The Subversive Summit – In These Times

The time is ripe—if not for the full-blown revolution, then at least for a transformative backlash to recenter the imperatives of social justice that have lately become so attenuated.

ZAGREB, CROATIA—What is often described in media, political and financial circles as the global “debt crisis” actually poses even more insidiously widespread dangers than the ubiquitous doom-filled reports commonly inform. “The greatest catastrophe threatening Greece and Europe is not the economic crisis,” says Costas Douzinas, professor of law at Birkbeck, University of London, “but the total destruction of the social bond, the way we see ourselves, the way we see our relation to the community. This is long-term. Economic crisis, fiscal deficits, can be restored in the medium term. But once you lose the social ethos, then there is no way back.”

That was the takeaway in May as scholars, writers, politicians and activists came together at Zagreb’s sixth annual Subversive Forum to plumb the depths of the current malaise, but also to propose remedies for the five years of European economic upheaval that has produced personal hardship, civic unrest, governmental instability and a general sense of paralysis.

For two weeks every year, Zagreb’s civic festival welcomes hordes of progressive lecturers and audiences to a program of films, debates, roundtable discussions and protest-planning sessions. Running past midnight in the city’s elegant 1920-vintage movie house Kino Europa, standing-room-only keynote speeches attract staunch partisans for advancing the interests of the public sphere against the authoritarian mediocracy that now prevails.

The cataclysm of human and social devastation in Europe is this generation’s defining moment. But calling it a debt crisis, as Greek economist Yanis Varoufakis explains, is like going to the hospital with advanced inoperable cancer and having the doctor diagnose your suffering as a pain crisis.

Yes there is pain, but the pain is symptomatic of bigger problems. The “debt crisis” is also a food crisis—people can’t afford to buy enough to eat. It’s a housing crisis, an education crisis, an unemployment crisis, an immigration crisis, a human rights crisis. In Greece, the New York Times reports, prostitution has surged 150 percent in the last two years as a direct result of social desperation, with supply-and-demand dynamics driving prices for sex work as low as five euros.

The Left rightly rejects austerity, despising it as collective punishment of citizens who had nothing to do with the financial collapse. Public health scholars David Stuckler and Sanjay Basu explain in The Body Economic: Why Austerity Kills that such spending cuts drastically lower life expectancy due to a higher prevalence of suicide, HIV, alcoholism, heart disease and depression.

Underlying all these other crises is the steady transformation of the over-bureaucratized European Union into a democracy-free zone. Voter turnout is in decline (especially for European Parliament elections, but also in national contests), as constituencies manifest apathy or disenfranchisement. Decisions that people should be able to make for themselves and that are consequential for their lives—how much society spends on healthcare, on education, on defense—emanate instead from afar by EU administrators. A “Merkiavellian” regime, some call it; a secular empire of finance.

The principles of democratic self-determination are hamstrung by the powerful Troika—the International Monetary Fund, the European Central Bank and the European Commission (the EU’s legislative and operational council)—which a disempowered citizenry increasingly views as an automaton that squelches democracy as it protects the interests of the power elite.

A teachable moment

But as many Europeans grow resigned to the “new normal,” a passionate movement of social democrats and subversive activists aims to recast a fatalistic narrative of inevitable capitulation. From the rubble of this financial catastrophe, they are extrapolating a systemic critique of how this mess came to pass and more importantly, how to use the collapse as a teachable moment. The time is ripe—if not for the full-blown revolution, then at least for a transformative backlash to recenter the imperatives of social justice that have lately become so attenuated.

The EU had been promoted as a strong “single market” (by many reckonings, the world’s largest economy) that would defuse Europe’s centuries of conflict: shared economic prosperity would generate cooperative unity. But clearly the EU has not delivered the promised transnational harmony. Capitalism is, after all, inherently a competition, which means there are winners and losers. Labor, always a weak player in this competition, loses the most in a race to attract foreign investment. Consequently, the labor movement fears a descent into what Slavoj Žižek calls a tyrannical “capitalism with Asian values.”

“Peripheral countries,” a label that has become so prevalent in the EU discourse, typifies the fault lines in the “union.” At the Subversive Forum, I noticed how keenly language highlights these tensions and fissures. Not surprisingly, people don’t like being thought of as peripheral—a lesson that might have been learned in light of the offense that the “third world” has always felt about that similarly condescending term. They also don’t appreciate being called PIIGS, the acronym that lumps together Portugal, Ireland, Italy, Greece and Spain (the extra “i” doesn’t soften the blow). The term is outdated anyhow as more countries slide into severe downturns. With France and the United Kingdom falling into recession and Cyprus imploding, we can expect even coarser acronyms in the future.

It’s not just about nomenclature. The discourse of “othering” reveals old and supposedly effaced neocolonialist prejudices at their worst. In the minds of those who oppose humane terms of support, the “pigs” are lazy and corrupt, unsophisticated and out of date. They have brought their troubles on themselves and forced austerity will do them good.

The idea of Europe and even the word itself, has become toxic, unstable; co-opted by the bureaucrats’ failed vision, nobody knows exactly what it means. Is the UK in Europe? What about other EU but non-Eurozone countries—like Poland or Sweden? Is Iceland, the canary in the coal mine for financial meltdown, European? Euro-Asiatic hybrids such as Russia and Turkey? Non-EU countries like Norway and Switzerland? Can a country be expelled from Europe?

“Europe” is uttered with a sneer or a spasm of abjection. “Euro,” which once denoted simply a strong cosmopolitan currency, is now a root that has spawned a more cynical vocabulary: Eurocritic, Euroskeptic, Europhobe. But if the establishment’s lexicon is becoming degraded, the radical retorts are more fiercely honed. “Union” and “unity” have been exposed as feckless in the face of European inability to sustain these, inspiring a more rousing synonym, “solidarity,” that resounds among those who are focused on social equality rather than financial technicalities. Paradoxically, the counter-rhetoric of the Left has expanded the context of the crisis by contracting the terminology. What was originally construed as “the global economic crisis” morphed into “the Eurozone crisis,” or “the Eurocrisis,” then became more tightly compressed into “the crisis,” and finally—stripping away everything else to convey simply a primordial vortex of personal agony and social decrepitude—the definite article dropped off, leaving just “crisis.”

“Crisis” has mobilized a radical critique of European capitalism. It’s not as simple as debating whether countries should leave the EU, or the euro—as bad as things are now, the alternative is probably catastrophic. But the Left has embarked upon a deep analysis of what sort of society has grown out of the EU’s financial autocracy. “Criminals, disguised as statesmen, were robbing us blind,” says Slovenian poet and critic Aleš Debeljak. “Crisis made us realize this truth.”

The radical mission is to uncover and expose the roots of this incompetence and institutional corruption, to question the motives and hidden agendas lurking beneath the “bankruptocracy” (another salient coinage), to educate and motivate suffering masses, and to reform the system.

“We can’t leave economic issues to the experts any longer,” says Maja Breznik, from the Slovenian Peace Institute. “It’s time for amateur investigations.”

These investigations, an end-run around the self-interested strategies of bankers and other EU cronies, begin from the premise that the vicious circle of debt is not the fault of immoderate spending by governments or households. Instead the primary goal of “recovery” has been a non sequitur: protecting the interests of private moneylenders and multinationals and refilling their coffers after their financial miscalculations and chicanery. The problem as it is being addressed bears little relation to the actual predicament, so society has plunged into deep recession.

As Europe tries to emerge from crisis, an exclusive focus on debt represents a class struggle designed by financiers to transfer losses from their books on to the taxpayers. Troubled countries are forced to sell off their economies to foreign investors. The Troika arranges bailouts under the harshest terms, with the heaviest burdens borne by agencies that support public welfare, because reducing social spending allows countries to pay more money, more quickly, back to the banks.

Privatization of the commons en- sues: everything that can be liquidated is sold, then rented back to the most disempowered classes. Much of the population is perpetually indebted and the idea of “permanent work” becomes a rarity, replaced by piece-work, part-time work and frequent lay-offs. The social contract has been broken.

We “amateur investigators” must ask questions about real value, as opposed to the merely monetary expressions of value that the Troika fetishizes. It seems reasonable to proclaim “bankrupt” (figuratively and literally) the discourse of valuation that culminated in the exotic, abstruse financial products that precipitated the crash.

It is our turn to open the discussion of what is valued from the perspective of the victims of fiscal malfeasance. (By “us” I refer to non-bankers, non-wealthy, non-functionaries and for good measure a healthy cadré of academic fellow travelers.) GDP itself is a subjective measure of value, a war-accounting mechanism that is not the only way to count. A euro is not just a euro: not every use of money is equally valuable. A different model of social accounting—one that focuses on the bottom, the workers, the poor and middle class, and starts with wages, taxes, social security—will produce a very different economic narrative than the one that has predominated for the last five years.

“We demand a new right,” argues Franco “Bifo” Berardi, a Marxist scholar from Milan’s Academy of Fine Arts, “The right to insolvency. We are not going to pay the tax. If I am insolvent, I don’t have money, so I won’t pay the debt.” Instead, there should be a moratorium on interest payments, some debt should be canceled and some repaid with a growth clause (as Germany did in the 1950s). Countries would pay as they grow, and as they can afford it.

Žižek—the Subversive Forum’s patron saint since its inception—warns that the radical Left has historically had a proclivity to sit on the sidelines: “They prefer sometimes not to take power so that when everything goes wrong they can write their books explaining in detail why everything had to go wrong. There is some deeply rooted masochism of the radical Left. Their best books are usually very convincing stories of failure.”

But today there is an especially high onus to take action, to engage in political reform. Leftist activists and politicians do have a concrete agenda for fixing the crisis. In Greece, defying the eulogies of democracy, Alexis Tsipras’ Syriza coalition has shown impressive strength in the last few elections and stands within grasp of parliamentary victory and a majority coalition in the near future. Nearly destroyed by crisis, Greece may soon emerge as the most advanced site of resistance. “The future of Greece is the future of Europe,” Tsipras proclaims, providing a heartening reverberation for the slogan that protestors chant across the continent, “Nous sommes tous des grecs”: We are all Greeks.

The Left’s challenge is to reorganize in a more cooperative, collective way: reclaiming the commons, reappropriating the wealth that is now in the hands of the state and the banks, and reconstituting the social fabric that was destroyed by economic restructuring.

Political platforms like Syriza’s draw on a wealth of theoretical foundations and strategic visions for reform.

Erik Wright, a University of Wisconsin sociologist who wrote Envisioning Real Utopias, is one of many academic subversives who offered Zagreb audiences a sophisticated array of fresh ideas for transcending the status quo of capitalism and replacing it with an emancipatory alternative, a democratic egalitarian pathway that empowers people to take control of their own destinies. Wright described a range of innovations that can be introduced “inside of capitalism” but that embody non-capitalistic principles and more fully reflect the values of democracy: worker-owned cooperatives, participatory budgeting (where citizens help determine civic priorities), freely provided public services like transportation and libraries (which we can think of as anti-capitalist ways to give people mobility and books), and unobstructed access to the commons of intellectual property. Peer-to-peer collaborations like Wikipedia illustrate how a non-capitalist means of production can flourish within capitalism and ultimately displace capitalism altogether (as evidenced by the recent demise of the print edition of that imperialist icon, the Encyclopedia Britannica).

Urban farms organized through community land trusts can support food production divorced from agribusiness. Crowd-sourcing finance like Kickstarter sidesteps the entrenched hegemonies of cultural production. The gift economy in music from the Internet allows people to download songs for free and pay whatever they want. (Wright believes these musicians actually make more income than they would in a conventional sales model because they have created a more palatable moral economy with their fans.)

The crisis of capitalism offers, as a silver lining, the opportunity for us to reconceptualize more democratic and sustainable systems of social and commercial existence. It’s a moment that is uniquely receptive to new ideas, as the old ones have proven so worthless. A subversive smorgasbord can be created in the world as it is, prefiguring things that might be in the world as it could become. Are these just utopian fantasies? A questioner at Wright’s lecture asked whether a smattering of such small-scale interventions could really inspire fundamental social change, to which the sociologist responded sublimely: “We don’t know for sure. The day before Wikipedia was invented, it was impossible.”

ABOUT THIS AUTHOR

Dr. Randy Malamud is regents’ professor and chair of the department of English at Georgia State University. He is the author of eight books, including Reading Zoos: Representations of Animals and Captivity (NYU Press, 1998) and An Introduction to Animals and Visual Culture (Palgrave Macmillan, 2012).   He can be reached at rmalamudgsuedu.

via The Subversive Summit – In These Times.

Croatia’s entry fee

Engineer Duje Kovai, who has worked in the shipyard at Split for 40 years, asks: “Why does Europe want to stop Croatia building ships?” He has no answer. The country has a long coastline and history of sailors, fishermen and shipbuilders, but EU membership will probably put an end to one of its oldest industries. The yards had to be completely privatised before Croatia officially joined the EU on 1 July.

Croatia had five shipyards, dating back to the 19th century: Uljanik in Pula, and 3-May at Rijeka, Kraljevica, Trogir and Split. They were the economic backbone of the coastal regions. Ships built in Yugoslavia used to sail the world, and for decades Dalmatia’s shipyards rivalled those of Trieste and Saint-Nazaire. Shipbuilding was key to the political imagination of the socialist years: Josip Broz Tito had worked as a mechanic at Kraljevica in the 1920s. Split’s history is linked with the shipyard: the famous Hajduk football club — which is to Croatia what Olympique de Marseille is to France — was founded by shipbuilders who joined the Communist partisans when Dalmatia was annexed by the Italian fascists in 1941.The termination of all public subsidies is stipulated in chapter 8 (Competition Policy) of the accession treaty admitting Croatia to the EU, and the European Commission has been monitoring the implementation of the “restructuring” programme. “All over the world, states help shipbuilding,” said Zvonko Šegvi, president of Split’s shipbuilders’ union. “In Italy, the Fincantieri shipyards are entirely in public hands; in France, the state is still a minority shareholder in the biggest yards such as STX-Chantiers de l’Atlantique. Even in South Korea, the world leader in naval construction, the state subsidises shipbuilding. What’s acceptable in every other country is forbidden in Croatia in the name of European integration.”

A few months before EU accession, the state put its shipyards up for sale. But this proved more difficult than expected: debts were underestimated and some potential buyers were put off by the requirement that they shoulder 40% of restructuring costs. Kraljevica didn’t find a buyer and went under. Only the privatisation of the small site at Trogir seems a comparative success: one pier will be turned into a marina and chandler’s yard, and shipbuilding will continue. It was bought by a Croatian businessman, Danko Konar. The state will contribute €60m ($80m) to its restructuring over five years, and the agreement includes cutting the workforce from 1,200 to 900. Slavko Bilota, an engineer, hopes though that as older workers retire new ones will be taken on.The yards in Split were purchased by the DIV group for the nominal sum of 500,000 kunas ($88,600). DIV, which is owned by the businessman Tomislav Debeljak, has not put forward any serious plan for getting them back in operation, and announced in June that almost all of the 3,500 workers would be laid off: 1,500 of these will be rehired on short-term contracts, but the selection criteria are unclear. DIV has also promised to recruit 500 former employees, also on temporary contracts.

Split is not going down without a fight, and DIV has brought charges against union leaders for alleged acts of violence and has had them banned from the site.The identity of Istria is likewise inextricably linked to the Uljanik shipyard at Pula. In this tiny region of 200,000 people, shipbuilding accounts for nearly 30,000 jobs, direct and indirect. Production has continued and the order book is full, despite a reduction in state aid since 2006. Uljanik even made a bid to buy the 3-May shipyard in Rijeka. But the future remains uncertain. The site is attracting attention for its touristic rather than industrial potential: the islet on which the shipyards are located is in the middle of Pula bay, visible from the promenade and the town’s Roman amphitheatre. For now, Pula’s tourist future is focused on Muzil, a former military base built in 1859 for the Austro-Hungarian fleet and used by the Yugoslav then Croatian navies until it was closed in 2007. Pula residents currently stroll, bathe, fish, and picnic on the site, which also hosts alternative festivals, but there are plans to privatise it and turn it into a tourist complex with a 2,500-bed hotel, golf course and marina.

The planned demise of the shipyards will complete Croatia’s deindustrialisation. But can the country rely on tourism? The coastal regions have the highest unemployment, with 22% officially out of work overall, and a third of those under 25. Many young people get by on casual work on the black market, earning as little as $250 a month. Zvonko Šegvi says Croatia is joining the EU “without any real preparation … our economy has been devastated, and all we can do is provide services to the rich countries in the north. In the EU, Croatia is going to be a second-rank country, like all the other states in the south.”

via Croatia’s entry fee – Le Monde diplomatique – English edition.

Hospital pharmacists warn austerity measures are negatively impacting patient welfare

Member countries of the European Association of Hospital Pharmacists (EAHP) have issued a jointly agreed statement expressing apprehension about the impact of public spending austerity on services to patients in hospitals.

Amongst the negative impacts of public spending austerity causing concern to hospital pharmacists are: increasing expectancy placed upon patients to meet the up-front costs of their medicines; the unintended impacts national cost-cutting measures are having in respect of medicines shortage; short-staffing in hospitals; diminished opportunities for healthcare professional training and development; and shrinking investment in areas of patient safety enhancement.

EAHP’s members have called for a European Commission review into the potential for greater joint level cooperation between governments in terms of reducing the detrimental health impacts of austerity measures. Such a review could be conducted in the context of both the pan-European aspects of these problems, and the remit of the European Union to take action in the area of public health, as per article 168 of the Treaty on the Functioning of the European Union.

Speaking about the new policy statement, EAHP president Dr Roberto Frontini said, “Hospital pharmacists, by the nature of our profession, are highly attuned to detecting patient safety threats. So with the impacts of public spending squeezes now keenly felt in almost all European countries, we call for greater caution, care and compassion by policy-makers when it comes to the area of health. Too much progress has been achieved in previous decades to be casually discarded in a rush to resolve macro-economic challenges. Sober analysis must made of the patient safety implications of all decisions, as well as the impacts on sustainable health services.”

Dr Frontini further added, “I see significant potential value that could be delivered by the European Commission taking a proactive role in helping member states navigate the current financial challenges to health systems. Ultimately, we all have a duty to ensure that it is not the sick and vulnerable that pays the price of austerity.”

EAHP is an association of national organisations representing hospital pharmacists at European and international levels.

via Hospital pharmacists warn austerity measures are negatively impacting patient welfare.

The global leadership crisis

Austerity measures imposed on already depressed economies have not been very helpful. Anyone with pedestrian knowledge of economics would have predicted that austerity measures imposed during a recessionary period would do more harm than good.

The IMF, which has been party to policy absurdities in the eurozone, now armed with the benefit of hindsight, admits to the damage that their nonsensical austerity measures have caused, more especially to the Greek economy. Former IMF managing director Dominique Strauss-Kahn when interviewed by Richard Quest on CNN also admitted to the unimaginative approach by the IMF, the European Commission and the European Central Bank and its failures. Forcing Greece to cut government spending when the economy was in recession was not only stupid but dangerous. Unemployment in Greece has since skyrocketed from a low of 8.5% in 2008 to an eye-popping 26.9% in 2013. Consumer spending, which is a critical component in the engine of economic growth, failed to grow due to lack of stimulus.

The one-size-fits-all policy approach to the eurozone under the dictatorship of Angela Merkel will not assist with economic recovery and will continue to negatively impact on the global economy. A policy shift is necessary to respond to the global economic realities. The global economic outlook has been slashed. Major economies have recorded declining growth rates. Emerging economies, which have been driving global economic recovery, are also under severe strain while still posting positive growth rates.

Japan has struggled for many years to fondle its economy back to decent growth. Its economy has been plagued by protracted periods of deflation, which are exacerbated by lower than desired consumer spending. The stimulus package of about $600 billion has had minimal inflationary effect to reach the target of 2% by 2015. Instead the Bank of Japan has cut the inflationary outlook, in spite of pumping liquidity into the market. The significant increase in government spending does not seem have the desired effect on the $5 trillion economy.

China, which has grown at mouth-watering rate for a consistent period, is also experiencing a slowdown. Some instructive lessons could be drawn from how Beijing has managed its economy over a period of three decades and how it continues to respond to changing circumstances with appropriate policy. The manner in which China manages its economy has offended some like the US, which accused Beijing of manipulating the exchange rate. The Chinese economy had been export-led for a number of years and low exchange rates served a meaningful purpose. There has been a policy shift in that there is an attempt to focus on consumption-led growth going forward. Low exchange rates, which the US has been whining about for a number of years, are of no significant consequence in the long-run. Consumer spending in China is about 40% of total GDP, compared to 70% in the US.

Policy-makers ordinarily see consumption as an opportunity for long-term growth and have responded accordingly with a stimulus package of about $600 billion. The results of policy intervention in China are evidenced by rising demand in luxury goods. Consumer spending on luxury products has been on steroids. The obvious question raised is the sustainability of these policy measures and potential bubbles created in the system, which may return later to cause heartache. But one thing remains, China appears to be demonstrating practical approaches to its own economic situation.

There are numerous global economic forums, like the G20, the World Economic Forum and so on, where global leaders converge on a regular basis to discuss problems confronting the world and how best to respond to them. These forums have become nothing more than talk-shops that do not generate any meaningful outcomes. There seems to be a greater need by world leaders to be seen to be doing something about global problems when in practical terms only narrow national interests take priority. The amount of hot-air emitted during these global forums could be the biggest contributor to global warming. The people are not doing enough to hold their leaders accountable and keep them honest.

Until the people begin to forcefully demand that leaders commit themselves to promotion of common welfare, they will keep getting the leaders they deserve. When leadership fails, it becomes the responsibility of the people to transform society and their conditions into what they should be. The act of transformation in the vacuum of leadership should begin with the overthrow of purposeless government, in the knowledge that revolutions are merely a means to an end but not an end itself. A successful revolution must equally transform the general thinking of society and strengthen their resolve in the pursuit of what is just and equitable. According to Che Guevara: “The revolution is not an apple that falls when it is ripe. You have to make it drop.” This persistent deterioration in the general welfare of society should be enough to agitate people to rebel against their thieving governments and punish crooked politicians. The people must rise!

via The global leadership crisis | Thought Leader.

The Irish bail-out programme: The meaning of exit

WHEN tapes of conversations between senior executives at the failed Anglo Irish Bank at the height of the financial crisis in 2008 were leaked in June, Irish credibility as a true penitent among the five bailed-out euro-zone countries took a knock. At last month’s European summit Angela Merkel, the German chancellor who calls the shots in the 17-state currency block, expressed her contempt for the bankers’ conduct, which included crass anti-German sentiment.

But any fears that this unwelcome reminder of past sins and sinners might upset Ireland’s path to exit from the rescue programme have been short-lived. This week’s review by the troika – the European Commission, the European Central Bank (ECB) and the IMF – concluded that Ireland should be able to leave on schedule by the end of 2013. That’s precisely three years after fiscal and banking woes forced the Irish to go cap in hand for €67 billion ($87 billion) of official loans from Europe and the IMF.

A punctual Irish exit has seemed likely for some time if only to show that the German-inspired programmes of austerity and structural reform can work. The worse things get in other bailed-out countries – Greece, Portugal, Cyprus and Spain (for its banks) – the more that Ireland is favoured. Thus Portugal’s recent political ructions, which has caused the planned inspection by the troika on July 15th to be postponed, have strengthened Ireland’s hand.

Moreover, Irish debt managers have deftly exploited chances to raise funds as Ireland’s fiscal credibility improved and its bond yields subsided. They have benefited along with the other crisis countries from the ECB’s commitment last September to make unlimited purchases of bonds in secondary markets under strict conditions – its “Outright Monetary Transactions” (OMT) programme, which has proved so successful a deterrent that it has not yet been used. Helped by the debt-management agency’s forays into the markets, the Irish government is now fully funded into early 2015.

That’s handy because on the economic front things haven’t been going so smoothly. Irish cheerleaders can no longer brag about their country being a bright spot in the recessionary gloom on the euro-zone southern and western periphery. In fact, GDP has shrunk for three consecutive quarters (the second half of last year and the first quarter of 2013) as exports have been hit first by a slowdown in global trade and secondly by the lapsing of patents on blockbuster drugs that have hurt pharmaceutical exports. The budget deficit remains high at 7.5% of GDP and public debt will reach 124% this year, a figure that underestimates the effective burden because a big chunk of Irish GDP is profits made by foreign multinationals which are lightly taxed.

The Irish government thus has good reasons to be nervous about having to fend for itself. That’s why Michael Noonan, the finance minister, is angling for a backstop to be available after the bail-out ends. But it is not just a credit line that the Irish are seeking: they want to be eligible for the ECB’s OMT programme.

That will be possible, however, only if the Irish apply to the European Stability Mechanism (ESM), the eurozone’s bail-out fund, for an “enhanced conditions” credit line. The Irish argue that there would be no need to comply with extra conditions, but whether the other euro-zone finance ministers who are on the board of the ESM will concur remains to be seen. Ireland may find that the best it can secure is a deal where it is still subject to intrusive monitoring.

If all goes to plan the Irish exit from its ignominious bail-out at the end of this year will be hailed as a big success. But the reality will be fuzzier. The official funding may end but the price of support remaining available if necessary is that Ireland will not secure full independence.

via The Irish bail-out programme: The meaning of exit | The Economist.

United Stasi of America

A protester in Hanover, Germany, holds up a sign on Saturday reading: “The United Stasi of America,” a reference to the feared secret police in totalitarian East Germany. A second sign states: “Those with nothing to hide should not fear whistleblowers.” Photo: Der Spiegel/DPA

In an important news report, ‘How the NSA Targets Germany and Europe’, Der Spiegel has reviewed a series of documents which prove that Germany played a central role in the NSA’s global surveillance network – and how the Germans have also become targets of US attacks. Each month, the US intelligence service saves data from around half a billion communications connections from Germany.

According to the listing, Germany is among the countries that are the focus of surveillance. Thus, the documents confirm that the US intelligence service, with approval from the White House, is spying on the Germans, said Der Spiegel, and possibly right up to the level of the chancellor.

Britain has been revealed as the junior partner in this Orwellian scheme. But the European Commission has reacted swiftly and strongly. In a letter to UK Foreign Secretary William Hague, the Commission vice-president Viviane Reding requested detailed clarifications about the scope of the UK’s spying practices and even hinted at legal action.

The new aspect of the revelations isn’t that countries are trying to spy on each other, eavesdropping on ministers and conducting economic espionage. What is most important about the documents is that they reveal the possibility of the absolute surveillance of a country’s people and foreign citizens without any kind of effective controls or supervision.

The Global Network of Undersea Cables. Graphic: Der Spiegel

Many high-ranking European officials have issued statements of outrage and protest against America’s spying. These representatives of the European ruling class pretend surprise at the revelations but have no doubt acquiesced to, authorised or supported similar surveillance of their own populations and of their American counterparts.

Nevertheless, the unanimity of the response is an indication that European governments have been goaded into voicing the concerns of their citizens. The US dragnet of telecommunications and the internet over Europe has never been so visible, as are now, thanks to Edward Snowden, US efforts to persecute those who have brought the spying to public notice.

The NSA’s ‘Boundless Informant’ Programme. Graphic: Der Spiegel

In the USA, the slavish corporate media has condemned Snowden’s actions. Witness a representative reaction in theNew York Times, for whom Snowden is the product of an “atomised society” and lacking “respect for institutions and deference to common procedures”! This daily newspaper, like others in its pettyfogging class and like the American national television channels, bloodthirsty and war-mongering now for a decade, has ignored the point made bluntly by the American Civil Liberties Unionthat these “institutions and procedures” long ago lost their claim to respectability.

Britain has been cast even further into Europe’s data protection wilderness after revelations that its formerly glorious signals intelligence agency GCHQ has been monitoring web and telecommunications on an even greater scale than the NSA. Germany’s justice minister, Sabine Leutheusser-Schnarrenberger, has demanded explanations from her British counterpart, asking whether the 30-day retention of signals data is based on concrete suspicion or is warrantless (guess which?).

Yet, as Der Spiegel has commented, among the intelligence agencies in the Western world there appears to be a division of duties and at times extensive cooperation. And it appears that the principle that foreign intelligence agencies do not monitor the citizens of their own country, or that they only do so on the basis of individual court decisions, is obsolete in this world of globalised communication and surveillance. Hence Britain’s GCHQ intelligence agency, the American NSA and Germany’s BND foreign intelligence agency create a matrix is created of boundless surveillance in which each partner aids in a division of roles.

Via

 

Bugged by US spying, EU may sever ties with American internet providers

The building of the European Parliament is seen in Brussels.(AFP Photo/Dominique Faget) 

EU businesses are threatening to terminate relations with American internet providers in response to the National Security Agency surveillance scandal, the European Commission has warned.

Neelie Kroes, Vice President of the European Commission, said that US providers of “cloud services,” a technology that permits clients to store data on remote servers, could suffer steep losses if users fear the security of their material is at risk of being compromised.

“If businesses or governments think they might be spied on, they will have less reason to trust cloud, and it will be cloud providers who ultimately miss out,” Kroes said. “Why would you pay someone else to hold your commercial or other secrets if you suspect or know they are being shared against your wishes?”

The EC vice president then pointed to the “multi-billion euro consequences” facing US internet companies in the wake of the scandal.

“It is often American providers that will miss out, because they are often the leaders in cloud services. If European cloud customers cannot trust the United States government, then maybe they won’t trust US cloud providers either. If I am right, there are multibillion-euro consequences for American companies. If I were an American cloud provider, I would be quite frustrated with my government right now.”

AFP Photo/John Macdougall

On Thursday, the European Parliament overwhelmingly passed a non-binding resolution that says the US should provide full disclosure about its email and communications data, otherwise two EU-US transatlantic information-sharing deals — the Terrorist Finance Tracking Program (TFTP) and Passenger Name Records (PNR) — could be revoked.

Relations between Washington and Brussels suffered a setback in June when former NSA analyst Edward Snowden leaked details of a top-secret US data-mining surveillance program, known as Prism, which operated both in the United States and the European Union.

Prism is said to give the NSA and FBI user information from some of the world’s largest internet companies, including Google, Facebook, Microsoft, Apple, Yahoo and Skype.

Der Spiegel cited a secret 2010 document alleging that the US spied on internal computer networks in Washington, as well as at the 27-member bloc’s UN office and EU offices in New York.

The NSA paper also allegedly refers to the EU as a “target.”

According to Der Spiegel, the US surveillance system spied on some 500 million telephone and internet recordings in Germany each month, ramping up fears that the United States was not simply collecting data to prevent against acts of terrorism, but was involved in full-scale industrial espionage.

In response to heated European criticism of the US surveillance activities, US President Barack Obama this week seemed to downplay the severity of the situation when he commented: “I guarantee you that in European capitals, there are people who are interested in, if not what I had for breakfast, at least what my talking points might be should I end up meeting with their leaders. That’s how intelligence services operate.”

During a Wednesday phone conversation with German Chancellor Angela Merkel, Obama sought to reassure her that the United States would provide the Europeans with details of their surveillance program.

Meanwhile, in an effort to contain the damage from the revelations, ambassadors to the European Union agreed on Thursday to proceed with EU-US negotiations on a new transatlantic free trade pact, scheduled to open in Washington on Monday. 

EU commissioner for Digital Agenda Neelie Kroes.(AFP Photo/Georges Gobet)

During the EU-US trade negotiations it will certainly not go unnoticed that crucial European positions in the trade talks may already be compromised due to the wide-scale surveillance. EU officials do not want the issue of America’s covert spy program to be the elephant in the room which nobody talks about.

Dalia Grybauskaite, the president of Lithuania, which takes over the rotating six-month EU presidency this week, said on Thursday that she awaits “information” — not apologies — from the Americans over the spying allegations.

“They are open to co-operation. They are open to explain,” she said. “I never seek an apology from anyone. I seek information … We don’t want to jeopardize the strategic importance of free trade.”

Grybauskaite insisted that the scandal, which has shown no sign of abating, should not be allowed to obstruct the trade talks but acknowledged that “some countries are very sensitive on this question.”

Meanwhile, Britain may also have some explaining to do on the sidelines of next week’s trade talks since it was suggested that the UK’s Government Communications Headquarters (GCHQ), through a system known as Tempora, .

The European Commission vice president said that US companies could suffer from the US government’s covert intelligence-gathering activities.

“Concerns about cloud security can easily push European policy-makers into putting security guarantees ahead of open markets, with consequences for American companies,” Kroes warned. “Cloud has a lot of potential. But potential doesn’t count for much in an atmosphere of distrust.”
________

 

Robert Bridge is the author of the book, Midnight in the American Empire, which discusses the dangerous consequences of excessive corporate power now prevalent in the United States.

 

 

http://rt.com

rt.com is Russian television, which actually does a great job reporting on US news too.

EuroNanoForum a ‘major’ opportunity for Irish researchers

The sixth biannual EuroNanoForum – which takes place in Dublin this week – is set to “showcase Ireland as a hotbed of nanotechnology research, innovation and investment”, according to Enterprise Ireland’s Dr Liam Brown.

The largest event of the Irish EU presidency, Dr Diarmuid O’Brien, executive director of Ireland’s leading nano-science institute Crann, says the event will be a “major chance for Irish researchers”.

They will seek to attract investment through the European Commission-backed €70 billion Horizon 2020 research and innovation framework which is being launched in January.

“It’s an opportunity for Irish industry and academia to put themselves in the shop window,” adds O’Brien, who notes that over the past decade, the global market for nano-enabled materials has grown from “from $420 million to almost $300 billion”.

Further attention

Dr Brown is national delegate for the commission-sponsored Nanosciences, Nanotechnologies, Materials and new Production Technologies programme.

He says the EuroNanoForum 2013 – which begins tomorrow and sees more than 1,400 delegates from across the continent gathering at the Convention Centre for three days of seminars and talks – is important to attract further attention to the opportunities nano-science presents in terms of “computing, health, energy, the environment and many other areas”.

“A lot of that work in those areas is done here. In Ireland we’re ranked sixth in the world per capita in terms of performance in nanotechnology,” Dr Brown tells The Irish Times.

“We have active researchers across all the Dublin universities as well as the Tyndall National Institute in Cork, the University of Limerick and NUI Galway. ”

Among the highlights of the event will be a speech from Tapani Ryhänen, who is head of Nokia’s sensor and material technologies laboratory.

He is set to talk about how graphene – a substance which is said to be harder than a diamond yet also incredibly flexible – can help revolutionise the design of mobile communications.

The event coincides with national Nanoweek, which runs until June 21st, celebrating the contribution of nano-science to the economy.

As part of the event, a gala dinner on Wednesday will feature two Irish-based projects vying for the EuroNanoForum Best Project Award.

Dr Syed A M Tofail, from the Materials and Surface Science Institute in the University of Limerick is being recognised for his BioElectricSurface project.

The NanoInteract project from UCD’s Kenneth Dawson and Iseult Lynch is also among the 11 nominations in total which were gathered from dozens of entries throughout Europe.

Breakthrough

The BioElectricSurface project successfully demonstrated how “nanotechnology could enable new knowledge critically needed for breakthrough medical device technology”, with Dr Syed already developing durable, washable, photosterilisable MRSA resistant textiles which are currently being licensed.

Meanwhile, the aim of Dawson and Lynch’s NanoInteract research is to ensure that nanotechnologies do not cause inadvertent harm to human or environmental health at any stage of their lifecycle.

On Thursday, the Convention Centre will open its doors to the public for the Nanotech Europe 2013 Magical Materials exhibition, from 9am to 2.30pm.

via EuroNanoForum a ‘major’ opportunity for Irish researchers – Technology Industry News | Market & Trends | The Irish Times – Mon, Jun 17, 2013.

EURO Press Release – The G8 summit in Lough Erne (UK) on 17-18 June 2013: the European Union’s role and actions

What are the main topics on this year’s agenda?

The United Kingdom, who is holding this year’s annual G8 presidency, has set out three main topics for their G8 presidency: trade, taxation and transparency (“the three Ts”). The three Ts will feature high on the summit’s agenda together with discussions of the global economy and foreign and security policy.

What are the EU’s role and actions regarding these topics?

1) TRADE

The European Union is the world’s biggest trading partner, accounting for 17% of global imports and exports of goods and commercial services. Trade is a key engine to boost growth and jobs in the EU. Almost one quarter of EU growth comes from international trade, and about 30 million jobs in the EU, or more than 10 % of the total workforce, depend on sales to the rest of the world, an increase of almost 50 % since 1995. To foster trade, EU policy translates into following actions: negotiating bilateral and multilateral trade agreements, ensuring that the rules agreed are actually applied, and working closely with the WTO and other multilateral institutions. This allows tackling international trade and customs barriers, backed up where needed with EU legislation.

In the field of bilateral trade agreements, prominent examples are the Transatlantic Trade and Investment Partnership with the United States, on which negotiations will be launched shortly, the free trade agreement that the EU has started negotiating recently with Japan, and the EU-Canada trade negotiations are now in their final stretch. In total, the EU has 28 trade agreements already in place, has finished negotiations on 9 trade agreements that yet have to enter into force, has 11 trade negotiations actively under way and several more trade and development negotiations on-going (for a full list see MEMO/13/282). If the EU was to complete all its current free trade talks tomorrow, it would add 2.2% to the EU’s GDP or €275 billion. This is equivalent of adding a country as big as Austria or Denmark to the EU economy. In terms of employment, these agreements could generate 2.2 million new jobs or additional 1% of the EU total workforce.

Complementing its bilateral trade relations, the EU continues to move forward with the multilateral trade agenda. For example, it is fully engaged to conclude a WTO trade facilitation agreement, on which the deal should be closed at December’s WTO ministerial meeting in Bali. Also, the EU is making the case to further trade in Africa, for example by lowering trade costs, stimulating infrastructure financing and coordinating support better. The EU is the world’s largest provider of development assistance in support of increased international and regional trade (“Aid for Trade”), with around 32% of total Aid for Trade flows – reaching more than €10.7 billion in 2010.

More info on EU trade policy: http://ec.europa.eu/trade/

2) TAXATION

Every year, around one trillion euros is lost to tax evasion and avoidance in the EU – the equivalent to the EU’s next seven years’ budget. The global losses are much higher. Tax fraud and tax evasion limit the capacity governments to raise money and implement their economic and social policies. Against the backdrop of developments like the so-called off-shore leaks and the need for consolidating public finances, a new political momentum towards greater tax fairness in Europe and globally is gaining ground. Concrete measures of legal, administrative and political nature are deployed to further step up the fight against tax evasion and tax avoidance. The EU is actively promoting and pioneering this agenda, at home, with neighbouring countries and with its global partners in the context of the G8, the G20 and the OECD. Just in May 2013, the European Council of Heads of State and Government marked important progress in this regard: it confirmed that all Member States are committed to adopt the EU savings directive by the end of 2013. After years of stand-still, this would establish the automatic exchange of information as the common standard in the EU. It also will help to promote the automatic exchange of information further internationally in the context of the OECD. The EU, also in May, has agreed the mandates to negotiate agreements on automatic information exchange with its neighbouring countries, including Switzerland (see press release 9487/13). On 12 June 2013, the European Commission proposed the widest possible scope for the automatic exchange of information between EU tax administrations (see IP/13/530 and MEMO/13/533). This proposal paves the way for the EU to have the most comprehensive system of automatic information exchange in the world. The European Council in May also called on the Council to adopt measures to counter VAT fraud by end of June. The measures include the Quick Reaction Mechanism, which will enable rapid intervention by Member States in cases of sudden and massive fraud, and the Reverse Charge Mechanism, which specifically targets carrousel fraud. The European Commission’s Action Plan to fight tax fraud and tax evasion, presented in December 2012 complements this toolbox including action on tax havens and on aggressive tax planning.

International groups of companies use and abuse opportunities to shift taxable profits to low tax countries or tax havens. As a result some big multinationals pay extremely little corporate income tax in Member States, as illustrated by several recent high profile cases. The EU is fully supportive and contributes to the global efforts in the OECD, G20 and G8 to limit base erosion and profit shifting (BEPS), including through the Commission’s December 2012 Action Plan to strengthen the fight against tax fraud and evasion and its Recommendations on good tax governance and aggressive tax planning.

More info on EU fight against tax fraud and tax evasion: http://ec.europa.eu/taxation_customs/taxation/tax_fraud_evasion/index_en.htm

3) TRANSPARENCY

The EU very recently (see MEMO/13/546) updated its transparency and accounting directives on 12 June (see MEMO/13/546), which is a huge step in the global fight against corruption and for more transparency in extractive industries and forestry. This legislation, once fully in place in the Member States, will greatly benefit developing countries, providing them with instruments to reduce corruption and to boost revenues from the exploitation of minerals, fossil fuels or wood.

In the context of this G8 summit’s ‘Land Transparency initiative’ and within the framework of its development policy (the Agenda for Change), the EU has been supporting the implementation of the 2012 Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests through 40 projects and programmes on land issues. Alone for 2013 the EU made a further commitment of €31 million to implement the land governance guidelines in 10 more countries.

On Open government data, the EU is currently finalising the revision of the 2003 Public Sector Information Directive, which will open-up public sector data for re-use across Europe. Developers, programmers, businesses and citizens will be able to get and re-use public sector data at zero or very low cost in most cases. They will also have access to more exciting and inspirational content, for example including materials in national museums, libraries and archives. For the Commission, opening up public data means opening up business opportunities, creating jobs and building communities. (see Vice-President Kroes’ statement: IP/13/316)

Shortly before the G8 summit in Lough Erne will also be the occasion for the EU to announce specific partnerships with African countries to promote transparency.

4) OTHER ISSUES

Other issues likely to top the agenda of the G8 leaders are the discussion of the global economy and how to boost jobs and growth as well as international and security issues. The crisis in Syria will figure particularly high on the agenda. The EU is appalled by the escalating violence and the continued violations of human rights. The EU has also reiterated its support for the American-Russian initiative for an international peace conference on Syria and has announced its willingness to support preparatory efforts. The solution to the conflict lies in facilitating a Syrian-led political process. The EU is also with more than 840 million euros already the largest humanitarian donor for the crisis and will mobilize an additional 400 million euros for Syria and neighbouring countries – in particular Lebanon and Jordan, including the host communities there, which are most severely affected (read President Barroso’s statement of 6 June on the crisis in Syria: MEMO/13/515 or watch the video of the statement). The situation in Iran, the Middle East Peace Process, Mali, the tensions on the Korean Peninsula or the transition process in the Southern Mediterranean through the G8 Deauville partnership are also likely to be touched upon.

The EU is the biggest donor in the world – more than half of global development aid is provided by Europeans. Aid constitutes about 9% of the EU budget (this includes the European Development fund, which is not part of the EU budget).

Since 2004, thanks to the EU support, more than 9 million pupils have been enrolled in primary education, and more than 720,000 primary school teachers have been trained; 5 million children received immunisation against measles; 750,000 persons received antiretroviral combination therapy; 32 million households have been connected to drinking water and 9 million to sanitation facilities; More than 600,000 families were provided access to electricity; The Commission has helped to protect 1.5 million km² of forests and to conserve and 1.1 million km² of protected areas; the EU as a whole helped build and rehabilitate around 36 000 km of roads. (for more info, see http://ec.europa.eu/europeaid/what/index_en.htm)

Boosting agriculture and food security is a top priority of the EU’s development policy: every year around €1 billion is invested to that end. In 2010-2011 alone, the Commission allocated nearly €5 billion to improve food security. A recent report on the EU’s Food Facility – the €1 billion facility set up in 2008 on initiative of President Barroso to counter the negative effects of the food crisis – shows that in three years, the EU food facility has improved the lives of over 59 million people in 49 countries, and provided indirect support for another 93 million others, particularly farmers. On Saturday 15 June the European Commission will be awarded the Food and Agriculture Organisation’s Jacques Diouf prize for its contribution towards to the improvement of global food security. (see http://ec.europa.eu/europeaid/what/food-security/index_en.htm)

Today, 870 million people are still going hungry and malnutrition is responsible for over 3 million child deaths annually. Only a few days ago, at the Nutrition for Growth event of the UK G8 Presidency, the EU announced that it will spend an unprecedented €3.5 billion between 2014 and 2020 on improving nutrition in some of the world’s poorest countries. The policy framework will seek a stronger mobilisation and political commitment for nutrition at country and international level, will scale up nutrition interventions, and will allow the EU to invest in applied research and support information systems. (more info: see IP/13/516)

See also the UK G8 Presidency’s accountability report published on 7 June 2013: https://www.gov.uk/government/publications/lough-erne-accountability-report

At this summit, also the fight against climate change is expected to be on the agenda and provide the global negotiations towards an agreement in 2015 additional momentum.

5) THE EU AS G8 MEMBER

Who represents the European Union at the G8 summit?

The European Union is a full member in the annual G8 Summits and is represented by the President of the European Commission and the President of the European Council. Commission President Barroso, who attended the G8 for the first time in Gleneagles in 2005, is participating for the 9th time, while Council President Van Rompuy has been attending the G8 since the entry into force of the Lisbon Treaty.

Since when does the EU participate in the G8 summits?

In 1977, representatives of the then European Community began participating in the London Summit. The first G8 summit was held two years earlier, in 1975 in Rambouillet (France). Originally, the EU had a limited role to those areas in which it had exclusive competences, but the EU’s role has grown with time. The European Commission was gradually included in all political discussions on the summit agenda and took part in all summit working sessions, as of the Ottawa Summit (1981).

Because the European Union is a unique supranational organisation – not a sovereign Member State – the name G8, ‘Group of Eight Nations’, still stands. For the same reason, the EU does not assume the rotating G8 presidency. The European Union has all the privileges and obligations of membership except the right to host and chair a Summit. The Commission and the Council have all the responsibilities of membership, and what the Presidents of the Commission and the Council endorse at the Summit is politically binding.

Which countries will hold the G8 presidency next?

The UK will hand over the Presidency to Russia for 2014. The Presidency will continue in its rotation to Germany in 2015, Japan in 2016, Italy in 2017, Canada in 2018, France in 2019, and the USA in 2020.

6) MORE NEWS ON THE 2013 G8 SUMMIT IN LOUGH ERNE:

President Barroso’s G8 website: http://ec.europa.eu/commission_2010-2014/president/g20/index_en.htm

President Van Rompuy’s G8 website: http://www.european-council.europa.eu/the-president/summits-with-third-countries?lang=en

UK Government G8 website: https://www.gov.uk/g8

Twitter: http://www.twitter.com/BarrosoEU and http://www.twitter.com/euHvr

Video material: http://ec.europa.eu/avservices/ebs/schedule.cfm

and http://tvnewsroom.consilium.europa.eu/

Press Material:

IP/13/535 The European Union at the G8 summit in Lough Erne (UK) on 17-18 June 2013

MEMO/13/548 Promoting global fairness through trade, taxation and transparency, says President Barroso ahead of G8 Summit

via EUROPA – PRESS RELEASES – Press Release – The G8 summit in Lough Erne (UK) on 17-18 June 2013: the European Union’s role and actions.

Neoliberalism has spawned a financial elite who hold governments to ransom

The International Monetary Fund has admitted that some of the decisions it made in the wake of the 2007-2008 financial crisis were wrong, and that the €130bn first bailout of Greece was “bungled”. Well, yes. If it hadn’t been a mistake, then it would have been the only bailout and everyone in Greece would have lived happily ever after.

Actually, the IMF hasn’t quite admitted that it messed things up. It has said instead that it went along with its partners in “the Troika” – the European Commission and the European Central Bank – when it shouldn’t have. The EC and the ECB, says the IMF, put the interests of the eurozone before the interests of Greece. The EC and the ECB, in turn, clutch their pearls and splutter with horror that they could be accused of something so petty as self-preservation.

The IMF also admits that it “underestimated” the effect austerity would have on Greece. Obviously, the rest of the Troika takes no issue with that. Even those who substitute “kick up the arse to all the lazy scroungers” whenever they encounter the word “austerity”, have cottoned on to the fact that the word can only be intoned with facial features locked into a suitably tragic mask.

Yet, mealy-mouthed and hotly contested as this minor mea culpa is, it’s still a sign that financial institutions may slowly be coming round to the idea that they are the problem. They know the crash was a debt-bubble that burst. What they don’t seem to acknowledge is that the merry days of reckless lending are never going to return; even if they do, the same thing will happen again, but more quickly and more savagely. The thing is this: the crash was a write-off, not a repair job. The response from the start should have been a wholesale reevaluation of the way in which wealth is created and distributed around the globe, a “structural adjustment”, as the philosopher John Gray has said all along.

The IMF exists to lend money to governments, so it’s comic that it wags its finger at governments that run up debt. And, of course, its loans famously come with strings attached: adopt a free-market economy, or strengthen the one you have, kissing goodbye to the Big State. Yet, the irony is painful. Neoliberal ideology insists that states are too big and cumbersome, too centralised and faceless, to be efficient and responsive. I agree. The problem is that the ruthless sentimentalists of neoliberalism like to tell themselves – and anyone else who will listen – that removing the dead hand of state control frees the individual citizen to be entrepreneurial and productive. Instead, it places the financially powerful beyond any state, in an international elite that makes its own rules, and holds governments to ransom. That’s what the financial crisis was all about. The ransom was paid, and as a result, governments have been obliged to limit their activities yet further – some setting about the task with greater relish than others. Now the task, supposedly, is to get the free market up and running again.

But the basic problem is this: it costs a lot of money to cultivate a market – a group of consumers – and the more sophisticated the market is, the more expensive it is to cultivate them. A developed market needs to be populated with educated, healthy, cultured, law-abiding and financially secure people – people who expect to be well paid themselves, having been brought up believing in material aspiration, as consumers need to be.

So why, exactly, given the huge amount of investment needed to create such a market, should access to it then be “free”? The neoliberal idea is that the cultivation itself should be conducted privately as well. They see “austerity” as a way of forcing that agenda. But how can the privatisation of societal welfare possibly happen when unemployment is already high, working people are turning to food banks to survive and the debt industry, far from being sorry that it brought the global economy to its knees, is snapping up bargains in the form of busted high-street businesses to establish shops with nothing to sell but high-interest debt? Why, you have to ask yourself, is this vast implausibility, this sheer unsustainability, not blindingly obvious to all?

Markets cannot be free. Markets have to be nurtured. They have to be invested in. Markets have to be grown. Google, Amazon and Apple haven’t taught anyone in this country to read. But even though an illiterate market wouldn’t be so great for them, they avoid their taxes, because they can, because they are more powerful than governments.

And further, those who invest in these companies, and insist that taxes should be low to encourage private profit and shareholder value, then lend governments the money they need to create these populations of sophisticated producers and consumers, berating them for their profligacy as they do so. It’s all utterly, completely, crazy.

The other day a health minister, Anna Soubry, suggested that female GPs who worked part-time so that they could bring up families were putting the NHS under strain. The compartmentalised thinking is quite breathtaking. What on earth does she imagine? That it would be better for the economy if they all left school at 16? On the contrary, the more people who are earning good money while working part-time – thus having the leisure to consume – the better. No doubt these female GPs are sustaining both the pharmaceutical industry and the arts and media, both sectors that Britain does well in.

As for their prioritising of family life over career – that’s just another of the myriad ways in which Conservative neoliberalism is entirely without logic. Its prophets and its disciples will happily – ecstatically – tell you that there’s nothing more important than family, unless you’re a family doctor spending some of your time caring for your own. You couldn’t make these characters up. It is certainly true that women with children find it more easy to find part-time employment in the public sector. But that’s a prima facie example of how unresponsive the private sector is to human and societal need, not – as it is so often presented – evidence that the public sector is congenitally disabled.

Much of the healthy economic growth – as opposed to the smoke and mirrors of many aspects of financial services – that Britain enjoyed during the second half of the 20th century was due to women swelling the educated workforce. Soubry and her ilk, above all else, forget that people have multiple roles, as consumers, as producers, as citizens and as family members. All of those things have to be nurtured and invested in to make a market.

The neoliberalism that the IMF still preaches pays no account to any of this. It insists that the provision of work alone is enough of an invisible hand to sustain a market. Yet even Adam Smith, the economist who came up with that theory, did not agree that economic activity alone was enough to keep humans decent and civilised.

Governments are left with the bill when neoliberals demand access to markets that they refuse to invest in making. Their refusal allows them to rail against the Big State while producing the conditions that make it necessary. And even as the results of their folly become ever more plain to see, they are grudging in their admittance of the slightest blame, bickering with their allies instead of waking up, smelling the coffee and realising that far too much of it is sold through Starbuck

via Neoliberalism has spawned a financial elite who hold governments to ransom | Deborah Orr | Comment is free | The Guardian.

Opponents have a field day at country meeting of the rich and powerful – The Irish Times – Sat, Jun 08, 2013

In the eyes of its most extreme enemies, the illuminati are not a creation of the author Dan Brown but, rather, a group of powerful people meeting this weekend in a luxury hotel in the English countryside. Now nearly 60 years old, the Bilderberg Group has been accused of being a secret, shadowy society controlled by the ultra-rich, intent on world domination.

Since Thursday, 130 senior business, political and legal figures have been enjoying the pleasures of the Grove Hotel in Hertfordshire, behind tight security. There, they are debating the need for more growth, “jobs [and] entitlement”, “nationalism and populism”, medical research trends and “the politics of the EU”. The topics also include “cyber warfare and the proliferation of asymmetric threats”, online education and “Africa’s challenges”.

No minutes are kept and no decisions will be made, they insist. Because of the privacy that surrounds it, “the participants are not bound by the conventions of office or by pre-agreed positions. As such, they can take time to listen, reflect and gather insights.”

Such declarations are exactly the problem for its opponents, who see the Bilderberg Group as a body free of democratic restraint, responsible for the Iraq War, airborne chemicals, cancer and privatisation.

Powerful people

Not all of its critics, however, delve into conspiracy-filled language, although, the Labour MP Michael Meacher argues, “These are 130 of the world’s most powerful people. This is not just intended to be a chat. This is intended to reach some decisions and we are not being told what they are.”

Meacher, a former minister under Tony Blair’s Labour government, criticised the presence of politicians such as the European Commission’s Manuel Barroso, Chancellor of the Exchequer George Osborne and Labour’s Ed Balls, and, before them, his former leader, Tony Blair.

The list includes two Irish names: Peter Sutherland, chairman of Goldman Sachs International, a long-time attender, and a former attorney general, Paul Gallagher, who has come every year since 2010. The head of Google, Eric Schmidt, is present, along with two directors of Facebook, Christine Lagarde of the IMF, and a string of bankers, including HSBC’s chief executive, Stuart Gallagher.

Jake Bexx, who says he is making a documentary on Bilderberg, became interested in it after he listened to “the conspiracy theories told to me by my tattoo artist. I used to believe in world government, the illuminati and all of that. I don’t any more; but they don’t tell us what goes on,” he says.

Two years ago, Bexx began a battle with the treasury to get information about the past attendance of George Osborne at Bilderberg meetings. “They eventually threw me a bone about his expenses,” says Bexx, “£350 for a flight to Switzerland. “I didn’t care about his expenses. I wanted information about what he was doing there.”

The treasury refused, citing a series of exemptions allowed for under freedom-of-information legislation, and on the grounds that it was “information relating to the formulation or development of government policy”.

The first Bilderberg meeting was held in 1954 following concerns about the “growing distrust of America which was making itself manifest in western Europe and which was paralleled by a similar distrust of western Europe in America”.

Propaganda was not needed, said one of its creators, Dr JH Retinger. “It was of far greater consequence to us to have mutual understanding and goodwill among men occupying the highest positions in the life of each country than to try to influence the man in the street directly,” he wrote in a 1956 note.

The choice of men, for it was then all men, was key: “The first essential is undoubtedly to have men of absolute personal and political integrity; the second, to have men of real international standing, or whose position in their own countries is such as to give them considerable influence.”

For years, conspiracy-filled accusations were of little import to the Bilderberg organisers, the rantings of a few without a platform since it was rarely reported on.

Things have changed a little: globalisation is increasingly under question, charges about the influences on politicians have become more common-place following scandals in the US and the UK. Fuelled by websites such as infowars.com and wearechange.net, Bilderberg has begun to enter a wider stream, even if it is still far from widespread public consciousness.

A PR company was appointed, though it says little. The attendance list has been published for some years, while a partial agenda for the gathering in the Grove hotel has been given out.

On a hill half a mile from the hotel there is a press encampment, where speakers rail against the group’s existence. Opponents include anti-austerity campaigners, old hippies and conservative libertarians such as Alex Jones of infowars.com. Jones is the star of the press camp, with his acolytes hanging on his every word. “We can’t let the ants stand up, that what’s they fear. Because if one does they might all stand up. And there are more of them,” he declaims through a bullhorn.

The campaigners are not united, however. One writer for an alternative media publication mocks a Guardian journalist for “your trivial little stories”.

via Opponents have a field day at country meeting of the rich and powerful – UK News | Online Newspaper | The Irish Times – Sat, Jun 08, 2013.

Is EVERY Market Rigged?

CNN reports:

The European Commission raided the offices of Shell, BP and Norway’s Statoil  as part of an investigation into suspected attempts to manipulate global oil prices spanning more than a decade.

None of the companies have been accused of wrongdoing, but the controversy has brought back memories of the Libor rate-rigging scandal that rocked the financial world last year.

***

A review ordered by the British government last year in the wake of the Libor revelations cited “clear” parallels between the work of the oil-price-reporting agencies and Libor.

“[T]hey are both widely used benchmarks that are compiled by private organizations and that are subject to minimal regulation and oversight by regulatory authorities,” the review, led by former financial regulator Martin Wheatley, said in August . “To that extent they are also likely to be vulnerable to similar issues with regards to the motivation and opportunity for manipulation and distortion.”

***

In a report issued in October, the International Organization of Securities Commissions — an association of regulators — said the ability “to selectively report data on a voluntary basis creates an opportunity for manipulating the commodity market data” submitted to Platts and its competitors.

Responding to questions from IOSCO last year, French oil giant Total said the price-reporting agencies, or PRAs, sometimes “do not assure an accurate representation of the market and consequently deform the real price levels paid at every level of the price chain, including by the consumer.” But Total called Platts and its competitors “generally… conscientious and professional.”

***

“Even small distortions of assessed prices may have a huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales, potentially harming final consumers,” the European Commission said this week.

USA Today notes:

The Commission … said, however, that its probe covers a wide range of oil products — crude oil, biofuels, and refined oil products, which include gasoline, heating oil, petrochemicals and others.

***

The EU said it has concerns that some companies may have tried to manipulate the pricing process by colluding to report distorted prices and by preventing other companies from submitting their own prices.

***

Unlike oil futures, which set prices for contracts, the data used in the MOC process is based on the physical sale and purchase of actual shipments of oil and oil products.

***

According to Statoil, the EU investigation stretches back to 2002, which is when Platts launched its MOC price system in Europe. The suspicion is that some companies may have provided inaccurate information to Platts to affect the oil products’ pricing, presumably for financial gain.

Fox points out:

At issue is whether there was collusion to distort prices of crude, refined oil products and ethanol traded during Platts’ market-on-close (MOC) system – a daily half-hour “window” in which it sets prices.

But the European Commission also is examining whether companies were prevented from taking part in the price assessment process.

The Guardian writes:

The commission said the alleged price collusion, which may have been going on since 2002, could have had a “huge impact” on the price of petrol at the pumps “potentially harming final consumers”.

Lord Oakeshott, former Liberal Democrat Treasury spokesman, said the alleged rigging of oil prices was “as serious as rigging Libor” – which led to banks being fined hundreds of millions of pounds.

He demanded to know why the UK authorities had not taken action earlier and said he would ask questions of the British regulator in Parliament. “Why have we had to wait for Brussels to find out if British oil giants are ripping off British consumers?” he said. “The price of energy ripples right through our economy and really matters to every business and families.”

***

Shadow energy and climate change secretary Caroline Flint said: “These are very concerning reports, which if true, suggest shocking behaviour in the oil market that should be dealt with strongly.

“When the allegations of price fixing in the gas market were made, Labour warned that opaque over-the-counter deals and relying on price reporting agencies left the market vulnerable to abuse.

“These latest allegations of price fixing in the oil market raise very similar questions. Consumers need to know that the prices they pay for their energy or petrol are fair, transparent and not being manipulated by traders.”

Shadow financial secretary to the Treasury Chris Leslie said: “If oil price fixing has taken place it would be a shocking scandal for our financial markets.

The Telegraph reports:

“97 per cent of all we eat, drink, wear or build has spent some time in a diesel lorry,” said a spokesman for FairFuel UK, the lobbyists. “If it is proved, they have been gambling with the very oxygen of our economy.”

***

Platts – to determine the benchmark price – examines just trades in the final 30 minutes of the trading day. A group of half a dozen analysts gather round a trading screen and decide on the final price. As with much that goes on in the City, it is a surprisingly old-fashioned method, reliant on gentlemanly conduct. Critics say it leaves the market open to abuse, and the price can suddenly spike or fall in the final minutes of the day.

The New York Times notes of agencies like Platt and Argus Media:

Their influence is extensive. Total, the French oil giant, estimated last year that 75 to 80 percent of crude oil and refined product transactions were linked to the prices published by such agencies.

The Observer writes that manipulation of the oil markets has long been an open secret:

Robert Campbell, a former price reporter at another PRA, Argus – he is now a staffer at Thomson Reuters, which also competes with Platts and others on providing energy news and data – said this a few days ago in a little-noticed commentary: “The vulnerability of physical crude price assessments to manipulation is an open secret within the oil industry. The surprise is that it took regulators so long to open a formal probe.”

Reuters points out that the probe may be expanding to the U.S.:

In Washington, the chairman of the Senate energy committee asked the Justice Department to investigate whether alleged price manipulation has boosted fuel prices for U.S. consumers.

“Efforts to manipulate the European oil indices, if proven, may have already impacted U.S. consumers and businesses, because of the interrelationships among world oil markets and hedging practices,” Sen. Ron Wyden (D-Ore.), chairman of the Senate Energy and Natural Resources Committee, wrote in a letter to Attorney General Eric H. Holder Jr.

Wyden also asked Justice to investigate whether oil market manipulation was taking place in the United States.

Not only are petroleum products a multi-trillion dollar market on their own, but manipulation of petroleum prices would effect virtually every market in the world.

For example, the Cato Institute notes how many industries use oil:

U.S. industries use petroleum to produce the synthetic fiber used in textile mills making carpeting and fabric from polyester and nylon. U.S. tire plants use petroleum to make synthetic rubber. Other U.S. industries use petroleum to produce plastic, drugs, detergent, deodorant, fertilizer, pesticides, paint, eyeglasses, heart valves, crayons, bubble gum and Vaseline.

The India Times explains that:

The price variation in crude oil impacts the sentiments and hence the volatility in stock markets all over the world. The rise in crude oil prices is not good for the global economy. Price rise in crude oil virtually impacts industries and businesses across the board. Higher crude oil prices mean higher energy prices, which can cause a ripple effect on virtually all business aspects that are dependent on energy (directly or indirectly).

The Federal Reserve Bank of San Francisco points out:

When gasoline prices increase, a larger share of households’ budgets is likely to be spent on it, which leaves less to spend on other goods and services. The same goes for businesses whose goods must be shipped from place to place or that use fuel as a major input (such as the airline industry). Higher oil prices tend to make production more expensive for businesses, just as they make it more expensive for households to do the things they normally do.

***

Oil price increases are generally thought to increase inflation and reduce economic growth.

***

Oil prices indirectly affect costs such as transportation, manufacturing, and heating. The increase in these costs can in turn affect the prices of a variety of goods and services, as producers may pass production costs on to consumers.

***

Oil price increases can also stifle the growth of the economy through their effect on the supply and demand for goods other than oil. Increases in oil prices can depress the supply of other goods because they increase the costs of producing them. In economics terminology, high oil prices can shift up the supply curve for the goods and services for which oil is an input.

High oil prices also can reduce demand for other goods because they reduce wealth, as well as induce uncertainty about the future (Sill 2007). One way to analyze the effects of higher oil prices is to think about the higher prices as a tax on consumers (Fernald and Trehan 2005).

The Post Carbon Institute notes (via OilPrice.com) that high oil prices raise food prices as well:

The connection between food and oil is systemic, and the prices of both food and fuel have risen and fallen more or less in tandem in recent years (figure 1). Modern agriculture uses oil products to fuel farm machinery, to transport other inputs to the farm, and to transport farm output to the ultimate consumer. Oil is often also used as input in agricultural chemicals. Oil price increases therefore put pressure on all these aspects of commercial food systems

Figure 1: Evolution of food and fuel prices, 2000 to 2009
Sources: US Energy Information Administration and FAO.

Economists Nouriel Roubini and Setser note that all recessions after 1973 were associated with oil shocks.

Interest Rates Are Manipulated

Unless you live under a rock, you know about the Libor scandal.

For those just now emerging from a coma, here’s a recap:

The big banks have conspired for years to rig interest rates … upon which $800 trillion in assets are pegged

This was the largest insider trading scandal ever … and the largest financial scam in world history

Local governments got ripped off bigtime by the Libor manipulation

Libor is still being manipulated

Derivatives Are Manipulated

The big banks have long manipulated derivatives … a $1,200 Trillion Dollar market.

Indeed, many trillions of dollars of derivatives are being manipulated in the exact same same way that interest rates are fixed: through gamed self-reporting.

Gold and Silver Are Manipulated

The Guardian and Telegraph report that gold and silver prices are “fixed” in the same way as interest rates and derivatives – in daily conference calls by the powers-that-be.

Everything Can Be Manipulated through High-Frequency Trading

Traders with high-tech computers can manipulate stocks,  bonds, options, currencies and commodities. And see this.

Manipulating Numerous Markets In Myriad Ways

The big banks and other giants manipulate numerous markets in myriad ways, for example:

Engaging in mafia-style big-rigging fraud against local governments. See this, this and this

Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here

Charging “storage fees” to store gold bullion … without even buying or storing any gold . And raiding allocated gold accounts

Committing massive and pervasive fraud both when they initiated mortgage loans and when they foreclosed on them (and see this)

Pledging the same mortgage multiple times to different buyers.  See this, this, this, this and this.  This would be like selling your car, and collecting money from 10 different buyers for the same car

Cheating homeowners by gaming laws meant to protect people from unfair foreclosure

Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this

Engaging in unlawful “frontrunning” to manipulate markets. See this, this, this, this, this and this

Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this

Otherwise manipulating markets. And see this

Participating in various Ponzi schemes. See this, this and this

Charging veterans unlawful mortgage fees

Cooking their books (and see this)

Bribing and bullying ratings agencies to inflate ratings on their risky investments

via Is EVERY Market Rigged? | Washington’s Blog.