Yemen Re-Draws Middle East Alliances

Yemen War: Redrawing The Fault lines

Dispatches From the Edge

May 8, 2015

 

Yemen is the poorest country in the Arab world, bereft of resources, fractured by tribal divisions and religious sectarianism, and plagued by civil war. And yet this small country tucked into the bottom of the Arabian Peninsula is shattering old alliances and spurring new and surprising ones. As Saudi Arabia continues its air assault on Houthis insurgents, supporters and opponents of the Riyadh monarchy are reconfiguring the political landscape in a way that is unlikely to vanish once the fighting is over.

 

The Saudi version of the war is that Shiite Iran is trying to take over Sunni Yemen using proxies—the Houthis—to threaten the Kingdom’s southern border and assert control over the strategic Bab al-Mandeb Strait into the Red Sea. The Iranians claim they have no control over the Houthis, no designs on the Straits, and that the war is an internal matter for the Yeminis to resolve.

 

The Saudis have constructed what at first glance seems a formidable coalition consisting of the Arab League, the monarchies of the Gulf Cooperation Council (GCC), Turkey and the U.S. Except that the “coalition” is not as solid as it looks and is more interesting in whom it doesn’t include than whom it does.

 

Egypt and Turkey are the powerhouses in the alliance, but there is more sound and fury than substance in their support.

 

Initially, Egypt made noises about sending ground troops—the Saudi army can’t handle the Houthis and their allies—but pressed by Al-Monitor, Cairo’s ambassador to Yemen, Youssef al-Sharqawy, turned opaque: “I am not the one who will decide about a ground intervention in Yemen. This goes back to the estimate of the supreme authority in the country and Egyptian national security.”

 

Since Saudi Arabia supported the Egyptian military coup against the Muslim Brotherhood government and is propping up the regime with torrents of cash, Riyadh may eventually squeeze Cairo to put troops into the Yemen war. But the last time Egypt fought the Houthis it suffered thousands of casualties, and Egypt has its hands full with an Islamic insurrection in Sinai.

 

While Turkish President Recep Tayyip Erdogan also pledged Ankara’s support for “Saudi Arabia’s intervention,” and demanded that “Iran and the terrorist groups” withdraw, Erdogan was careful to say that it “may consider” offering “logistical support based on the evolution of the situation.”

 

Erdogan wants to punish Iran for its support of the Assad regime in Syria and its military presence in Iraq, where Teheran is aiding the Baghdad government against the Islamic Front. He is also looking to tap into Saudi money. The Turkish economy is in trouble, its public debt is the highest it has been in a decade and borrowing costs are rising worldwide. With an important election coming in June, Erdogan is hoping the Saudis will step in to help out.

 

But actually getting involved is another matter. The Turks think the Saudis are in a pickle—Yemen is a dreadfully difficult place to win a war and an air assault without ground troops has zero chance of success.

 

When the Iranians reacted sharply to Erdogan’s comments, the President backpeddled. Iran is a major trading partner for the Turks, and, with the possibility that international sanctions against Teheran will soon end, Turkey wants in on the gold rush that is certain to follow. During Erdogan’s recent trip to Teheran, the Turkish President and Iran’s Foreign Minister Mohammad Javad Zarif issued a joint statement calling for an end to the war in Yemen, and a “political solution.” It was a far cry from Erdogan’s initial belligerence.

 

The Arab League supports the war, but only to varying degrees. Iraq opposes the Saudi attacks, and Algeria is keeping its distance by calling for an end to “all foreign intervention.” Even the normally compliant GCC, representing the oil monarchs of the Gulf, has a defector. Oman abuts Yemen, and its ruler, Sultan Qaboos, is worried the chaos will spread across its border. And while the United Arab Emirates have flown missions over Yemen, the UAE is also preparing to cash in if sanctions are removed from Teheran. “Iran is on our doorstep, we have to be there,” Marwan Shehadeh, a developer in Dubai told the Financial Times. “It could be a great game changer.”

 

The most conspicuous absence in the Saudi coalition, however, is Pakistan, a country that has received billions in aid from Saudi Arabia and whose current Prime Minister, Nawaz Sharif, was sheltered by Riyadh from the wrath of Pakistan’s military in 1999.

 

When the Saudi’s initially announced their intention to attack Yemen, they included Pakistan in the reported coalition, an act of hubris that backfired badly. Pakistan’s Parliament demanded a debate on the issue and then voted unanimously to remain neutral. While Islamabad declared its intention to “defend Saudi Arabia’s sovereignty,” no one thinks the Houthis are about to march on Jiddah.

 

The Yemen war is deeply unpopular in Pakistan, and the Parliament’s actions were widely supported, one editorial writer calling for rejecting “GCC diktat.” Only the extremist Lashkar-e-Taiba organization, which planned the 2008 Mumbai massacre in India, supported the Saudis.

 

Pakistan has indeed relied on Saudi largesse and, in turn, provided security for Riyadh, but the relationship is wearing thin.

 

First, there is widespread outrage for the Saudi support of extremist Islamic groups, some of which are at war with Pakistan’s government. Last year one such organization, the Tehrik-i-Taliban, massacred 145 people, including 132 students, in Peshawar. Fighting these groups in North Waziristan has taxed the Pakistani Army, which must also pay attention to its southern neighbor, India.

 

The Saudis, with their support for the rigid Wahabi interpretation of Islam, are also blamed for growing Sunni-Shiite tensions in Pakistan.

 

Second, Islamabad is deepening its relationship with China. In mid-April, Chinese President Xi Jinping promised to invest $46 billion to finance Beijing’s new “Silk Road” from Western China to the Persian Gulf. Part of this will include a huge expansion of the port at Gwadar in Pakistan’s restive Baluchistan province, a port that Bruce Riedel says will “rival Dubai or Doha as a regional economic hub,”

 

Riedel is a South Asia security expert, a senior fellow at the conservative Brookings Institute, and a professor at Johns Hopkins. Dubai is in the United Arab Emirates and Doha in Qatar. Both are members of the GCC.

 

China is concerned about security in Baluchistan, with its long-running insurgency against the central government, as well as the ongoing resistance by the Turkic-speaking, largely Muslim, Uyghur people in western China’s Xinjiang Province. Uyghurs, who number a little over 10 million, are being marginalized by an influx of Han Chinese, China’s dominant ethnic group.

 

Wealthy Saudis have helped finance some of these groups and neither Beijing or Islamabad is happy about it. Pakistan has pledged to create a 10,000-man “Special Security Division” to protect China’s investments. According to Riedel, the Chinese told the Pakistanis that Beijing would “stand by Pakistan if its ties with Saudi Arabia and the United Arab Emirates unravel.”

 

The U.S. has played an important, if somewhat uncomfortable, role in the Yemen War. It is feeding Saudi Arabia intelligence and targeting information and re-fueling Saudi warplanes in mid-air. It also intercepted an Iranian flotilla headed for Yemen that Washington claimed was carrying arms for the Houthis. Iran denies it and there is little hard evidence that Teheran is providing arms to the insurgents.

 

But while Washington supports the Saudis, it has also urged Riyadh to dial back the air attacks and look for a political solution. The U.S. is worried that the war-induced anarchy is allowing Al-Qaeda in the Arabian Peninsula to florish. The embattled Houthis were the terrorist group’s principal opponents.

 

The humanitarian crisis in Yemen is growing critical. More than a 1,000 people, many of them civilians, have been killed, and the bombing and fighting has generated 300,000 refugees. The Saudi-U.S. naval blockade and the recent destruction of Yemen’s international airport has shut down the delivery of food, water and medical supplies in a country that is largely dependent on imported food.

 

However, the Obama administration is unlikely to alienate the Saudis, who are already angry with Washington for negotiating a nuclear agreement with Iran. Besides aiding the Saudi attacks, the U.S. has opened the arms spigot to Riyadh.

 

The Iran nuclear agreement has led to what has to be one of the oddest alliances in the region: Israel and Saudi Arabia. Riyadh is on the same wavelength as the Netanyahu government when it comes to Iran, and the two are cooperating in trying to torpedo the agreement. According to investigative journalist Robert Perry, the alliance between Tel Aviv and Riyadh was sealed by a secret $16 billion gift from Riyadh to an Israeli “development” account in Europe, some of which has been used to build illegal settlements in the Occupied Territories.

 

The Saudis and the Israelis are on the same side in the Syrian civil war as well, and, for all Riyadh’s talk about supporting the Palestinians, the only members of the GCC that have given money to help rebuild Gaza after last summer’s Israeli attack on Gaza are Qatar and Kuwait.

 

How this all falls out in the end is hard to predict, except that it is clear that, for all their financial firepower, the Saudis can’t get the major regional players—Israel excepted—on board. And an alliance with Israel—a country that is more isolated today because of its occupation policies than it has been in its history—is not likely to be very stable.

 

Long-time Middle East correspondent for the Independent Robert Fisk says the Saudis live in “fear” of the Iranians, the Shiia, the Islamic State, Al-Qaeda, U.S. betrayal, Israeli plots, even “themselves, for where else will the revolution start in Sunni Muslim Saudi but among its own royal family?”

 

That “fear” is driving the war in Yemen. It argues for why the U.S. should stop feeding the flames and instead join with the European Union and demand an immediate cease-fire, humanitarian aid, and a political solution among the Yemenis themselves.

Conn Hallian can be read at https://dispatchesfromtheedgeblog.wordpress.com and https://middleempireseries.wordpress.com

 

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Kenya’s Sorrow: The U.S. Connection

Kenya’s Sorrow: The U.S. Connection

Dispatches From The edge

April 16, 2015

 

 

The systematic murder of 147 Kenyan university students by members of the Somalia-based Shabab organization on April 2 is raising an uncomfortable question: was the massacre an unintentional blowback from U.S. anti-terrorism strategy in the region? And were the killers forged by an ill-advised American supported Ethiopian invasion that transformed the radical Islamic organization from a marginal player into a major force?

 

As Kenyans were mourning their dead, opposition figures were openly opposing Kenya’s occupation of southern Somalia and bringing into question Washington’s blueprint for fighting terrorism: drones, Special Forces, and regional proxies.

 

Speaking in the port of Mombasa, former prime minister and opposition leader Raila Odinga called for the withdrawal of Kenyan troops, as did the Speaker of the National Assembly, Justin Muturi. Speaking at the funeral for one of the victims, Senator James Orengo said, “We know very well the consequences of a war of occupation. We must withdraw our troops from Somalia to end this.”

 

Absent from most of the mainstream American media was an examination of exactly what role the U.S. has played in Somalia over the past decade, and how Washington has helped create the current crisis.

 

A little history.

 

When military dictator Siad Barre was overthrown in 1991, Somalia fell into the chaos of clan warfare, sparking off a U.S. military intervention in 1992. While billed as a “humanitarian intervention,” the Americans aggressively sought to suppress the plague of warlords that had turned the nation’s capital, Mogadishu, into a shattered ruin. But the expedition derailed in 1993 after 18 U.S. soldiers and hundreds of Somalis were killed in the infamous Black Hawk down incident. The U.S. withdrew the following year.

 

Which doesn’t mean the U.S. went away, or that it didn’t apply a new strategy for Africa, one designed by the right-wing Heritage Foundation. The genesis of that plan came from James Carafano, a West Point graduate and head of Heritage’s foreign policy section, and Nile Gardiner, director of the think tank’s Margaret Thatcher Center for Freedom, who drew up a document entitled “U.S. Military Assistance for Africa: A Better Solution.”

 

The strategy called for the creation of a U.S. military command for Africa, a focus on terrorism, and direct military intervention using air power and naval forces. The authors argue against putting U.S. troops on the ground, instead enlisting those of allies. Those recommendations were adopted by the Bush administration—and later the Obama administration—lock, stock and barrel. African Command (Africom) was created, as along with the Trans-Sahara Counterterrorism Initiative, to train troops in 16 nations that border the vast area embraced by world’s biggest desert.

 

While targeting “terrorism” is the strategy’s public face, Carafano and Gardiner argue that U.S. “vital interests” are involved on the continent, “With its vast natural and mineral resources,” Africa, say the two scholars, “remains important to the West, as it has been for hundreds of years, and its geostrategic significance is likely to rise in the 21st century.”

 

A major rationale behind the strategy is to checkmate Chinese influence in Africa and short circuit Beijing’s search for raw materials. China gets about one third of its oil from Africa, plus platinum, copper, timber and iron ore.
The new policy made its début in Somalia when the U.S. actively aided Ethiopia’s 2006 invasion to support the unpopular and isolated the Transitional Federal Government of Somalia (TFGS). The invasion overthrew the Islamic Courts Union (ICU), which had brought Somalia its first stable government in 15 years.

 

The ICU was a coalition of Islamic organizations that included a small group calling itself the “Shabab,” Arabic for “Youth.” While the ICU was Islamic in ideology, it was more moderate than the Shabab. The ICU also had more support than the TFGS, because it had routed the clan warlords who had dominated Somalia since 1991.

 

However, those warlords—united in an organization incongruously called the “Alliance for Restoration of Peace and Counter-terrorism”—were strongly supported by the U.S. CIA. Claiming that the ICU was linked to Al-Qaeda, Washington leaned on Ethiopia to invade. When they did, U.S. Special Forces based in Djibouti accompanied them and gave them intelligence and equipment. The U.S. Navy shelled a town in Southern Somalia, killing, according to Oxfam and the United Nations, 70 civilians and wounding more than a 100. While the New York Times claims that U.S. support for the invasion was “covert,” it was anything but.

 

The powerful Ethiopian Army crushed the ICU, but the brutality of the occupation that followed fired up a resistance movement led by the Shabab. Given that Ethiopians and Somalians are traditional enemies, and that the former is largely Christian, the latter overwhelmingly Muslim, one wonders what Washington was thinking when it backed the invasion.

 

It was the 2006 Ethiopian-U.S. invasion that turned the Shabab into a major player, just as the invasion of Iraq fueled the creation of, first, Al-Qaeda and then the Islamic State of the Levant (ISIL) in Iraq and Syria.

 

The Shabab quickly took over most of southern and central Somalia, although their brutality and strict interpretation of Islam eventually alienated them from much of the population. However, the one thing that Somalians could unite around was expelling the Ethiopians, and after two years of ambushes, roadside bombs and suicide vests, Addis Abba withdrew most its forces.

 

At the time, the Shabab was not affiliated with Al-Qaeda—it did not do so until 2012—and its concerns were mainly local. The organization was more like the Taliban in Afghanistan, albeit with a more extreme interpretation of Islam. But that distinction was lost on Washington, which pressed the African Union (AU) to send in troops. In 2007, the AU, with UN compliance, established the African Union Mission in Somalia (AUMIS) and deployed 9,000 troops to support the TFGS.

 

It is no coincidence that the bulk of AUMIS troops are from Uganda and Burundi, two countries that receive U.S. aid, as does Ethiopia. From 2009, U.S. military aid to Addis Abada jumped 256 percent.

 

The U.S. also footed the bill for private mercenary organizations, like Bancroft Global Development, to train Ugandan and Burundi troops in counter-insurgency warfare. The fact that Bancroft is a private company shields it from public scrutiny, including by the U.S. Congress.

 

While the initial AUMIS deployment was not very successful, it finally drove the Shabab out of the nation’s capital, Mogadishu, although that was, in part, a reflection of the Shabab’s loss of support among Somalians, alienated by the group’s brutality. Eventually the organization was driven out of all Somalia’s major cities. But even with numerous setbacks, a recent attack in the capital that killed 15 people and wounded 20 demonstrates the Shabab still has a bite.

 

Kenya—another recipient of U.S. aid whose soldiers are trained by U.S. Special Forces—invaded southern Somalia in 2011 and seized the Shabab-controlled port of Kismayo . While publically the reason for the invasion was Shabab kidnappings of Kenyans and tourists, apparently Nairobi has long had its eye on the port of Lamu as part of a development plan for the northeast part of the country.

 

Again, the Shabab was scattered rather easily, but only then to resort of guerilla war and attacks on civilian targets in Kenya and Uganda. In 2011, it set off two bombs in Kampala, Uganda, that killed 76 people. In 2013, it killed 67 people in a shopping mall in Nairobi and then topped that with the massacre at Garissa University.

 

The response of the Kenyan government has been targeting ethnic Somalians living on the Kenyan side of the border with Somalia, threatening to close down one of the largest refugee camps in the world, and squeezing the country’s Muslim. Those are actions liable to alienate Kenya’s large ethnic Somali population and its minority Muslim communities. “Shabab needs to create an atmosphere of fear and suspicion to gain a foothold,” security analyst Mohamed Mubarak told the Financial Times,” “And they may succeed if the Kenyan response is not thought out carefully.”

 

The blowback attacks have soured most Kenyans on the invasion. A poll taken last fall, six months before the Garissa University bloodbath, found that a majority of the country wants its troops out, and two in three Kenyans thought there would be more terrorist attacks.

 

What seems clear is that the Heritage Foundation’s blueprint for using military force in Africa has been a disaster. It has destabilized Somalia by overthrowing the ICU, spreading the war to Uganda and Kenya. It turned Libya into a failed state, which in turn unleashed a flood of arms that have helped fuel civil wars in Mali, Niger and the Central African Republic.

 

The widespread use of drones may kill some terrorist leaders, along with large numbers of civilians, and, rather than destroying organizations like Al-Qaeda and the Shabab, it ends up atomizing them into groups that are smaller and harder to track, but no less capable of committing mass murder. Indeed, for organizations like the Shabab and Al-Qaeda, drones have proved to be the 21st century’s most effective recruiting sergeants.

 

Military occupation sows the seeds of its own destruction, and, while using drones and proxies may keep the American death count down, that strategy ultimately creates more enemies than it eliminates.

 

The solution in Somalia (and Syria and Yemen) is political, not military. According to Bronwyn Bruton of the Council On Foreign Relations, the Shabab is “not a monolithic movement,” but includes leaders from the old Islamic Courts Union that the U.S. and it allies so disastrously overthrew. “Some of these leaders are extremists, and the idea of talking with them is unappetizing. But the United States can and should negotiate with them directly.”

 

In short, talking beats bombing and works better.

 

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Yemen & The Congress of Reaction

Dispatches From The Edge

April 3, 2015

 

 

While the ostensible rationale for Saudi Arabia’s recent intrusion into Yemen is that the conflict is part of a bitter proxy war with Iran, the coalition that Riyadh has assembled to intervene in Yemen’s civil war has more in common with 19th century Europe than the Middle East in the 21st.

 

When the 22-member Arab League came together at Sharm el Sheikh on Mar. 28 and drew up its plan to attack Houthi forces currently holding Yemen’s capital, Sanaa, the meeting bore an uncanny resemblance to a similar gathering of monarchies at Vienna in 1814. The leading voice at the Egyptian resort was Saudi Foreign Minister Prince Saud al-Faisal. His historical counterpart was Prince Klemens von Metternich, Austria’s foreign minister, who designed the “Concert of Europe” to insure that no revolution would ever again threaten the monarchs who dominated the continent.

 

More than 200 years divides those gatherings, but their goals were much the same: to safeguard a small and powerful elite’s dominion over a vast area.

 

There were not only kings represented at Sharm el Sheikh. Besides the foreign ministers for the monarchies of the Gulf Cooperation Council (GCC)—Saudi Arabia, Kuwait, Oman, the United Arab Emirates, Bahrain, Oman, Qatar, Morocco, and Jordan—most of the Arab League was there, with lots of encouragement and support from Washington and London. But Saudi Arabia was running the show, footing the bills, and flying most the bombing raids against Houthi fighters and refugee camps.

The Yemen crisis is being represented as a clash between Iran and the Arab countries, and part of ongoing tension between Sunni and Shiite Islam. The League accuses Iran of overthrowing the Yemeni government of Abdu Rabbu Mansour Hadi, using the Shiite Houthis as their proxies. But the civil war in Yemen is a long-running conflict over access to political power and resources, not religion, or any attempt by Iran to spread its influence into a strategic section of the Arabian Peninsula. And the outcome, as long-time Middle East journalist Patrick Cockburn points out, is likely the spread of sectarian warfare throughout the region.

 

 

The Houthis, like the Iranians, are Shiites, but of the Zaydi variety, not one that many Iranians would even recognize. And while the Houthis have been at war with the central government off and on since 1992, the issues are profane, not sacred.

 

Yemen—about the size of France, with 25 million people—is the poorest nation in the Middle East, with declining resources, an exploding population, and a host of players competing for a piece of the shrinking pie. Unemployment is above 40 percent and water is scarce. Oil, the country’s major export, is due to run out in the next few years.

 

The country is also one of the most fragmented in the region, divided between the poorer north and the richer, more populous, south, and riven by a myriad of tribes and clans. Until 1990 it was not even one country, and it took a fratricidal civil war in 1994 to keep it unified. There is still a strong southern secession movement.

 

The current war is a case in point. The Houthis fought six wars with former military strongman Abdullah Saleh, who was forced out of the presidency in 2011 by the GCC and the UN Security Council. Hadi, his vice-president, took over and largely ignored the Houthi—always a bad idea in Yemen. So aided by their former enemy, Saleh—who maintains a strong influence in the Yemeni armed forces—the Houthi went to war with Hadi. The new president was arrested by the Houthi, but escaped south to the port of Aden, then fled to Saudi Arabia when the Houthis and Saleh’s forces marched on the city.

 

That’s the simple version of the complexity that is Yemen. But complex was not a word encountered much at Sham el Sheikh. For the Arab League, this is all about Iran. The Houthis, said Yemen President-in-exile Hadi, are “Iranian stooges.”

 

Most independent experts disagree. The Houthis, says Towson University professor Charles Schmitz, an expert on the group, “are domestic, homegrown, and have deep roots in Yemen going back thousands of years.” He says that the Houthis have received support by Iran, but “not weapons, which they take from the Yemeni military.” “Does that mean they are going to do Iran’s bidding? I don’t think so.”

 

Both Democrats and Republican hailed the Saudi attacks. “I applaud the Saudis for taking this action to protect their homeland and to protect their own neighborhood,” said House Speaker John Boehner (R-Oh). U.S. Rep Adam Schiff (D-Ca), the senior Democrat on the House Intelligence Committee, agreed. The Obama administration says it is providing intelligence and logistical support for the operation.

 

U.S. involvement in Yemen is long-standing, dating back to 1979 and the Carter administration. According to UPI, the CIA funneled money to Jordan’s King Hussein to foment a north-south civil Yemen civil war, and U.S. Special Forces have been on the ground directing drone strikes for over a decade.

 

This, of course, creates certain logical disconnects. The U.S. is supporting the Saudi bombing in Yemen because the Houthis are allied with Iran. But in Iraq, the U.S. is bombing the Islamic State (ISIS) in support of Iran’s efforts to aid the Iraqi government’s war on the ISIS. And while the Riyadh government is opposed to the Islamic State and al-Qaeda, aided by U.S. intelligence, it is attacking one of the major forces fighting al-Qaeda in Yemen, the Houthi. In the meantime, the Gulf Council has stepped up its support of the Nusra Front in Syria, a group tied to al-Qaeda and a sworn enemy of the Gulf monarchies and the U.S.

 

On one level this reaches the level of farce. On the other, the situation is anything but humorous. The Yemen intervention will deepen Shiite-Sunni divisions in the Islamic world and pull several countries into Yemen, the very definition of a quagmire. As Cockburn points out that while the Arab League’s code name for the Yemini adventure is “Operation Decisive Storm,” the military operation will almost certainly be the opposite. “In practice, a decisive outcome is the least likely prospect for Yemen, just like it has been in Iraq and Afghanistan. A political feature common to all three countries is that power is divided between so many players it is impossible to defeat or placate them all for very long.”

 

Even if the Houthis are driven back to their traditional base in the north, it would be foolhardy for any ground force to take them on in the mountains they call home. The Yemeni government tried six times and never succeeded. It is rather unlikely that Egyptian or Saudi troops will do any better. While the League did make a decision to form a 40,000 man army, how that will be constituted, or who will command it is not clear.

 

Besides stirring up more religious sectarianism, the Yemen war will aid the Saudis and the GCC in their efforts to derail the tentative nuclear agreement with Iran. If that agreement fails, a major chance for stability in the region will be lost. Saudi Arabia’s new found aggressiveness—and its bottomless purse—will gin up the civil war in Syria, increase tensions in northern Lebanon, and torpedo the possibility of organizing a serious united front against the ISIS.

 

While the U.S. has talked about a political solution, that is not what is coming out of the Arab league. The military campaign, says Arab League General Secretary Nabil el-Araby “will continue until all the Houthi militia retreats and disarms and a strong unified Yemen returns.” The bombings have already killed hundreds of civilians and generated tens of thousands of refugees. Gulf Council sources say that the air war may continue for up to six months.

 

Instead of endorsing what is certain to be a disaster, Washington should join the call by European Union foreign policy chief Federica Mogherini for a ceasefire and negotiations. “I’m convinced that military actions is not a solution,” she said, calling on “all regional actors” to “act responsibly and constructively…for a return to negotiations.”

 

The Houthis are not interested in running Yemen. Senior Houthi leader Saleh Ali al-Sammad said that his organization “does not want anything more than partnership, not control.” Houthi ally and ex-president Saleh also said, “Let’s go to dialogue an ballot boxes,” not bombing. Yemen needs an influx of aid, not bombs, drones, and hellfire missiles.

 

The Congress of Europe muzzled European modernism for more than a generation, just as the Gulf Cooperation Council and Egypt will do their best to strangle what is left of the Arab Spring. Prince Metternich remained Austria’s Chancellor until a storm of nationalism and revolution swept across Europe in 1848 and brought down the congress of reaction.

 

That day will come for the 21st century’s Metternichs as well.

 

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Greece: Fascists At The Gate

Greece: Fascists At the Gate

Dispatches From The Edge

March 20, 2015

 

When some 70 members of the neo-Nazi organization Golden Dawn go on trial sometime this spring, there will be more than street thugs and fascist ideologues in the docket, but a tangled web of influence that is likely to engulf Greece’s police, national security agency, wealthy oligarchs, and mainstream political parties. While Golden Dawn—with its holocaust denial, its swastikas, and Hitler salutes—makes it look like it inhabits the fringe, in fact the organization has roots deep in the heart of Greece’s political culture

 

Which is precisely what makes it so dangerous.

 

Golden Dawn’s penchant for violence is what led to the charge that it is a criminal organization. It is accused of several murders, as well as attacks on immigrants, leftists, and trade unionists. Raids have uncovered weapon caches. Investigators have also turned up information suggesting that the organization is closely tied to wealthy shipping owners, as well as the National Intelligence Service (EYP) and municipal police departments.

 

Several lawyers associated with two victims of violence by Party members—a 27-year old Pakistani immigrant stabbed to death last year, and an Afghan immigrant stabbed in 2011— charge that a high level EYP official responsible for surveillance of Golden Dawn has links to the organization. The revelations forced Dimos Kouzilos, director of EYP’s third counter-intelligence division, to resign last September.

 

There were several warning flags about Kouzilos when he was appointed to head the intelligence division by rightwing New Democracy Prime Minister Antonis Samaras. Kouzilos is a relative of a Golden Dawn Parliament member, who is the Party’s connection to the shipping industry. Kouzilos is also close to a group of police officers in Nikea, who are currently under investigation for ties to Golden Dawn. Investigators charge that the Nikea police refused to take complaints from refugees and immigrants beaten by Party members, and the police Chief, Dimitris Giovandis, tipped off Golden Dawn about surveillance of the Party.

 

In handing over the results of their investigation, the lawyers said the “We believe that this information provides an overview of the long-term penetration ands activities of the Nazi criminal gang with the EYP and the police.” A report by the Office of Internal Investigation documents 130 cases where Golden Dawn worked with police.

 

It should hardly come as a surprise that there are close ties between the extreme right and Greek security forces. The current left-right split goes back to 1944 when the British tried to drive out the Communist Party—the backbone of the Greek resistance movement against the Nazi occupation. The split eventually led to the 1946-49 civil war when Communists and leftists fought royalists and former German collaborationists for power. However, the West saw the civil war through the eyes of the then budding Cold War, and, at Britain’s request, the U.S. pitched in on the side of the right to defeat the left. In the process of that intervention—then called the Truman Doctrine—U.S. intelligence services established close ties with the Greek military.

 

Those ties continued over the years that followed and were tightened once Greece joined NATO in 1952. The charge that the U.S. encouraged the 1967 fascist coup against the Greek government has never been proven, but many of the “colonels” that initiated the overthrow had close ties to the CIA and the U.S. military.

 

Golden Dawn was founded by some of the key people who ruled during the 1967-74 junta, and Greek dictator Georgios Papadopoulos, the leader of the “colonels” who led the 1967 coup, groomed the Party’s founder and current leader, Nikos Michaloliakos. Papadopoulos was a Nazi collaborator and served with the German “security battalions” that executed 130,000 Greek civilians during WW II. Papadopoulos was trained by the U.S. Army and recruited by the CIA. Indeed, he was the first CIA employee to govern a European country.

 

Golden Dawn’s adherence to Hitler, the symbols of Nazism, and the “Fuehrer principle”—investing the Party’s leader with absolute authority—is, in part, what has gotten the organization into trouble. According to an investigation by Greek Supreme Court Deputy Prosecutor Haralambos Vourliotis, Golden Dawn is split into two wings, a political wing responsible for the Party’s legal face and an operational wing for “carrying out attacks on those deemed enemies of the party.” Michaloiakos oversees both wings.

 

Prosecutors will try to demonstrate that attacks and murders are not the actions of individuals who happen to be members of Golden Dawn, because independent actions are a contradiction to the “Fuehrer principle.” Many of the attacks have featured leading members of Golden Dawn and, on occasion, members of Parliament. Indeed, since the leadership and core of the Party were jailed last September, attacks on non-Greeks and leftists have fallen off.

 

There is a cozy relationship between Golden Dawn and some business people as well, with the Party serving as sort of “Thugs-R-Us” organization. Investigators charge that shortly after two Party MPs visited the shipyards at Piraeus, a Golden Dawn gang attacked Communists who were supporting union workers. Golden Dawn also tried to set up a company union that would have resulted in lower pay and fewer benefits for shipyard workers. In return, shipping owners donated 240,000 Euros to Golden Dawn.

 

Investigators charge that the Party also raises funds through protection rackets, money laundering and blackmail.

 

Journalist Dimitris Psarras, who has researched and written about Golden Dawn for decades, argues that the Party is successful not because it plays on the economic crisis, but because for years the government—both socialists and conservatives—mainstream parties, and the justice system have turned a blind eye to Golden Dawn’s growing use of force. It was the murder of Greek anti-fascist rapper/poet Pavlos Fyssas that forced the authorities to finally move on the organization. Killing North Africans was one thing, killing a Greek quite another.

 

Instead of challenging Golden Dawn in the last election, the New Democracy Party railed against “Marxists,” “communists” and—pulling a page from the 1946-49 civil war—“bandits.” Even the center parties, like the Greek Socialist Party (PASOK) and the new Potami Party, condemned both “left and right” as though the two were equivalent.

 

Golden Dawn did see its voter base shrink from the 426,025 it won in 2012, to 388,000 in the January election that brought left party Syriza to power. But then Golden Dawn is less interested in numbers than it is in wielding violence. According to Psarras, the Party’s agenda is “to create a climate of civil war, a divide where people have to choose between leftists and rightists.”

 

Some of the mainstream parties have eased Golden Dawn’s path by adopting the Party’s attacks on Middle East and African immigrants and Muslims, albeit at a less incendiary level. But, as Psarras points out, “Research in political science has long since showed that wherever conservative European parties adopt elements of far-right rhetoric and policy during pre-election periods, the upshot is the strengthening of the extreme far right parties.”

 

That certainly was the case in last year’s European Parliamentary elections, when center and right parties in France and Great Britain refused to challenge the racism and Islamophobia of rightwing parties, only to see the latter make strong showings.

 

According to the Supreme Court’s Vourliotis, Golden Dawn believes that “Those who do not belong to the popular community of the race are subhuman. In this category belong foreign immigrants, Roma, those who disagree with their ideas and even people with mental problems.” The Party dismisses the Holocaust: “There were no crematoria, it’s a lie. Or gas chambers,” Michaloliakos said in a 2012 national TV interview. Some 60,000 members of Greece’s Jewish population were transported and murdered in the death camps during World War II.

 

The trial is scheduled for April 20 but might delayed. Golden Dawn members, including Michaloliakos and many members of Parliament, were released Mar. 18 because they can only be held for 18 months in pre-trial detention. The Party, with its ties in the business community and its “wink of the eye” relationship to New Democracy—that mainstream center right party apparently printed Golden Dawn’s election brochures—has considerable resources to fight the charges. Golden Dawn has hired more than 100 attorneys.

 

If convicted, Golden Dawn members could face up to 20 years in prison, but there is not a great deal of faith among the anti-fascist forces in the justice system. The courts have remained mute in the face of Golden Dawn’s increasing use of violence, and some magistrates have been accused of being sympathetic to the organization. Golden Dawn is charged with being a criminal organization, murder, assault, and illegal weapons possession under Article 187.

 

Thanasis Kampagiannis of “Jail Golden Dawn” warns that the Party will not vanish on its own. “Many are under the impression that if we stop talking about Golden Dawn the problem will somehow disappear. That is not the case. The economic crisis has burnished the organization, but there are other causes that have contributed to its existence and prominence, such as the intensification of state repression and the institutionalization of racism by the dominant parties.”

 

But courts are political entities and respond to popular movements. Anti-fascists are calling on the Greeks and the international community to stay in the streets and demand that Golden Dawn be brought to justice. Germans missed that opportunity with the Nazi Party and paid a terrible price for it.

 

Thanks to Kia Mistilis, journalist, photographer and editor, for providing material for this column

 

 

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Greece: Memory and Debt

Greece: Memory & Debt

Dispatches From the Edge

Conn Hallinan

March 14, 2015

 

Memory is selective and therein lays an explanation for some of the deep animosity between Berlin and Athens in the current debt crisis that has shaken the European Union (EU) to its foundations.

 

For German Finance Minister Wolfgang Schauble, “memory” goes back to 2007 when Greece was caught up in the worldwide financial conflagration touched off by American and European speculators. Berlin was a major donor in the 240 billion Euro “bailout”—89 percent of which went to pay off the gambling debts of German, French, Dutch and British banks. Schauble wants that debt repaid.

 

Millions of Greeks are concerned about unpaid debts as well, although their memories stretch back a little further.

 

In July, 1943 Wehrmacht General Hubert Lanz, commander of the First Mountain Division, was annoyed because two of his officers had been threatened by civilians in the Western Greek town of Kommeno. It was dangerous to irritate a German commander during the 1941-45 occupation of Greece.

 

Lanz first murdered 153 men, women and children—ages one to 75—in Mousiotitsas, then surrounded Kommeno, where his troops systematically killed 317 people, including 172 women. Thirteen were one-year old, and 38 people were burned alive in their houses. After the massacre, the soldiers ate their lunch in the village square, surrounded the by bodies of the dead, and then pushed on to other villages, killing more than 200 civilians.

 

It was not the first, nor the last massacre of Greeks, and most people in that country can recite them like the beads on a rosary: Kondomari (60 killed); Kardanos (180 killed); Alikianos (118 killed); Viannos (over 500 killed); Amari (164 killed); Kalavryta (over 700 killed); Distomo (214 killed). All in all, the Germans destroyed more than 460 villages, executed 130,000 civilians, and murdered virtually the entire Jewish population—60,000—during the occupation.

 

On top of that, Athens was forced to “lend” Germany 475 million Reich marks—estimated today at 14 billion Euros—to pay for the occupation. Adding interest to the loan makes that figure somewhere around 95 billion Euros.

 

Greece’s public debt is currently 315 billion Euros.

 

The Greeks “remember” a few other things about those massacres. Gen. Kurtl Student, the butcher of Kondomari, Kardanos, and Alikianos, was sentenced to five years after the war, but got out early on medical grounds. The beast of Mousiotitsas and Kommeno, Gen. Lanz, was sentenced to 12 years, served three, and became a major military and security advisor to the German Free Democratic Party. In 1954 he wrote a book about his exploits and died in bed in 1982. Gen. Karl von Le Suire of Kalavryta fame was not so lucky. Captured by the Soviets, he died in a Stalingrad POW camp in 1954. Lt. Gen. Friedrich-Wilhelm Muller, who ordered the Viannos massacre, was tried and executed by the Greeks in 1947.

 

It is not hard to see why many Greeks see a certain relationship between what the Germans did to Greece during the occupation and what is being done to it today. There are no massacres—although suicide rates are through the ceiling—and no mass starvation, but 44 percent of the Greek people are now below the poverty line, the economy shattered, and Greeks feel they no longer control their country. Up until the last election, they didn’t. The Troika—the European Central Bank, the European Commission, and the International Monetary Fund—dictated the price of the loan: layoffs, wage and pension reductions, and huge cutbacks in health care. True, their occupiers did not wear the double thunderbolts of the SS or the field green of the Wehrmacht, but armies in pinstripes and silk ties can inflict a lot of damage.

 

Germany dismisses the Greek demand for reparations—estimated at anywhere from some 160 billion Euros to over 677 billion Euros—as a long-dead issue that was decided back in 1960 when the Greek government signed a Bilateral Agreement with Berlin and accepted 115 million Deutschmarks in compensation.

 

“It is our firm belief that questions or reparations and compensation have been legally and politically resolved,” said Steffen Seibert, a spokesperson for German Chancellor Angela Merkel. “We should concentrate on current issues and, hopefully what will be a good future.”

 

But that is a selective reading of history. There was never any “resolution” of Nazi Germany’s post-war debts because the country was divided between East and West. The 1953 Treaty of London cut Germany’s obligations in half and stretched out debt payments, but the Treaty did not address reparations because they were supposed to be resolved in the final peace treaty. However, with Germany divided, there was no such agreement.

 

When Germany was unified in 1990, the Greeks raised the issue of reparations, but the Germans dismissed the issue as resolved by the combination of the London Treaty and the 1960 payoff. But not according to historian Hagen Fleischer, who has studied the reparations issue and the original loan documents. Fleischer says that Germany first argued that as long as the country was divided, Berlin could not consider repaying any debts. “Then after German reunification Helmut Kohl [then Chancellor] and Hans-Dietrich Genscher [then Foreign Minister] said that it was now much too late. The matter was ancient history.”

 

According to the Syriza government, the 115 million marks Germany paid in 1960 were only in compensation for Greek victims of Nazism, not the physical damage to the country, the destruction of the economy, or the forced loans.

 

“Germany has never properly paid reparations for the damage done to Greece,” argues Greek Prime Minister Alexis Tspiras. “After the reunification of Germany in 1990 the legal and political conditions were created for this issue to be solved. But since then, German governments chose silence, legal tricks and delay.”

 

Many Greeks refuse to accept what they consider a paltry sum for the vast crimes of the occupation. Four descendents of the 214 civilians massacred by the 4th SS Panzergrenadier Division at Distomo sued and, in 1997, were awarded 37.5 million Euros, a ruling upheld by the Greek Supreme Court in 2000. When Germany refused to recognize the verdict, the defendants took their case to Italy, and in 2008 an Italian court ruled that the plaintiffs had the right to seize German-owed property in compensation for the Greek award, including a villa on Lake Como.

 

Germany appealed the Italian decision to the International Court at Hague, which found in favor of Berlin on a principle of international law that countries are immune from the jurisdiction of other states.

 

However, Germany has assets in Greece, including property and the Goethe Institute, a leading cultural center in Athens. Justice Minister Nikos Paraskevopoulos says he is ready to begin seizing German assets in Greece.

 

Tsipras says Germany has a “moral obligation” to pay reparations, a sentiment that some on the German left agrees with. “From a moral point of view, Germany ought to pay off these old compensations and the ‘war loan’ that they got during the Occupation,” says Gabriele Zimmer of Die Linke, a party closely allied to Syriza in the European Parliament.

 

Addressing the Greek Parliamentary Committee for Claiming the German Reparations on Mar. 10, Tsipras asked “Why do we tackle the past” instead of focusing on the future? “But what country, what people can have a future if it does not honor its history and its struggles?”

 

Dismissing the argument that reparations are ancient history—“The generation of the Occupation and the National Resistance is still living”—Tsipras warned about the consequences of amnesia: “The crimes and destruction caused by the troops of the Third Reich, across the Greek territory, but also across the entire Europe” are memories “that must be preserved in the younger generations. We have a duty—historical, political, ethical—to preserve, remember forever what Nazism means, what fascism means.”

 

Nazism is not a memory that needs a lot of refreshing in Greece. Sometime this spring some 70 members of the neo-Nazi Golden Dawn Party, including 16 current and former Parliament members, will go on trial for being members of a “criminal organization.” The anti-Semitic and racist Golden Dawn Party has been associated with several murders, attacks on leftists, trade unionists, and immigrants, and has close ties with the police and several of the billionaire oligarchs who dominate Greek politics and the economy.

 

Indeed, its profile is eerily similar to that of the German National Socialist Party (Nazi) in its early years. Golden Dawn has 17 members of Parliament and is the third highest vote getter in the country, though its support has recently dipped.

 

Old memories certainly fuel Greek anger at Germany, but so do the current policies of enforced austerity that Berlin has played a pivotal role in inflicting on debt-ravaged Greece. “Germany’s Europe has finished,” says Greek Social Security Minister Dimitris Statoulis, the Europe “where Germany forbids and all other countries execute orders.”

 

Thanks to Kia Mistilis, journalist, photographer and editor, for providing material for this column

 

 

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Greece: Whispers Of Battles Past

Greece: A Whisper of Battles Past

Dispatches From the Edge

 

March 5, 2015

 

 

The recent negotiations between Greece and the European Union (EU) bring to mind Themistocles, a man who knew when to retreat and when to fight. The year was 480 BC and Xerxes I—“the king with half the east at heel”—was marching on Greece with a massive army accompanied by an enormous fleet. Against the invasion stood a small Greek army, led by Leonidas of Sparta, and an equally outnumbered navy, commanded by the Athenian, Themistocles.

 

It didn’t look good for the Greeks in August 480 BC. The Persian army was at least 10 times the size of the Greek force, and Themistocles was outnumbered almost three to one. It didn’t look good for Syriza in 2015: not a single EU member supported the Greek call for easing the debt crisis and ending the punishing austerity regime that has shattered the country’s economy and impoverished many of its people.

 

The Greek army and Leonidas were destroyed at Thermopylae, but the wily Themistocles first bloodied the Persians at Artemisium, then retreated, buying time to lay a trap at Salamis. With a little deception and a wind at his back—always a plus when you are ramming other people’s ships—the Greeks annihilated the Persian fleet and defeated the invasion.

 

Can Greek Prime Minister Alexis Tsipras and his finance minister Yanis Varoufakis pull off a Salamis and best what looks like another unbeatable foe? It is too soon to tell, but the deal they cut in Brussels bears a resemblance to that long ago battle in the Straits of Artemisium: both sides took losses, but the Greeks bought themselves valuable time.

 

And as Varoufakis recently remarked, “Time is our most precious commodity.”

 

There are a couple of things to keep in mind about the Feb. 20 agreement approved by the 19 European finance ministers.

 

First, Syriza did not have a mandate from the electorate to play one of its most powerful cards: “give us a deal or we leave the Eurozone and maybe tank the Euro.”

 

Second, Greece had a gun to its head: a Feb. 28 deadline, after which its banks would have lost support from the European Central Bank (ECB), one of the “Troika” members that include the International Monetary Fund (IMF) and the European Commission. Without ECB support, Greek banks might have gone under, forcing Athens to default on the debt and force it to exit from the Eurozone.

 

In the long run the Greeks may decide to default or drop the Euro, but that is not a decision that a freshly elected government that relies on a coalition to stay in power can make in a few weeks.

 

Third, as attractive as it is to think of scrappy little Greece defeating the mighty Troika and the EU, let’s be serious. Greece represents about 2 percent of the EU’s GDP. Its foes would have made Xerxes’ tremble: Germany, France, Italy, Finland, and the Netherlands, and even the debt-strapped governments of Spain, Portugal, and Ireland.

 

Syriza’s critics charge that the Party folded in Brussels, getting little more than a few cosmetic word changes in the Memorandum of Understanding that the Troika forced on Greece back in 2010. But language, as economist James Galbraith points out, has power. In “Reading the Greek Deal Correctly,” the University of Texas professor argues that substituting words like “the current programme” with “Master Financial Assistance Facility Agreement” means the agreement is extended “but the commitments are to be reviewed.”

 

Analyzing the centerpiece of the agreement, Galbraith concludes that there is no “unwavering commitment to the exact terms and conditions” of the 2010 Memorandum. “So,” he writes, “No, the Troika cannot come to Athens and complain about the rehiring of cleaning ladies.”

 

Georgos Katroughalos, a Syrizan minister, called the Feb. 20 agreement a study in “constructive ambiguity” that “allows different readings. Our reading is that we are not applying the Memorandum program. We are applying our agenda.”

 

What Syriza accepted were those sections of the Memorandum that mirrored its own program: running down tax evaders—unpaid taxes are estimated at 76 billion Euros—ending corruption, targeting fuel and tobacco smuggling, modernizing public administration, and tackling the “humanitarian crisis” with programs for food stamps, free medical care, and electricity for the poor. There will also be a pilot program for a minimum income for those under the poverty line—Brazil has had much success with this—and mortgage relief.

 

Which is not to say there were no casualties.

 

Syriza backed away from its pledge to end privatizations, although it added a caveat that the sale of public property must actually bring in significant amounts of cash. To date, many privatizations have been inside deals at fire sales prices. The privatization part of the agreement could be a retreat, or a loophole to put the brakes on the process. People will just have to wait and see what Syriza does.

 

“Labor reform” is another area around where sparks are certain to fly. By “reform” the Troika means cutting back minimum wages, abolishing collective bargaining, increasing the retirement age, and laying off workers. In theory this is supposed to make Greek workers more “productive” and more like German workers. In fact, Greeks work longer hours than German workers, but Greece does not possess Germany’s modernized infrastructure, including computers, high-speed rail, and autobahns.

 

Much of the German “modernization” was paid for by the U.S. to serve as a bulwark against the Soviet Union and the Eastern bloc countries. The 1953 London Agreement that canceled much of Germany’s World War II debts and stretched out payments—Syriza is asking for something very similar— was not done out of kindness, but as a critical ingredient in the Cold War. Germany would be part of the “west wall” against the Russians.

 

Syriza has agreed to “phase in” raising the minimum wage but is vague about implementing the rest of the “reform” package. Again, this could be seen as capitulation or as a temporary retreat. The measure of that will be what the Greek government actually does.

 

Greece is facing some deadlines this summer, and there is pressure from the EU for yet another bailout deal. But if Athens gets its anti-corruption program up and running, throttles gas and tobacco smuggling, and successfully collects taxes, Greece will have cash on hand to fulfill some of its election promises to restore jobs and pensions, and fund health care. The agreement recognizes that Greece is facing a “humanitarian crisis,” wording that might give Syriza more space to maneuver.

 

Greece is not alone in this fight. While it received no support from other Eurozone countries, most of those countries have growing anti-austerity movements that back Syriza. The Greek party’s close ally in the European Parliament, Podemos, is now the second largest party in Spain. And while governments in Portugal and Ireland have demanded that Greece stick with its austerity program, those governments are under siege at home for their own austerity regimes.

 

Portuguese Prime Minister Pedro Passos Coelhois is one of Syriza’s sharpest critics, dismissing the Greek Party’s position as a “children’s fairytale,” but his center-right Social Democrats are running behind the Socialist Party (SP). While the Socialists negotiated the original austerity agreement with the Troika, they have since turned against it. Antonio Costa, the recently elected major of Lisbon and leader of the SP, says austerity has brought nothing to Portugal but poverty and unemployment. On Feb. 12 a multi-party group of 32 leading politicians, economists and scientists urged Coelho to end his “punitive” approach to Greece and instead declare “solidarity” with Athens.

 

Even the Germans are not all on the same page. While Finance Minister Wolfgang Schauble—sounding more like a Wehrmacht commander than a European politician— snarled that Syriza “would have a difficult time to explain the deal to their voters,” Vice Chancellor Sigmar Gabriel was far more conciliatory.

 

What about just dumping in the Euro and declaring bankruptcy? Argentina did that and its economy grew for several years straight. But Argentina still cannot borrow money without paying onerous interest rates, and the IMF’s blockade of international finances has hurt Buenos Aires. In any case, Argentina has a much bigger economy than Greece and close ties with other South American countries through the trade bloc, Mercosur. In short, it has far greater resources than Athens.

 

The Euro has not been good for Greece, or for most of Southern European members of the Eurozone. A common currency doesn’t work when some economies are big, industrial and strong, while others are smaller and, like Greece, rely on business like tourism. Indeed, Greece has lost some of its industrial base since joining the Eurozone. When the playing field is uneven, the big dogs take over, which is why Germany dominates the EU.

 

The consequences of withdrawing from the Euro are uncertain, and not something a newly elected government can responsibly take. In any case, the vast majority of Greeks have yet to have that conversation.

 

In the coming months it will be obvious whether the latest agreement was a defeat or a tactical maneuver by Syriza. If the new government is to successfully resist the Troika, however, it will need support, not only within Greece, but from Europe and beyond. As UK political activist and journalist Tom Walker put it, “This battle is a long way from over,” and “the future of austerity across Europe now rests on what happens in Greece. If we give up on them we are giving up on our own struggles too.”

 

In 480 BC the Spartans held the Persians for three days, and poems were written about their courage, but they all died. It was Themistocles, who knew when to retreat and when to fight, who saved Greece.

 

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Europe’s Debt: Lies and Myths

Europe’s Debt: Lies & Myths

Dispatches From The Edge

Feb. 23, 2015

 

“Debt, n. An ingenious substitute for the chain and whip of the slave driver”

Ambrose Bierce

Journalist & writer

 

“The history of an oppressed people is hidden in the lies and agreed myth of its conquerers”

 

Meridel Le Suer

Author & activist

 

 

Myths are dangerous precisely because they rely more on cultural memory and prejudice than facts, and behind the current crisis between Greece and the European Union (EU) lays a fable that bears little relationship to why Athens and a number of other countries in the 28-member organization find themselves in deep distress.

 

The tale is a variation of Aesop’s allegory of the industrious ant and the lazy, fun-loving grasshopper, with the “northern countries”—Germany, the Netherlands, Britain, Finland—playing the role of the ant, and Greece, Spain, Portugal, and Ireland the part of the grasshopper.

 

The ants are sober and virtuous—lead by the frugal Swanban house frau, German Chancellor Angela Merkel—the grasshoppers are spendthrift, corrupt lay-abouts who have spent themselves into trouble and now must pay the piper.

 

The problem is that this myth bears almost no relationship to the actual roots of the crisis or what the solutions might be. And it perpetuates a fable that the debt is the fault of individual countries rather than a serious crisis at the very heart of the EU.

 

First, a little myth busting.

 

The European debt crisis goes back to the end of the roaring ‘90s when the banks were flush with money and looking for ways to raise their bottom lines. One major strategy was to pour money into real estate, which had the effect of creating bubbles, particularly in Spain and Ireland. In the latter, from 1999 to 2007, bank loans for Irish real estate jumped 1,730 percent, from 5 million Euros to 96.2 million Euros, or more than half the GDP of the Republic. Housing prices increased 500 percent. “It was not the public sector but the private sector that went haywire in Ireland,” concludes Financial Times analyst Martin Wolf.

 

Spain, which had a budget surplus and a low debt ratio, went through much the same process, and saw an identical jump in housing prices: 500 percent.

 

In both countries there was corruption, but it wasn’t the penny ante variety of tax evasion or profit skimming. Politicians—eager for a piece of the action and generous “donations”—waved zoning rules, environmental regulations, and cut sweetheart tax deals. Hundreds of thousands of housing projects went up, many of them never to be occupied.

 

Then the American banking crisis hit in 2008, and the bottom fell out. Suddenly, the ants were in trouble. But not really, because the ants have a trick: they gamble and the grasshoppers pay.

 

The “trick,” as Joseph Stiglitz, Nobel Laureate in economics, points out, is that Europe (and the U.S.) have moved those debts “from the private sector to the public sector—a well-established pattern over the past half-century.”

 

Fintan O’Toole, author of “Ship of Fools: How Stupidity and Corruption sank the Celtic Tiger,” estimates that to save the Irish-Anglo Bank Irish taxpayers shelled out $30 billion Euros, a sum that was the equivalent of the Island’s entire tax revenues for 2009. The European Central Bank—which, along with the International Monetary Fund (IMF) and the European Commission, make up the “Troika”—strong-armed Ireland into adopting austerity measures that tanked the country’s economy, doubled the unemployment rate, increased consumer taxes, and forced many of the country’s young people to emigrate. Almost half of Ireland’s income tax now goes just to service the interest on its debts.

 

Poor Portugal. It had a solid economy and a low debt ratio, but currency speculators drove up interest rates on borrowing beyond what the government could afford, and the European Central Bank refused to intervene. The result was that Lisbon was forced to swallow a “bailout” that was laden with austerity measures that, in turn, torpedoed its economy.

 

In Greece’s case corruption was at the heart of the crisis, but not the popular version about armies of public workers and tax dodging oligarchs. There are rich tax dodgers aplenty in Greece, but Germany, Sweden, and many other European countries spend more of their GDP on services than does Athens. Greece spends 44.6 percent of its GDP on its citizens, less than the EU average and below Germany’s 46 percent and Sweden’s 55 percent.

 

And as for lazy: Greeks work 600 hours more a year than Germans.

 

According to economist Mark Blyth, author of “Austerity: The History of a Dangerous Idea,” Greek public spending through the 2000s is “really on track and quite average in comparison to everyone else’s,” and the so-called flood of “public sector jobs” consisted of “ 14,000 over two years.” All the talk of the profligate Greek government is “a lot of nonsense” and just “political cover for the fact that what we’ve done is bail out some of the richest people in European society and put the cost on some of the poorest.”

 

There was a “score” in Greece. However, it had nothing to do with free spending, but was a scheme dreamed up by Greek politicians, bankers, and the American finance corporation, Goldman Sachs.

 

Greece’s application for EU membership in 1999 was rejected because its budget deficit in relation to its GDP was over 3 percent, the cutoff line for joining. That’s where Goldman Sachs came in. For a fee rumored to be $200 million (some say three times that), the multinational giant essentially cooked the books to make Greece look like it cleared the bar. Then Greece’s political and economic establishment hid the scheme until the 2008 crash shattered the illusion.

 

It was the busy little ants, not the fiddling grasshoppers that brought on the European debt crisis.

American, German, French, and Dutch banks had to know that they were creating an unstable real estate bubble—a 500 percent jump in housing prices is the very definition of the beast—but kept right on lending because they were making out like bandits.

 

When the bubble popped and Europe went into recession, Greece was forced to apply for a “bailout” from the Troika. In exchange for 172 billon Euros, the Greek government instituted an austerity program that saw economic activity decline 25 percent, unemployment rise to 27 Percent (and over 50 percent for young Greeks). The cutbacks slashed pensions, wages, and social services, and drove 44 percent of the population into poverty.

 

Virtually all of the “bailout”—89 percent—went to the banks that gambled in the 1999 to 2007 real estate casino. What the Greek—as well as Spaniards, Portuguese, and Irish—got was misery.

 

There are other EU countries, including Italy and France that, while not in quite the same boat as the “distressed four,” are under pressure to bring down their debt ratios.

 

But what are those debts?

 

This past summer, the Committee for a Citizen’s Audit on the Public Debt issued a report on France, a country that is currently instituting austerity measures to bring its debt in line with the magic “3 percent” ratio. What the Committee concluded was that 60 percent of the French public debt was “illegitimate.”

 

More than 18 other countries, including Brazil, Portugal, Ecuador, Greece and Spain, have done the same “audit,”, and, in each case, found that increased public spending was not the cause of deficits. From 1978 to 2012, French public spending actually declined by two GDP points.

 

The main culprit in the debt crisis was a fall in tax revenues resulting from massive tax cuts for corporations and the wealthy. According to Razmig Keucheyan, sociologist and author of “The Left Hemisphere,” this “neoliberal mantra” that was supposed to increase investment and employment did the opposite.

 

According to the study, the second major reason was the increase in interest rates that benefits creditors and speculators. Had interests rates remained stable during the 1990s, debt would be significantly lower.

 

Keucheyan argues that tax reductions and interest rates are “political decisions” and that “public deficits do not grow naturally out of the normal course of social life. They are deliberately inflicted on society by the dominant classes to legitimize austerity policies that will allow the transfer of value from the working classes to the wealthy ones.”

 

The International Labor Organization recently found that wages have, indeed, stalled or declined throughout the EU over the past decade.

 

The audit movement calls for repudiating debt that results from “the service of private interests” as opposed to the “wellbeing of the people.” In 2008, Ecuador canceled 70 percent of its debt as “illegitimate.”

 

How this plays out in the current Greek-EU crisis is not clear. The Syriza government is not asking to cancel the debt—though it would certainly like a write down—but only that it be given time to let the economy grow. The recent four-month deal may give Athens some breathing room, but the ants are still demanding austerity and tensions are high.

 

What seems clear is that Germany and its allies are trying to force Syriza into accepting conditions that will undermine its support in Greece and demoralize anti-austerity movements in other countries.

 

The U.S. can play a role in this—President Obama has already called for easing the austerity policies—through its domination of the IMF. By itself Washington can outvote Germany, the Netherlands, and Finland, and could exert pressure on the two other Troika members to compromise. Will it? Hard to say, but the Americans are certainly a lot more nervous about Greece exiting the Eurozone than Germany.

 

But the key to a solution is exploding the myth.

 

That has already begun. Over the past few weeks, demonstrators in Greece, Spain, Italy, Germany, Portugal, Great Britain, Belgium and Austria have poured into the streets to support Syriza’s stand against the Troika. “The Left has to work together having as its common goal the elimination of predatory capitalism” says Maite Mola, vice-president of the European Left organization and member of the Portuguese parliament. “And the solution should be European.”

 

In the end, the grasshoppers might just turn Aesop’s fable upside down.

 

—30—

 

 

 

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