War in Ukraine. Nato taboos fall
by R Bathon, H Neuber, P Fess & R Streck
This military-scientific glorification of a war that has long been hopeless for both sides, which is also supported by some media, leads to the postulation of the prospect of victory against one’s better judgment. What is meant, however, is more likely a victorious peace. A peace that can only lead to new wars that will possibly be even more catastrophic.
Financial warfare: debt system and dollar hegemony
by Philipp Fess
[This article posted on 12/15/2022 is translated from the German on the Internet, http://www.heise.de.]
Why reforming the World Bank and Monetary Fund suits the U.S., and why the label “development aid” hides imperial interests. Climate change colonialism? (Part 2).
Environmental protection and geopolitics have a closer relationship than is known to the general (and pro-climate) public. This is true not only of the “new Bretton Woods moment” announced at the COP27 climate conference in Egypt (see Part 1).
In 2010, the UK Guardian reported on leaked documents that revealed “how the US launched a secret global diplomatic offensive to break opposition to the controversial Copenhagen Accord.”
They had been published by WikiLeaks, the disclosure platform against whose founder Julian Assange the Central Intelligence Agency (CIA) was plotting assassinations. The “Copenhagen Cables” (=Depeschen) are one of many reasons.
Part 1: Climate finance: a “new Bretton Woods”.
After all, it was precisely that CIA on whose behalf the State Department obtained compromising information on diplomatic representatives within the United Nations (UN) who opposed the “fight against climate change” – even though the actual climate protectors saw nothing more than a rotten compromise in the Copenhagen Accord.
What is particularly interesting now is the form of persuasion that the U.S. used.
After all, the Copenhagen Accord pledged a total of $30 billion to the poorest nations, which were the worst hit by climate change. “So some countries needed little persuasion,” the Guardian concluded. And those who were skeptical because of previous broken promises were simply blackmailed. Sound adventurous? It isn’t.
For example, former EU Climate Change Commissioner, Connie Hedegaard, and former U.S. National Security Advisor (now U.S. Trade Representative), Michael Froman, considered “neutralizing, co-opting [“co-opt”], or marginalizing” uncooperative countries like Venezuela and Bolivia. Bolivia and Ecuador had their U.S. development aid cut off a few months later. Apparently, they did not want to be blackmailed.
Why this anecdote?
It shows that in the context of (supposed) environmental aid, the United States is willing to use its financial power as a weapon. The question is, what does this mean for “green” reform of the World Bank and International Monetary Fund (IMF)? After all, the “Bretton Woods institutions” have always been under massive U.S. influence.
World Bank, IMF and U.S. “unconventional warfare”.
Both UN specialized institutions are based in Washington. The World Bank is traditionally headed by a US-American (currently: David Malpass), the IMF by a representative of the EU (currently: Kristalina Georgieva). The IMF and World Bank were founded in 1944 at the Bretton Woods Conference in New Hampshire, USA.
The original purpose was to rebuild after World War II and stabilize the international monetary system to avoid devaluation struggles and prevent world economic crises such as the last experienced Great Depression of 1929.
In addition, the twin institutions were intended to combat poverty and income inequality – unofficially, they also served to ward off communist influence. Since the late 1960s, the focus has increasingly shifted from infrastructure projects to health, nutrition and family planning.
The World Bank Group consists of four sub-institutions with different tasks. Broadly speaking, the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) grant (long-term) loans, the International Finance Corporation (IFC) organizes cooperation with the private sector, and the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID) protect foreign capital investments.
The IMF, for its part, is supposed to guarantee monetary stability and remedy problems in the balance of payments, among other things through the notorious structural adjustment programs, in which loans are tied to (austerity) conditions. Because these usually have a very “market-oriented” character, critics speak of a “triad of privatization, deregulation, liberalization.” Now to the influence of the United States.
The United States holds the largest shares of more than 15 percent in each of the two UN specialized agencies (World Bank: 16.45, IMF: 17.43). Under the “one dollar, one vote” principle, the U.S. holds de facto veto power because “substantive” decisions must be made by a majority of 85 percent of member states.
Moreover, the Western alliance of the G10, including Ireland, Australia and Korea, together account for more than 50 percent of the votes. So with a little “persuasion,” the U.S. can bring all member countries in line.
In February 2019, the portal mintpressnews reported on another WikiLeaks document that – in more ways than one – holds a lot of explosive power. The document, called “Unconventional Warfare – Field Manual,” was reportedly released by Army Special Operations Forces (ARSOF) on Sept. 30. It states:
ARSOF may use financial power as a weapon in times of conflict up to and including large-scale general warfare. […]
Manipulation of U.S. financial power can influence the policies and cooperation of state governments. Financial incentives and disincentives can build and sustain international coalitions that conduct or support U.S. campaigns […]
Participation in international financial organizations such as the World Bank (WB), the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), and the Bank for International Settlements (BIS) provides diplomatic-financial opportunities for the United States to achieve such coalitions.
ARSOF: Unconventional Warfare – Field Manual.
The “Reform Dictatorship from Washington”
The possibilities of financial warfare outlined here are the specialty of U.S. economist Michael Hudson, whose contributions Telepolis has recently picked up on several times, whether in the discussion of the sabotage of NordStream II or the question of a new world order.
Hudson has published extensively on the influence of the U.S. on the World Bank and the IMF, with his 1972 work “Super Imperialism” gaining greater notoriety. It states:
Vis-à-vis debtor countries, U.S. diplomats, through the World Bank and IMF, enforce the Washington consensus and demand that debtors raise their interest rates to raise the money to pay foreign investors.
These unfortunate countries dutifully implement austerity programs to keep wages low, sell their public property to pay their foreign debts, deregulate their economies to allow foreign investors to privatize electricity, telephone services, and other national infrastructure previously offered at subsidized prices to fuel the growth of these economies.
Michael Hudson: Super Imperialism – The Economic Strategy of American Empire.
For a less scholarly but more autobiographically based assessment, see the book Confessions of an Economic Hitman (2004) by former energy company strategy consultant Chas. T. Main, John Perkins. The preface states:
As an EHM [=Economic Hit Man], John’s job was to convince Third World countries to take out huge loans for infrastructure development – loans that were much larger than necessary – and to guarantee that the development projects were given to U.S. companies like Halliburton and Bechtel.
Once these countries were saddled with huge debts, the U.S. government and its allied international aid agencies were able to control these economies and ensure that oil and other resources were put at the service of global empire building.
John Perkins: Confessions of an Economic Hit Man
The neoliberal impetus of the Washington Consensus, the “reform dictatorship from Washington,” is now, and at least since the world financial crisis of 2007/2008, seen by many experts as outdated. Nevertheless, quite a few continue to see the key to reducing the structural weaknesses of the so-called developing countries in an “opening to the world market.”
In terms of imperialism, however, these demands miss the point. For the role of the United States is not limited to instrumentalizing the multilateral financial institutions.
Dollar imperialism and its impending end
Alex Gladstein, Chief Strategic Officer of the nongovernmental organization Human Rights Foundation (HFR) and ardent Bitcoin advocate, has spent the past two years insightfully examining the ambivalent role of the World Bank and IMF, as well as Michael Hudson’s U.S. super-imperialism (examples here and here).
In an insightful piece for Bitcoin Magazine, Gladstein also addresses Hudson’s analysis of US dollars as a vehicle of “financial colonialism.” The core element is the transition from the gold standard (repealed in 1971 by U.S. President Nixon under the impact of runaway inflation) to what Hudson calls the “debt standard” (“Treasury Bill Standard”):
[The] U.S. was able to convince other nations to save in dollars rather than gold by guaranteeing that the dollars could be exchanged for gold. But in the end, U.S. officials bamboozled the world, refusing to exchange back billions of dollars that had flowed into the hands of foreign governments under the promise that they would be as good as gold because of the fixed repurchase rate.
This deception allowed the U.S. government to finance an ever-expanding military-industrial complex and an inefficient welfare state without having to make the traditional compromises that a country or empire must make when its deficit becomes too large.
Because U.S. policymakers found a way to incorporate American debt into the global monetary base [!], the U.S. never had to repay its debt. According to Hudson, America counterintuitively transformed its Cold War debtor status into an “unprecedented element of strength rather than weakness.”
Alex Gladstein: The End Of Super Imperialism
An echo of Hudson’s perspective can also be found in 2015 in political scientist Ian Bremmer, whom Telepolis quoted in an earlier post with his thesis of a “geopolitical recession” of the world power USA:
So how does America express its power? It does so with drones and surveillance, and most importantly, with the dollar. The ability of the United States to use the dollar and financial access as both a carrot and a stick to advance America’s national security interests, in many different places and ways with both adversaries and allies, is very strong indeed.
With U.S. dominance, “coercive diplomacy” [“coercive diplomacy”], along with “financial warfare,” will also come to an end, Bremmer said in 2015.
End of the neoliberal phase?
Telepolis spoke with Peter Wahl, co-founder of the NGO World Economy, Ecology & Development (WEED) and a founding member and member of the coordination circle of Attac Germany, about the issue of debt imperialism. He agrees that an end to the “neoliberal phase” is on the horizon.
“The debt system is a very important part of the dollar hegemony.” And this is being massively challenged right now, according to Wahl. “It started already with the euro, and for some years now we have seen China, Russia and the emerging markets conducting their trade at least partly in their own national currencies.” Then came Russia’s Swift exclusion.
The exclusion from the “U.S.-dominated” international payments system set a “major precedent. “This could lead to a split in the international financial system,” Wahl believes, “and tend to ensure that the unified globalization in the financial sector will fall apart.”
Wahl is not yet in a position to judge how the global economy will develop: “People are obviously prepared to go down new paths,” he says, referring to the $369 billion for the Inflation Reduction Act (IRA) or the European Union’s Next Generation Program (NGEU), “but in the end these are all just patches.”
The energy transition, the transformation of the entire industrialized world, will require far more sacrifices, Wahl believes.
The 74-year-old is one of the few who also recognize national interests behind the U.S.’s global climate protection efforts (see Climate Policy as a Geopolitical Weapon).
What does this mean for the “green reform” of the Bretton Woods institutions, the World Bank and the Monetary Fund? Is climate protection being used as a “geopolitical weapon” here, too? And why are investment bankers so keen on the energy transition? That’s what the third part of this short series will be about.
Here’s how government agencies are increasingly influencing the press
by Harald Neuber
[This article posted on 12/14/2022 is translated from the German on the Internet, So nehmen Regierungsstellen zunehmend Einfluss auf die Presse.]
Topics of the day: AfD sees dead people. Germans are losing purchasing power. And the government is visibly influencing the media.
1. how the crisis is reducing Germans’ purchasing power.
2. how the AfD interprets unavailable Corona figures.
3. and how the government is building up a network of propagandists.
But one after the other.
Buy, buy, buy – before the money is gone!
In Germany, too, the purchasing power of the population is shrinking sharply, writes Telepolis author Ralf Streck today. A preliminary annual assessment of the wage archive of the Economic and Social Research Institute (WSI) of the Hans Böckler Foundation, which is close to the trade unions, currently assumes that we are dealing with a historically high loss of real wages.
Collectively agreed wages are expected to fall by 4.7 percent in 2022, writes the WSI. According to the institute’s calculations, collectively agreed wages have risen by an average of only 2.7 percent compared with the previous year. The inflation gives the WSJ thereby even still optimistically with only 7.8 per cent up to the end of the year.
Mass deaths with the AfD
An excess mortality is undisputed above all in the autumn of the current year – a cause of death statistics was not published however yet even for 2021, writes today Telepolis editor Claudia Wangerin: The Federal Statistical Office speaks of delayed data supplies by health offices and of personnel bottlenecks.
This situation is fueling speculation. “The AfD is heavily involved in this – a data analyst commissioned by it was supposed to get to the bottom of the matter, but apparently did not do so with an open mind,” writes Wangerin: According to this, there was an increase of 1,082 percent in deaths recorded under the ICD-10 code R96 for “sudden death”. Telepolis has asked real experts.
Poles want to expropriate in Germany
The European Council meeting on Friday is eagerly awaited. Because until then Germany and Poland want to agree on the future of the PCK refinery in Schwedt. This was reported by Handelsblatt on Monday, according to Telepolis author Bernd Müller.
The point of contention is still that the Russian energy company Rosneft is the majority shareholder of the refinery. The Polish government had made it clear months ago that it would only help supply the refinery if the Russians were ousted. As the Handelsblatt now claims to have heard from Polish and German government circles, the Poles are still insisting on expropriation.
Government and media: with carrot and stick
According to a report in the Berlin daily Tagesspiegel, Bundestag Vice President Wolfgang Kubicki (FDP) has accused the previous government under Chancellor Angela Merkel (CDU) of partially influencing media coverage at the height of the Corona pandemic through background discussions with selected journalists.
Kubicki told the Tagesspiegel newspaper that he “considers the procedure at the time to be legally questionable, especially since no one can understand what criteria the federal government applied when selecting its interlocutors.”
The FDP politician, who has made a name for himself since the beginning of the pandemic with his critical assessment of the Corona policy, is basing his opinion on a brief report by the Scientific Service of the German Bundestag.
Referring to a ruling by the Federal Administrative Court in mid-September 2019, it states that the disclosure of information by the government to the media should “not amount to a regimentation or control of the media or part of it.”
Now, it is a matter of interpretation whether that was the case in the background talks by then-government spokesman Steffen Seibert. In the Tagesspiegel interview, Kubicki sees this as a given.
State influence on the media has increased not only in the pandemic, but also in the context of international politics – Russia’s war against Ukraine acted as a catalyst. For example, the Internet magazine Nachdenkseiten reported at the end of September on an interministerial paper on programs of the German government.
Under the title “Ongoing activities of departments and authorities against disinformation in connection with RUS war against UKR”, ten pages would list “meticulously the corresponding activities of the federal ministries and subordinate authorities”. These state measures also sometimes classify media coverage as part of a “hybrid threat.”
This development is dangerous for democracy and media freedom because it is covert and lacks transparency. Three developments can be observed:
1. government agencies deliberately influence media through information access;
2. government agencies reward the media with access or money, for example by placing advertisements.
3. government agencies take action against media.
Direct attacks on the media – which one would really only suspect in authoritarian states from Moscow to Budapest – are carried out by an increasing number of front organizations. The “Center for Liberal Modernity” of former Green politicians Ralf Fücks and Marieluise Beck has made a name for itself in this context.
This organization has recently received millions from various federal funds. One of its most important projects, called “Gegneranalyse,” is devoted to aggressive criticism of the media. All financed by the government!
How one-sidedly this project “Gegneranalyse” intervened in the discourse and debate about the pandemic policy in the case of the Corona pandemic is made clear by a quick look in the archives: “Corona protest movement: The New Cross Front?” it says, or “Corona Protests: A Threat to Democracy?”
It is then about “how right-wing radicals react to the corona crisis,” how “conspiracy theorists (gather) in Berlin” to “revolt against the ‘corona dictatorship,'” how corona skeptics:inside take to the streets against pandemic measures and for “peace, freedom, democracy” – or one writes about “corona-denying and anti-genderist positions.” A discussion of corona policy mistakes, collateral damage, questions of democratic control, or even government corona fakenews? Missing! All funded by the government!
It is disturbing that such organizations and structures are increasingly emerging and acting under the guise of concerned media criticism or having their staff pose as journalists. In this way, they influence political and media discourse without it always being clear who is speaking and on whose behalf.
It is therefore necessary to be clear what we are talking about: organizations that act in the interests of the government. Activists, not journalists. And in no case independent actors.
Articles on the topic:
Harald Neuber, Sabine Schiffer: “Opponent Analysis” and Center Liberal Modernity: The Press as Enemy?
Harald Neuber: How the state fight against disinformation is getting out of hand
Harald Neuber: Russian propaganda vs. NATO framing: How would you have answered the following question?
Climate finance: a “new Bretton Woods”
by Philipp Fess
[This article posted on 12/14/2022 is translated from the German on the Internet, https://www.heise.de/tp/features/Klimafinanzierung-Ein-neues-Bretton-Woods-7393981.html?seite=all.]
How the World Bank, IMF, and U.S. sow doubt about whether climate action is about “development aid” – or painting global growth capitalism “green.” Climate protection colonialism? (Part 1).
For some Telepolis readers, this text may open doors. Others may find absurd the notion that what we commonly think of as development aid can have exactly the opposite effect on so-called developing and emerging countries. Still others may doubt that climate protection measures can be “abused” at all.
In any case, “green” development aid opens a new chapter in an old debate that urgently needs to be revisited. The following three texts are intended to contribute to this.
A fund for the history books
Greta Thunberg has spoken of “greenwashing.” More than 30,000 guests from all over the world gathered at the 27th United Nations Climate Change Conference (Conference of the Parties, COP) in Sharm El-Sheikh, Egypt, from November 6 to 18. “Greenwashing?” Only because Coca-Cola, one of the world’s biggest “plastic sinners” and union “killers,” stepped up as a major sponsor?
Only because political leaders and lobbyists of the fossil energy industry arrived in hundreds of private jets? Only because the US and EU have an overly friendly (taxonomic) relationship with (fracking) gas and nuclear energy? Only because it was foreseeable for the climate activists that the results of the conference would not satisfy their need for escalation?
The 19-year-old is right: there are many reasons to talk about greenwashing. And yet there was virtually no talk about one – and of all things, it is being celebrated as a “historic” success for Cop27. The talk is of the agreement on the Loss and Damage Fund.
This fund aims to “provide financial support to the countries most vulnerable to and affected by the impacts of climate change,” as summarized by the United Nations Environment Programme (UNEP).
This is expressly not (!) about environmental reparations, as the countries of the global south demanded as early as 1972, at the first UN World Environment Conference in Stockholm.
Rather, it is about concrete projects of compensation and prevention. The measures range “from the construction of coastal walls to the development of drought-resistant plants” (it is fortunate that Monsanto and the Gates Foundation have already helped to launch the corresponding genetic technologies).
Of course, all this has to be paid for. The New York Times writes of nothing less than the “largest mobilization of international capital in history”.
According to the UNEP’s “Adaptation Gap Report 2022” (subtitle: “too little, too slowly”), in order to achieve the UN’s Sustainable Development Goals (SDGs), 160 to 340 billion US dollars must be paid annually to the so-called developing countries by 2030.
And the report’s authors warn that if climate change “accelerates,” the sum could rise to $565 billion annually. So it’s good that countries agreed to pay into the joint fund. Or not?
“Drastic” reforms of the Bretton Woods institutions
Exactly what the fund should look like has not yet been finalized. Germany’s special envoy for climate policy, Jennifer Morgan, said in early December that a decision on the “institutional design” would be made at COP28 in Dubai. Yet in Sharm El-Sheikh, fairly clear cornerstones were already outlined. For example, by David Malpass, President of the World Bank:
At COP27, recommendations were made to the multilateral development banks to significantly increase our climate finance […] I very much welcome these calls. Successful climate action to reduce greenhouse gas emissions requires a concerted global effort, and we are committed to that effort.
And Malpass was far from alone. Advocates for what the New York Times calls “drastic reform” of the World Bank and IMF include International Monetary Fund (IMF) Managing Director Kristalina Georgieva, U.S. Treasury Secretary (and ex-Federal Reserve board member) Janet Yellen, and “UN climate envoy” and former U.S. Secretary of State John Kerry.
Germany’s Development Minister Svenja Schulze pledged her support for the reform back in October. But it had apparently been planned for much longer – and independently of the climate summit in Egypt.
IMF Director Georgieva spoke of a new “Bretton Woods moment” as early as the fall of 2020. The 1944 conference of the same name established the postwar monetary order and prompted the creation of the World Bank and IMF, which is why people refer to them as the “Bretton Woods institutions.” Georgieva was not referring to the climate crisis, however, but to the Corona crisis.
Thanks to financial injections by member countries into the Catastrophe Containment and Relief Trust and the Poverty Reduction and Growth Trust, she said, the IMF has been able to maintain its “financial firepower” and triple its ability to lend to countries in need. That should be kept in mind.
Likewise, that the invocation of a new Bretton Woods involves more than just reform of the World Bank and International Monetary Fund. After all, the 1944 conference also established the U.S. dollar as the reserve currency – a decision that critics say laid the foundation for U.S. geopolitical dominance in the decades that followed. We will come to that as well.
What might be the parallel to the present is made clear by a post on the website of the official Bretton Woods Committee:
The new G20 effort to explore digital central bank currencies (CBDC) as part of a roadmap to improve cross-border payments, and its broader implications for the international monetary system, represents a rare multilateral attempt to recalibrate international monetary relations.
Perhaps CBDC can pick up where Bretton Woods left off.
The Bretton Woods Committee
The Strange Connection between Capital and Climate Protection
Telepolis has already addressed the monetary necessities and sociopolitical dangers of a CBDC in an earlier article.
The same applies to the memorable mixture of private capital and public institutions in so-called impact investing. This is also reflected in the tenor of COP27. And the next most prominent advocate could not be more prominent:
We need to reconvene Bretton Woods and completely revamp and reform the world banking system and give developing countries access to private capital.
It is questionable, of course, to what extent the opposite is not the case and private capital should be given access to the so-called developing countries.
At any rate, this is how one could understand French President Emmanuel Macron, who a few days later at the Asia-Pacific Economic Community (APEC) summit in Bangkok called for “cooperation between the public and private sectors” to solve “common problems” such as climate change (Telepolis reported). The president sounded a very similar note at COP27:
These institutions [the World Bank and IMF] must come up with concrete proposals to activate these innovative financing mechanisms, open up access to new liquidity, develop new concessional financing ideas for emerging economies, and propose solutions that take into account their vulnerability
Better than former investment banker Macron, however, is former U.S. presidential candidate Al Gore, who embodies the strange link between markets, growth and climate action.
Generation Investment, which Gore co-founded, says it has $36 billion invested in funds run by private and public companies that specialize in “sustainable” investments in the ESG (environment, social, governance) sector. The convergence of interests with World Bank reform is hard to miss.
Gore had already outlined his vision of a green future through public-private partnerships in a 2016 speech to a Master of Business Administration (MBA) class at Stanford Business School – the course of study that critics consider the “ideological transport vehicle of finance capitalism.”
A summary of the speech states:
Gore lays out a vision of a world in which nation-states no longer dictate the pace of change. The sustainability revolution is increasingly driven by local, on-the-ground projects and the enlightened self-interest of the private sector. And at the heart of this movement, Gore said, is the role of investors in identifying opportunities and financing forward-looking enterprises.
Stanford Graduate School of Business
In a 2010 article worth reading, Wirtschaftswoche quotes philanthrocapitalist George Soros: Emissions trading is “not very transparent and prone to manipulation,” says the major investor. Concludes, “That’s why it’s so popular with financial types like me.”
Who is accommodating whom here?
So once again, one must ask the question: Who is accommodating whom here? The arguable thesis this text series seeks to establish is this: “green” development aid is a “facelift” of an old principle that critics have called economic (debt) imperialism. The next two parts are intended to support this thesis.
The fact is: parallels between the old and new (inglorious) roles of the IMF and the World Bank are also observed among experts. Thus writes political scientist Aram Zai in an interview with the Goethe-Institut:
In this sense, the SDGs [Social Development Goals of Agenda 2030] are very much in the tradition of development policies that emerged in the context of the Cold War and the decolonization of the United States and its allies to prevent countries that were becoming independent from defecting to the socialist camp.
This was done by promising them that, with the support of the West, they could become prosperous or “developed” countries within a capitalist world economic order. This promise came true for only a very small minority of countries […] The SDGs are a renewal of this promise.”
Part 2 of this series will explore what else lies behind this (false) promise.
War in Ukraine: Nato taboos fall
December 13, 2022 Roland Bathon
[This article posted on 12/13/2022 is translated from the German on the Internet, Krieg in der Ukraine: Tabus der Nato fallen.]
The fear of an escalation of the conflict seems to be fading in the control centers of NATO. This is evident from the arms deliveries to Kiev. There is a danger hovering over everything.
For a long time, it was considered an unwritten law when it came to Western arms deliveries to Ukraine: the country’s own weapons should not be suitable for attacking the Russian hinterland. There was a valid reason for this, explained by U.S. National Security Advisor Jake Sullivan at the Aspen Security Forum in July: supplying such weapons could provoke Russia and lead to a possible third world war.
Despite these officially expressed concerns, there were already the first reports in August, for example in the U.S. magazine Politico, according to which the U.S. is not only supplying Ukraine with what is officially announced. The talk quickly turned to high-precision projectiles, cluster munitions – and long-range missiles.
Nevertheless, the official line was initially adhered to. As late as the beginning of December, the Wall Street Journal reported that the rather effective Himars multiple rocket launcher, which Kiev had received from U.S. stocks, had been modified before delivery in such a way that it was no longer suitable for launching long-range projectiles flying deep into the Russian hinterland. Again, U.S. officials’ reasoning to the U.S. newspaper was that they did not want to escalate.
First hinterland strikes with own conversions
Then, a few days later, when the Ukrainians hit three airfields deep in the Russian hinterland with missiles, there was talk that the projectiles were self-modified conversions of Soviet drones. One of the airfields hit, on the Volga River, was 630 kilometers from territory controlled by Kiev.
When asked how such conversions are possible, the Latvian online newspaper Meduza points to Ukraine’s ability to freely purchase components on the international market, unlike Russia.
Such in-house conversions, however, are not comparable in combat power to the original Western long-range missiles compatible with Himars, according to Meduza. The warheads are smaller, he said, and their accuracy is lower.
The Ukrainians also failed to completely destroy a long-range bomber in the three attacks, he said. Meduza notes, however, that Ukraine will do everything it can to obtain better weapons with which to attack targets deep inside Russia. Also to force the Russians to deploy parts of their defensive equipment far from the front lines.
London: “Open-minded” to supply of long-range weapons.
That possibility increasingly appears to exist. According to the Reuters news agency, British Defense Secretary Ben Wallace stated that they are now open to supplying Ukraine with longer-range weapons systems.
Such statements are also reported in Germany. “Ukraine is not obliged to limit itself to its own territory to defend itself against Russian aggression,” the Ukrainian online newspaper Strana quotes deputy German government spokeswoman Christiane Hoffmann as saying.
In this context, she quotes an unspecified article in the British Times that the U.S. is now less afraid of escalation by Russia. The fear, she says, is only that any U.S. threats deployed could be intercepted by the Russians, which would put them at a military disadvantage of their own.
In fact, Ukrainian military actions on Russian territory have been a reality for some time. In earlier months, however, they were always limited to the immediate border area and Russian staging areas near Belgorod, Kursk, or in Crimea for lack of other options. Morally, they feel the Ukrainians, as the attacked, have the right to attack any target in Russia from which attacks on their own country originate. Geopolitical considerations are secondary for them.
The debate resonates with the question of whether greater involvement of the West as a warring party is not even in Kiev’s interest, because such a development would favor access to a greater number of weapons.
The fear of a global military escalation is precisely the stumbling block that is currently preventing the delivery of German battle tanks and U.S. killer drones to Ukrainian troops, both of which Kiev is vehemently demanding.
If these demands are now met, a dangerous poker game is being played. For it will quickly become clear whether threatening words from Moscow in the event of any escalation of the war by the West – and such an escalation will then be present – were just hot air or will have serious consequences for Russian combat operations. In the latter case, additional victims are certain to be Ukrainians in the war zone again with a high probability.
Real wage losses like never before in Germany
by Ralf Streeck
[This article posted on 12/14/2022 is translated from the German on the Internet, Reallohnverluste wie nie zuvor in Deutschland.]
“Profit inflation” and mistakes of the traffic light government: not only energy companies, more and more industries use price increases to cash in on inflation.
In Germany, too, the purchasing power of the population is shrinking sharply. A preliminary annual assessment by the collective bargaining archive of the Economic and Social Research Institute (WSI) of the Hans Böckler Foundation, which is close to the trade unions, currently assumes that we are dealing with a historically high loss of real wages.
Collectively agreed wages are expected to fall by 4.7 percent in 2022, writes the WSI. According to the institute’s calculations, collectively agreed wages have risen by an average of only 2.7 percent compared with the previous year. The WSJ even gives an optimistic estimate of inflation of just 7.8 percent by the end of the year.
A political value
One could also call this a whitewash, since the foundation obviously worked with the data from the statistics authority Destatis. As is well known, however, Destatis uses the “consumer price index” (CPI), which is particularly heavily embellished. But even according to the CPI, an official inflation rate of 10 percent was just confirmed in November. As we have discussed here several times, the inflation rate is primarily a political value.
This is already evident from the fact that the official German inflation rate according to the “Harmonized Index of Consumer Prices” (HICP), which is used by the European statisticians at Eurostat, was found to be 11.3 percent in November.
Even the former chief economist of Deutsche Bank, Thomas Mayer, criticized the fact that for the euro zone, too, more and more parts had been removed from the calculation of the inflation rate in order to make the inflation rate appear lower.
This, too, had led to the European Central Bank (ECB) being able to drag the problem out even longer with absurd forecasts. Ordinary people are now paying a high price for this.
So we have long been dealing with an even significantly higher loss of purchasing power. But this is partly concealed by the institute, which is close to the unions, because otherwise the unions, with their rather timid wage agreements, would be in an even worse position. The head of the WSI collective bargaining archive also cites this as a reason to save the unions’ honor:
“On the one hand, no collective bargaining at all took place in 2022 due to long-term effective collective agreements in many sectors. On the other hand, currently agreed, significantly stronger, wage increases and inflation premiums will often not take effect until 2023,” says Thorsten Schulten. Despite everything, he has to conclude:
Against this background, there will be a real wage loss this year that is unprecedented in the history of the Federal Republic of Germany.
Who will be hit particularly hard
For many people, however, who work in industries where there are not even collective wage agreements, or for many self-employed people, the loss of real wages is even significantly higher, since there have been hardly any increases, if any at all. People who are particularly weak in social terms also have to suffer even more severe losses in purchasing power.
As is well known, the Hartz IV increase amounted to a whopping 0.67 percent. By the renaming to the citizen money the rule set is increased now around 50 euro on 502 euro. That lies within the range of the official inflation rate of 10 per cent, but does not even make past losses good.
The real loss of purchasing power is particularly high for people living on the subsistence level. This is because the lower the income, the higher the proportion that has to be spent on energy and food. However, these are the items that have become particularly expensive, at 38.7 percent and 21.1 percent respectively.
The figures known so far show that the optimistic forecasts made by the Kiel Institute for the World Economy (IfW) are already wastepaper. The IfW had expected that “the purchasing power of private households will slump by 4.1 percent in the coming year, more than ever before in reunified Germany”.
It can be assumed that this forecast value for the coming year will already be exceeded in 2022. Whether there will then be a new record in 2023 depends on whether the fight against inflation, which the ECB was ultimately forced to do, actually works and whether the unions finally push through wage agreements that are commensurate with inflation.
Otherwise, we can expect strong stagflation like in the UK. Shrinking purchasing power, as in the Kingdom, of course additionally drives recessionary tendencies, which is particularly dramatic when inflation is high.
Causes of high prices
Much depends, of course, on political decisions, which have so far been conspicuous by their absence, especially in the case of the traffic light coalition. For example, effective action should finally be taken against speculative profits, so-called “windfall profits”, which are also called “profits falling from the sky”.
Because they drive inflation massively. Telepolis had besides already pointed out that the high energy prices, like also for example the fuel prices, cannot be justified with high oil prices.
At no point in 2022 has the price of oil even approached the all-time record of nearly $150 per barrel. In 2008, a barrel of oil cost almost as much without gasoline prices reaching highs like they are now. In July 2008, the average price of diesel rose to a high of just under 1.54 euros.
Currently, however, a barrel of oil costs less than 90 euros, but diesel still costs around 1.80 euros at the gas station. Furthermore, only speculation and greed explain these high prices.
Since the ECB had to raise interest rates in the meantime, however, the exchange rate against the U.S. dollar has improved somewhat again. Since the euro had fallen partly even under the parity to the dollar, over it energy became additionally more expensive. Oil and gas have to be paid for in dollars.
In the meantime, however, 1.06 dollars must be paid for one euro again. Even above that, the ECB’s interest rate hikes, which it had to be forced to do, have also had an inflation-inhibiting effect, because capital flight has been curbed. Therefore, the peak may now have been passed in the euro area as well. The HICP had risen to 10.6 percent in October and fell to 10 percent in November.
But to effectively reduce inflation, antitrust laws would also have to be changed. But the traffic lights do not do that either. “Excess profits” continue to be taxed here, not even to a small extent, while, as in the case of the oil companies, profits have exploded.
Excess profits tax as a means of combating speculation
So-called excess profits, whether from speculation or as windfall profits, should, however, be completely collected throughout the EU in order to prevent dumping.
In Italy, of all places, where the conservative Mario Draghi introduced the first excess profits tax of 25 percent, the radical right-wing Giorgia Melonie now wants to double it for large companies in order to flush billions more into the coffers.
The 50 percent is to be payable if a company’s energy revenues in 2022 are at least ten percent above the average level for 2018 to 2021. However, this still rewards those in Italy for their speculatively high prices, which drive up inflation.
In Greece, an excess profits tax of 90 percent comes closer to combating speculation in real terms, but there, as in Romania (80 percent), it is limited only to electricity producers. Here, too, they don’t really want to step on the toes of those who are currently skimming off the top. That’s why only 400 million euros are collected through the tax in Greece, whereas in Italy it has already raised about 10 billion euros.
In Germany, however, a government that claims to have a left-wing and social approach refuses to introduce any excess profits tax and even put the brakes on an EU gas price cap that has demonstrably lowered inflation in Spain. In Spain, the inflation rate is now 6.6 percent.
Of course, no one should be surprised if, in view of the inaction of the traffic light government, in which the FDP with Christian Lindner obviously determines that in the meantime not only energy companies use inflation as an excuse to cash in strongly.
“Profit inflation”: inferences about price increases
Among other things, the narrative that the Ukraine war is to blame for high energy prices and inflation was also used to this end. Yet inflation in Germany was already at six percent last November, more than three months before Russia’s invasion of Ukraine, according to Eurostat.
A study by the Ifo Institute just made it clear that many companies have used high inflation as an excuse to “maximize profits,” as Tagesschau reported Tuesday. There was no mention of massive speculation, because the ifo Institute does not speak of it either.
The institute has calculated that not even the already speculatively strongly increased prices for energy and intermediate inputs can explain the extent of inflation in Germany. The term “profit inflation” is used because companies in some sectors of the economy have used the price increases to boost their profits.
This process was suggested by data from official statistics on economic output. From this, differences between nominal and price-adjusted value added were determined. “This allows conclusions to be drawn about price increases that were not caused by higher input costs,” the press release says.
Construction, agriculture, forestry, trade, hospitality and transport.
During the Corona pandemic, private households had accumulated large savings, it said. These have now been liquidated, fuelling consumer demand, explains Joachim Ragnitz. The deputy head of Ifo’s Dresden branch goes on to explain that relief measures by the government are also likely to have helped support demand, thus expanding scope for price increases.
“Particularly in agriculture and forestry, including fisheries, as well as in construction and in the trade, hospitality and transport sectors, companies raised their prices significantly more than would have been expected on the basis of increased input prices alone,” says Ragnitz.
Some companies seem to be using the cost surge as an excuse to also improve their profit situation by raising their sales prices.
In agriculture, companies initially used up their stocks of fertilizers and feedstuffs, but had already factored into their calculations the expected price increases for repeat orders, he cites a concrete example.
But at the neoliberal institute, which sometimes comes up with untenable theories, such as that inflation should hit higher incomes harder than lower incomes, there is of course no desire for regulation. There is no reason for government intervention in prices, they say.
An excess profits tax is also rejected because of an alleged “distorting effect on the scarcity signals of the market,” as it is neither in line with the market nor legally enforceable, says Ragnitz. Nor, of course, does he want to see any evidence that companies are colluding behind the price increases.
That is why antitrust measures are not helpful. But a drive past various gas stations shows that this is wrong. In today’s information society, there is no need for backroom deals between the heads of the oil companies to agree on overpriced fuel.
In view of what ifo has determined, however, and contrary to Ragnitz’s statements, changes to antitrust law are urgently needed. After all, it is obvious that companies in an oligopoly position are massively using their position in the market to inflate profits. To put an end to this, both an excess profits tax close to 100 percent and modern antitrust law are needed.
Ragnitz, on the other hand, believes that “only more competition” will help against excessive price increases. That’s the old neoliberal canard, that consumers could then “also buy cheaper products and thus dampen profit inflation.”
The only problem is that the cheaper products don’t exist, as can be well seen at gas stations only as an example. Of course, there is nothing to be read at the ifo Institute about a demand to break up the oligopolies in order to at least ensure more competition.
Scholz: EU geopolitics and new Cold War between China and U.S.
by Philipp Fess
[This article posted on 12/12/2022 is translated from the German on the Internet, https://www.heise.de/tp/features/Scholz-Geopolitik-der-EU-und-neuer-Kalter-Krieg-zwischen-China-und-USA-7373381.html?seite=all.]
The (historically) oblivious chancellor on a multipolar world order with the U.S. at its head, NATO saber-rattling for world peace, and other semantic balancing acts. An exegesis.
After a U.S.-China think tank of economists, journalists and lawyers presented its concept for a “better” world order in Foreign Affairs in early September (Telepolis reported), the German chancellor also had his say in the renowned political magazine in early December.
In Germany, however, the article entitled “Die globale Zeitenwende – Wie ein neuer Kalter Krieg in einer multipolaren Ära vermieden werden kann” (The global turning point – How a new Cold War can be avoided in a multipolar era) attracted little attention. But it should have.
Olaf Scholz (SPD) surpassed the authors of the “US-China Trade Policy Working Group” not only by lengths of text, but also in dressing his arguments in ambivalent rhetoric. In some cases so ambivalent and informal that he rivaled his predecessor and advisor Angela Merkel. Even the major German media can no longer close their eyes to some of the parallels.
What is hard to believe is that, just as in the text of the transpacific think tank, there are hidden jibes in Scholz’s work, too, that challenge the prevailing transatlantic narrative and make daring criticisms of the U.S. hegemon.
Scholz criticizes the superpower for its geopolitically motivated policy of interests in Ukraine, strongly condemns its softening of the nuclear weapons doctrine in the face of an imminent Third World War, and finally accuses it of the Central Intelligence Agency’s (CIA) inhumane plans to murder Julian Assange, who has merely uncovered war crimes that must now finally be tried in The Hague.
Don’t think so? You shouldn’t either. Because Scholz unsurprisingly did not mention these issues with a single word.
Actually, it is a kind of funeral speech. For Scholz buries – with Merkel-like pathos – the “resilient world order” that heralded the fall of the Berlin Wall and ushered in a time of peace. At that time, Europe had finally been able to “grow together” and, above all, to disarm, because the countries of the former Eastern Bloc left the Warsaw Pact and soon joined NATO.
Everything would probably have been perfect had an “imperialist” and “revisionist” Russia under Vladimir Putin not brought the peace order to an abrupt end:
“Instead of seeing the peaceful overthrow of communist rule as an opportunity for greater freedom and democracy, Russia’s President Vladimir Putin called it  the ‘greatest geopolitical catastrophe of the 20th century.'”
Will Foreign Affairs readers be taking their chins and thinking about NATO’s eastward expansion? After all, the Soviets had made their failure to do so a condition for reunification at the time and had received assurances to that effect – even if this has been willingly ignored in the one-sided portrayals since the turn of the century. Just as the assurances themselves were ignored.
George H. W. Bush, ex-chief of the CIA responsible for numerous regime changes, who appears in Scholz’s text rather as a liberator well-disposed towards Europe, is said to have said to Helmut Kohl with regard to the Soviet conditions: “To hell with them! We won, not them.”
But Scholz tells a different story.
That of the revisionist Putin, who already in 2007 at the Munich Security Conference had the audacity to “brand the rules-based international order as a mere tool of American domination.” The rules-based international order to which Scholz pledges his “unwavering support” in the article.
That Putin is far from alone in his judgment, however, and that even authors of the newspaper in which Scholz’s article appears share his opinion, was elaborated by Telepolis in the text mentioned at the beginning of this article.
But even this does not fit the story that Scholz tells.
International Law for the Chosen
The story begins with Russia’s war against NATO aspirant Georgia, followed by the annexation of Crimea in 2014, the undermining of arms control treaties, and the “brutal military intervention in favor of the Assad regime in Syria”.
Scholz nonchalantly passes over the role of the U.S. in the Caucasian war, ignores the entire history of the Maidan revolution with obvious U.S. interference, and glosses over the mutual accusations regarding the Intermediate-Range Nuclear Forces Treaty (INF) – which the Tagesschau still tried to present in a differentiated way in 2019 – as well as the origins of the conflict in Syria, which can be traced back to one of many regime change attempts by the CIA. Such a one-sided account speaks volumes. But it doesn’t stop there. Scholz writes:
When Putin gave the order to attack, he destroyed a European and international architecture of peace that had been built over decades. Under Putin’s leadership, Russia flouted the most basic principles of international law enshrined in the UN Charter.
“Look who’s talking,” the US American would say: look who’s talking. After all, Scholz is a member of the party that, together with the Greens and the Left, sent the Bundeswehr to Kosovo without a UN mandate.
The humanitarian intervention directed against the communist enemy of the system, Slobodan Miloševi?, by the German government, which had sworn in the supposedly beneficial year of 1990 never again to start a war (bypassing international law), was given a reverberating name by the Süddeutsche Zeitung in 2008: “Die Bonner Zeitenwende” (“The Bonn Turn of Time”).
And in view of the wars that the U.S. has waged or supported in numerous countries – from Indochina and Vietnam to Iraq and Afghanistan, not to mention the drone war – which are also questionable under international law, it is difficult to maintain the claim of the untouched peace architecture.
But then the title of the article could just no longer say “Zeitenwende.” This is a narrative that Scholz sometimes exaggerates into the irrational to such an extent that one almost has to wonder whether his text does not subversively want to flaunt it as such.
Germany’s New Security Strategy and the EU as a “Geopolitical Actor with Weight”
Thus, the turn of the times also applies with regard to a Europe that is no longer free and pacified and faces the threat of an “imperialist Russia.” One that intends to divide the European continent “into zones of influence [and] divide the world into blocs of great powers and vassal states.” How Scholz knows the Russian strategy so well, he does not reveal.
The threatened Europe, the chancellor continues, must be expanded and transformed into a “geopolitical actor with weight.” Germany, he said, will take responsibility as “one of the main guarantors of security in Europe” by “investing in our armed forces, strengthening the European arms industry, increasing our military presence on NATO’s eastern flank, and training and equipping the Ukrainian armed forces.”
More military, more security. The new Germany is again relying on deterrence instead of diplomacy and détente. Foreign Minister Annalena Baerbock, who is known as an expert in international law, has already declared that “change through trade” has failed.
It also fits in that Scholz sees Sweden’s and Russia’s neighbor Finland’s accession to NATO less as a provocation than as a strengthening of “Euro-Atlantic security. At the same time – and hold on now – NATO’s action should “not lead to a direct confrontation with Russia.”
Nation-state sovereignty as an obstacle
As far as peace negotiations with Putin are concerned, Scholz consistently advocates an absolute lack of compromise.
No “dictatorial peace” in which Russia imposes conditions, is the watchword. There is clearly a need for Franco-German talks here, because Emmanuel Macron recently struck a different note with his security guarantees for Russia.
The EU’s new saber-rattling doctrine, which Germany, on the other hand, is pursuing together with France, is also to be reflected in a new “National Security Strategy,” “which we will adopt in a few months,” Scholz writes.
In addition to military unity on the outside, the chancellor is also propagating political unity on the inside. The intergovernmentalists and those who already accuse the EU of a democratic deficit will not like his plans:
[…] quick decisions [are]an essential prerequisite for success. For this reason, Germany has proposed to gradually expand the practice of majority voting in areas where decisions currently require unanimity, such as EU foreign policy and tax issues.
Blockades like those from Hungary or from EU candidate Serbia would then be history. But enough of that. After all, according to the article, Olaf Scholz started out to avoid the Cold War.
“The third world war begins with forgetting” – and Scholz likes to forget
Does Scholz want to play the same confrontation card on the China issue? Yes and no. Scholz is using a tactic here that has also worked wonderfully so far with embarrassing questions about secret agreements with bankers or omitted financial investigations: Simply “forget” – or deny that the problem exists:
Many […] see a new Cold War coming, with the United States and China positioned as adversaries. I do not share this view. […] Rather, I believe that we are currently witnessing the end of an extraordinary phase of globalization […] in which the United States became the defining world power – a role it will maintain in the 21st century. […] China’s rise is neither a justification for isolating Beijing nor for limiting cooperation.
Can you still keep up with that argumentatively? While the U.S. is supposed to continue playing hegemon in a world that has all of a sudden gone off the rails, “China’s growing power […] does not justify hegemonic claims in Asia and beyond.” And it gets even more contradictory.
For Scholz promotes “dialogue and cooperation even outside the democratic comfort zone” and cites the new U.S. National Security Strategy as a model. The security strategy in which China is named as “the only competitor […] with the ability to reshape the international world order” – and thus as a potential threat.
At the same time, however, China could keep “a dangerous Russia” in check – a country for which Scholz and Friends rule out “dialogue and cooperation” from the outset. “No country should be another’s backyard,” the chancellor writes, also quoting the German foreign minister.
The sentence refers, of course, to Russia’s doctrine toward a “military presence on NATO’s eastern flank,” but at the same time also to China and the simmering conflict over the island nation of Taiwan. What was that again about Cuba in 1962?
“World War III begins with forgetting,” is the title of a recent New York Times article by political scientist Stephen Wertheim of the Carnegie Endowment for International Peace. And the author also offers an explanation as to why it is not only our chancellor who is so forgetful:
After the collapse of the Soviet Union and the generational shift, World War II was presented as a moral triumph rather than a cautionary tale. […] Presidents began invoking World War II to glorify the struggle and justify U.S. global dominance.
The supremacy that is already set in stone for our Chancellor in the 21st century. And which some say is what Scholz has pledged his “unwavering support” to.
Striving for peace – taking war seriously
by Werner van Gent, Athens
Those who want peace must recognize the signs of war early. This is the only way to prevent senseless fighting and suffering.
[This article posted on 12/13/2022 is translated from the German on the Internet,
Editor – This article by former war reporter Werner van Gent first appeared in the interfaith newspaper “zVisiste”.https://www.infosperber.ch/politik/nach-frieden-streben-den-krieg-ernst-nehmen/.]
Sometime in the early 1980s, I became a war reporter. That had never been my dream job as a correspondent. But when wars broke out in “my” area – I was also living part of the time in Greece at the time – I wanted to report on them, and I was determined to do so.
I quickly learned how dangerous this work was and how brutal and uncontrollable the military violence was. The severely wounded on the front lines in the Iran-Iraq war, the children who had lost their eyesight in bomb explosions, the victims of Saddam Hussein’s chemical warfare, and later the mine victims in Kosovo.
Now the war in Ukraine has revived all these horrible images and impressions. At the same time, they have strengthened a basic conviction in me: Wars must be foreseen and prevented. Until last February 24, 2022, I believed that Putin could not even think of this war. That was a mistake, he obviously thought it very well and thus showed the world: Economic relations do not guarantee peace. That he may have been mistaken about the course of the war merely confirms the old adage that in a war only the first shot can be calculated.
The key question we all have to ask ourselves – including me as a media professional – is: Why did we slide into this catastrophe with our eyes open? What made us deaf and blind? Was it the cheap gas, was it the long peace in Europe?
Unfortunately, the debate about the war is now largely dominated by military experts – among them, incidentally, only a few women – who glorify the war with tables of troop strengths, with diagrams of the most modern weapons systems and with detailed maps. This view suppresses the unbearable images of horror.
Stale “peace of victory”
This military-scientific glorification of a war that has long been hopeless for both sides, which is also supported by some media, leads to the postulation of the prospect of victory against one’s better judgment. What is meant, however, is more likely a victorious peace. A peace that can only lead to new wars that will possibly be even more catastrophic. The war in Ukraine has long since determined our daily lives, perhaps even our survival. In any case, we can no longer ignore it. And we have become a party to it without wanting to. The civilian population has felt the same way in all the wars I have reported on. Only they raged at a safe distance from our country.
For a long time, peace and conflict research was considered a playground for unworldly utopians. Today, there is an enormous need to catch up here. If we want to do something for peace in the long term, we must learn to think the unthinkable. Precisely because the Putins, Erdogans and all the other potentates are doing so. Early signs must be recognized and evaluated without ideology. In the Ukraine war, unfortunately, this task was not performed in time.