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State of Power 2014: The Transnational Institute
By: Andrew Gavin Marshall
Originally posted at the Transnational Institute, 21 January 2014
In its third annual ‘State of Power’ report, TNI uses vibrant infographics and penetrating essays to expose and analyse the principal power-brokers that have caused financial, economic, social and ecological crises worldwide.
In my contribution to the ‘State of Power’ report (and in cooperation with Occupy.com), “State of Europe: How the European Round Table of Industrialists Came to Wage Class War on Europe,” I examine the role of a major corporate interest group in shaping the policies of the European Union.
From the introduction:
“Founded in 1983, the European Round Table of Industrialists (ERT) quickly became – and today remains – one of the most influential voices of organized corporate interests in Europe. Not quite a lobby, not quite a think tank, the ERT is an action-oriented group made up of roughly 50 CEOs or Chairmen of Europe’s top industrial corporations who collectively push specific ideologies, pressure political elites, and plan objectives and programs designed to shape the European Union and the ‘common market’.
The past thirty years of the ERT’s existence has revealed it one of the most influential organizations in Europe, widely known to the EU’s political, technocratic, and financial elites, holding regular meetings, dinners, and social events with prime ministers and cabinet officials of EU member states, as well as the leadership of the European Commission itself. In the wake of the European debt crisis of the past several years, the ERT has again been at the forefront of shaping the changes within the EU, promoting austerity and structural reforms as the ‘solution’ to the debt crisis.
As through their three-decade history, the Round Table today continues to promote the ideologies and interests of corporate and financial power at the expense of the interests of labour and the population more widely. This paper aims to examine this highly influential group in order to shed some light on an organization very well known to those who make the important decisions within the EU, yet largely in the shadows to those who have to suffer the consequences of those decisions.”
To read the full essay on the ERT and the European Union, click here.
To review and access all of the reports which contributed to the TNI ‘State of Power’ report, click here.
The Debtor’s War: A Modern Greek Tragedy
By: Andrew Gavin Marshall
Early on Thursday, 7 November 2013, Greek riot police stormed the offices of Greece’s main public broadcaster, which had been under a five-month occupation by workers who opposed the government’s decision to shutdown the broadcaster, firing thousands and destroying a major cultural institution. The broadcast seems to have come to an end.
The long and painful Greek tragedy continues, where society and culture are gutted, people impoverished, driven into a deep depression, with growing political and social conflicts, the rise of fascism, detention camps filled with immigrants from Africa and the Middle East, trying to escape the dictators we arm, or the wars we support, with suicide rates spiking, health and well-being deteriorate, services and support vanish, and all the people are left to be punished, humiliated, oppressed and destroyed… These are called “solutions” to an economic crisis, on the road to “economic recovery”… think about that for a moment.
Why is this done? Because some of the world’s largest banks demand it. The same banks that created the global financial crisis, and the European debt crisis, and the global food crisis (which drives tens of millions more people into hunger, and makes the banks richer in the process)., and which launder hundreds of billions of dollars in drug money, profit from arms sales, war and terror. Those banks want the people of Greece (and Spain, and Italy, Portugal, and Ireland, and everywhere, always, across the world) to pay the interest they feel they are owed.
Let me put this simply: a computer screen somewhere, at some big bank, says that some country owes that bank a certain amount of money, and thus, the people of that country must suffer and even die, so that the government can afford to pay back the bank. That’s what government’s are for, right? To serve banks… right?
Greece needs to pay the bank, because the bank and all the bank’s friends (what we call “financial markets”) have decided to punish the country of Greece by betting against the ability of the country to repay its debts, to crash its credit rating, making its ability to borrow and spend increasingly expensive and impossible. Now Greece is basically broke. Greece needs money, so it turns to the EU, the European Central Bank, and the IMF for “assistance.”
They demand that Greece – in return for the loan(s) – impoverish its population, cut all social services and health care, education, anything of benefit to the population – destroy it! – because it’s “too costly.” These are called “austerity measures.” Then, ensure that the newly-impoverished population has all their ‘benefits’ withdrawn, which were promised to them through the ‘social contract’ between the population and the government (essentially, a social agreement between people and the state which legitimizes the state’s ability to rule over them). These things must be destroyed. So things like pensions, social security, labour rights and regulations, protections and safety, industries, resources, services and anything that again benefits the population, must be dismantled and sold for cheap to foreign banks and corporations. All must be dismantled to ensure that the newly-impoverished population and country can be effectively and efficiently exploited by cosmopolitical corporations. These are called “structural reforms,” presumably because they ‘reform’ the very structure of society.
Then, with the combination of impoverishment and exploitation, comes the saintly glow of the all-encompassing human desire and civilizational drive – our goal and purpose as a species on this planet, what our societies are organized by and for – the highest stage of humanity: “economic growth.” Who wouldn’t want “growth”? Well, unless we’re talking about something like a wart, rash, infection, inflammation, or a tumour, everyone wants “growth”, right? Even if it’s at the expense of entire societies and populations of actual individual and living human beings, like any single one of us. Just so long as they suffer for “growth,” all will be well and happy.
So what does “growth” mean? It means that the banks and corporations – which worked with government agencies and officials in creating the global economic and financial crises in the first place – now have the ability to reap the benefits of destruction: massive profits, and growing global power. Large corporations have more money than most countries on earth. Their power is protected by the state, their influence unquestioned, their domination of the world’s resources, materials, culture and society is rapidly advancing, and they are – institutionally and ideologically – totalitarian. So what’s not to love, really?
They want it all. Profit and power. Our world is dominated and being re-shaped by a tiny global financial, corporate, political and intellectual elite. And all must suffer so that they can have what anyone in their position would want to have: more, they want it all. And they want you to just shut up and let them take it all. If you have a problem with that, well, that’s what riot police, prisons, and fascism are for.
This is why Greece must suffer. This is why we hear the unholy trinity economic mantra of: “austerity,” “structural reform,” and “economic growth.” The modern Greek Tragedy of ‘The Debtor’s War’ is driven by the tyrannical trio known as the ‘Troika’: the European Commission (of unelected, unaccountable supranational elite technocrats who serve the interests of global corporate and financial power), the European Central Bank (of unelected technocrats and economists who serve the interests of “financial markets” and the big banks), and the IMF (of unelected technocrats and economists who serve global financial and corporate interests). This institutional ‘Troika’ (the EC, ECB, and IMF) demanded the implementation of the ideological ‘Troika’: austerity, structural reform, and economic growth.
Together, institutionally and ideologically, they wreak havoc upon humanity.
Welcome to the most completely INSANE point in human history; the all-or-nothing. Welcome to reality.
Now please, kindly help change it.
Global Power Project: Connecting Josef Ackermann, the Institute of International Finance and the Euro Debt Crisis
Global Power Project: Connecting Josef Ackermann, the Institute of International Finance and the Euro Debt Crisis
By: Andrew Gavin Marshall
Originally posted at Occupy.com
In Part 1 of a Global Power Project exposé on the Institute of International Finance (IIF), I examined the founding the institute as a response by leading world banks to organize and manage their interests in relation to the 1980s debt crisis. When the European debt crisis hit headlines in 2010, the IIF was again on the scene and playing a major part. At the center was the CEO of Deutsche Bank, Josef Ackermann.
Josef Ackermann served as CEO of Deutsche Bank from 2002 to 2012, and over the same period served as Chairman of the IIF. Ackermann was also, and still remains, a member of the Steering Committee of the Bilderberg Group and continues to serve on the IIF’s Group of Trustees, a board which includes a number of prominent central bankers including Christian Noyer, the Governor of the Bank of France and Chairman of the Bank for International Settlements (BIS); Jamie Caruana, the General Manager of the BIS; and Jean-Claude Trichet, who was the president of the European Central Bank from 2003 to 2011.
During the early stages of the financial crisis, Ackermann served as an “unofficial adviser” to German Chancellor Angela Merkel and her then-Finance Minister Peer Steinbrueck. In December of 2009, Ackermann was speaking at a summit in Berlin attended by Chancellor Merkel and several other German cabinet ministers, corporate CEOs and others, where he explained that while the financial crisis had largely been “abated,” many “time bombs” remained — in particular, Greece, which he referred to as the “problem child” of Europe. Ackermann blamed the debt crisis on people having “lived beyond their means for years, if not decades,” warning that pensions and health care systems would “compound the problem” in the future.
The Financial Times has referred to Ackermann as a “reluctant power broker” who “has the ear of Angela Merkel, Europe’s most powerful politician.” Ackermann not only became one of the most influential bankers in the world, but a major political figure as well. As he himself explained: “Financial markets now are very political – political considerations have to play an important role.” In 2011, Ackermann warned that in terms of Europe’s crisis, “I don’t see a quick economic recovery, so we will have a longer time of somewhat lower growth – certainly three to five years.”
In October of 2011, Ackermann delivered a speech in which he said that Europe had “now entered a period of deleveraging” which “will inevitably entail a long period of austerity as governments, households and firms raise their savings.” At an economic forum in December of 2011, Josef Ackermann stated that Europe had to get its debt under control, “even at the cost of national sovereignty,” suggesting that neither “the pressure of financial markets” nor austerity measures “threaten democracy.” The real threat to democracy, according to Ackermann, was the “excessive debt” of European states.
In 2011, France and Germany agreed to negotiate directly with the “private sector” in the next planned Greek bailout agreement. The lead negotiator for the banks was the Institute of International Finance, which was brought in to discuss the potential for the banks to take a slight loss on their holdings of Greek debt. Ackermann was to be one of the lead negotiators for the IIF (also representing Deutsche Bank,a major private holder of Greek debt).
The Institute of International Finance under Ackermann’s chairmanship in turn became directly involved in major European summits, providing key input and suggestions that led to the Greek bailout. In July of 2011, the IIF warned the Eurozone countries that they would have to conclude a bailout agreement for Greece in order to avoid financial markets “spinning out of control.” The IIF delivered these warnings in a report delivered directly to European finance ministers, stating: “It is essential that euro area member states and the IMF act in the coming days to avoid market developments spinning out of control and risk contagion accelerating.”
The IIF undertook talks with Greek political leaders as well as EU officials, the European Central Bank and the IMF, with the organization noting that its managing director Charles Dallara and an IFF team “had extensive meetings with very senior European government officials over several weeks.” The three main IFF officials involved in discussions and negotiations were Charles Dallara (managing director from 1993-2013), Ackermann and Baudouin Prot, the Chairman of BNP Paribas.
According to one report, Ackermann even attended a meeting of the European Council during the EU summit to discuss the Greek bailout. Dallara was reported to have engaged in a conference call with top EU officials, including the Eurogroup chair Jean-Claude Juncker and the European Commissioner for Economic and Monetary Affairs, Olli Rehn. Dallara also reportedly met with European Council President Herman van Rompuy, then-French President Nicolas Sarkozy and Angela Merkel.
Discussions continued over the following months with little resolution. In an October meeting, EU officials reportedly hit a wall, at which point they summoned Dallara as the representative of the banks to the meeting in order “to break the deadlock.” Dallara met with Sarkozy and Merkel and other leading EU officials. While a general agreement was reached with the banks, negotiations over the technicalities continued into 2012, taking place between the Greek government, the EU, IMF and the IIF.
Ackermann explained that the banks were being “extremely generous” and then warned that failure to agree on a new program would open“a new Pandora’s box” for the debt crisis. Ackermann spoke at the World Economic Forum where he said that any agreement would have to force Greece to adhere to “harsh new austerity measures,” including cuts to wages and pensions, as well as making “the labor market more flexible.”
The final agreement had the banks holding Greek debt to take a 50% “loss” of their holdings of that debt, which would be done through a “bond swap” where they were to exchange their current junk status Greek debt for long-term Greek government bonds (debt) with a higher rating. In other words, the much-touted “write off,” or “loss,” for banks holding Greek debt amounted to a fancy financial method of kicking the can down the road.
After leaving his position as Chairman and CEO of Deutsche Bank as well as Chairman of the IIF, Ackermann spoke at the Atlantic Council, a U.S. think tank where he stated that elections in Greece were “not necessary” and “a big mistake.” What was necessary, he said, was “to make the funding of the banking system more certain,” and claimed it would require between 1 and 2 trillion euros. The European Stability Mechanism’s (ESM) ability to provide banks with $1 trillion was, according to Ackermann, “sufficient,” but he added, “we have to do more” and “we should maintain the pressure on the countries to do the necessary structural reforms and the necessary financial reforms to reduce the debt burden.” However, he noted, “if it comes to the worst,” in terms of a potential collapse of the Eurozone, “everything will be done to bail the Eurozone out.”
When Ackermann was asked why Germany did not simply come out and say that it would guarantee bank debts in the Eurozone, he explained that “it would be very difficult to get parliamentary approval for such behavior or attitude. People would not support it at all.” Further, if Germany did publicly state that it would guarantee bailouts for banks, many countries in the Eurozone would then ask, “Well, why then go on with our austerity programs? Why go on with our reforms? We have what we need.” Thus, Germany was not saying so publicly, based on what Ackermann called “political tactical consideration,” adding: “I think to keep the pressure up until the last minute is probably… not a bad political solution.”
Ackermann has never lacked as a source for controversy. He has been referred to as “a global banker and political power broker” by one financial analyst, and Simon Johnson, former Chief Economist at the IMF, referred to him as “one of the most dangerous bank managers” in the world whose advice not just to Germany and Greece but also to Belgium and Switzerland “shaped talks to bail out German lenders [banks], reduce Greece’s debt, leverage the euro-area’s rescue fund and influence regulation.” Ackermann himself stated, “Financial markets have become highly political over the past years… Politics and finance will become even more intertwined in the future. Accordingly, bankers have to think and act more politically as well.” One financial analyst stated: “He’s the most influential banker in the euro zone.” A German economics professor noted, “Deutsche Bank and its CEO are the target of all the people who feel our social or economic system is unfair or wrong.”
In 2011, Ackermann was targeted by an Italian anarchist group that claimed responsibility for sending a letter bomb to the Deutsche Bank CEO, though it was intercepted by police. When confronted by Occupy protesters during a speech he gave in November of 2011, Ackermann touted his “environmental” credentials, explaining that the UN Secretary General had referred to him as a “visionary.”
When Ackermann left Deutsche Bank and the IIF, he did not leave the world of financial and political power. He continued holding positions as a member of the Steering Committee of the Bilderberg Group; Vice Chairman of the Foundation Board of the World Economic Forum; and as a member of the Group of Trustees of the Principles for the Institute of International Finance. On top of that, he became a board member of Investor AB, Siemens AG, and Royal Dutch Shell, as well as being appointed Chairman of Zurich Insurance Group. Ackermann also sits on the international advisory boards of the China Banking Regulatory Commission, the National Bank of Kuwait, and Akbank, Turkey’s largest bank, as well as sitting on the boards of a number of other corporate and financial institutions.
When Ackermann left his position as CEO of Deutsche Bank and Chairman of the IIF, he was replaced at the IIF by Douglas Flint, the chairman of HSBC Holdings, who also sits on the board of the IIF. Flint is a member of the Mayor of Beijing’s International Business Leaders’ Advisory Council, a member of the Mayor of Shanghai’s International Business Leaders’ Advisory Council, a member of the International Advisory Board of the China Europe International Business School, a former director of BP (from 2005-2011), a participant in Bilderberg meetings (including for the years 2011-2013), a member of the European Financial Services Round Table (a group of CEOs and chairmen from Europe’s top banks), a member of the Financial Services Forum, a member of the European Banking Group (a group of over ten top European bank leaders formed to directly lobby the EU on “regulation” of the financial industry), and a member of the International Monetary Conference (IMC), an annual conference of private bankers formed to “compliment” the annual IMF meetings.
Whether through the leadership of Josef Ackermann, or now under the chairmanship of Douglas Flint, the IIF has been and will remain a major global player within the debt crisis and future financial crises, representing the organized interests of the financial markets. It’s no surprise, then, that even the Financial Times noted in 2010 that, three years after the financial crisis began, “the markets (and the bankers) still rule.”
Or as former Deputy Treasury Secretary Roger Altman noted, in 2011, that financial markets had become “a global supra-government” that “oust entrenched regimes… force austerity, banking bail-outs and other major policy changes,” whose “influence dwarfs multilateral institutions such as the International Monetary Fund” as “they have become the most powerful force on earth.”
We need look no further than the Institute of International Finance to see just how “the most powerful force on earth” is organized.
Andrew Gavin Marshall is a 26-year old researcher and writer based in Montreal, Canada. He is Project Manager of The People’s Book Project, chair of the Geopolitics Division of The Hampton Institute, research director for Occupy.com’s Global Power Project, and hosts a weekly podcast show with BoilingFrogsPost.
In the Arms of Dictators: America the Great… Global Arms Dealer
By: Andrew Gavin Marshall
The following is a first draft sample from a chapter currently being written for The People’s Book Project. Read more about The People’s Book Project here, and please consider donating to help the Project continue.
The American imperial system incorporates much more than supporting the occasional coup or undertaking the occasional war. Coups, wars, assassinations and other forms of overt and covert violence and destabilization, while relatively common and consistent for the United States – compared to other major powers – are secondary to the general maintenance of a system of imperial patronage. A “stable” system is what is desired most by strategic planners and policy-makers, but this has a technical definition. Stability means that the populations of subject nations and regions are under “control” – whether crushed by force or made passive by consent, while Western corporate and financial interests have and maintain unhindered access to the “markets” and resources of those nations and regions. Since the 19th century development of America’s overseas empire, this has been referred to as the “Open Door” policy: as in, the door opens for American and other Western economic interests to have access to and undertake exploitation of resources and labour.
As the only global imperial power, and by far the world’s largest military power, America does not merely rely upon the “goodwill” of smaller nations or the threat of force against them in order to maintain its dominance, it has established, over time, a large and complex network of imperial patronage: supplying economic aid, military aid (to allow its favoured regimes to control their own populations or engage in proxy-warfare), military and police training, among many other programs. These programs are largely coordinated by and between the Defense Department, State Department, and the United States Agency for International Development (USAID).
Arms sales are a major method through which the United States – and other powerful nations – are able to exert their hegemony, by arming and strengthening their key allies, directly or indirectly fueling civil wars and conflicts, and funneling money into the world’s major weapons manufacturers. The global economic crisis had “significantly pushed down purchases of weapons” over 2009 to the lowest level since 2005. In 2009, worldwide arms deals amounted to $57.5 billion, dropping 8.5% from the previous year. The United States maintained its esteemed role as the main arms dealer in the world, accounting for $22.6 billion – or 39% of the global market. In 2008, the U.S. contribution to global arms sales was significantly higher, at $38.1 billion, up from $25.7 billion in 2007. In 2009, the second-largest arms dealer in the world was Russia at $10.4 billion, then France at $7.4 billion, followed by Germany, Italy, China and Britain.
There are two official ways in which arms are sold to foreign nations: either through Foreign Military Sales (FMS), in which the Pentagon negotiates an agreement between the U.S. government and a foreign government for the sale and purchase of arms, and through Direct Commercial Sales (DCS), in which arms manufacturers (multinational corporations) negotiate directly with foreign governments for the sale and purchase of arms, having to apply for a license from the State Department.
Between 2005 and 2009, U.S. arms sales totaled roughly $101 billion, with direct commercial sales (DCS) accounting for more than half of the total value, at $59.86 billion, and Foreign Military Sales (FMS) accounting for $40.85 billion. The top seven recipients of U.S. arms sales between 2005 and 2009 were: Japan at $13.14 billion, the United Kingdom at $8.32 billion, Israel at $8 billion, South Korea at $6.53 billion, Australia at $4.17 billion, Egypt at $4.07 billion, and the United Arab Emirates (UAE) at $3.98 billion.
The United States experienced a slight decline in global arms sales over 2009, though it maintained its position as the world’s number one arms dealer, holding 30% of the global market. However, the Obama administration in 2010 decided to change certain “export control regulations” in order to make arms deals easier and increase the U.S. share of the global market. The stated reason for the legal change was “to simplify the sale of weapons to U.S. allies,” though it had the added benefit of “generating business for the U.S. defense industry.” The U.S. National Security Advisor at the time, General James Jones, claimed that without the changes, the existing system of arms sales “poses a potential national security risk based on the fact that its structure is overly complicated.”
In early 2010, the Obama administration began pressuring Saudi Arabia and other Gulf dictatorships (aka: “allies”) to increase their purchases of U.S. arms, upgrade their defense of oil installations and threaten Iran with overwhelming military superiority. In the lead were Saudi Arabia and the UAE in undertaking a regional “military buildup” – or arms race – resulting in more than $25 billion in U.S. arms sales to the region over the previous two years. A senior U.S. official in the Obama administration commented: “We’re developing a truly regional defensive capability, with missile systems, air defense and a hardening up of critical infrastructure… All of these have progressed significantly over the past year.” Another senior official stated, “It’s a tough neighborhood, and we have to make sure we are protected,” adding that Iran was the “number one threat in the region.”
Of course, Iran is actually a nation that exists within the region, and thus has the right to defend itself, whereas the United States cannot “defend” itself in a region in which it does not exist. But then, geographical trivialities have never been a concern to imperialists who believe that the world belongs to them and it was a mere accident of history that all the resources exist outside of the empire’s home country. Therefore, with such a rationalization, the United States – and the West more broadly – have a “right” to “defend” themselves (and their economic and political interests) everywhere in the world, and against everyone in the world. Any other nation which poses a challenge to Western domination of the world and its resources is thus a “threat” to whichever region it belongs, as well as to U.S. “national security.”
Iran is of course not the only competition for the United States and the West in its unhindered access to and control of the world, but China is another and arguably much more significant threat (though not an officially sanctioned U.S. enemy, as of yet). Around the same time the U.S. was pushing for increased arms sales to the Persian Gulf dictatorships (no doubt, to advance the causes of “democracy” and “peace”), the Obama administration secured an arms deal with Taiwan worth over $6 billion, incurring the frustration of China. The deal included the sale of 114 Patriot missiles, 60 Black Hawk helicopters, and communications equipment for Taiwan’s fleet of F-16s, with the possibility of future sales of F-16 fighter jets.
The Chinese vice foreign minister expressed “indignation” to the U.S. State Department in response to the arms deal, adding: “We believe this move endangers China’s national security and harms China’s peaceful reunification efforts [with Taiwan]… It will harm China-U.S. relations and bring about a serious and active impact on bilateral communication and cooperation.” In response, the U.S. National Security Advisor General James Jones stated that the announcement shouldn’t “come as a surprise to our Chinese friends.”
In September of 2010, the Obama administration announced the intention to undertake the largest arms deal in U.S. history, the sale of advanced aircraft to Saudi Arabia worth up to $60 billion for fighter jets and helicopters (84 F-15s, 70 Apaches, 72 Black Hawks, and 36 Little Birds), as well as engaging “in talks with the [Saudi] kingdom about potential naval and missile-defense upgrades that could be worth tens of billions of dollars more,” according to the Wall Street Journal, with “a potential $30 billion package to upgrade Saudi Arabia’s naval forces.” The stated objective was to counter the role of Iran in the region, though no agreement had been initially reached. The U.S. was selling the idea to Congress as a means of creating “jobs,” a political euphemism for corporate profits. One official involved in the talks noted, “It’s a big economic sale for the U.S. and the argument is that it is better to create jobs here than in Europe.”
The arms deal would purchase equipment and technology from Lockheed Martin, Raytheon, Boeing, and United Technologies. In recent years, Saudi Arabia had been purchasing more European and Russian-made arms from companies like BAE Systems. U.S. officials were also attempting to ease the fears of Israel while massively building up the arsenal of a close neighbor, ensuring that the planes sold to the Kingdom wouldn’t have long-range weapons systems and further, that the Israelis would purchase the more advanced F-35 jet fighters. The Israeli ambassador to the United States, Michael Oren, commented, “We appreciate the administration’s efforts to maintain Israel’s qualitative military edge.” The potential $60 billion arms deal with the Saudis would be stretched out over several years, though there was talk that the Saudis might only guarantee a purchase of at least $30 billion, at least, initially.
The Financial Times reported that the Arab dictatorships in the Gulf “have embarked on one of the largest re-armament exercises in peacetime history, ordering US weapons worth some $123 billion as they seek to counter Iran’s military power.” Saudi Arabia’s $60 billion was the largest, with the United Arab Emirates (UAE) signing arms deals worth between $35 and $40 billion in purchases of a “high altitude missile defence system” known as THAAD, developed by Lockheed Martin, as well as purchasing upgrades of its Patriot missile defense systems, produced by Raytheon. Oman was expected to purchase $12 billion and Kuwait $7 billion in arms and military technology. The CEO of Blenheim Capital Partners, a consultancy firm which helps arrange arms deals, noted that Middle Eastern and Southeast Asian countries were replacing Western European nations as the largest arms purchasers, adding: “They are the big buyers.”
Anthony Cordesman from the Center for Strategic and International Studies (CSIS) said that the United States was seeking to create a “new post-Iraq war security structure that can secure the flow of energy exports to the global economy.” These massive arms sales would then “reinforce the level of regional deterrence” – or in other words, expand American hegemony over the region through local proxy powers and dictatorships – and thus, “help reduce the size of forces the US must deploy in the region.” As a Saudi defense analyst noted, “[t]he Saudi aim is to send a message especially to the Iranians – that we have complete aerial superiority over them.”
According to three of four members of an ‘Expert Roundup’ published by the Council on Foreign Relations, the $123 billion arms deals with the Arab dictatorships are “a good idea for the United States and the Middle East.” One of the “experts” is Anthony Cordesman, the Arleigh A. Burke Chair in Strategy at CSIS, former director of intelligence assessment in the Office of the Secretary of Defense, as well as having served in several other State Department and NATO staffs, and has been a regular consultant to the Afghan and Iraqi occupation commands, U.S. embassies, and was a member of the Strategic Assessment Group which advised General Stanley McChrystal in developing a new strategy in Afghanistan for 2009. He also regularly consults with the U.S. State and Defense Departments and the intelligence community. Cordesman wrote that the US “shares critical strategic interests with Saudi Arabia,” notably the control of oil for “the health” of the global economy.
Cordesman also emphasized the role of pliant dictatorships in carrying out U.S imperial objectives in the region, writing that the U.S. “needs allies that have interoperable forces that can both fight effectively alongside the United States and ease the U.S. burden by defending themselves,” meaning, to defend America’s interests, which then become the interests of America’s proxies – or “allies.” The arms sales would be a helpful counter to Iran in the region, and secure a strong relationship between “the current Saudi government as well as Saudi governments for the next fifteen to twenty years,” the suggested timeline for delivery of all purchases, providing Saudi Arabia with a “strong incentive to work with the United States” over the long-term.
Loren B. Thompson, the Chief Operating Officer of the Lexington Institute, also participated in the Council on Foreign Relations ‘Roundup’ report, writing that the arms deal “appears to be a careful reconciliation of Saudi requirements with Israeli fears, while also offering a strategic balance against Iran.” Whatever the differences between Saudi Arabia and the United States, he wrote, casting aside the fact that the Kingdom is one of the most brutal and dictatorial regimes in the world, “the Saudis have been reliable allies of America for decades and have exercised a moderating influence on the behavior of other oil-producing states.” Helping the Saudis, Thompson wrote, “means helping ourselves.”
F. Gregory Gause III, Professor and Chair of the Political Science Department at the University of Vermont wrote that the arms deal “will not buy much security in the long run in the Persian Gulf,” but, he added, “there are no good reasons not to sell the Saudis those weapons, and there are some potentially positive results (besides the economic benefits to the US),” such as opposing the “Iranian regional challenge,” with which he included Hezbollah in Lebanon, Hamas in the Occupied Territories of Palestine, “various Iraqi parties,” Syria, and “Shia activists in the Gulf monarchies.” One could not object to the arms sale on the basis of supporting a regime with a horrible record on democracy, women’s rights, Islam, and human rights, Gause wrote, adding: “Moral purity would be purchased at the price of reduced American regional influence.” In other words, it’s a terrible regime, but it’s America’s terrible regime, and thus, challenging or changing the nature of the regime could undermine and erode America’s influence through the dictatorship and over the region.
William Hartung, the director of the Arms and Security Initiative at the New America Foundation, was another “expert” in the Council on Foreign Relations ‘Roundup’ report, providing the one “cautionary note” on the arms deal on the basis that it could amount to fueling an arms race in the region, building up the forces of Saudi Arabia, the Gulf monarchs, and Israel, thus providing pressure on Iran “to ratchet up its own military capabilities.” The Saudi deal “consists primary of offensive weapons,” though it is stated to be for defensive purposes, and if Saudi Arabia were to undertake aggressive military actions in the region, such as in Yemen (as it has), it would more likely “inflame passions” against Saudi Arabia instead of solving security problems.
The United States has for years dominated the arms market of the Persian Gulf, supplying military equipment to Saudi Arabia, UAE, Kuwait, Oman, Qatar and Bahrain, all members of the Gulf Cooperation Council (GCC), a regional governance association. A Middle East “defense analyst” with Forecast International, stated: “The U.S. arms sales to these countries are meant to improve the defense capabilities of the recipient nations, reinforce the sense of U.S. solidarity with its GCC partners and, finally, create a semblance of interoperability with American forces.” After the United States, the largest arms dealers to the region are France, Russia, Britain and China. Russian and Chinese arms mostly went to Iran, while Israel received $2.78 billion in U.S. military aid in 2010.
In October of 2010, the United States assistant secretary of state for political-military affairs, Andrew Shapiro, formally announced the intended Saudi arms deal for the U.S. Congress to approve for a program to last from 15 to 20 years. Shapiro stated that, “This is not solely about Iran… It’s about helping the Saudis with their legitimate security needs… they live in a dangerous neighbourhood and we are helping them preserve and protect their security.”
For an average of $13 billion per year in arms sales between 1995 and 2005, the Department of Defense announced in 2010 that it intended to sell up to $103 billion, though presumably achieving a lower number, such as $50 billion, over the course of the year. A defense industry consultant, Loren Thompson, stated that, “Obama is much more favorably disposed to arms exports than any of the previous Democratic administrations.” Jeff Abramson of the Arms Control Association stated that there was “an Obama arms bazaar going on.” While the discussion about the massive arms sales in most of the press and political discourse was focused upon supporting 200,000 workers in the ‘defense’ industry, industry consultant Thompson was less ambiguous: “It’s about U.S. allies, it’s about maintaining jobs, and it’s about America’s broader role in the world – and what you have to do to maintain that role;” the role being – of course – that of the global imperial hegemon.
Military contractors spread their factories and workforce out across several U.S. states in order to use their leverage as “major employers” with the U.S. Congress and other political powers. Boeing has facilities in over 20 U.S. states, and the corporation’s head of business development for military aircraft, Lt. Gen. Jeffrey Kohler, was previously responsible for overseeing arms exports for the Pentagon. The entire industry of military contractors is entirely dependent upon massive state subsidies to survive, doing 80-90% of their business with the Pentagon. And, as CNN Money reported, “business recently has been good,” with the U.S. more than doubling its military spending since 2001 to roughly $700 billion, nearly as much as the rest of the entire world spends combined.
Congress agreed in December of 2010 to spend $725 billion on ‘defense’ for 2011. Military contractors were largely seeking “growth” – a euphemism for exploitation and profit – by turning to foreign arms sales. The military contractor EADS sought to establish a headquarters in Asia, Honeywell created a new “international sales” division, and Lockheed Martin was planning to increase its revenue share acquired outside the United States from 14 to 20% by 2012, Boeing aimed to increase international sales from 17-25%, and Raytheon had the largest percentage of revenue from overseas at 23%. But sadly, for the arms dealers, it’s not so easy to sell weapons to foreign governments, since each deal requires a license from the U.S. State Department, a pesky barrier to “growth.” The countries with the “biggest appetite for U.S weapons” are “oil-rich nations in the Middle East,” with roughly 50% of foreign military sales by U.S. contractors between 2006 and 2009 being sold to countries in the region, with Boeing reaping the most overall profits. Mark Kronenberg, the head of Boeing’s international business development, noted: “The last time we had a period like this in the Middle East was the early ‘90s,” during the lead up to and aftermath of the first Gulf War, adding, “Here we are, 20 years later, and they’re recapitalizing.”
A report prepared by the U.S. Congressional Research Service and published in December of 2011 detailed Foreign Military Sales (FMS) agreements between the United States and other nations for the period of 2003 to 2010. Between 2003 and 2006, the top ten largest recipients of U.S. arms through FMS (and excluding Direct Commercial Sales and Foreign Military Aid programs) were: Egypt ($4.5 billion), Saudi Arabia ($4.2 billion), Poland ($4.1 billion), followed by Australia, Japan, Greece, South Korea, Kuwait, Turkey, and Israel. For the years 2007 to 2010, the top ten recipients were: Saudi Arabia ($13.8 billion), UAE ($10.4 billion), Egypt ($7.8 billion), followed by Taiwan, Australia, Iraq, Pakistan, UK, Turkey, and South Korea. In 2010, the top ten purchases of U.S. arms were: Taiwan ($2.7 billion), Egypt ($1.8 billion), Saudi Arabia ($1.5 billion), followed by Australia, UK, Israel, Iraq, Jordan, South Korea, and Singapore.
In April of 2011, Leslie H. Gelb, the President Emeritus of the Council on Foreign Relations, wrote that in light of “the possible consequences of the new popular awakenings” across the Middle East, and the fact that as dictatorships increasingly “crack down even harder against the protesters… enabled by Western arms,” Americans “don’t like thinking of themselves or having others think of them as merchants of death.” The “nightmares” of Western policy-makers “comes from their hopes for Arab democracy” – that is, the emergence of “stable democracies over time” – and “their fears that fledgling Arab democracies will go awry.” So naturally, arms deals are a good means to secure U.S. interests in the region.
In May of 2011, Andrew Shapiro, the Assistant Secretary of State for Political-Military Affairs, spoke to the U.S. Department of State’s Defense Trade Advisory Group, at which he said the “demand” for U.S. arms and military technology “will remain strong because the U.S. has longstanding defense commitments to allies around the world,” and “we will remain very busy no matter the fluctuations of the global market.” The “dynamic nature of the geopolitical landscape” would require the U.S. “to adapt to changing situations.” Shapiro stated that, “we are witnessing another geopolitical shift, which may have broad implications for U.S. foreign policy,” referencing the popular uprisings across the Middle East as “perhaps the most significant geopolitical development since the end of the Cold War.” In his speech, Shapiro praised his audience at the Defense Trade Advisory Group (DTAG) as “valuable” in “giving us a formal channel to the private sector,” enabling the State Department “to better evaluate U.S. laws and regulations, especially during times of immense change.”
The members of the DTAG included top executives and officials from such companies as BAE Systems, ITT Defense, Boeing, Booz Allen Hamilton, EADS North America, Intel, General Electric, General Dynamics, United Technologies, Tyco, Northrop Grumman, Honeywell International, Raytheon, and Lockheed Martin, among a total of 45 individuals. According to its website, the DTAG advises the State Department Bureau of Political-Military Affairs “on its support for and regulation of defense trade to help ensure that impediments to legitimate exports are reduced while the foreign policy and national security interests of the U.S. continue to be protected and advanced.”
Shapiro told these corporate representatives that, “It is important to emphasize that arms transfers are a tool to advance U.S. foreign policy. And therefore when U.S. foreign policy interests, goals, and objectives shift, evolve, and transform over time, so will our arms transfer policy.” As always, stated Shapiro, “we urge you to provide your thoughts and ideas over how we should move forward.” Foreign military sales – especially to the Middle East – will continue as “a critical foreign policy instrument” allowing the U.S. to “gain influence and leverage, which can be used to help advance our foreign policy goals and objectives.”
As an example, the United States approved $200 million in military sales from U.S. corporations to the government of Bahrain in 2010, just months before pro-democracy protests erupted in the country, resulting in “a harsh crackdown on protesters,” killing at least 30 and injuring hundreds of more people in a matter of months.
In December of 2011, Andrew Shapiro announced the formal signing with Saudi Arabia to sell the dictatorship $30 billion in F-15 fighter jets to be delivered by 2015, as well as other plans to sell $11 billion in arms to Iraq. The Saudi deal was the result of extensive lobbying efforts by top government officials, including Obama making several phone calls to Saudi King Abdullah, and the U.S. National Security Advisor, Thomas E. Donilon, twice traveling to Riyadh while Vice President Joe Biden led a “high-level delegation” to a funeral for a Saudi Prince in October of 2011.
Embracing the World with Open “Arms”
In 2009, worldwide arms sales stood at $65.2 billion, dropping by 38% to $40.4 billion in 2010, the lowest number since 2003, with the United States contributing $21.4 billion – or 52.7% – of the global arms deals, Russia in second place at $7.8 billion over 2010, followed by France, Britain, China, Germany and Italy, according to a report by the Congressional Research Service. Over 75% of global arms sales in 2010 were for ‘developing’ countries, with India in top place at $5.8 billion in arms deals, followed by Taiwan at $2.7 billion, Saudi Arabia at $2.2 billion, Egypt, Israel, Algeria, Syria, South Korea, Singapore and Jordan.
This relative decline in global arms sales over 2010 was not to be repeated for 2011, with the number skyrocketing to $85.3 billion, with the U.S. contribution tripling to $66.3 billion, accounting for more than three-quarters of global arms deals. Russia stood in a distant second place with $4.8 billion in arms sales. While the United States controls roughly 75% of the global arms trade, it would be wrong to ignore the role of the other major players, though they are far from even competing with the U.S.
The Stockholm International Peace Research Institute (SIPRI) reported that the rise in arms sales had increased by 60% in real terms since 2002, with the total sales of the top 100 arms companies reaching $411.1 billion in 2010. The arms industry is “increasingly concentrated” to the point where the top ten firms account for 56% of all sales, with Lockheed Martin at the top with sales of $35.7 billion in 2010, followed by Britain’s BAE Systems at $32.8 billion, Boeing at $31.3 billion, and Northrop Grumman at $28.5 billion. Other major companies on the top 100 list of arms manufacturers include: General Dynamics, Raytheon, EADS, L-3 Communications, United Technologies, Thales, SAIC, Honeywell, Rolls-Royce, General Electric, KBR, Hewlett-Packard, and DynCorp.
Following the beginning of the Arab Spring and the toppling of the Western-backed dictators in Tunisia and Egypt, British Prime Minister David Cameron continued with a pre-planned tour of the Middle East in February of 2011, leading what the British Green Party leader called a “delegation of arms traders,” with almost 75% of the businessmen accompanying the Prime Minister on his trip to the region representing the defense and aerospace industries. As the first Western leader to visit Egypt following the fall of Mubarak, Cameron praised the pro-democracy movement: “Meeting the young people and the representatives of the groups in Tahrir Square [in Cairo] was genuinely inspiring,” adding: “These are people who have risked a huge amount for what they believe in.” Immediately after praising Egypt’s revolution and expressing his own ‘beliefs’ in democracy, Cameron flew to Kuwait with his arms dealer delegation to sell weapons to other Arab dictatorships. When criticized for the excessive hypocrisy of his democracy-praising and dictatorship arms-dealing tour of the Middle East, Cameron simply asserted that Britain had “nothing to be ashamed of,” as there was nothing wrong with such transactions.
As dictators across the region were becoming increasingly belligerent toward protesters, seeking to violently crush resistance after the successful examples of Tunisians and Egyptians toppling their long-standing dictators, increasing arms shipments to the region’s despots seemed to be only natural for Western imperial powers seeking stability and control. Kevan Jones, the British Shadow Defence Minister noted: “The defence industry is crucially important to Britain but many people will be surprised that the prime minister in this week of all weeks may be considering bolstering arms sales to the Middle East.” Accompanying David Cameron on his trip were 36 corporate representatives, including Ian King, the CEO of BAE Systems, as well as Victor Chavez of Thales UK, Alastair Bisset of Qinetiq, and Rob Watson of Rolls Royce. When questioned about his ‘arms dealer delegation,’ Cameron stated: “I have got a range of business people on the aeroplane, people involved in infrastructure and people involved in the arts and cultural exchanges. Yes, we have defence manufacturers as well. Britain does have a range of defence relationships with countries in the region. I seem to remember that we spent a lot of effort and indeed life in helping to defend Kuwait. So it is quite right to have defence relationships with some of these countries.”
As Cameron was hopping around the region selling weapons, the largest arms fair in the Middle East – the Index 2011 – was taking place in Abu Dhabi, bringing thousands of arms dealers to an exhibition hall with fighter jets flying overhead, tanks in the sand, with Predator drones and assault rifles on display, models fully dressed in the latest riot police outfits, and all choreographed to a hip-hop soundtrack. Meanwhile, not very far from the booming arms fair, protesters in Bahrain were being violently repressed by a dictatorship armed and supported by the West. The British delegation to the arms fair was led by the Defence Minister, Gerald Howarth, helping represent British companies which were displaying and selling their latest tools for ‘crowd control,’ showcasing teargas grenades, stun grenades, and rubber bullets.
A British officer from the government’s Trade and Industry stand at the arms fair was explaining the benefits of a particular fragmentation bomb to a top military official from the Algerian dictatorship. Howarth explained, “I am here as the minister for national security strategy, supporting this important exhibition.” While in 2011 the British had to revoke export licenses to Bahrain and Libya following the violence erupting in both countries, over the previous year the British issued 20 licenses for exports of “riot control weapons,” such as teargas, smoke and stun grenades, to Bahrain, Qatar, the United Arab Emirates, and Oman, as well as nearly 200 million pounds in “crowd control ammunition” to the government of Libya.
Weapons manufacturers stated that they felt the increased criticism inflicted upon their industry following the start of the Arab Spring had left them “battered and bruised.” One arms trader, commenting less than two weeks after Mubarak was toppled, stated that, “[t]he Middle East was a growing market until a few weeks ago,” while a representative from BAE agreed that the market for arms was insecure: “It is too early to say where it will end up… Given what is going on at the moment, nobody is likely to be talking about how to spend their defence procurement budget.” When a representative for the British arms exporter Chemring was questioned about selling CS gas shotgun cartridges and stun grenades, he explained, “we have an ethical policy in place and look closely at the countries we are considering exporting to and see if they fit that.” A representative for Primetake, a British firm selling rubber ball shot, teargas, and rubber baton rounds, defended his firm: “We are a very respectable organization and we take very careful advice from the Ministry of Defense and the business department.”
Between October of 2009 and October of 2010, the British exported arms and military equipment to multiple countries in the Middle East and North Africa, including over 270 million pounds in materials to Algeria, including combat helicopters, roughly 6.4 million pounds in arms deals with Bahrain, nearly 17 million pounds with Egypt, 477 million pounds with Iraq, 27 million pounds with Israel, 21 million pounds with Jordan, 14.5 million pounds with Kuwait, 6.2 million pounds with Lebanon, 215 million pounds with Libya, 2.2 million pounds with Morocco, 14 million pounds with Oman, 13 million pounds with Qatar, 140 million pounds with Saudi Arabia, 2.6 million pounds with Syria, 4.5 million pounds to Tunisia, and 210 million pounds to the UAE. These sales included assault rifles, tear gas, ammunition, bombs, missiles, body armour, gun parts, gas mask filters, signaling and radar equipment, armoured vehicles, anti-riot shields, patrol boats, military software, shotguns, “crowd-control equipment,” tank parts, military cargo vehicles, air surveillance equipment, armoured personnel carriers, small arms ammunition, heavy machine guns, and a plethora of other products, almost exclusively delivered to dictatorships (with the exception of Israel).
Germany, which stood as the world’s third-largest arms exporter in previous years (after the US and Russia), had doubled its share of the global arms trade over the previous decade to 11%, totaling roughly 6 billion euros in arms deals for 2008 alone, with companies like EADS, Rheinmetall and Heckler & Koch leading the way. Even Russia was becoming a big customer for German military equipment, purchasing armoured plating and tanks.
In 2009, the European Union had established new export rules for arms and military technology, much-praised as preventing the export of arms that “might be used for undesirable purposes such as internal repression or international aggression or contribut[ing] to regional instability.” With the EU rules in place, member countries were free to completely disregard them. A European Commission study leaked to Der Spiegel in 2012 revealed that combined exports from EU nations made the European Union “the world’s largest exporter of weapons” to Saudi Arabia, delivering at least $4.34 billion in equipment in 2010 alone. Sweden helped the Saudi dictatorship build a missile factory, Finland delivered grenade launchers, Germany sold tanks and Britain provided fighter jets. The arms exporters were unfazed by the fact that equipment such as the tanks were used by Saudi Arabia in its “invitation” to invade Bahrain and help the Bahraini dictatorship crush the pro-democracy movement in early 2011. An official with the Swedish Peace and Arbitration Society noted that the Swedish support for building a missile factory in Saudi Arabia has meant that, “we are legitimizing one of the most brutal regimes in the world.” Pakistan had meanwhile become China’s biggest customer for arms exports, while India purchased 10% of the world’s arms exports in 2010 “to defend itself against neighbor and arch enemy Pakistan.”
When German Chancellor Angela Merkel spoke at the Munich Security Conference in 2011, she mentioned the “obligation to pursue value-based foreign policy,” and has often argued that “no compromises” can be made on issues of human rights. As part of Merkel’s respect for “human rights” and “value-based foreign policy,” weapons sales have increased as a significant factor in Germany’s foreign policy strategy, quietly changing the rules for arms exports to increase weapons sales to “crisis regions” as “a major pillar of the country’s security policy.” The objective would be to strengthen countries within “crisis regions” and therefore reduce the possibility that the German military would itself have to participate in “international missions.”
The German publication Der Spiegel referred to this as the “Merkel doctrine” of “tanks instead of soldiers.” Among the key countries to support, identified by Merkel and eight other ministers who met behind closed doors under the aegis of the Federal Security Council, were Saudi Arabia, Indonesia, Qatar, India, and Angola. Merkel explained her doctrine in a speech at an event in Berlin in September of 2011 where she stated that if the West lacks the will and ability to undertake direct military intervention, “then it’s generally not enough to send other countries and organizations words of encouragement. We must also provide the necessary means to those nations that are prepared to get involved. I’ll say it clearly: This includes arms exports.” This, of course, Merkel added, would nicely manifest as a foreign policy “that is aligned with respect for human rights.”
As part of the “Merkel doctrine” of engaging in a “value-based foreign policy” with “respect for human rights,” Germany increased its arms sales to the Algerian dictatorship from 20 million euros in 2010 to nearly 400 million euros in 2012, with German military manufacturer Rheinmetall planning to produce 1,200 armored personnel carriers for Algeria over the next ten years. According to published European Union documents, over 2011, the top five arms exporting countries in the EU were France, the U.K., Germany, Italy, and Spain, collectively exporting over 80% of 37.5 billion euros in arms from EU countries. The European Union, winner of the 2012 Nobel Peace Prize, increased its arms exports by 18.3% since the previous year, with an increase in export licenses to Asia, the Middle East, and sub-Saharan Africa. There were arms licenses issued to Libya, Tunisia, Algeria, Morocco, and over 300-million euros-worth of arms for Egypt. The EU increased its arms exports to “areas of tension,” including India, Pakistan, and a record 465 million euros in arms to Afghanistan, “a country still under partial arms embargo.” However, ‘partial’ is apparently debatable.
With the United States reaching a record-breaking $60 billion in arms deals over 2011, Andrew Shapiro at the State Department stated that 2012 was set to be an equally – if not larger – bonanza for arms dealers. Revealing the role of diplomats and top government officials as glorified lobbyists and corporate representatives, Shapiro told a group of defense writers in the Summer of 2012: “We’ve really upped our game in terms of advocating on behalf of U.S. companies,” adding, “I’ve got the frequent-flyer miles to prove it.” Shapiro had traveled to more than 11 countries over 2012 promoting arms deals, noting that sales were at a record level for the third quarter of 2012, already passing $50 billion. Secretary of State Hillary Clinton had made “advocacy” for arms dealers “a key priority” for U.S. diplomats and State Department officials who “were now expected to undertake such efforts on all trips abroad.” Shapiro and others had been lobbying for American military contractors in deals ranging from Japan’s $10 billion purchase of aircraft from Lockheed Martin to India’s increased arms purchases, where Shapiro saw “tremendous potential” for U.S. arms sales, and to Brazil, where Boeing was competing with France’s Dassault company for a multibillion-dollar defense contract, of which Shapiro stated, “We’re eager to make the best possible case for the Boeing aircraft, and we’re hopeful that it will be selected.”
By March of 2013, the world’s five largest arms exporters were the U.S., Russia, Germany, France, and China overtook the UK for the first time in fifth place, having increased its arms exports by 162% between 2008 and 2012, increasing its share of the global arms trade from 2 to 5%, over 50% of which are delivered to Pakistan, with other large recipients being Myanmar, Bangladesh, Algeria, Venezuela and Morocco. Li Hong, the secretary-general of the China Arms Control and Disarmament Association noted: “Military exports are one way for China to increase its international status,” explaining that, “China needs to increase its influence in regional affairs and from that perspective it needs to increase weapons exports further.” As China increased its own military budget in recent years, it had turned to developing its own weapons industries, thus moving from being the world’s number one arms importer (of conventional weapons) between 2003-2007 to taking second place behind India in the 2008-2012 period, acquiring roughly 69% of its arms imports from Russia.
British Prime Minister David Cameron again traveled to the Middle East, accompanied by his Defense Secretary Philip Hammond and another delegation of arms dealers in 2012, seeking to sell up to 100 Eurofighter Typhoon jets to Saudi Arabia and the UAE, built by EADS and marketed by BAE, competing with France’s cheaper Rafale strike jet made by Dassault Aviation. The increased – and increasingly profitable – arms race in the Middle East was largely facilitated by America’s policies toward Iran. William Cohen is a former U.S. Secretary of Defense in the Clinton administration, current Counselor and Trustee to the Center for Strategic and International Studies (CSIS), former member of the board of directors of the Council on Foreign Relations from 1989 to 1997, current Vice Chairman of the U.S.-China Business Council, on the board of directors of CBS Corporation, and is Chairman and CEO of The Cohen Group, an international business consulting firm. Commenting on the growing arms race in the Middle East, Cohen repeated the usual American propaganda, stating that there was “A very legitimate concern about Iran being a revolutionary country,” though also adding that terrorism, cyberattack threats, and “the implications of the Arab Spring” spurred each country in the region “to make sure it’s protected against that.” Cohen added that military contractors, information technology firms and other corporations “have an enormous opportunity” in the region.
When British Defense Secretary Philip Hammond traveled to Indonesia to promote arms deals for British military contractors like BAE Systems and Rolls-Royce, he explained that increasing military ties with notoriously corrupt Indonesia, posed “manageable” risks. He commented: “From the companies I have talked to, they recognize that there is a challenge but they think that it is manageable, and they can operate here successfully while observing the UK and US legal requirements to address anti-corruption issues.” This statement came amid accusations of Rolls-Royce engaging in bribery to acquire business in China, Indonesia, and elsewhere. Hammond noted that in light of the U.S. “pivot” to Asia, Britain was “looking east in a way we have not done before.” Indonesia had recently purchased F-16 fighter jets and Apache helicopters from the U.S., Sukhoi fighters from Russia, missile systems from China, anti-aircraft missiles, Hawk jets and small arms from British companies. Prime Minister David Cameron defended arms sales to oppressive regimes such as Saudi Arabia, declaring it to be “completely legitimate and right.”
The International Institute for Strategic Studies (IISS), a major think tank, projected that defense spending in Asia would overtake that of Europe for the first time in 2012, noting that Asia was in the midst of an arms race between China and other states in the region. The expenditure of European members of NATO on defense spending over 2011 was just under $270 billion, whereas in Asia it had reached $262 billion (excluding Australia and New Zealand). As China announced increased defense spending, the United States announced a “shift in military strategy” which treats the Asia-Pacific region “as one of the Pentagon’s priorities at a time when forces in Europe are being sharply cut.” Secretary of State Hillary Clinton stated that large and rising powers like China “have a special obligation to demonstrate in concrete ways that they are going to pursue a constructive path.” Leon Panetta, the U.S. Defense Secretary, noted that America’s “military posture in Asia will be increased.”
Indeed, in 2012, Asian defense spending surpassed that of Europe for the first time, reaching a record level of $287.4 billion, though the United States continued to account for 45.3% of total global military spending, meaning that the United States spends almost as much on military expenditures than the rest of the entire world combined. The United States, as part of its Pacific ‘pivot’ in military strategy, increased its arms sales to countries neighbouring China and North Korea. Fred Downey, vice president of the U.S. trade group, Aerospace Industries Association, which includes top U.S. military contractors, noted that the Pacific pivot “will result in growing opportunities for our industry to help equip our friends.” U.S. arms sales to the region increased to $13.7 billion in 2012, up more than 5% from the previous year. There were 65 individual notifications to the U.S. Congress over the previous year regarding total foreign military sales brokered by the Pentagon with a collective value exceeding $63 billion. The State Department, responsible for issuing licenses for direct commercial sales between military contractors and foreign governments, noted that 2012 saw a new record increase with more than 85,000 license requests.
As Obama set a new record for arms sales to the Middle East in 2012, Assistant Secretary of State Andrew Shapiro noted, “If countries view the United States unfavorably, they will be less willing to cooperate on security matters,” and for this reason, “the current administration has sought to revitalize U.S. diplomatic engagement, especially relating to security assistance and defense trade.” The growth in arms sales, noted Shapiro, speaking to the Defense Trade Advisory Group in November of 2012, “has been truly remarkable,” that in spite of the global economic crisis, “demand for U.S. defense sales abroad remains robust” with “significant growth both in direct commercial sales and in foreign military sales.”
As part of America’s Pacific ‘pivot,’ the United States announced a $5.9 billion arms deal with Taiwan in 2011, upgrading the country’s fleet of 145 F-16 fighter jets. Zhang Zhijun, a Chinese Vice-Foreign Minister, commented: “The wrongdoing by the US side will inevitably undermine bilateral relations as well as exchanges and co-operation in military and security areas.” Upon the announcement of the arms deal, Zhijun summoned the U.S. ambassador to China, Gary Locke, and informed him that, “China strongly urges the US to be fully aware of the high sensitivity and serious harm of the issue, [to] seriously treat the solemn stance of China, honour its commitment and immediately cancel the wrong decision.” A top Obama administration official replied, “We believe that our contribution to the legitimate defense needs of Taiwan will contribute to stability across the Taiwan Strait.” The Chinese Ministry of Defense warned that the arms deal “will create a serious obstacle to developing normal exchanges between the two militaries” and that the “U.S. has ignored China’s firm opposition and insisted on selling arms to Taiwan.” Obviously, there are different definitions of “stability” at play.
In April of 2012, the Pentagon announced an arms deal with Japan of four F-35 Joint Strike Fighter aircraft with an option to purchase an additional 38 F-35 jets from Lockheed Martin at an estimated cost of $10 billion. In late 2011, Japan announced its intention to relax a ban on weapons exports which dated back to 1967, which, the Financial Times reported, could open “the way for Japanese companies to participate in the international development and manufacture of advanced weapon systems.” Japan’s largest business lobby, the Keidanren, praised the move as “epoch-making.” Following the “relaxing” of controls, Japan and Britain announced that they would jointly develop weaponry, the first time that Japan would work with another country (apart from the United States) on constructing military equipment.
In October of 2012, the United States announced an arms deal in which South Korea would get longer-range missiles capable of striking anywhere in North Korea, “altering” (or violating) a 2001 accord which barred the U.S. “from developing and deploying ballistic missiles with a range of more than 300km (186 miles),” in order to avert a regional arms race. Obviously, a decision was made to create a regional arms race, so the accord was “altered” and the US agreed to sell South Korea missiles with a range of 800km. South Korea’s defense ministry praised the new deal, stating that they would then be able to “strike all of North Korea, even from southern areas.” The 2001 accord also ensured that the U.S. would not deploy or develop missiles for the South with a payload of more than 500 kg (1,100lbs), since the “heavier a payload is, the more destructive power it can have.” So obviously, that pesky restriction also had to be “altered,” and while long-range missiles maintain the 1,100lb payload, missiles with shorter ranges will be permitted to hold much more. South Korea will also be able to operate U.S.-supplied drones, permitted to hold payloads up to 5,510lb with a range of more than 300km, and no payload restrictions on drones with a flying distance less than 300km. South Korea can also acquire cruise missiles with unlimited range, and some media reports suggested that South Korea had already deployed cruise missiles with a range of more than 1,000km, though officials “refused to confirm” if that were true. The South Korean Defense Ministry reported that North Korea had missiles that could reach South Korea, Japan, and Guam, a Pacific territory of the United States. Thus, the United States intends to counter the “threat” of North Korea by instigating a massive arms race in the region.
Arms Trade Diplomacy: “Chief Commercial Officer” or Ambassador?
As the massive release of diplomatic cables from Wikileaks revealed, U.S. and other diplomats are often little more than glorified lobbyists and salesmen for the Western arms industry. Lockheed Martin got help from the U.S. State Department in selling C-130 military transport planes to the government in Chad starting in 2007. The U.S. Embassy in Chad noted that the government likely could not afford the aircraft, not to mention that it would probably use the aircraft “to defend the regime against a backlash provoked by its refusal so far to open its political system and provide for a peaceful democratic transition.” In other words, the government of Chad wanted to use the military equipment to crush a pro-democracy movement. Nevertheless, noted the U.S. Embassy, we “would concur in allowing the sale to go forward.”
With Chad’s air force chief, its ambassador to the U.S. and a representative from Lockheed Martin promoting the deal with the State Department, the Embassy noted that the sale “would provide a healthy boost to U.S. exports to Chad” and “strengthen U.S. military cooperation.” While Chad told the State Department that it wanted the aircraft “to go after terrorists or help refugees,” the U.S. Embassy noted that in reality, “it needs them to support combat operations against the armed rebellion in eastern Chad,” and commented: “A decision to approve the sale would be met with dismay by many Chadian supporters of peaceful democratic change.” Our conclusion, noted a U.S. Embassy cable, “is that, like it or not, our interests line up in favor of allowing the sale in some form to go forward.” However, the U.S. would have to promote the sale with full knowledge of how Chadians will perceive it, and will have to undertake “a strategy to counter these perceptions.”
Ben Berkowitz wrote for Reuters that Wikileaks cables painted “a picture of foreign service officers and political appointees willing to go to great lengths to sell American products and services,” where, “in some cases, the efforts were so strenuous they raise the question of where if anywhere the line is being drawn between diplomacy and salesmanship.” A State Department spokesperson said in response that the U.S. government “has broad, though not unlimited, discretion to promote and assist U.S. commercial interests abroad.” Such practice became official policy shortly after the end of the Cold War when U.S. Secretary of State Lawrence Eagleburger introduced a bill which gave corporations a direct role in foreign policy. One former U.S. diplomat in Asia noted, “Until (then), U.S. diplomats were not particularly encouraged to help U.S. business. They were busy fighting the Cold War.” Suddenly, he noted, “we were given new direction: if a single U.S. company is looking for business, we should advocate for them by name; if more than one U.S. company was in the mix, stress buying the American product.” The former diplomat added: “It was great to see how influential the right word from the U.S. ambassador was.”
Former Spanish Prime Minister Jose Luis Zapatero had informed the U.S. Embassy, “to let him know if there was something important to the (U.S. government) and he would take care of it,” according to a 2009 diplomatic cable. The embassy took up the offer when General Electric was bidding against Rolls-Royce to sell helicopters to the Spanish Ministry of Defense (MOD), with GE informing the U.S. Embassy that if it did not get the contract, it would close part of its business in Spain. The U.S. Embassy passed the information along to Zapatero’s economic adviser, and, although there was “considerable” evidence that the government was going to award the contract to Rolls Royce, the Zapatero’s office “overturned the decision and it was announced that GE had won the bid,” and the U.S. Ambassador was “convinced that Zapatero personally intervened in the case in favor of GE.”
The U.S. Embassy in the United Arab Emirates promoted the interests of Halliburton to participate in a joint venture with the Abu Dhabi National Oil Co. in 2003, a time at which Halliburton’s former CEO, Dick Cheney, was Vice President of the United States. The contract was eventually awarded to Halliburton. The U.S. Ambassador to the UAE at the time, Marcelle Wahba, noted, “I can’t think of a time when a month went by when a commercial issues wasn’t on my plate… Some administrations put more of an emphasis on it than others, but now I think, regardless of who’s in power you really find it’s become an integral part of the State Department mandate.”
Tom Niles, a former U.S. ambassador to Canada, the European Union and Greece, as well as former president of the “pro-trade group” the U.S. Council for International Business, stated: “By the time I was retired from the Foreign Service, which was 1998, things had changed fundamentally and being an active participant in the commercial program and promoting trade using the prestige of the ambassador and receptions held at the ambassador’s residence was an important part of what I did.” Niles suggested that a U.S. ambassador was as much a “chief commercial officer” for corporations as a diplomat. “We might have been a little bit late to the game. The Europeans understood the crucial role of foreign trade in the growth and development of their economies before we did.” A former ambassador to the UAE noted: “Oftentimes European ambassadors, that’s all they’re there for.” Of course, that’s only logical, considering that European ambassadors do not have to be concerned with managing the world in the same way the United States does. Therefore, their interests are specific: economic.
In the Arms of America
With all the flowery rhetoric of “democracy” and “freedom,” American – and the Western world’s – hypocrisy can easily be revealed with a brief look at the global arms trade: supporting ruthless and repressive dictatorships, as well as creating and supporting regional arms races which increase instability and the threat of war. The objective is simple, and from the imperial perspective, very practical: support regional proxy states to do our dirty work for us. If this happens to increase regional instability and even lead to war, well, such things are inevitable within and as a result of an imperial system. So long as the final result is that the United States and the West maintain their “access” to and control over regions, resources, and populations, the means are incidental.
To put it another way: if our nations were actually interested in concepts and ideas of “democracy” and “freedom” for all people, around the world, why do we sell billions of dollars in weapons and military technology to the countries which most enthusiastically crush democracy and prevent freedom?
The answer to that question reveals the true nature of our society.
Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, with a focus on studying the ideas, institutions, and individuals of power and resistance across a wide spectrum of social, political, economic, and historical spheres. He has been published in AlterNet, CounterPunch, Occupy.com, Truth-Out, RoarMag, and a number of other alternative media groups, and regularly does radio, Internet, and television interviews with both alternative and mainstream news outlets. He is Project Manager of The People’s Book Project, Research Director of Occupy.com’s Global Power Project, and has a weekly podcast show with BoilingFrogsPost.
 Thom Shanker, “Bad Economy Drives Down American Arms Sales,” The New York Times, 12 September 2010:
 Matt Sugrue, “GAO Report on U.S. Arms Sales, 2005-2009,” Arms Control Now, 29 September 2010:
 Maggie Bridgeman, “Obama seeks to expand arms exports by trimming approval process,” McClatchy, 29 July 2010:
 Joby Warrick, “U.S. steps up weapon sales to Mideast allies,” The Washington Post, 31 January 2010:
 Helene Cooper, “U.S. Approval of Taiwan Arms Sales Angers China,” The New York Times, 29 January 2010:
 Adam Entous, “Saudi Arms Deal Advances,” The Wall Street Journal, 12 September 2010:
 Roula Khalaf and James Drummond, “Gulf states in $123bn US arms spree,” The Financial Times, 20 September 2010:
 Anthony H. Cordesman, et. al, “Is Big Saudi Arms Sale a Good Idea?” Expert Roundup, the Council on Foreign Relations, 27 September 2010:
[12 – 15] Ibid.
 “U.S. dominates Middle East arms market,” UPI, 28 December 2010:
 “US confirms $60bn Saudi arms deal,” Al-Jazeera, 20 October 2010:
 Mina Kimes, “America’s hottest export: Weapons – Full version,” CNN money, 24 February 2011:
 Richard F. Grimmett, “U.S. Arms Sales: Agreements with and Deliveries to Major Clients, 2003-2010,” U.S. Congressional Research Service, 16 December 2011, page 3.
 Leslie H. Gelb, “Mideast Arms Sales Not So Bad,” The Daily Beat, 12 April 2011:
 Andrew J. Shapiro, “Remarks: Defense Trade Advisory Group Plenary,” Dean Acheson Auditorium, U.S. Department of State, 3 May 2011:
 DTAG Activity 2010, “2010-2012 Membership,” The Defense Trade Advisory Group (DTAG), U.S. Department of State:
 Andrew J. Shapiro, “Remarks: Defense Trade Advisory Group Plenary,” Dean Acheson Auditorium, U.S. Department of State, 3 May 2011:
 Agencies, “US arms sales to Bahrain surged in 2010,” Al-Jazeera, 11 June 2011:
 Mark Landler and Steven Myers, “With $30 Billion Arms Deal, U.S. Bolsters Saudi Ties,” The New York Times, 29 December 2011:
 Thom Shanker, “Global Arms Sales Dropped Sharply in 2010, Study Finds,” The New York Times, 23 September 2011:
 Harry Bradford, “U.S. Arms Sales Tripled In 2011 To $66.3 Billion: Report,” The Huffington Post, 27 August 2012:
 Thom Shanker, “U.S. Arms Sales Make Up Most of Global Market,” The New York Times, 26 August 2012:
 Richard Northon-Taylor, “Arms sales rise during downturn to more than $400bn, report reveals,” The Guardian, 29 February 2012:
 Ami Sedghi, “Arms sales: who are the world’s 100 top arms producers?,” The Guardian Data Blog, 2 March 2012:
 “Cameron Middle East visit ‘morally obscene’ says Lucas,” BBC News, 23 February 2011:
 Benjamin Bidder and Clemens Hoges, “Democracy or Dollars?: Weapons Sales to the Arab World under Scrutiny,” Der Spiegel, 1 April 2011:
 Nicholas Watt and Robert Booth, “David Cameron’s Cairo visit overshadowed by defence tour,” The Guardian, 21 February 2011:
 Robert Booth, “Abu Dhabi arms fair: Tanks, guns, teargas and trade at Index 2011,” The Guardian, 21 February 2011:
 Simon Rogers, “UK arms sales to the Middle East and North Africa: who do we sell to, how much is military and how much just ‘controlled’?” The Guardian, 22 February 2011:
 Benjamin Bidder and Clemens Hoges, “Democracy or Dollars?: Weapons Sales to the Arab World under Scrutiny,” Der Spiegel, 1 April 2011:
 “Weapons Exports: EU Nations Sell the Most Arms to Saudi Arabia,” Der Spiegel, 19 March 2012:
 Ulrike Demmer, Ralf Neukirch and Holger Stark, “Arming the World for Peace: Merkel’s Risky Weapons Exports,” Der Spiegel, 30 July 2012:
 “Tanks in the Desert: Germany Plans Extensive Arms Deal with Algeria,” Der Spiegel, 12 November 2012:
 Press Release, “Large increase in EU arms exports revealed,” Campaign Against Arms Trade, 10 January 2013:
 Andrea Shalal-Esa, “U.S. government advocacy said boosting foreign arms sales,” Reuters, 27 July 2012:
 Michael Martina, “World’s Top 5 Arms Exporters: China Replaces UK In Weapons Trade,” Reuters, 18 March 2013:
 Jamil Anderlini and Victor Mallet, “China joins top five arms exporters,” The Financial Times, 18 March 2013:
 “Defense contest over major gulf arms buys,” UPI, 20 November 2012:
 Ben Bland, “UK defence minister bullish on arms sales,” The Financial Times, 16 January 2013:
 “David Cameron defends arms deals with Gulf states,” The Telegraph, 5 November 2012:
 FT Reporters, “Asia defence spending to overtake Europe,” The Financial Times, 7 March 2012:
 Myra MacDonald, “Asia’s defense spending overtakes Europe’s: IISS,” Reuters, 14 March 2013:
 “US Arms Sales to Asia Set to Boom on Pacific ‘Pivot’,” Reuters, 2 January 2013:
 “Obama set record in 2012 for Mideast defense exports,” World Tribune, 4 December 2012:
 Richard McGregor, “US agrees $5.9bn arms deal with Taiwan,” The Financial Times, 21 September 2011:
 Kathrin Hille, “China hits at US over Taiwan arms deal,” The Financial Times, 22 September 2011:
 “U.S. Government Says Japan’s Cost to Buy 42 F-35s Around $10 Billion,” Ottawa Citizen, 2 May 2012:
 Mure Dickie, “Japan relaxes weapons export ban,” The Financial Times, 27 December 2011:
 Reuters, “Japan and Britain ‘set to agree arms deal’,” The Telegraph, 4 April 2012:
 AP, “South Korea to get longer-range missiles under new deal with US,” The Guardian, 7 October 2012:
 07NDJAMENA43, “C-130’s for Chad?”, 12 January 2007, Wikileaks Diplomatic Cables:
 Ben Berkowitz, “Wikileaks reveals extent of State Department’s involvement in arms sales, oil deals,” Reuters, 4 March 2011:
The Great Corporate Colony: Welcome to Canada Inc., A Subsidiary of the American Empire & Co.
By: Andrew Gavin Marshall
The following is a sample from the first volume of The People’s Book Project, a crowd-funded initiative to produce a series of books studying the ideas, institutions, and individuals of power and resistance. Please consider donating to help the Project come to fruition.
As one of the most resource-rich countries on earth, and the largest single trading partner with the United States, Canada is strategically positioned to influence the changing nature of global power structures. Do we support – and siphon our resources for the benefit of – the American Empire, co-operating in the wholesale plundering of the world, the oppression and impoverishment of peoples, destruction of global ecology, all for the benefit of an increasingly small class of global corporations and banks… Or, do we become independent and free? Canada’s Prime Minister Stephen Harper once said, “You won’t recognize Canada when I get through with it.” With multiple “free trade” agreements under way, expanded corporate rights, expropriation of vast amounts of natural resources, Canada is becoming one of the world’s foremost corporate colonies, unrecognizable from what Canadians once imagined our nation to be.
The Plundering Potential of Resource Wealth
Canada is the second largest country by landmass in the world, after Russia, and with roughly 10% of the population of the United States, it is also one of the most resource rich countries on the entire planet. Looking at a list of the ten most resource-rich nations on earth (determined not by the multitude, but rather the ‘market value’ of the resources they contain) is rather revealing. At number ten, and in descending order is: Venezuela, Iraq, Australia, Brazil, China, Iran, Canada, Saudi Arabia, the United States, and Russia. Canada has one of the largest oil reserves in the world after Saudi Arabia and Iran (though these are largely located in the difficult-to-extract Alberta tar sands), as well as having some of the largest mineral resource deposits in the world, with the second-largest proven reserves of uranium and the third largest amount of timber. According to Statistics Canada, the nation’s natural wealth tripled in value between 1990 and 2009, then valued at $3 trillion, largely due to the increased price of oil.
In June of 2012, the United Nations released a major report in which it established a new index to account for and define ‘wealth’ beyond mere reports of GDP. Termed the “Inclusive Wealth Index” (IWI), it determines national wealth based upon three types of assets: “manufactured” (machinery, buildings, infrastructure, etc.), “human capital” (the population’s education and skills), and “natural capital” (land, forests, fossil fuels, minerals, etc.). The study, Inclusive Wealth Report 2012, analyzed 20 different countries, and was intended to take into account depleting resources and sustainability for future generations when determining a nation’s real wealth. While GDP growth has taken place in China, the U.S., South Africa and Brazil, these nations have significantly reduced their natural capital. Between 1990 and 2008, the “natural capital” of the United States declined by 20%, 17% for China, 25% for Brazil, and 33% for South Africa. In fact, 19 out of the 20 countries studied showed a decline in natural capital, offset only by an increase in human capital (education and skills).
Human capital is based upon the average years of schooling, wages that the country’s workers can demand, and how many years they are expected to work before they retire or die. With this measurement, human capital amounts to the largest percentage of a nation’s wealth (except for Nigeria, Russia, and Saudi Arabia), accounting for 88% of Britain’s wealth and 75% of America’s. Canada is of course included among the 19 countries with rapidly declining natural capital.
Canada’s Minister of Natural Resources Joe Oliver spoke to a gathering of Canaccord Genuity Corporation (a financial services conglomerate) in Toronto in September of 2012, where he explained that Canada’s “tremendous natural wealth” included “huge capacities and reserves of energy, including the third-largest proven oil reserves in the world,” as well as “tremendous hydroelectric capacity, massive tracts of forests and an abundance of minerals and metals.” He added, however: “it’s not enough to have the resources… You have to do something with them.” Oliver listed some of the many resources which Canada has and produces in abundance: oil, natural gas, hydroelectricity, uranium (second largest producer in the world), more than 200 mines turning out more than 60 minerals, “including more potash than anyone else,” as well as aluminum, cobalt, diamonds, nickel, platinum group metals, titanium concentrate, tungsten, chromite, the second-largest exporter of primary forest products, and is the “biggest exporter of wood pulp, newsprint and softwood lumber.” The resource sector, explained Oliver, “is the cornerstone of our economy, our long-term prosperity and our quality of life.”
Oliver explained that the energy, forestry, metals and minerals industries accounted for roughly 15% of Canada’s nominal GDP, the “direct contribution” to the Canadian economy, while the indirect GDP (taking into account “goods and services purchased from other sectors – construction, machinery and equipment, business and professional services”) takes the number up to roughly 20%. The key areas and industries are oil in Alberta, forestry in British Columbia, potash and uranium in Saskatchewan, mining in Ontario and hydro-power in Quebec. Oliver told the assembled crowd in the heart of Toronto’s finance industry that there was “about $650 billion invested in over 600 major resource projects currently underway in Canada or planned in the next 10 years.” He added: “Countries in the Asia-Pacific region are especially hungry for the energy and minerals and metals and forest products they need to fuel their growth and build a better quality of life for their citizens.” There were, he acknowledged, still inherent problems with the global economy which could effect this outlook, but suggested that what the Canadian government can – “and is doing – is establish a competitive business climate so the private sector can capitalize on our enormous potential.” In other words, the Canadian government will establish a highly protective and subsidized market for multinational corporations to more effectively plunder the natural resources. All for altruistic intentions, of course!
Canada’s highly influential big business dominated think tanks have not been far behind in promoting resource plundering by multinational corporations. The Conference Board of Canada published a report in June of 2012 arguing that “Canada’s trade strengths are concentrated in industries that extract natural resources and process raw materials,” including agricultural and food products, minerals and metals, forest products, and electricity exports. In the report, Adding Value to Trade: Moving Beyond Being Hewers of Wood, Michael Burt wrote: “These industries rely heavily on natural resource wealth such as land, water, forests, and mineral products. The abundance of these resources gives Canada a robust comparative advantage in the industries that extract and process them.” Thus, it would be desirable to promote the “development and use of our natural resources, and industries that support the primary sector are competitive with world standards.” The board of directors of the Conference Board of Canada includes executives and/or board members of the Business Development Bank of Canada, EPCOR Utilities, CGI Group, GE Canada, Canada Post Corporation, TransAlta Corporation, ICICI Bank Canada, Cisco Systems Canada, Desjardins Group, IBM Canada, Shell Canada, Xerox Canada, SaskTel, SaskPower, and John Manley, the President and CEO of the Canadian Council of Chief Executives (CCCE), the main business interest group in Canada, made up of the top 150 corporate CEOs in the country.
In October of 2012, the Canadian International Council (CIC) – the Canadian counterpart to the Council on Foreign Relations in the U.S. – published a report entitled, Becoming a Resource Superpower, in which the author, Madelaine Drohan (the Canada correspondent for The Economist) argued that, “without strong leadership and collaboration we risk losing an opportunity to become a real resource superpower.” A series of recommendations were laid out, including the possibility of establishing a sovereign wealth fund (SWF) to pool and invest money made from resources, encouraging the provincial and federal governments in Canada to “stop treating” revenue from resources “as income to be spent and start treating them as capital to be saved or invested.” In other words, the money made from resources should not go back to benefit Canadians, but rather be used to exclusively benefit the investor class.
Other recommendations focused on expanding the relationship between government, business, and academia (as if we don’t have enough of this already): “To do this, federal and provincial governments must concentrate their funding for research and development on collaborative projects between groups of companies and academic institutions.” Another recommendation focused on expanding “trade” networks and energy customers, specifically in the Asia-Pacific, noting: “Canada should focus on negotiations involving the largest possible number of countries, such as the Trans-Pacific Partnership, and look beyond China so we do not repeat the error of putting all our eggs in one basket.” The report then recommended the government to establish highly protectionist trade agreements for corporations, writing: “Government can help companies plug into global value chains by removing impediments and securing the right trade and investment deals.” By definition, that is the opposite of “free trade,” which is why it is important that we call it “free trade,” when in actuality, it is highly protectionist, involving state intervention designed to undermine the ‘market’ and give corporations a subsidized advantage, thus, undermining competition. The last major recommendation was for federal, provincial, and territorial governments to “collaborate on a national blueprint for resource development that identifies the gaps to be filled – including in infrastructure, environmental protection, trade diversification, education, immigration, technology, and supporting sectors – and sets out how to address them, with achievable goals and deadlines.” In other words, massive state-capitalist planning and plundering is required.
The board of directors of the Canadian International Council (CIC) includes the president and CEO of the Canadian Chamber of Commerce, Chair of the Atlantic Council of Canada, Raymond Chrétien (nephew of former Prime Minister Jean Chrétien), while the chief sponsors of the CIC include: Bennett Jones, Power Corporation of Canada (owned by the Desmarais family, Canada’s Rockefellers), the Royal Bank of Canada, AGF, Barrick Gold, BMO Financial Group, Sun Life Financial, Scotiabank, and TD Bank. So naturally, it has everyone’s interests at heart, and by ‘everyone’, I mean, everyone that matters to the investor class (i.e., the investor class).
So, as Canada increases production of oil from Alberta’s tar sands, the government is seeking to expand the major pipelines to the coast in the hopes of acquiring China as a major trading partner, instead of just the United States. Canada sits atop “unknown quantities” of natural gas reserves, what The Economist calls an “unconventional bonanza,” adding: “Just as the 20th century was the age of oil, the 21st could prove to be the century of gas.” However, in August of 2012, Canadian Prime Minister Stephen Harper declared that Canada’s future economic hopes depend upon the natural resources of the Arctic, which has been the focus of a new global grab for resources since the Arctic ice has begun to break up more rapidly. On a visit to the region, Harper stated, “Obviously, there is a tremendous economic opportunity here. The fact that we are attracting investment not just domestically, but from around the globe speaks very highly to the future.” As revealed by documents released to the press, in late 2011, the Mining Association of Canada was lobbying the Environment Minister Peter Kent “to change regulations and allow non-metal mines, such as diamonds, oilsands and coal, to discharge potentially polluted water under federal guidelines.”
In other words, now that the ice is breaking and resources are being readied for plunder, the major mining conglomerates want the government’s permission to treat the Canadian environment the way they treat the environment in the rest of the world, notably, in poor, conflict-ridden countries like Colombia and the Democratic Republic of Congo. After all, what is plundering without the added bonus of environmental devastation? It’s not just a matter of extracting and exploiting all available resources, from which to gain massive profits, but it’s also important for corporations to destroy the surrounding environment so that little, if anything, can flourish and replenish. That is plundering at its most profitable. In October of 2012, it was reported that Canada was going to claim ownership of a massive size of undersea territory in the Arctic, larger than the size of the province of Québec, and roughly equal to 20% of the country’s surface area.
In 2013, Canada will begin chairing a two-year term of the Arctic Council, a grouping of eight nations working together to manage the development of the Arctic as an economically and strategically important global region. With the opening of new and large opportunities for economic exploitation and resource plundering, the states with territory in the Arctic have become increasingly aggressive in their military posturing in the region, “increasingly designed for combat rather than policing,” according to a study by the Centre for Climate and Energy Solutions. The report noted: “Although the pursuit of co-operation is the stated priority, most of the Arctic states have begun to rebuild and modernize their military capabilities in the region.”
Canadian Prime Minister Stephen Harper had been publicly making aggressive statements about competition in the Arctic, particularly in relation to Russia. In private, however, Harper had been making different claims. As revealed by Wikileaks, Harper expressed the message to the Secretary-General of NATO that there was no real military threat in the Arctic, instead expressing the perspective that, “Canada has a good working relationship with Russia with respect to the Arctic, and a NATO presence could backfire by exacerbating tensions.” Harper added, according to the released cables, “that there is no likelihood of Arctic states going to war, but that some non-Arctic members favoured a NATO role in the Arctic because it would afford them influence in an area where ‘they don’t belong’.” All the public statements and aggressive military stances in the region have, however, helped to sway public opinion into believing that there is a “security or sovereignty threat to the northern border,” and thus justify increased expansion into the region for exploitation. The issue is not one of security, but of securing resources (for corporations, no doubt). One released cable from 2009 relayed this point accurately, noting that Canada’s defense plan to build six Arctic Patrol ships for the navy was “an example of a requirement driven by political rather than military imperatives, since the navy did not request these patrol ships. The Conservatives have nonetheless long found domestic political capital in asserting Canada’s ‘Arctic Sovereignty’.” By the summer of 2012, the aggressive rhetoric had essentially vanished, and Harper’s missions to the Arctic were entirely diplomatic and aimed at exploiting the region’s vast natural resources. The Obama administration has also identified the Arctic as “an area of key strategic interest.”
Canada For Sale: “Free Trade” Fanaticism
Canada has been pursuing a vast array of so-called “free trade” agreements with specific countries around the world, as part of the overall program of plundering resources and giving multinational corporations unprecedented control over society. Since the 1988 Canada-U.S. Free Trade Agreement and the 1994 North American Free Trade Agreement (NAFTA), Canada has pursued agreements with several countries, including Israel, Jordan, Chile, Costa Rica, Colombia, Honduras, Panama, Peru and is in talks with the European Union and Japan, as well as China and India.
On August 15, 2011, the Canada-Colombia Free Trade Agreement – a highly protectionist corporate-driven agreement (like all “free trade” agreements) – came into effect. The agreement was reached in 2008, receiving “royal assent” in 2010, and is sure to benefit major corporations and help finance a state which is responsible for the greatest human rights violations in the Western Hemisphere. Canada’s top five exports to Colombia include wheat, newsprint and paper, machinery and equipment, dump trucks as well as beans, peas, and lentils. Colombia’s top five exports to Canada include coal, coffee, bananas, fuel oil and cut flowers (note: this list excludes illicit trade products like cocaine, of which Colombia is a major global exporter).
As critics of the deal pointed to Colombia’s record on human rights abuses, Stephen Harper commented, “No good purpose is served in this country or in the United States by anybody who is standing in the way of the development of the prosperity of Colombia,” by which he means to say that human rights are irrelevant so long as multinational corporations are making large profits. And indeed, policies fit that paradigm very well. Harper added: “Colombia is a wonderful country with great possibility and great ambition. And we need to be encouraging that every step of the way. That’s why we have made this a priority to get this deal done. We can’t block the progress of a country like this for protectionist reasons.” In this sense, the word “protectionist” refers to any impediments, regulations, or barriers to the unhindered exploitation and plundering of a country by multinational corporations. When agreements are protectionist in favour of corporations, securing and enforcing their unhindered monopolization of markets and exploitation of resources, this is called “free trade.”
With more than 70 Canadian corporations in Colombia, from oil and mining to finance, the agreement will open up more access for major companies. For those who mention human rights abuses, Harper had this to say: “I think there are protectionist forces in our country and in the United States that don’t care about development and prosperity in this part of the world. And that’s unfortunate.” Chris Spaulding of Talisman Energy, a Canadian corporation doing business in Colombia, commented that, “It’s very business friendly. They want foreign investment. The labor force is very good. The resources are there.”
According to the Globe and Mail, Colombia has “near bullet-proof potential for rapid growth,” due to low wages, abundant resources, and with the return of “order” (a euphemism for state oppression and control), though the country still has a high murder rate, five times the rate of the United States. Colombia not only signed a free trade agreement with Canada, but also with the U.S., and has received top rates from the World Bank for fostering a good “business climate.” Scotiabank, one of Canada’s big five banks, made a $1 billion purchase of a 51% stake in Colombia’s fifth largest bank, Banco Colpatria. Rick Waugh, the CEO of Scotiabank, declared that, “Colombia is very important to us.”
Toronto-based mining company Gran Colombia Gold Corp has been seeking to remove an entire town, a 500-year old community, to make way for an open-pit mine. When the Colombian government was preparing to displace the town, villagers in the community formed a committee to defend themselves. One of the organizers, a local priest, Father José Reinel Restrepo, publicly denounced the plan to move the town for the benefit of a foreign corporation, even giving television interviews in which he denounced “Canadian imperialism.” He explained: “If they are going to drive me out of here, I would tell them they would have to expel me by way of bullets or machetes – but they can’t oblige me to leave.” Four days later, Father Restrepo was shot dead while traveling to visit his family.
Colombia has a long history with powerful business interests allying themselves with paramilitary outfits to “silence opponents and displace rural populations living atop natural resources.” Under the guise of the “war on drugs,” Colombia’s military, with billions in “aid” from the United States, has co-operated with big business interests and criminal paramilitary groups, purportedly to fight rebel groups (notably FARC), but mostly to clear rural communities to allow for corporate plundering of the resources upon which they sit. In recent decades, some four million people have been displaced by such actions, leaving the country with Latin America’s “most inequitable distribution of wealth.” On top of that, Colombia is a major narco-state, with state, paramilitary and rebel groups all participating in the massive cocaine trade. Many historians have described Colombia as “the world’s most enduringly violent country,” with over five decades of constant internal warfare. With over 20 major Canadian companies holding major investments in Colombia, it’s no wonder that the World Bank rated the country as the best investment climate in Latin America.
The brand of “order” that the government of Colombia has enforced in recent years represents a continuation of the policies of several administrations before it. The human rights and humanitarian crisis in Colombia is “staggering in scale,” with millions displaced, killed, tortured, raped, kidnapped or “disappeared,” more than 280,000 people had to flee their homes in 2010 alone. State, paramilitary and rebel groups have all routinely been accused of vast human rights abuses and war crimes. While the new government of President Santos promised to prioritize human rights when he came to power in 2010, the reality, according to Amnesty International, was that “threats against and killings of leaders of displaced communities and of those seeking the return of lands misappropriated during the conflict, mainly by paramilitary groups, have increased during the Santos government.” In criminal investigations of human rights abuses, witnesses, victims, lawyers, and judges have continuously been threatened or even killed. Threats and murders have also increased for human rights activists, trade unionists, and community leaders.
Canadian law demands that the government table a human rights report for Parliament on the impact of the Canada-Colombia Free Trade Agreement. Instead of submitting the report, the Canadian government decided, in May of 2012, that it would not even adhere to Canadian law, and refused to submit any such report, instead stating that it would produce a report for May of 2013. With more than 259,000 people displaced from their homes in Colombia in 2011 (on top of the 280,000 displaced in 2010), human rights abuses and war crimes will continue, with the tacit (and perhaps active) cooperation of Canadian corporations, notably mining companies. The Canadian government has effectively given the green light for such abuses to continue. While Colombia’s Constitutional Court identified 34 Indigenous nations in the country that were in “grave danger of extinction,” Canadian indifference continued. Alex Neve, the Secretary General of Amnesty International Canada declared that, “Canada must not turn its back on the human rights crisis in Colombia for yet another year… The crucial question that should not be postponed is what role is Canadian investment playing with regard to this emergency?” Neve added: “Failure to carry out a full impact assessment violates Canada’s responsibility of due diligence under international law and denies Canadian corporations working in Colombia the information they need to avoid implicating themselves in grave human rights violations.”
The website for the Canadian ministry for Foreign Affairs and International Trade declared that the Canada-Colombia FTA provided “a key boost for Canadian companies in five important sectors: agriculture, information and communication technologies, mining, oil and gas, and services.” Noting that Canada’s interest in the narco-state was “growing strongly,” the ministry website added that Colombia had “undergone important economic and legal reforms, spurring democracy and global direct investment.” The business climate, it declared, was “now stable and predictable, making Colombia a secure business partner and a solid investment destination.” With that in mind, Canada’s Defence Minister Peter MacKay signed an agreement with the Colombian military in November of 2012 to strengthen its “military relationship with Colombia,” which MacKay stated, “represents a natural evolution in our relationship… And we look forward to continuing to build our ties with the Colombian Armed Forces.” No doubt, as they continue to displace hundreds of thousands of innocent people in order to clear the land for foreign corporations, and of course, to help advance the profits of the international illicit drug trade.
Scotiabank decided to expand its operations further in Colombia, with the purchase of a majority stake in one of Colombia’s largest pension fund companies. Scotiabank has taken on a major role in “financing Colombia’s energy and mining sectors,” with the bank’s head of global wealth management stating, “We look to continue the growth and expansion of this business.” Another executive at Scotiabank stated, “We continue to invest in Colombia because we see this as a market with great potential for growth.” Interestingly, the Canadian Embassy in Colombia is located in the new Scotiabank Tower in Bogota.
Canada continues to pursue further “free trade agreements” with other countries as well, notably, Japan and China. In March of 2012, Canada and Japan agreed to begin free trade talks, already steadfast trading partners. On top of “free trade,” the Japanese Prime Minister Yoshihiko Noda announced that Canada and Japan would also be advancing defence and security “co-operation.” At the announcement, Harper declared that, “This is a truly historic step that will help create jobs and growth for both countries.” Jayson Myers, the president of the Canadian Manufacturers & Exporters association stated, “Japan is a strategic commercial partner… However, it is also a country with whom we’ve had a persistent trade deficit when it comes to manufacturing. These negotiations provide the appropriate forum to resolve ongoing concerns.”
As revealed by secret documents obtained by the media, the Canadian government had been lobbying the United States to join the Trans-Pacific Partnership agreement for the main reason of gaining more access to Japan, with one document noting that the TPP without Japan “does not excite us.” In November of 2012, it was reported that Japan was likely to follow Canada’s entrance into the TPP, the largest and most secretive trade agreement in history, involving 11 Pacific rim countries, and negotiated in cooperation with over 600 corporations. The TPP is highly controversial within Japan, since it could potentially – and likely would – lead to reduced protections and subsidies for the Japanese agriculture sector, an area long considered untouchable. A spokesperson for the Canadian department of Foreign Affairs and International Trade stated, “We welcome Japan’s interest in joining the TPP. Japan’s participation in the TPP would further strengthen Canada and Japan’s strong trade and investment relationship. We are already working closely with Japan towards a bilateral free trade agreement that will bring new jobs and increased prosperity to Canadians and we would welcome the opportunity to also work together in the TPP.”
(For more information on the TPP, please see my three-part series here: The Trans-Pacific Partnership)
Canada has also begun talks with India and hoped to sign a free trade deal with the country by the end of 2013, with Stephen Harper stating, upon a visit to India, “I think I am very clear that we need to go farther and faster.” Stephen Harper lamented against the fact that India has democratic institutions, and thus, undemocratic policies are harder to implement. He stated: “What we do have to realize when we deal with India, as opposed to some other countries that we’re dealing with in the developing world – this country is a democracy… And that means that governments cannot simply dictate a whole set of policy changes to happen the next day. That means governments must develop consensus behind policy changes. And that, in this country is not easy. We understand that.” Luckily for Harper, he doesn’t have to face any such problems at home, with a majority government, tearing the country to pieces day-by-day. Stephen Harper once boasted many years ago, that if he was given the chance to become Prime Minister, “You won’t recognize Canada when I get through with it.” Indeed, that turns out to be quite true. Indeed, back in 1997, Harper wrote an article in which he referred to Canada as “a benign dictatorship,” though there seems to be little ‘benign’ about his majority-government rule.
In September of 2012, Stephen Harper signed an investment treaty with China (as a precursor to a potential free trade agreement), called the Foreign Investment Promotion and Protection Agreement (FIPA). The details of the agreement were kept secret until the deal was tabled in the Canadian Parliament in late September, but the agreement is not to be debated in Parliament because treaty making “is a royal prerogative,” and can thus become law through the initiative of the Prime Minister’s cabinet alone, so long as the treaty is ‘tabled’ in Parliament. Canada already had roughly 24 FIPAs in operation, with roughly a dozen more in the works. FIPAs are not “free trade agreements,” but are designed to simply “protect and promote” foreign investment in legally-binding agreements. In essence, they are quicker and smaller versions of “free trade” agreements, and designed with a similar purpose: to advance corporate rights and the expense of democratic rights.
China’s ambassador to Canada stated that the two countries should move quickly toward a free-trade agreement within a decade, adding, “It’s time to open each other’s markets.” The comments came as a major Chinese state-owned corporation was seeking to take over a Canadian energy company, which would be the first direct foreign takeover of a major actor in Canada’s energy sector, a major concern for Canadians who fear Canada’s resource wealth will not benefit Canadians. On this issue, the Chinese ambassador noted, “Business is business. It should not be politicized… If we politicize all this, then we can’t do business.” The ambassador told a Canadian journalist, “We are not coming to control your resources.” No, of course not, they’re just coming to take the resources. Within a couple months, Prime Minister Harper approved of the Chinese takeover of the Canadian energy company Nexen, as well as another takeover by a Malaysian company in the Canadian energy sector. However, Harper then stated that there would be restrictions on foreign governments buying some of Canada’s largest energy conglomerates (just not these ones in particular). At a press conference, Harper stated, “When we say that Canada is open for business, we do not mean that Canada is for sale to foreign governments.” Except, of course, for all the exceptions to that rule.
Critics of the Canada-China FIPA warned that it would reduce Canada to little more than a “resource colony,” which would bind Canada to new investment rights with China for 30 years. Not only does it allow China to gain an increased foothold in Canada’s economy, and specifically, in purchasing Canadian resources, but it also acts “to protect Canadian capitalists when they go into China.” What more could someone ask for? The Council of Canadians, a public interest organization, referred to the Canada-China FIPA as a “corporate rights pact” that would have serious repercussions on Canadian environmental, energy, and financial policies. This is because the deal would allow for lawsuits against the Canadian federal and provincial governments for having “barriers” to investments, which could then be overturned.
Canada is also in the final stages of negotiating a trade agreement with the European Union, called the Comprehensive Economic Trade Agreement (CETA), designed to reduce tariffs and open up “new markets,” having major impacts upon agriculture, intellectual property rights (copyright and patent laws), with drug prices likely to increase “significantly,” as well as allowing for more “labour mobility,” a euphemism for increased labour exploitation. The agreement, which has been in negotiations for years, would “deal another blow to Canada’s already battered manufacturing sector,” with roughly 28,000 jobs under threat, deemed to be the “best-case scenario” by the Canadian Centre for Policy Alternatives. The “worst-case” scenario could see up to 152,000 jobs being “vaporized.”
As is typical, the negotiations are “behind closed doors” and barely deal with actual “trade.” CETA is, much like the TPP, termed a “next generation” free trade agreement, negotiated since May of 2009, and would further deregulate and privatize the Canadian economy, and of course, therefore, increase corporate power, and thus at the expense of democratic accountability. The agreement could restrict how local and provincial governments could spend money, even banning “buy local” policies, increase the cost of drugs by $3 billion, increase Canada’s trade deficit with the EU, allow for European corporations to attack environmental and health protections within Canada as “barriers to investment,” potentially even apply pressure to privatize water, transit, and energy, and even prevent farmers from saving their seeds, as a major gift to GMO manufacturers. Where corporate rights are advanced, democratic rights are dismantled.
A leaked document from the European Commission dated November 6, 2012, revealed that the practice of Canadian municipalities “buying locally” would disappear with the Canada-EU CETA, and that “provincial development programs could go with them.” Canadian municipalities were offering better terms for European access to municipal contracts that those which Canadian provinces give each other. The document, prepared for the European Commission’s Trade Policy Committee noted that the agreement is “the most ambitious and comprehensive offer Canada and its provinces have made to any partner, including the U.S.” EU negotiations will, however, continue to press for more access to energy sectors. Maude Barlow of the Council of Canadians noted: “The amount of room our provinces, municipalities and local communities have to support local farmers and otherwise create the jobs of tomorrow is threatened again by a Canada-European Union free trade deal that will forever prohibit these kinds of economic strategies.” The province of Ontario could alone lose between 13,000 and 70,000 jobs as a result of the agreement, according to the Canadian Centre for Policy Alternatives.
Openly acknowledged by European politicians was that Canada would be getting the short end of the stick in the CETA deal, as a Danish member of the European Parliament stated, “At the moment Europe will be able to export more than what Canada will be exporting.” Another European official closely linked to the negotiations stated, “We will gain a bit more.” Canadian Trade Minister Ed Fast said, “[t]he potential benefits to Canadians under a free trade agreement with the European Union are immense,” though he forgot to acknowledge that the ‘Canadians’ he was referring to are largely corporations, and the elite class that owns them. Michael Hart, a trade expert at Carleton University noted, “[t]rade agreements do not create jobs. Never have. Never will. But ministers have never accepted that economic insight.” And understandably so, after all, it’s rather challenging to sell a trade deal to the public if one openly declares it is for the singular purpose of advancing corporate rights, domination, and plundering. So instead, politicians must always mutter the magical word of “jobs,” which in political language, translates accurately into “profits,” as Noam Chomsky has suggested in the past. Thus, when politicians say that trade agreements will “create jobs,” which they never do, what they are actually saying is that such agreements will “create profits,” and exclusively for major multinational corporations, which they always do.
Canada’s trade agenda is of course driven by big business, whose interests will be served by such “free trade” agreements. In regards to CETA, the Canada Europe Roundtable for Business (CERT) was established in 1999 to contribute “recommendations on trade and investment to government officials and hosting thematic, high-level meeting focused on developing strategic relationships between company executives and with government officials,” according to the website for CERT. A declaration of support in 2008 for a Canada-EU trade agreement was signed by over 100 executives in Europe and Canada, urging Canadian and EU leaders to “design a new type of forward-looking, wide-ranging and binding bilateral trade and investment agreement.” Such an agreement, the document stated, “will provide European companies with a gateway into the vast North American free trade area, while increasing Canadian opportunities in the European Common Market,” serving as “a strategic and important step towards the eventual creation of a comprehensive transatlantic trade and investment area.” Among the signatories to the statement were top executives at the following companies: Anglo American plc, AstraZeneca, Barrick Gold Corporation, BASF, Bayer, Bertelsmann, BNP-Paribas, Bombardier, British Airways, Canadian Chamber of Commerce, Canadian Manufacturers & Exporters, CN, Commerzbank, Deutsche Bank, E.ON AG, Gaz de France, GlaxoSmithKline, Lafarge, Manulife Financial, Merck, Monsanto Canada, Munich Re, Pfizer Canada, Power Financial Corporation, Rio Tinto plc, Royal Dutch Shell, Siemens, SNC-Lavalin, Société Générale, SUEZ, Suncor, ThyssenKrupp, TOTAL SA., TSX Group, Ubisoft Entertainment, and Volkswagen, among many others.
In late October 2012, a number of European and Canadian big business lobbying groups, including BusinessEurope, the Canadian Chamber of Commerce, and the Canada Europe Roundtable for Business (CERT), sent a letter to the Canadian and European trade negotiators, Ed Fast and Karel de Gucht, respectively, urging them to push through on the CETA. The signatories called for Canada and the EU to reach “an ambitious and successful conclusion to the Comprehensive Economic and Trade Agreement (CETA) negotiations by the end of 2012.” The letter said it was “imperative” to “maintain a high level of ambition” in key areas which would benefit Canadian and European corporate interests. Among the many areas for which the letter suggested “a high level of ambition” were in recommending the “full and rapid dismantling of tariffs for all industrial goods,” and “[a]ccess to raw materials and energy products,” the removal of barriers and “discriminations” in service sectors, “full access” to the agricultural sector, including “a satisfactory path forward on the bio-tech issues that have caused trade impediments,” by which is meant to advance the interests of GMO manufacturers. Further recommendations included “access to government procurement” which removes all barriers and allows for increased privatization, and of course, “[r]obust protection and enforcement of intellectual property (IP) rights in both markets,” which would include “the targeting, seizing and destroying of counterfeit imports and exports,” so as to undermine competition and protect monopoly and oligopoly corporations. Finally, the letter stated that the Canada-EU agreement “must also ensure improved labour mobility,” which would allow for increased labour exploitation, enhancing competition between the labour forces of Europe and Canada, which always results in lost jobs, lower wages, and reduced protections and benefits. These are, of course, all very good things for multinational corporations. Since they are terrible things for the populations, they have to be coded in political and economic language, so instead of saying, “we want easily exploitable and cheap labour,” they suggest, “improved labour mobility,” which is also at times referred to as “labour flexibility” (i.e., making labour “flexible” to the interests of multinational corporations).
The Great Canadian Corporate Colony
Such letters from corporate leaders are necessary in order to remind political leaders whose interests they are in office to serve. The Canadian government ensured that it would serve big business interests through trade policy by appointing, in May of 2012, a new ‘advisory panel’ which would “help guide Canada’s ambitious, pro-trade plan in large, dynamic and fast-growing priority markets.” Speaking at the Canadian Chamber of Commerce, International Trade Minister Ed Fast stated: “Our government’s top priority is the economy – creating jobs, growth and long-term prosperity for Canadian workers, businesses and families… We understand the importance of trade to our economy… That is why we are deepening Canada’s trading relationships in priority markets around the world.”
Ed Fast announced the formation of the new advisory panel at the Canadian Chamber of Commerce. The members of the panel include: Murad Al-Katib, president and CEO of Alliance Grain Traders Inc.; Paul Reynolds, president and CEO of Canaccord Financial; Kathleen Sullivan, executive director of the Canadian Agri-Food Trade Alliance (CAFTA), representing 80% of Canada’s agri-food sector; Perrin Beatty, president and CEO of the Canadian Chamber of Commerce, former president and CEO of the Canadian Manufacturers & Exporters, former president and CEO of the Canadian Broadcasting Corporations (CBC), and former government minister; John Manley, former Deputy Prime Minister of Canada, former Foreign Affairs and Finance Minister, and currently president and CEO of the Canadian Council of Chief Executives (CCCE), a corporate interest group made up of Canada’s top 150 CEOs; Catherine Swift, president and CEO of the Canadian Federation of Independent Businesses; Jayson Myers, president and CEO of Canadian Manufacturers & Exporters; Brian Ferguson, president and CEO of Cenovus Energy Inc, a major Canadian oil company; Serge Godin, founder and executive chairman of the board of CGI Group Inc, one of the largest information technology businesses in the world; and Indira Samarasekera, president of the University of Alberta. Upon the announcement of this panel, Ed Fast stated: “I look forward to receiving advice from these knowledgeable Canadian leaders.”
So we return to the statement once made by Prime Minister Stephen Harper: “You won’t recognize Canada when I get through with it.” Sadly, this is quite true as Harper Inc. advance Canada to the status of one of the world’s premier corporate colonies, where plundering for profits, environmental degradation, mass privatization, deregulation, and democratic devastation are the rules of the day. A Canada once thought of as democratic, free, and peaceful, is ever-advancing toward a fully privatized outpost of global corporate tyranny: Canada Inc., a subsidiary of the American Empire & Co.
Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, with a focus on studying the ideas, institutions, and individuals of power and resistance across a wide spectrum of social, political, economic, and historical spheres. He has been published in AlterNet, CounterPunch, Occupy.com, Truth-Out, RoarMag, and a number of other alternative media groups, and regularly does radio, Internet, and television interviews with both alternative and mainstream news outlets. He is Project Manager of The People’s Book Project and has a weekly podcast show with BoilingFrogsPost.
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Welcome to the World Revolution in the Global Age of Rage
By: Andrew Gavin Marshall
I am currently writing a book on the global economic crisis and the global resistance, rebellious and revolutionary movements that have emerged in reaction to this crisis. Our world is in the midst of the greatest economic, social, and political crisis that humanity has ever collectively entered into. The scope is truly global in its context, and the effects are felt in every locality. The course of the global economic crisis is the direct and deliberate result of class warfare, waged by the political and economic elites against the people of the world. The objective is simple: all for them and none for you. At the moment, the crisis is particularly acute in Europe, as the European elites impose a coordinated strategy of class warfare against the people through “austerity” and “structural adjustment,” political euphemisms used to hide their true intention: poverty and exploitation.
The people of the world, however, are beginning to rise up, riot, resist, rebel and revolt. This brief article is an introduction to the protest movements and rebellions which have taken place around the world in the past few years against the entrenched systems and structures of power. This is but a small preview of the story that will be examined in my upcoming book. Please consider donating to The People’s Book Project in order to finance the completion of this volume.
Those who govern and rule over our world and its people have been aware of the structural and social changes which would result in bringing about social unrest and rebellion. In fact, they have been warning about the potential for such a circumstance of global revolutionary movements for a number of years. The elite are very worried, most especially at the prospect of revolutionary movements spreading beyond borders and the traditional confines of state structures. Zbigniew Brzezinski, Jimmy Carter’s former National Security Adviser, co-founder with banker David Rockefeller of the Trilateral Commission, and an arch-elitist strategic thinker for the American empire, has been warning of what he terms the ‘Global Political Awakening’ as the central challenge for elites in a changing world.
In June of 2010, I published an article entitled, “The Global Political Awakening and the New World Order,” in which I examined this changing reality and in particular, the words of Zbigniew Brzezinski in identifying it. In December of 2008, Brzezinski published an article for the New York Times in which he wrote: “For the first time in history almost all of humanity is politically activated, politically conscious and politically interactive. Global activism is generating a surge in the quest for cultural respect and economic opportunity in a world scarred by memories of colonial or imperial domination.” This situation is made more precarious for elites as it takes place in a global transition in which the Atlantic powers – Western Europe and the United States – are experiencing a decline in their 500-year domination of the world. Brzezinski wrote that what is necessary to maintain control in this changing world is for the United States to spearhead “a collective effort for a more inclusive system of global management,” or in other words, more power for them. Brzezinski has suggested that, “the worldwide yearning for human dignity is the central challenge inherent in the phenomenon of global political awakening.” In 2005, Brzezinski wrote:
It is no overstatement to assert that now in the 21st century the population of much of the developing world is politically stirring and in many places seething with unrest. It is a population acutely conscious of social injustice to an unprecedented degree, and often resentful of its perceived lack of political dignity. The nearly universal access to radio, television and increasingly the Internet is creating a community of shared perceptions and envy that can be galvanized and channeled by demagogic political or religious passions. These energies transcend sovereign borders and pose a challenge both to existing states as well as to the existing global hierarchy, on top of which America still perches…
The youth of the Third World are particularly restless and resentful. The demographic revolution they embody is thus a political time-bomb, as well. With the exception of Europe, Japan and America, the rapidly expanding demographic bulge in the 25-year-old-and-under age bracket is creating a huge mass of impatient young people. Their minds have been stirred by sounds and images that emanate from afar and which intensify their disaffection with what is at hand. Their potential revolutionary spearhead is likely to emerge from among the scores of millions of students concentrated in the often intellectually dubious “tertiary level” educational institutions of developing countries… Typically originating from the socially insecure lower middle class and inflamed by a sense of social outrage, these millions of students are revolutionaries-in-waiting, already semi-mobilized in large congregations, connected by the Internet and pre-positioned for a replay on a larger scale of what transpired years earlier in Mexico City or in Tiananmen Square. Their physical energy and emotional frustration is just waiting to be triggered by a cause, or a faith, or a hatred.
Important to note is that Brzezinski has not simply been writing abstractly about this concept, but has been for years traveling to and speaking at various conferences and think tanks of national and international elites, who together form policy for the powerful nations of the world. Speaking to the elite American think tank, the Carnegie Council, Brzezinski warned of “the unprecedented global challenge arising out of the unique phenomenon of a truly massive global political awakening of mankind,” as we now live “in an age in which mankind writ large is becoming politically conscious and politically activated to an unprecedented degree, and it is this condition which is producing a great deal of international turmoil.” Brzezinski noted that much of the ‘awakening’ was being spurred on by America’s role in the world, and the reality of globalization (which America projects across the globe as the single global hegemon), and that this awakening “is beginning to create something altogether new: namely, some new ideological or doctrinal challenge which might fill the void created by the disappearance of communism.” He wrote that he sees “the beginnings, in writings and stirrings, of the making of a doctrine which combines anti-Americanism with anti-globalization, and the two could become a powerful force in a world that is very unequal and turbulent.”
In 2007, the British Ministry of Defence issued a report looking at global trends over the following three decades to better plan for the “future strategic context” of the British military. The report noted that: “The middle classes could become a revolutionary class, taking the role envisaged for the proletariat by Marx… The world’s middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest.” In my April 2010 article, “The Global Economic Crisis: Riots, Rebellion, and Revolution,” I quoted the official British Defence Ministry report, which read:
Absolute poverty and comparative disadvantage will fuel perceptions of injustice among those whose expectations are not met, increasing tension and instability, both within and between societies and resulting in expressions of violence such as disorder, criminality, terrorism and insurgency. They may also lead to the resurgence of not only anti-capitalist ideologies, possibly linked to religious, anarchist or nihilist movements, but also to populism and the revival of Marxism.
In December of 2008, the managing director of the IMF, Dominique Strauss-Kahn warned that the economic crisis could lead to “violent unrest on the streets.” He stated that if the elite were not able to instill an economic recovery by 2010, “then social unrest may happen in many countries – including advanced economies,” meaning the Western and industrialized world. In February of 2009, the head of the World Trade Organization (WTO), Pascal Lamy, warned that the economic crisis “could trigger political unrest equal to that seen during the 1930s.” In May of 2009, the president of the World Bank, Robert Zoellick, stated that if the economic crisis did not come to an end, “there is a risk of a serious human and social crisis with very serious political implications.”
In early 2009, the top intelligence official in the United States, Dennis Blair, the Director of National Intelligence (who oversees all 16 U.S. intelligence agencies), stated that the global economic crisis had become the primary threat to America’s “security” (meaning domination). He told the Senate Intelligence Committee: “I’d like to begin with the global economic crisis, because it already looms as the most serious one in decades, if not centuries… Economic crises increase the risk of regime-threatening instability if they are prolonged for a one-or-two-year period… And instability can loosen the fragile hold that many developing countries have on law and order, which can spill out in dangerous ways into the international community.” He also noted that, “there could be a backlash against U.S. efforts to promote free markets because the crisis was triggered by the United States… We are generally held responsible for it.”
In December of 2008, police in Greece shot and killed a 15-year old student in Exarchia, a libertarian and anarchist stronghold in Athens. The murder resulted in thousands of protesters and riots erupting in the streets, in what the New York Times declared to be “the worst unrest in decades.” Triggered by the death of the young Greek student, the protests were the result of deeper, social and systemic issues, increasing poverty, economic stagnation and political corruption. Solidarity protests took place all over Europe, including Germany, France, and the U.K. But this was only a sample of what was to come over the following years.
In the early months of 2009, as the economic crisis was particularly blunt in the countries of Eastern Europe, with increased unemployment and inflation, the region was headed for a “spring of discontent,” as protests and riots took place in Lithuania, Bulgaria, and Latvia. In January of 2009, more than 10,000 people took to the streets in Latvia in one of the largest demonstrations since the end of Soviet rule. A demonstration of roughly 7,000 Lithuanians turned into a riot, and smaller clashes between police and protesters took place in Bulgaria, the Czech Republic and Hungary, while police in Iceland tear gassed a demonstration of roughly 2,000 people outside the parliament, leading to the resignation of the prime minister. The head of the IMF said that the economic crisis could cause more turmoil “almost everywhere,” adding: “The situation is really, really serious.” A mass strike took place in France, bringing hundreds of thousands of workers into the streets and pushing anti-capitalist activists and leaders to the front of a growing social movement.
May 1, 2009 – the labour activist day known as ‘May Day’ – saw protests and riots erupting across Europe, including Germany, Greece, Austria, Turkey and France. In Germany, banks were attacked by protesters, leading to many arrests; there were over 150,000 demonstrators in Ankara, Turkey; more than 10,000 people took to the streets in Madrid, Spain; thousands took to the streets in Italy and Russia and social unrest continued to spread through Eastern Europe. Results from a poll were released on early May 2009 reporting that in the United States, Italy, France, Spain, Britain and Germany, a majority of the populations felt that the economic crisis would lead to a rise in “political extremism.”
In April of 2009, the G20 met in London, and was met there with large protests, drawing tens of thousands of people into the streets. In London’s financial district, protesters smashed the windows of the Royal Bank of Scotland, which was the recipient of a massive government bailout during the early phases of the financial crisis. One man, Ian Tomlinson, dropped dead on the streets of London following an assault by a British police officer, who was later questioned under suspicion of manslaughter.
In November of 2011, a month of student protests and sit-ins erupted in Germany, Austria, and Switzerland, triggered by budget cuts and tuition fees. The protests began in Austria, where students occupied the University of Vienna for over a month, quickly spreading to other cities and schools in Germany, where roughly 80,000 students took part in nationwide protests, with sit-ins taking place in 20 universities across the country, and the University of Basel in Switzerland was also occupied by students.
The small little island-country of Iceland has undergone what has been referred to as the “Kitchenware Revolution,” where the country had once been rated by the UN as the best country to live in as recently as 2007, and in late 2008, its banks collapsed and the government resigned amid the mass protests that took place. The banks were nationalized, Iceland got a new prime minister, a gay woman who brought into her cabinet a majority of women, fired bank CEOs; the constitution was re-written with significant citizen participation and the government took steps to write off debts and refused to bailout foreign investors. Now, the economy is doing much better, hence why no one is talking about Iceland in the media (woeful is power to the ‘tyranny’ of a good example). Iceland has even hired an ex-cop bounty hunter to track down and arrest the bankers that destroyed the country’s economy. As the debt burdens of a significant portion of the population of Iceland were eased, Iceland was projected in 2012 to have a faster growing economy than those in the euro area and the developed world. As reported by Bloomberg, the main difference between how Iceland has dealt with its massive economic crisis and how the rest of the ‘developed’ world has been dealing with it, is that Iceland “has put the needs of its population ahead of the markets at every turn.” Instead of rewarding bankers for causing the crisis, as we have done in Europe and North America, Icelanders have arrested them, and protected homeowners instead of evicting them.
As Greece came to dominate the news in early 2010, with talk of a bailout, protests began to erupt with more frequency in the small euro-zone country. In early May, a general strike was called in Greece against the austerity measures the government was imposing in order to get a bailout. Banks were set on fire, petrol bombs were thrown at riot police, who were pepper spraying, tear gassing, and beating protesters with batons, and three people died of suffocation in one of the bombed banks.
In May of 2010, British historian Simon Schama wrote an article for the Financial Times entitled, “The world teeters on the brink of a new age of rage,” in which he explained that historians “will tell you that there is often a time-lag between the onset of economic disaster and the accumulation of social fury.” In act one, he wrote, “the shock of a crisis initially triggers fearful disorientation” and a “rush for political saviours.” Act two witnesses “a dangerously alienated public” who “take stock of the brutal interruption of their rising expectations,” which leads to the grievance that someone “must have engineered the common misfortune,” which, I might add, is true (though Schama does not say so). To manage this situation, elites must engage in “damage-control” whereby perpetrators are brought to justice. Schama noted that, “the psychological impact of financial regulation is almost as critical as its institutional prophylactics,” or, in other words: the propaganda effect of so-called “financial regulation” on calming the angry plebs is as important (if not more so) as the financial regulations themselves. Thus, those who lobby against financial regulation, warned Scharma, “risk jeopardizing their own long-term interests.” If governments fail to “reassert the integrity of public stewardship,” then the public will come to perceive that “the perps and the new regime are cut from common cloth.” In the very least, wrote Scharma, elites attempting to implement austerity measures and other unpopular budget programs will need to “deliver a convincing story about the sharing of burdens,” for if they do not, it would “guarantee that a bad situation gets very ugly, very fast.”
As French President Nicolas Sarkozy began implementing austerity measures in France, particularly what is called “pension reform,” unions and supporters staged massive strikes in September of 2010, drawing up to three million people into the streets in over 230 demonstrations across the country. Soldiers armed with machine guns went on patrol at certain metro stations as government officials used the puffed up and conveniently-timed threat of a “terrorist attack” as being “high risk.” More strikes took place in October, with French students joining in the demonstrations, as students at roughly 400 high schools across the country built barricades of wheelie bins to prevent other students from attending classes, with reports of nearly 70% of French people supporting the strike. The reports of participants varied from the government figures of over 800,000 people to the union figures of 2-3 million people going out into the streets. The Wall Street Journal referred to the strikes as “an irrational answer” to Sarkozy’s “perfectly rational initiative” of reforms.
In November of 2010, Irish students in Dublin began protesting against university tuition increases, when peaceful sit-ins were met with violent riot police, and roughly 25,000 students took to the streets. This was the largest student protest in Ireland in a generation.
In Britain, where a new coalition government came to power – uniting the Conservatives (led by David Cameron, the Prime Minister) and the Liberal Democrats (led by Nick Clegg, Deputy PM) – tuition increases were announced, tripling the cost from 3 to 9,000 pounds. On November 10, as roughly 50,000 students took to the streets in London, the Conservative Party headquarters in central London had its windows smashed by students, who then entered the building and occupied it, even congregating up on the rooftop of the building. The police continued to ‘kettle’ protesters in the area, not allowing them to enter or leave a confined space, which of course results in violent reactions. Prime Minister David Cameron called the protest “unacceptable.” The Christian Science Monitor asked if British students were the “harbinger of future violence over austerity measures,” There were subsequent warnings that Britain was headed for a winter of unrest.
Tens of thousands again took to the streets in London in late November, including teenage students walking with university students, again erupting in riots, with the media putting in a great deal of focus on the role of young girls taking part in the protests and riots. The protests had taken place in several cities across the United Kingdom, largely peaceful save the ‘riot’ in London, and with students even occupying various schools, including Oxford. The student protests brought ‘class’ back into the political discourse. In November, several universities were occupied by students, including the School of Oriental and African Studies, UWE Bristol and Manchester Metropolitan. Several of the school occupations went for days or even weeks. Universities were then threatening to evict the students. The school occupations were the representation of a new potential grass-roots social movement building in the UK. Some commentators portrayed it as a “defining political moment for a generation.”
In early December of 2010, as the British Parliament voted in favour of the tripling of tuition, thousands of students protested outside, leading to violent confrontations with police, who stormed into crowds of students on horseback, firing tear gas, beating the youth with batons, as per usual. While the overtly aggressive tactics of police to ‘kettle’ protesters always creates violent reactions, David Cameron was able to thereafter portray the student reactions to police tactics as a “feral mob.” One student was twice pulled out from his wheelchair by police, and another student who was struck on the head with a baton was left with a brain injury. As the protests erupted into riots against the police into the night, one infamous incident included a moment where Prince Charles and his wife Camilla were attacked by rioters as their car drove through the crowd in what was called the “worst royal security breach in a generation,” as the royal couple were confronted directly by the angry plebs who attacked the Rolls-Royce and Camilla was even ‘prodded’ by a stick, as some protesters yelled, “off with their heads!” while others chanted, “Whose streets? Our streets!” As more student protests were set to take place in January of 2011, Scotland Yard’s counter-terrorism command contacted university officials requesting “intelligence” as students increased their protest activities, as more occupations were expected to take place.
In December of 2010, a Spanish air traffic controller strike took place, grounding flights for 330,000 people and resulting in the government declaring a state of emergency, threatening the strikers with imprisonment if they did not return to work.
Part way through December, an uprising began in the North African country of Tunisia, and by January of 2011, the 23-year long dictatorship of a French and American-supported puppet, Ben Ali, had come to an end. This marked the first major spark of what has come to be known as the Arab Spring. Protests were simultaneously erupting in Algeria, Jordan, Egypt, Yemen, and elsewhere. In late January of 2011, I wrote an article entitled, “Are we witnessing the start of a global revolution?,” noting that the protests in North Africa were beginning to boil up in Egypt most especially. Egypt entered its modern revolutionary period, resulting in ending the rule of the long-time dictator, Hosni Mubarak, and though the military has been attempting to stem the struggle of the people, the revolutionary struggle continues to this day, and yet the Obama administration continues to give $1.3 billion in military aid to support the violent repression of the democratic uprising. The small Arab Gulf island of Bahrain (which is home to the U.S. Fifth Fleet) also experienced a large democratic uprising, which has been consistently and brutally crushed by the local monarchy and Saudi Arabia, with U.S. support, including the selling of arms to the dictatorship.
In early 2011, the British student protests joined forces with a wider anti-austerity social protest against the government. As protests continued over the following months all across the country, banks became a common target, noting the government’s efforts to spend taxpayer money to bailout corrupt banks and cut health, social services, welfare, pensions, and increase tuition. Several bank branches were occupied and others had protests – often very creatively imagined – organized outside closed bank branches. On March 26, roughly 500,000 protesters took to the streets of London against austerity measures. As late as July 2011, a student occupation of a school continued at Leeds.
Throughout 2011, protests in Greece picked up in size and rage. In February, roughly 100,000 people took to the streets in Athens against the government’s austerity measures, leading to clashes with riot police that lasted for three hours, with police using tear gas and flash bombs and some protesters reacting with rocks and petrol bombs. In June of 2011, Greece experienced major clashes between protesters and police, or what are often called “riots.” During a general strike in late June, police went to war against protesters assembled in central Athens. Protests continued throughout the summer and into the fall, and in November, roughly 50,000 Greeks took to the streets in Athens.
In March of 2011, as Portugal plunged forward into its own major crisis and closer to a European Union bailout, roughly 300,000 Portuguese took to the streets of Lisbon and other cities protesting against the government’s austerity measures. Driven by the youth, calling themselves Portugal’s “desperate generation,” in part inspired by the youth uprisings in North Africa, the Financial Times referred to it as “an unexpected protest movement that has tapped into some of Portugal’s deepest social grievances.”
The Portuguese protests in turn inspired the Spanish “Indignados” or 15-M movement (named after the 15th of May, when the protests began), as youth – the indignant ones – or the “lost generation,” occupied Madrid’s famous Puerta del Sol on May 15, 2011, protesting against high unemployment, the political establishment, and the government’s handling of the economic crisis. The authorities responded in the usual way: they attempted to ban the protests and then sent in riot police. Thousands of Spaniards – primarily youth – occupied the central square, setting up tents and building a small community engaging in debate, discussion and activism. In a massive protest in June of 2011, over 250,000 Spaniards took the streets in one of the largest protests in recent Spanish history. Over the summer, as the encampment was torn down, the Indignados refined their tactics, and began to engage in direct action by assembling outside homes and preventing evictions from taking place, having stopped over 200 evictions since May of 2011, creating organic vegetable gardens in empty spaces, supporting immigrant workers in poor communities, and creating “a new social climate.”
The Indignados spurred solidarity and similar protests across Europe, including Greece, Belgium, France, Germany, the U.K., and beyond. In fact, the protests even spread to Israel, where in July of 2011, thousands of young Israelis established tent cities in protest against the rising cost of living and decreasing social spending, establishing itself on Rothschild Boulevard, a wealthy avenue in Tel Aviv named after the exceedingly wealthy banking dynasty. The protest, organized through social media, quickly spread through other cities across Israel. In late July, over 150,000 Israelis took to the streets in 12 cities across the country in the largest demonstration the country had seen in decades, demonstrating against the “rising house prices and rents, low salaries, [and] the high cost of raising children and other social issues.” In early August, another protest drew 320,000 people into the streets, leading some commentators to state that the movement marked “a revolution from a generation we thought was unable to make a revolution.” In early September, roughly 430,000 Israelis took to the streets in the largest demonstration in Israeli history.
In May and June of 2011, a student movement began to erupt in Chile, fighting against the increased privatization of their school system and the debt-load that comes with it. The state – the remnants of the Pinochet dictatorship – responded in the usual fashion: state violence, mass arrests, attempting to make protesting illegal. In clashes between students and riot police that took place in August, students managed to occupy a television station demanding a live broadcast to express their demands, with the city of Santiago being converted into “a state of siege” against the students. The “Chilean Winter” – as it came to be known – expanded into a wider social movement, including labour and environmental and indigenous groups, and continues to this very day.
The Indignados further inspired the emergence of the Occupy Movement, which began with occupy Wall Street in New York City on 17 September of 2011, bringing the dialectic of the “99% versus the 1%” into the popular and political culture. The Occupy movement, which reflected the initial tactics of the Indignados in setting up tents to occupy public spaces, quickly spread across the United States, Canada, Europe, and far beyond. There were Occupy protests that took place as far away as South Africa, in dozens of cities across Canada, in countries and cities all across Latin America, in Israel, South Korea, Japan, Australia, New Zealand, and in hundreds of cities across the United States.
On October 15, 2011, a day of global protests took place, inspired by the Arab Spring, the Indignados, and the Occupy movement, when over 950 cities in 82 countries around the world experienced a global day of action originally planned for by the Spanish Indignados as a European-wide day of protest. In Italy, over 400,000 took to the streets; in Spain there were over 350,000, roughly 50,000 in New York City, with over 100,000 in both Portugal and Chile.
The Occupy movement was subsequently met with violent police repression and evictions from the encampments. The U.S. Department of Homeland Security (DHS) was busy spying on various Occupy groups around the country, and reportedly was involved in coordinating the crack-downs and evictions against dozens of Occupy encampments, as was later confirmed by declassified documents showing White House involvement in the repression. The FBI has also undertaken a “war of entrapment” against Occupy groups, attempting to discredit the movement and frame its participants as potential terrorists. Following the example of tactical change in the Indignados, the Occupy groups began refurbishing foreclosed homes for the homeless, helping families reclaim their homes, disrupting home foreclosure auctions, and even take on local community issues, such as issues of racism through the group, Occupy the Hood.
In late November of 2011, a public sector workers’ strike took place in the U.K., with tens of thousands of people marching in the streets across the country, as roughly two-thirds of schools shut and thousands of hospital operations postponed, while unions estimated that up to two million people went on strike. The host of a popular British television show, Jeremy Clarkson, said in a live interview that the striking workers should be taken out and shot in front of their families.
In January of 2012, protests erupted in Romania against the government’s austerity measures, leading to violent clashes with police, exchanging tear gas and firebombs. As the month continued, the protests grew larger, demanding the ouster of the government. The Economist referred to it as Romania’s “Winter of Discontent.” In early February, the Romanian Prime Minister resigned in the face of the protests.
In February of 2012, a student strike began in the French-speaking Canadian province of Quebec against the provincial government’s plan to nearly double the cost of tuition, bringing hundreds of thousands of students into the streets, who were in turn met with consistent state repression and violence, in what became known as the ‘Maple Spring.’ Dealing with issues of debt, repression, and media propaganda, the Maple Spring presented an example for student organizing elsewhere in Canada and North America. The government of Quebec opposes organized students but works with organized crime – representing what can be called a ‘Mafiocracy’ – and even passed a law attempting to criminalize student demonstrations. The student movement received support and solidarity from around the world, including the Chilean student movement and even a group of nearly 150 Greek academics who proclaimed their support in the struggle against austerity for the “largest student strike in the history of North America.”
In the spring of 2012, Mexican students mobilized behind the Yo Soy 132 movement – or the “Mexican Spring” – struggling against media propaganda and the political establishment in the lead-up to national elections, and tens of thousands continued to march through the streets decrying the presidential elections as rigged and fraudulent. The Economist noted that Mexican students were beginning to “revolt.”
In May of 2012, both the Indignados and the Occupy Movement undertook a resurgence of their street activism, while the occupy protests in Seattle and Oakland resulting in violent clashes and police repression. The protests drew Occupy and labour groups closer together, and police also repressed a resurgent Occupy protest in London.
In one of the most interesting developments in recent months, we have witnessed the Spanish miners strike in the province of Asturias, having roughly 8,000 miners strike against planned austerity measures, resorting to constructing barricades and directly fighting riot police who arrived in their towns to crush the resistance of the workers. The miners have even been employing unique tactics, such as constructing make-shift missiles which they fire at the advancing forces of police repression. For all the tear gas, rubber bullets and batons being used by police to crush the strike, the miners remain resolved to continue their struggle against the state. Interestingly, it was in the very region of Asturias where miners rebelled against the right-wing Spanish government in 1934 in one of the major sparks of the Spanish Civil War which pitted socialists and anarchists against Franco and the fascists. After weeks of clashes with police in mining towns, the striking workers planned a march to Madrid to raise attention to the growing struggle. The miners arrived in Madrid in early July to cheering crowds, but were soon met with repressive police, resulting in clashes between the people and the servants of the state. As the Spanish government continued with deeper austerity measures, over one million people marched in the streets of over 80 cities across Spain, with violent clashes resulting between protesters and police in Madrid.
This brief look at the resistance, rebellious and revolutionary movements emerging and erupting around the world is by no means an exhaustive list, nor is it meant to be. It is merely a brief glimpse at the movements with which I intend to delve into detail in researching and writing about in my upcoming book, and to raise the question once again: Are we witnessing the start of a global revolution?
I would argue that, yes, indeed, we are. How long it takes, how it manifests and evolves, its failures and successes, the setbacks and leaps forward, and all the other details will be for posterity to acknowledge and examine. What is clear at present, however, is that no matter how much the media, governments and other institutions of power attempt to ignore, repress, divide and even destroy revolutionary social movements, they are increasingly evolving and emerging, in often surprising ways and with different triggering events and issues. There is, however, a commonality: where there is austerity in the world, where there is repression, where there is state, financial and corporate power taking all for themselves and leaving nothing for the rest, the rest are now rising up.
Welcome to the World Revolution.
Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on BoilingFrogsPost.com.
Please donate to The People’s Book Project to help this book come to completion.
Austerity, Adjustment, and Social Genocide: Political Language and the European Debt Crisis
By: Andrew Gavin Marshall
The following is a sample analysis from my upcoming book on the global economic crisis and global resistance movements. Please consider donating to The People’s Book Project to help support the effort to finish this book.
Political language… is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.
- George Orwell, “Politics and the English Language,” 1946
Political language functions through euphemism, by employing soft-sounding or simply meaningless words to describe otherwise monstrous and vicious policies and objectives. In the European debt crisis, political language employed by politicians, economists, technocrats and bankers is designed to make policies which create poverty and exploitation appear to be logical and reasonable. The language employed includes the words and phrases: fiscal austerity/consolidation, structural adjustment/reform, labour flexibility, competitiveness, and growth. To understand political language, one must translate it. This requires four steps: first, you look at the rhetoric itself as inherently meaningless; second, you examine the policies that are taken; third, you look at the effects of the policies. Finally, if the effects do not match the rhetoric, yet the same policies are pursued time and time again, one must translate the effects as the true meaning of the rhetoric. Thus, the rhetoric has meaning, but not at face value.
The debt crisis followed the 2007-2009 financial crisis, erupting first with Greece, then Ireland, Portugal, Italy and Spain, and threatens even to spread elsewhere. Of those mentioned, only Italy has not received a bailout. Though whether “bailed out” or not, Europe’s people are being forced to undergo “austerity measures,” a political-economic euphemism for cutting social spending, welfare, social services, public sector jobs, and increased taxes. The aim, they are told, is to get their “fiscal house in order.” The people protest, and go out into the streets. The state responds by meeting the people with riot police, batons, tear gas, pepper spray, and rubber bullets. This is called “restoring order.”
The effects of austerity are to increase poverty, unemployment, and misery. People are fired from the public sector, welfare and social benefits are reduced or lost, retirement ages are increased to keep people in the work force and off the pension system, which is also cut. Cuts to health care and education take a social and physical toll; as poverty increases the need for better health care, that very system is dismantled when it is needed most. Taxes are increased, and wages are decreased. People are deeper in debt, and destined for destitution. The objective, we are told, is to reduce public spending so that the government can reduce its deficit (the yearly debt).
In Europe, austerity has been the siren call of all the agencies, organizations, and individuals who represent the interests of elite financial control. In March 2010, the OECD (Organisation for Economic Co-operation and Development) suggested Europe undertake a program of austerity lasting for no less than six years from 2011 to 2017, which the Financial Times referred to as “highly sensible.” In April of 2010, the Bank for International Settlements (BIS) – the central bank to the world’s central banks – called for European nations to begin implementing austerity measures. In June of 2010, the G20 finance ministers agreed: it was time to enter the age of austerity! German Chancellor Angela Merkel, the European midwife of austerity, set an example for the EU by imposing austerity measures at home in Germany. The G20 leaders met and agreed that the time for stimulus had come to an end, and the time for austerity poverty was at hand. This was of course endorsed by the unelected technocratic president of the European Commission, José Manuel Barroso. The unelected president of the European Council, Herman Van Rompuy, also agreed, explaining in his unrelenting economic wisdom that austerity “has no real effect on economic growth.” Jean-Claude Trichet, president of the European Central Bank (ECB), also hopped on the austerity train, writing in the Financial Times that, “now is the time to restore fiscal sustainability.” Jaime Caruana, General Manager of the Bank for International Settlements (BIS) stated in June of 2011 that the need for austerity was “more urgent” than ever, while BIS chairman, Christian Noyer, also the governor of the Bank of France (and board member of the ECB), stated that apart from austerity, “there’s no solution possible” for Greece.
In April of 2011, the two president of the EU – Barroso and Van Rompuy – felt it was necessary to clarify (just in case people were getting the wrong idea), that: “Some people fear this work is about dismantling the welfare states and social protection… Not at all … It is to save these fundamental aspects of the European model… We want to make sure that our economies are competitive enough to create jobs and to sustain the welfare of all our citizens and that’s what our work is about.” However, the following year, the new European Central Bank president, Mario Draghi (former governor of the Bank of Italy), stated in an interview with the Wall Street Journal that, “there was no alternative to fiscal consolidation,” meaning austerity, and that Europe’s social contract was “obsolete” and the social model was “already gone.” However, Draghi explained, it was now necessary to promote “growth,” adding, “and that’s why structural reforms are so important.”
Thus, “austerity packages” will then prepare the state and economy for the next phase, which, we are told, would make the country “competitive” and create “growth.” This is how the country would pay off its total debt, which deficits merely add to. This process is called “structural adjustment” (or “structural reform”) and it requires “competitiveness” to facilitate “growth.”
As we can loosely translate “austerity” into poverty, we may translate “structural adjustment” into exploitation. After all, nothing goes better with poverty than exploitation! How does “structural adjustment” become exploitation? Well through competitiveness and growth, of course! Structural adjustment means that the state liberalizes the economy, so everything is deregulated, all state-owned assets are privatized, like roads, hospitals, airports, rivers, water systems, minerals, resources, state-owned companies, services, etc. This, as the story goes, will encourage “investment” in the country when it “needs it most.” This idea suggests that foreign banks and corporations will enter the “market” and purchase all these wonderful things, explaining that they work better when they are “competitive” in the “free market,” and then with their new investments, they will create new industries, employ local people, revive the economy, and with the “trickle down” from the most productive and profitable, all of society will rise in living standards and opportunity.
But first, other “structural adjustment” measures must be simultaneously employed. One of the most important ones is called “labour flexibility.” This means that if you have protected wages, hours, benefits, pensions… well, now you don’t! If you are a member of a union, or engage in collective bargaining (which has at its disposal the threat of a strike), soon you won’t. This is done because, as the story goes, wages must be decreased to increase the competitiveness of the labour force. Simply put, if less money goes into labour during the process of production, what is ultimately being produced will be cheaper on “the market,” and thus, will become more attractive to potential buyers. Thus, with lower wages comes greater profits. ECB president Mario Draghi himself emphasized that the “structural reforms” which Europe needs are, “the product and services market reform,” and then “the labour market reform which takes different shapes in different countries.” He added that the point was “to make labour markets more flexible and also fairer than they are today.” Isn’t that nice? He wants to make labour markets “fairer.” What this means is that, since some countries have protections for various workers, this is unfair to the workers who have no protections, because, as Draghi explained, “in these countries there is a dual labour market: highly flexible for the young part of the population… [and] highly inflexible for the protected part of the population.” Thus, “labour markets at the present time are unfair in such a setting because they put all the weight of flexibility on the young part of the population.” So to make the labour markets “fair,” everyone should be equally exploitable, and thus, equally flexible.
Labour flexibility will then help “specialize” your country in producing one or a few select goods, which you can produce better, cheaper, and more of than anywhere else. Then your economy will have success and the lives of all will prosper and grow… just not their wages. That is left to the “trickle down” from those whose wages are increased, the corporate, banking, and government executives and managers. That is because they take all the risk (remember, you are not risking anything when you passively accept your wages and standards of living to be rapidly decreased), and thus, they should get all of the reward. And because their rewards are so huge, large scraps will fall off of their table and onto the floor, which the wage-slaves below can fight over. By the laws of what I can only assume is “magic,” this will eventually lift the downtrodden from a life of poverty and labour and all will enjoy the fruits of being in a modern, technological, democratic-Capitalist paradise! Or so the fable goes.
The actual, predictable, and proven results of “structural adjustment” aimed at achieving “growth” through “competitiveness” is exploitation. The privatization of the economy allows foreign banks and corporations to come in and buy the entire economy, resources, commodities, infrastructure and wealth. Because the country is always in crisis when it does this, everything is sold very cheaply, pennies on the dollar kind of cheap. That is because the corporations and banks are doing the government and people a favour by investing in a country which is a large risk. The money the state gets from these sales is recorded as “revenue,” and helps reduce the yearly debt (deficit). The result for the people, however, is that mass layoffs take place, commodity prices increase, service costs increase, and thus, poverty increases. But privatization has benefits, remember; it encourages “competitiveness.” If everything was privatized, everyone would compete with each other to produce the best goods for the lowest costs, and everyone can subsequently prosper together in a society of abundance.
What actually takes place is that multinational corporations and banks, which already own most of the world’s resources, now own yours, too. This is not competitive, because they are ultimately all cartels, and collude together in exploiting vast resources and goods from around the world. They do compete in the sense of seeing which one can exploit, produce, and control more than the other. But at the bottom of this system, everyone else gets poorer. This is called “competitiveness,” but what it actually means is control. So if the economy needs to become more competitive, what is really being said is that it needs to come under more control, and of course, in private corporate and financial hands.
State owned industries are simply closed down, employees fired, and the product or resource which that industry was responsible for producing is then imported from another country/corporation. A corporation takes over that domestic good/resource and then extracts/produces it for itself. But this requires labour. It’s a good thing that the labour force has had its back broken through austerity and adjustment, because now there are no protected jobs, wages, hours, unions, or workers’ rights in general. Thus, the population is free to be exploited for long hours and minimal wages. This makes what they are producing to be cheaper, and thus, more “competitive.” This can become extremely profitable for corporations and banks which took all the risk in this entire process (remember: you don’t count; you had very little to begin with, so you lost very little. They have a lot, and thus, a lot more to lose. That’s what risk means). If workers attempt to form unions or organize and demand higher wages, the corporation can simply threaten to close down the plant, and move the jobs to somewhere else with a more “flexible” labour force. Or, the corporation could simply hire local immigrant populations (or ship in others) and pay them less for more hours, and leave you without any jobs. This is called “labour flexibility.” Labour flexibility translates as cheap labour: to bring everyone down to an equally low level of worker standards, and thus, to encourage “utilization,” which means exploitation.
In the ‘Third World,’ this has been best achieved through what are called “Export Processing Zones (EPZs),” a term used to describe a designated area outside of state control in which corporations may establish factories to freely exploit labour as they choose. Commodities are shipped in, goods are produced in the EPZs, from where they are then exported abroad, free of pesky national taxation and regulation. Ultimately, EPZs are mini corporate colonies. In late May of 2012, it was reported that Germany was looking for “alternatives” to its exclusive focus on austerity, and subsequently came up with a six-point plan for “growth.” One of the most notable points from Berlin was to establish “special economic zones to be created in crisis-plagued countries at the periphery of the euro zone,” as “foreign investors could be attracted to those zones through tax incentives and looser regulations.” Essentially, they are EPZs for the eurozone. The plan also calls for establishing trusts which would organize the sell-off of state assets in massive privatization schemes. Further, what is needed, according to Berlin, was to establish a “dual education system, which combines a standardized practical education at a vocational school with an apprenticeship in the same field at a company in order to combat high youth unemployment.” In other words, no more academic or intellectual education for youth, but rather “vocational” or labour-oriented education, to not allow the expectations of the youth to rise too far, and to simply prepare them for a life of ‘work’ by attaining the necessary vocational skills. And of course, the plan for “growth” from Germany also includes more efforts at establishing “labour flexibility,” which would include “a loosening of provisions that make it difficult to fire permanent employees and to create employment relationships with lower tax burdens and social security contributions.” In other words: make it easy to fire workers, have lower wages, and eliminate benefits.
Economists and politicians often talk about the need to “utilize labour flexibility to increase competitiveness and achieve growth.” What they are really saying is that they need to exploit cheap labour to increase control and achieve profits and power. Lucas Papademos was installed (unelected) as the “Technocratic” prime minister of Greece in November of 2011, in order to “help” Greece undertake the mandatory “reforms.” Papademos was the perfect candidate for the job: he was an economist educated in the U.S., served on the board of the Federal Reserve Bank of Boston, was chief economist at the Bank of Greece, he became Governor of the bank in 1994, where he oversaw the conversion of Greece into the euro, and in 2002, he joined the European Central Bank board, where he became a Vice President under Jean-Claude Trichet.
In a 2005 interview with the Financial Times while he was Vice President at the European Central Bank (ECB), Lucas Papademos said that European “growth” potential was looking good, but added: “There is a risk that, unless there are changes in policies – more reforms in labour and product markets – as well as in the behaviour of private economic agents, this [growth] range may have to be revised downwards.” He explained: “the main way that potential growth could increase is through policies that boost productivity growth and raise labour utilization by increasing the average hours worked and the participation rate in the labour market and by making this market more flexible and adaptable.” In May of 2010, Bank of England governor Mervyn King stated that the eurozone needed “structural reforms, changes in wages and prices in the countries that need to regain competitiveness.” Former ECB president Jean-Claude Trichet had also emphasized that what was needed was a program of fiscal austerity, “accompanied by structural reforms to promote long-term growth.” In other words, what was needed was impoverishment, accompanied by exploitation to promote long-term profits.
The European Financial Stability Facility (EFSF), the Euro-area bailout fund, was headed by a man named Klaus Regling. In an article he wrote for The Banker, Regling emphasized that funds from the EFSF would come with conditions, including of course, austerity measures, but also, “structural reforms, such as modernizing public administrations, improving labour market performance and enhancing the tax systems, with the aim of increasing a country’s competitiveness and growth potential.” In other words, the conditions imposed on countries receiving a bailout would amount to an impoverishment program (“austerity”), combined with increased exploitation (“structural reforms”), through privatization of state industries and assets (“modernizing public administration”), creating a cheap labour force (“improving labour market performance”), extracting all remaining domestic wealth (“enhancing the tax systems”), designed to increase control (“competitiveness”) and profits (“growth”).
Mario Draghi, as president of the ECB, called for a “growth pact” (or a “profit pact”) for Europe, to go alongside the “fiscal pact” (or “poverty pact”). This received quick endorsements from France’s new president Francois Hollande, Angela Merkel, and José Manuel Barroso. Merkel was sure to emphasize, however, that growth would be “in the form of structural reforms.”
The combination of “fiscal austerity” and “structural adjustment” are generally referred to as a “comprehensive structural adjustment program” or a “restructuring of the economy.” This language is important to understand because “restructuring” as a word is used to describe two processes: one, is that it is what is needed to prevent a country from defaulting on its debt and to return the country to a period of growth; and, on the other hand, “restructuring” is used to describe what takes place after a country defaults. The words in both situations are the same, and so are the policies, though in a default they are inflicted more severely. The very process we are told we must undergo to prevent a default, is the very same process that we undergo after a default. Thus, the combination of fiscal austerity and structural adjustment is, in actuality, a slow and painful default.
This combination of austerity and adjustment amounts to a program and effect of social devastation. Thus, the words “structural adjustment program,” “restructuring,” and “default” in actuality translate into social genocide. These three terms provide further insight into their use: the class system is what is being restructured, as middle classes are wiped out and pushed into poverty, the poor are made destitute, and the elite become concentrated and in total control; the political and economic system is being adjusted to fit this restructuring; and the promise that people everywhere were told, that their leaders and society exists to serve their interests, is what is being defaulted on. The state does not default; it is the ‘social contract’ that is defaulted. Just as Mario Draghi told the Wall Street Journal, “the European social model has already gone… Fiscal consolidation is unavoidable in the present set up, and it buys time needed for the structural reforms.” Thus, social genocide.
As George Orwell wrote in his 1946 essay, “political language has to consist largely of euphemism,
question-begging and sheer cloudy vagueness.” But there remains intent and meaning behind the words that are used. When we translate the political language of the European debt crisis, it reveals a monstrous agenda of impoverishment and exploitation. Thus, we also see the necessity of political language for those who use it: one cannot argue openly for programs of impoverishment and exploitation for obvious reasons, so words like “fiscal consolidation” and “structural reform” are used, because they are vague and obscure.
Ultimately, one can get away with saying, “we need a comprehensive austerity package augmented by structural reforms, such as labour flexibility, designed to increase competitiveness and facilitate growth,” as opposed to: “We need to rapidly impoverish our populations, whom we will then exploit to the fullest, such as by creating a cheap labour force, which would increase elite control and generate private profits.” Such honesty and bluntness would lead to revolt, so, political language is used instead. In Europe, political language is part of a ‘power dialectic’ which supports policies and agendas that aim to take more for those who already have the most, and to take from all the rest; to impoverish, exploit and oppress; to plunder, profit and punish.
Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on BoilingFrogsPost.com.
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Super Mario Monti and the Dictatorship of Austerity in Italy
By: Andrew Gavin Marshall
The following is Part 2 of a two-part excerpt on ‘Italy in Crisis.’ These excerpts are rough-draft, unedited samples of a chapter on the European debt crisis to be featured in my upcoming book (as yet ‘Untitled’), to be done by the end of the summer. The book covers the following: the origins, evolution, and effects of the global economic crisis; the acceleration of international imperialism; the elite global social engineering project of constructing a system of ‘global governance’; emerging resistance and revolutionary movements (and elite attempts to co-opt, control, or crush them), including the Arab Spring, European anti-austerity protests, the Spanish Indignados, the Chilean student movement, the Occupy movement, the Quebec ‘Maple Spring’, and the Mexican student movement, among others. This sample allows you to see the research that is going into this book, and if you would like to see the book come to completion, please consider making a generous donation to The People’s Book Project. With a fundraising goal of $2,500 the Project has raised $810, and just $1,690 to go!
In Part 1 of this series (The Decline of the Roman Democracy and Rise of the ‘Super Mario’ Technocracy), I examined the Technocratic coup in Italy, which removed the democratically-elected Berlusconi and replaced him with an unelected technocrat, Mario Monti, an economist, Bilderberg member, former European Chairman of the Trilateral Commission, former European Commissioner for Competition, and a former adviser to Goldman Sachs International, was also on the board of the Coca-Cola Company, and founded the European think tank, Bruegel. Mario Monti was installed by the European elites with one purpose: punish the population of Italy through ‘fiscal austerity’ and ‘structural adjustment.’
The Technocracy of Austerity
Monti wasted no time in punishing the people of Italy for the crimes and excesses of Europe and the world’s elite. On December 2, 2011, Monti announced a 30 billion euro ($40.3 billion) package of austerity measures, which included “raising taxes and increasing the pension age.” Monti described the measures as “painful, but necessary.” He told a press conference that, “We have had to share the sacrifices, but we have made great efforts to share them fairly.” Monti, who is both Prime Minister and Economy Minister, said he had renounced his own salaries from those positions. Considering that he was – until taking those positions – an adviser to Coca-Cola and Goldman Sachs, among other prominent jobs, those salaries likely would not make much of a difference to Monti’s bank account, anyway. The Deputy Economy Minister Vittorio Grilli (who is still on the board of the Monti-founded think tank Bruegel), said that, “the package should ensure that Italy meet its target of a balanced budget by 2013.” The Welfare Minister Elsa Fornero broke down into tears as she announced an end to inflation indexing on many pension bands, which would essentially amount to “an effective income cut for many retired people.” Unions spoke out against the cuts, stating that they would “hit poorer workers and pensioners disproportionately hard.” Deputy Economy Minister Grilli said that 12-13 billion euros of the package would come from spending cuts, and the rest of the 30 billion euro package would come from tax increases. The minimum age for pensioners (that is, the retirement age) was set to be raised for both men and women to 66 by 2018, as well as providing “incentives” to keep people in the workforce until the age of 70.
The austerity package was passed by an undemocratic decree which Monti named the “Save Italy” decree, and while the union leaders denounced the package, the main business lobby in Italy, Confindustria, praised the package as vital “for the salvation of Italy and the euro.” As Elsa Fornero, the Minister for Welfare, began crying as she announced the austerity measures, she explained, “We know we are asking for sacrifices, but we hope they will be understood in the name of growth and to avoid collective impoverishment.” Of course, austerity is just that: “collective impoverishment.”
In response to the austerity package, Italy’s three largest labour unions began a week of strikes on December 12, with port, highway, and haulage workers stopping work for three hours on the 12th, while metalworkers, including employees of Fiat, put down their tools for eight hours. Printing press operators stopped working for a full shift, and most newspapers were expected to not publish the following day. Public transport strikes took place on December 15-16, and bank employees were set to stop work in the afternoon of December 16, while the public administration closed down for the entire day of December 19. Susanna Camusso, the head of the largest and most militant labour federation, CGIL, said, “We’re not giving up on the idea that the austerity package must be changed… It hurts workers, pensions and the country as a whole.” Mario Monti held a last-minute meeting with the union leaders to unsuccessfully attempt to stop the strikes that were set to begin the following day.
CGIL leader Camusso said that as a result of the austerity measures, “We see every risk of a social explosion.” CGIL, which represents six million members, half of whom are pensioners, stated that, “We are flexible in the face of the emergency but we are not willing to accept everything… You can’t ride roughshod over people.” With only 57% of Italians working, raising the retirement age, as dictated by the austerity package, would amount to “closing the door on the young unemployed,” warned Camusso, adding that Monti had done nothing for “young people and women who can’t find work, and when they do it is badly paid.”
In late December, the Italian Senate passed a vote of confidence on Mario Monti’s government when they approved the new austerity package. Monti commented: “Today this chamber concludes a rapid, responsible, complex job… on a decree that was passed in extreme emergency and that enables Italy to hold its head high as it faces the very serious European crisis.”
Prior to the European Summit held at the end of January 2012, Mario Monti was holding meetings with Angela Merkel, Nicolas Sarkozy, British Prime Minister David Cameron, and European Council President Herman Van Rompuy. Italy, wrote the Economist, “it seems fair to say, is back at the top table after being quietly shoved off under the leadership of Silvio Berlusconi.” Monti emphasized to Merkel, Sarkozy, and other leaders that the EU needs to not simply “enforce fiscal discipline,” but to stimulate growth. This would mean, according to Monti, “not only finding ways to lower interest rates, but encouraging liberalisation wherever possible.” Monti even suggested that Germany should “liberalize” (meaning: privatize) some of its services. Monti, in an interview with the Economist, stated that, “It is rather unusual for Italy to be at the forefront of pro-market initiatives,” but that he planned to undertake a major liberalization of Italy, saying: “I am convinced that it is also in Italy’s national interest.” Acknowledging that his government is “unelected,” Monti told the Economist that, “there was in Italy a hidden demand for a boring government which would try to tell the truth in non-political jargon.” Monti warned, however, that, “Austerity is not enough, even for budgetary discipline, if economic activity does not pick up a decent rate of growth… A lowering in interest rates does not depend only on Italy’s efforts but also, and essentially, on Europe’s ability to confront the crisis in a more decisive way.” Monti stated that Italy’s domestic political situation is getting problematic for the EU, with a growing appeal to ‘Euroscepticism,’ warning: “What I see now, week after week, in parliament is a widening of the spread of this attitude… The degree of impatience-cum-hostility to the EU, to Germany and to the ECB is mounting.”
Monti warned Merkel and other EU leaders that Italian sacrifices alone would not get Italy out of crisis, that Italy needed some form of outside support, without which, he warned: “a protest against Europe will develop in Italy, also against Germany, which is viewed as the ringleader of E.U. intolerance, and against the European Central Bank… I cannot have success with my policies if the E.U.’s policies don’t change.” In particular, he was referring to the need to bring down Italy’s interest rates, something that could likely only be achieved through the ECB purchasing large amounts of Italian bonds, which would increase “market confidence” in Italy and bring down interest rates. Otherwise, Monti lamented, the popular discontent of the people with the economic situation could push Italy to “flee into the arms of populists.” Spoken like a true unelected technocrat. Imagine that, a government which dares to serve the interests of the people over whom it rules! Not in the ‘New Europe.’
In late January, Philip Stephens, writing for the Financial Times, stated that, “Italy is back,” and that while Merkel “sits at the top of Europe’s power list,” and Sarkozy “can lay claim to be the continent’s most energetic leader,” it is Mario Monti who “is its most interesting.” Stephens declared that, “Mr. Monti’s fate may turn out to be Europe’s.” Barack Obama’s White House announced that in a future meeting between Obama and Monti, the two leaders would discuss “the comprehensive steps the Italian government is taking to restore market confidence and reinvigorate growth through structural reform, as well as the prospect of an expansion of Europe’s financial firewall.” Stephens translated this as: “Mr. Obama is behind Mr. Monti all the way – including when he puts pressure on Ms. Merkel.” Lamenting the Italy of Berlusconi, who was “shunned by his European Union peers,” though always embraced as a friend by Russia’s Putin, Stephens wrote that Monti, “a serious-minded academic with a serious plan, is different in every dimension.” He also noted that there was “a second Italian at the top table,” meaning Mario Draghi, the new President of the European Central Bank, “the other Mario,” who in terms of economic orthodoxy, “styles himself an honorary German.” Stephens wrote that Monti is so important because “it is in Italy that the euro’s long-term prospects will be decided,” as Italy is the euro-area’s third largest economy (after Germany and France), and if Italy “cannot chart a credible economic course, the euro does not have a future as a pan-European project.” While praising Monti’s austerity package, Stephens said that, “the real test will come in liberalizing the economy,” which “will not be easy,” but “the choices are unavoidable.”
Mario Monti, upon unveiling his “liberalization” plans in late January, stated: “Italy’s economy has been slowed down for decades by three constraints: insufficient competition; an inadequate infrastructure; and complicated administrative procedures.” Thus, Monti passed a decree opening the occupation of taxi drivers up to “competition,” prompting taxi drivers to block central streets in Rome. As liberalization brings in higher petrol prices (which were previously under more control), truck drivers and agricultural workers set up barricades in Sicily. One Italian paper (owned by the Berlusconi family) headlined: “Half of Italy is ready to wage war on the government.” Once decrees are issued, they go into effect immediately, but require parliamentary approval within two months. Monti’s liberalization decrees of January (following the austerity decrees of December) also targeted the gas and electricity markets, as well as the insurance sector and public services. Next in Monti’s target: the labour market. One analyst at Roubini Global Economics told the Financial Times: “Although structural reforms are necessary to boost long-term growth, they will take several years to bear fruit and, in a period of economic contraction and government retrenchment, will have an adverse effect on short-term output, deepening the recession which will last through 2013.”
In his first interview since resigning as Prime Minister, Berlusconi told the Financial Times in early February that he was “stepping aside” from frontline Italian politics and had no intention of running for prime minister again. Berlusconi gave his “strongest endorsement to date of the technocratic government led by Mario Monto,” specifically in “its intention to implement labour market reforms opposed by trade unions.” Berlusconi declared: “I have now stepped aside, even in my party.” He explained that he resigned the previous November because he had been attacked “by an obsessive campaign by the national and foreign media that blamed me personally and the government for the high spread of Italian state bonds and the crisis on the stock market.” Thus, he contended: “After having evaluated the causes of the crisis, which did not rest in Italy but in Europe and the euro, I believed that if I had stayed in government I would have damaged Italy as we would have had more terrible media campaigns… With a sense of responsibility, though having a majority in both houses of parliament… I stepped aside and with elegance.” One can always rely upon a politician to sing their own praises, especially if they are undeserving. He did suggest, however, that he would consider running for parliament, quipping: “I still have strong popular backing, almost twice as much as my colleagues Merkel and Sarkozy… In opinion polls, I personally have 36 per cent support. If I walk out in the street I stop the traffic. I am a public danger and I cannot go out to do the shopping.” Berlusconi concluded:
The hope is that this government, which is supported for the first time by the whole of parliament, will have the chance to propose great structural reforms, starting from the state’s institutional architecture, without which we cannot think of having a modern and truly free and democratic country.
Martin Wolf, perhaps the most influential financial columnist in the world, writing for the Financial Times in January of 2012, asked if the two Marios – nicknamed by the media as the “Super-Marios” – will be able to “save the eurozone?” Wolf wrote that they “bring sophisticated pragmatism to the table,” and hoped that they would “shift policy in a more productive direction.” Wolf referred to the ECB’s new long-term refinancing operation announced in December of 2011, which is essentially a bank bailout with a three-year yield at the ECB’s average interest rate (which stands at 1% currently). When the ECB began this new program, roughly 523 banks took 489 billion euros, described by Wolf as “a bold and cunning move by Mr. Draghi and probably the most he could get away with right now.” Wolf also referred to Monti’s willingness to argue that the creditor countries “do more to lower his country’s borrowing costs,” or interest rates, warning in the Financial Times against a “powerful backlash” among voters in the EU periphery states. Wolf wrote that, “Mr. Monti is in a strong position to make this argument,” as Monti “is a well-respected official with staunchly pro-European views and a strong sympathy for German attitudes to competition and fiscal and monetary stability.” Wolf explained that, “Draghi and Monti are addressing two interlinked fragilities: the vulnerability of the banking system and the unsustainable terms on which weaker countries can now borrow.” While praising the “Super-Marios,” Martin Wolf said that they alone could not save the eurozone, whose problems run very deep, and where even the ‘solutions’ to the crises felt by various EU states can make larger, structural reforms even more challenging. As Wolf correctly noted: “In Italy’s case, for example, the combination of high interest rates and vulnerable banks with fiscal austerity is likely to lead to a lengthy and deep recession and so to a rise in cyclical fiscal deficits [debt incurred during and because of the economic crisis at the time] as the structural deficit falls [the debt acquired by spending more than what is brought in through revenue].” Naturally, though, this simply means that the overall debt will increase. Wolf wrote, ultimately, that if “break-up [of the euro] is ruled out, one must choose reforms, however painful.” This is because, according to Wolf, “the costs of failure are so large that the possibility of domestic and eurozone reform must be kept alive.” On this, the “Super-Marios” can be leaders.
When the credit ratings agency Standard & Poor’s downgraded Italy’s debt in January by two notches to BBB, “with a warning of more to come,” Mario Monti stated that he “agrees with almost everything in S&P’s analysis,” and “jokes that he could almost have written it himself.” He told the Financial Times that, “If I ever dictated anything, it must have been what S&P had to say about domestic Italian economic policy,” and then laughed. As a result of the downgrade, Italy had the lowest credit rating of any eurozone country which did not receive a bailout, apart from Cyprus. Why was Monti so pleased with the downgrade? He quoted the report to the interviewer from the Financial Times, going through the risk factors associated with Italy, but adding: “Nevertheless, we have not changed our political risk score for Italy. We believe that the weakening policy environment at European level is to a certain degree offset by a strong domestic Italian capacity.” In other words: “Mr. Monti’s 60 days in office have been enough to convince the agency that his government is on a path of reform that could return the country to growth and shrink its debt levels, but that European Union mismanagement of the eurozone debt crisis is dragging down struggling countries, including Italy.” Mr. Monti stated, “I think I’m the only one in Europe not to have criticized the rating agencies.”
In discussing how his government came into existence, as in, not through democratic means, Monti told the Financial Times that he agreed that he could be helping to bring a “revolution,” referring to the number and extent of measures he intended to pass before democratic elections take place. He explained that if Italy’s borrowing costs (interest rates) fall, “the political parties will not dare stop the experiment [in technocracy] before it has to stop… And in my view the political parties will not dare go back to the acrimonious, superficial and tough confrontation that animated parliament. The image and style of public debate has changed.” He added: “If and when success comes, you will find us not really taking credit… My ambition is that Italy becomes a boring country, in relative terms. It is really in the hands of Europe.”
In February of 2012, Mario Monti gave an interview with PBS Newshour in which he continued to heap praise upon austerity measures, saying that because Greece’s debt had been so high, “it would have been hard – let’s face realities – to have a soft landing from those excesses of deficit without a recession.” He added, “I think there is a valid point if we say that Europe needed to be put under a safe place as regards the public finances of each member state.” Monti thanked “German and other pressures” for pushing countries in that direction of austerity. And now, he claimed, “the time has come to focus more energies on how collectively we can achieve more growth in Europe.” Growth, of course, simply means growth of profits for big banks and multinational corporations.
Super Mario’s ‘Structural Adjustment’: The Meaning of “Growth”
When Europe’s political and financial elite discuss “growth” in the current context as an added “solution” on top of austerity, what they really mean is to implement major structural changes: to liberalize the economy, privatize all assets, state subsidies, services, industries, and resources. This will allow corporations and banks to come in and purchase all of these assets and industries, and since this process takes place in the midst of a deep crisis, they are able to take control of all the assets for very cheap prices. This is called “foreign direct investment.”
The major corporations of Europe, of North America, and elsewhere, will be able to control directly a much larger share of the economy. Their purchases provide short-term funds for the state, thus increasing short-term revenue. However, since state industries are privatized and sold for pennies on the dollar, they are actually losing long-term revenue, but that isn’t mentioned. Markets respond to the short-term, not the long-term, and of course, we want to have our world and its social, political, and economic stability determined by forces that theoretically do not look more than a couple months ahead. The process of liberalization and privatization is also sold on the prospect of “creating jobs,” because the theory goes that corporations will enter the market with the ability to invest and thus, create jobs for workers. The reality is that the corporations buy up the industries, and generally shut them down to relocate elsewhere for cheaper labour. This means mass firings. This also means that unions and labour rights in general have to be dismantled and people have to be kept in line, under control.
Austerity measures are aimed at redistributing wealth from the mass of society to the very top percentiles, which is achieved through increased taxation, mass firing of public sector workers, cuts to social spending, health care, welfare, education and other areas. This, quite predictably, creates a massive social crisis. Many austerity packages – such as Monti’s in Italy – also include efforts to undermine labour and unions. This prepares the work force for the period and programs of “growth,” in which workers will be forced to submit to exploitative working conditions with no collective bargaining rights, or else the industries will simply fire them all, close up shop, and go elsewhere. This is why we hear all the Eurocrats and politicians in Europe and elsewhere explain that austerity and growth are not mutually exclusive, that they can and should co-exist together. Indeed, from the view of the ‘effects’ of these policies, a joint program of “austerity” and “growth” makes perfect sense: commit social genocide (through fiscal austerity), and exploit, plunder, and profit from the spoils of economic war (growth through structural adjustments).
In the ‘Third World’ over the past three decades, these policies were imposed by the IMF, World Bank, Western imperial powers, and Western banks and corporations. With the primary engine being the International Monetary Fund (IMF), countries in Latin America, Africa, and Asia, which were in the midst of a major debt crisis in the 1980s, were forced to sign what were called ‘Structural Adjustment Programs’ (SAPs) with the IMF and World Bank if they wanted to get any loans or aid from Western banks or institutions. The SAPs would be a set of conditions that the countries would have to adhere to if they were to get a loan, and the conditions included a mix of ‘fiscal austerity’ and ‘structural adjustment’: devalue the currency to make it cheaper to invest in the country (but which creates inflation and increases the costs of food, fuel, and other commodities, hurting the poor and middle classes); cut social spending to reduce the deficit (but which saw the destruction of education, health care, welfare and social programs, as well as mass firings from the public sector); trade liberalization, to allow for foreign countries and corporations to more easily invest in the country, and thus, bring in revenue (which meant dismantling all tariffs, trade barriers, price controls, state subsidies, and resulted in the easy exploitation and cheap purchase of the country’s wealth by foreign corporations and banks); and privatization, meant to encourage investment and allow for the market to make state-owned industries and asset more “efficient” (but which resulted in mass firings, closing of entire industries, mass corruption, and total control of the economy being handed to foreign banks and corporations).
The result of SAPs – the combination of “austerity” and “growth” – over three decades has been devastating: poverty has rapidly accelerated and expanded; wealth becomes heavily polarized, with a tiny minority owning the economy, and everyone else with next to nothing; the small elite become increasingly dependent upon and integrated with a global elite (based primarily in the West), and disassociated from their fellow citizens; mortality rates go up as health care and social services are dismantled or made incredibly expensive at a time of deepening poverty in which more people need the services more than ever before; social unrest and repression become rampant, as the people rise up against ‘Structural Adjustment,’ the state resorts to increasingly authoritarian and brutal measures to control or crush resistance to the programs and to protect the dominance of the tiny minority, locally and internationally.
This, essentially, is the fate of Europe and the rest of the industrialized world. Europe, simply being the most integrated region of the world (a trend which is accelerating everywhere in the world), is experiencing the brunt of this crisis before the rest of the industrialized nations of the world. So when politicians and financial elites say that Europe needs “growth” in conjunction with austerity, and this will lead to “recovery”, remember what “growth” means: exploitation, plundering, and profits. When you remember this, suddenly everything the politicians and pundits have been saying for years, suddenly makes sense.
When asked if he felt that there was a danger of “a backlash” in Italy against what people “may see as E.U. imposed changes to their way of life that are very, very painful,” Monti replied that, “there was such a risk of backlash,” but he explained: “I try to avoid that backlash by always presenting the necessary sacrifices that Italians have to go through not as an imposition from Brussels or Germany or the European Central Bank, but rather as a necessary step that Italians have to undertaking — to undertake also at the suggestion of Europe, but basically for their own interests, for the interests of ourselves and of future generations of Italians. This is precisely meant to avoid backlashes.” Interesting statement: saying that austerity is for the interests of Italians and “future generations” is done not to speak truth, but “to avoid backlashes” against the E.U. Monti emphasized that, “it is very, very important” to ensure that the single currency, “which was meant to be the culminating point of the European construction,” does not become, “through psychological negative effects, a factor of disintegration of Europe.”
In an interview with the Wall Street Journal in early February, Mario Monti publicly outlined his strategy for “growth” in Europe, which he proposed privately to other European governments the previous month, pushing Europe beyond austerity and suggesting “tougher European rules aimed at prying open member states’ national industries,” of course to “encourage economic growth and competition in the euro zone.” Monti explained that if this is not done, “Europe will not be a nice place to live in five years from now if we haven’t solved the problem of how to grow… We have to say what growth will look like in a fiscally compacted union.” His proposal “would speed up the process by which European authorities sanction nations that violate the tenets of the EU’s single market.” For Monti and other technocrats like himself, this “growth” does not include government spending. Since Italy is supposed to knock off 30 billion euros ($39.8 billion) – 2% of its GDP – from its public debt “every year for decades,” this means, explained Monti, that “any thought of budget-stimulated growth ideas will have to go away.” Instead, Monti suggested that the European Union “should back single markets more forcefully to support economic growth,” which instead of having Berlin sign off on the EU spending its way to prosperity, would mean “to push Germany to liberalize its own economy,” which, claimed Monti, “would have a trickle-down effect.”
Monti was undertaking various programs of “liberalization” in Italy, such as liberalizing major professions and sectors, such as pharmacies, taxis, and notaries. To handle Italy’s “unemployment” issue, which is significant to say the least, Monti was seeking to “introduce new measures aimed at making it easier for companies to hire and fire workers,” which, he said, “will increase the overall flexibility of the labor market,” meaning that it will allow for cheaper and more easily-exploited labour by corporations. Monti even stated that the changes he was making in the labour market were aimed at “reducing the segmentation of Italy’s labor market between those who are protected, sometimes hyper-protected, and those, particularly the young, who can’t really get into the labor market.” So, instead of having various work forces that are “protected” (or “hyper-protected” in Monti’s words), it would be better to simply bring everyone down to the same level to allow for “flexibility,” or in other words, easy exploitative capacity. For “Super Mario,” no protection is better than any protection when it comes to workers. Imagine if there were politicians who thought the same thing about bankers.
While Europe agreed to a ‘Fiscal Compact’ to ensure austerity, Monti felt that the EU should add to this a growth pact, and felt that the supranational and undemocratic European Union should have “an efficient mechanism to swiftly sanction countries that don’t open up their economies to competition,” meaning exploitation and plundering. Thus, the previous month, Monti submitted a proposal “aimed at giving the European Commission – the EU’s governing body – greater power over sanctioning member states.” This proposal, which had not been reported prior to this interview, “could speed up the process by years, by making it easier for the commission to impose rulings rather than having to take member states to court, as it often does now.” When asked what this has to do with growth, Monti replied: “A lot, because if you give more teeth to the commission to remove national obstacles to the functioning of the single market, we’ll create a large level playing field, which the business community always insists is a key component of growth.” Well that answers that: it will lead to “growth” because the business community says so. Thank you, Prime Minister.
Monti acknowledged that this creates obvious concerns, especially with countries like the U.K. and France which would likely oppose the proposal for fear of its encroachment on their sovereignty, and the existence of a “democratic deficit” which will continue “as member states gradually hand over more of their fiscal and economic policies to the central oversight of European institutions.” But for this, Monti has a solution: “Much of the reconciliation between more centralized governance and the scope for democracy will be resolved through an even stronger role of the European Parliament,” which is, in effect, utterly useless.
The Most Important Man in Europe?
In late February, Time Magazine published an article reporting on an interview they conducted with Monti in which they referred to him as “the most important man in Europe.” The article described Monti as “the tough taskmaster Italy so desperately needs,” though he “has the aura of a gentlemanly grandfather.” Time reported that Monti was “fixing a deadlocked democracy,” no doubt by ruling as an unelected technocrat, “and charging forward with greater European integration,” in a “wholesale overhaul of Italian society.” Monti told Time, “I believe that reforms will not really take hold if they do not gradually come into the culture of the people.” Time declared that for the problem of Italy’s partisan politics, “the solution was Monti.” Monti said that the request to rule came “at such a severe time of crisis for Italy that I could not refuse.” Thus, declared Time Magazine: “Today he reigns over Rome like a new Caesar.” In effect, “the democratic process has been suspended to allow an unelected technocrat to implement policies that elected politicians could not.” Monti himself refers to this as a “temporary mutual disarmament” of the left and right, a technocratic euphemism for “dictatorship of austerity.”
The publication praised Monti’s austerity package in December, his liberalization program in January, and his new plan to overhaul the labour market; then lamented that Monti is taking on “entrenched interest groups,” such as taxi drivers (no joke, the article referred to taxi drivers as “entrenched interest groups”), who staged strikes in Rome and other Italian cities, and pharmacists who were threatening to do the same thing, or truckers that blocked roadways in protest of a fuel-tax hike. The president of a national taxi union stated, “In Italy, the economy was more based on rules that used to be applied to create wealth for the general public… I don’t understand why suddenly the only solution is to get rid of the rules.” He added: “Monti has always lived in the salons… He really doesn’t know the problems of ordinary people.” To this, Monti replied, “Maybe they’re right,” but he felt this was an advantage: “Italy has piled up huge public debt because the successive governments were too close to the life of ordinary citizens, too willing to please the requests of everybody, thereby acting against the interests of future generations.” Monti earned a reputation – and the nickname “Super Mario” – back when he was an EU Commissioner, where he came into conflict with some major global corporations, such as blocking a merger between GE and Honeywell, which prompted the then-CEO of GE, Jack Welch, to refer to Monti as “cold-blooded.” Monti acknowledged that as he is more successful in pushing “reforms,” the effects of those reforms would put pressure on the political parties to abandon him, and make it more difficult for him to continue his programs before he leaves office in 2013. “The point,” explained Monti, “is how to keep this pressure even once the most visible elements of emergency hopefully are over.” This would largely be left to accelerating the process of European integration: “I think there is a genuine wish on the part of the E.U. and Germany and France to again play an active game with Italy for a relaunch of European integration… I think we will be seeing an acceleration of the good news.” Apparently, accelerating the integration and institutionalization of an undemocratic, technocratic, supranational structure is “good news.”
When Mario Monti went to visit Wall Street on the seventh floor of the New York Stock Exchange (to visit his actual ‘constituents’), he received a long, standing ovation when he entered the room with an audience of 200 people. Charlie Himmelberg, a managing director at Goldman Sachs, commented that, “It’s been impressive how quickly the sentiment has changed on Italy.” Blaise Antin, the head of sovereign research at TCW said, “It is a good thing Monti visits investors… But plenty will ultimately depend on the Italian parliament” in the tough choices ahead. Monti told the crowd of Wall Street financiers that, “What’s important is that this improved governance of the euro zone is almost there and the euro zone crisis is almost overcome, I believe.” Monti later reflected at a new conference in New York that he was “warmly greeted by the financial community” on Wall Street. No doubt.
Super Mario Wages War on Workers
After making the rounds in interviews, state visits, meeting Obama, and visiting his constituents at Wall Street, Mario Monti went back to Italy in late February to push forward on his “labour reforms” to undermine and destroy unions and workers’ rights. By March, the effects were being felt among Italians. Monti went to great pains to denounce what he described as Italy’s “two-tier labour market,” dividing generations and leaving the young out to dry. The New York Times wasted no time in supporting Monti’s calls to dismantle this system. Framing the discourse around the generational divide, in which “older workers came of age with guaranteed jobs and ironclad contracts granting generous pensions and full benefits,” the younger Italians, “the best-educated in the country’s history… are lucky to find temporary work, which offers few benefits or stability.” Thus, one of Monti’s “solutions” was to “make it easier for companies to hire and fire.”
Very typical of the neoliberal economic discourse, is to draw conclusions based upon these facts alone: older workers have benefits, younger workers have few opportunities; thus, older workers are destroying future generations with their “entitlements.” Solution: dismantle entitlements and benefits so all can work on an “equal playing field.” The discourse divides workers and people against each other, meanwhile, there is no mention of the fact that the reason why the youth have so few job opportunities has more to do with the lack of state and business investment, the deregulation and privatization of industries over the 1990s (while Mario Draghi was head of the Treasury), the effects of the euro (creating an economic hierarchy between the Northern nations of the EU and the Southern states), or the very obvious fact that Italy is in a severe crisis because its corrupt government colluded with global banks and suffered under the institutions and rules of the E.U., which promote elite interests and undermine democracy and self-determination. No, mentioning the massive – and elite-driven – causes for the crisis Italy faces, and the unemployment issues which are symptomatic of that crisis, is too inconvenient for the New York Times. Instead, it is simply easier and more acceptable in the popular discourse to pit workers against each other, in an effort to undermine them all, collectively.
An economist at Bocconi University, of which Mario Monti was president until he became Prime Minister of Italy, supported this discourse for Italy, arguing: “Reforming contracts, unemployment benefits and salary levels would permit labor productivity to rise, which would in turn permit the country to grow… It’s a central theme for improving a country like Italy.” Undertaking all of these labour “reforms,” in actuality, would allow for youth to enter the job market to a certain degree, as it would mean that other “hyper-protected” workers no longer have protection, and all of Italy’s workforce is left vulnerable to exploitation. Thus, youth could be hired as extremely cheap labour, since for them, some work – even horrible work with little pay – is better than nothing at all. If workers who had protections attempt to organize and salvage various labour rights, companies can simply fire them and hire cheap, young workers with no benefits as replacements. This is called “youth opportunity.” This is how sweatshops became so popular in the ‘developing’ world over the past several decades, which were also brought about through fiscal austerity and structural adjustment: undermine labour/worker rights for easy exploitation, and if they attempt to organize, strike, or obtain rights, foreign corporations can fire them all and hire cheaper labour, close their factories and outsource elsewhere, or ship in cheaper immigrant labour forces. This has the effect of bringing the standards and conditions of the entire work force, and indeed, the global labour market, down to a more easily exploitative position: equality of exploitation (what economists and bankers call “labour flexibility”).
Monti declared: “We have to get away from a dual labor market where some are overly protected, while others totally lack protection and benefits when unemployed.” Thus, he said, “equity and growth” would be the “watchwords” of his government. Since “growth” means profits, plunder, and exploitation, “equity” is a logical addition to this: equity in exploitation. The New York Times, reporting on a 33-year old graduate without job opportunities, said she would “welcome” such changes, as she, “like so many in her generation, feels thwarted, overly reliant on her parents and uncertain of her future.” Amazingly, in the same article, it was acknowledged that the two-tier labour system was not created by “entitlements,” but rather as a result of policies the government undertook nearly a decade previous (in facilitating Italy’s entry into the euro-zone), in which the state made it easier for Italian corporations “to hire younger workers on a range of temporary contracts and internships,” while many of the early-retirement benefits for older workers were put in place during the mass privatizations (undertaken by Mario Draghi), in order to facilitate the reduction of staff “and cutting costs in the period before Italy joined the euro zone.” The article then went on to blame the unions, claiming that “younger Italians have come to see them as part of the problem.”
One must actually pause in appreciation of the intellectual gymnastics displayed by the New York Times in publishing an article which quietly acknowledges that the causes of Italy’s two-tiered labour and employment issues were the result of demands and policies put in place in order to join the single-currency, yet still concluded that the main problem was “overly-protected workers,” and thus, that the solutions lie in undermining labour and workers’ rights. The article even acknowledged that the government’s policies of making it easy for Italian corporations to exploit youth labour were designed “to make the market more flexible,” yet does not question the logic in Monti’s program of solving the crisis brought on by this “flexibility” by implementing measures to make it “more flexible.” The Monti-logic, which the New York Times readily endorses, is to look at policies that didn’t work (in terms of what people were ‘told’ they were meant to achieve), and then to advance and accelerate those same policies in the hopes that it will have the opposite effect as to that which it has always had before. Einstein once said that the definition of insanity is doing the same thing over again, expecting different results. If we actually apply that definition, almost the entire discipline of economics – and most especially neoliberal economics – is absolutely insane. Either that, or they simply use coded rhetoric which sounds like one thing, means another, and is done so to promote a global social, political, and economic agenda which would otherwise be impossible to publicly justify: preserving and accumulating for a tiny minority, and exploiting and punishing the vast majority.
Right on cue, the effects of the economic crisis over the previous year, exacerbated by Monti’s labour reforms and austerity package, was being felt across Italy. In Naples, one of Europe’s poorest cities, by late March it was reported that child labour has returned, as “thousands of children are leaving school to help their families make ends meet,” an increasing trend in the country, in which children work in the black market or “are recruited for sinister purposes by the mafia.” The most common job for child workers is as a “shop assistant,” earning less than a euro an hour. This trend had been developing in Italy over a number of years, as one local government report in the Campania region revealed that between 2005 and 2009, more than 54,000 children left school to join the work force, with 38% of them under the age of 13. The deputy mayor of Naples, located in the Campania region, commented: “Of course, we were the poorest region in Italy. But we haven’t seen a situation like this since the end of the Second World War… At age 10, these kids are already working 12 hours a day, which is a clear breach of their right to development.” The succession of financial reforms put in place by the Italian government since 2008 introduced drastic cuts, and in June of 2010, the Campania region had to end its minimum welfare program, “plunging more than 130,000 families into poverty.” Children from poor families face three options: struggle to stay in school, drop out to work in the black economy, or “join the ranks of the Camorra, the Neopolitan mafia.” Since the beginning of the crisis, support for youth and their families has been cut by 87%, and roughly 20,000 educators in the Campania region had not been paid for two years. Perhaps this is what Mario Monti means by “labour flexibility.”
In late March, reported the Economist, as Mario Monti was engaged in talks with employers and unions, trying to get them to accept labour-market reforms, “when it became clear that unanimity was impossible, Mr. Monti declared the talks over and said his government would press ahead regardless.” It is quite appropriate, one must acknowledge, that for a government which was created through undemocratic means, it should only continue to act and rule undemocratically as well. Such is the path Mario Monti has taken with Italy. On March 16, the Italian parliament’s three largest parties endorsed Monti’s reforms, on the warning from President Napolitano that, “failure to agree would have serious consequences.” The main problem for Monti came from the largest union federation, the CGIL, an historic ally of the Democratic Party (PD), which had endorsed Monti and his austerity packages, leading one senior leader in the PD to suggest that the party leader, Pier Luigi Bersani, “could face a backbench revolt or a party split.”
The Wall Street Journal naturally congratulated Monti, in an article entitled, “Monti pulls a Thatcher,” for showing “political courage” in walking away from negotiations with Italy’s labour unions, announcing that he was “going to move ahead with reforming the country’s notorious employment laws – with or without union consent.” Italy had stringent rules regarding the ability of employers to fire workers, what the Wall Street Journal referred to as a “job-for-life scheme,” which Monti’s reforms will replace with a “generous system of guaranteed severance when employees are dismissed” for what are called, “economic reasons.” The Journal heaped praise upon Monti, as “standing up to Italy’s labor unions takes courage, and not only of the political sort,” noting how there was an economist ten years prior who was shot and killed “for his role in designing a previous attempt at labor reform.” Monti had been ruling by decree since December, but announced in late March that the labour reform proposals would be voted through the National Assembly. The WSJ wrote that as a former economics professor, Mario Monti “has a rare opportunity to educate Italians on the consequences of opposing reform,” to which the Journal suggested, they need only to look at Greece: “If that doesn’t scare them sober, then nothing will help.”
Within a week, Monti allowed for a very slight change to his labour reform bill, which would give judges “greater leeway in determining whether companies were justified in laying off a worker.” The Wall Street Journal then referred to this, in an article entitled, “Surrender, Italian Style,” as a “cave-in to the left side of his political coalition,” and noted that, “Monti was brought in as Prime Minister to retrieve his country from the edge of a Greek abyss,” and that this “labor bill is a surrender to those who are bringing” that abyss to Italy. For the WSJ, any capitulation – no matter how minor (and this particular one was very minor) – to unions and labour, is deemed an absolute “surrender” or “cave-in.” Monti defended himself in a letter to the Wall Street Journal in which he explained that this “surrender” was still a move in the right direction of reform, as it “introduces a more predictable [i.e., controllable] and speedier [i.e., systematic] procedure to handle dismissals for economic or other objective reasons.” He elaborated: “First, a fast, compulsory, out-of-court settlement procedure at local level; then, if conciliation fails, the worker can take the case to a judge as happens in other countries.” In “extreme cases” where the “economic or other reason” for firing the worker is deemed “manifestly inexistent,” the judge then has the ability to decide “for reinstatement instead of compensation.” When the “economic dismissal” is “not justified” in other cases (i.e., not an “extreme case”), compensation will be given with a cap at 24 months of wages. Monti said that it was a “complex reform” and deserves “serious analysis rather than snap judgments.” He then wrote: “I would suggest that perhaps the fact that it has been attacked by both the main employers association and the metalworkers union, part of the leading trade union confederation [CGIL], indicates that we have got the balance right.” This reform, claimed Monti, “will make the Italian labor market more flexible” which “lays the foundation for increase productivity, economic growth and employment.”
In mid-April, Italy’s major unions took to the streets of Rome in protest against Mario Monti’s pension-system reforms put in place in January, “saying it traps hundreds of thousands of workers in a legal limbo without retirement pay.” The reform that raised the retirement age affects those who are already retired. Bloomberg gave the example of Maria Dinelli, who had an early-retirement deal in 2008, in which her former employer provided benefits until her pension was to begin in 2015. Under Monti’s reforms, her pension won’t begin until 2017, upon which she commented, “I’ll be without a salary or pension for two full years before the retirement age, and will have to put money aside… You were told you had guarantees, then you lose it all because a new government takes power and changes the rules.” Tens of thousands of Italians took to the streets of Rome on April 13 as the Italian Labor Ministry said the night before that, “there are 65,000 Italians who may be left without support between when they leave work and when their pension kick in as the higher retirement age delays their payout,” while unions say the amount of people affected is five times that size, at roughly 300,000, prompting one union leader to state, “If these figures were correct,” referring to the Labor Ministry numbers, “then we’d have to say that the thousands of workers who’ve turned to the union for help are not real and just ghosts.” A labor law professor in Rome estimated the number may actually be as high as 450,000.
Monti referred to this plan as “cutting edge.” Well, it certainly ‘cuts.’ Meanwhile, Italians are facing increased taxes and record-high gasoline prices, thus producing a “slump in consumer demand” which pushed Italy into a deeper recession. Nicola Marinelli of Glendevon King Asset Management in London stated: “An overhaul of the pension system was unavoidable because the old scheme was too generous compared to the country’s possibilities and the European standards… That said, the protest of these workers may be a harbinger of future social tensions. I don’t think the younger workers have really realized they will have starvation-level pensions.” Just another “cutting edge” facet of Monti’s reforms. Interestingly, though perhaps not surprisingly, Monti’s reforms had not yet included “a heavy hand with the richest taxpayers,” prompting a labor law professor to opine, “I think it’s about time for those who have more to contribute to the needs of the country.” But such is not the nature of austerity.
In fact, in April it was reported that the political class in Italy, the “army of politicians and senior officials” who support Monti and his reforms in Parliament, “are clinging to fat salaries that far outstrip those of their peers abroad.” Monti had issued a decree which aimed to “prevent public servants earning more than U.S. President Barack Obama,” many of whom “earn considerably more.” Italy’s wealthy, however, not simply the top politicians and bureaucrats alone, “are hardly carrying their share of the burden.” One economist noted: “There has not been an equal distribution of sacrifices… In proportion to their salaries, higher incomes are paying less.” Italy has roughly 1,000 lawmakers across the nation, who earn more than their counterparts in the United States, with a base salary of 11,283 euros per month, while the lowest-earning households in Italy, “hurt most by rising fuel, property and sales taxes,” live “on less than 8,000 euros per year, or 667 euros per month, after taxes.” Between 2006 and 2010, Italy’s poorest families already lost almost 12 percent of their real income, according to data from the Bank of Italy. Unlike the political class, most Italian families are “traditionally thrifty,” however, under austerity in 2011, “households saved only 12 percent of their gross income, the lowest level since 1995.” That is the nature of austerity: when you need to save more than ever before, the ability to do so becomes harder than ever before. In March, a Moroccan worker in Italy set himself on fire in protest, and an Italian businessman did the same. Polls in Italy have shown that the people are “increasingly dissatisfied with the parties and politicians that led the country for the past two decades,” as more than 40% of respondents said that they wouldn’t vote for any of them if there were an election today.
Italy Under Austerity
The Wall Street Journal reported in early April that figures from the Italian Treasury revealed that Monti’s austerity measures were “stunting activity in the euro-zone’s third-largest economy,” and while “recent tax increases are helping Italy cut its fiscal shortfall,” they are also “pushing economic activity to contract even faster.” Industry Minister Corrado Passera stated: “With austerity one doesn’t grow.” The majority of tax increases are on the income of workers, though they also include taxes on consumption (such as Value Added Taxes – VAT) and on property assets. As Italy’s GDP contracted by 1% in the first quarter of 2012, yields on Italian government bonds rose, making it more expensive for Italy to borrow. Former prime minister Berlusconi commented: “The cure that the European Union has prescribed for our country is the one that has already caused a disaster in Greece and is beginning to do so again in Spain,” though he continued to throw his support behind the technocratic government. One businessman in Italy warned that, “Consumers have insurmountable obstacles ahead of them, with higher income-tax rates from March, higher property taxes as of June and a value-added tax increase in September.”
By late April, unemployment in Italy had reached nearly 10%, according to “official” statistics (meaning, it’s actually much higher), and in Sardinia, one in two young people were out of work. The construction industry in Italy has been hard hit, leading to one industry businessman killing himself, adding to a wave of “austerity suicides” across Italy, reaching 25 by April for the year of 2012.
In May of 2012, the Italian anarchist group which had claimed responsibility for shooting a nuclear engineering firm chief threatened to target Mario Monti. The group, referring to itself as the Olga Nucleus of the Informal Anarchist Federation – International Revolutionary Front, sent a statement to a newspaper in southern Italy, warning that “Monti was among seven remaining targets after Roberto Adinolfi, chief executive of Ansaldo Nucleare, was shot in the leg last week.” The statement read: “We say to Monti that he is one of the seven remaining and that the people have no interest in staying in Europe, saving the banks and helping to balance the accounts of a state that squandered money for its own interests.” The statement explained that any suicide connected to tax difficulties brought about by the austerity measures would be punished as a “state murder.” This referred to a series of suicides in Italy by businessmen and others, “despairing at the collapse of their livelihoods because of the crisis.” It was the same anarchist group that in the previous year, claimed responsibility for sending letter bombs to several banks, including to Josef Ackermann, the CEO of Deutsche Bank, while the director-general of Equitalia in Italy lost a finger opening one of the letter bombs in December. One of the members of the group, facing prosecution in court, “called for armed revolution… when asked about the Adinolfi shooting.”
Mario Monti had been pushing himself into European politics as a “mediator” between Germany and the weaker euro-zone economies, to seemingly “broaden” decision-making in Europe beyond the Franco-German axis. In the first few weeks of May, Monti’s technocratic administration had been “courting Berlin on two fronts,” trying to draw the parliaments of both countries closer together, and in term of ideology, they had been “trying to convince German officials – in both private meetings and public speeches – that the compromise solution to stoking growth in Europe’s weaker economies is investment in big public projects, such as transportation, Internet networks or electricity grids, while maintaining fiscal discipline.” Some spending, claimed Monti, should be “exempted” from fiscal austerity, something which Germany had long opposed. But with the French elections in early May getting rid of Nicolas Sarkozy and bringing in the Socialist President Francois Hollande, who favoured a strategy of spending on growth, Monti was seeking to find a common ground between Germany and France, but in a way that ultimately was supportive of the European Union, specifically. Nicholas Spiro, who heads a London-based sovereign debt consultancy, stated, “If there’s one European leader whose policies can appeal to both Chancellor Merkel and President-elect Hollande, it’s Monti.” The refined “growth” program promoted by Monti would be based on “creating bonds to fund European Union infrastructure projects and boosting the firepower of the European Investment Bank to fund public investments.” Thus, it would be based upon European spending, not individual nations spending, and so the debt would be pan-European, and controlled by the EU.
In late April, Mario Monti announced that he would be making more cuts to spending by the end of the year, “and appointed an expert from the private sector as a special commissioner to oversee the spending review.” The cuts, amounting to some 4.2 billion euros (or $5.6 billion), “would allow him to avoid proceeding with a plan to raise the national sales tax to 23 percent in October from 21 percent, a move that could hurt consumer spending and slow a return to growth,” reported the New York Times. Monti stated, “Today we are faced with the necessity of making up for the time lost… And not in years, but in months.” The new special commissioner from the private sector to review the process was Enrico Bondi, known as “Mr. Fix-it” for having successfully restructured the bankrupt Parmalat group. The change in austerity measures followed intense pressure from the business community in Italy to push the burden from increased taxation to more government spending cuts.
In mid-May, yields on Italian debt jumped up to nearly 6%, as evidence emerged that Italy was sliding into an even deeper recession, brought on by Monti’s austerity measures and ‘structural adjustments.’ The government in Italy was openly discussing using troops to protect various targets after a wave of violent actions, claimed by various anarchist groups, such as the shooting of the nuclear industry executive, as well as petrol bombs being thrown at tax offices in early May. An Italian banker warned that unless the European Central Bank was converted into a lender of last resort, Italy faces “massive devaluation, three to five years of hyperinflation, and unbearable unemployment.” Moody’s ratings agency downgraded 26 Italian banks in May, evoking the anger of the Italian Banking Association, which called the downgrade, “irresponsible, incomprehensible, and unjustifiable,” and said it was “an attack on Italy, its companies, its families and its citizens.”
Italy held a series of local elections in early May, in which the Italian comedian, Beppe Grillo, who is also leading a political party, the Five Star Movement, which “rode a wave of protest against austerity politics” and suggested, “We will see you in parliament.” Grillo had been increasingly critical of Monti’s tax hikes, and in one local election forced a run-off with the Democratic Party (PD), and managed to “trounce” Silvio Berlusconi’s Freedom People party in all the local elections, while the right-wing Northern League party, which has also criticized Monti’s reforms, “was humiliated at the polls.” The major Italian newspaper, Corriere della Sera, said, following the elections, “As of yesterday, it seems Monti is now more alone.”
In mid-June, police in Italy, Switzerland and Germany arrested 10 people suspected of involvement in “leftwing terrorist activity” in Italy and elsewhere over the previous three years, connected to one of two organizations, the Informal Anarchist Federation (FAI) and the International Revolutionary Front (FRI). A general in Italy’s semi-militarized Carabinieri police force said that, “the two groups were in contact with the Greek anarchist movement.” The individuals who were arrested, however, were not suspected of being involved in the major act associated with the groups, the shooting of Roberto Adinolfi in Italy, though the General claimed, “The origin is the same.” The arrests did, however, include suspected involvement in the failed letter bomb sent to former Deutsche Bank CEO Josef Ackermann.
In mid-June, as the G20 meeting unfolded in Mexico, Italian Prime Minister Mario Monti said that the euro area needs a “road map with concrete interventions to make the euro more stably credible,” as well as a “pro-growth plan,” stating, “the two things are strictly complementary.” Even though Monti had imposed his brutal austerity measures upon the people of Italy, the bond rates for the country remained high, prompting Monti to comment, “There must be something wrong if a country that complies still has such high interest rates.” Monti noted that through the European Financial Stability Facility (EFSF), the European bail out fund, Italy had supplied loans to Greece, Ireland and Portugal amounting to 31.5 billion euros, commenting, “Italy has not until now asked for loans… She has made a lot of them and every day that passes, is in fact subsidizing others with the high interest rates she pays in the market.”
In late June, following the G20 summit, Mario Monti announced a “growth decree” for Italy, which included “discount loans for corporate R&D [Research & Development], tax credits for businesses that hire employees with advanced degrees, and reduced headcount at select government ministries.” Also in late June, Italy, Germany, France and Spain agreed to a “growth pact” for Europe with the total value of 130 billion euros ($163 billion), noting that, “austerity alone will not be enough to pull the euro zone out of its deep crisis.” The total sum represents 1% of the European Union’s GDP. Also envisioned are “project bonds” which would be financed through the EU’s budget, and issued “for private-sector infrastructure projects,” or in other words, corporate subsidies.
At the end of June, it was reported that Italy’s economic crisis was deepening, due in large part to the austerity measures, but also as a result of the increasingly high yields (interest rates) on Italian bonds, as Italy had to pay the highest interest rates since December in a 5.24 billion euro auction of 5 and 10 year government bonds (meaning that the country pays high interest rates to the financial institutions which purchased these bonds until they expire in a 5-or-10 year term). The ten-year bonds sold at an average rate of 6.19 percent, while the five-year bonds were at an average rate of 5.84 percent. This, the Financial Times warned, “is the latest sign of a deepening double-dip recession in Italy and will add urgency to prime minister Mario Monti’s demands for short-term measures” to reduce interest rates (such as the ECB purchasing bonds on the market). An Italian business lobby, however, went on to praise the “huge steps, unthinkable only a year ago,” which were implemented by Monti’s technocratic government, though adding, “the process is far from being completed.”
In late June, a bickering Italian parliament passed Monti’s labour reform package, just ahead of the EU summit. Angela Merkel said that Italy had “taken the road towards solid public finances, growth, jobs and competitiveness.” The reform of the labour market has been a major demand of the European Commission and the European Central Bank, and thus, Brussels praised the passing of the reforms, and even the IMF chimed in to cheer on Monti. The reform package was passed in parliament as protests led by the labour unions, took place outside, with police helicopters overhead and demonstrators clashing with security forces blocking the way to the parliament building.
At the EU summit at the end of June, Italy and Spain forced leaders to remain at the summit overnight, forcing an agreement to restructure Spain’s 100 billion euro bank recapitalization plan (the Spanish bailout), allowing funds to be injected directly into banks in Spain, “meaning Madrid can sweep the burden of the bailouts off its sovereign books.” Though this, in turn, requires the “creation of a single banking supervisor to be run by the European Central Bank,” likely as a precursor to a European banking union. Italy also received concessions, though less than Spain received, yet was the main driving force behind the revised rules for the eurozone bailout fund – the EFSF (and later the ESM) – which would have it purchasing sovereign bonds in order to lower the borrowing costs, as it would increase confidence in Italian bonds and thus, lower the interest rates, Monti’s key demand in the previous months. The countries that have their bonds purchased by the bailout fund “will no longer be subject to Greek-style monitoring programmes,” but instead, “they would simply have to maintain their EU debt and deficit commitments.” Monti declared, “It is a double satisfaction for Italy.” For Angela Merkel, who had for months refused to support any short-term rescue measures, “the deal was a significant concession.” Though, of course, every concession comes with a condition: “a German-led group of northern creditor countries will gain more control over all of the eurozone banks through the new single supervisor,” the mechanism through which to establish the banking union.
Upon this news, Spanish and Italian government bond yields fell sharply, with a Deutsche Bank economist commenting, “There was so little expectation and since there was a breakthrough at least on bank recapitalizations, the markets salute that.” The German media reported that, “Italy and Spain broke the will of the iron chancellor by out-negotiating her in the early hours of Friday morning,” on June 29. Der Spiegel reported that, “Monti emerged from the late-night negotiations as a clear victor.” Merkel had to concede to Monti, and Spanish Prime Minister Mariano Rajoy, specifically on the issue of “demands” for the bailouts, as Merkel has been the reigning Queen of austerity. Faced up to Monti, however, the permanent European bailout fund – the European Stability Mechanism (ESM) – can loan to countries “which fulfill the budgetary rules laid down by the European Commission… without agreeing to tough additional austerity measures.” Thus, strict oversight by the troika – the European Commission, the European Central Bank, and the IMF – would no longer apply.
Monti’s uprising at the summit began at 7:00 p.m. on Thursday evening, when European Council President Herman Van Rompuy wanted to conclude the first working session and announce the growth pact to the press. Monti, furious, asked Van Rompuy where he was going, and then refused to agree to the growth pact until resolving the issue of establishing “concrete measures to fight the high interest rates on Italian government bonds.” Spanish Prime Minister Rajoy supported Monti, adding that he could not support the growth pact either until such an issue had been resolved. Danish Prime Minister Helle Thorning-Schmidt asked if the attendees “were now all hostages,” and Van Rompuy remained seated. After midnight, representatives from the ten non-euro EU countries left for their hotel rooms, while the 17 eurozone countries “remained in their seats and began a decisive round of negotiations.” After a few hours, Monti and Rajoy convinced Merkel “that countries would in the future be able to receive funds from the ESM without having to submit to troika oversight.” Thus, “only the European Commission’s annual targets will have to be met.” The session ended at 4:20 a.m. on Friday morning, with European Commission President Barroso and Council President Van Rompuy announcing it at a press conference.
This is not to say that austerity and structural adjustment would not be pursued, but simply that the ‘Troika’ (the EC, ECB, and IMF) monitoring and imposition of austerity would cede in favour of general targets set by the European Commission. Those targets, however, would still demand fiscal austerity and structural adjustment, but would not be subject to the same oversight or schedule with which the demands must be met. Ultimately, it was a deal that was not aimed at reducing the imposition and effects of austerity, but rather, was designed to institutionalize more effectively the domination of the European Commission itself (an unelected technocratic institution), as opposed to a more ad-hoc Troika system of oversight.
In the Italy of Mario Monti – and in the European Union at large – austerity is poverty, growth is plundering, labour reform is exploitation, and democracy… is Technocracy. Welcome to Italy, welcome to the new Europe in the age of austerity.
Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on BoilingFrogsPost.com.
Please donate to The People’s Book Project to help this book be finished by the end of summer:
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Italy in Crisis: The Decline of the Roman Democracy and Rise of the ‘Super Mario’ Technocracy
Part 1 of “Italy in Crisis”, a series of excerpts from a chapter in an upcoming book.
By: Andrew Gavin Marshall
The European debt crisis continues into its third year, with four government bailouts – of Greece, Ireland, Portugal, and Spain – and having imposed harsh austerity measures upon the people of Europe, forcing them to pay – through reduced standards of living and increased poverty – for the excesses of their political and financial rulers. Italy, as Europe’s third largest economy, with one of the largest debt-to-GDP ratios, plays a central role in the unfolding debt crisis across Europe. Part 1 of this excerpt from a chapter on the economic crisis in my upcoming book covers the “suspension” of democracy in Italy and the imposition of a ‘Technocracy’ – an unelected government led by academics and bankers – with a mandate to punish the people, facilitate the financial elite, and serve the interests of the supranational, unelected, technocratic European Union. Power centralized, power globalizes, power plunders and profits on the punishment and impoverishment of people everywhere. This is the story of Italy’s debt crisis.
This is an unedited, rough draft excerpt from my upcoming book – the Preface to the People’s Book Project – which is due to be finished by the end of the summer, and covers the following subjects: the origins, evolution, and consequences of the global economic crisis; the expansion and effects of global imperialism and war; the elite-driven social engineering project of establishing an institutional structure of ‘global governance’; and the rising resistance of people around the world to this system, as well as the attempts of the imperial powers to co-opt, control, or destroy these socio-political movements – the embodiment of the ‘Global Political Awakening’ – from the Arab Spring, to the anti-austerity movements across Europe, the Indignados in Spain, the Occupy Movement, the Chilean Winter and the Maple Spring in Quebec, among others. This project needs your support: I am attempting to raise $2,500 in donations to support the efforts to finish this book by the end of the summer, with $530 raised so far, and $1,970 left to go. Please donate today!
Bilderberg, Berlusconi, and Italian Austerity
The Italian Finance Minister, Giulio Tremonti had attended the Bilderberg meeting in early June of 2011, alongside other notable Italian participants, including Franco Bernabe, CEO of Telecom Italia (and Vice Chairman of Rothschild Europe); John Elkann, the Chairman of Fiat; Mario Monti, the president of Bocconi university and a former EU Commissioner; and Paolo Scaroni, the CEO of Eni, an oil and gas company and Italy’s largest industrial corporation. The Bilderberg meeting for 2011 took place from June 9-12 in Switzerland, and of course was attended by a host of other major European elites, including: Josef Ackermann, Chairman and CEO of Deutsche Bank; Marcus Agius, Chairman of Barclays Bank; the Swedish Ministers for Foreign Affairs and Trade; Luc Coene, the Governor of the National Bank of Belgium; Frans van Daele, Chief of Staff to the President of the European Council; Werner Faymann, the Federal Chancellor of Austria; Douglas J. Flint, Group Chairman of HSBC Holdings; Neelie Kroes, Vice President of the European Commission; Bernardino Leon Gross, Secretary General of the Spanish Presidency; George Papaconstantinou, the Greek Minister of Finance; Herman Van Rompuy, President of the European Council; and Jean-Claude Trichet, President of the European Central Bank, among many others.
In July of 2011, Silvio Berlusconi’s government announced a package of austerity measures hoping to calm markets, seeking to reduce the deficit by 40 billion euros. The package, largely designed by finance minister Giulio Tremonti, only attempted to address Italy’s debt, but markets were also concerned about the country’s “ultra-low-growth,” which has been consistent since Berlusconi returned to office in 2001. Once the austerity measures would be signed into law, several opposition politicians were suggesting the formation of a cross-party “technical government” without Berlusconi in office. The Finance Minister Tremonti announced a wave of privatizations. Apparently, the privatizations and various liberalizations were urged into the austerity package by the main opposition party, the Democratic Party (PD), not Berlusconi’s Freedom People Party. The central bank governor of Italy, Mario Draghi, who was poised to become the next President of the European Central Bank (ECB) following the end of the term of Jean-Claude Trichet, warned the Italian government that “it would have to raise taxes or make further spending cuts” if it wanted to calm markets. By July 14, the Italian Senate approved an increased austerity package worth 70 billion euros (or $99 billion), “aimed at convincing investors that the eurozone’s third-largest economy won’t be swept into the debt crisis.” Italy’s bonds (government debt) saw its borrowing rates (interest) hit record highs as investors were not calmed by the proposed austerity measures.
Even as the austerity measures were being passed, market confidence was still lacking, which was largely credited to the fact that a rift emerged between Berlusconi and his Finance Minister Tremonti, who as a Bilderberg attendee, no doubt has the confidence of markets. Berlusconi reportedly viewed Tremonti as a “rival” and has “repeatedly attacked [Tremonti] as a traitor in newspapers owned by the Berlusconi family.” After Tremonti, who was facing his own corruption charges, was caught on camera calling a colleague a “cretin,” Berlusconi told an Italian newspaper, “You know, he thinks he’s a genius and that everyone else is stupid… I put up with him because I’ve known him for a long time and one has to accept the way he is. But he’s the only one who is not a team player.” It was opined, then, that markets reacted to this rift between the Prime Minister and the Finance Minister, as articulated by an official at F&C Investments, who stated that markets view Tremonti as the “steady counterweight to the unpredictable and capricious” Berlusconi.
In July of 2011, Nichi Vendola, a popular leftist opposition political figure in Italy, wrote an article for the Guardian, in which he critiqued the austerity measures imposed by the Berlusconi government. Vendola wrote that, “Italy will not survive this crisis by listening to the very people who got us into it, especially not when they demand that the middle class and poor foot the bill for their failures.” Vendola also put blame on the European managing of the crisis, as “governments now have an obsessive fixation on employing tighter control of budget deficits to satisfy the European stability pact.” Vendola referred to Tremonti’s austerity package as a “social catastrophe,” and that instead, he suggested, what Italy must do “is turn this policy on its head,” noting that, “Italy’s problem is as much about growth as it is debt.” To do this, Vendola wrote, it “will require a new government,” and that, “Italy needs elections, because only a completely new governing class can achieve the political consensus to design and implement a plan to tackle the crisis.” He suggested that the European stability pact would need to be re-negotiated, and concluded: “It does us little good to please the out-of-touch elite of our capitals while the people have to tighten their belts and our youth are robbed of their future.”
Mario Monti, President of Bocconi University and a former European Commissioner, also agreed that Italy needed a new government, though for different reasons (and a different type of government). He wrote an article in a major Italian paper in August of 2011 in which he advocated – as a solution to Italy’s problems – the formation of a “supranational technical government” which would make all the major decisions in order to “remove the structural constraints to growth,” and opined that “an Italy respected and authoritative… would be of great help to Europe.” Vendola wanted a new government to help the people, and Monti wanted a new government to help “Europe” (read: banks and elites). Guess who became the next leader of Italy!?
Berlusconi Bows Down to the Bankers and Punishes the People
In August, Silvio Berlusconi had to approve a new austerity package, the second in less than a month. In a letter which was leaked to the Italian press, it was revealed that Jean-Claude Trichet, the President of the European Central Bank, and Mario Draghi, the President of the Italian Central bank (from 2006 to 2011, who was set to secede Trichet at the ECB in October of 2011), put pressure on Berlusconi to “implement significant austerity measures.” The letter, written by the two central bankers, demanded “pressing action… to restore the confidence of investors.” Dated August 5, 2011, it was issued just days before the ECB announced its new programme to buy Italian bonds (debt), designed to reduce the country’s borrowing costs (interest on future debt). One of the measures mentioned in the letter instructed Berlusconi to take “immediate and bold measures to ensuring the sustainability of public finances,” to achieve a balanced budget in 2013. This was adopted in the subsequent austerity package put forward by Berlusconi in August. The letter also stated that, “it is possible to intervene further in the pension system, making more stringent the eligibility criteria for seniority pensions and rapidly aligning the retirement age of women in the private sector to that established for public employees.” Further, the “borrowing, including commercial debt and expenditures of regional and local governments should be placed under tight control, in line with the principles of the ongoing reform of intergovernmental fiscal relations.”
In economic-speak, the letter asked for privatizations of public services: “Key challenges are to increase competition, particularly in services to improve the quality of public services and to design regulatory and fiscal systems better suited to support firms’ competitiveness and efficiency of the labour market.” This would require three key actions, the first of which was that, “a comprehensive, far-reaching and credible reform strategy, including the full liberalization of local public services and of professional services is needed,” and that, “this should apply particularly to the provision of local services through large-scale privatizations.” The second major step was “a need to further reform the collective wage bargaining system [meaning: undermine unions] allowing firm-level agreements to tailor wages and working conditions to firms’ specific needs and increasing their relevance with respect to other layers of negotiations.” In other words, destroy the unions so that companies can exploit labour to whatever degree they choose. And thirdly, according to Trichet and Draghi, what was needed was a “thorough review of the rules regulating the hiring and dismissal of employees [which] should be adopted in conjunction with the establishment of an unemployment insurance system and a set of active labour market policies capable of easing the reallocation of resources towards the more competitive firms and sectors.”
In other words, labour rights and laws and the rights of workers need to be dismantled so that companies can do as they please. It’s not simply the unions that need to be destroyed, but the laws for worker security in general. Of course, no advice from central bankers would be complete if it didn’t advocate that the government “immediately take measures to ensure a major overhaul of the public administration in order to improve administrative efficiency and business friendliness.” Trichet and Draghi wrote that it was “crucial” that the government take these actions “as soon as possible with decree-laws, followed by parliamentary ratification,” or, in other words: skip the democratic process because it takes too long, rule by decree, something Italy has a “proud” history of. All of this was demanded to be done before the end of September 2011. In an interview with an Italian paper, Trichet admitted that this was not the first time the ECB had sent such letters to governments (such as Greece), saying, “We have sent messages and we do that on a permanent basis, through various means, addressed to individual governments. We do not make them public.”
Indeed, the European Central Bank had demanded austerity measures be implemented by the governments of Greece, Ireland, Portugal, and Italy, and when Berlusconi submitted to the mandate from the central bankers, he complained that it made his administration look like “an occupied government.” A leading liberal MP in Italy, Antonio Di Pietro, said that, “Italy is under the tutelage of the EU, and a country under tutelage is not a free and democratic one.” An Irish MEP (Member of the European Parliament), Paul Murphy, stated that there had been a “massive shift away from democratic accountability since the start of the crisis,” and that: “There needs to be a check on the enormous power of the ECB, which is unelected, and has basically held a government to ransom.” Europe’s largest trade union federation, the European Public Sector Union, “accused the ECB of directing Italian fiscal and labour policy in secret,” which is, of course, true. The Deputy General Secretary of the federation, Jan Willem Goudriaan, said, “Europe cannot be governed through secret letters of bankers, officials or an unaccountable body.” EU officials, from Angela Merkel, Nicolas Sarkozy, to Herman Van Rompuy and Jean-Claude Trichet, have been increasing their calls for an “economic government” of Europe, tightening and deepening fiscal integration and proposing the creation of new council’s and organizations to impose sanctions on countries and “police the austerity measures of governments,” and even the creation of a European finance ministry. Paul Murphy stated that, “All these proposals, discussions about economic government, are about undermining democracy in order to impose a European shock doctrine… EU elites need to remove points of pressure that can be mounted on governments. If the mass of people are opposed to austerity, they can mount pressure on governments to hold that in check. So the only way it can then be imposed s undemocratically.” The head of a Belgian pro-transparency group stated that, “European powers [are] distancing themselves from voters while at the same time [there is] a growing tendency towards building closer relationships with corporate and specifically financial lobbies… These two trends are explosive and can only lead to a loss of legitimacy for the EU institutions.”
Shortly after, on August 12, the Berlusconi government was meeting to approve the new austerity package to meet the ultimatum from the ECB, amounting to a package of “fiscal adjustments” (i.e., spending cuts) of 20 billion euros in 2012 and 25 billion euros in 2013, with the spending cuts and tax increases to be “enacted immediately by decree, but subject to approval by parliament later,” just as Draghi and Trichet instructed. The rapid tax increases did much to damage even long-time supporters of Berlusconi who had promised that he would “never put their hands in the pockets of the Italian people.” Fiscal federalism was the policy of giving the various regions in Italy more control over their finances. With the new austerity package, the governor of Lombardy, Roberto Formigoni, stated, “It seems clear [fiscal] federalism has vanished.”
In mid-September, Berlusconi won final parliamentary approval for the 54 billion euro ($74 billion) austerity package, while police outside the parliament in Rome had to disperse protesters with tear gas. The German Economy Minister Phillip Roesler told a news briefing in Rome that, “The approval of the austerity package sends a signal of stability… I have respect for what Italy has done with its budget adjustment as this will benefit the whole euro area.” The legislation simply made legal the measures that Berlusconi’s government enacted through un-democratic decree the month before, and were formalized in exchange for the European Central Bank bond purchases which helped to reduce Italy’s borrowing costs. Silvio Peruzzo, an economist at the Royal Bank of Scotland, stated that the plan’s passage is a “very welcome step,” but that the slowing global economy still cast doubts on whether Italy could “meet its fiscal targets and will also render additional corrective measures [austerity packages] very likely.” Even with the endorsement and backing of the ECB, said Peruzzo, Italy’s debt remained “under pressure, which is indicative of a well-rooted lack of confidence in Italy and in the European policies to tackle the crisis.” One the plan was approved, said Italian Finance Minister Tremonti on September 10, “If there are things to change in our growth measures we will, and if there are things to add, we will.”
The Economist reported on the new austerity package, noting that while Berlusconi had approved the austerity package in Italy, designed to cut roughly 45.5 billion euros from the deficit by the end of 2013, he almost immediately back-peddled on 7 billion euros worth of spending cuts and tax increases, “notably a tax on high earners that would have hurt his natural supporters,” meaning, rich people. Thus, even as the package went to the Senate in early September, Berlusconi was fine-tuning the details. Thus, noted the Economist, “the markets [were] again registering alarm,” and at the same time, Italy’s largest and most militant trade union federation, the CGIL, called for a one-day strike in opposition to the austerity package, “protesting over a clause making it easier to dismiss workers and, more generally, over a budget that the CGIL’s leader, Susanna Camusso,” referred to as “unjust because it attacks the weakest.” This further worried “the market” and “investors.” The Economist wrote that: “Mr. Berlusconi had consistently failed to react unless bullied. His first emergency budget in July followed a telephone call from the German chancellor, Angela Merkel,” while the second was of course at the prompting of the ECB.
By October of 2011, the austerity measures in Italy had been wreaking havoc, as non-profit organizations lose their funding and had major bureaucratic obstacles put in their way for community projects, such as the Associazione Obiettivo Napoli, which ran two programs working with children in difficulty in Naples since 1998, helping them clean up local communities and provide counseling. As central government funding to town halls had been cut, organizations like Obiettivo Napoli, “which sit uneasily somewhere between education, welfare and rehabilitation budgets, have been the first to suffer.” Pietro Varriale, who works with the organization, commented on further obstacles put in their way: “They’re saying we need a second degree in education science to be able to do this work… It’s crazy. I have 15 years experience in this field, most of the team likewise, and we all have first degrees. A second degree is going to cost people a fortune, really a lot of money, and there’s no help or grant for that kind of thing. We’ve been given till 2013 to conform.” To add to that, the city of Naples simply stopped paying the bills for the organization, which had to then borrow money from a bank, forcing the employees such as Pietro to have to take on jobs working at bars, waiting tables, picking tomatoes and other piecemeal projects while they continue to work with the association being unpaid: “You keep going because of the kids, the relationships you build up.”
Giancarlo Di Maio, a 23-year old university graduate in Naples working at a secondhand bookshop told the Guardian that, “University here is like a car park. You stay there as long as you can, because there’ll be nothing to do when you come out,” referring to the lack of jobs for youth. As he was employed, he explained: “Every morning, I wake up with a smile… How fortunate am I? Because otherwise, the only other work around here is black. The black economy is a huge, monumental issue for Italy.” His friends might make 30 euros for 10 hours working in a bar, or 20 euros for a night waiting tables in a restaurant. Di Maio, who works at a bookshop owned by his father, said that, “I know plenty of people in their 30s, even some in their 40s, still living with their parents… That’s not normal. For me, that’s one of the biggest problem [sic] in Italy – opportunities, any kind of prospects for young people.” When asked about Italian politics, he replied, “We have the worst political class in Europe, no question… Twenty years of Berlusconi, and not a single reform, nothing for the unemployed, nothing to address the economic crisis. Instead we talk about his sex life… we have a political class who do nothing. They don’t have solutions, and even if they did they wouldn’t try to do anything. They just speak air, it’s all they can do. Posturing.” Expressing some hope at the Occupy movement, though lamenting how it turned to violence in Italy, he explained that people were “finally starting to get angry. They are beginning to see that really, we can’t carry on like this. Italy really is sick. We can’t pretend to be the doctor any more; we need curing ourselves.”
The Technocratic Coup
By early October 2011, it was clear that the “markets” were not satisfied with Berlusconi’s efforts at implementing a program of social genocide (fiscal austerity) which was to their liking. Thus, on October 5, the international ratings agency Moody’s cut Italy’s credit rating for the first time in two decades, adding to the downgrading from Standard & Poor’s two weeks prior. The Italian government responded that the actions of the ratings agencies were “politically motivated.” Even Moody’s acknowledged that the political situation within Italy played a part in its decision, including Berlusconi’s sex scandals, and the growing protests against the austerity measures.
The effect of the downgrades is to make Italian bonds (government debt) less attractive to buy (as it is a riskier investment), and thus, Italy would have to pay higher interest rates. As a result of that, as we have seen with Greece, this makes the country’s overall debt larger (as it amounts to borrowing money to pay back borrowed money), except with the higher yields (interest rates), the future payments will be even more costly, likely to create potential for a bailout (again, just taking more debt to pay interest on older debts). All the while, the overall debt to GDP ratio increases, and austerity measures become the “conditions” for receiving bailouts, and the country is essentially taken over by the IMF, the ECB, and the EC (named the “Troika”), as occurred in Greece. This creates a permanent spiral of expanded debt, economic crisis, and social genocide. This is what is often called “market discipline.”
In mid-October, opposition to Berlusconi’s harsh austerity measures from within Italy was increasing, just as “market pressure” and EU-opposition from outside Italy was building against Berlusconi for his austerity measures being perceived as ‘too little, too late.’ Nine members of Berlusconi’s own coalition said the austerity package “unfairly targets the middle class and fails to tackle Italy’s massive tax evasion problem.” Susanna Camusso, the head of Italy’s largest and most militant labour federation, CGIL, said that a strike is the only way to “change the inequity of this package.” During a global “day of rage” partly inspired by the Occupy Wall Street movement in the United States and the Indignados movement in Spain, October 15 saw various Occupy and other protests erupt around the world, in 950 cities in 80 different countries. In Italy, Rome saw roughly 200,000 protesters come out into the streets, protesting against the austerity measures, the government, the EU, the ECB and the IMF. The protests erupted into violence as hundreds of those assembled began fighting with riot police, who were using tear gas and water cannons against the protesters, and several hundred erupted in urban rebellion (what is often called “riots”) in which banks were destroyed, they set cars and garbage bins on fire, hurled rocks, bottles, and fireworks at the police who continually charged the crowd. Roughly two dozen demonstrators were injured, with one reported to be put in critical condition, and at least 30 riot police were injured.
As Berlusconi’s own government began to fracture in the face of the austerity package, disagreeing on what and how and if to cut, one of Berlusconi’s main coalition partners, the center-right Northern League, hinted that new elections were a possibility. Considering the popularity of the anti-austerity leftist leader Nichi Vendola, this was perhaps too much to bear. European leaders Angela Merkel and Nicolas Sarkozy lost their patience, and in late October, demanded that Berlusconi move forward with the austerity package. In a series of EU summits in late October on handling the economic crisis, discussing specifically the plan to boost the funds of the European Financial Stability Facility (EFSF), there was concern, reported Der Spiegel, “that the current size of the (recently expanded) fund isn’t sufficient should additional countries, particularly Spain and Italy, be infected with debt contagion.”
Following these meetings, it was made “abundantly clear” to the Italians that their “leadership is no longer taken seriously.” Italian papers and TV shows were overwhelmed with covering the “condescending smile” of Angela Merkel to Berlusconi, and comments made by Sarkozy. Merkel and Sarkozy and other EU leaders told Berlusconi in the talks that he had to present a plan within three days “for reducing Italian debt more quickly than current plans call for.” European Council President Herman Van Rompuy said that Berlusconi had “promised to do so.” The following evening, Berlusconi stated, “No one is in a position to be giving lessons to their partners.” European leaders were frustrated that even the austerity package passed earlier in the summer had not been fully implemented, and the government’s stability was continually threatened over debating each new measure. The European Commissioner for Economic and Monetary Affairs, Olli Rhen, said that all the details of the new plan were “unclear.” With the EU summits proposing increasing the EFSF bailout fund from 440 billion euros to 1 trillion, a central feature to the demands of the EU leaders was that countries like Italy impose more stringent austerity measures. As Der Spiegel reported, “A clear Italian commitment to austerity is a key component of that plan.” There was then a good deal of conjecture over the possible departure of Berlusconi. The Italian paper Corriere della Serra reported that Angela Merkel called the Italian President Giorgio Napolitano the previous week “to discuss concerns about Italy’s political leadership.”
In fact, Angela Merkel did make such a phone call to Italy’s president Napolitano in October, violating “an unwritten rule” for Europe’s leaders “not to intervene in one another’s domestic politics.” But this is a new, changing EU, one in which democracy – even the withering façade Western governments maintain – simply no longer matters. Merkel was “gently prodding Italy to change its prime minister, if the incumbent – Silvio Berlusconi – couldn’t change Italy.” The Wall Street Journal reported on the events that led to this incident, explaining that at the annual meeting of the IMF in September, China, Brazil, and the U.S. “berated” Europe for its small bailout fund, and told Europe to borrow “hundreds of billions of euros from the ECB,” something Merkel had long been against, and which was refused by Jens Weidmann of the German central bank, explaining that the bailout fund “was an arm of the governments… and lending to governments was against the ECB’s charter.” On October 19, Sarkozy left his wife who was in labor at a clinic in Paris to fly to Frankfurt to confront Jean-Claude Trichet at a party being held for the President of the ECB to honour him as he prepared to leave the ECB at the end of the month (to be replaced by the president of the Central Bank of Italy, Mario Draghi). Sarkozy argued that the ECB needed to intervene in the bond markets (buying government debt), stating that, “Everything else is too small.” Trichet said that it wasn’t “the ECB’s job to finance governments.”
The ECB had engaged already in certain bond purchases, which “had caused a political backlash in Germany,” and as Trichet said, “I did a bit, and I was massively criticized in Germany.” Merkel, who was present during the shouting match between Trichet and Sarkozy, was frustrated at Sarkozy’s pressure on Trichet, as she had always opposed the ECB printing money to handle the crisis, telling Trichet, “You’re a friend of Germany.” It was the following day, on October 20, that Merkel made her “confidential” phone call to the Italian President in Rome, “the man with authority to name a new prime minister if the incumbent were to lose parliament’s support.” President Napolitano informed Merkel that it was “not reassuring” that Berlusconi had only “recently survived a parliamentary vote of confidence by just one vote.” Merkel then thanked Napolitano for doing what was “within your powers” in promoting reform. Within days, Napolitano began “sounding out Italy’s political parties to test the support for a new government if Mr. Berlusconi couldn’t satisfy Europe and the markets.” It no doubt did not help Berlusconi when he wrote in an Italian paper in late October that the word austerity “isn’t in my vocabulary.”
In early November, at a G20 meeting in Cannes, President Obama and other leaders were “effectively ordering Silvio Berlusconi to accept surveillance of Italy’s austerity measures by the International Monetary Fund,” reported the Guardian. Berlusconi was advised by Merkel, Sarkozy, Herman Van Rompuy and other EU leaders the previous week to come to the G20 with “a specific austerity package,” but due to divisions within his cabinet, Berlusconi “arrived empty-handed.” It was reported that Berlusconi would likely not survive a vote of confidence in the Italian parliament set for the following week. The ECB had been purchasing Italian bonds since August in order to push the yields lower, which dropped to below 5%, but by early November they had been driven up to 6.5%, “levels that make it difficult to pay back debt.” Italian President Napolitano had been holding meetings with party leaders to discuss the possibility of “constructing an interim government if Berlusconi’s collapses.” The G20, which was discussing the possibility of adding $300 billion to the IMF’s bailout fund of $950 billion, and G20 leaders pressured Italy “to sign up to a more specific austerity package or else the US and other countries would not put extra funds into the IMF.”
Just prior to heading to the G20 meeting, Berlusconi had attempted to issue a decree which would pass various austerity measures, “thus bypassing the parliament,” but, reported the EUobserver, he “was held back by [President] Giorgio Napolitano,” as well as the Finance Minister Giulio Tremonti. Instead, Berlusconi was pressured to attempt an amendment to a “law for stability” to be approved the following week, at which time he would likely face a vote of confidence. Enrico Letta, the deputy general secretary of the center-left Democratic Party (PD), the main opposition party, said that, “We think that next week will be a week in parliament where we try to force the situation if Berlusconi does not resign before.”
As Jean-Claude Trichet retired from the ECB at the end of October, and Mario Draghi left the Bank of Italy to take up his new job as President of the ECB, the newly-appointed governor of the Bank of Italy, Ignazio Vasco, said that Italy “needed to take urgent action to boost confidence in the economy and initiate structural reforms,” insisting that the commitments already given to the EU in a “letter of intent” in late October (following Berlusconi being castigated by Merkel and Sarkozy), “must be honoured quickly and consistently.” At the G20 conference, Berlusconi agreed under pressure to have the IMF oversee Italy’s implementation of austerity measures, following late-night talks with G20 leaders. Jose Manuel Barroso, President of the European Commission (EC), said that, “Italy had decided on its own initiative to ask the IMF to monitor. I see this as evidence of how important Italy’s commitment to reform is.” The EC would also monitor Italy’s progress, and was set to visit Italy the following week to undertake a more detailed study. One EU source told the Telegraph that, “We need to make sure there is credibility with Italy’s targets – that it is going to meet them. We decided to have the IMF involved on the monitoring, using their own methodology, and the Italians say they can live with that.” The chief financial officer of Commerzbank, Eric Strutz, said that, “The whole stability of Europe depends on whether Italy gets its act together.”
On November 8, Berlusconi suffered a party revolt in parliament which failed to deliver him a majority, and would likely lead to a vote of non-confidence a few days later. Upon this defeat, Berlusconi announced that he would resign as Prime Minister “as soon as parliament passed urgent budget reforms demanded by European leaders.” President Napolitano announced that he would begin consultations on the formation of a new government, and stated that he would prefer a “technocrat or national unity government.” At the same time, the “markets” had pushed Italy’s bond yields (debt interest) to nearly 7%, figures that saw Greece, Ireland, and Portugal getting bailouts. The leader of the main opposition Democratic Party (PD), Pier Luigi Bersani, said, “I ask you, Mr. Prime Minister, with all my strength, to finally take account of the situation… and resign.” Berlusconi and some of his close allies, however, warned that appointing a technocratic government, the option which was said to be favoured by “markets,” would amount to an “undemocratic coup.” Naturally, that’s just what happened.
Writing for the Guardian, John Hooper suggested that one of four scenarios would take place upon the event of Berlusconi’s resignation: one envisions Berlusconi leaving but the right gaining a broader majority, specifically under Umberto Bossi’s Northern League, who was in Berlusconi’s coalition but had advised him to resign, and was pushing for him to be replaced with the next in command in Berlusconi’s party, Angelino Alfano; another scenario envisioned a “grand coalition,” or a “government of national emergency or salvation,” bringing together all the parties; a third scenario had Italy calling an election, urged by both Berlusconi and Bossi; or the fourth option, “a cabinet of technocrats,” which Hooper wrote was “favoured by the markets and the Italian centre left,” which would consist of “a government filled with specialists who could pass the unpalatable legislation needed to revive Italy’s flagging economy without having to worry about re-election.” This happened before in Italy, when Berlusconi’s government fell in 1994, at which time he was replaced by Lamberto Dini, a central banker, who headed a government of “professors, generals and judges.” In this scenario, suggested Hooper, the likely prime minister would be Mario Monti.
Upon Berlusconi’s failure to achieve a minority during the budget vote on November 8, many officials from the financial community began making their observations, such as Jan Randolph, the head of sovereign risk analysis at HIS Global Insight, who said that, “Berlusconi has effectively lost political capital to carry the country through a period of austerity and structural reform,” and that, “Berlusconi will have to resign.” He went on to suggest that it was possible “that a broad National Unity government headed by a respected technocrat like ex-EU commissioner Mario Monti could be formed.”
As Berlusconi officially resigned on the night of November 12, 2011, he left the president’s palace through a side door as a crowd of over 1,000 people outside yelled, “buffoon,” “Mafioso,” and for him to “face trial.” A poll from early November reported that 71% of Italians favoured his resignation, and upon hearing of his official resignation, the crowd erupted in roars of “Halleluja.”
On November 16 of 2011, Mario Monti was appointed as Prime Minister of Italy. Monti accepted the mandate to form a new government, and was expected to appoint technical experts as opposed to politicians to his cabinet. President Napolitano told Italian politicians that, “it is a responsibility we perceive from the entire international community to protect the stability of the single currency as well as the European frame work.” Berlusconi’s political party, the People of Liberty, said it would accept a Monti government for a short while before elections would have to be scheduled, and Berlusconi referred to his resignation as “an act of generosity.”
Mario Monti is an economist and academic who served as European Commissioner for the Internal Market, Services, Customs and Taxation from 1995 to 1999, and European Commissioner for Competition from 1999 to 2004. Monti is founder and Honorary President of Bruegel, a European think tank he launched in 2005, based in Belgium, and which represents the interests of key European elites. Monti has also been a member of the advisory board of the Coca-Cola Company, and was an international advisor to Goldman Sachs, was a former member of the Steering Committee of the Bilderberg Group, having previously attended the meeting in Switzerland in June of 2011, and was European Chairman of the Trilateral Commission until he resigned when he became Prime Minister of Italy.
Monti’s think tank, Bruegel, represents key elite European interests. The Chairman of the Board of Bruegel is Jean-Claude Trichet, the former President of the European Central Bank (ECB) from 2003 to 2011, who is also a member of the board of directors of the Bank for International Settlements (BIS), and has joined the boards of a number of major corporations, including EADS. Other board members of Bruegel include: Jose Manuel Campa Fernandez, who was the Spanish Secretary of State for Economic Affairs at the Ministry of Economy and Finance from 2009 to 2011, and has been a consultant for the European Commission, the Bank of Spain, the Bank for International Settlements (BIS), the Federal Reserve Bank of New York, the Inter-American Development Bank, the International Monetary Fund and the World Bank; Anna Ekström, the president of the Swedish Confederation of Professional Associations, Saco, and formerly the Swedish State Secretary for the Ministry of Industry, Employment and Communication; Jan Fisher, Vice President of the European Bank for Reconstruction and Development (EBRD), former Prime Minister of the Czech Republic; Vittorio Grilli, the Deputy Minister of the Ministry of Economy and Finance of Italy (whom Monti appointed to his technocratic government in November of 2011), and a former Managing Director at Credit Suisse First Boston; Wolfgang Kopf, Vice President at Deutsche Telekom AG; Rainer Münz, head of Research and Development at Erste Group and Senior Fellow at the Hamburg Institute of International Economics (HWWI), former consultant to the European Commission, the OECD, and the World Bank; Jim O’Neill, Chairman of Goldman Sachs Asset Management; Lars-Hendrik Röller, the Director General of the Economic and Financial Policy Division of the German Federal Chancellery, and is President of the German Economic Association; Dariusz Rosati, former consultant economist at Citibank, former Minister of Foreign Affairs for Poland, former adviser to the President of the European Commission, and was a member of the European Parliament from 2004 to 2009; and Helen Wallace, a British academic expert on European integration.
In October of 2009, Mario Monti was asked by the President of the European Commission Manuel Barroso to draw up a report on how the EU should re-launch its single market. Barroso advised that the report, “should address the growing tide of economic nationalism and outline measures to complete the EU’s currently patchy single market.” Mario Monti was President of the Bocconi University at the time he was asked to write the report. In May of 2010, Monti produced the report and officially handed it in to European Commission President Barroso. The report recommended ways to fight the potential of economic nationalism and to preserve and protect the regional bloc and to advance the process of integration, with Monti arguing that, “There is now a window of opportunity to bring back the political focus of the single market.” The report eventually became the EU’s Single Market Act of 2011.
After becoming the technocratic and unelected Prime Minister of Italy, Monti quickly appointed his new cabinet, of which more than a third of the 17-member cabinet consisted of professors and other technocrats. The cabinet position of Minister of Economic Development, Infrastructure and Transport was given to Corrado Passera, the chief executive of Italy’s largest bank, Intesa Sanpaolo. Passera told the Financial Times upon his appointment as “superminister” that, “If you want to build the wide consensus that is needed, we have to share sacrifices and benefits among all the segments of society with a balanced set of actions and with the right mix of austerity and development programmes.” British hedge fund manager Davide Serra stated, “Monti and Passera are the right guys for the job. They are the dream team.” Upon appointing his new technocratic government, Monti declared: “We feel sure of what we have done and we have received many signals of encouragement from our European partners and the international world. All this will, I trust, translate into a calming of that part of the market difficulty which concerns our country.” On the lack of party representatives in his cabinet, Monti commented, “The absence of political personalities in the government will help rather than hinder a solid base of support for the government in parliament and in the political parties because it will remove one ground for disagreement.”
A former ambassador who worked with Monti when he was an EU Commissioner recalled Mario’s style of governance, stating, “He didn’t have a very Italian way of going about things… His nickname in those days was ‘The Italian Prussian’.” An article in Reuters described Monti as “a convinced free marketeer with close connections to the European and global policy making elite, Monti has always backed a more closely integrated euro zone,” and went on to mention his leadership positions within the Bilderberg Group of “business leaders” and “leading citizens” and the Trilateral Commission, which “brings together the power elites of the United States, Europe and Japan.” Monti’s government would be given roughly 18 months to push through “reforms” and austerity measures, as another election would not be due until 2013. However, as one outgoing minister commented in November of 2011, “The decisions which Monti will take must pass in parliament and I think that with such a heterogeneous majority he will have many problems. I believe this solution will lead to many problems.”
Monti of course received abundant praise from Europe’s leaders on becoming the new unelected technocratic Prime Minister of Italy. An article by Tony Barber in the Financial Times explained that Italian party politics was simply too problematic, as: “Even a centre-left government with a mandate from the voters would find it hard to maintain the unity and resolution required to implement the unpopular austerity measures and structural economic reforms demanded by Germany, France, the European Commission, the European Central Bank and the International Monetary Fund.” And with the prospect of labour resistance from workers and pensioners, “it is easy to see why Europe’s leaders were eager for Mr Monti to inherit the premiership.” Thus, wrote Barber, “technocracy has an irresistible appeal.” Mario Monti himself had acknowledged that “irresistible appeal” in August of 2011, when he wrote an article in a major Italian paper advocating the formation of a “supranational technical government” which would make all the major decisions in order to “remove the structural constraints to growth,” and opined that “an Italy respected and authoritative… would be of great help to Europe.” And as it turned out, a great help to Monti.
In early December of 2011, after forming his cabinet and being approved by Italy’s lower chamber of Parliament with a rare majority, Mario Monti received the endorsement of Angela Merkel and Nicolas Sarkozy, declaring their “absolute trust” in Monti and in “his structural changes” to his governing of Italy. Monti, upon assuming power, warned Italians in a speech that, “It is not going to be easy, sacrifice will be required.” As Monti’s “technocratic government” is full of appointments from the ruling class, including bankers and other executives, many in Italy were raising concerns that this suggested an inherent conflict of interest in his government, as those who helped create the crisis are brought in to solve it, a highly political government, despite all the claims of an apolitical ‘technocracy’ (technocracies are always political entities, but instead of pushing party ideologies, they push ultra-elite ideologies in the management and maintenance of society). Monti replied that, “There is no conflict of interests… The fact that many of us have played a role in the institutions before doesn’t mean that we will not be totally transparent.” And with that note, Monti appointed Carlo Malinconic as undersecretary for publishing affairs, after having previously served as president of the Italian Federation of Publishing and Newspapers.
Writing in the journal of the Council on Foreign Relations, Foreign Affairs, Jonathan Hopkin, a professor of comparative politics at the London School of Economics, commented that the replacement of Berlusconi with Monti “marks a new stage in the European financial crisis,” in which “the crisis now seems to be wiping out democratically elected governments.” Largely under pressure from bond markets, “Italian politicians have opted to hand power to technocrats, expecting that they will somehow enjoy greater legitimacy as they impose painful measures on an angry population.” Hopkin stated: “This will not work.”
In early November, as democratically-elected governments in Greece and Italy were replaced with unelected and unaccountable technocratic governments, essentially run by and for the European Union and global banks, Tony Barber, writing in the Financial Times, suggested that this is but one of several responses to the economic crisis. Specifically, this response “involves the surgical removal of elected leaders in Greece and Italy and their replacement with technocratic experts, trusted within the EU to pass economic reforms deemed appropriate by policymakers in Berlin, the bloc’s top paymaster, and at EU headquarters in Brussels.” Barber referred to the “sidelining of elected politicians in the continent that exported democracy to the world” as a “momentous development.” In short, “eurozone policymakers have decided to suspend politics as normal in two countries because they judge it to be a mortal threat to Europe’s monetary union.” Thus, these policymakers “have ruled that European unity, a project more than 50 years in the making, is of such overriding importance that politicians accountable to the people must give way to unelected experts who can keep the show on the road.” In Greece, the government was put under the technocratic leadership of Lucas Papademos, a former vice president of the European Central Bank, and upon accepting his appointment, stated: “I am confident that the country’s participation in the eurozone is a guarantee of monetary stability.” In Italy, Mario Monti came to power, a technocrat who “is revered in Brussels as one of the most effective commissioners for competition and the internal market that the EU has known.” One prominent Italian banker commented: “We need a strong national unity government for one to one and a half years to do what the politicians haven’t had the courage to do.”
Running the ECB can be such a ‘Draghi’
In late October of 2011, at a gala event to mark the end of Jean-Claude Trichet’s eight years as president of the European Central Bank, Mario Draghi, the governor of the Bank of Italy, who was selected to take over for Trichet at the start of November, was “working the room” of high-powered European elites, including Angeal Merkel, and IMF Managing Director Christine Lagarde. Between 1984 and 1990, Draghi was the Italian Executive Director at the World Bank, and in 1991, he became the director general of the Italian Treasury until 2001. Between 2002 and 2005, Draghi was the Vice Chairman and Managing Director of Goldman Sachs International, thereafter becoming the governor of the Bank of Italy from 2006 until 2011, also putting him on the Governing Board of the European Central Bank and the Bank for International Settlements (BIS). Draghi is not simply one of the individuals who has been most responsible for handling and managing the economic crisis, but he also played an important role in causing it. As Vice Chairman of Goldman Sachs, and in Italy at the Treasury and the central bank, “Draghi was a proponent of nations and other institutions like pension funds using derivatives to more efficiently manage their liabilities.” This means that Draghi advised that governments should essentially hide their debts in the derivatives market, where they would not be viewed as liabilities, but rather, transactions. These “transactions” were very popular in Greece and Italy, and had a great deal to do with accumulating and hiding the massive debts of these countries.
When Draghi led the Italian Treasury in the 1990s, he “oversaw one of the largest European privatization efforts ever and paved the way for Italy’s entry into the euro,” earning him the nickname, “Super Mario.” Italy liberalized its financial markets, allowing for massive speculation, derivatives, and other banking excesses, and he privatized roughly 15% of Italy’s economy. While Italian governments came and went during this period, Draghi always remained. While both Draghi and Goldman Sachs said that “Super Mario” did not have anything to do with the especially controversial Greece-Goldman Sachs transactions, one Goldman Sachs executive in Europe, “who was not authorized to speak publicly,” told the New York Times that, “Mr. Draghi had discussed similar initiatives with other European governments.” When asked about his involvement at Goldman Sachs, Draghi once replied, “I was not in charge of selling stuff to the governments… In fact, I worked in the private sector even though Goldman Sachs expected me to work in the public sector when I was hired.” However, in a paper which Draghi wrote in 2002 just a couple months after being hired by Goldman Sachs, at which his job description was “to win investment banking business from European governments,” Draghi argued in favour of governments using derivatives “to stabilize tax revenue and avoid the sudden accumulation of debt,” which the New York Times politely described as “faithful to the spirit” of the Goldman-Greece deal.
In an interview with the Financial Times in December of 2011, European Central Bank president Mario Draghi reflected upon the financial crisis and the actions taken to manage it. He explained that the ECB’s long-term refinancing operation (a half-trillion euro bank bailout) was not designed to give banks an incentive to buy government bonds from the “periphery” nations, but rather, that, “the objective is to ease the funding pressures that banks are experiencing,” and that the banks “will then decide what the best use of these funds is.” Draghi stated that, “we don’t know exactly” what banks were doing with the money, but that, “the important thing was to relax the funding pressures.” Draghi reiterated that the banks “will decide in total independence what they want to do.”
It’s interesting to note that when governments get bailouts, they are told what and how to spend the money, and are forced to impose austerity measures that destroy the social fabric and punish the populations of their countries, and then, of course, have to pay back the money at exorbitant interest rates; but when banks get a half-trillion euro bailout, the banks will “decide what the best use” of the money is, and where it goes is not important, it’s only important to “relax” the pressure on the banks, who will repay the debt over a long-term period (3 years) with extremely low interest (averaging 1%). So people get pressure, and banks get pressure “relaxed.”
Draghi told the Financial Times that what is needed most is to “restore confidence,” and for this, there are four answers. The first one “lies with national economic policies, because this crisis and this loss of confidence started from budgets that had got completely out of control.” The second answer, explained Draghi, “is that we have to restore fiscal discipline to the euro area,” which means to impose austerity, “and this is in a sense what last week’s EU summit started [in mid-December 2011], with the redesign of the fiscal compact.” The third answer “is to have a firewall in place which is fully equipped and operational,” meaning a massive bailout fund, which “was meant to be provided by the EFSF.” The fourth answer, according to Draghi, is for countries “to undergo significant structural reforms that would revamp growth,” implying things like liberalization, privatization, and further deregulaiton. When Draghi was asked about the critics of the fiscal compact who suggest that it amounts to a “stagnation and austerity union,” Draghi replied that, “they are right and wrong at the same time.” Draghi repeated the mantra of pro-austerity voices, who always suggest with no historical evidence to support, that there is “no trade-off between fiscal austerity, and growth and competitiveness.” However, Draghi contended, “I would not dispute that fiscal consolidation [austerity] leads to a contraction in the short run.” The correspondent with the Financial Times asked: “But these austerity programmes are very harsh. Don’t [you] think that some countries are really in effect in a debtor’s prison?” Draghi replied: “Do you see any alternative?”
In an interview with the Wall Street Journal in February, Mario Draghi warned European countries “that there is no escape from tough austerity measures and that the continent’s traditional social contract is obsolete.” Draghi said that Europe’s social model was “already gone,” and that the only way to return to “long-term prosperity” was “continuing economic shocks [that] would force countries into structural changes in labor markets and other aspects of the economy.” As European people were suffering through the increased austerity measures, Draghi warned that, “Backtracking on fiscal targets would elicit an immediate reaction by the market.” This of course implies that the market has the ‘right’ to determine the fate of Europe’s people. For Draghi, “austerity, coupled with structural change, is the only option for economic renewal.” The European Commission, headed by Jose Manuel Barroso, agreed with Draghi, stating that despite forecasting a deepened recession brought on by austerity measures, governments “should be ready to meet budgetary targets.” Simon Johnson, the former chief economist of the IMF, said that Draghi was “just sugarcoating the message.” Johnson explained: “A lot of this structural reform talk is illusory at best in the short run… but it’s a better story than saying you’re going to have a terrible 10 years.”
In the interview, Draghi commented on the “positive changes” which had been taking place in the previous few months: “There is greater stability in financial markets. Many government shave taken decisions on both fiscal consolidation and structural reforms. We have a fiscal compact where the European governments are starting to release national sovereignty for the common intent of being together.” When Draghi was asked what his view was “of these austerity policies in the larger strategy right now, forcing austerity at all costs,” Draghi replied: “There was no alternative to fiscal consolidation, and we should not deny that this is contractionary in the short term.” Then, he added, it was necessary to promote growth, “and that’s why structural reforms are so important.” The interviewer asked Draghi what the “most important structural reforms” were for Europe at that time. Draghi replied:
In Europe first is the product and services market reform. And the second is the labour market reform which takes different shapes in different countries. In some of them one has to make labour markets more flexible and also fairer than they are today [in other words: more easily exploited]. In these countries there is a dual labour market: highly flexible for the young part of the population where labour contracts are three-month, six-month contracts that may be renewed for years. The same market is highly inflexible for the protected part of the popuation where salaries follows seniority rather than productivity. In a sense labour markets at the present time are unfair in such a setting because they put all the weight of flexibility on the young part of the population.
When central bankers and politicians and others talk about “labour flexibility,” what they really mean is “worker insecurity.” This was bluntly stated by Alan Greenspan back when he was Governor of the Board of the Federal Reserve System, when in testimony before the US Senate in 1997, he discussed how America’s “favorable” economy was constructed. Greenspan discussed how wage increases for workers did not keep pace with inflation, which was, he explained, “mainly the consequence of greater worker insecurity.” He elaborated: “the willingness of workers in recent years to trade off smaller increases in wages for greater job security seems to be reasonably well documented.” Greenspan credited the creation of “worker insecurity” with technological changes, corporate restructuring and downsizing, as well as “domestic deregulation.” The New York Times reported on this, stating that Greenspan described “job insecurity” as “a powerful recent force in the American economy,” and that Greenspan, “clearly elevated this insecurity to major status in central bank policy.” How does worker insecurity influence central bank policy? The article explained: “Workers have been too worried about keeping their jobs to push for higher wages… and this has been sufficient to hold down inflation without the added restraint of higher interest rates.” However, Greenspan warned that even though job insecurity continues to rise, once “workers become accustomed to their new level of uncertainty, their confidence may revive and the upward pressure on wages resume.”
In his interview with the Wall Street Journal, Mario Draghi was asked if “Europe will become less of the social model that has defined it,” to which Draghi replied: “The European social model has already gone.” Draghi, repeating the mantra of so many in power, stated that, “there is no feasible trade-off between” austerity and growth: “Fiscal consolidation is unavoidable in the present set up, and it buys time needed for the structural reforms. Backtracking on fiscal targets would elicit an immediate reaction by the market.” In terms of “progress” – as Draghi defines it – throughout the crisis, he praised the fiscal compact treaty as “a major political achievement because it’s the first step towards a fiscal union. It’s a treaty whereby countries release national sovereignty in order to accept common fiscal rules that are especially binding, and accept monitoring and accept to have these rules in their primary legislation so they are not easy to change. So that’s a beginning.”
In further testimony in 2000, Alan Greenspan again addressed the issue of “worker insecurity,” which he stipulated was the “consequence of rapid economic and technological change,” which in turn created a “fear of potential job skill obsolescence.” Greenspan stated that, “more workers currently report they are fearful of losing their jobs than similar surveys found in 1991 at the bottom of the last recession,” and that, “greater workers insecurities are creating political pressures to reduce fierce global competition that has emerged in the wake of our 1990s technology boom.” While Greenspan admitted that “protectionist policies” would “temporarily reduce some worker anxieties,” he felt this was a bad idea, as “over the longer run such actions would slow innovation and impede the rise in living standards.” Greenspan elaborated:
Protectionism might enable a worker in a declining industry to hold onto his job longer. But would it not be better for that worker to seek a new career in a more viable industry at age 35 than hang on until age 50, when job opportunities would be far scarcer and when the lifetime benefits of additional education and training would be necessarily smaller?.. These years of extraordinary innovation are enhancing the standard of living for a large majority of Americans. We should be thankful for that and persevere in policies that enlarge the scope for competition and innovation and thereby foster greater opportunities for everyone.
This is called “labour market flexibility.” Of course, as Greenspan was full of praise for the fact that “job insecurity” is a necessary factor in “enhancing the standard of living for a large majority of Americans,” which “fosters greater opportunities for everyone,” what he really meant was that it benefits a tiny minority and creates better opportunities for exploitation. Ironically, this wonderful “boom” in the economy turned out to be a bubble, and it popped within a year of his giving this speech, and then of course, he resorted to building up the housing bubble thereafter… and we know how that went: more worker insecurity, more labour market flexibility, and thus, more benefits to a tiny minority and more opportunities for exploitation and profits. Isn’t the “free market” wonderful?
In April of 2012, Mario Draghi advised the eurozone to adopt a “growth compact” in order to boost economic prospects as he “scaled back his hopes for an early economic rebound,” stating that the eurozone bloc was “probably in the most difficult phases” in which the austerity measures were “starting to reverberate its contractionary effects,” he told the European Parliament. Austerity had, according to Draghi, “taken a larger than expected toll.” A “growth pact” was promoted by the front-runner in the French presidential elections, Francois Hollande, who would go on to win the May 6 elections against Sarkozy. Hollande had called for a “new Europe” stressing “solidarity, progress and protection,” warning against a North-South split in the EU countries. Angela Merkel also approved of Draghi’s call for a “growth pact,” agreeing that austerity was not “the whole answer” to the crisis, but insisted that growth would be “in the form of structural reforms,” which implies liberalization and privatization. She added: “We need growth in the form of sustainable initiatives, not simply economic stimulus programmes that just increase government debt.” While acknowledging the “economic weakness” created by the austerity packages across Europe, Draghi continued to say that, “Europe’s leaders should stay the course on fiscal consolidation.”
European leaders were quick to endorse the calls from Draghi for a “growth pact” for Europe, including Angela Merkel in Germany, and France’s new Socialist president, Fancois Hollande, as well as EC President José Manuel Barroso. Following Draghi’s suggestion, Barroso stated that, “Growth is the key, growth is the answer.” Francois Hollande commented in references to Draghi’s proposal, “He doesn’t necessarily have the same measures in mind as me to foster growth,” as Draghi’s position was closer to that of Angela Merkel, who viewed the pact as consisting of “structural reforms,” not a stimulus which would “again increase national debt.” An analyst at the Cutch bank ING said: “For the ECB, a growth compact does not mean more fiscal stimulus,” which is, of course, only reserved for banks, not people. Instead, stated the analyst, Carsten Brzeski, it entails “structural reforms with a vision.”
In May, this vision was publicly endorsed by Jorg Asmussen, the governor of the Bundesbank (the German central bank), and a member of the Executive Board of the European Central Bank, and was just previously the deputy finance minister of Germany. In a speech on May 21, Asmussen stated that, “we need both” austerity and growth, but that: “Talking about more growth does not mean moving away from the fiscal policy strategy pursued so far. It is not a matter of boosting growth over the next one to two quarters with credit-financed spending programmes, but of increasing potential growth. No one is against growth. The crucial and rather difficult question to answer is how, in ageing societies, to increase potential growth.” As to the question of ‘how’, Asmussen suggested three main components: product market reforms, labour market reforms, and financing of reforms. Product market reforms could include, according to Asmussen, “the completion of the internal market for services… [as] 70% of the EU’s GDP comes from services, but only 20% of services are provided on a cross-border basis.” As for labour market reforms, Asmussen suggested they should be “inspired by the Agenda 2010 programme in Germany,” and that, ultimately: “labour mobility needs to be increased in the euro area (the theory says, we remember, that an optimal currency area requires full mobility of labour). Mobility could be increased through broader recognition of qualifications within Europe, greater portability of pension rights, language courses and a European network of job centres.” The Agenda 2010 programme was, explained Der Spiegel, “a series of labor market and social welfare reforms introduced by former Chancellor Gerhard Schröder that completely restructured Germany’s welfare state,” which included, “easing job dismissal protections, lowering bureaucratic hurdles for starting businesses, setting a higher retirement age and lowering non-wage labor costs,” all of which are “typical examples of structural reforms.”
The Crisis Continues…
And so the European debt crisis continues, and so the austerity measures continue to punish the populations of Europe, and so Italy remains at the forefront of a growing global power grab: a ‘Technocratic Revolution’ in which even the trappings of formal democracy are pushed aside in favour of a government subservient to unelected councils of supranational institutions and global financial interests. In Par 2 of this excerpt on the Italian debt crisis, we examine the austerity programs and structural adjustments undertaken by the technocratic government of Mario Monti.
Please donate to The People’s Book Project to help this book be finished by the end of summer:
 Bilderberg Meetings, Participants, 2011:
 John Hooper, “Italy’s politicians rally round to prevent market’s slide,” The Guardian, 12 July 2011:
 Phillip Inman and John Hooper, “Italy hopes privatisations will calm markets,” The Guardian, 13 July 2011:
 AP, “Italian Senate passes key austerity package,” The Independent, 14 July 2011:
 Rachel Donadio, “Italy to Adopt Austerity Plan to Fend Off a Debt Crisis,” The New York Times, 14 July 2011:
 Emma Rowley, “Silvio Berlusconi v. Giulio Tremonti: a clash that spooked the markets,” The Telegraph, 14 July 2011:
 Nichi Vendola, “Italian debt: Austerity economics? That’s dead wrong for us,” The Guardian, 14 July 2011:
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 Leigh Phillips, “ECB austerity drive raises fears for democratic accountability in Europe,” The Guardian, 22 August 2011:
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 Lorenzo Totaro, “Berlusconi’s Austerity Package Wins Final Approval in Italian Parliament,” Bloomberg, 14 September 2011:
 “Italy’s Austerity Budget – Needed: A New Broom,” The Economist, 10 September 2011:
 Jon Henley, “Austerity in Italy: cuts compound bureaucratic obstacles,” The Guardian, 18 October 2011:
 Jon Henley, “Europe on the breadline: hopelessness and Berlusconi,” The Guardian, 18 October 2011:
 Bruno Mascitelli, “As Moody’s trashes Italy, voters can’t count on Berlusconi,” The Conversation, 5 October 2011:
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Antonio Padellaro, “Come previsto,” Il Fatto Quotidiano, 16 October 2011, (original in Italian, translation courtesy of Google Translate):
“Rome counts cost of violence after global protests,” BBC News, 16 October 2011:
Alessandra Rizzo and Meera Selva, “Rioters hijack Rome protests; police fire tear gas,” The Denver Post, 16 October 2011:
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 Hans-Jürgen Schlamp, “Berlusconi’s Government Wobbles in Face of EU Pressure,” Der Spiegel, 25 October 2011:
 MARCUS WALKER, CHARLES FORELLE, and STACY MEICHTRY, “Deepening Crisis Over Euro Pits Leader Against Leader,” The Wall Street Journal, 30 December 2011:
 Armorel Kenna, “Austerity ‘Isn’t in My Vocabulary,’ Berlusconi Tells Il Foglio,” Bloomberg, 29 October 2011:
 Patrick Wintour and Larry Elliott, “G20 leaders press Italy to accept IMF checks on cuts programme,” The Guardian, 4 November 2011:
 Philip Ebels, “Berlusconi heads to G20 amid mutiny at home,” EUObserver, 3 November 2011:
 Nick Squires, “Eurozone crisis: Italian coalition fails to reach austerity deal,” The Telegraph, 3 November 2011:
 Emily Gosden, “Italian Prime Minister Silvio Berlusconi agrees to IMF oversight of austerity measures,” The Telegraph, 4 November 2011:
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 Graeme Wearden and Alex Hawkes, “Eurozone debt crisis: Berlusconi to resign after austerity budget passed,” The Guardian, 8 November 2011:
 “The end of Berlusconi: Hallelujah,” The Economist, 13 November 2011:
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 Alan Greenspan, “Testimony of Chairman Alan Greenspan: The Federal Reserve’s semiannual monetary policy report,” Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, February 26, 1997:
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Lies, War, and Empire: NATO’s “Humanitarian Imperialism” in Libya
By: Andrew Gavin Marshall
In this report I seek to examine the war against Libya in a more critical and comprehensive manner than that of the story we have been told. We hear a grand fairy tale about powerful Western nations working together to save innocent civilians in a far-off country who simply want the freedoms and rights we already have. Here we are, our nations and governments – whose officials we elect (generally) – are bombing and killing people on the other side of the world. Is it not our responsibility, as citizens of these very Western nations, to examine and critique the claims of our governments? They are, after all, killing people around the world in our name. Should we not seek to discover if they are lying?
It has been said, “In war, truth is the first casualty.” Libya is no exception. From the lies that started the war, to the rebels linked to al-Qaeda, ethnically cleansing black Libyans, killing civilians, propaganda, PR firms, intelligence agents, and possible occupation; Libya is a more complex story than the fairy tale we have been sold. Reality always is.
What Were the ‘Reasons’ for ‘Intervention’?
We were sold the case for war in Libya as a “humanitarian intervention.” We were told, of course, that we “needed” to intervene in Libya because Muammar Gaddafi was killing his own people in large numbers; those people, on the same token, were presented as peaceful protesters resisting the 40-plus year reign of a brutal dictator.
In early March of 2011, news headlines in Western nations reported that Gaddafi would kill half a million people. On March 18, as the UN agreed to launch air strikes on Libya, it was reported that Gaddafi had begun an assault against the rebel-held town of Benghazi. The Daily Mail reported that Gaddafi had threatened to send in his African mercenaries to crush the rebellion. Reports of Libyan government tanks sitting outside Benghazi poised for an invasion were propagated in the Western media. In the lead-up to the United Nations imposing a no-fly zone, reports spread rapidly through the media of Libyan government jets bombing the rebels. Even in February, the New York Times – the sacred temple for the ‘stenographers of power’ we call “journalists” – reported that Gaddafi was amassing “thousands of mercenaries” to defend Tripoli and crush the rebels. Italy’s Foreign Minister declared that over 1,000 people were killed in the fighting in February, citing the number as “credible.” Even a top official with Human Rights Watch declared the rebels to be “peaceful protesters” who “are nice, sincere people who want a better future for Libya.” The UN High Commissioner for Human Rights declared that “thousands” of people were likely killed by Gaddafi, “and called for international intervention to protect civilians.” In April, reports spread near and far at lightning speed of Gaddafi’s forces using rape as a weapon of war, with the first sentence in a Daily Mail article declaring, “Children as young as eight are being raped in front of their families by Gaddafi’s forces in Libya,” with Gaddafi handing out Viagra to his troops in a planned and organized effort to promote rape.
As it turned out, these claims – as posterity notes – turned out to be largely false and contrived. Doctors Without Borders and Amnesty International both investigated the claims of rape, and “have found no first-hand evidence in Libya that rapes are systematic and being used as part of war strategy,” and their investigations in Eastern Libya “have not turned up significant hard evidence supporting allegations of rapes by Qaddafi’s forces.” Yet, just as these reports came out, Hillary Clinton declared that the U.S. is “deeply concerned by reports of wide-scale rape” in Libya. Even U.S. military and intelligence officials had to admit that, “there is no evidence that Libyan military forces are being given Viagra and engaging in systematic rape against women in rebel areas”; at the same time Susan Rice, U.S. Ambassador to the United Nations, “told a closed-door meeting of officials at the UN that the Libyan military is using rape as a weapon in the war with the rebels and some had been issued the anti-impotency drug. She reportedly offered no evidence to backup the claim.”
An investigation by Amnesty International, released in June, attempted to assess the on-the-ground (as opposed to ‘in-the-newspapers’) reality of the claims made which led to Western “intervention” in Libya. Among the stories of mass rapes were the use, by Gaddafi, of “foreign mercenaries” and using helicopters and jets to attack rebel forces and protesters. As the Independent reported in June:
An investigation by Amnesty International has failed to find evidence for these human rights violations and in many cases has discredited or cast doubt on them. It also found indications that on several occasions the rebels in Benghazi appeared to have knowingly made false claims or manufactured evidence.
Hillary Clinton stated, “Rape, physical intimidation, sexual harassment, and even so-called ‘virginity tests’ have taken place in countries throughout the region,” and at the same time, the senior crisis responder for Amnesty International who was in Libya for three months following the uprising stated, “we have not found any evidence or a single victim of rape or a doctor who knew about somebody being raped.” Human Rights Watch reported, “We have not been able to find evidence.” The rebels had been very active, in fact, in manufacturing and propagating lies that supported intervention and war, as the Amnesty representative explained, “rebels dealing with the foreign media in Benghazi started showing journalists packets of Viagra, claiming they came from burned-out tanks, though it is unclear why the packets were not charred.” Further, in regards to the use of foreign mercenaries, for which many black Africans were killed and imprisoned by the rebels, Amnesty reported, “there was no evidence for this.” The Amnesty rep in Libya declared: “Those shown to journalists as foreign mercenaries were later quietly released… Most were sub-Saharan migrants working in Libya without documents.” Others, Amnesty reported, “were not so lucky and were lynched or executed,” as “the politicians kept talking about mercenaries, which inflamed public opinion and the myth has continued because they were released without publicity.”
Those migrants who were shown to foreign media were not represented in that media in a friendly or even falsely unbiased manner. As the Daily Mail reported at the time, publishing photos of the “savage mercenaries” who later turned out to be migrant workers, “they were a pretty sorry bunch,” and that, “you could smell their fear.” The article then went on to declare, “these men are alleged to have been among several thousand foreign thugs and gunmen that Muammar Gaddafi sent against his own people, to kill and destroy and quell the uprising in eastern Libya.” Now, claimed the Daily Mail, “they are the prisoners of the people.” However, the article continued to – several paragraphs below, mind you – quote some of the “savage mercenaries” who made statements to the reporter such as: “We did not do anything… We are all construction workers from Ghana. We harmed no one… they are lying about us. We were taken from our house at night when we were sleeping.” The reporter assessed the situation with: “Still complaining, they were led away. It was hard to judge their guilt.”
Further, with the “credible” reports – as the Italian Foreign Minister referred to them – of “thousands” of civilians killed by Gaddafi in the early weeks of rebellion, the Amnesty International investigation found that, “there is no proof of mass killing of civilians.” During the first days of the uprising, most of the fighting was in Benghazi, “where 100 to 110 people were killed, and the city of Baida to the east, where 59 to 64 were killed.” However, there were indications that some of these deaths were also pro-Gaddafi forces, and that some “protesters” had weapons, indicating that it may have been a fight as opposed to a massacre. Further, reported Amnesty: “There is no evidence that aircraft or heavy anti-aircraft machine guns were used against crowds. Spent cartridges picked up after protesters were shot at came from Kalashnikovs or similar calibre weapons.” The Amnesty report further criticized Western media coverage of the war:
Much Western media coverage has from the outset presented a very one-sided view of the logic of events, portraying the protest movement as entirely peaceful and repeatedly suggesting that the regime’s security forces were unaccountably massacring unarmed demonstrators who presented no security challenge.
As for the notion that NATO was bombing Gaddafi troops poised for an invasion, even the New York Times quoted a Libyan official who claimed, “that Western powers were now attacking the Libyan Army in retreat, a far cry from the United Nations mandate to establish a no-fly zone to protect civilians.” This is an important point, because the reason for the UN no-fly zone was purportedly to “protect civilians,” not to “take sides” in the civil conflict between the government and the rebels. As a Libyan official stated, some Libyan forces “were attacked as they were clearly moving westbound,” as in, away from Benghazi and the rebels in the east. He further stated, “Clearly NATO is taking sides in this civil conflict. It is illegal. It is not allowed by the Security Council resolution. And it is immoral, of course.” At the same time, the NATO Secretary-General, Anders Fogh Rasmussen, declared that, “NATO will implement all aspects of the U.N. resolution. Nothing more, nothing less.”
Days before the Libyan government official claimed that Libyan forces were in retreat as they were bombed (something which would no doubt be immediately cast aside as Libyan propaganda by Western media sources), the New York Times, within days of NATO strikes beginning, reported on 20 March 2011 that, “with brutal efficiency, allied warplanes bombed tanks, missile launchers and civilian cars, leaving a smoldering trail of wreckage that stretched for miles,” and further, outside of Benghazi, “many of the tanks seemed to have been retreating, or at least facing the other way. And others were simply abandoned.”
Richard Haas, President of the Council on Foreign Relations, the most prestigious and influential think tank in the United States, was also a former Director of Policy Planning for the U.S. Department of State, former National Security Council Senior Director, who has also been a key figure within the Brookings Institution, the International Institute for Strategic Studies, and the Carnegie Endowment for International Peace. In short, it is a hard thing to be a more institutionalized imperial strategist than Haas; however, even he wrote in early April that, “I did not support the U.S. decision to intervene with military force in Libya. The evidence was not persuasive that a large-scale massacre or genocide was either likely or imminent.” However, he of course went on to support NATO’s efforts, as – he explained – “we are where we are.”
Long before the UN resolution 1973 and the NATO air strikes began, the Russian military, who had been monitoring events in Libya from satellites, said that Libya never launched attacks from helicopters or jets against its own civilians, and that, “as far as they are concerned, the attacks some media were reporting have never occurred.” Of course, this was later confirmed by an independent investigation, however the war had already been sold on the basis of such dubious reporting. Indeed, far more journalists are “stenographers of power” rather than ‘investigators of truth.’
On March 1, the same day that the Russian military reported that there had been no jets used in attacks by Gaddafi against his own civilians, the U.S. Secretary of Defense, Robert Gates, and the U.S. Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, gave a press conference at the Pentagon where one reporter posed the question: “Do you see any evidence that he actually has fired on his own people from the air? There were reports of it, but do you have independent confirmation? If so, to what extent?” Secretary Gates responded: “We’ve seen the press reports, but we have no confirmation of that,” and Admiral Mullen added, “That’s correct. We’ve seen no confirmation whatsoever.” So even the Pentagon itself admitted that it had absolutely “no confirmation whatsoever” that jets and helicopters had been used to attack civilians, yet the whole Western world took this as de facto truth. In this, we can see the power of the media in making a case for war, where their propaganda is more absurd and manufactured than that of the Pentagon’s.
Stenographers of Power?
Glenn Greenwald, an American constitutional and civil rights lawyer who writes for Salon.com wrote an article about the notion of reporters as “stenographers of power.” He quoted an article entitled, “How to be a stenographer,” in which it was written:
If you are considering a career as a stenographer, one of the most important things that you should consider is what type of job duties stenographers have. They transcribe, or type, material which they are dictated. This can include orders, memos, correspondence, reports and various other types of information.
Greenwald, in describing his own personal experience with courtroom stenographers, wrote:
Their defining trait is that they have a fierce devotion to transcribing accurately everything that is said and doing nothing else. It’s not uncommon for lawyers, in the heat of some dispute, to attempt to recruit the stenographer into the controversy in order to say who is right… Stenographers will never do that. They will emphasize that they are only there to write down what is said, not to resolve disputes or say what actually happened… But there’s a fundamental difference: stenographers are far better at their job, since they give equal weight to what all parties say. But Time and friends exist principally to trumpet government claims and minimize and belittle anything to the contrary, and they pretend to “balance” it all only when they’re caught mindlessly transcribing these one-sided claims and are forced to write down what the other side says, too. The bulk of our establishment journalists aren’t merely stenographers. They’re bad stenographers.
Following the beginning of the Iraq war, many newspapers had to publish small pieces outlining their role as “[bad] stenographers of power” in presenting the case for war in the first place. Of course, at the time that the New York Times, the Washington Post and others were selling the war to the American people, dissenters and critics were unabashedly seeking truth and were able to assess the claims made as “false” long before the war, let alone before these news publications had “discovered” the falsities they reported. Of course, claims will always be made that “hindsight is 20/20” and “we didn’t know,” but such claims don’t stand to scrutiny when the dissenters whose voices were never heard in the Times or Post were far ahead of the media in assessing the validity of the government’s assertions. In 2004, the New York Times had to publish a brief report on its own pre-Iraq war coverage, stating:
We have found a number of instances of coverage that was not as rigorous as it should have been. In some cases, information that was controversial then, and seems questionable now, was insufficiently qualified or allowed to stand unchallenged.
The Washington Post ran a similar story, detailing the attitude its editors and journalists took in the run up to the war in Iraq. It was reported that any article questioning the validity of claims made by the administration, such as the notion that there were WMDs in Iraq, wouldn’t make the front page. Bob Woodward, Assistant Managing Editor at the Post stated, “We should have warned readers we had information that the basis for this was shakier.” The article further explained:
Some reporters who were lobbying for greater prominence for stories that questioned the administration’s evidence complained to senior editors who, in the view of those reporters, were unenthusiastic about such pieces. The result was coverage that, despite flashes of groundbreaking reporting, in hindsight looks strikingly one-sided at times… Administration assertions were on the front page. Things that challenged the administration were on A18 on Sunday or A24 on Monday. There was an attitude among editors: Look, we’re going to war, why do we even worry about all this contrary stuff?..
Across the country, “the voices raising questions about the war were lonely ones,” [Washington Post Executive Editor] Downie said. “We didn’t pay enough attention to the minority.”…
From August 2002 through the March 19, 2003, launch of the war, The Post ran more than 140 front-page stories that focused heavily on administration rhetoric against Iraq. Some examples: “Cheney Says Iraqi Strike Is Justified”; “War Cabinet Argues for Iraq Attack”; “Bush Tells United Nations It Must Stand Up to Hussein or U.S. Will”; “Bush Cites Urgent Iraqi Threat”; “Bush Tells Troops: Prepare for War.”
One story that was submitted to the Post for publication, which threw into doubt all the claims made by the U.S. administration, and which largely quoted retired military officials and outside experts, “was killed by Matthew Vita, then the national security editor and now a deputy assistant managing editor” of the Post. Karen DeYoung, a former assistant managing editor who covered the prewar diplomacy, said quite bluntly that, “Bush, Vice President Cheney and other administration officials had no problem commanding prime real estate in the paper, even when their warnings were repetitive”:
“We are inevitably the mouthpiece for whatever administration is in power,” DeYoung said. “If the president stands up and says something, we report what the president said.” And if contrary arguments are put “in the eighth paragraph, where they’re not on the front page, a lot of people don’t read that far.”
There you have it, a former assistant managing editor of the Washington Post herself admitted that, “We are inevitably the mouthpiece for whatever administration is in power.” If there had ever been a clearer admission of being stenographers of power, I have yet to hear it.
No doubt, then, that upon the militaristic adventurism of yet another war, the media is again doing what it does best: being a “mouthpiece for whatever administration is in power.” Yet, with Libya it is even more profound; sold as a “humanitarian intervention,” this war must be presented in the media as a type of “rescue” operation as opposed to an imperial adventure. This task requires all the more deception on the part of both official statements and media “mouthpieces.”
As the saying goes, “In war, truth is the first casualty.” Indeed, it was so in Libya, and continues to be assaulted day-in day-out so long as this unjustified war continues.
Who are the Rebels?
We have been told a great many things about the rebels in Libya. We were told that they were “peaceful protesters,” that they were “nice guys,” and represented a popular uprising. From the flurry of reports about the rebels, the general ‘presentation’ given by Western governments and media was that the rebels are average Libyan civilians seeking to liberate themselves from a brutal tyrant who was indiscriminately killing them. Invariably and incessantly, the media in the West, such as the Financial Times, frame the forces as “pro-democracy rebels.” Naturally, such assertions must be more diligently questioned and investigated. So who are the rebels? Who makes up Libya’s Transitional National Council (TNC), largely recognized by the Western nations as the “legitimate” government in Libya?
The protests in Libya began in Benghazi on February 15, 2011. Fighting broke out between protesters and government forces, though it was naturally framed by Western media as a massacre, which ultimately turned out to be false. On 27 February, the National Transition Council (NTC) (also referred to as the Transitional National Council – TNC) was formed as a consolidated effort on the part of rebel groups to form an opposition ‘government.’ The TNC immediately called for a no-fly zone to be imposed by the U.N. and for air strikes against Gaddafi forces, which the TNC claimed were committing air strikes against them, which also turned out to be false. The rebels, however, were composed of a wide array of different groups. Among them, as Political Scientist and Sociologist Mahmood Mamdani explained, are “four different political trends: radical Islamists, royalists, tribalists, and secular middle class activists produced by a Western-oriented educational system.” Further, “of these, only the radical Islamists, especially those linked organisationally to Al Qaeda, have battle experience.”
While many Western media outlets initially tried to frame the rebels as simply, “lawyers, academics, businessmen and youths,” trying to sidetrack the Islamist elements within the rebel groups, eventually the story started to slowly break, though still largely downplayed. The TNC includes many former Libyan government officials who defected to the rebel camp at the start of the fighting. As the Wall Street Journal reported at the time, “some of the officials are known in Washington and European capitals as secular, pro-Western and pro-business,” and that, “Islamists among the rebels have been largely kept out of the public spotlight, though they are believed to have support in eastern Libya and have assumed key functions in the rebel efforts.” The head of the TNC is a man named Mahmoud Jibril, a Western-educated political scientist and economist who previously headed Libya’s National Economic Development Board, “with the mandate to boost foreign investment and economic growth in country.” By putting Jibril at the head of the TNC, the Council is “sending a message to foreign companies that the future Libyan government is interested in foreign investment and privatization.” According to a diplomatic cable released by Wikileaks from 2009, the U.S. ambassador to Libya wrote that Jibril “gets the U.S. perspective,” as in a meeting with Jibril, he had “highlighted the need to replace the country’s decrepit infrastructure and train Libyans,” and “requested American public and private assistance to do so.” Jibril, in his pitch to the ambassador, stated that Libya “has a stable regime and is ‘virgin country’ for investors,” leading the ambassador to conclude: “we should take him up on his offer.”
Jibril and the TNC released, in late March, a document entitled, “A Vision of a Democratic Libya,” as a type of blueprint for building a ‘new’ Libya. Among the many points in the blueprint were to: “Draft a national constitution”, “Form political organisations and civil institutions including the formation of political parties, popular organisations, unions, societies and other civil and peaceful associations”, “Maintain a constitutional civil and free state by upholding intellectual and political pluralism and the peaceful transfer of power, opening the way for genuine political participation, without discrimination”, “Guarantee every Libyan citizen, of statutory age, the right to vote in free and fair parliamentary and presidential elections”, “Guarantee and respect the freedom of expression”, and a firm commitment to “political democracy.” The ‘vision’ further states that it seeks, “the development of genuine economic partnerships between a strong and productive public sector, a free private sector and a supportive and effective civil society.”
Well, that all sounds well and good, but just how truly “democratic” or “respectful” of ‘human rights’ are the rebels and the TNC? How does their purported statements of support for Libyans “without discrimination” stand up to scrutiny? How truly democratic and peaceful are these groups?
Western Intelligence and the Rebels
The rebel groups are not simply disparate, localized, and grassroots individuals rising up in support of democracy and against a brutal tyrant. In fact, from the very beginning of the fighting, many rebels have been actively supported by Western and NATO intelligence agencies and special forces, including the CIA.
In March it was reported that the CIA had been authorized by President Obama to begin operations in Libya. The CIA was reportedly sent to Libya to gather intelligence for air strikes and “to contact and vet the beleaguered rebels.” As Obama said no U.S. forces were on the ground in Libya, which itself is a direct violation of the UN resolution 1973 which authorized a no-fly zone in Libya (but directly forbade foreign troops on the ground), “small groups of C.I.A. operatives [had] been working in Libya for several weeks as part of a shadow force of Westerners that the Obama administration hopes can help bleed Colonel Qaddafi’s military,” reported the New York Times. As they had been in Libya “for several weeks,” they had arrived prior to even the passing of UN resolution 1973 and the imposition of a no-fly zone, indicating directly that there were no plans for peace, and war was the favoured option. Further, in the same report, it was revealed that British special forces and MI6 intelligence agents were also active in Libya. Prior to the UN resolution, which was implemented to only “protect civilians” and not to take sides in the conflict, President Obama signed a secret finding “authorizing the C.I.A. to provide arms and other support to Libyan rebels.”
The CIA officers in Libya, reported the Los Angeles Times, are “coordinating with rebels and sharing intelligence,” and that, “the CIA has been in rebel-held areas of Libya since shortly after the U.S. Embassy in the capital, Tripoli, was evacuated in February.” As the article pointed out, in a clear indication of where the war might be headed:
In the early days of the U.S.-led wars in Afghanistan and Iraq, teams of CIA officers and U.S. special operations troops entered secretly, coordinated with opposition groups and used handheld equipment to call in and aim airstrikes against the government armies.
However, at the time, in late March, Obama and the White House were declaring that, “no decision has been made about providing arms to the opposition or to any group in Libya.” Before the UN resolution was even passed in early March, a report broke in the Independent which revealed a secret plan by the U.S. to arm the Libyan rebels through Saudi Arabia. Also before the U.N. resolution was passed, the Wall Street Journal revealed that, “Egypt’s military has begun shipping arms over the border to Libyan rebels with Washington’s knowledge.” The Egyptian military is largely subsidized and supported by the United States, thus what it does with U.S. “knowledge” is also done with U.S. ‘consent.’
The leader of the Libyan rebel’s military command is a man named Khalifa Hifter. As McClatchy Newspapers revealed in March, he had “spent the past two decades in suburban Virginia but felt compelled — even in his late-60s — to return to the battlefield in his homeland,” and explained that he had maintained, over those 20 years in Virginia, strong ties to anti-Gaddafi groups without any ‘known’ financial support, while living a mere 20 miles from CIA headquarters. There is a significant amount of investigative research, largely not undertaken by the mainstream media, who largely kept Hifter’s name out of the press, that he is, in fact, an asset of the CIA, and has been for a great many years. However, the Guardian, in April of 2011, reported that Hifter had, in the early 1980s, “joined a CIA-run anti-Gaddafi force.”
Gaddafi, al-Qaeda, and … Charlie Sheen?
In late February and early March, Gaddafi was claiming that the rebel groups were linked to al-Qaeda, a claim which was largely ridiculed by Western media. Apparently, it is only the Western nations and media who have the ability to claim that all their ‘enemies’ are linked to al-Qaeda. As the Guardian reported on 1 March, “Muammar Gaddafi’s insistent claim that al-Qaida is behind the Libyan uprising – made in all his public appearances since the crisis began – has been dismissed at home and abroad as propaganda.” The group, the Libyan Islamic Fighting Group (LIFG), an affiliate of al-Qaeda, have long been in Libya, and have been long-opposed to Gaddafi’s rule. Established in Afghanistan in the 1990s, the group has been responsible for assassinating dozens of Libyan soldiers and policemen. At the time, MI6, the British foreign intelligence agency, was accused of supporting the LIFG in Britain’s vehement campaign to rid Libya of Gaddafi.
The Western media attempted to ridicule Gaddafi for making such claims, as MSNBC reported Gaddafi’s denouncement as a “rambling phone call to Libyan state TV.” The media kept up its campaign, with a Guardian headline in early March asking readers to participate in an online questionnaire entitled, “Charlie Sheen v Muammar Gaddafi: whose line is it anyway?” Or how about Vanity Fair, which ‘challenged’ their readers with a hard-bitten ‘journalistic’ quiz, asking, “The Two and a Half Men star and the Libyan dictator delivered rambling rants this week. Can you tell who said what?” As the National Post – Canada’s vociferously imperial national newspaper – wrote in early March:
It’s rare that the news stories that would usually be relegated to the “bizarre news” section make it onto the front pages, but over the last few days the fantasies of two famous men have forced their way into the public consciousness. Muammar Gaddafi and Charlie Sheen have probably never met (though given the proclivity for Hollywood stars to dabble in foreign policy, you never know), but they share a number of qualities, such as a slipping grip on reality and easy access to TV interviewers through which to share their musings.
This line of ridicule comparing Gaddafi to Charlie Sheen was repeated all over Western news media, as a simple Google search of both of their names will indicate, with several publications engaging in the rank-and-file self-assured ridicule, including the Mirror, MSNBC, New York Magazine, The First Post, the Chicago Tribune, Life, Reuters, Salon, the Telegraph, the Atlantic, ABC News, and comedy pundits like Stephen Colbert of Comedy Central, among many others. So this is what our ‘news’ media has come to, in a situation of impending war and devastation, the destruction of human life and invasion of foreign countries and occupation of foreign peoples, sending our young, largely poor domestic populations to go kill or be killed, turning their guns on other poor, forgotten peoples for the benefit of those who send them. Instead of taking an issue like “humanitarian intervention” in the proper context of a war, which like all wars, would kill inordinate amounts of innocent civilians, our media chose to engage in the disgraceful frenzy of a group joke.
As the claims of Gaddafi were increasingly ridiculed as the crazy rants of a beleaguered psychopathic dictator (note: I am not casting doubt on the fact that he IS a dictator), several intermittent reports slipped through the cracks which in fact validated many of Gaddafi’s “crazy” claims.
The Wall Street Journal reported in early April that ex-Mujahideen (CIA-trained) fighters from the Afghan-Soviet war are in Libya aiding the rebels. The ex-Mujahideen fighters that the West trained, armed and supported in Afghanistan in the 1980s are now referred to in common parlance as “al-Qaeda,” unless of course we are supporting them. Then, just as Ronald Reagan did in the 1980s, we call them “freedom fighters” or “pro-democracy protesters” in Obama’s case. In fact, the actual term “al-Qaeda”, as explained by former British Foreign Secretary Robin Cook, literally means “the database,” which “was originally the computer file of the thousands of mujahideen who were recruited and trained with help from the CIA to defeat the Russians.” In short, al-Qaeda is a “database” of Western intelligence assets used to expand Western imperial interests around the world. They provide an excuse for intervention in countries whose governments you want to overthrow or whose people you want to prevent from ushering in a popular liberation struggle. Or, conversely, you can support them covertly in engaging in warfare against a hated regime, but invariably you would not want to refer to them as ‘al-Qaeda’ in such an instance, as it would conflict with the propagated concept of a worldwide “war on terror”, instead of what it actually is: a “war of terror.”
However, as the WSJ reported from Beghazi, “Sufyan Ben Qumu, a Libyan army veteran who worked for Osama bin Laden’s holding company in Sudan and later for an al Qaeda-linked charity in Afghanistan, is training many of the city’s rebel recruits.” Many other officials within the rebel command come from similar backgrounds, as they make up the experienced elements of the rebel army, which is incidentally led by a CIA asset (as explained above). Even a rebel leader admitted that his fighters have al-Qaeda links, as reported by the Telegraph. Further, a senior American Admiral, and NATO’s Supreme Allied Commander (leading the attack on Libya), admitted that al-Qaeda was among the rebels.
Yet, while these admissions surfaced in the mainstream media, once reported, in true Orwellian fashion, they were cast into the “memory hole,” all but forgotten. Thus, when any reference or indeed dissenter continues to refer to the rebel’s links to al-Qaeda, they are cast aside as a “crackpot” or a “conspiracy theorist.” It may have even been the very news outlet which is denouncing such claims that actually reported them as fact in the first place. The National Post recently engaged in a hit-piece against independent journalists who were based in Tripoli covering events and views unwanted by the NATO powers. In ridiculing these reports of NATO involvement with al-Qaeda linked rebels, the National Post journalist stated, cynically, “No massive popular uprising, no victorious rebels flooding into Tripoli greeted by throngs of well-wishers among the city’s populace. It was a NATO – Al Qaida job.”
The writer went on to denounce my former employers and colleagues at the Centre for Research on Globalization as “a Canadian clubhouse for crackpots of the anti-war, 911-truth, anti-imperialist and anti-Zionist variety. The Centre would not normally be worth noticing except for a laugh.” Seemingly, in the eyes of Terry Glavin and the National Post, “anti-war” and “anti-imperialist” sentiments are the intellectual bastion of “crackpots.” What, might I ask, does that say about the National Post? Personally, the label of “anti-war” and “anti-imperialist” is not an insult to me, nor to my former colleagues; it is a badge of honour, a source of pride and a directive for action. The framing of such anti-war and anti-imperialist sentiments as a ‘negative’ label, indeed says more about the National Post than it does about Global Research and its writers.
Is this a Popular Democratic Uprising?
The National Post refers to the rebels as a “massive popular uprising” of “victorious rebels” who entered Tripoli “greeted by throngs of well-wishers among the city’s populace,” perhaps we should ask if this is indeed the case. Scott Taylor, a Canadian journalist writing for the Halifax Chronicle-Herald in late August, observed (and it is worth quoting at some length):
The rebellion in Libya has been more of a media war than a full-scale armed clash… To prevent Gaddafi from inflicting reprisals on the rebels, the UN authorized a NATO-enforced no-fly zone over Libya to protect unarmed civilians from being bombed. That, of course, did not apply to civilians living in Gadhafi-controlled sectors, as the Canadian-led NATO coalition soon began mounting airstrikes against government targets.
For more than five months now NATO planes have supported the rebels, and NATO warships have enforced a one-sided arms embargo against Gadhafi’s forces. And all foreign-held Libyan financial assets have been frozen, making it virtually impossible for Libya to purchase any war materiel, or even basic necessities such as fuel…
On a fact-finding trip into Tripoli last week, I saw first-hand that Gaddafi has solidified his control over the capital and most of western Libya. Foreign diplomats still based in Tripoli confirmed to me that, since NATO started bombing, Gaddafi support and approval ratings have actually soared to about 85 per cent.
Of the 2,335 tribes in Libya, over 2,000 are still pledging their allegiance to the embattled president. At present, it is the gasoline shortage due to the embargo and lack of electricity from NATO’s bombing that are causing the most hardship to Libyans inside Gadhafi-controlled sectors.
However, at present, the people still blame NATO — not Gaddafi — for the shortages. In an effort to combat that sentiment and to encourage a popular uprising against Gadhafi, NATO planes have taken to dropping leaflets in canisters over the streets of Tripoli. Unfortunately for the NATO planning staff, the canisters are heavy enough to cause injury and damage roofs when they plummet to the ground…
It is possible that the continued embargo, shortage of fuel and downgrading of Libyan utilities will create a humanitarian crisis inside Gadhafi’s Libya so severe that his followers have no choice but to turn on him for their own survival. However, if that indeed transpires it will be impossible for the West to justify this as being a humanitarian intervention.
It is no surprise that Gaddafi’s support has risen to such extreme levels, as this tends to be the case whenever a country is bombed and attacked by an outside imperial power. It is also no wonder that Gaddafi has such strong support among his people when one considers the human toll of fighting. Reports vary on the amount of deaths, both combatant and civilian, but in early June, the U.N. Human Rights Council mission to Tripoli reported that between 10-15,000 people have been killed in the fighting thus far. Reports of NATO strikes killing civilians do not help “win the hearts and minds” of Libyans, especially when one such strike killed over 85 innocent civilians, including 33 children. Also in June, the Italian Foreign Minister, following a NATO bombing of a house in Tripoli, declared, “NATO is endangering its credibility,” and in an extrapolation of how the West is losing the ‘propaganda war’, he stated, “We cannot continue our shortcomings in the way we communicate with the public, which doesn’t keep up with the daily propaganda of Gaddafi.”
‘Worthy’ vs. ‘Unworthy’ Victims: Are the Rebels Committing ‘Ethnic Cleansing’?
A typical propaganda tactic used by Western media, throughout the entire Cold War (and arguably much longer) is the notion of “worthy” and “unworthy” victims. In any conflict in which the Western world engages and seeks a particular outcome, the presentation to the public – (i.e., propaganda) – determines, by the very way in which it reports the conflict, who are the “good guys” and who are the “bad guys.” It is important for conflicts to be framed – from the view of the propagandist – in a black and white, simplified manner. Effective propaganda tends to play to the lowest common denominator. If everything is geared towards a very base, simplified audience, with minimal critical thinking and contemplation required, it tends to manifest those very sensibilities in the audience who consumes it. In short, by the very method of reporting, they create the audience they seek.
Make it simple to create a simple audience. Then, that which is contrary to the saturated and filtered version of ‘reality’ is simply rejected outright as lunacy, fantasy, conspiracy theory, or worse. It is rejected almost instinctively because it requires more effort to determine accuracy, to investigate claims, to understand much broader concepts and employ far more contemplation and thinking than is required by the propaganda system. It is not simply that the ‘truth’ itself is more complicated, which makes lies so appealing to the masses, but it is exactly because the method of investigating truth is far more complicated. Thus, setting back into the comforts of ‘simplicity’ (“let the TV tell me what to think”), is far more attractive an option than taking painstaking efforts to investigate and understand an issue.
Thus, in conflicts we come to the nomenclature of ‘worthy’ versus ‘unworthy’ victims. This allows the West – and the public especially – to “take sides” in a conflict before understanding the realities of the conflict itself. That way, intervention can be justified and assured. Strategy, more today than ever before, requires the need of an efficient, organized, and effective propaganda machine. In Israel-Palestine, Israeli citizens and even soldiers (within the Occupied Territories) are deemed as ‘worthy victims’, while Palestinians are deemed ‘unworthy’ victims. When an Israeli dies, whether a civilian or soldier, the media ensures that the ‘consumer’ knows the names, is exposed to the families, learns the ambitions and dreams of the victims. When Palestinians die, however, they become – if at all even reported – mere statistics, and more often than not, they are blamed for their own deaths, vilified and generally dehumanized. The Palestinians are the ‘unworthy’ victims.
In Libya, it is apparent that the rebels are ‘worthy victims’, while the majority of civilians, (as roughly 85% support Gaddafi) are deemed ‘unworthy’ victims. The deaths of rebels are often hyped and exaggerated; others are denied, underplayed, justified, or simply not covered at all.
The best example of this in the current conflict is the rebels themselves committing atrocities, particularly against black African migrants in Libya. In this scenario, rebels remain the ‘worthy’ victims, and the black Africans ‘unworthy.’ This disparity is increased in that the deaths of black Africans were not only largely ignored, but they were first demonized, and thus their deaths became justified. This was the basis for the propaganda rhetoric regarding Gaddafi’s “African mercenaries.” These stories proliferated through the Western media ad nauseum and largely unquestioned; they were accepted at face value. As an Amnesty International investigation revealed, the stories of African mercenaries massacring rebels for Gaddafi emerged largely from the rebels themselves, and as it turned out, was false.
A Google search of “African mercenaries” and “Libya” from February 15 (when the rebellion began) to March 30, less than two weeks following the NATO ‘intervention’, turned up over 86,000 matches. As it turned out, the “mercenaries” were in fact African migrants working in Libya. A Google search over the same period (Feb. 15 – March 30), but with the terms “African migrants” and “Libya” revealed just under 48,000 results. Yet, from as early as February, African migrants reported that, “they’ve become targets for Libyans who are enraged that African mercenaries are fighting on behalf of the regime.” The migrants work in Libya’s oil industry and certain other sectors. It was the reports of African mercenaries – which later turned out to be false – that induced the violence against African migrants, instead of simply justifying them. The Deputy Director of the North Africa Center at Cambridge University stated in late February, in an interview with NPR, “I tell you, these people, because of their skin, they will be slaughtered in Libya. There is so much anger there against those mercenaries, which suddenly sprung up. I think it is urgent to do something about it now, otherwise, a genocide [could occur] against anyone who has black skin and who doesn’t speak perfect Arabic.”
Al-Jazeera reported in late February that dozens of black Africans were killed, with hundreds more in hiding, as “anti-government protesters” (read: ‘worthy victims’) “hunt down” the “black African mercenaries” (read: ‘unworthy victims’). Migrants fleeing the violence who returned to their home countries were interviewed, and reported that, “We were being attacked by local people who said that we were mercenaries killing people. Let me say that they did not want to see black people.” Further, one witness reported, “Our camp was burnt down, and we were assisted by the Kenyan embassy and our company to get to the airport.” A Senior Fellow with the International Migration Institute posed the question:
But why is nobody concerned about the plight of sub-Saharan African migrants in Libya? As victims of racism and ruthless exploitation, they are Libya’s most vulnerable immigrant population, and their home country governments do not give them any support.
These cases were rarely reported in Western media, however, African media sources reported much more diligently on these events, as they were more directly effecting their own citizens; thus, the victims are those who may deemed – in the African media – as ‘worthy victims.’ Thus, the coverage was much more extensive. One African media outlet reported in early March, that “rebel fighters and their supporters in eastern Libya are detaining, beating and intimidating African immigrants and black Libyans, accusing them of being African mercenaries.” In some instances, “rebels have executed suspected mercenaries captured in battle, according to Human Rights Watch and local Libyans.” Even the rebel-led government “concedes it is rounding up suspects and detaining them for questioning.” Not only is it African migrants who were in danger, but regular black Libyans as well, as in some cases rebels had lynched black Africans, claiming they were mercenaries. Human Rights Watch referred to the assault against black Libyans as “widespread and systematic attacks… by rebels and their supporters.” A Human Rights Watch official explained, “thousands of Africans have come under attack and lost their homes and possessions during the recent fighting,” and referred to the rebels (who are, in our media mostly referred to as ‘pro-democracy’ protesters) as “ad hoc military and security forces.”
Another report explained that the assaults against blacks have “revived a deep-rooted racism between Arabs and black Africans” in Libya, as “discrimination is common not only against migrant Black Africans, but also against darker-skinned Libyans, especially from the south of the country.” The Executive Director of the Afro-Middle East Centre in South Africa told IPS in late March, “Against this background, one needs to be a little wary of the accusations of ‘African mercenaries’ or even ‘Black African mercenaries’ that have been bandied around.” Further, he reported that, “about one and a half million Sub-Saharan African migrants and refugees, out of a population of nearly two to two and a half million migrants, work as cheap labour in Libya’s oil industry, agriculture, construction and other service sectors.” As it turned out, “this is not the first time Libya’s most vulnerable immigrant population has fallen victim to racist attack,” as in 2000, “dozens of migrant workers from Ghana, Cameroon, Sudan, Niger, Burkina Faso, Chad and Nigeria were targeted during street killings in the wake of government officials blaming them for rising crime, disease and drug trafficking.”
One apparent victim of these assaults told media that, “I bet you many Ghanaians and Nigerians and other nationals of south of the Sahara have been killed and murdered,” and further, “they put the dead bodies in mass graves, while they still pursued others. Sometimes we had to dig deep and wide holes to hide ourselves for fear of being identified by the opposition forces.” By early March, there were reports of hundreds of black Africans from over a dozen countries who landed at Nairobi Airport after fleeing Libya by plane, and were arriving “with horrific tales of violence.” Even in early March, Human Rights Watch told the Sydney-Morning Herald that they were “yet to confirm a single case of a mercenary being used in the conflict.” Even as reports spread out regarding Gaddafi’s “African mercenaries,” Human Rights Watch stated that, “of the hundreds of suspected mercenaries detained in the east, all had turned out to be innocent workers or Libyans in the regular army.”
The most high-profile coverage in the West perhaps came from the Los Angeles Times, in which the reporter had been led by the rebels to view some of their captured “mercenaries,” and the reporter wrote that the so-called mercenaries told the media, “We are construction workers,” as they pleaded their innocence, and then “the interview was abruptly ended and the group of Africans were led away to detention by Muhammed Bala, who described himself as a security officer for the rebel government.” Bala added, “We’re out looking for mercenaries every day.”
Some reports in late March suggested that black Africans had been “slaughtered in the thousands in the ongoing civil war in Libya.” As the rebels claimed that Gaddafi’s forces were engaging in mass rape, other reports (otherwise unconfirmed) reported that the rebels were themselves, were starting “to detain, insult, rape and even executing black immigrants, students and refugees,” stating that more than 100 Africans were killed by early March, and “some of them were led into the desert and stabbed to death,” while other “black Libyan men receiving medical care in hospitals in Benghazi were reportedly abducted by armed rebels.” Further, there were “more than 200 African immigrants held in secret locations by the rebels.” As the Somaliland Press reported in early March, the attacks reflect racist and xenophobic attitudes among many Arabs in Libya (specifically the east, where the rebels were largely based), some of which was a result of Gaddafi’s ‘pan-Africanist’ views, which many Arabs felt betrayed by:
In many situations, Gaddafi and his inner circle preferred black Africans and Libyans from the south over Libyans from the east. Now the angry mobs using the revolutionary movement across Arabia and North Africa are hunting down black people.
Mohamed Abdillahi, Somaliland, 25, was sleeping at his home in Zouara, when the mobs arrived. “They knocked on the door around 1 o’clock in the morning. They said get out, we’ll kill you, you are blacks, foreigners, clear.”
The testimonials are very similar among the thousands of Africans that saw the ugly side of Libya in the past weeks. “They have attacked us, they took everything from us,” said Ali Farah, Somali labourer 29 years…
Many of the fleeing Africans are terrified to tell their stories. At the checkpoint, they do not mingle with others. When asked about their ordeal, they just freeze, “they stopped us many times and said not tell what has happened here, say there are no problems,” Elias Nour from Ethiopia said.
Of all the publications, the Wall Street Journal reported in late June that within the rebel-held city of Misrata, black Libyans were being targeted by the rebels who were ethnically cleansing Misrata of its black population. Espousing the lies that the black Libyans from Tawergha, a small mostly black town 25 miles south of Misrata, were being used as mercenaries, this galvanized the rebels and their supporters against them, referring to them as “traitors.” Prior to the siege of Misrata, roughly four-fifths of the population in the poor housing project of Misrata’s Ghoushi neighbourhood were black Tawergha natives. Now, reported the WSJ, “they are gone or in hiding, fearing revenge attacks by Misratans, amid reports of bounties for their capture.” The rebel leadership in Benghazi reportedly stated that they were working on a “post-Gadhafi reconciliation plan,” yet claim that, “Libya is one tribe.” Some were calling for the expulsion of the Tawerghans from the area, and one rebel commander said, “They should pack up… Tawergha no longer exists, only Misrata.” As further evidence of the increasingly ethnically focused rebel leadership, some “rebel leaders are also calling for drastic measures like banning Tawergha natives from ever working, living or sending their children to schools in Misrata.” One rebel slogan that has appeared on the road between Misrata and Tawergha refers to the rebels as “the brigade for purging slaves, black skin.”
It is thus a very legitimate concern that if the rebels take power in Libya, they may undertake an “ethnic cleansing” of Libya in order to eliminate threats to their power (as the black Libyans by and large are supportive of Gaddafi), as well as to have a convenient scapegoat target population upon whom they can place blame for all the ills that a post-Gaddafi Libya would surely face. Scapegoats are always necessary for leaders that seek to centralize their power and brutally enforce their rule. Totalitarian leaders throughout history have always employed such a tactic. The possibility of a rebel-led government committing ethnic cleansing in Libya is, I think, an imminent and extremely likely possibility.
By mid-March, the United Nations reported that black migrants were fleeing Libya at a rate of about 6,000 a day, while “some 280,000 have already escaped to neighboring states.” As one report in Uganda articulated, a major concern for European nations (who are actively engaged in the NATO assault) was in the possible exodus of black Africans into Europe, as Libya is one of the main routes for African immigrants into Western Europe, a major source of internal social stratification, xenophobia, racism, and political pressure. Thus, if Libya collapsed into a “state of lawlessness,” it could become a major problem for Western Europe. As one BBC reporter stated, “The fear with Libya is that sub-Saharan Africans will try to leave and there are more of them.” The Ugandan Independent reported that following the stories in the Western press about the “African immigrant” came the stories about the “African mercenary.”
In fact, the West European media did prominently feature stories about the impending ‘threat’ of a wave of African immigrants into their countries. An article in the major German publication, Der Spiegel, in late February reported that, “Moammar Gadhafi, in recent years, has enjoyed a cynical role as Europe’s border guard against African immigrants. Italian ministers now warn that if his Libyan government collapses, people will flow across the Mediterranean.” Italy’s Interior Minister, ahead of an EU summit in Brussels, warned that, “hundreds of thousands of immigrants could head for Europe” which would create a “catastrophic humanitarian emergency.” While immediately fearing a wave of immigrants due to “violence that Moammar Gadhafi’s regime has reportedly visited on its own people.” But, according to some observers, “if Libya collapses into anarchy… it could become an immigration route for far more people from sub-Saharan Africa.” Der Spiegel reported:
Gadhafi in recent years has played up his role as a bulwark against African immigrants to Europe. Italy and Libya began joint naval patrols in 2008 to stop boatloads of illegal or trafficked immigrants from crossing the Mediterranean, and last year Libya signed a 50 billion euro deal with the European Union to manage its borders as a “transit country” for sub-Saharan Africans.
Italian Foreign Minister Frattini said that some 2.5 million people in Libya — about a third of the population — are non-Libyan immigrants who would flee if the government fell.
Gadhafi himself has enjoyed stoking these fears. “Europe will become black,” he said last December, if European leaders failed to cooperate with him on immigration controls.
The fear of a wave of African immigrants into Europe was a major topic of discussion at the EU summit in Brussels in February, according to the Financial Times. EU ministers heard that, “the collapse of Colonel Gaddafi’s regime could result in a tidal wave of refugees and illegal immigrants pouring into Europe,” as roughly 1-2 million refugees “could attempt to make their way across the Mediterranean into southern Europe if the Gaddafi regime collapses.” The Italian Foreign Minister told the members at the EU summit:
We are following very closely the situation. Italy as you know is the closest neighbour, both of Tunisia and Libya, so we are extremely concerned about the repercussions on the migratory situation in the southern Mediterranean… We need a European comprehensive action plan. We should support all peaceful transitional processes that are ongoing in the Middle East while avoiding a patronising position.
The Minister further warned that, the collapse of the regime would lead to the “self proclamation of the so-called Islamic emirate of Benghazi.” He added: “I’m very concerned about the idea of dividing Libya in two, in Cyrenaica and in Tripoli. That would be really dangerous. Can you imagine having an Islamic Arab emirate on the borders of Europe? This would be a really serious threat.” The Czech Foreign Minister echoed this fear, warning that the fall of Gadhaffi could pave the way for “bigger catastrophes.”
The rebels are aided in their war – which is largely a “propaganda war” – by an American public relations firm “to help them earn recognition from the U.S. government.” The firm – the Harbour Group – in early April “signed a pro-bono contract with the National Transitional Council.” Pro-bono? Since when do public relations firms do charity work? In an article in the Hill, it was reported that Harbour Group “will be working with the council’s U.S. representative, Ali Aujali, who resigned as Libya’s ambassador to the U.S. in protest in February as the revolution began to hold.” The Harbour Group’s Managing Director Richard Mintz “will help manage the PR effort on behalf of the council.” Mintz told The Hill, “It’s the right thing to do. They need help and we are pleased that we are able to do that. It is in the U.S.’s interest, in the world’s interest.” Part of the firm’s work was to be aimed at gaining U.S. recognition of the TNC as the “legitimate” government in Libya, while “other goals for the Harbour Group are to encourage U.S. humanitarian aid to Libya and to push for the release of Gadhafi’s assets frozen by U.S. financial institutions to help pay for that aid.” The article went on:
To achieve those goals, the firm will help prepare speeches, press releases and op-eds, contact reporters and think tanks and develop a website and social media for the council.
According to the contract, the firm “will provide all of its professional services free of charge to the council,” though the council will be “directly responsible” for “major expenses,” such as Web design and travel.
The Harbour Group is plugged in politically — Mintz is a former director of public affairs for the Clinton administration’s Transportation Department — and is already familiar with the Middle East. The firm is helping to implement “a public diplomacy program” on behalf of the Embassy of the United Arab Emirates, according to Justice records.
In early July, Patton Boggs, the number one lobby firm in the United States, was hired by the rebels to promote their cause in the U.S., to get America to recognize the TNC as the “legitimate government” in Libya, as well as to unfreeze Libya’s assets in order to provide funds for them. One outside counsel at Patton Boggs stated, “We care about the cause… We want the Transitional National Council to succeed on behalf of all the Libyan people… We are proud that they selected us in assisting them and we hope that we can continue being effective for them.” According to an article in The Hill, a Washington-D.C. paper, “Thomas Hale Boggs Jr., a partner at the firm who is one of Washington’s top lobbyists, will be leading the Libya account.” Boggs wrote that, “We understand that at this time the [Transitional National] Council may not have sufficient funds to pay our fees for these important services… We will charge the Council on an hourly basis for our work, according to our customary hourly billable rates… [and] will not seek payment for these funds and costs until the Council obtains sufficient funds to pay for them.” Further:
Two lobbyists at Patton Boggs, Stephen McHale and Vincent Frillici, have filed so far to lobby on behalf of the council. Frillici previously served as the director of operations at NATO for the 50th Anniversary Host Committee and was deputy director of finance operations for the Democratic National Convention in 1996. McHale served as the first deputy administrator of the Transportation Security Administration and helped merge the administration into the Homeland Security Department.
Robert Kapla, who has represented foreign governments in the past, and Matthew Oresman, formerly a law clerk within the State Department and the Senate Judiciary Committee, will also work for the council…
Announcing recognition of the Libyan council would cut Gadhafi off from any legal legitimacy, allow the rebels access to funding to help the Libyan people and announce to the international community that only the rebels have the right to “transfer the country’s natural resources,” [Patton Boggs counsel David]Tafuri wrote in a Washington Post editorial.
The notion that a rag-tag group of rebels fighting a war in a far-off foreign nation know exactly who the best lobbying firm and one of the best PR firms in Washington, D.C. are is hard to believe. The decision to contact these firms, then, was likely suggested by an American voice. As reported, the point man of contact between both firms and the rebels is Ali Aujali, the former Libyan Ambassador to the United States, who clearly still maintains his close ties to Washington.
Sure enough, in July the United States recognized the rebels as the “legitimate” government in Libya. And now in August, there are major pushes for Libya’s frozen assets to be unfrozen for the new rebel government.
Could Libya Collapse?
Naturally, to prevent such a “catastrophe” as a “tidal wave” of African immigrants, the Europeans – who are now fully involved in the Libyan war – will need to push for an occupation of Libya. While most ad-hoc coalitions try to maintain some vestiges of unity until their initial objectives (overthrowing the state) are achieved, the Libyan rebels have already descended into infighting and murder. In late July, members of the rebel armed forces killed the commander of the armed forces, Abdel Fatah Younis, who was a former Libyan government official who defected to the rebels in the early days of protests.
This event “triggered fears that opposition fighters battling to oust Col Muammar Gaddafi could instead turn their weapons on each other.” When news spread, many units who were loyal to Younis abandoned their front line posts at the oil town of Brega, and poured into Benghazi “to avenge their commander’s death.” The TNC attempted to blame the murder on pro-Gaddafi loyalists, but his supporters believed he was killed by “his rivals within the rebel leadership.” Some of the supporters even fired on the hotel in Benghazi which the TNC leader and a favourite of the U.S., Abdul-Jalil, earlier gave a press conference. The General, when he was killed, was headed to defend himself in front of four rebel judges who were questioning “illicit contacts he may have had with the Gaddafi regime,” which were instigated when the Daily Telegraph reported that he was “the regime’s main point of contact with the rebels.” As another Telegraph article revealed, “Gen Younes was also engaged in a very public feud with the rebels’ most celebrated battlefield commander, Khalifa Hifter,” which “was seen as an important factor in the pervasive chaos along the front line as the two frequently countermanded one another’s orders.” Thus, the elimination of the General could possibly allow for “greater cohesion” among the rebels on the front lines. Unreported in that article, however, was the previously revealed fact that Khalifa Hifter, the man who profits most from the assassination, also has a long history of working with the CIA.
Yet, it would still appear inevitable, with remaining divisions among the rebels and competing and contradictory ideas of what a post-Gaddafi Libya would be like, infighting will continue and likely accelerate. There is the possibility of a scenario in which one faction, and most likely the most militant and well-quipped faction (being the Islamist, al-Qaeda-linked faction run by a CIA-operative), simply purges the rebels entirely of competing visions. This assassination could have been the start of that effort already, and even a warning to potential challengers. Regardless of the specifics, the Libyan war is likely to plunge into a total civil war, so the Western nations would perhaps be most interested in having a united, militant, and ruthless proxy army under one leadership and vision, not many. With such enormous support for Gaddafi remaining in the country, and in fact, accelerating as the NATO bombings and rebel attacks continue, a rapid overthrowing of the Gaddafi government would certainly spark major national unrest far more severe than at present. In such a power vacuum, the Western powers certainly want to ensure the group they backed will be the winning horse on the way to fill the empty seat of power.
Western government have recognized the TNC as the “legitimate” government of the Libyan people, while the Libyan people – to the tune of 85% – largely support Gaddafi. So, in the face of such enormous opposition, this ‘horse’ in the race would by necessity have to be brutal, exacting, precise, and ruthless. If they do not seize power instantly, and establish a firm control over the country, it would be likely that the nation would plunge into a vicious civil war. Further, if Gaddafi supporters quickly regain the seat of power, Western powers may seek to stoke and actively create the conditions for civil war. It is arguable that they are attempting to do this already. In such a case, it would – from the imperial perspective – be better to ‘divide’ the people among each other, and ‘rule’ over them as a justification for maintaining ‘order.’ In this instance, using recent precedents of the past decades – two conflicts which Western powers claim they “don’t” want Libya to turn into – Rwanda and Iraq, became likely outcomes. Either a situation in which a Western-supported rebel army rushes to power amid a massive wave of carnage and establishes a strong dictatorship, ultimately resulting in the ‘cleansing’ of opponents to the potential of genocide (such as with U.S. support for the RPF in Rwanda). Or, there could be an attempt to establish a liberal democratic government, with a mix of rebels and former government officials, yet dividing power among ethnic or tribal lines, further inflaming those very divisions, and possibly resulting in a total civil war (such as in Iraq). Further, if pro-Gaddafi supporters re-take power quickly and effectively, the rebels would likely go underground and attempt a more insurgent war, attempting to plunge the country into a civil war. The dismantling of Yugoslavia also presents a telling example. In this case, ethnic or tribal rivalries are inflamed, al-Qaeda-linked radical sects are actively armed and aided; these groups engage in ethnic cleansing and a territorial war, with the country ultimately breaking up into several small and easily manageable parts. In whichever case, the potential for Western troops on the ground in Libya is a stark reality.
The Occupation of Libya
In late August, Libyan rebels rapidly advanced on Tripoli, preceded by a massive NATO bombardment of the city. The operation – Mermaid Dawn – was planned weeks in advance by the rebels and NATO. As the Guardian reported: “British military and civilian advisers, including special forces troops, along with those from France, Italy and Qatar, have spent months with rebel fighters, giving them key, up-to-date intelligence,” though the article then claimed that they were also “watching out for any al-Qaida elements trying to infiltrate the rebellion,” ignoring, of course, that we have long been supporting the ‘infiltrated’ elements. One of the rebel organizers of the operation said, “Honestly, Nato played a very big role in liberating Tripoli. They bombed all the main locations that we couldn’t handle with our light weapons.” While “sleeper cells rose up and rebel soldiers advanced on the city, Nato launched targeted bombings,” and American hunter-killer drones were also used in the attacks. According to a NATO diplomat, “Covert special forces teams from Qatar, France, Britain and some east European states provided critical assistance, such as logisticians, forward air controllers for the rebel army, as well as damage-assessment analysts and other experts.” Foreign military advisers were on the ground providing “real-time intelligence to the rebels,” or in other words, ‘directing’ the rebels. Apparently, Gaddafi aides attempted to communicate with Obama administration officials, including the Ambassador and Jeffrey Feltman, the Assistant Secretary of State, in order to “broker a truce.” Yet, reported the Guardian, “the calls were not taken seriously.” NATO warplanes bombed convoys of Libyan troops as they sought to re-take rebel advances within Tripoli and elsewhere, and further, NATO undertook “bombing raids on bunkers set up in civilian buildings in Tripoli.” The article continued:
The western advisers are expected to remain in Libya, advising on how to maintain law and order on the streets, and on civil administration, following Gaddafi’s downfall. They have learned the lessons of Iraq, when the US got rid of all prominent officials who had been members of Saddam Hussein’s Ba’ath party and dissolved the Iraqi army and security forces.
The rebels who helped in planning the operation had hoped that an invasion of Tripoli would have sparked an uprising among the people, joining with the rebels against Gaddafi, clearly indicating their own ignorance of the support for Gaddafi within Libya and especially Tripoli. The New York Times, explaining why the mass popular uprising never took place, claimed that it was a result of “a bloody crackdown on protesters in February by Colonel Qaddafi’s forces [which] had served as a grim deterrent to those inside Tripoli who might try to challenge the government’s authority.” Naturally, the New York Times failed to report, as Amnesty International confirmed, that those reports were largely exaggerated, and there were deaths on both sides, indicating that the “peaceful protesters” had – at least a few – fighters among them.
With British and French Special Forces troops on the ground alongside CIA operatives, NATO was integral in launching this “pincer” campaign in Libya, often bombing government troops in retreat. Britain played a strong role with both military and intelligence officials – Special Forces and MI6 – in planning and coordinating the assault on Tripoli. As the Telegraph reported, “MI6 officers based in the rebel stronghold of Benghazi had honed battle plans drawn up by Libya’s Transitional National Council (TNC) which were agreed 10 weeks ago,” while “the RAF stepped up raids on Tripoli on Saturday morning [August 20] in a pre-arranged plan to pave the way for the rebel advance.” Before the official rebel attack even began, the RAF bombed a key communications facility in Tripoli “as part of the agreed battle plan.” It is likely that in a rebel government, two prominent factions, that which is composed of the former Libyan National Army, founded and now currently run by Khalifa Hafter, a CIA asset; and the Islamist al-Qaeda linked Libyan Islamic Fighting Group (LIFG), both of which are currently supported through the TNC by the CIA, MI6, and NATO military structures.
So while it is clear that not only are NATO forces already in Libya, but they are in fact directing the operations of rebel forces, far beyond the mandate from the United Nations to simply “protect civilians.” But then, that wasn’t the point of the war.
Even as the rebels continue to fight in Tripoli, Western media has jubilantly and prematurely declared a victory for the rebels and for NATO. The Washington Post reported that the ‘lesson of Libya’ was that, “limited intervention can work.” But then, this is no surprise from the Post, considering that one of their editors had previously said, “We are inevitably the mouthpiece for whatever administration is in power.” As the rebels were far from victorious – though victory had already been declared – the media engaged in a ‘discussion’ of “post-Gaddafi Libya.” Meanwhile, fighting continued in the streets of Tripoli, as one resident told the Independent, “The rebels are attacking our homes. This should not be happening,” and further:
The rebels are saying they are fighting government troops here, but all those getting hurt are ordinary people, the only buildings being damaged are those of local people. There has also been looting by the rebels, they have gone into houses to search for people and taken away things. Why are they doing this? They should be looking for Gaddafi, he is not here.
While British SAS Special Forces were on the ground in Libya helping to hunt down Gaddafi, the British Foreign Secretary declared that, “Gaddafi must accept defeat,” and President Sarkozy of France said, “Gaddafi’s time has run out.” Average Libyans in Tripoli were nervous with the celebratory rebels, claiming, “The situation here reminds me of Iraq in 2003,” and that, “We don’t know who has entered the city. We don’t know anything about the people who will rule this country, about their mentality.” As one resident explained to the Independent:
The past 42 years we knew everything about the country: our people, our politics, everything. Now we don’t know anything about the future. We are afraid of the end of this, that Gaddafi will use chemical weapons, that there will be a massacre. I am afraid of both sides – of the rebels and of Gaddafi… We have no safety in this city. Now most of the people in this area have left. There are no families in the building now, just the young men.
Robert Fisk, writing in the Independent, drew several parallels between Libya and Iraq, such as the fact when the Americans took Baghdad, Saddam fled underground promising to fight to the death, as Gaddafi just did. Further, as the U.S. was faced with the birth of the Iraqi insurgency in 2003, officials and media pundits alike claimed that the insurgents were “die-hards” who apparently “didn’t realise that the war was over.” As Fisk observed, already a pundit on SkyNews in Britain had claimed the remaining fighters were “die-hards.” Fisk repudiates the notion, as repeated throughout the media and by Western officials, that it is now “up to the Libyans,” as amidst “the massive presence of Western diplomats, oil-mogul representatives, highly paid Western mercenaries and shady British and French servicemen – all pretending to be ‘advisers’ rather than participants – is the Benghazi Green Zone.” Fisk explained:
Of course, this war is not the same as our perverted invasion of Iraq. Saddam’s capture only provoked the resistance to infinitely more attacks on Western troops – because those who had declined to take part in the insurgency for fear that the Americans would put Saddam back in charge of Iraq now had no such inhibitions. But Gaddafi’s arrest along with Saif’s would undoubtedly hasten the end of pro-Gaddafi resistance to the rebels. The West’s real fear – right now, and this could change overnight – should be the possibility that the author of the Green Book [Gaddafi] has made it safely through to his old stomping ground in Sirte, where tribal loyalty might prove stronger than fear of a Nato-backed Libyan force.
Sirte, Fisk elaborated, is an oil rich region with a strongly pro-Gaddafi populace. It was in Sirte where the rebels were defeated by the loyalists in the current war. However, as Fisk opined, “we shall soon, no doubt, have to swap these preposterous labels – when those who support the pro-Western Transitional National Council will have to be called loyalists, and pro-Gaddafi rebels turn into the ‘terrorists’ who may attack our new Western-friendly Libyan administration.”
NATO officials stated that the alliance “will not put troops on the ground,” ignoring the fact that already there are special forces and intelligence operatives on the ground who have been there for several months since even before the war broke out. Though, NATO officials claimed that if any organization sends in troops, it would be the UN, with one official commenting, “It is a classic case for blue helmets,” and that, “Nato will help the UN if asked.” The Western “advisers,” according to NATO officials, “are expected to remain in Libya, advising on how to maintain law and order on the streets, and on civil administration, following Gaddafi’s downfall.”
The Telegraph reported that, “Britain is preparing to send a team to Tripoli to help with a key plan to stabilise Libya after the fall of the Gaddafi regime and prevent any repeat of the chaos seen in post-war Iraq.” Thus, the Western nations are engaging in double-speak, whereby they claim that no boots will be put on the ground, yet simultaneously send boots onto the ground. The trick, however, is in calling these boots “advisers.” This has been a common tactic for decades, as even before the escalation of the Vietnam War, President Kennedy, and Eisenhower before him, had sent “advisers” to Vietnam, which slowly, and inevitably became a massive occupying force. The British plan, which has already begun in effect, “included contacting officials in ministries in Libya by mobile phone to try to persuade them not to abandon their posts.” The British “stabilisation response team” has been sent to Libya by the Foreign Office, Department for International Development and the Ministry of Defence. The Development Secretary stated, “It has been clear that we needed to learn the lessons of Iraq and plan for stabilisation and that that needed to take place in an organised and timely way.” Yet, in the same breath – and in the usual double-speak – he claimed, “It was equally clear that the process had to be Libyan led and owned.” The EU also offered to send “experts” to Tripoli “at any minute.” Libyan government officials have been and continue to be contacted “to let them let them know that they could stay in place under the new regime,” which Western officials proclaim is a lesson they learned from Iraq, where they had simply purged the former Ba’athist regime of Saddam Hussein and dismantled the army, adding to the chaos and crisis of post-Saddam Iraq. Commenting on this, the Development Secretary stated, “if you can get hold of the chief of police and tell him, ‘You’ve got a job, don’t take to the hills, and you will get paid,’ we can avoid that.” Another aspect of the plan includes unfreezing Libya’s assets around the world to give them to the new provisional government of the TNC.
The plans for the latest assault were organized far in advance. As Debkafile, an Israeli publication, revealed, they were established back in July between the US and France, as they were organizing plans for managing the Israel-Palestine issue:
According to the US-French plan, [an agreement] will take place shortly after the Libyan war is brought to a close – ideally by a four-way accord between the US, France, Muammar Qaddafi and the Libyan rebels or, failing agreement, by a crushing NATO military blow in which the United States will also take part. The proposed accord would be based on Muammar Qaddafi’s departure and the establishment of a power-sharing transitional administration in Tripoli between the incumbent government and rebel leaders.
As recently as April, the EU said that they had a ‘ready’ force of 1,000 soldiers poised to be sent in to Libya in case they were needed. The Guardian reported that the EU “has drawn up a ‘concept of operations’ for the deployment of military forces in Libya, but needs UN approval for what would be the riskiest and most controversial mission undertaken by Brussels.” Purportedly, the combat troops would not be engaged in a combat role but would be authorised to fight if they or their humanitarian wards were threatened.” As one EU official stated, “It would be to secure sea and land corridors inside the country.” Another EU official declared, “The operation is agreed. It’s ready to go when we get the nod from the UN.”
How to Get NATO Support: Die and Lie
However, if the EU, NATO, or the UN were to deploy troops into Libya, it would need to be under the guise of providing “peacekeeping” or other “aid” support. Thus, it would only be possible to do so in the event that Libya collapses into chaos, whether there be mass killings, genocide, or civil war. In such a situation, one is reminded of the events surrounding the ‘Srebrenica massacre’ in Bosnia in 1995.
The official account was that roughly 8,000 Bosnian Muslims were killed by Serb aggressors, thus justifying a NATO intervention. The reality, however, was that the Bosnian Muslims had been struggling for years to “persuade the NATO powers to intervene more forcibly on their behalf,” writes Edward Herman. In fact: “Bosnian Muslim officials have claimed that their leader, Alija Izetbegovic, told them that [Bill] Clinton had advised him that U.S. intervention would only occur if the Serbs killed at least 5000 at Srebrenica.” As a result of Clinton’s statement, the town was sacrificed by the Bosnian Muslims, and the propagated claim was that the Serbs had gone in and killed 8,000 Bosnian Muslims, thus justifying the NATO intervention in Bosnia. However, not only did the Bosnians sacrifice the town, but the numbers themselves were subject to much manipulation, and the facts of the circumstances surrounding the event were ignored by the media. The Croatians, along with Madeleine Albright and Bill Clinton, were delighted at the reporting of the ‘massacre,’ as for the Croats, explained Herman:
this deflected attention from their prior devastating ethnic cleansing of Serbs and Bosnian Muslims in Western Bosnia (almost entirely ignored by the Western media), and it provided a cover for their already planned removal of several hundred thousand Serbs from the Krajina area in Croatia. This massive ethnic cleansing operation was carried out with U.S. approval and logistical support within a month of the Srebrenica events, and it may well have involved the killing of more Serbian civilians than Bosnian Muslim civilians killed in the Srebrenica area in July: most of the Bosnian Muslim victims were fighters, not civilians, as the Bosnian Serbs bused the Srebrenica women and children to safety.
In short, NATO (and Bill Clinton in particular) told the Bosnian Muslims that at least 5,000 Muslims needed to die at the hands of the Serbs in order to justify an intervention and the continuing war against Serbs all across the former Yugoslavia. The fact that a number of 8,000 Muslims having been killed was (and remains) widely propagated, though widely inflated and unsubstantiated (save for the investigations into the manipulation of those numbers), was a ‘convenient’ event for NATO and the Bosnians. Also significant is the fact that such an event took place in the midst of massive ethnic cleansing of Serbs, largely ignored by the Western media, as it was committed by those who NATO were claiming to “save” from “Serbian aggression”; in particular, the Bosnian Muslims and Croatians. Some years later, Madeleine Albright, upon being told of another massacre which was good for U.S. interests, stated that, “spring has come early this year.” Of course, this is also the same woman who said that 500,000 dead Iraqi children (killed by the UN sanctions Albright helped impose and enforce during the Clinton administration) was “worth it.” So, it is safe to say that we can dispense with any claims of “humanitarian” concerns on the part of NATO leaders. Their interests are imperial. Their propaganda is humanitarian.
The same must be kept in mind about Libya, where we were told we went to “intervene” in order to “protect civilians.” Yet, immediately we began supporting what turned out to be a ruthless military outfit, including al-Qaeda-linked Islamists, who have concocted lies to justify their cause and foreign intervention, and who have been committing ethnic cleansing of black migrants and citizens in Libya. We call these people “pro-democracy” and claim that they represent a “popular uprising.”
The British government stated on 22 August that, “hundreds of British soldiers could be sent to Libya to serve as peacekeepers if the country descends into chaos,” with two hundred troops on standby since the start of July, as well as 600 Royal Marines who “are also deployed in the Mediterranean and would be available to support humanitarian operations.”
The possibility of an invasion seems imminent, as even if the rebels take Tripoli and overthrow Gaddafi, since thereafter the real struggle would begin, and the rebel TNC would likely struggle to maintain unity and possibly engage in attempts to purge various factions from the leadership, as the assassination of the former army commander in late July indicated is already taking place. Uniting these factions remains one of the greatest challenges the rebels will face.
Military sources revealed to some alternative media the plans for the U.S. to occupy Libya with upwards of 30,000 soldiers by October. A Debkafile report from July indicates that Western leaders were actively planning for a military invasion and occupation of Libya, starting with the French and British and followed by American troops. In early July, the Russian envoy to NATO stated that, “I think that now we are witnessing the preparation stage of a ground operation which NATO, or at least some of its members… are ready to begin.”
The Barons of ‘Humanitarian Imperialism’
As the rebels entered the capital, the true nature and purpose of the war and “intervention” in Libya was made known, as Western oil companies made their intentions and interests public, and the rebel TNC established themselves as subservient to those very interests.
Gaddafi may have signed his own death warrant back in 2009, when his government gathered 15 executives from global oil and energy corporations and demanded that they foot the bill – to the tune of $1.5 billion – for Libya’s settlement with victims of the downed Pan Am Flight 103 (itself a very mysterious terrorist attack possibly tracing back to the CIA itself). Libya had been subjected to UN sanctions from 1992-2003 as punishment for the terrorist attack, though it has never been conclusively proven that Libya had any involvement. Gaddafi, for his part, was seeking to make those who profited off of his country’s wealth (foreign oil conglomerates) pay for the costs of their punishment, as the sanctions had largely affected the nation’s economy. Libyan officials warned the oil companies that if they did not comply, there would be “serious consequences” for their oil leases. In 2004, when trade restrictions were lifted with Libya, Gaddafi gave in to Western interests in the aftermath of the Iraq war, fearing that Libya would be next. As the trade barriers broke down, the U.S. Department of Commerce “began to serve as self-described matchmakers for American businesses,” as companies like Halliburton, Boeing, Raytheon, ConocoPhillips, Occidental, and Caterpillar tried to “gain footholds” in the country. However, there were several problems and corporate plundering was increasingly stalled. The Gaddafis often demanded the corporations plunder the nation in joint partnerships with state-owned (and Gaddafi family run) companies, which the foreign conglomerates resisted, in which the State Department tried to intervene (according to diplomatic cables), but often failed to come to an agreement. However, some companies such as Occidental Petroleum, Petro-Canada, and Canadian arms manufacturer, SNC-Lavalin made inroads into Libya.
In January of 2009, Gaddafi threatened that Libyan oil “maybe should be owned by national companies or the public sector at this point, in order to control the oil prices, the oil production or maybe to stop it.” Forbes magazine asked: “Is Libya about to take the lead of its friends in Venezuela and Russia and launch a new round of energy-sector nationalism?” Postulating on the answer, Forbes wrote: “The thought sends a shiver through the collective spines of ConocoPhillips, Marathon Oil, Occidental Petroleum, Amerada Hess, and Royal Dutch Shell. All have made massive new investments in Libya.” Libyan papers had all been discussing the possibility of nationalization.
Libya, as Africa’s largest oil producer, even far surpassing the proven reserves of Nigeria, would be an enormous loss to Western interests. In March of 2009, Libya was trying to convince three American oil companies operating in the country “to sign revised contracts giving the North African nation a greater share of its oil production.” Libya had already revised its contracts with Petro-Canada, ENI of Italy, and Repsol of Spain, as well as Occidental Petroleum in the U.S. It was seeking to revise its contracts with ConcocoPhillips, Amerada Hess, and Marathon Oil, all U.S. companies.
In March of 2010, Middle Eastern press reported that, “Libya is an economic force to be reckoned with,” as it challenged both Europe and America, and gave “a warning to US oil firms that their contracts are in danger.” Oil companies were finding it increasingly difficult to do business in Libya. As one oil industry expert reported, many companies are seeking an exit, “That’s partly because Libyan authorities have, over the past year, taken a very hard line on contract negotiations and renegotiations. A lot of companies developing oilfields are finding it incredibly difficult to make money.” Libya also expelled Swiss companies and even detained two Swiss businessmen after police in Geneva arrested one of Gaddafi’s sons. U.S. State Department spokesman Philip Crowley publicly derided Gaddafi, “which in turn provoked a warning from Libya that failure to apologise could hurt US oil companies.” Crowley, in a not-so-subtle display of who the State Department really works for, apologized. As one commentator from an American think tank explained, Libya’s use of oil as political leverage represents a new turn in the country’s leadership: “After decades in isolation, Libya’s oil reserves and a sovereign wealth fund worth around US$60 billion (Dh220bn) have given it unprecedented leverage with western governments.” Italy received roughly a quarter of its energy supplies from Libya, and many other Europeans hoped that Libya’s natural gas fields would free them from dependence upon Russia. One industry analyst explained, “Libya mostly gets its way because people are prepared to pay the price,” and that, “the future of new discoveries really boils down to a small number of companies – such as BP, Shell, ExxonMobil – which have massive exploration programmes going on for the next few years, and which could open new frontiers.” However, “for time being, oil companies are leaving rather than entering.” There was even a diplomatic row in November of 2010 when Libya expelled an American diplomat from the country “for breaching diplomatic rules.”
In October of 2010, U.S. oil companies Chevron and Occidental Petroleum did not extend their 5-year licenses with Libya, and instead left the country. The companies, among the first to rush to Libya following the lifting of international sanctions and formation of bilateral relations with the U.S. in 2004, established 5-year contracts with Libya in 2005. Libya, while home to Africa’s largest proven oil reserves, remained largely ‘under-explored’, and thus, unexploited.
Gaddafi’s Libya had many shady dealings with foreign (primarily British, but also French, Italian, and American) companies and individuals. Prime Minister Tony Blair had especially facilitated the emergence of prominent British industrial and financial interests into Libya, setting up meetings with top executives and Libyan officials, both while in office and after leaving. Blair and a former top MI6 official who joined BP, helped the oil conglomerate establish itself in Libya. Business and social relationships were also established between top British elites and Gaddafi’s family. Gaddafi’s son, Saif al-Islam, had a cozy relationship with British Business Secretary Lord Mandelson, and in 2009, both men were guests of Lord Jacob Rothschild’s at his villa in Corfu. Until 2009, Lord Rothschild was an adviser to the Libyan Investment Authority (LIA). Tony Blair, who after leaving office, took up a job at JP Morgan, continued to go to Libya as a representative of the bank, and Gaddafi’s son referred to Tony Blair as “a personal family friend.”
JP Morgan Chase reportedly, as of late January 2011, “handles much of the Libyan Investment Authority’s [LIA’s] cash, and some of the Libyan central bank’s reserves.” According to one Libyan financier, by the summer of 2008, “a great percentage of the L.I.A.’s funds were in the interbank money markets, channelled through the central bank. They have given mandates to some of the international banks to manage this liquidity,” such as JP Morgan Chase.
Within ten days of Britain’s sanctions on Libya having been lifted in 2004, a secret delegation of British officials had rushed to Libya to open the way for British business interests. Among the officials were Lord Foster of Thames Bank; Lord Guthrie of Craigiebank, the former Army Chief of Staff; and the financier Lord Rothschild, who brought his son Nathaniel, “and the party was accompanied by four executives from a public relations firm run by Lord Bell.” As reported by the Times, “At stake was access to oil and gas reserves and the opportunity to profit from the country’s $90 billion sovereign wealth fund, the Libyan Investment Authority.” Lord Rothschild became an adviser to the Libyan Investment Authority, until 2009.
As Tony Blair and his secret delegation went to Libya in 2004, their meeting with Gaddafi “led to lucrative Libyan oil contracts for Shell,” and “a month before stepping down as PM, Mr Blair visited-Colonel Gaddafi in Tripoli again at the same time that BP signed a $900million deal with the Libyan National Oil Company.” On behalf of JP Morgan, Blair helped develop banking opportunities in Libya. As the fighting broke out in February of 2011, Gaddafi’s “friends” in the West immediately turned their backs on him. A statement from Tony Blair’s office stated: “Tony Blair does not and has never had any sort of commercial relationship or any sort of advisory role with any member of the Gaddafi family, the government of Libya, the Libyan Investment Authority nor any Libyan companies.”
In early March, Britain (and several other nations, including the United States and Canada) froze Libya’s foreign assets in their countries, which had been managed by the Libyan Investment Authority. Over $3.2 billion in assets were frozen in London, and over $32 billion were frozen in the U.S. As the fighting began, the major Western oil conglomerates closed down their operations and fled.
Clearly, Gaddafi, after establishing significant ties with foreign elites, from JP Morgan, to Rothschild, to Prince Andrew of the British Royals and Tony Blair, made ‘friends’ of himself and his family to the dominant foreign financial and oil interests. When he began using Libya’s newfound oil wealth as a political tool, his “new friends” quickly became “old enemies.” These Western elites had helped Gaddafi gain access to Western markets and invest in their companies, while those companies tried to plunder the resources of Libya, as soon as Gaddafi felt secure enough, he began to use his new oil and financial leverage as a political tool. As this began, the West – and in particular the banking and oil elites – found Gaddafi to be much more of a liability than an asset. Now that Gaddafi is “gone,” the jubilation of Western conglomerates can barely be contained.
This is evident in the fact that as the rebels have gone into Libya, foreign oil conglomerates quickly followed behind. On 24 August 2011, the Independent reported that, “British businesses are scrambling to return to Libya in anticipation of the end to the country’s civil war,” yet, “they are concerned that European and North American rivals are already stealing a march as a new race to turn a profit out of the war-torn nation begins.” Thus, it is a new ‘scramble for Africa’ as the Western nations and corporations rush to plunder the country’s resources and wealth. British business leaders said that, “plans are in hand to send a trade mission to Benghazi to meet leaders of the Transitional National Council (TNC).” Among the stampeding oil conglomerates, there “is also intense lobbying for the multibillion-pound reconstruction contracts that are likely to be offered once fighting ends.”
Even as the rebels had not taken Tripoli, reported the Globe and Mail, “already the leaders of France and Italy, and their national oil champions, were openly courting the top men of the rebels’ National Transitional Council (NTC).” As for who will get to reap the rewards of Libya’s newly “liberated” oil, “the NTC has already said it will reward the countries that bombed Col. Gadhafi’s forces.” One rebel official stated, “We don’t have a problem with Western countries like Italians, French and U.K. companies,” however, he added, “we may have some political issues with Russia, China and Brazil.” These were, of course, the countries that did not back the strong sanctions on Gaddafi’s regime.
This is what we call “humanitarian intervention.” A situation in which we go to war against a foreign nation, based upon lies; in which we support – arm, organize, and lead – a militant rebel army; an army which has been committing atrocities, ethnic cleansing, and spreading lies and misinformation; in which we call these rebels ‘pro-democracy’ protesters; in which we call a group with less than 15% of the support of the people a “popular uprising”; in which we bomb innocent civilians to allow these rebels to move forward and occupy new territory; in which our oil companies move in to plunder the wealth of the most oil-rich country in Africa. This – this! – is what we call “humanitarian intervention.”
Our leaders do not care for human life. They care about power and profits. They will tell you anything you want to hear in order to justify their imperial conquests around the world. They will send you – most especially the poor ‘you’ – off to foreign countries in order to kill poor, foreign people. They will do this in order to obtain control over resources and strategic routes. One of America’s most pre-eminent imperial strategists, Zbigniew Brzezinski, wrote in his 1997 book, The Grand Chessboard, that America must maintain hegemony over the entire world, but – he wrote – “the pursuit of power is not a goal that commands popular passion, except in conditions of a sudden threat or challenge to the public’s sense of well-being.” In the same book, Brzezinski, in blunt language explained the purpose and role for America to play in the world:
To put it in a terminology that hearkens back to the more brutal age of ancient empires, the three imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together.
Brzezinski, incidentally, supported the military intervention in Libya, which he claimed is “something between war and military intervention, to stop something that is going on, but without really trying to conquer the country,” and that, “if we didn’t act it would be worse.”
Who are we really helping? Who are we really hurting? And why?
We must not support this cynical and disastrous conquest of “humanitarian imperialism,” whether it is in Libya, or perhaps – quite soon – in Syria. Wherever we “intervene,” we make everything much worse for that vast majority of the people involved. Where our nations go, they spread chaos, war, death, destruction and genocide. When our nations speak, they speak of hypocritical morality and paradoxical ethics. They speak with twisted tongues and poison words.
We must speak truth back. We must “intervene” in the discourse of the powerful around the world, in order to promote the true interests of humanity: freedom, peace, and solidarity. Only when we seek – and speak – truth, can we ever hope to meet the true ‘humanitarian’ needs of the world’s people.
Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is co-editor of the book, “The Global Economic Crisis: The Great Depression of the XXI Century.” His website is http://www.andrewgavinmarshall.com
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 African migrants targeted in Libya, Al-Jazeera, 28 February 2011:
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 Ibid, page 412.
 Ibid, page 411.
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 Hiram Reisner, Brzezinski: Libya Action Isn’t War, But Necessary Intervention, NewsMax, 24 March 2011: