-year sweetheart deal between NYPA and Alcoa, which has an aluminum smelting facility in Massena, New York. This amounts to a 40 percent discount off the wholesale electric rates.

For 2013 the non-profit agency raked in income of $228 million, which was $56 million more than the prior year and was attributed to the higher electric prices.

The NYPA was founded during the Depression by then-governor of New York, Franklin D. Roosevelt. It manages the Niagara Falls hydroelectric project, which is the fourth largest hydroelectric facility in the US.

The PSC is also considering the agreement reached this past weekend between Rochester Gas & Electric (RG&E) and Chicago-based Exelon Corporation to maintain operations at the Ginna power plant. Exelon claims this plant is unprofitable. The agreement will mean that RG&E customers will see their bills increase by over 4 percent to subsidize Exelon’s profits.

Those workers who can least afford the sky-high utility rate increases are being forced to go without basic necessities, or to risk their lives utilizing dangerous alternatives in an effort to keep the lights on or stay warm.

Chicago mayor forced into runoff election

Kristina Betinis

In the Chicago municipal elections February 24, Democratic mayor and former Obama administration official Rahm Emanuel failed to win the more than 50 percent of votes needed to avoid a runoff on April 7.

Despite the intervention of President Obama into the mayoral race at a publicity event last week, Emanuel earned just 45 percent of the vote, compared to 34 percent for Cook County Commissioner Jesus “Chuy” Garcia.

Three candidates ran well behind Emanuel and Garcia, taking roughly 21 percent of the vote. Of that, 12 percent went to millionaire businessman Willie Wilson, who is African American. He sought votes from city Republicans, openly supporting the new Republican Governor Bruce Rauner, who has launched a frontal assault on Illinois workers, particularly public employees.

The election was a political debacle for both Emanuel and Obama as popular support for the Democratic Party continues to drop amid expanded wars, deepening recession, continued austerity and rising levels of police violence.

Even more than the vote for Garcia, a long-time Democratic Party hack, mass abstention expressed the hostility of Chicago working people to the whole political structure. Voter turnout fell to an abysmal 34 percent, only slightly higher than the 2007 record low of 33 percent, when Mayor Richard M. Daley was reelected for a sixth term against token opposition.

The remarkably low voter turnout reflects widespread political alienation and opposition to the Democratic Party in Chicago, which has ruled the city for more than 80 years. The candidates who ran against Emanuel postured as political alternatives, but did not put forward any significant policy differences.

The elections took place on the same day an exposé was published on the Chicago police department’s secret prison detention center, or “black site,” where prisoners have been held without legal representation, and tortured and killed by police. (See, “Chicago Police Department operates “black site” interrogation compound”)

The enormous social anger at Emanuel’s policies, largely continuing those of his predecessor, Richard M. Daley—including the closure of 50 elementary schools and multiple public mental health clinics, the denial of the basic needs of the working class for jobs, affordable housing, quality health care and education and public transportation—cannot and does not find any expression in the city’s perfunctory election rituals.

To the extent that there are divisions in the Chicago political establishment, this reflects concerns that Emanuel ’ s arrogant personality and thinly-veiled hostility to the working class reveals too much about the real social relations in the city, and the lack of democracy that exists in the US more broadly.

This concern found expression in the Garcia campaign, which focused in part on associating Garcia with an earlier era in Chicago politics, the tenure of Harold Washington, the city’s first and only African American mayor, in office from 1983 to 1987. On this thirty-year-old association—and not on Garcia’s current record of supporting cuts to pensions and health benefits on the Cook County board—his campaign will aim to curry favor with African American and Hispanic voters against Emanuel in the April run-off election.

Chicago Teachers Union vice president Jesse Sharkey, a leading member of the International Socialist Organization, discussed the CTU’s support for Garcia with Chicago magazine Wednesday morning, saying, “Garcia will be the next mayor. Politics in Chicago has changed forever ... The CTU played an important role in getting Chuy to run.”

Not only did CTU leaders play a part in Garcia’s candidacy, support for him was pushed through the CTU’s house of delegates via a video endorsement by union president Karen Lewis, released ahead of any discussion on who the union would endorse. (See, “Chicago Teachers Union backs long-time Democratic party politician for mayor”)

Sharkey went on to say, “As the Democratic Party has governed to the right and taken on tax cuts for the wealthy and public coffers shrink, there’s a big space that has opened up to the left and candidates are saying, “My opponents are corporate Democrats.”

Sharkey is already working hard to bolster illusions in bourgeois politics, by insisting that the corrupt, sclerotic and frankly criminal political establishment can in some meaningful sense be pushed to the left.

“The reason that imperial leaders like Rahm, or George W., or the Daleys could get away with so much is not because people liked what they were doing,” he claimed. “It’s because they don’t think they can do anything about it. Once the little idea sinks in, that’s when you have 26,000 on the streets around the CTU strike; that’s when Harold Washington gets elected.”

Sharkey’s comments demonstrate the real attitude of groups like the ISO, which represent a privileged layer of the middle class. They support the Democratic Party by promoting illusions in the existence of “non-corporate” Democrats, while covering up the fundamental class nature of this big business party and all its representatives.

In testimony before US Congress, Fed chair signals likely delay in interest rate hike

Andre Damon

Speaking before Congress this week, Federal Reserve Chair Janet Yellen, stressing the need for “patience,” made clear to Wall Street that the US central bank might push back its time table for beginning to raise interest rates.

Referring to the Fed’s policy-setting Federal Open Market Committee (FOMC), Yellen reiterated her previous indication that the central bank would not increase the “target range for the federal funds rate for at least the next couple of FOMC meetings.”

That would make the Fed meeting this coming June the earliest date for a rise in the benchmark rate beyond the zero to 0.25 percent level that has prevailed since the end of 2008. In her testimony before the Senate and House banking committees on Tuesday and Wednesday, respectively, Yellen seemed to add a further condition for raising rates, suggesting a later date, when she added that the central bank would not raise rates until inflation rose to what it considered a more normal level of 2 percent.

Given the continuing prevalence of price deflation in the US and other countries, Yellen’s comment suggested an inclination to put off raising rates. US prices fell by 0.4 percent in December, according to the latest Labor Department report.

Yellen’s testimony before the Senate Banking Committee on Tuesday prompted a stock rally, with the Dow Jones Industrial Average closing up by 92 points, or 0.5 percent, to a new record of 18,209. “Investors interpreted Yellen’s remarks on Tuesday as giving the Fed more flexibility to hike later than June,” declared Reuters, summing up the consensus response to Yellen’s appearance.

While US stocks were largely unchanged Wednesday, following Yellen’s testimony before the House committee, the FTSE all-world stock index closed at a new record high, reflecting both the enthusiastic response to Yellen’s comments and the abandonment by the newly-elected Greek government of its anti-austerity election program.

In the run-up to the Fed’s January policy report, a strong US dollar and falling global demand led major US corporations, including Microsoft, Caterpillar, Procter & Gamble and DuPont, to announce either reduced fourth-quarter earnings or curtailed 2015 forecasts. The rise of the dollar, driven by the disjuncture between US Fed plans to raise US interest rates and European and Japanese moves to slash their rates, was cited by corporate officials as a major factor in the fall in exports and earnings.

Yellen’s congressional testimony was, at least in part, a response to pressure from Wall Street and big business to signal a delay in any increase in US rates, a move that would tend to narrow the gap between the dollar and other major currencies.

Republican members of the House Financial Services Committee took Yellen’s appearance Wednesday as the occasion to grandstand against the Fed chair’s supposed left-wing bias, directing their fire at her comments last year that the growth of social inequality posed economic dangers and alleging that her meetings with the White House were inappropriate.

Defending the “independence” of the Federal Reserve from a proposal to subject its monetary policy to a congressional audit, Yellen took a no less right-wing position than her Republican critics, declaring that such a proposal would have prevented former Federal Reserve Chairman Paul Volcker from taking politically unpopular measures to end high inflation in 1979 and the early 1980s.

Volker, who was appointed Fed chairman by Democratic President Jimmy Carter, deliberately thrust the US into a recession in order to use mass unemployment as a bludgeon to drive down wages. His policies went hand in hand with the smashing of the 1981 PATCO air traffic controllers strike and scores of other struggles by American workers, setting the stage for decades of attacks on workers’ living standards. For all of Yellen’s rhetorical invocations of social inequality, her move to associate her own policies with Volker’s made clear the interests she serves.

Her supposed defense of the “independence” of the Fed, moreover, was made in the context of the Fed’s continued functioning as a direct tool of the most powerful Wall Street interests.

The Democrats at the hearings for the most part praised Yellen, who, as both Fed chair and vice chair, has overseen the transfer of trillions of dollars to Wall Street. Among the few Democrats to voice any criticism of Yellen was Massachusetts Senator Elizabeth Warren, who quibbled about an obscure Federal Reserve official, general counsel Scott Alvarez, in order to posture as an opponent of the close relations between the Federal Reserve and Wall Street.

Warren made no mention of any of the Federal Reserve’s real crimes, from standing by as major financial institutions made billions of dollars selling toxic mortgage-backed securities before 2008 to the backdoor bailout of Goldman Sachs and other banks through the rescue of insurance giant AIG.

Warren strongly favored Yellen’s appointment in 2013, declaring that she would “make a terrific federal reserve chair.”

Unions demobilize Canadian railway workers

Carl Bronski

A threatened lockout by Canadian National Railway’s management of 4,800 safety inspectors and rail maintenance workers was averted late Monday night when Unifor officials and company negotiators reached an eleventh-hour tentative contract settlement.

With the signing of the deal, all major sections of the over 11,000-strong unionized workforce at Canada’s two major railways—Canadian National (CN) and Canadian Pacific (CP)—have either been forced into binding arbitration or been covered by recently initialed tentative agreements.

No details of the proposed CN contract will be released until Unifor members vote on the agreement over the next three weeks. However, it can be said without fear of contradiction that the Unifor-CN agreement will not reverse any of the major concessions the union has made in previous deals. CN shares rose on the Toronto Stock Exchange in early morning trading after the announcement of the settlement. The railway, which consistently posts multi-billion dollar annual profits, has already recorded one of the strongest growth and earnings ratings of any Canadian company over the past year.

While Canada’s Conservative government did not publicly threaten to introduce legislation ordering an end to any disruption of CN’s operations, illegalizing any future job action by the CN safety inspectors and rail maintenance workers, and imposing binding arbitration, it hardly needed do so. Time and again, Stephen Harper’s Conservative government has intervened to "suspend" workers’ right to strike or threatened to do so. Just in the past four years, the government has criminalized strikes by Canada Post, Air Canada and CP Rail workers. It has also permanently stripped tens of thousands of federal government employees of the right to strike under a new essential services law.

Only last week the Conservative government threatened to again criminalize a strike by 3,300 CP Rail engineers, conductors and yardmen, and publicly vilified the striking workers for destabilizing the Canadian economy. In the face of this threat, the Teamsters union quickly capitulated and agreed to binding arbitration. (See: Citing government threats, Teamsters suppress Canadian Pacific rail strike 

CN's own lockout threat was clearly made with the intention of precipitating government intervention. Labour Minister Kellie Leitch, for her part, chose to wait and see if Unifor could be cowed without the government having to take center stage.

Over the weekend, Unifor President Jerry Dias quickly moved to demonstrate that the last thing he wanted was a confrontation with the Harper government. He held direct talks on Sunday with CN’s president and pledged that even in the event of a lockout he would instruct his members to ensure passenger traffic in Montreal—where CN has commuter tracks—would not be disrupted.

The outcome and logistics of the several railway contract negotiations underscore the role that the trade unions play today in enforcing “labour peace” even as Canadian corporations wage an all-out offensive on the living standards, jobs and working conditions of workers across the country.

Only ten days ago, contracts for 1,800 Unifor inspectors and rail maintenance workers and 3,300 Teamsters Canada Railway Conference (TCRC) locomotive engineers at CP plus another 1,800 Teamsters locomotive engineers at CN were being negotiated at various bargaining tables. Added to this equation was the expired Unifor-CN contract encompassing another 4,800 workers.

In all cases, the railways were intent on upholding and expanding the concessions they have pried from workers in recent years—concessions that have allowed them to impose a brutal work-regime, including for many workers12-hour days, and squeeze ever larger profits from a shrinking workforce.

Yet there was never any question of uniting railway workers in struggle against CN and CP, let alone joining their struggle with those of locked-out US West Coast longshoremen and striking US oil refinery workers. The longshoremen’s lockout had in fact created serious bottlenecks in freight transport in Canada, as US shippers moved cargo to the increasingly overloaded Canadian port of Vancouver and thereby placed railway workers in an economically even more critical and powerful position.

The unions did everything to divide the workers by union bargaining unit and company. As the CP engineers and yardmen were preparing to strike on the evening of Feb. 14, action that put them on a collision course with the hated Harper government, Unifor came to CP Rail’s aid by signing a tentative contract deal on behalf of 1,800 CP inspectors and rail maintenance workers. The Teamsters union meantime initialed a contract deal with CN Rail on behalf of 1,800 CN engineers.

While the Unifor CP Rail workers had themselves been in a legal strike position as of midnight on Feb. 14th, the union had failed to take the requisite steps to place its members at CN in a position to legally strike alongside them. Yet at the latter company, just as at CP, there had been months of fruitless negotiations.

In a statement issued last weekend CN Rail management itself expressed some puzzlement that Unifor, while long complaining negotiations were at an impasse, had not deigned to consult its membership on a strike mandate.

So as to further divide the workers at CN and CP, the release of the full terms of last week’s Teamsters’ deal with CN and the contract ratification vote are being delayed until April. No doubt cognizant of the experience with their last contract, Teamsters officials have left themselves plenty of time to try to ram through the agreement. In 2014, when the union took another “fully endorsed” deal to the membership, rail workers repudiated it. Citing the contract’s failure to properly safeguard workers against excessive hours and violations of rest-scheduling protocols, they voted 67 percent to reject it.

As for the Canadian Labour Congress, the country’s principal labor organization, it didn’t so much as issue a press release to denounce the government’s moves to illegalize the short-lived, February 14-15 CP Teamsters’ strike.

New Democratic Party (NDP) leader Thomas Mulcair similarly issued no statement on the CP strike and Harper’s pending legislation, nor on CN’s threat to lock out the Unifor workers. The trade union-backed NDP views support for industrial action as an electrified third rail in national politics. In the face of historic attacks on the right to strike, the social democrats occasionally mouth empty phrases about “unfairness,” but like the union leaders they are utterly opposed to any defiance of the strikebreaking laws.

The last thing the trade unions want is the mass mobilization of their members in an open challenge to the dictates of big business and the Canadian state. The actions by Unifor and the Teamsters over the past ten days only underscore that the trade unions today serve only to demobilize and block worker resistance and police the diktats of big business.

It is now some 18 months since the creation of Unifor—the country’s largest industrial union and arguably its most politically influential—as a result of the merger of the Canadian Auto Workers (CAW) and the Communication, Energy and Paperworkers (CEP) unions. At the time, the merger was hailed as an “exciting new beginning” by numerous representatives of the pseudo-left, from Sam Gindin, himself a former CAW official and leader of the “Socialist Project,” to Naomi Klein and “Fightback,” an ostensible Marxist group that tenaciously upholds the authority of the NDP.

Instead, as the World Socialist Web Site warned, the new union has served not as an instrument of working class struggle but as a bureaucratic apparatus for suppressing any fight against concessions contracts and government austerity and for politically subordinating the working class to the parties of big business.

Last spring, Unifor played a leading role in rallying union support around the re-election of the big business Liberal government of Kathleen Wynne. Union president Jerry Dias, like most Canadian union bureaucrats, is now directing his energies to promoting the election of the pro-austerity federal Liberal party of Justin Trudeau or possibly a Liberal-NDP coalition government. As Dias said last September, when announcing that his union’s chief 2015 priority is the electoral defeat of Harper, “If my choice is Stephen Harper or Justin Trudeau, then that’s a no-brainer.”

New Zealand to send troops to Iraq

Tom Peters

Prime Minister John Key announced on Tuesday that up to 143 New Zealand soldiers will be sent to Iraq in May to join the US-led war, ostensibly to help fight the Islamic State in Iraq and Syria (ISIS).

Conscious of widespread anti-war sentiment, the government has sought to portray the deployment as a “non-combat” mission. Key said the troops would be stationed at Camp Taji, north of Baghdad, where they will work with Australian forces to train Iraqi army soldiers “behind the wire.” However, only 16 of the soldiers being sent are specialist trainers.

Investigative journalist Jon Stephenson told RadioLIVE on Tuesday that according to “very reliable sources” New Zealand’s elite SAS commandos are already secretly operating in Iraq. Stephenson, whose reporting in Afghanistan helped expose the complicity of New Zealand forces in war crimes, dismissed the claims of “training and mentoring” as a “cover” and said New Zealand was going to be “part of the killing process.”

The decision to send troops was made following consultation with New Zealand’s main allies in Washington, London and Canberra, behind the backs of the population and in a thoroughly anti-democratic manner. Just five days before the September 20 election last year, Key told Newstalk ZB that the chances his National Party government would join the war were “particularly low.”

During the election campaign, Key and the opposition Labour Party leader David Cunliffe both expressed support for the US bombing campaign in Iraq and Syria. Labour’s allies—the Greens, New Zealand First and the Internet-Mana Party—remained virtually silent on the war in order to prevent it becoming an election issue.

Since the election, the government and corporate media have carried out a propaganda campaign to justify dragging the country into the war. With the support of Labour, the government has also trumpeted the supposed terrorist threat posed by ISIS to justify legislation allowing the Security Intelligence Service to carry out warrantless surveillance. Key has repeatedly claimed, without producing any evidence, that the SIS is monitoring dozens of ISIS sympathisers in New Zealand.

Tuesday’s Dominion Post editorial hailed the decision to send troops because ISIS “is a gang of murdering fanatics who must be resisted.” The New Zealand Herald asserted that the government was “doing the right thing in a just cause.”

In reality, the war has nothing to do with combating Islamist extremism. Washington’s aim is to strengthen its grip on Iraq and its oil, while intervening directly in Syria, where the US has funded militias like ISIS and used them as proxy forces in an attempt to overthrow President Bashar al-Assad. The rise of ISIS, the by-product of Bush’s 2003 US invasion of Iraq and Obama’s bloody interventions in Libya and Syria, is being used as the pretext for unending war across the Middle East.

Key revealed the government’s real reason for joining the war in an interview with the BBC on January 20, stating that it was the “price” of being “part of a club like we are with Five Eyes”—the alliance of New Zealand, British, American, Australian and Canadian spy agencies, which gathers information on hundreds of millions of people. New Zealand’s ruling elite depends on its alliance with Washington, in particular, to support its own predatory imperialist interests in the South Pacific and around the world.

The US and its allies are counting on New Zealand to lend both practical support and a veneer of legitimacy to the war. Earlier this month Britain’s foreign secretary Philip Hammond visited New Zealand and publicly urged New Zealand to join the fight “alongside the US, the UK, Australia, as part of the family.” This was followed by a visit from Iraqi foreign minister Ibrahim al-Jaafari, who formally requested New Zealand troops. Australian Prime Minister Tony Abbott revealed after Key’s announcement that his government is preparing to despatch hundreds more ground troops to Iraq to work alongside the New Zealand contingent.

Every party in parliament supports the alliance with the US. The 1999–2008 Labour government strengthened military and intelligence collaboration with the US by sending troops to Afghanistan and Iraq. Over the past two years, US troops have carried out large-scale exercises in New Zealand, as the Obama administration seeks to integrate the country into its “pivot” to Asia—the military encirclement and preparations for war against China.

In parliament on Tuesday, Key ferociously denounced Labour for opposing the latest deployment to Iraq. He yelled at the party to “get some guts and join the right side,” pointing out that the social democratic opposition in Britain, Canada and Australia all supported joining the war. Key declared, no doubt correctly, that if Labour was the government it would send troops, as it did in 2003.

Labour’s mild criticisms of the deployment are a cynical ploy aimed at containing popular opposition to the war, which the party has made clear that it fully supports. The Herald reported on February 17 that Labour leader Andrew Little “said he supported [US] airstrikes, and he also supported the use of New Zealand spy agencies to identify targets.” The Government Communications Security Bureau (GCSB) has helped to target air strikes in Afghanistan and Pakistan, where they have killed thousands of civilians.

New Zealand First, which contested last year’s election in a de-facto alliance with Labour and the Greens, made demagogic statements against the troop deployment. At the same time, the right-wing nationalist party repeatedly called for more spending on the military and indicated its support for US imperialism. In parliament on Tuesday its defence spokesman Ron Mark declared that “if we’d maintained the promise the National Party gave to re-establish our air combat capability, we might have been able to send that [to Iraq instead of ground troops]... but we don’t have those options.”

Greens co-leader Russel Norman declared that the government was “entering another bloody conflict that will only make things worse in the Middle East.” The Greens, however, supported New Zealand’s decade-long contribution to the occupation in Afghanistan. The party’s main objection to the current war in Iraq is that it lacks the fig leaf of a UN mandate. Labour and the Greens have previously denounced the UN Security Council—in particular China and Russia—for failing to pass motions that would have paved the way for a direct assault on Syria.

Australian prime minister’s leadership continues to unravel

Mike Head

More than a fortnight after 40 percent of his own Liberal Party members of parliament voted to oust him in a party room “spill” motion, Prime Minister Tony Abbott’s leadership is continuing to fall apart. Media headlines such as “Liberals paralysed over leadership,” now appear daily, accompanied by damaging leaks and allegations targeting the prime minister.

Underlying the destabilisation is mounting business dissatisfaction with the government’s failure to impose deep cuts to social spending, and workers’ wages and conditions, amid a rapid deterioration of the Australian economy.

After surviving the leadership spill vote on February 9, Abbott declared that everything was resolved and “good government” would begin from that day. But all his efforts to shore up his position, primarily pitching to his right-wing base by posturing as a strongman on the alleged threats posed by terrorists, Muslims and refugees, have backfired.

Last weekend, the Murdoch media’s Australian newspaper, effectively undermined Abbott’s credentials on “national security” by reporting that last November he proposed a unilateral Australian intervention into Iraq, with 3,500 ground troops, to confront the Islamic State of Iraq and Syria (ISIS).

“Flanked by his chief of staff Peta Credlin in a meeting in Canberra on November 25, the Prime Minister said the move would help halt the surge of Islamic State in northern Iraq,” the Australian reported. When Abbott raised the idea with Australia’s leading military planners, they were “stunned,” telling Abbott that sending soldiers without any US or NATO cover would be “disastrous.”

Abbott claimed that the report was “fanciful, absolutely fanciful,” only to have the Australian’s editor Clive Mathieson insist: “We stand by the story 100 percent.” This may indicate a shift in the stance of the Murdoch media, which up until now has urged Abbott to find ways to turn his government around, and push ahead with budget-cutting and pro-business economic “reform.”

The Australian’s revelation came as part of a series of articles by associate editor John Lyons critical of Credlin, Abbott’s long-time chief of staff. For weeks, ever since Rupert Murdoch tweeted that Abbott should sack Credlin, the Australian has been agitating for her removal.

Lyons upped the ante by reporting that “Credlin had a key role in developing last year’s budget, including on occasions acting as the chair of the expenditure review committee” and “Abbott has allowed Ms Credlin a role previous prime ministerial advisers have never had.”

The pressure on Abbott intensified last Sunday when the Liberal Party’s treasurer Philip Higginson, a prominent businessman, wrote an explosive letter to the party’s federal executive. He condemned the “dysfunction” caused by an inherent “conflict of interest” between Credlin, the PM’s chief adviser, and her husband, Brian Loughnane, who is the Liberal Party’s federal director.

Credlin is closely associated with the right-wing constituency on which Abbott has relied since winning the Liberal Party leadership five years ago at the expense of Malcolm Turnbull, who is now Abbott’s putative challenger. As against Abbott, Turnbull, a wealthy ex-merchant banker with deep ties throughout the financial elite, is positioning himself as the man who can deliver on the demands for a wholesale cutting of social spending and wage levels.

Dressed up in a more socially “progressive” guise, Turnbull presents himself as a more sophisticated and commanding salesperson who can somehow convince millions of ordinary working people to make painful financial sacrifices. As part of this pitch, he has called for the Labor Party, which has blocked some of the most unpopular budget measures, and feigned opposition to austerity, to join him in fashioning a bipartisan effort to implement the requirements of big business.

Turnbull’s posturing, and the growing concerns in ruling circles with Abbott’s leadership, reached a new level this week as the prime minister stepped up his vitriolic attacks on Human Rights Commission president Gillian Triggs, who earlier this month released a damning report on the suffering of refugee children inside Australia’s detention camps.

On Tuesday, Abbott denounced the report as “a blatantly partisan, politicised exercise” and confirmed that the government wanted Triggs’s resignation. That morning, Triggs had testified in a Senate committee hearing that Attorney-General George Brandis’s departmental secretary requested her resignation during a meeting on February 3, and offered her another posting as an inducement to quit. The Labor opposition has asked the Australian Federal Police to investigate whether this constitutes bribery, a serious offence under the Criminal Code.

Turnbull, who remains a cabinet minister, pointedly took an opposite stance to that of Abbott. He dismissed the debate about Triggs’s impartiality as one that “misses the point” and described her as a “very distinguished figure.” He boasted instead of the government’s record in reducing the number of children in detention by blocking all refugee boats from reaching Australia. As with the austerity agenda, he is touting his ability to provide “progressive” window-dressing for fundamentally reactionary policies.

The corporate discontent with Abbott escalated another notch when the government ruled out seeking to cut the minimum wage and overtime penalty rates, even if its own Productivity Commission inquiry into the workplace relations system recommends reducing them. The Australian Financial Review condemned the government for “giving up” and “waving the white flag” on the issue.

Australian Chamber of Commerce and Industry chief executive Kate Carnell said employers were “really disappointed” after Employment Minister Eric Abetz, a key Abbott loyalist, declared that the government would leave the minimum wage and penalty rate in the hands of the Fair Work Commission. Carnell accused the government of “trying to avoid all controversy.”

The government’s decision flies in the face of intensifying calls by dominant sections of finance capital for a wholesale restructuring of the Australian economy, including a drastic reduction in real wages, in order to make it “internationally competitive” by matching the cuts in living standards imposed on workers in the US, Europe and around the world.

Yesterday’s editorial in the Melbourne Age again warned that the slide in iron ore, coal and liquefied natural gas prices over the past year had “cut deeply into profits for Australian producers.” The resulting fall in tax revenues, combined with the government’s failure to get key cuts from last year’s budget through the Senate, could produce a deficit of “as much as $50 billion this financial year.”

The Age declared: “The government, though, is looking like it has lost the appetite for reform and the courage to try.” Unless there was a shift, “Australia will have endured three years of drift and equivocation by another government with its eye fixed on the short term.”

As far as the corporate elite is concerned, it is no longer tenable for the minimum wage to sit at about double that of the US and for average weekly earnings to remain about 70 percent above the global mean. Moreover, welfare payments, along with other social services, must be slashed to force the unemployed to accept work at poverty level wages.

Whatever the immediate outcome of the intense political crisis that has engulfed the Abbott government, the result will be a massive assault on the jobs, wages and social conditions of the working class.

US-Iran negotiations inch toward a nuclear agreement

Peter Symonds

Talks this week in Geneva between US Secretary of State John Kerry and Iranian Foreign Minister Javad Zarif appear to have taken a step toward a long-term agreement over Iran’s nuclear programs. The prospect of a deal to end the protracted US confrontation with the Iranian regime has already fuelled considerable tension between Washington and its allies in the Middle East, particularly the Israeli government.

Details of the closed-door negotiations leaked to the American media point to a pact that would limit or reduce Iran’s existing uranium enrichment capability for a lengthy period, then allow it to increase the number of gas centrifuges that are used to enrich uranium. The US and its allies have accused Tehran of seeking to build a nuclear weapon, a charge that Iranian leaders have repeatedly denied.

The presence of US Energy Secretary Ernest Moniz and Ali Akbar Salehi, director of the Atomic Energy Organisation of Iran, in Geneva points to high-level discussions of various technical aspects of an agreement. Many questions remain unanswered, including the time frames involved and the ending of crippling US-led sanctions—the critical issue for Iranian leaders.

Press reports this week suggesting that the freeze on Iran’s uranium enrichment could be 10 years provoked sharp criticism from US Congressional Republican leaders and Israeli ministers.

Republican Senator Bob Corker, the foreign relations committee chairman, declared that 10 years was not long enough and was “very concerning.” Another Republican, Lindsey Graham, denounced the Obama administration for negotiating with Iranian officials who are “hell bent on expanding their influence in the Mideast in a destructive fashion.”

Israel’s Intelligence Minister Yuval Steinitz said on Monday that Israel considered the negotiations “totally unsatisfactory,” as a deal would allow Iran to be “extremely close” to a “dangerous breakout program.” He condemned a 10-year time frame as “sacrificing the future of Israel and the US, and the future of the world.”

The Israeli government has bitterly opposed the negotiations from the outset and repeatedly threatened military action against Iran if all Tehran’s nuclear facilities were not dismantled. Israel, which has an arsenal of nuclear weapons, is determined to ensure its unchallenged military superiority in the Middle East.

Relations between the Obama administration and Israeli Prime Minister Benjamin Netanyahu, who will address the US Congress next week at the invitation of Republican leaders, have become rancorous. Obama has declined to meet Netanyahu, who will undoubtedly use his speech to denounce the talks with Iran.

On Tuesday, Obama’s national security adviser Susan Rice declared that Netanyahu’s decision to travel to Washington before next month’s election in Israel was “destructive of the fabric of the relationship” between the two countries.

Addressing US Senate hearings on Tuesday, Secretary of State Kerry defended the talks with Iran and dismissed suggestions that a time-frame was decided. “The answer is the proverbial ‘don’t believe what you read.’ I’ve told you it’s not true,” he said. Kerry said he expects to know soon if Tehran would agree to “an acceptable and verifiable plan” to curtail its nuclear program in exchange for sanctions relief.

The US has always placed the onus on Iran to demonstrate that it has no plans to build a nuclear weapon. In practice, this means severe restrictions on its uranium enrichment to ensure no possibility of “break-out”—that is, to produce enough weapons-grade uranium—within a year. The US has also demanded a highly intrusive inspection regime, on top of the International Atomic Energy Agency monitoring of all Iranian nuclear facilities.

The negotiations involving the so-called P5+1 group—the US, Britain, France, China, Russia and Germany—began with an interim agreement in November 2013 that followed the election of Iranian President Hassan Rouhani in June. Iran was compelled to freeze or limit much of its nuclear activity in return for limited sanctions relief. After the initial deadlines ran out, the talks were extended last November to the end of next month to secure the framework of an agreement, and June to finalise it.

The Obama administration has deliberately dragged out the talks to force Iran to agree to its terms. Punitive US-led economic sanctions have halved Iran’s oil exports, sent inflation spiralling and slashed government revenue. The current slump in global oil prices has further hit the Iranian economy, with growth expected to more than halve to 2 or even 1 percent in the coming fiscal year.

Iranian President Rouhani insisted on Wednesday that a comprehensive nuclear agreement would have to include the lifting of international sanctions. “The side negotiating with us should know that conclusion of the talks and the result of a deal should be removal of the whole oppressive and illegal sanctions,” he said.

Rouhani had the backing of Iran’s Supreme Leader Ayatollah Ali Khamenei to proceed with the negotiations. Khamenei, who has the ultimate say over foreign and defence policies, has to date kept conservative critics of the talks inside Iran in check. He warned yesterday that if the US and its allies retained the sanctions, Iran could retaliate by holding “back gas that Europe and the world is so dependent on.”

While pressing for an agreement to end the sanctions, the Iranian regime is keeping its options open should the talks fail. Last week, Defence Minister Hossein Dehghan signed an agreement in Moscow to expand military ties between the two countries. Noting their shared viewpoints, Dehghan said: “Iran and Russia are able to confront the expansionist intervention and greed of the United States through cooperation, synergy and activating strategic potential capacities.”

Any nuclear agreement faces numerous obstacles. The National Council of Resistance of Iran, a pro-Western Iranian exile group, claimed on Tuesday to have evidence that Iran was conducting secret nuclear research and some uranium enrichment at a site dubbed Lavizan-3. These claims are clearly aimed at undermining the negotiations. This organisation has in the past been used by Israeli intelligence as a conduit for publishing allegations against the Iranian regime.

While Israel has publicly opposed the talks, Saudi Arabia and other Arab states are no less hostile to a deal with Iran. Saudi Arabia, which regards Iran as a dangerous regional rival, has threatened to develop its own nuclear programs if Tehran is permitted to maintain its nuclear facilities. An unnamed Arab official told the Wall Street Journal last week: “At this stage, we prefer a collapse of the diplomatic process to a bad deal.”

With further US-Iranian negotiations due next week, tensions will undoubtedly continue to rise. Provocations or military action aimed at sabotaging the negotiations cannot be ruled out. In the five years up to 2012, Israeli intelligence engaged in a criminal campaign of assassinations and sabotage inside Iran aimed at undermining its nuclear programs. Israel’s Channel 2 aired a program on Tuesday suggesting that Saudi Arabia was on the point of granting Israel permission to overfly its territory “en route to attack Iran if an attack is necessary.”

UK joins US, Poland in sending military trainers to Ukraine

Jean Shaoul

Prime Minister David Cameron announced that Britain is to send military “advisors” and “nonlethal aid” to Ukraine. The purpose, according to defence sources, is to “improve the survivability” of Ukrainian troops who have taken a beating from separatist forces in the east of the country.

The move is widely seen as a bid by Cameron in the run up-to the general election in May to counter criticism from the military and political establishment that Britain has become virtually invisible on the international arena. A parliamentary committee denounced the government for not being “active or visible enough” in dealing with the situation in Ukraine.

More crucially, it signifies that Washington and London are determined to arm Ukraine, up the ante against Russia, and further undermine the ceasefire agreed between Russia, France, Germany and the Ukrainian regime at Minsk earlier this month.

Britain’s deployment of a training force coincides with the deployment of a US battalion to train Ukrainian battalions, and expectations that other NATO countries will follow suit.

After the US announcement that it could directly arm the right-wing regime in Kiev at the beginning of the month, leading European officials publicly acknowledged that the world was on the verge of “total” war between NATO and Russia. London is joining the US and Polish governments in aggressively arming Ukraine and stoking the risk of world war.

Polish Defence Ministry official Boguslaw Pacek announced yesterday that Warsaw would send military advisors to help train Ukrainian non-commissioned officers.

The Ukrainian government is also trying to obtain military support from the United Arab Emirates (UAE), a key US ally in the Middle East.

US Secretary of State John Kerry accused Russia of backing the separatists and failing to abide by the Minsk ceasefire, though he admitted that there had been a lull in the fighting. “To date, neither Russia nor the forces it is supporting have come close to complying with their commitments,” he said, renewing warnings that Moscow would face further sanctions.

Cameron promised, “What we need to do now is deliver the strongest possible message to Putin and to Russia that what has happened is unacceptable. These ceasefires need to hold and if they don’t, there’ll be more consequences, more sanctions, more measures.”

Shortly afterwards, Royal Air Force jets were scrambled to escort two Russian military aircraft seen off the Cornwall coast, although both the prime minister and Defence Secretary Michael Fallon acknowledged that they had not entered British airspace.

Britain will be sending 75 trainers to western Ukraine in the next few weeks to provide instruction in command procedures, tactical intelligence, battlefield first aid, logistics, and the planning and execution of urban operations. They will also assess the training needs of the army’s infantry.

While Britain has deployed troops as part of NATO exercises in Ukraine, this is the first explicit British mission there.

Fallon denied that this was the beginning of a wider deployment of troops and claimed that there would be no mission creep. “We are not deploying combat troops to Ukraine and we will not do so,” he said, adding: “We should come to the help of a friend in need.”

In the next breath, however, he acknowledged that his officials were looking at what other training might be needed, in addition to that announced on Tuesday.

He also said that the Ukrainian government had requested all kinds of military equipment, but insisted that “at this stage” any British military supplies would be “nonlethal,” an indication that heavy weaponry as well as “nonlethal” supplies are indeed being actively considered.

Cameron called on the European Union to examine wide-ranging sanctions on Russia’s economy, which is already on the rocks due to the fall in oil prices.

His move to send British troops to Ukraine has the Labour Party’s support, according to Shadow Defence Minister Kevan Jones. In what amounted to a call for stepped-up intervention, he asked how the plan accorded with “broader NATO strategy” on Ukraine, and “what the overall objective of the deployment is and how long has it been in the planning.”

On Tuesday, Ukrainian President Petro Poroshenko also signed a deal with the United Arab Emirates (UAE) for military and technical cooperation while attending the IDEX military trade fair in Abu Dhabi.

In the wake of the virtual secession of the eastern manufacturing belt of the country following the Berlin and Washington-backed fascist-led coup a year ago, Ukraine has been forced to find new suppliers for its armed forces. Poroshenko said that Ukrainian companies had signed contracts worth tens of millions of dollars to accelerate the modernisation of its armed forces.

The UAE is the fourth-largest arms purchaser in the world, buying mainly from the US and to a lesser extent, France. Thus, any military deal between Ukraine and the UAE must have US approval.

The semi-feudal Gulf monarchy that presides over a migrant labour force forced to live in slave-like conditions is—in terms of arms per capita—the most heavily armed country on the planet. It has tried to build up its own defence manufacturing capacity and taken an increasingly open military role, sending forces to Kosovo and Afghanistan, and carrying out airstrikes in Libya, Iraq and Syria.

Speaking to reporters at the IDEX trade show, Poroshenko said that he hoped that Washington would agree to provide arms to Ukraine. He had reportedly planned to meet chief Pentagon weapons buyer Frank Kendall at the show.

He said of his talks with Washington, “We are in a very practical dialogue, and we hope in the very near future, we have a decision to help us attain defensive weapons.”