Europe fails with German help

July 01, 2022

Source

by Jorge Vilches

Robert Habeck, Vice-Chancellor of Germany and Federal Minister for Economic Affairs and Climate Action, jointly with Annalena Baerbock — Germany´s Anglophile Minister of Foreign Affairs — have patronized the world from the German Green Party´s self-proclaimed moral high ground thru their ´we truly care´ and ´superior knowledge´ mantras.

Now, both German officials — quite active in the European War Party led by also German Ursula von der Leyen – are behind NATO´s announced increase of military presence in Europe with US headquarters and troops in Poland… plus a 10-fold enlarged rapid-response force up to 300,000 with yet additional troops in Romania and the Baltic states… plus yet more destroyers and F-35s in Europe´s waters and skies… and now considering itself the “unique, essential and indispensable”(sic) bloc while sweeping under the rug the deep existential crisis it has dug Europeans into with no way out for energy and commodities sourcing security. Ref #1 https://www.rt.com/news/558088-biden-troop-deployments-nato-europe/

C:\Users\Jorge Vilches\Desktop\777.jpgPower Outage. Electricity Symbol in Red Ban Circle with Text Below Stock Vector – Illustration of concept, cable: 151740792

And precisely to address the current self-inflicted energy debacle, German Minister Habeck is compounding this ugly all-inclusive European conundrum in at least 14 different ways and has (1) shut down Germany´s nuclear power plants including the domino impact upon the inter-connected European electrical grid without any foresight or consideration whatsoever (2) banned excellent, cheap Russian hydrocarbons and distilled petroleum products thereof to which Europe´s entire economy and energy infrastructure is uniquely matched and tuned for, including the superb, proven, mostly un-replaceable Russian Urals crude oil blend and the most convenient Russian Druzbha door-to-door pipeline rendering 24x7x365 already vetted exceptional performance (3) shut down and indefinetly cancelled the most-needed NS2 pipeline for delivery of Russian hydrocarbons, with possible partial expropiatory theft yet again beyond bank deposits and other assets (4) fully ignored the very loud Siemens compliance warning regarding the EU ban on return-delivery of NS1 equipment back to Russia under well-known, scheduled and mandatory Canadian maintenance requirements (5) re-introduced the dirtiest of coals, namely brown coal, as feedstock for German and EU coal-fired power plants (6) rationed hot water and fuel consumption including the amount of time that Herr Habeck himself spends in the shower (7) shamefully placed Russia´s Gazprom Germania in a ´trusteeship´ of sorts which will also prove to be a very expensive mistake (8) promoted a fully counter-productive wind-mill expansion program requiring fossil-fueled equipment for the extraction and transportation of thousands of tons of nickel and rare earths that Europe does not have, plus subsequent movement, erection and maintenance of such wind mills with other fossil fueled equipment that Europe has to import, plus additional fossil fuel power-generating equipment always needed as backstop during low wind seasons such as the last several months, plus tons of fossil-fuel powered equipment to eventually de-commission such wind-mills (9) fast-tracked the LNG Acceleration Act to favor in every possible way the construction of fully unnecessary and super-costly Liquefied Natural Gas terminals in detriment of many other much needed infrastructures so as to many months from now eventually buy über-expensive LNG from the USA which is really the Master Pupeteer behind this anti-Europe Master Plan (10) with direct benefit to Russia, the current lower volume of its oil exports at much higher prices thanks to EU sanctions allows the Ruble to become ever stronger while saving Russian oil for sale to others (11) pushed for a naïve buyer´s oil price cap cartel in a seller’s market (!!!) (12) seized Russian LNG tankers (13) crashed German nat-gas giant Uniper now ready for bail-out and Lehman moment (14) launched Germany and the EU in the most nonsensical “firehose” oil & gas policies already explained to death and with excruciating details Ref # 2 https://thesaker.is/herr-habeck-firehoses-oil-gas/ Ref #3 https://www.rt.com/business/558116-germany-seizes-russian-lng-tankers/ Ref # 4 https://www.rt.com/news/558073-nato-adopts-new-strategic-concept-russia/ Ref #5 https://www.rt.com/business/558126-skepticism-russian-oil-price-cap/ Ref #6 https://www.zerohedge.com/commodities/uniper-crashes-russian-natgas-supply-crunch-bailout-talks-germany

So, Herr Habeck and Fräulein Baerbock, on behalf of the few future European survivors, please enjoy a loud and clear “bravo, bravissimo, bravo” from your colleague Mario Draghi – Italy´s NATO Prime Minister courtesy of Goldman Sachs – for such creative and successful ´green solutions´ that will have both of you go down in history forever.

Die Grünen: “Regieren ist radikal” | ZEIT ONLINE

Unbeknownst to EU politicians and to these two ignorant dilettantes, Europe´s diesel is now strictly in Russian hands.

I have said it before and I´ll say it yet again: no imagination can ever be creative enough to make this stuff up. No way.

Could it be a deliberate insider attack of the West on the West? Will Joe Six-Pack figure all this out soon enough?

Ref #7 https://www.mondaq.com/germany/oil-gas-electricity/1204198/liquefied-natural-gas-projects-in-germany-the-lng-acceleration-act

Ref #8 https://www.spiegel.de/international/germany/german-economy-minister-on-the-gas-shortage-there-is-a-black-hat-and-putin-is-wearing-it-a-e387bacf-70ce-447f-b7dc-3b48d0ac4178 Ref #9 https://www.rt.com/business/557554-europe-coal-energy-crisis/

Russia rules diesel

European transportation of anything and everything — from people to peanuts to 500,000 metric tons ULCC oil tankers — is 99% diesel-powered. Whomever in Europe wishes or needs to move whatever with whichever vehicle or craft from point A to point B anywhere — either very close or very far away — will need diesel-powered engines somewhere along the line, and sometimes all along the long line. This is a fact, not an opinion. No diesel, no Europe. By the same token – and if so far you´ve only been browsing from now on please focus sharply on every word — less diesel, less Europe… and not enough diesel, no longer Europe as we know it. Furthermore, less diesel necessarily means even far less diesel yet as explained below. But first, let´s recall where diesel comes from.

Diesel comes from distilled crude oil which, as of December 2022 will no longer be from Russia but per the EU sanctions package No.6 from somewhere else yet an unfathomable mystery. Now then, so far nothing to write home about as we all know such circumstances very well and mostly pray and hope for the best right?. Unfortunately, it´s much much worse than that. Why so? Please keep reading, we´ll get there soon enough, in the next couple of paragraphs at the most. Because when we all generically talk about “diesel”, we automatically and exclusively think

of diesel fuel, the beautifully colored liquid we fill up our fuel tanks with. But actually, the problem is three-fold as we have, yes indeed, (1) diesel fuel of course… but also (2) diesel exhaust fluid or DEF + (3) diesel engine lube oil…

and all three are required by diesel engines. And to compound the problem further, the vessels absolutely required for seaborne delivery of non-Russian diesel-refinable crude oil from December 2022 also run on diesel-powered engines. So that´s why above you read “less diesel necessarily means even far less diesel yet ” clear enough?

By the way, other Russian commodities besides their superb Urals blend for diesel distillation are also involved.

(1) diesel fuel

Diesel fuel is required and consumed all along the transportation vectors, from container ships with goods from wherever and the trucks that pick up such goods from European ports and bring them to warehouses and then to homes etc., etc., etc. Same thing for farms that grow food produce and have tractors and vehicles to move stuff around. Trucks, cars, ships, industrial machinery, buses, factories, homes, etc., etc., etc., all require diesel fuel.

(2) diesel exhaust fluid (DEF)

DEF is a solution of urea + de-ionized water required by diesel engines in order to reduce harmful gases released during combustion by catalytic conversion of the nitrogen oxide into nitrogen and steam. In most cases diesel engines will not even start without urea-derived DEF — manufactured as a derivative of natural gas – and normally produced partly in Europe but mostly in Russia and China, the world´s two largest exporters. Europe is now having very serious natural gas supply problems, so no urea — and thus no DEF — will come from Europe. And both China and Russia have stopped exporting urea in order to produce fertilizers for themselves. So without urea anywhere around either of European origin or imported from wherever then no DEF for Europe which means no diesel engines for Europe okay?

(3) diesel engine lube oil

Because of the Ukraine war and previous Covid supply chain problems, key manufacturers of certain additives have curtailed operations, and thus diesel engine lube oil has suffered serious shortage problems worldwide. With foresight, some countries have stockpiled such raw materials for additive manufacturing or improvised new ones. This includes Russia, India, China, and others in Southeast Asia. The additives involved are antioxidants, anti-corrosion agents, dispersing additives, antirust mechanisms, friction modifiers, EP additives, antifoaming agents, antioxidants, and others. Without these additives, traditional manufacturers cannot produce the final oil products for the internal lubrication of diesel engines. Please do remember that all three “diesels” explained above are required by any diesel engine.

Ref #10 http://theeconomiccollapseblog.com/a-warning-about-the-coming-shortages-of-diesel-fuel-diesel-exhaust-fluid-and-diesel-engine-oil/

Ref #11 https://www.newsweek.com/diesel-exhaust-fuel-shortage-us-drivers-fuel-prices-russia-ukraine-war-1716503

Ref #12 https://www.motorbiscuit.com/what-could-a-def-shortage-mean-for-diesel/

Ref #13 https://www.naturalnews.com/2022-06-22-red-alert-entire-us-supply-of-diesel-engine-oil-wiped-out.html

Ref #14 https://www.zerohedge.com/personal-finance/summer-preview-rolling-blackouts-higher-gas-prices-natural-gas-rationing-europe

So then, let´s summarize the European crude oil-dependency factors that impact availability of diesel products

(A) Crude oil shortage

Source yet unknown, below please see “what NOT to do” as non-sensical and foolish as it might sound.
Also please see Ref #15 https://thesaker.is/no-fuels-for-europe/

(B) Crude oil seaborne delivery is either poor or has failed

Diesel fueling problems for tankers, so less crude oil delivery means less diesel refined (vicious circle)
Suez limitations + Cape Horn problems + piracy + very long trips from far away with serious issues
Much higher freight costs + much longer distances complicate logistics compliance of batch deliveries.
Tanker problems & port labor union issues re schedule non-compliance both out-bound and in-bound
Tanker size limitations in a very tight batch-delivery quantum-discontinuous system
Tanker availability as 50% of the existing fleet is still fully dedicated to the delivery of Russian oil exports
Please see Ref #16 https://www.maritime-executive.com/article/sovcomflot-has-worked-around-sanctions-to-keep-sailing

(C) Crude oil serious port limitations & compromised loading & unloading capabilities

Port limitations + reforms per the Rostock example at Ref # 17 https://thesaker.is/dear-ursula-you-are-dead-wrong/
(D) Crude oil serious land logistics very limited capabilities

• The Schwedt pipeline example per Ref # 18 https://thesaker.is/germans-schwedt-hard-for-russian-oil/

(E) None (zero) refinery modifications planned for, coordinated, or made for new crude oil- refinement capabilities

European DEF shortage per the description above
European diesel engine lube oil shortage per the description above
European diesel fuel shortage affecting the distribution of diesel fuel per the description above
the sequence

The process starts by defining the desired output, in this case with the focus on much-needed diesel fuel for all-around transportation and industrial machinery up and downstream of every sort which ends up governing everything else.

The process does NOT start by deciding to buy some whatever good or bad or intermediate quality oil at a “fair” price somewhere else wherever with whatever freight & delivery terms from whichever somebody you don´t even know yet. No, it doesn´t work that way. If skeptical, please ask other sources, and then understand, accept, and act accordingly.

Benjamin Franklin once said: “ Experience is an expensive school but fools will learn in no other”. That is humbly true.

C:\Users\Jorge Vilches\Desktop\index.jpg

what NOT to do

Reuters – “ France wants to replace Russian oil with oil from Venezuela and Iran ”. Really, do they? First of all, there is the very live and sensitive political memory both in Iran and Venezuela of years-long damaging sanctions and always constant Western aggressions, be it with Soleimani´s brutal in-your-face acknowledged assassination or Guaydo´s now supposed ownership of the Venezuelan gold vaulted in the Bank of England. But beyond the enormous geopolitical obstacles involved now even with Iran officially requesting admission into BRICS, the ignorant fools in charge should be whispered to in their ears that they will NEVER EVER distill the quality and amount of diesel that Europe requires from readily available either Venezuelan or Iranian oils. The reason is that both are heavy (or very heavy) and also ´sour´ meaning with relatively high sulfur content and are thusly very complicated to process into diesel, let alone by European refineries which simply can´t do it no matter what or how hard they try. Very exceptionally some very rare Iranian and Venezuelan blends could possibly be found to be somewhat better adapted to European needs. But the price of such would be ultra-high while constantly available volumes are ultra-low for European requirements or simply non-existent. In sum, not good, forget about those, please do not blow up the refineries (I kid you not) just stick to “the science” as Herr Habeck would have it, and for Heaven´s sake please do hurry up and stop proposing foolish ideas which you should know much better about.

Ref # 20 https://www.rt.com/business/557918-france-replacement-russian-oil/

Ref # 21 https://thesaker.is/europes-mad-ban-on-russian-oil/

Ref # 22 https://thesaker.is/why-russias-oil-ban-is-impossible/

Ref # 23 https://thesaker.is/europe-now-cheats-or-suffers/

Ref # 24 https://thesaker.is/pitchforks-soon-in-europe/

Now please repeat out loud after me, word by word… refineries-are-pretty-much-built-and-later-matched-and-finely-tuned-for-the-feedstock-they-will-use-for-the-rest-of-their-useful-service-lives… and can only be tweaked so far to be able to use even a slightly different feedstock, let alone completely different crudes such as traditional Venezuelan or Iranian oils. That is the reason why crude oil procurement contracts are so difficult to agree upon with a humongous amount of lab data, tests all-around, back & forth, and highly intense negotiations (meaning lots of TIME) which also necessarily require the guarantee of decades-long constant-quality supply. Crude oil blends are always at least slightly different (possibly a lot) but are definitely never fungible, not interchangeable in any way, shape or form. European refineries were built, matched, and mated to the Russian Urals blend to which everybody has become used to in more than one way. Iranian and Venezuelan oils are perfectly good for refining very important petrochemical distillates but are mostly very different from those which Europe now needs. Instead, Europe needs massive amounts of high-quality diesel and they better have lots of it soon enough, or else… What part of this is so hard to understand?

So please stop the wishful-thinking dead in its tracks, right now. Please. Many hundreds of millions of people depend upon a correct judgment nowhere to be seen today. Time is of the essence and in more than one-way time is already up. Once that diesel is defined as the preferential output, then – and only then – you look for the right type of crude oil to be refined ( … not from Iran or Venezuela…) but always delivered in the agreed quality and quantities, means, and terms, including guarantees provided by the right type of reliable vendor. There is a whole LOT to unpack in that last sentence so do not breeze by it lightly. Rather stop and focus on the many key difficult features yet to be found for the Urals substitute which will not happen. It may though possibly be that several different blends are found from different vendors, not a single well-known reliable supplier as Russia, which would complicate the matter tremendously as it would not be a “universal” substitute, but rather many. And finally – and never ever before – all the European refineries would be modified according to a (1) “coordinated plan” which now does not exist and (2) per the specific crude oil to be refined which now does not exist and (3) with the due process for each and only one by one (which does not exist) one at a time, not all simultaneously throughout Europe as these fools have decided without even knowing yet the source crude oil(s) to be refined (!!!!). Do you now understand why I say that it´s impossible to make this stuff up?

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the chicken and the egg

Despite being a clear priority, so far Europeans are acting as if they did not need diesel production as the main desired output of their refineries. Furthermore, the diesel portion extracted from any new non-Russian crude oil – if ever found in the right terms with the delivery of large and continuous quantities and quality – would never be identical to what the Urals blend renders today, no way. At any rate, if the already approved game plan is to change such Russian Urals blend, the modifications to all European refineries would have to be made necessarily after the new crude oil feedstock is precisely known and made available, not a second before. And after decades of constant only-Urals processing, the switchover to whatever is finally found – yet unknown, if ever – is unfathomable. The only way to do it is to close down the distillation process throughout Europe for months. And precisely who, how, and by when will keep on supplying the European market with the quantity and quality required by the all-important diesel and other distillate fuels and petrochemicals, huh? We need an answer for that right now, before messing things up forever, okay?

not a drill

I am listening but can´t hear a single sound, anyone and all please do respond. This is for real, not a drill. If you don´t have the answer to the above question, come December 2022 — unless EU politicians backtrack with a humiliating 180 rewind, something which is definitely in the cards — supposedly the seaborne Russian Urals blend will be fully banned from Europe, meaning that a different non-Russian blend would be its substitute. But until a definition of such is made, nothing can be done, no plans, no bids, no contracts, no modifications, no calibration, no fine-tuning, no certification, no permitting, no commissioning, nothing. And whenever it is finally known, the switch-over sequence will be the hardest trick on planet Earth. The only known procedure is to very gradually stop the inflow of Urals (which takes time) and slowly “purge” the system, then shut down the refineries (not easy to do and yet more time) but always having ready at hand the continuous feed of the new (but yet-unknown) batch-delivered crude oil substitute right there and then – and only then — start with operational trials after lots of lab tests and back & forth until finally the bosses – not technical folks, but the political bosses — feel ´comfortable´ ( I did not say ´sure´) to re-start operations with the traditional comings and goings and – quite frankly – just see what the hell happens until the refinery achieves cruising speed, if ever, and then lock on the operating parameters. A very messy and risky experiment done simultaneously throughout all of Europe´s refineries … and winter is coming… And please do not blow up several European refineries in the process, I beg you because that would perpetuate the problem pretty much forever. Only harebrained fools can plan for this, but the price will still be paid by all Europeans, not only by two German Greens.

Slightly off-topic ( still very much EU energy-related ) per the Financial Times the UK has warned that, if push ever got to shove, it would shut down its nat-gas supply pipeline to Europe. Yes, it will. Meanwhile, a fully unsubstantiated report from Fitch without any details whatsoever, concludes that “it could take the EU more than three years to offset a full loss of Russian gas supply”. No kidding Fitch. How about never ever as it´d had to be mainly through non-existent LNG terminals and non-existent supplies plus hundreds of un-existent pipelines and lots of additional land-logistical infrastructure. And just from where exactly would Europe find the nat-gas required to survive during such “three years or more“? Are only harebrained ´experts´ available or shall we ever get any no-nonsense reporting from the West?

Ref # 25 https://www.rt.com/business/558053-europe-gas-threat-uk/

Ref # 26 https://www.rt.com/business/558048-eu-russia-gas-replacement/

Ref # 27 https://www.rt.com/business/557967-eu-gas-crisis-domino-effect/

You’re either with us or you’re a “systemic challenge”

June 30, 2022

Source

After all we’re deep into the metaverse spectrum, where things are the opposite of what they seem.

By Pepe Escobar, posted with the author’s permission and widely cross-posted

Fast but not furious, the Global South is revving up. The key takeaway of the BRICS+ summit in Beijing,  held in sharp contrast with the G7 in the Bavarian Alps, is that both West Asia’s Iran and South America’s Argentina officially applied for BRICS membership.

The Iranian Foreign Ministry has highlighted how BRICS has “a very creative mechanism with broad aspects”. Tehran – a close partner of both Beijing and Moscow – already had “a series of consultations” about the application: the Iranians are sure that will “add value” to the expanded BRICS.

Talk about China, Russia and Iran being sooooo isolated. Well, after all we’re deep into the metaverse spectrum, where things are the opposite of what they seem.

Moscow’s obstinacy in not following Washington’s Plan A to start a pan-European war is rattling Atlanticist nerves to the core. So right after the G7 summit significantly held at a former Nazi sanatorium, enter NATO’s, in full warmongering regalia.

So welcome to an atrocity exhibition featuring total demonization of Russia, defined as the ultimate “direct threat”; the upgrading of Eastern Europe into “a fort”; a torrent of tears shed about the Russia-China strategic partnership; and as an extra bonus, the branding of China as a “systemic challenge”.

There you go: for the NATO/G7 combo, the leaders of the emerging multipolar world as well as the vast swathes of the Global South that want to join in, are a “systemic challenge”.

Turkiye under the Sultan of Swing – Global South in spirit, tightrope walker in practice – got literally everything it wanted to magnanimously allow Sweden and Finland to clear their paths on the way of being absorbed by NATO.

Bets can be made on what kind of shenanigans NATO navies will come up with in the Baltics against the Russian Baltic Fleet, to be followed by assorted business cards distributed by Mr. Khinzal, Mr. Zircon, Mr. Onyx and Mr. Kalibr, capable of course of annihilating any NATO permutation, including “decision centers”.

So it came as a sort of perverse comic relief when Roscosmos released a set of quite entertaining satellite images pinpointing the coordinates of those “decision centers”.

The “leaders” of NATO and the G7 seem to enjoy performing a brand of lousy cop/clownish cop routine. The NATO summit told coke comedian Elensky (remember, the letter “Z” is verboten) that the Russian combined arms police operation – or war – must be “resolved” militarily. So NATO will continue to help Kiev to fight till the last Ukrainian cannon fodder.

In parallel, at the G7, German Chancellor Scholz was asked to specify what “security guarantees” would be provided to what’s left of Ukraine after the war. Response from the grinning Chancellor: “Yes … I could” (specify). And then he trailed off.

Illiberal Western liberalism

Over 4 months after the start of Operation Z, zombified Western public opinion completely forgot – or willfully ignores – that Moscow spent the last stretch of 2021 demanding a serious discussion on legally binding security guarantees from Washington, with an emphasis on no more NATO eastward expansion and a return to the 1997 status quo.

Diplomacy did fail, as Washington emitted a non-response response. President Putin had stressed the follow-up would be a “military technical” response (that turned out to be Operation Z) even as the Americans warned that would trigger massive sanctions.

Contrary to Divide and Rule wishful thinking, what happened after February 24 only solidified the synergistic Russia-China strategic partnership – and their expanded circle, especially in the context of BRICS and the SCO. As Sergey Karaganov, head of Russia’s Council on Foreign and Defense Policy noted earlier this year, “China is our strategic cushion (…) We know that in any difficult situation, we can lean on it for military, political and economic support.”

That was outlined in detail for all the Global South to see by the landmark February 4th joint statement for Cooperation Entering a New Era – complete with the accelerated integration of BRI and the EAEU in tandem with military intelligence harmonization under the SCO (including new full member Iran), key foundation stones of multipolarism.

Now compare it with the wet dreams of the Council on Foreign Relations or assorted ravings by armchair strategic “experts” of “the top national security think tank in the world” whose military experience is limited to negotiating a can of beer.

Makes one yearn for those serious analytic days when the late, great Andre Gunder Frank penned ” a paper on the paper tiger” , examining American power at the crossroads of paper dollar and the Pentagon.

The Brits, with better imperial education standards, at least seem to understand, halfway, how Xi Jinping “has embraced a variant of integral nationalism not unlike those that emerged in interwar Europe”, while Putin “skillfully deployed Leninist methods to resurrect an enfeebled Russia as a global power.”

Yet the notion that “ideas and projects originating in the illiberal West continue to shape global politics” is nonsense, as Xi in fact is inspired by Mao as much as Putin is inspired by several Eurasianist theoreticians. What’s relevant is that in the process of the West plunging into a geopolitical abyss, “Western liberalism has itself become illiberal.”

Much worse: it actually became totalitarian.

Holding the Global South hostage

The G7 is essentially offering to most of the Global South a toxic cocktail of massive inflation, rising prices and uncontrolled dollarized debt.

Fabio Vighi has brilliantly outlined how “the purpose of the Ukrainian emergency is to keep the money printer switched on while blaming Putin for worldwide economic downturn. The war serves the opposite aim of what we are told: not to defend Ukraine but to prolong the conflict and nourish inflation in a bid to defuse cataclysmic risk in the debt market, which would spread like wildfire across the whole financial sector.”

And if it can get worse, it will. At the Bavarian Alps, the G7 promised to find “ways to limit the price of Russian oil and gas”: if that doesn’t work according to “market methods”, then “means will be imposed by force”.

A G7 “indulgence” – neo-medievalism in action – would only be possible if a prospective buyer of Russian energy agrees to strike a deal on the price with G7 representatives.

What this means in practice is that the G7 arguably will be creating a new body to “regulate” the price of oil and gas, subordinated to Washington’s whims: for all practical purposes, a major twist of the post-1945 system.

The whole planet, especially the Global South, would be held hostage.

Meanwhile, in real life, Gazprom is on a roll, making as much money from gas exports to the EU as it did in 2021, even though it’s shipping much smaller volumes.

About the only thing this German analyst gets right is that were Gazprom forced to cut off supplies for good, that would represent “the implosion of an economic model that is over-reliant on industrial exports, and therefore on imports of cheap fossil fuels. Industry is responsible for 36% of Germany’s gas use.”

Think, for instance, BASF forced to halt production at the world’s biggest chemicals plant in Ludwigshafen. Or Shell’s CEO stressing it’s absolutely impossible to replace Russian gas supplied to the EU via pipelines with (American) LNG.

This coming implosion is exactly what Washington neocon/neoliberalcon circles want – removing a powerful (Western) economic competitor from the world trading stage. What’s truly astonishing is that Team Scholz can’t even see it coming.

Virtually no one remembers what happened a year ago when the G7 struck a pose of trying to help the Global South. That was branded as Build Back Better World (B3W). “Promising projects” were identified in Senegal and Ghana, there were “visits” to Ecuador, Panama and Colombia. The Crash Test Dummy administration was offering “the full range” of US financial tools: equity stakes, loan guarantees, political insurance, grants, technical expertise on climate, digital technology and gender equality.

The Global South was not impressed. Most of it had already joined BRI. B3W went down with a whimper.

Now the EU is promoting its new “infrastructure” project for the Global South, branded as Global Gateway, officially presented by European Commission (EC) Fuhrer Ursula von der Leyen and – surprise! – coordinated with the floundering B3W. That’s the Western “response” to BRI, demonized as – what else – “a debt trap”.

Global Gateway in theory should be spending 300 billion euros in 5 years; the EC will come up with only 18 billion from the EU budget (that is, financed by EU taxpayers), with the intention of amassing 135 billion euros in private investment. No Eurocrat has been able to explain the gap between the announced 300 billion and the wishful thinking 135 billion.

In parallel, the EC is doubling down on their floundering Green Energy agenda – blaming, what else, gas and coal. EU climate honcho Frans Timmermans has uttered an absolute pearl: “Had we had the green deal five years earlier, we would not be in this position because then we would have less dependency on fossil fuels and natural gas.”

Well, in real life the EU remains stubbornly on the road to become a fully de-industrialized wasteland by 2030. Inefficient solar or wind-based Green Energy is incapable of offering stable, reliable power. No wonder vast swathes of the EU are now Back to Coal.

The right kind of swing

It’s a tough call to establish who’s The Lousiest in the NATO/G7 cop routine. Or the most predictable. This is what I published about the NATO summit . Not now: in 2014, eight years ago. The same old demonization, over and over again.

And once again, if it can get worse, predictably it will. Think of what’s left of Ukraine – mostly eastern Galicia – being annexed to the Polish wet dream: the revamped Intermarium, from the Baltic to the Black Sea, now dubbed as a bland “Three Seas Initiative” (with the added Adriatic) and comprising 12 nation-states.

What that implies long-term is a EU breakdown from within. Opportunist Warsaw just profits financially from the Brussels system’s largesse while holding its own hegemonic designs. Most of the “Three Seas” will end up exiting the EU. Guess who will guarantee their “defense”: Washington, via NATO. What else is new? The revamped Intermarium concept goes back all the way to the late Zbig “Grand Chessboard” Brzezinski.

So Poland dreams of becoming the Intermarium leader, seconded by the Three Baltic Midgets, enlarged Scandinavia, plus Bulgaria and Romania. Their aim is straight from Comedy Central: reducing Russia into “pariah state” status – and then the whole enchilada: regime change, Putin out, balkanization of the Russian Federation.

Britain, that inconsequential island, still invested in teaching Empire to the American upstarts, will love it. Germany-France-Italy much less. Lost in the wilderness Euro-analysts dream of a European Quad (Spain added), replicating the Indo-Pacific scam, but in the end it will all depend which way Berlin swings.

And then there’s that unpredictable Global South stalwart led by the Sultan of Swing: freshly rebranded Turkiye. Soft neo-Ottomanism seems to be on a roll, still expanding its tentacles from the Balkans and Libya to Syria and Central Asia. Evoking the golden age of the Sublime Porte, Istanbul is the only serious mediator between Moscow and Kiev. And it’s carefully micromanaging the evolving process of Eurasia integration.

The Americans were on the verge of regime-changing the Sultan. Now they have been forced to listen to him. Talk about a serious geopolitical lesson to the whole Global South: it don’t mean a “systemic challenge” thing if you’ve got the right kind of swing.

Michael Hudson interviewed by Ben Norton (Multipolarista) Update with transcript

June 30, 2022

Economist Michael Hudson on inflation and Fed plan to cut wages: A depression is coming

Transcript:

BENJAMIN NORTON:

Hey, everyone, this is Ben Norton, and you are watching or listening to the Multipolarista podcast. I am always privileged to be joined by one of my favorite guests, Michael Hudson, one of the greatest economists living today.

We’re going to be talking about the inflation crisis. This is a crisis around the world, but especially in the United States, where inflation has been at over 8%. And it has caused a lot of political problems. It’s very likely going to cause the defeat, among other factors, of the Democrats in the mid-term elections in November.

And we’ve seen that the response of the US government and top economists in the United States is basically to blame inflation on wages, on low levels of unemployment and on working people.

We’ve seen that the chair of the Federal Reserve, Jerome Powell, has said that inflation is being caused by wages supposedly being too high. We’ve also seen that the top economist and former Clinton administration official Larry Summers has claimed that the solution to inflation is increasing unemployment, potentially up to 10%.

So today I’m joined by economist Michael Hudson, who has been calling out this kind of neoliberal snake oil economics for many years. And Professor Hudson has an article he just published that we’re going to talk about today. You can find this at his website, which is michael-hudson.com. It’s titled “The Fed’s Austerity Program to Reduce Wages.” and I’m going to let Professor Hudson summarize the main points of his article.

Professor Hudson, as always, it’s a pleasure having you. Can you respond to the decision by the Federal Reserve to increase interest rates by 0.75%? It doesn’t sound like a lot – it’s less than 1% – but this was the largest rate hike since 1994.

And now we’ve already seen reports that there’s going to be a depression. The Fed chair is blaming this on wages. Can you respond to the position of the Fed and the inflation crisis in the US right now.

MICHAEL HUDSON:

For the Fed, the only two things that it can do is, number one, raise the discount rate, the interest rate; and number two, spend $9 trillion buying stocks, and bonds, and real estate mortgages to increase real estate prices, and to increase the amount of wealth that the wealthiest 10% of the population has.

To the wealthiest 10%, especially the 1%, it’s not only inflation that’s a problem of wages; every problem that America has is the problem of the working class earning too much money. And if you’re an employer, that’s the problem: you want to increase your profits. And if you look at the short term, your profits go up the more that you can squeeze labor down. And the way to squeeze labor down is to increase what Marx called the reserve army of the unemployed.

You need unemployment in order to prevent labor from getting most of the value of what it produces, so that the employers can get the value, and pay that to the banks and the financial managers that have taken over corporate industry in the United States.

You mentioned that while the Fed blames the inflation it on labor, that’s not President Biden’s view; Biden keeps calling it the Putin inflation. And of course, what he really means is that the sanctions that America has placed on Russia have created a shortage of oil, gas, energy, and food exports.

So really we’re in the Biden inflation. And the Biden inflation that America is experiencing is the result basically of America’s military policy, its foreign policy, and above all, the Democratic Party’s support of the oil industry, which is the most powerful sector in the United States and which is guiding most of the sanctions against Russia; and the national security state that bases America’s power on its ability to export oil, or control the oil trade of all the countries, and to export agricultural products.

So what we’re in the middle of right now isn’t simply a domestic issue of wage earners wanting higher salaries – which they’re not particularly getting; certainly the minimum wage has not been increased – but you have to put this in the context of the whole cold war that’s going on.

The whole US and NATO confrontation of Russia has been a godsend, as you and I have spoken before, for the oil industry and the farm exporters.

And the result is that the US dollar is rising against the euro, against sterling, and against Global South currencies. Well, in principle a rising dollar should make the price of imports low. So something else is at work.

And what’s at work, of course, is the fact that the oil industry is a monopoly, that most of the prices that have been going up are basically the result of a monopolization, in the case of food, by the marketing firms, like Cargill and Archer Daniels Midland, that buy most of the crops from the farmers.

The irony is that while food prices, next to oil prices, are the major factor that is soaring, farmers are getting less and less for their crops. And yet farmers’ costs are going up – up for fertilizer, up for energy, up for other inputs – so that you’re having enormous profits for Archer Daniels Midland and the food monopolies, of the distributors, and enormous, enormous gains for the oil industry, and also of course for the military-industrial complex.

So if you look at what’s happening in the overall world economic system, you can see that this inflation is being engineered. And the beneficiaries of this inflation certainly have not been the wage earners, by any stretch of the imagination.

But the crisis that the Biden policy has created is being blamed on the wage earners instead of on the Biden administration’s foreign policy and the basically the US-NATO war to isolate Russia, China, India, Iran, and Eurasia generally.

BENJAMIN NORTON:

Professor Hudson, I want to talk about the increase in interest rates by the Fed. There has been a lot of attention to this, although, again, it’s 0.75%, which is not that big. But it’s of course going to have an outsize impact on the economy.

In your article, again, this is your column at michael-hudson.com, “The Fed’s Austerity Program to Reduce Wages,” you talk about the Fed’s “junk economics,” and you say that the idea behind raising interest rates by 0.75% is that:

raising interest rates will cure inflation by deterring borrowing to spend on the basic needs that make up the Consumer Price Index and its related GDP deflator. But banks do not finance much consumption, except for credit card debt, which is now less than student loans and automobile loans. Banks lend almost entirely to buy real estate, stocks and bonds, not goods and services.

So you argue that one of the effects of this is that it’s actually going to roll back homeownership in the United States. You note that the rate of homeownership has been falling since 2008.

So can you expand on those arguments? What will be the impact of the increase of the interest rates by the Fed?

MICHAEL HUDSON:

Well, in order to get an economics degree which is needed to work at the Fed or at the Council of Economic Advisors, you have to take economics courses in the universities, and all of the textbooks say just what you quoted me as saying they say.

The pretense is that banks actually play a productive role in society, by providing the money for factories to buy machinery, and build plants, and do research and development, and to hire labor; and that somehow the money that banks create is all lent out for industrial economy, and that that will enable companies to make more money that they’ll spend on labor; and of course, as they spend more money on labor, that supports to bid prices up as the reserve army of the unemployed is depleted.

But that’s all a fiction. The textbooks don’t want to say that banks don’t play a productive role like that at all. And the corporations don’t do what the textbooks say.

If you look at the Federal Reserve balance sheet and statistics that it publishes every month, you’ll see that 80% of bank loans in the United States are mortgage loans to commercial real estate and mostly for home real estate. And of course the home mortgage loans have been nothing, like under 1% for the last 14 years, since 2008.

Only the banks and the large borrowers, the financial sector, have been able to borrow at these low rates. Homeowners all along have had to pay very high rates, just under 4%, and now it’s going above 4%, heading to 5%.

Well, here is the situation that the Federal Reserve has created. Suppose that you’re a family right now going out to buy a home, and you find out that in order to borrow the money to buy the home – because if the average home in America costs $600,000 or $700,000, people haven’t saved that much; the only way you can buy a home is to take out a mortgage.

Well, you have a choice: you can either rent a home, or you can borrow the money to buy a home. And traditionally, for a century, the carrying charge for financing a home with the mortgage has been about the equivalent of paying a rent. The advantage is, of course, that you get to own the home when it’s over.

Well, now let’s look at what’s happening right now. All of a sudden, the carrying charge of mortgages have gone way, way up. The banks are making an enormous gap. They can borrow at just around 1%, and they lend out at 4.5%. They get a windfall gain of the markup they have in mortgages, lending to prospective homeowners.

And of course, the homeowners don’t have enough money to be able to pay the higher interest charged on the mortgages that they take out. So they are not able to buy as expensive a home as they wanted before.

But they’ve been a declining part of the population. At the time Obama took office, over 68% of Americans owned their own home. Obama started the great wave of evictions, of 10 million Americans who lived in homes, essentially to throw them out of their homes, especially the victims of the junk mortgages, especially the lower income and racial minorities who were redlined and had to become the main victims of the mortgages.

America’s homeownership rate is now under 61%. What has happened? You’ve had huge private capital firms come into the market thinking, wait a minute, we can now buy these properties and rent them out. And we can buy them for all cash, unlike homeowners, we’re multibillionaires, we Blackstone, BlackRock.

You have these multibillion-dollar funds, and they say, well, we can’t make much money buying bonds or buying stocks that yield what they do today, now that the Federal Reserve has ground down interest rates. What we can do is make money as landlords.

And so they’ve shifted, they’ve reversed the whole shift away from the 19th-century landlordism to an economy based on financialization, and the wealthy classes making money on finance, to go back to making money as landlords.

And so they are buying up these homes that American homeowners can’t afford to buy. Because when you raise the mortgage rate, that doesn’t affect a billionaire at all. Because the billionaire firm doesn’t have to borrow money to buy the home. They have the billion dollars of their own money, of pension fund money, of speculative money, of the money of the 1% and the 10% to spend.

So what you’re having by increasing the interest rates is squeezing homeowners out of the market and turning the American economy into a landlord-ridden rental economy, instead of a homeowners economy. That’s the effect.

And it’s a windfall for the private capital firms that are now seeing that are making money as landlords, the old fashioned way, it worked for 800 years under feudalism. It’s coming back in style.

BENJAMIN NORTON:

Professor Hudson, you point out in this article at your website that more than 50% of the value of U.S. real estate already is held by mortgage bankers. And of course, that percentage is increasing and increasing.

Now, you, Professor Hudson, have argued a point that I haven’t seen many other people make, although it’s an obvious, correct point, which is that there has actually been a lot of inflation in the United States in the past several years, but that inflation was in the FIRE sector: finance, insurance, and real estate.

We see that with the constant increase in real estate prices; they go up every single year; rent goes up every single year. The difference now is that there’s also a significant increase in the Consumer Price Index.

And there is an interesting study published by the Economic Policy Institute, which is, you know, a center-left think tank, affiliated with the labor movement; they’re not radicals, they’re progressives. And they did a very good study.

And they found – this was published this April – they found that corporate profits are responsible for around 54% of the increase of prices in the non-financial corporate sector, as opposed to unit labor costs only being responsible for around an 8% increase.

So they showed, scientifically, that over half of the increase of prices in the non-financial corporate sector, that is in the Consumer Price Index, over half of that inflation is because of corporate profits.

Of course, that’s not the way it’s discussed in mainstream media. That’s not the way the Fed is discussing it all. We see Larry Summers saying that we need to increase unemployment. Larry Summers, of course, was the treasury secretary for Bill Clinton.

He’s saying that the U.S. has to increase unemployment; the solution to inflation is increasing unemployment. Even though these studies show that over half of inflation in the Consumer Price Index is because of corporate profits.

I’m wondering if you can comment on why so many economists, including people as revered as Larry Summers, refuse to acknowledge that reality.

MICHAEL HUDSON:

Most economists need to get employment, and in order to be employed, you have to give a picture of the economy that reflects how well your employer helped society at large. You’re not allowed to say that your employer is acting in ways that are purely predatory. You’re not allowed to say that the employer does not earn an income.

You talked about corporate profits and the classical economists. If you were a free-market economist like Adam Smith, or David Ricardo, or John Stuart Mill – these are monopoly rents. So what you call corporate profits are way above normal corporate rates of return, normal profits. They’re economic rents from monopoly.

And that’s because about 10 or 15 years ago, the United States stopped imposing its anti-monopoly laws. It has essentially let monopolies concentrate markets, concentrate power, and charge whatever they want.

And so once you’ve dismantled the whole legal framework that was put in place from the 1890s, from the Sherman Antitrust Act, down through the early 20th century, the New Deal, once you dismantle all of this state control, saying – essentially what Larry Summers says is, we’re for a free market.

A “free market” is one in which companies can charge whatever they want to charge for things; a free market is one without government regulation; a free market is one without government; a free market is a weak enough government so that it cannot protect the wage earners; it cannot protect voters. A “democracy” is a country where the bulk of the population, the wage earners, have no ability to affect economic policy in their own interests.

A “free market” is one where, instead of the government being the planner, Wall Street is the planner, on behalf of the large industries that are basically being financialized.

So you’ve had a transformation of the concept of what a free market is, a dismantling of government regulation, a dismantling of anti-monopoly regulation, and essentially the class war is back in business.

That’s what the Biden administration is all about. And quite frankly, it’s what the Democratic Party is all about, even more than the Republican Party. The Republican Party can advocate pro-business policies and pro-financial policies, but the Democratic Party is in charge of dismantling the legacy of protection of the economy that had been put in place for a century.

BENJAMIN NORTON:

Yeah, and this is an article in Fortune that was originally based on an article in Bloomberg: “5 years at 6% unemployment or 1 year at 10%: That’s what Larry Summers says we’ll need to defeat inflation.” That’s how simple it is, you know, just increase unemployment, and then inflation will magically go away!

Now, I also wanted to get your response, Professor Hudson, to these comments that you highlighted in a panel that was organized by the International Manifesto Group – a great organization, people can find it here, their channel here at YouTube. And they held a conference on inflation. And you were one of several speakers.

And you highlighted these comments that were made by the Fed chair, Jerome Powell. And this is according to the official transcript from The Wall Street Journal. So this is not from some lefty, socialist website. Here’s the official transcript of a May 4 press conference given by the Fed chief, Jerome Powell.

In this press conference, he said, discussing inflation, he said, in order to get inflation down, he’s talking about things that can be done “to get wages down, and then get inflation down without having to slow the economy and have a recession and have unemployment rise materially.”

So this is another proposal. Larry Summers says 6% unemployment for five years, or 10% unemployment for one year. The Fed chair, Jerome Powell, says the solution is “to get wages down.” I’m wondering if you can respond to that as well.

MICHAEL HUDSON:

Well, the important thing to realize is that President Biden re-appointed Jerome Powell. President Biden is a Republican. The Democratic Party is basically the right wing of the Republican Party, the pro-financial, the pro-Wall Street wing of the Republican Party.

Why on earth, if the Democrats were different from the Republicans, why would would Biden re-appoint an anti-labor Republican, as head of the Federal Reserve, instead of someone that would actually try to spur employment?

Imagine, here’s a party that is trying to be elected on a program of, “Elect us, and we will create a depression and we will lower wages.” That is the Democrat Party slogan.

And it’s a winning slogan, because elections are won by campaign contributions. The slogan is, “We will lower wages by bringing you depression,” is a tsunami of contributions to the Democratic Party, by Wall Street, by the monopolists, by all the beneficiaries of this policy.

So that’s why the Supreme Court ruling against abortions the other day is a gift to the Democrats, because it distracts attention from their identity politics of breaking America into all sorts of identities, every identity you can think of, except being a wage earner.

The wage earners are called deplorables, basically. And that’s how the donor class thinks of them, as sort of unfortunate overhead. You need to employ them, but it really it’s unfortunate that they like to live as well as they do, because the better they live, the less money that you will end up with.

So I think that this issue of the inflation, and what really causes it, really should be what elections are all about. This should be the economic core of this November’s election campaign and the 2024 election campaign. And the Democrats are leading the fight to lower wages.

And you remember that when President Obama was elected, he promised to increase the minimum wage? As soon as he got in, he said the one thing we cannot do is raise the minimum wage. And he had also promised to back card check. He said, the one thing we must not do is increase labor unionization with card check, because if you unionize labor, they’re going to ask for better wages and better working conditions.

So you have the Democratic Party taking about as hard a right-wing position as sort of Chicago School monetarism, saying the solution to any any problem at all is just lower wages and somehow you’ll be more competitive, whereas the American economy is already rendered uncompetitive, not because wages are so high, but because, as you mentioned before, the FIRE sector, the finance, insurance, and real estate sector is so high.

Rents and home ownership, having a home is too expensive to be competitive with foreign labor. Having to pay 18% of GDP on medical care, privatized medical care, prices American labor out of the market. All of the debt service that America has paid is pricing America out of the market.

So the problem is not that wages are too high. The problem is that the overhead that labor has to pay in order to survive, for rent, for medical care, for student loans, for car loans, to have a car to drive to work, for gas to drive to work, to buy the monopoly prices that you need in order to survive – all of these are too high.

None of this even appears in economic textbooks that you need to get a good mark on, in order to get an economics degree, in order to be suitably pliable to be hired by the Federal Reserve, or the Council of Economic Advisers, or by corporations that use economists basically as public relations spokesmen. So that’s the mess we’re in.

BENJAMIN NORTON:

Professor Hudson, in your article at your website, michael-hudson.com, you have an important section about the quantitative easing policies. We were talking about how there has been inflation in the past decade, but then inflation was largely in the FIRE sector, pushing up, artificially inflating the prices of real estate and stocks.

You note that:

While home ownership rates plunged for the population at large, the Fed’s “Quantitative Easing” increased its subsidy of Wall Street’s financial securities from $1 trillion to $8.2 trillion – of which the largest gain has been in packaged home mortgages. This has kept housing prices from falling and becoming more affordable for home buyers.

And you, of course, note that “the Fed’s support of asset prices saved many insolvent banks – the very largest ones – from going under.”

I had you on to discuss, in late 2019, before the Covid pandemic hit, we know that the Fed had this emergency bailout where it gave trillions of dollars in emergency repo loans to the biggest banks to prevent them from from crashing, trying to save the economy.

I do want to talk about this as well, because sometimes this is used by right-wingers who portray Biden hilariously as a socialist. You were just talking about how the Democrats have a deeply neoliberal, right-wing economic program.

But of course, there is this rhetoric that we see from Republicans and conservatives claiming that Biden is a socialist. They claim that the reason there is inflation is because Biden is just printing money and giving money to people.

Of course, that’s not at all what’s happening. What has happened is that the Fed has printed trillions of dollars and given that to stockholders, to big corporations, and to banks.

And this is a point that I saw highlighted in that panel I mentioned, the conference on inflation that was organized by the International Manifesto Group. A colleague of yours, a brilliant political economist, Radhika Desai, she invited everyone to go to the Fed website and look at the Fed balance sheet.

And this is the Fed balance sheet from federalreserve.gov. This is the Board of Governors of the Federal Reserve System website. And it is pretty shocking to see this graph, which shows the total assets of the U.S. Federal Reserve.

US Federal Reserve assets balance sheet 2022

Back in 2008, the Federal Reserve had around $900 billion in assets. Now it’s at nearly $9 trillion in assets.

And we can see, after the financial crash, or during the financial crash, it increased to around $2 trillion. And then around 2014, it increased to around $4.5 trillion. And then especially in late 2019 and 2020, it skyrocketed from around $4 trillion up to $7 trillion. And since then, it has continued skyrocketing to $9 trillion in assets.

Where did all of that money go? And what was the impact on the economy, of course?

MICHAEL HUDSON:

Well, the impact on the economy has been to vastly increase the wealth of the wealthiest 1% of Americans who own most of the stocks and bonds.

Sheila Bair, the former head of the Federal Deposit Insurance Corporation, pointed out that a lot of this $8 trillion is spent to buy junk bonds.

Here’s the problem. The problem really began with President Obama. He inherited a system where you had the largest wave of commercial bank fraud in American history.

As my colleague Bill Black at the University of Missouri at Kansas City has pointed out, everybody knew that there was a bank fraud on. The newspapers referred to junk mortgages and “NINJA” borrowers: “no income, no jobs, no assets.”

So banks had written mortgages way above the actual value of homes, especially to racial and ethnic minorities, without any ability of the borrowers to actually pay.

And then these banks had packaged these mortgages, and sold them to hapless pension funds, and other institutional investors and to the European banks that are always very naive about how honest American banks are.

You had this whole accumulation of what the 19th century called fictitious capital. Mortgages for property that wasn’t worth anywhere near as much as the mortgage is for.

So if the mortgage was defaulted, if homeowners had jingle mail – in other words, you just mail the keys back to the bank and say, ok, take the house, I find I can buy a house now at half the price that Citibank or one of these other banks lent out.

Well, normally you’d have a crash of prices back to realistic levels, so that the value of mortgages actually reflected the value of property, or the value of junk bonds issued by a corporation reflected the actual earning power of the corporation to pay interest on the junk bonds.

So by the time Obama took over, the whole economy was largely fictitious capital. Well, Obama came in and he said, my campaign donors are on Wall Street. He called in the Wall Street bankers and he said, I’m the guy standing between you and the crowd with the pitchforks, the people who voted for me. But don’t worry, I’m on your side.

He said, I’m going to have the Federal Reserve create the largest amount of credit in human history. And it’s all going to go to you. It’s going to go to the 1% of the population. It’s not going to go into the economy. It’s not going to build infrastructure. It’s not going into wages. It’s not going to reduce the price of homes and make them more affordable to Americans.

It’s going to keep the price of these junk bonds so high that they don’t crash back to non-fictitious values. It’s going to keep the stock market so high that it’s not going to go down. It’s going to create the largest bond market boom in history.

The boom went from high interest rates to low interest rates, meaning a gigantic rise in the price of bonds that actually pay interest that are more than 0.1%.

So there was a huge bond market boom, a huge stock market, a tripling of stock market prices. And if you are a member of the group that owns 72% of American stocks, I think that’s 10% of the population, you have gotten much, much richer.

But if you’re a member of the 90% of the population, you have had to go further and further into debt just in order to survive, just in order to pay for medical care, student loans, and your daily living expenses out of your salary.

So if American wages were at a decent level, American families would not be pushed more and more into debt. The reason the personal debt has gone up in the United States is because families can’t get by on what they earn.

So obviously, if they can’t get by on what they earn, and they have to borrow to get by, they are not responsible for causing the inflation. They’re being squeezed.

And the job of economists, and of Democratic Party and Republican politicians, is to distract attention from the fact that they’re being squeezed and blame the victim, and saying, you’re doing it to yourself by just wanting more money, you’re actually creating the inflation that is squeezing you.

When actually it’s the banks, and the government’s non-enforcement of the monopoly policy, and the government support of Wall Street that is responsible for what is happening.

BENJAMIN NORTON:

Very, very well said.

Professor Hudson, I should have highlighted another part of this graph here. This is, again, this is at the Federal Reserve Board website. It’s even more revealing when you look at the selected assets of the Fed, and you see that all of these assets basically are securities, securities held outright by the Fed.

We see that around 2008, the Fed had less than $500 billion in securities. And you have this policy of quantitative easing. And since then, basically all of the increase has been in securities. Of the roughly $9 trillion in assets the Fed holds, about about $8.5 trillion is in securities.

US Federal Reserve assets securities balance sheet 2022

I’m wondering if you can compare this to central banks in other countries. We’ve seen, for instance, that the Western sanctions on Russia were aimed at trying to destroy the Russian economy.

President Biden claimed they were trying to make the ruble into rubble. In fact, the ruble is significantly stronger now than it was before the sanctions. To such a degree that the Russian government and Russian national bank are actually trying to decrease the value of the ruble, because they think it’s a little overvalued; it makes it a little harder to be competitive.

So how does this policy of the US Fed having $8.5 trillion worth of securities compare to the policies of other central banks?

You have experience working with the Chinese government as an advisor. Do other governments’ central banks have this policy?

And and that $8.5 trillion in securities, what are those securities? Even from the perspective of these neoliberal economics textbooks that you were talking about, that people are taught in universities, this seems to me to be totally insane. I don’t see how there is even an academic, neoliberal textbook explanation for this policy.

MICHAEL HUDSON:

Very few people realize the difference between a central bank and the national treasury. The national treasury is what used to perform all of the policies that central banks now do. The national treasury would be in charge of issuing money and spending it.

Central banks were broken off in America in 1913 from the Treasury in order to shift control of the money supply and credit away from Washington to New York. That was very explicit.

The original Federal Reserve didn’t even permit a Treasury official to be on the board of directors. So the job of a central bank is to represent the interest of the commercial banks.

And as we just pointed out, the interest of the commercial banks is to produce their product: debt. And they create their product against existing assets, mainly real estate, but also stocks and bonds.

So the job of the central bank here is to support the financial sector of the economy, and that sector that holds wealth in the form of stocks, bonds, and loans, and especially bank bonds that make their money off real estate credit.

Same thing in Europe, with Europe’s central bank. Europe is going into a real squeeze now, and has been going into a squeeze ever since you had the Greek crisis.

In Europe, because right-wing monetarist designed the euro, part of the eurozone rule is you cannot run a budget deficit, a national budget deficit of more than 3% of gross domestic product.

Well, that’s not very much. That means that you can’t have a real Keynesian policy in Europe to pull the economy out of depression. That means that if you’re a country like Italy right now, and you have a real financial squeeze there, a corporate squeeze, a labor squeeze, the government cannot essentially rescue either Italian industry or Italian labor.

However, the European central bank can, by the way that it creates credit, by central bank deposits, the European central bank can vastly increase the price of European stocks, bonds, and packaged mortgages. So the European central bank is very much like the commercial bank.

China is completely different, because, unlike the West, China treats money and credit as a public utility, not as a private monopoly.

And as a public utility, China’s central bank will say, what are we going to want to create money for? Well, we’re going to want to create money to build factories; we’re going to want to create money so that real estate developers can build cities, or sometimes overbuild cities. We can create money to actually spend in the economy for something tangible, for goods and services.

The Chinese central bank does not create money to increase stock market prices or bond prices. It doesn’t create money to support a financial class, because the Communist Party of China doesn’t want a financial class to exist; it wants an industrial class to exist; it wants an industrial labor force to exist, but not a rentier class.

So a central bank in a Western rentier economy basically seeks to create credit to inflate the cost of living for homebuyers and for anyone who uses credit or needs credit, and to enable corporations to be financialized, and to shift their management away from making profits by investing in plant and equipment and employing labor to produce more, to making money by financial engineering.

In the last 15 years, over 90% of corporate earnings in the United States have been spent on stock buybacks and on dividend payouts. Only 8% of corporate earnings have been spent on new investment, and plants, and equipment, and hiring.

And so of course you have had the economy deindustrialized. It’s this idea that you can make money financially without an industrial base, without a manufacturing base; you can make money without actually producing more or doing anything productive, simply by having a central bank increase the price of the stocks, and bonds, and the loans made by the wealthiest 10%.

And of course, ultimately, that doesn’t work, because at a certain point the whole thing collapses from within, and there’s no industrial base.

And of course, when that happens, America will find out, wait a minute, if we close down the economy, we’re still reliant on China and Asia to produce our manufacturers, and to provide us with raw materials, and to do everything that we need. We’re really not doing anything but acting as a world – well, people used to say parasite – as a world rentier, as getting something for nothing, as a kind of financial colonialism.

So America you could look at as a colonial power that is a colonial power not by military occupation, but simply by financial maneuvering, by the dollar standard.

And that’s what’s being unwound today as a result of Biden’s new cold war.

BENJAMIN NORTON:

Professor Hudson, you criticized the strategy of simply trying to increase the interest rates to bring down inflation, noting that it’s going to lead to a further decline in homeownership in the United States. It’s going to hurt working people. I think that’s a very valid criticism.

I’m curious, though, what your take is on the response of the Russian central bank to the Western sanctions. We saw that the chair of the Russian central bank, Elvira Nabiullina, she – actually this is someone who is not even necessarily really condemned a lot by Western economists; she is pretty well respected by even, you know, Western neoliberal economists.

And she did manage to deal with the sanctions very well. She imposed capital controls immediately. She closed the Russian stock market. And also, in a controversial move, she raised the interest rates from around 9% up to 20%, for a few months. And then after that, dropped the rates.

MICHAEL HUDSON:

A few days, not a few months. That was very short. And now she has moved the interest rates way down.

BENJAMIN NORTON:

Back to 9%.

MICHAEL HUDSON:

She was criticized for not moving them further down.

BENJAMIN NORTON:

Yeah, well go ahead. I’m just curious. So she immediately raised it to 20%, and then has dropped the interest rates since then. I’m curious what you think about that policy. Yeah, go ahead.

MICHAEL HUDSON:

There is very little that a central banker can do when the West has declared a war, basically, a war on a country that is completely isolated.

The response has come from President Putin and from Foreign Secretary Lavrov. And they pointed out, well, how is Russia going to going to trade and get what it needs. And this is what the recent meetings of the BRICS are all about.

Russia realizes that the world is now broken into two halves. America and NATO have separated the West. Basically you have a white people’s confederation against all the rest of the world.

And the West has said, we’re isolating ourselves from you totally. And we think you can’t get along without us.

Well, look at the humor of this. Russia, China, Iran, India, Indonesia, and other countries are saying, hah, you say we we can’t get along without you? Who is providing your manufacturers? Who is providing your raw materials? Who is providing your oil and gas? Who is providing your agriculture, and the helium, the titanium, the nickel?

So they realize that the world is breaking in two, and Eurasia, where most of the world’s population is concentrated, is going to go its own way.

The problem is, how do you really go your own way? You need a means of payment. You need to create a whole international system that is an alternative to the Western international system. You need your own International Monetary Fund to provide credit, so that the these Eurasian countries and their allies in the Global South can deal with each other.

You need a World Bank that, instead of lending money to promote U.S. policies and U.S. investments, will promote mutual gains and self-sufficiency among the countries.

So already, every day in the last few weeks, you have had meetings with the Russians about this, who said, ok, we’re going to create a mutual trading area, starting among the BRICS: Brazil, Russia, India, China, and South Africa.

And how are we going to pay? We can’t pay in dollars, because if we have money in a dollar bank, or a euro bank in Europe, they can just grab the money, like they grab Venezuela’s money. They can just say, we’re taking all your money because, essentially, we don’t want you to exist as an alternative to the finance capital world that we are creating.

So essentially, Russia, China, and these other countries are saying, ok, we’re going to create our own international bank. And how are we going to fund it? Well, every member of the bank will contribute, say, a billion dollars, or some amount of their own currency, and this will be our backing. We can also use gold as a means of settlement, as was long used among countries.

And this bank can create its own special drawing rights, its own bank order, is what Keynes called it. It can create its own credit.

Well, the problem is that, if you have Brazil, for instance, or Argentina, joining this group, or Ecuador, that sells almost all of its bananas to Russia, how is it going to get by?

Well, if there is a BRICS group or a Shanghai Cooperation Organization bank, obviously the Western governments are not going to accept this.

So Russia realizes that as a result of Biden’s Cold War Two, there is going to be a continued rise in energy prices. You think gasoline prices are not high now? They’re going up. You think food prices are not high now? They’re going up more.

And Europe is especially the case, because Europe now cannot buy Russian gas to make the fertilizer to make its own crops grow.

So you’re going to have a number of countries in the Global South, from Latin America to Africa, being squeezed and wanting to trade with the Eurasian group.

And the problem is Russia says, all right, we know that you can’t afford to pay. We’re glad to give you credit, but we don’t want to give you credit that you’re going to simply use the money you have to pay your dollar debts that are coming due.

Because one of the effects that I didn’t mention of the Federal Reserve raising interest rates is there is a huge flow of capital from Europe and England into the United States, so that if you’re a billionaire, where are you going to put your savings? You want the highest interest rates you want. And if the United States raises interest rates, the billionaires are going to move their money out of England, out of the euro, and the euro is going back down against the dollar. It’s almost down to a dollar a euro.

The British pound is heading downwards, towards one pound per dollar.

This increase in the dollar’s exchange rate is also rising against the currencies of Brazil, Argentina, the African countries, all the other countries.

So how are they going to pay this summer, and this fall, for their food, for their oil and gas, and for the higher cost of servicing their dollar debts?

Well, for Eurasia, they’re going to say, we want to help you buy our exports – Russia is now a major grain exporter, and obviously also an oil exporter – saying we want to supply you and give you the credit for this, but you’re really going to have to make a decision. Are you going to join the U.S.-NATO bloc, or are you going to join the Eurasian bloc?

Are you going to join the White People’s Club or the Eurasian Club? And it really comes down to that. And that’s what is fracturing the world in these two halves.

Europe is caught in the middle, and its economies are going to be torn apart. Employment is going to go down there. And I don’t see wages going up very much in Europe.

You’re going to have a political crisis in Europe. But also you’ll have an international diplomatic crisis over how are you going to restructure world trade, and investment, and debt.

There will be two different financial philosophies. And that’s what the new cold war is all about.

The philosophy of US-sponsored finance capitalism, of making money financially, without industrialization, and with trying to lower wages and reduce the labor force to a very highly indebted workforce living on the margin.

Or you’ll have the Eurasian philosophy of using the economic surplus to increase productivity, to build infrastructure, to create the kind of society that America seemed to be growing in the late 19th century but has now rejected.

So all of this is ultimately not simply a problem of interest rates and central bank policy; it really goes beyond central banks to what kind of a social and economic system are you going to have.

And the key to any social and economic system is how you treat money and credit. Is money and credit going to be a public utility, or will it be a private monopoly run for the financial interests and the 1%, instead of a public utility run for the 99%?

That’s what the new cold war is going to be all about. And that’s what international diplomacy week after week is trying to settle.

BENJAMIN NORTON:

Very, very well said. And I really agree about this increasing kind of bipolar order, where the US-led imperialist system is telling the world they have to pick a side. You know, as George W. Bush said, you’re either with us or you’re against us; you’re with us or you’re with the terrorists.

That’s what Biden is saying to the world. And we see the West has drawn this iron curtain around Russia. And now they’re threatening to do the same around China.

Now, of course, the difference is that China has the largest economy in the world, according to a PPP measurement. It’s even larger than the US economy. I don’t know how they can try to sanction the Chinese economy, considering China is the central factory of the world.

But this is related to a question I had for you, Professor Hudson, and this is from a super chat question from Manoj Payardha, and it’s about how Chinese banks say they’re not ready yet to develop an alternative to the SWIFT. He asked, how will the Third World pay Russia for resources?

And we’ve seen, maybe you can talk about the measures being implemented. India has this rupee-ruble system that they’ve created.

But I want to highlight an article that was published in Global Times. This is a major Chinese newspaper, and this is from April. And it quotes the former head of China’s central bank, who was speaking at a global finance forum in Beijing this April.

And basically he said, we need to prepare to replace Swift. He said the West’s adoption of a financial nuclear option of using SWIFT to sanction Russia is a wake up call for China’s financial development. And he said, “We must get prepared.”

So it seems that they’re not yet prepared. But this is something that you’ve been talking about for years. Or maybe you disagree and maybe you think they already are prepared with the SWIFT alternative?

MICHAEL HUDSON:

Well they’re already using an alternative system. If they weren’t using an alternative system – Russia is adopting part of the Chinese system for this – they wouldn’t be able to have banks communicate with each other.

So, yes, they already have a rudimentary system. They’re making it a better system that can also be immune from U.S. computer espionage and interference. So yes, of course there’s already a system.

But I want to pick up on what you said about Biden, how Biden characterizes things.

Biden characterizes the war of the West against Eurasia as between democracy and autocracy. By “democracy,” he means a free market run by Wall Street; he means an oligarchy.

But what does he mean by autocracy? What he means by autocracy, when he calls China an autocracy, an “autocracy” is a government strong enough to prevent an oligarchy from taking power, and taking control of the government for its own interests, and reducing the rest of the economy to debt peonage.

An “autocracy” is a country with public regulation against monopolies, instead of an oligarchic free market. An “autocracy” uses money and credit, essentially, to help economies grow. And when debts cannot be paid in China, if a factory or a real estate company cannot pay debts, China does not simply say, ok, you’re bankrupt, you’re going to have to be sold; anybody can buy you; the Americans can buy you.

Instead, the Chinese say, well, you can’t pay the debts; we don’t want to tear down your factory; we don’t want your factory to be turned and gentrified into luxury housing. We’re going to write down the debt.

And that’s what China has done again and again. And it’s done that with foreign countries that couldn’t pay the debt. When a debt that China has come due for China’s development of a port, or roads, or infrastructure, it says, well, we understand that you can pay; we will delay payment; we will have a moratorium on your payment. We’re not here to bankrupt you.

For the Americans, to the international funds, they’re saying, well, we are here to bankrupt you. And now if we lend you, we the IMF, lends you money to avoid a currency devaluation, the term is you’re going to have to privatize your infrastructure; you’re going to have to sell off your public utilities, your electric system, your roads, your land to private buyers, mainly from the United States.

So you have a “democracy” supporting bankruptcy, foreclosure, financialization, and privatization, and low wages by a permanent depression, a permanent depression to keep down wages.

Or you have “autocracy,” seeking to protect the interests of labor by supporting a living wage, to increase living standards as a precondition for increasing productivity, for building up infrastructure.

You have these two diametrically economic systems. And, again, that’s why there’s a cold war on right now.

BENJAMIN NORTON:

And there’s another super chat question here, Professor Hudson. You mentioned the International Monetary Fund, the IMF. We have talked about that many times. This is from Sam Owen. He asked, why do countries continue to accept bad IMF loans when they have such a poor track record? Is it just the US government meddling in the national politics? Are there cases of good IMF loans?

MICHAEL HUDSON:

Well, what is a country? When you say a country to most people, people think, ok, let’s talk about Brazil; let’s talk about all the people in Brazil; you have a picture in the mind of the Amazon; you have a big city with a lot of people in it.

But the country, in terms of the IMF, is a group of maybe the 15 wealthiest families in Brazil, that own most of the money, and they are quite happy to borrow from the IMF, because they say, right now there’s a chance that Lula may become president instead of the neo-fascist Bolsonaro. And if Lula comes in, then he is going to support labor policies, and he may stop us from tearing down the Amazon. So let’s move our money out of the country.

Well, normally this would push the exchange rate of the cruzeiro (real) down. So the IMF is going to make a loan to Brazil to support the cruzeiro (real), so that the wealthy 1% of Brazil can move their money into dollars, into euros, into foreign currency and offshore bank incentives, and load Brazil down with debt, so that then when there is an election, and if Lula is elected, the IMF is going to say, well, we don’t really like your policies, and if you pursue a pro-labor, socialist policy, then there’s going to be a capital flight. And we’re insisting that you pay all the money that you borrowed from the West right back now.

Well, that’s going to lead Lula either to sit there, follow the IMF direction, and let the IMF run the economy, instead of his own government, or just say, we’re not going to pay the foreign debt.

Well, until now, no country has been in a strong enough position not to pay the foreign debt. But for the first time, now that you have the Eurasian group – we’ll call it BRICS, but it’s really Eurasia, along with the Southern groups that are joining, the Global South – for the first time, they can say, we can’t afford to stay in the West anymore.

We cannot afford to submit the economy to the IMF demands for privatization. We cannot submit to the IMF rules that we have to fight against labor, that we have to pass laws banning labor unions, that we have to fight against laborers’ wage, like Western democracies insist on. We have to go with the Chinese “autocracy,” which we call socialism.

And of course, when America accuses China being an “autocracy,” autocracy is the American word for socialism. They don’t want to use that word. So we’re back in Orwellian double-think.

So the question is what, will the Global South countries do when they cannot afford to buy energy and food this summer, without an IMF loan? Are they going to say, ok, we can only survive by joining the break from the West and joining the Eurasian group?

That is what the big world fracture is all about.

And I described this global fracture already in 1978. I wrote a book, “Global Fracture,” explaining just exactly how all of this was going to happen.

And at that time, you had Indonesia, you had Sukarno taking the lead, the non-aligned nations, India, Indonesia, were trying to create an alternative to the financialized, American-centered world order. But none of these countries had a critical mass sufficient to go their own way.

Well, now that America has isolated Russia, China, India, Iran, Turkey, all these countries, now it has created a critical mass that is able to go its own way. And the question is, now you have like a gravitational pull, and will this Eurasian mass attract Latin America and Africa to its own group, away from the United States? And where is that going to leave the United States and Europe?

BENJAMIN NORTON:

And we saw one of the clearest examples yet of this bipolar division of the world between, you know, the West and the rest, as they say, with this ridiculous meeting that was just held of the G7.

Of course, the G7 are the white, Western countries. And then they’ll throw in U.S.-occupied Japan in there, to pretend they’re a little more diverse.

But we saw that the G7 just held a summit, and basically the entire summit was about how can we contain China? How can we expand the new cold war on Russia into a new cold war on China?

And here’s a report in BBC: “G7 summit: Leaders detail $600bn plan to rival China’s Belt and Road initiative.” Now, I got a chuckle out of this. The idea that the US government is going to build infrastructure in the Global South, I mean, it’s pretty laughable.

It’s also absurd considering that China’s Belt and Road Initiative, which involves over half of the countries on Earth, is estimated at many trillions of dollars in infrastructure projects. So the US and its allies think that they can challenge that with $600 billion in public-private partnerships.

I should stress, of course, what they announced is going to be a mixture of so-called public initiative and then contracts for private corporations.

So it’s yet another giveaway to the private sector, in the name of building infrastructure.

But I’m wondering if if you can comment on the G7 summit that just was held.

MICHAEL HUDSON:

Well, nothing really came out of it. They all said that they could not agree on any more sanctions against Russia, because they’re already hurting enough. India, in particular, stood up and said, look, there’s no way that we’re going to join the sanctions against Russia, because it’s one of our major trading partners. And by the way, we’re getting a huge benefit from importing Russian oil, and you’re getting a huge benefit by getting this oil from us at a markup.

So the G7 could not get any agreement on what to do. It is already at a stalemate. And this is only June. Imagine the stalemate it’s going to be in September.

Well, next week, President Biden is going to Saudi Arabia and saying, you know, we’re willing to kill maybe 10 million more of your enemies; we’re willing to help Wahhabi Sunni groups kill more of the Iranian Shiites, and sabotage Iraq and Syria. We’ll help you back al-Qaeda again, if you will lower your oil prices so that we can squeeze Russia more.

So that’s really the question that Saudi Arabia will have. America will send give it more cluster bombs to use against Yemen.  And the question is, is Saudi Arabia going to say, ok, we’re going to earn maybe $10 billion less a month, or however much they’re making, just to make you happy, and so that that you will kill more Shiites who support Iran?

Or are they going to realize that if they throw in their lot with the United States, all of a sudden they’ll be under attack from Iran, Russia, Syria, and they’ll be sitting ducks? So what are they going to do?

And I don’t see any way that Biden can actually succeed in getting Saudi Arabia to voluntarily earn less on its oil prices. Maybe Biden can say it’s only for a year, only for one or two years. But as other countries know, when America says only for a year or two, it really means forever. And if you don’t continue, then somehow they have a regime replacement, or a regime change and a color revolution.

So Biden keeps trying to get foreign countries to join the West against Eurasia, but there is Saudi Arabia sitting right in the middle of it.

And all that Europe can do is watch and wonder how it’s going to get by without without energy and without much food.

BENJAMIN NORTON:

Yeah, in fact, Venezuela’s President Maduro just confirmed that the Biden administration has sent another delegation basically begging Venezuela to try to work out some deal because, of course, the U.S. and the EU have boycotts of Russian energy.

So it’s really funny to me that, after years of demonizing Venezuela, portraying it as a dictatorship and all of this, the U.S. had to decide, well, the war in Venezuela is not as important as the war on Russia right now; so we’re going to temporarily pause our war on Venezuela to stick the knife deeper into Russia.

But on the on the subject of the the G7 meeting, this was the hilarious comment made by the European Commission President Ursula von der Leyen, in an article in Reuters titled “Europe Must Give Developing Nations Alternative to Chinese Funds.”

So echoing the same perspective that we hear from Biden, U.S. government officials constantly say that the US needs to challenge China in the Global South. So Europe pledged €300 billion – however, once again, important asterisk – “in private and public funds over five years to fund infrastructure in developing countries.”

So once again, we see another neoliberal private-public partnership. It’s going to be another public giveaway to private corporations.

And “she said that this is part of the G7’s drive to counter China’s multitrillion-dollar Belt and Road project.”

Now, this is really just tying everything together that we have been talking about today, Professor Hudson – in your article “The Fed’s Austerity Program to Reduce Wages,” you conclude the article noting that the depression that people in the United States are on the verge of facing because of these neoliberal policies – telling workers in the U.S. that they need to decrease their wages and be unemployed in order to stop inflation – you point out that:

Biden’s military and State Department officers warn that the fight against Russia is just the first step in their war against China’s non-neoliberal economy, and may last twenty years. That is a long depression. But as Madeline Albright would say, they think that the price is “worth it.”

And you talk about the new cold war against the socialist economy in China and the state-led economy in Russia.

So you predict not only a depression is coming. We have seen that in mainstream media outlets. Larry Summers said, you know, a depression could be coming for a few years. But you say, no, not only is a depression coming; it’s going to be a long depression. We could be seeing 20 years.

And basically the U.S. government and other Western leaders, as we see Ursula von der Leyen from the EU, they’re basically telling their populations, tighten your belts; we have decades of depression coming, because we have collectively decided, as Western leadership, that we are going to force the world through a long depression economically, or at least forced the West through a long economic depression, in order to try to halt the rise of China and Russia.

They’re basically telling their populations, suck it up, tighten your belts for decades, because in the end, the price is worth it in order to prevent the collapse of our empires.

MICHAEL HUDSON:

That’s right. When they’re talking about private-public initiatives, they’re talking about Pentagon capitalism. That means the government will give trillions of dollars to private firms and ask them to build infrastructure.

And if they build a port or a road in a Global South country, they will operate this at a profit, and it will be an enormously expensive infrastructure, because to make financial money off this infrastructure, you have to price it at the cost of production, which is Pentagon capitalism, hyper inflated prices; you have to pay management fees; you have to pay profits; you have to pay interest rates.

As opposed to the Chinese way of funding as equity. The Western mode of funding is all debt leverage. China takes as collateral for the infrastructure that it pays, an equity ownership in the port or whatever infrastructure in the Belt and Road that it’s building.

So you have the difference between equity ownership, debt-free ownership, where if it can afford to pay, fine; if it doesn’t make an income, there are no dividends to pay.

Or you have the debt leverage that is intended that the government cannot pay it, so that the government that will be the co-signer for the debt for all of this infrastructure will somehow be obliged to tax its whole population to pay the enormous super-profits, the enormous monopoly rents, the enormous debt charges of von der Leyen’s Margaret Thatcher plan.

Von der Leyen thinks that she can do to Europe and to America what Margaret Thatcher did to England. And if she does, then then America and Europe deserve it.

BENJAMIN NORTON:

And Professor Hudson, as we start wrapping up here, I know you have to go pretty soon, just a few short questions here at the end.

I’m wondering if what we’re also seeing is not only this fundamental crisis in the Western neoliberal, financialized economies, but it’s also this bubble that has burst, or at least this phase that is over.

At least this is my reading, I’m curious if you agree. In the 1990s, the peak of, you know, the so-called golden age of neoliberalism; we had Bill Clinton riding this wave, and it was the “end of history,” in Francis Fukuyama’s nonsense prediction and all that.

How much of that was not only based on this exorbitant privilege, as the French call it, of the dictatorship of the US dollar – we talked about that based on your book “Super Imperialism,” how the US was given this massive global free lunch economically because of dollar hegemony – but how much of it was not just that, but also the fact that in the 1990s and the first decade of the 2000s, the US and Western Europe had access to very cheap consumer goods from Asia and very cheap energy from Russia?

To me, it seems like those two factors are some of the most important reasons why this golden age of neoliberalism in the ’90s and early 2000s was even possible.

It was on the back of low-paid Asian workers, and based on this idea that Russia would permanently be, what Obama called it: a gas station.

Well, we’ve seen that, one, East Asian economies have lifted themselves up of poverty, especially China has ended extreme poverty and raised median wages significantly.

And now, of course, the West has sanctioned itself against buying Russian energy, massively increasing the cost of energy around the world.

So do you think that that bubble, or that brief moment of the end of history, the golden age of neoliberalism, that can never come back?

Because unless the West can succeed in overthrowing the Russian government and imposing a new puppet like Yeltsin, and overthrowing the Chinese government, it seems like that that the golden in the 1990s is never going to come back.

MICHAEL HUDSON:

Well, you’ve left out the key element of the golden age: that is military force, and the willingness to assassinate any foreign leader that does not want to go along with US policy.

BENJAMIN NORTON:

Of course.

MICHAEL HUDSON:

You’re neglecting what America did to [Salvador Allende]; you’re neglecting how America took over Brazil; America’s meddling and control, and in Europe, the wholesale bribery and manipulation of Europe’s political system, to put in charge of the [German] Green Party a pro-war leadership, an anti-environmental leadership, to put in charge of every socialist party of Europe right-wingers, neoliberals.

Every European socialist and labor party turned neoliberal largely by American maneuvering and meddling in their foreign policy.

So it’s that meddling that was intended to prevent any alternative economic philosophy from existing to rival neoliberalism.

So that when you talk about the end of history, what is the end of history? It means the end of change. It means stop; there will be no reform; there will be no change in the neoliberal system that we have locked in.

And of course, the only way that you can really end history is by what Biden is threatening: atomic war to blow up the world.

That is the neoliberal end of history. And it’s the only way that the neoliberals can really stop history. Apart from that, all they can try to do is to prevent any change that is adverse to locking in the neoliberal order.

So the “end of history” is a declaration of war against any country that wants to go its own way. Any country that wants to build up its own economy as a way that will keep the benefits of its economic growth in its own country, instead of letting it go to the global financial class centered in the United States and Britain.

So we’re talking about, neoliberalism was always a belligerent, implicitly military policy, and that’s exactly what you’re seeing in the proxy war of US and NATO in Ukraine today.

BENJAMIN NORTON:

Yeah, very well said. That’s the other key ingredient: overthrowing any government that is a challenge, that shows there is an alternative, to try to prove the maxim that “there is no alternative.”

MICHAEL HUDSON:

Yes.

BENJAMIN NORTON:

Here’s an interesting comment from Christopher Dobbie. He points out that in Australia, the average age for their first homeowner was 27 in 2001; now it’s 35, and increasing more and more by the year.

Now, in the last few minutes here, Professor Hudson, here’s another brief question that I got from someone over at patreon.com/multipolarista – people can go and support this show. One of my patrons asked this question: who who is hurt most by the Fed or other central banks raising interest rates? People, average consumers, or companies?

And obviously, you talked earlier about how the US Federal Reserve is different from other central banks, but it’s kind of an open question. Who is hurt more by raising interest rates?

MICHAEL HUDSON:

Well, companies are certainly hurt because it means that any possibility of getting productive credit is raised. But they’re also benefited, because if interest rates raised go up high enough, then it will not pay corporate raiders to borrow money to take over and raid companies and empty them out, like they did in the 1980s.

So everything cuts both ways. Raising the interest rates have given commercial banks an excuse to raise the interest charges on credit card loans and mortgage debts.

So raising interest rates, to the banks, have enabled them to actually increase their margin of monopoly profits on the credit that they extend.

And that certainly hurts people who are reliant on bank credit, either for mortgages or for consumer debt, or for any kind of loans that they want to take out.

Basically, raising interest rates hurts debtors and benefits creditors.

And benefiting creditors very rarely helps the economy at large, because the creditors are always really the 1%; the debtors are the 99%.

And if you think of economies, when you say, how does an economy benefit, you realize that, well, if the economy is 1% creditors and 99% debtors, you are dealing with a bifurcation there.

And you have to realize that the creditors usually occupy the government, and they claim we are the country. And the 99% are not very visible.

Democracy can only be afforded if they population’s voting has no effect at all on the government, that it’s only symbolic. You can vote exactly which oligarch you want to rule your country. Ever since Rome that was the case, and it’s the case today.

Is there really any difference between the Republicans and Democrats in terms of their policy? When you the same central bank bureaucracy, the same State Department blob, the same military-industrial complex, the same Wall Street control, what does democracy mean in a situation like that?

The only way that you can have what democracy aims at is to have a government strong enough to check the financial interests, to check the 1%, acting on behalf of the 99%. And that’s what socialism is.

BENJAMIN NORTON:

Very well said.

Here is another brief question from patreon.com/multipolarista – people can become a patron and help support the show over there.

This question, Professor Hudson, is about the proposal of an excess profits tax as an alternative to try to contain inflation. What do you think about the proposal of an excess profits tax?

MICHAEL HUDSON:

Well, only the little people make profits. If you’re a billionaire, you don’t want to make a profit; you want to essentially take all of your return in the form of capital gains. That’s where your money is.

And the way you avoid making a profit is you establish an offshore bank or creditor, and you pay out all of your profits in the form of interest, which an expense. You expense all of what used to be, what really is, income. And you show no profits at all.

I don’t think Amazon has ever made a profit. You have huge, the biggest corporations, with all the capital gains, have no profits. Tesla is a gigantic stock market presence, and it doesn’t make a profit.

So the key is capital gains, is financial gains, stock market gains, gains in real estate prices, unearned income. That’s what the free lunch is.

You want to prevent profits being paid out in the form of interest. So I would vastly increase profits, by saying you cannot deduct interest as a business expense. It’s not a business expense. It’s a predatory parasitic expense. So you’re going to have to declare all of this as profit, and pay interest on it.

Pricing your output from a foreign offshore banking center, so that you don’t seem to make any profit, like Apple does, pretending to make all its money in Ireland, you can’t do that anymore. You’re going to have to pay a real return.

So the accounting profession has made profits essentially tax free. So the pretense of making money by taxing profits avoids talking about capital gains and all of fictitiously low profits that are simply pretended not to be profit, like interest, depreciation, amortization, offshore earnings, management fees.

All of these should be counted as profits, and taxed as such as they were, I’d say back at the Eisenhower administration levels.

BENJAMIN NORTON:

And finally, the last question here, Professor Hudson, someone asked about the U.S. government pressuring countries in Africa not to buy Russian wheat. And the U.S. is, of course, claiming that this wheat is supposedly stolen from Ukraine.

This article, this headline at Newsweek, it summarizes pretty well: “U.S. Warns Starving African Nations to Not Buy Grain Stolen by Russia.” Again, that “stolen” is alleged by the U.S.

But you actually have a really good column about this over at your website, which again is michael-hudson.com: “Is US/NATO (with WEF help) pushing for a Global South famine?

I know this could be a long point of discussion; it could be the entire interview. And I know you have to go soon. But just concluding here, I’m wondering if you could comment.

The United Nations itself has warned that there could be a famine, especially in Global South nations.

What do you think the role of these neoliberal policies and Western sanctions are in fueling that potential crisis?

MICHAEL HUDSON:

Well, the wealthiest families in the world used to go every year, now they go every few years, to Davos, to Klaus Schwab’s Davos World Economic Forum. And they say, the world is overpopulated; we need about 2 billion human beings to starve, preferably in the next year or two.

So it’s as if the wealthy families have got together and say, how can we thin out the population that really we, the 1%, don’t need?

And in all of their policies, it is as if they’ve decided to follow the World Economic Forum and deliberately shrink the world population, especially in Africa and Latin America.

Remember, these are white people at the World Economic Forum, and that is their idea of how to retain equilibrium.

They’re always talking about “equilibrium,” and equilibrium is going to be for countries that cannot afford to grow their own food, because they have put their money into plantation crops and cotton to sell to the West, instead of feeding themselves – they’re just going to have to starve to contribute to world “equilibrium.”

BENJAMIN NORTON:

And while we’re on the subject of the World Economic Forum, I guess I should just briefly add – we’ve talked about this a little bit, but I just feel remiss not mentioning it – it’s interesting to see how right-wingers have seized on the World Economic Forum and begun criticizing it a lot.

Obviously, it’s worth criticizing. It’s a horrible neoliberal institution that represents the Western capitalist class. But we’ve even seen, you know, Glenn Beck, the right-winger, former Fox News host, he published a book about the Great Reset and the World Economic Forum.

I’m just wondering really quickly if you could respond to the idea that the World Economic Forum is like some “socialist” organization. Obviously, it’s the exact opposite.

But what do you say to these conservatives who have a right-wing critique of the World Economic Forum, and think it’s like secretly socialist, and Biden is a socialist.

MICHAEL HUDSON:

They look at any government or managerial power as socialist, not drawing the distinction between socialism and oligarchy.

The question is government power can be either right-wing or left-wing, and to say that any government power is socialist is just degrading the word.

However, as I mentioned before, almost all of the European “socialist” parties are neoliberal. Tony Blair was the head of something that called itself the British Labour Party. Gordon Brown was the head of the British Labour Party.

You can’t be more neoliberal and oligarchic than that. And that’s why Margaret Thatcher said her greatest success was creating Tony Blair.

You have the same thing in France; the French “socialists” are on the right-wing of the spectrum. The Greek “socialist” party, on the right-wing of the spectrum.

You have “socialist” parties around the world being neoliberalized.

So what does the word socialism mean? You want to go beyond labels into the essence.

And the question is, in whose interest is the government going to be run for? Will it be run for the 1% or the 99%?

And the right wing wants to say, well, the 1% can be socialist, because they’re taking over the government and that’s the big government, and we’re against it.

Well, the right-wing is taking over the government, but it’s not really what the world meant by socialism a century ago.

BENJAMIN NORTON:

Yeah, very well said. I just always laugh when I see these right-wing critiques of the World Economic Forum. I mean, the World Economic Forum is the embodiment of capitalism. It is the group of the elite capitalists who get together to talk about how they can exploit the working class and help monopolize the global economy on behalf of Western capital.

So with that said, there still are many questions, but I know you have to go, and we’re already at an hour and a half.

I do want to thank everyone who joined. We’re at 1200 viewers right now, so it has been a really good response.

Professor Hudson, you’re very popular. You should do your own YouTube channel. Maybe we can talk about that, because every time I have you on, it’s always an amazing response that I get. And hopefully we can do this again more in future.

Aside from people going to your website, michael-hudson.com, is there anything else that you want to plug before we conclude?

MICHAEL HUDSON:

Well, the book that I just wrote, “The Destiny of Civilization,” is all about what we’ve been talking about. It’s about the world’s split between neoliberalism and socialism. So that was just published and is available on Amazon. And I have two more books that are coming out very shortly.

BENJAMIN NORTON:

Yeah, for people who are interested, I did an interview with Professor Hudson here at Multipolarista a few weeks ago about his new book, The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism.”

And of course, anyone who wants to support this show, you can go to patreon.com/multipolarista. And as always, this will be available as a podcast, if you want to listen to the interview again. I’m certainly going to listen to this discussion again. You can find that anywhere there are podcasts.

Professor Hudson, it’s always a real pleasure. Thanks so much for joining me.

MICHAEL HUDSON:

I enjoyed the discussion.

BENJAMIN NORTON:

And like I said earlier at the beginning, for me, I truly think it’s always a privilege, because I do think you’re one of the greatest living economists. So I always feel very privileged to have the opportunity to pick your brain about all of these questions.

And I want to thank everyone who commented, who watched, and who listened. I will see you all next time.

أميركا تحزم أمرها: نحو عسكرة العالم

الجمعة 1 تموز 2022

 سعيد محمد

أهمّ القرارات الصادرة عن القمة كان زيادة تعداد القوّة الضاربة للحلف في أوروبا من 40 ألف جندي إلى 300 ألف (أ ف ب)

لندن انتهت قمّة «حلف شمال الأطلسي» (الناتو) المنعقدة في مدريد، مع انتصاف نهار أمس، وغادر رؤساء دول وحكومات الغرب إلى بلدانهم، وفي جُعبهم خطط لمزيد من الإنفاق الحربي والتجنيد والتصعيد، فيما تُواجه اقتصاداتهم أزمات تضخّم وركود لم يشهد مثلَها العالم منذ الحرب العالمية الثانية. وبدت الولايات المتحدة، في خلال إعلان مخرجات القمّة، وكأنها ألقت على نفسها رداء العسكرة، وعزمت على أخذ العالم برمّته نحو الحرب، وذلك بعدما بثّت الروح في جسد «الناتو»، وفرضت تضخيم عديده في شرقيّ أوروبا إلى ضِعف حجم الجيش الروسي، وأعادت توجيه بوصلته نحو عدوّ مباشر آنيّ (روسيا)، وتحدّ استراتيجي (الصين)، إضافة إلى تجديد الالتزام بـ«مكافحة الإرهاب» في العالم العربي والساحل

وافق رؤساء دول وحكومات «حلف شمال الأطلسي»، في قمّتهم الطارئة التي عُقدت في العاصمة الإسبانية مدريد، على صياغة جديدة لفلسفة الحلف، تُحدّد استراتيجياته ومهامه الأساسية للعقد المقبل. وفي تحوُّل كبير عن وثيقة الاستراتيجية السابقة (قمّة لشبونة 2010) التي كانت اعتبرت روسيا شريكاً محتملاً، فإن موجز الوثيقة التي تمّ التوافق عليها في مدريد يقول إن روسيا تظلّ «التهديد الأكثر أهمية ومباشرة لأمن الدول الأعضاء وللسلام والاستقرار»، كما يضع الصين، لأوّل مرّة، في خانة «التحدّي الرئيس لأمن الحلفاء ومصالحهم وقيمهم». واعتَبر المجتمعون أن بيئة الأمن الأوروبي تغيّرت كليّاً نتيجة «العدوان» الروسي على أوكرانيا، و«انتهاك المعايير والمبادئ» التي ساهمت في ضمان استقرار تلك البيئة لعقود، ولم يستبعدوا «احتمال شنّ هجوم روسيّ في أيّ وقت ضدّ سيادة الحلفاء وسلامة أراضيهم»، مستشهدين بجهود موسكو لتحديث قوّتها النووية، ورفضها الامتثال للالتزامات الدولية للحدّ من التسلح، وما وصفوه بمحاولاتها «زعزعة استقرار الدول المجاورة على الجناحَين الشرقي والجنوبي للناتو».

كما تعهّدوا بـ«العمل معاً في التصدّي للتحدّيات المنهجية التي تفرضها الصين على الأمن الأوروبي – الأطلسي جرّاء طموحاتها المعلَنة وسياساتها القمعية التي تهدّد مصالح الغرب، ومحاولاتها الحثيثة للسيطرة على التقنيات والصناعات الرئيسة، مع تجاهل القواعد واللوائح الدولية». ومع ذلك، لم ينصّ الاتفاق على وصف الصين بالعدو، بل أكد أن الحلف لا يزال منفتحاً على إمكانية بناء علاقات بنّاءة معها، ربّما في حالة تخلّيها عن شراكتها الاستراتيجيّة مع روسيا، والتي عدّها المجتمعون «طليعة التصدّي الاستبدادي» لقواعد النظام الدولي. وفي الواقع، فإن الشراكة الصينية – الروسية تبدو أخطر تهديد لهيمنة الغرب منذ انهيار الاتحاد السوفياتي، وانتهاء الحرب الباردة، إذ نجحت روسيا في عقدَين من حُكم الرئيس فلاديمير بوتين في استعادة حيويتها، فيما تقدّمت الصين بشكل مطّرد لتُنافس الولايات المتحدة اليوم على مكانة أكبر اقتصادات العالم، وهما اليوم تتعاونان في غير مجال، في ما من شأنه التمهيد لنشوء بيئة بديلة لا تخضع لرغبات نُخبة واشنطن، وقادرة على استيعاب شعوب أخرى في الجنوب.

ستتعيّن على ستولتنبرغ متابعةُ الحلفاء للحصول على تعهّدات منهم بالمساهمة بقوات إضافية ومعدّات وتمويل


وبالعودة إلى الوثيقة الصادرة عن القمّة، فإن «الإرهاب لا يزال يشكّل تهديداً مستمرّاً غير متكافئ لأمن الدول الأعضاء» (الثلاثين)، فضلاً عن تغيّرات المناخ، والتكنولوجيات الحديثة المخلّة بالاستقرار، وانتشار الأسلحة. كما شدّد المجتمعون على حق الردّ المسلّح على الهجمات الهجينة (السايبرية وعبر الفضاء) التي قد تستهدف دول الحلف، وعلى دور الأخير في الردع والدفاع ومنع الأزمات وإدارتها، كما التعاون الأمني (الاستخباراتي)، والذي يقتضي استدامة عملياته. وتضمّنت الوثيقة عدّة إشارات إلى شمال أفريقيا والشرق الأوسط ومنطقة الساحل، بحجّة أن أيّ «صراع أو عدم استقرار» في هذه المناطق يمكن أن «يؤثّر بشكل مباشر على أمننا»، وهو ما سيثير ارتياح أعضاء «الناتو» في جنوبي أوروبا، ولا سيما إسبانيا وإيطاليا واليونان التي طالما طالبت بدعمها لمواجهة تدفّق اللاجئين من الجنوب. كذلك، أشار الموجز إلى أن المناطق المذكورة تُواجه «تحدّيات أمنية وديموغرافية واقتصادية وسياسية عميقة ومترابطة ومرشّحة للتفاقم»، مضيفاً أن «هذه الديناميكيات توفّر أرضاً خصبة لانتشار الجماعات المسلحة، بما في ذلك المنظّمات الإرهابية، وتشرّع الأبواب لتدخّلات تزعزع الاستقرار من قِبَل المنافسين الاستراتيجيين» – في إشارة إلى الصين وروسيا -.
إلى جانب ذلك، قرّرت القمّة دعوة فنلندا والسويد، رسمياً، للانضمام إلى «الناتو»، علماً أن التحاقهما به سيعزّز تواجده في بيئة بحر البلطيق، ويسهّل «الدفاع» عن لاتفيا وليتوانيا وإستونيا القابعة تحت هاجس «الغزو» الروسي. لكن أهمّ القرارات الصادرة عن المجتمعين في مدريد، كان زيادة تعداد القوّة الضاربة للحلف في أوروبا من 40 ألف جندي حالياً، إلى 300 ألف، وفق مقترح الأمين العام لـ«الناتو»، ينس ستولتنبرغ. على أن هذا القرار يظلّ مجرّد إطار عمل، فيما ستتعيّن على ستولتنبرغ متابعة الحلفاء للحصول على تعهّدات منهم بالمساهمة بقوات إضافية ومعدّات وتمويل. وقالت ألمانيا إنها ستخصّص 15 ألف جندي لهذه الغاية، وتعهّدت كندا برفع تواجدها الأوروبي من نحو 1375 جندياً حالياً إلى مستوى لواء. لكنّ الاندفاعة الأكبر أتت من الرئيس الأميركي، جو بايدن، الذي أعلن أن بلاده ستُعزّز تواجدها في كلّ أوروبا، وستُخصّص أسلحة ومعدّات متطوّرة لدعم حضور «الناتو» بحراً وبرّاً وجوّاً في مواجهة روسيا. وتشمل الخطط الأميركية المعلَنة مقرّاً دائماً في بولندا، و5000 جندي إضافي في رومانيا، وسربَين من طائرات «إف-35» في المملكة المتّحدة، ومعدّات دفاع جوي متقدّم في إيطاليا وألمانيا، ومدمّرتَين بحريتَين في إسبانيا. وتمتلك الولايات المتحدة وجوداً عسكرياً دائماً في 13 بلداً أوروبياً، ويصل تعداد جنودها في مختلف القطاعات عبر القارّة إلى 70 ألفاً الآن، فيما يمكن أن يبلغ بعد القمّة 100 ألف، وفق تقديرات الخبراء.

من جهتها، أعربت إسبانيا عن راحتها لحصولها على ضمانات من «الناتو» لحماية سبتة ومليلة، وهما مدينتان عربيتان تحتلّهما في شمال أفريقيا. ونُقل عن رئيس هيئة الأركان الإسبانية، تيودورو لوبيز كالديرون، قوله إن التزام الحلف بالدفاع عن «السلامة الإقليمية» للدول الأعضاء يشمل أيضاً ممتلكات إسبانيا في القارة الأفريقية. بريطانياً، أعلن بوريس جونسون، رئيس الوزراء، عن دعم مسلّح إضافي بقيمة مليار جنيه إسترليني لأوكرانيا، وهو ما من شأنه أن يرفع مجموع ما قدّمته لندن لكييف منذ شباط الماضي، إلى 2.3 مليار جنيه إسترليني (2.8 مليار دولار أميركي)، الأمر الذي يجعلها أكبر مموّلي النظام الأوكراني بعد الولايات المتحدة. وتعهّد جونسون، الذي يواجه ضغوطاً داخلية شديدة للاستقالة، بزيادة حجم الإنفاق العسكري لبلاده داخل «الناتو»، إلى 2.5% من مجموع الناتج القومي، أي بزيادة 20% عن الحد الأدنى. لكنّ سخاء الرئيس من جيوب البريطانيين لن يكون من دون عواقب محلّية على الأقل، حيث يشتكي وزير الدفاع من عدم توفّر الاعتمادات الكافية للجيش البريطاني، فيما تملأ الصحفَ التي سيقرأها أثناء رحلة العودة إلى لندن تصريحات محبطة من أندرو بيلي، محافظ بنك إنكلترا (المركزي)، الذي قال في مؤتمر في البرتغال إن المملكة المتحدة – من الناحية الاقتصادية – في أسوأ وضع ممكن -، وتعاني من أزمة طاقة أكثر من بقيّة أوروبا، وقد تعيش حالة تضخّم أعلى لفترة أطول.
وحضرت اليابان – مُمثَّلة برئيس وزرائها فوميو كيشيدا – القمّة، وذلك لأوّل مرّة في تاريخ الحلف الذي تأسّس قبل 73 عاماً. وشارك كيشيدا زعماء الحلف مخاوفهم من صعود الصين، وقلقهم على مستقبل تايوان، لكنّ مراقبين أعربوا عن خشيتهم من أن الأميركيين سيعيدون عسكرة اليابان، كما شرعوا بالفعل في عسكرة ألمانيا، مع كلّ ما يحمله هذا من كوابيس فاشيات القرن العشرين. وحضرت القمّةَ أيضاً مجموعة ممّن تسمّيهم واشنطن شركاء «الناتو»، ومن هؤلاء رؤساء دول وحكومات أستراليا، وأوكرانيا (عن بعد)، وجورجيا، وكوريا (الجنوبية)، فضلاً عن رئيس المجلس الأوروبي ورئيس المفوّضية الأوروبية والسويد وفنلندا. وتَمثّل الأردن وموريتانيا من خلال وزيرَي خارجيّتهما، في حين سُجّل حضور وزير الدفاع في البوسنة والهرسك.

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Sweden and Finland joining NATO precedes an inevitable financial collapse of the current international system

June 29, 2022

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Sweden and Finland joining NATO besides being a provocative act towards Russia, precedes an inevitable financial collapse of the current international system

By Guilherme Wilbert

The Nordic entry into NATO, in the middle of a war, is clearly an act that does not help the peace negotiations that could be underway, but acts as the opposite, putting more wood on the fire for “military-technical” measures (to paraphrase Shoigu, Russian Defense Minister who uses the term when talking about responding to Western provocations).

With the entry of Finland and Sweden barred initially by Turkey, it shows that even a NATO member cares about enemies of its national interests. In Turkey’s case with the PKK, which is a Kurdish political organization seen as terrorist by Ankara and some countries, yet they were (until then) operating freely throughout the Nordic countries with active members of the official Kurdistan party holding protests in public squares in Helsinki and Stockholm.
Just for level of knowledge, Kurdistan is a region that would be home to the Kurdish ethnic group, taking part of Turkish territory up to the North of Iran, which explains Erdogan’s concern with a possible disintegration of Turkish territory if the Kurds were to gain prominence on the battlefields (which in real data would be very difficult since the Turkish army is the strongest in NATO for example).

But this provocation, which will surely be responded to by Moscow, proves the warmongers’ concern with continuing disputes and wars around the world, using Ukraine, which is the most recent case at the moment, as a kind of proxy to weaken Russia, serving only as a spearhead of the American objective, since Zelensky himself and his cabinet acknowledge that they will never join NATO and possibly not even the European Union, if you consider and draw a parallel with the case of Turkey itself, which has been waiting since 1999 for a resolution whether to join the bloc or not.

So, the entrance of the Nordics into NATO does not help Ukraine at all and can even make the situation worse with military-technical measures applied by the Russian Armed Forces perhaps in the decision centers in Brussels or in the Baltics, which would lead us to a nuclear catastrophe since the mentioned countries (Belgium and the Baltics for example) are NATO members and could invoke article 5 of mutual aid in case of “aggression” (See that aggression here is interpreted by Westerners (in an exercise of deduction) as only after the military-technical measure, ignoring what provoked the decision to do so).

Coupled with the desperation to provoke more wars, Western leaders get lost in the real global objective: economic integration and the fight against hunger

While great concern is seen with NATO, with diplomats having used the term “Global NATO” a few times, some primary and more basic goals of the organization’s member nations are put aside to add more gasoline to the fire.

The recent cases of inflation in Western Europe or even in the US precede a global financial collapse that has several causes, with some analysts citing the sanctions on Russia but personally I would go further and cite all of the last 10 years of at least NOTHING-backed dollar printouts that were used to give a supposed liquidity to the economy after the 2008 crash that was a scare felt around the world.

Economics, unlike some sciences, is not as if it can receive arguments and opinions, the theories are very clear and explanatory: by printing too much of your currency, you devalue it. But surely American economists know this and they also know that the coming collapse would affect the entire Globe because unfortunately after World War II, American hegemony was also monetary, with countries to this day using the dollar as an international reserve. In other words, in addition to the overprinting and national devaluation of the currency on American territory, it also devalues in the coffers of the countries that use it as a reserve and this will cause a cascading effect that will further force realpolitik into play and cause more haste in the emerging countries to get rid of the coming bomb.

Unfortunately war-hungry Western leaders are blind to what is coming and is already happening in some parts of the world, either because of irresponsible sanctions or the natural course of the very sequence of American economic mistakes. Because it is very different to sanction Russia compared to sanctioning Iran for example. And this does not mean that Iran deserves to be sanctioned in any way, because I believe that every country should have the right to its nuclear program, at least for peaceful purposes, and this cannot be used as a pretext for sanctions that crush already small economies, such as the example of Iran.

In the case of Russia the conversation is different for numerous reasons, be they military at the nuclear level or at the economic level, because Russia is part of a global production chain which acts as an active player on the macroeconomic stage. For example, the raw material called antimony, which is used in the global defense industry for military equipment of various kinds, is rightly found in excess in Russia and parts of Asia. This is to cite a simple example of an element that is not on the average citizen’s table, for example. In addition to the many important productions that Russia is responsible for.

So, given recent events and the inference for the disastrous future, the international scenario for the Global South forces them towards long term solutions of American de-dollarization and decolonization in the various ways, either by American NGOs that operate in several countries or by the very US culture exporting technologies that function as small fiefdoms of thought, the case of Facebook for example. But the latter is a little more difficult to achieve because it involves a collective societal thought that would require a national unity for the development of regional cultures.

Having said that, a peace agreement between Ukraine and Russia with the Ukrainian loss of the territories that comprise New Russia needs to happen and sanctions against any country need to be lifted for the sake of multipolarity.

The world cannot be guided by one diplomatic corps and one government only because the international scenario is not a movie of one actor, but of several, with several potentials to be developed in different parts of the Globe.


Guilherme Wilbert is a Brazilian Bachelor of Law interested in geopolitics and international law.

أميركا وأوروبا تتدخّلان لحماية «إسرائيل»: «كاريش» جزء من أمن الطاقة العالميّ

 الخميس 30 حزيران 2022

الأخبار 

الكلام «الإيجابي» الذي سُرّب في اليومين الماضيين، في واشنطن وبيروت، حول مستقبل مفاوضات ترسيم الحدود البحرية مع فلسطين المحتلة لم يتجاوز حدود الرسائل التي لا تستند إلى وقائع صلبة. فحتى اللحظة، لا يبدو أن «الوسيط» الأميركي عاموس هوكشتين في صدد العودة إلى لبنان، فيما دخل الأوروبيون على الخط لمصلحة إسرائيل. في وقت شهدت المياه الإقليمية اللبنانية والفلسطينية المحتلة سلسلة خطوات عسكرية وأمنية توحي بدرجة عالية من التوتر.

وبحسب معلومات «الأخبار»، فإن سفينة الاستخراج التابعة لشركة «أنيرجيان» تقدّمت مع سفينة أخرى نحو الخط 29، وتجاوزت إحداهما الخط بأميال قليلة، في وقت كشفت مصادر في قوات اليونيفل عن وصول بوارج حربية أميركية إلى قبالة حقل «كاريش»، ومباشرتها إجراءات لتوفير حماية للمنصة العائمة. وترافق ذلك مع قيام سرب من طائرات تجسس بريطانية وأخرى تابعة لحلف شمال الأطلسي بمسح لكل المنطقة البحرية التي تلامس الحدود اللبنانية وتجاوز المياه الإقليمية لكل من لبنان وفلسطين المحتلة.

وأوضحت مصادر الأمم المتحدة في لبنان أن المناورة العسكرية البحرية التي أجرتها قوات بحرية من اليونيفل قرب الحدود خلال الأيام القليلة الماضية لا تستهدف أحداً، وأنها «تمرين عادي يواكب التطورات السياسية والأمنية في المنطقة». لكنّ مصادر معنية لفتت إلى أن طبيعة المناورة التي جرت بالذخيرة الحية «لا تقود إلى هذا الاستنتاج، خصوصاً أنها تزامنت مع نشر الأميركيين قطعاً بحرية عسكرية قبالة حقل كاريش، في وقت فعّل حلف الناتو عمل طائرات مُسيَّرة ذات طابع تجسسي في كل المنطقة البحرية، بالتزامن مع نشاط أمني إسرائيلي في محيط حقل كاريش».
في غضون ذلك، سمع لبنان الرسمي «نصائح» أوروبية غير مباشرة، خصوصاً من فرنسا وبريطانيا وألمانيا، بعدم التصعيد في هذا الملف. وبحسب المصادر فقد شرح الأوروبيون لمسؤولين لبنانيين بأن «ما تقوم به إسرائيل هو استخراج كميات من الطاقة التي تحتاج إليها أوروبا، وهي بالتالي تحظى بغطاء دولي، أميركي وأوروبي، وأن عملية استخراج النفط أو الغاز من حقل كاريش باتت جزءاً من أمن الطاقة العالمي، وأن تهديدات حزب الله لن تفيد في معالجة الأمر». وفي الوقت نفسه، تحدّث الأوروبيون عن مساعٍ يقومون بها لإقناع إسرائيل بالتوصل إلى تسوية تتيح للبنان بدء التنقيب والاستخراج لمواجهة أزمته الاقتصادية والمالية المتفاقمة.
إلى ذلك، علمت «الأخبار» أن المنسّقة الخاصة للأمم المتحدة في لبنان يوانا فرونتيسكا زارت تل أبيب أخيراً وبحثت مع المسؤولين الإسرائيليين في ملف ترسيم الحدود، وعادت إلى لبنان بـ«مناخات لا تتطابق مع الكلام المسرّب عن استعداد إسرائيلي لتقديم تنازلات جدية». وقد زارت الدبلوماسية الأممية الرئيس ميشال عون أمس ووضعته في أجواء زيارتها للكيان الإسرائيلي. وفيما يُفترض أن تتبلّغ الجهات الرسمية في لبنان تفاصيل المحادثات خلال الساعات المقبلة، فُهم أن الإسرائيليين يطرحون مجدداً الخط الـ 23 المتعرّج الذي سبق أن اقترحه هوكشتين على لبنان في شباط الماضي وتبلّغ رفضاً شفهياً له الشهر الماضي.

منسّقة الأمم المتحدة تعود من تل أبيب بأجواء سلبية ومناورات عسكرية إسرائيلية وأممية وأميركية وأوروبية قبالة سواحل لبنان وفلسطين


ويُفترض أن السفيرة الأميركية في بيروت دوروثي شيا، التي عادت إلى بيروت أمس، تحمل رسالة من هوكشتين بعد المحادثات التي أجراها مع مسؤولين إسرائيليين لمناقشة الردّ اللبناني. وقال مقرّبون من مرجع رئاسي إنه يجب الاستماع إلى الوسيط الأميركي بصورة أوضح قبل الركون إلى ما تسرّب عن لسان مسؤولين أوروبيين وأمميين. وكرّرت المصادر أن الجديد في ما نُقل عن الإسرائيليين يتلخّص بأن التنازل عن الخط 29 يعني أن حقل «كاريش» هو حصة إسرائيلية كاملة، وأن «الخط 23 هو خط التفاوض الجديد انطلاقاً من كون الخزان الكبير الموجود في حقل قانا يجب حسم حصة كلّ من الطرفين فيه، ما يشير مجدداً إلى فكرة الخط المتعرّج، الأمر الذي يرفضه لبنان».

توضيحات يونانية

في غضون ذلك، وبعد زيارة قام بها دبلوماسي يوناني رفيع إلى حزب الله لشرح موقف أثينا، أبلغت الخارجية اليونانية القائمة بأعمال السفارة اللبنانية في أثينا المستشارة رانيا عبدالله رسائل إلى لبنان تطابقت مع الكلام الذي أبلغه الدبلوماسي اليوناني لحزب الله، وفيه:
أولاً، إن اليونان ترفض «الخطاب غير اللطيف» للأمين العام لحزب الله السيد حسن نصرالله، انطلاقاً من أن اليونان ليست طرفاً في المشكلة.
ثانياً، إن سفينة الاستخراج ليست يونانية ولا تحمل العلم اليوناني، بل تتبع لشركة عالمية ويوجد بين مالكيها من يحملون الجنسية اليونانية.
ثالثاً، اليونان تدعم توصل لبنان وإسرائيل إلى اتفاق، وترفض أيّ اعتداء من إسرائيل على حقوق لبنان في المياه الإقليمية.
رابعاً، اليونان ليست على عداء لا مع الحكومة اللبنانية ولا مع حزب الله ويُفضل عدم إقحامها في هذه القضية.

فيديوات متعلقة

فيديوات متعلقة

Douglas MacGregor: Its collapsed

June 29, 2022

Behind the Tin Curtain: BRICS+ vs NATO/G7

June 28, 2022

Photo Credit: The Cradle

The west is nostalgically caught up with outdated ‘containment’ policies, this time against Global South integration. Unfortunately for them, the rest of the world is moving on, together.

The Cradle

Once upon a time, there existed an Iron Curtain which divided the continent of Europe. Coined by former British Prime Minister Winston Churchill, the term was in reference to the then-Soviet Union’s efforts to create a physical and ideological boundary with the west. The latter, for its part, pursued a policy of containment against the spread and influence of communism.

Fast forward to the contemporary era of techno-feudalism, and there now exists what should be called a Tin Curtain, fabricated by the fearful, clueless, collective west, via G7 and NATO: this time, to essentially contain the integration of the Global South.

BRICS against G7

The most recent and significant example of this integration has been the coming out of BRICS+ at last week’s online summit hosted by Beijing. This went far beyond establishing the lineaments of a ‘new G8,’ let alone an alternative to the G7.

Just look at the interlocutors of the five historical BRICS (Brazil, Russia, India, China, South Africa): we find a microcosm of the Global South, encompassing Southeast Asia, Central Asia, West Asia, Africa and South America – truly putting the “Global” in the Global South.

Revealingly, Russian President Vladimir Putin’s clear messages during the Beijing summit, in sharp contrast to G7 propaganda, were actually addressed to the whole Global South:

– Russia will fulfill its obligations to supply energy and fertilizers.

– Russia expects a good grain harvest – and to supply up to 50 million tons to world markets.

– Russia will ensure passage of grain ships into international waters even as Kiev mined Ukrainian ports.

– The negative situation on Ukrainian grain is artificially inflated.

– The sharp increase in inflation around the world is the result of the irresponsibility of G7 countries, not Operation Z in Ukraine.

– The imbalance of world relations has been brewing for a long time and has become an inevitable result of the erosion of international law.

An alternative system

Putin also directly addressed one of the key themes that the BRICS have been discussing in depth since the 2000s — the design and implementation of an international reserve currency.

“The Russian Financial Messaging System is open for connection with banks of the BRICS countries.”

“The Russian MIR payment system is expanding its presence. We are exploring the possibility of creating an international reserve currency based on the basket of BRICS currencies,” the Russian leader said.

This is inevitable after the hysterical western sanctions post-Operation Z; the total de-dollarization imposed upon Moscow; and increasing trade between BRICS nations. For instance, by 2030, a quarter of the planet’s oil demand will come from China and India, with Russia as the major supplier.

The “RIC” in BRICS simply cannot risk being locked out of a G7-dominated financial system. Even tightrope-walking India is starting to catch the drift.

Who speaks for the ‘international community?’

At its current stage, BRICS represent 40 percent of world population, 25 percent of the global economy, 18 percent of world trade, and contribute over 50 percent for world economic growth. All indicators are on the way up.

Sergey Storchak, CEO of Russian bank VEG, framed it quite diplomatically: “If the voices of emerging markets are not being heard in the coming years, we need to think very seriously about setting up a parallel regional system, or maybe a global system.”

A “parallel regional system” is already being actively discussed between the Eurasia Economic Union (EAEU) and China, coordinated by Minister of Integration and Macroeconomics Sergey Glazyev, who has recently authored a stunning manifesto amplifying his ideas about world economic sovereignty.

Developing the ‘developing world’

What happens in the trans-Eurasian financial front will proceed in parallel with a so far little known Chinese development strategy: the Global Development Initiative (GDI), announced by President Xi Jinping at the UN General Assembly last year.

GDI can be seen as a support mechanism of the overarching strategy – which remains the Belt and Road Initiative (BRI), consisting of economic corridors interlinking Eurasia all the way to its western peninsula, Europe.

At the High-level Dialogue on Global Development, part of the BRICS summit, the Global South learned a little more about the GDI, an organization set up in 2015.

In a nutshell, the GDI aims to turbo-charge international development cooperation by supplementing financing to a plethora of bodies, for instance the South-South Cooperation Fund, the International Development Association (IDA), the Asian Development Fund (ADF), and the Global Environment Facility (GEF).

Priorities include “poverty reduction, food security, COVID-19 response and vaccines,” industrialization, and digital infrastructure. Subsequently, a Friends of the GDI group was established in early 2022 and has already attracted over 50 nations.

BRI and GDI should be advancing in tandem, even as Xi himself made it clear during the BRICS summit that “some countries are politicizing and marginalizing the developmental agenda by building up walls and slapping crippling sanctions on others.”

Then again, sustainable development is not exactly the G7’s cup of tea, much less NATO’s.

Seven against the world

The avowed top aim of the G7 summit in Schloss Elmau at the Bavarian Alps is to “project unity” – as in the stalwarts of the collective west (Japan included) united in sustainable and indefinite “support” for the irretrievably failed Ukrainian state.

That’s part of the “struggle against Putin’s imperialism,” but then there’s also “the fight against hunger and poverty, health crisis and climate change,” as German chancellor Scholz told the Bundestag.

In Bavaria, Scholz pushed for a Marshall Plan for Ukraine – a ludicrous concept considering Kiev and its environs might as well be reduced to a puny rump state by the end of 2022. The notion that the G7 may work to “prevent a catastrophic famine,” according to Scholz, reaches a paroxysm of ludicrousness, as the looming famine is a direct consequence of the G7-imposed sanctions hysteria.

The fact that Berlin invited India, Indonesia, South Africa and Senegal as add-ons to the G7, served as additional comic relief.

The Tin Curtain is up

It would be futile to expect from the astonishing collection of mediocrities “united” in Bavaria, under de facto leader of the European Commission (EC), Fuehrer Ursula von der Leyen, any substantial analysis about the breakdown of global supply chains and the reasons that forced Moscow to reduce gas flows to Europe. Instead, they blamed Putin and Xi.

Welcome to the Tin Curtain – a 21st century reinvention of the Intermarium from the Baltic to the Black Sea, masterminded by the Empire of Lies, complete with western Ukraine absorbed by Poland, the Three Baltic Midgets: Bulgaria, Romania, Slovenia, Czechia and even NATO-aspiring Sweden and Finland, all of whom will be protected from “the Russian threat.”

An EU out of control

The role of the EU, lording over Germany, France and Italy inside the G7 is particularly instructive, especially now that Britain is back to the status of an inconsequential island-state.

As many as 60 European ‘directives’ are issued every year. They must be imperatively transposed into internal law of each EU member-state. In most cases, there’s no debate whatsoever.

Then there are more than 10,000 European ‘rulings,’ where ‘experts’ at the European Commission (EC) in Brussels issue ‘recommendations’ to every government, straight out of the neoliberal canon, regarding their expenses, their income and ‘reforms’ (on health care, education, pensions) that must be obeyed.

Thus elections in every single EU member-nation are absolutely meaningless. Heads of national governments – Macron, Scholz, Draghi – are mere executants. No democratic debate is allowed: ‘democracy,’ as with ‘EU values,’ are nothing than smokescreens.

The real government is exercised by a bunch of apparatchiks chosen by compromise between executive powers, acting in a supremely opaque manner.

The EC is totally outside of any sort of control. That’s how a stunning mediocrity like Ursula von der Leyen – previously the worst Minister of Defense of modern Germany – was catapulted upwards to become the current EC Fuhrer, dictating their foreign, energy and even economic policy.

What do they stand for?

From the perspective of the west, the Tin Curtain, for all its ominous Cold War 2.0 overtones, is merely a starter before the main course: hardcore confrontation across Asia-Pacific – renamed “Indo-Pacific” – a carbon copy of the Ukraine racket designed to contain China’s BRI and GDI.

As a countercoup, it’s enlightening to observe how the Chinese foreign ministry now highlights in detail the contrast between BRICS – and BRICS+ – and the imperial AUKUS/Quad/IPEF combo.

BRICS stand for de facto multilateralism; focus on global development; cooperation for economic recovery; and improving global governance.

The US-concocted racket on the other hand, stands for Cold War mentality; exploiting developing countries; ganging up to contain China; and an America-first policy that enshrines the monopolistic “rules-based international order.”

It would be misguided to expect those G7 luminaries gathered in Bavaria to understand the absurdity of imposing a price cap on Russian oil and gas exports, for instance. Were that to really happen, Moscow will have no problems fully cutting energy supply to the G7. And if other nations are excluded, the price of the oil and gas they import would drastically increase.

BRICS paving the way forward

So no wonder the future is ominous. In a stunning interview to Belarus state TV, Russian Foreign Minister Sergei Lavrov summarized how “the west fears honest competition.”

Hence, the apex of cancel culture, and “suppression of everything that contradicts in some way the neoliberal vision and arrangement of the world.” Lavrov also summarized the roadmap ahead, for the benefit of the whole Global South:

“We don’t need a new G8. We already have structures…primarily in Eurasia. The EAEU is actively promoting integration processes with the PRC, aligning China’s Belt and Road Initiative with the Eurasian integration plans. Members of the Association of Southeast Asian Nations are taking a close look at these plans. A number of them are signing free trade zone agreements with the EAEU. The Shanghai Cooperation Organization is also part of these processes… There is one more structure beyond the geographic borders of Eurasia.”

“It is BRICS. This association is relying less and less on the Western style of doing business, and on Western rules for international currency, financial and trade institutions. They prefer more equitable methods that do not make any processes depend on the dominant role of the dollar or some other currency. The G20 fully represents BRICS and five more countries that share the positions of BRICS, while the G7 and its supporters are on the other side of the barricades.”

“This is a serious balance. The G20 may deteriorate if the West uses it for fanning up confrontation. The structures I mentioned (SCO, BRICS, ASEAN, EAEU and CIS) rely on consensus, mutual respect and a balance of interests, rather than a demand to accept unipolar world realities.”

Tin Curtain? More like Torn Curtain.

June 27th This and That

June 27, 2022

Yellow Vest Win: Proving that Western Liberal Democracy is the same old autocracy

June 27, 2022

Ramin Mazaheri is the chief correspondent in Paris for PressTV and has lived in France since 2009. He has been a daily newspaper reporter in the US, and has reported from Iran, Cuba, Egypt, Tunisia, South Korea and elsewhere. He is the author of ‘Socialism’s Ignored Success: Iranian Islamic Socialism’ as well as ‘I’ll Ruin Everything You Are: Ending Western Propaganda on Red China’, which is also available in simplified and traditional Chinese.

Source

by Ramin Mazaheri

If we say that the Yellow Vests are not socialist revolutionaries even latently, then what are they protesting about?

To put it the most simply: they are protesting the end of European Social Democracy, with the limited protections it provided.

(This is the seventeenth chapter in a new book, France’s Yellow Vests: Western Repression of the West’s Best ValuesPlease click here for the article which announces this book and explains its goals.)

The Yellow Vests intuited that the pan-European project has ended the era of European Social Democracy (1945-75) and replaced it with elite-driven, free market, winner-take-all Liberalism.

Seeing that their list of 43 demands doesn’t include the word “Europe” once, however, the Yellow Vests don’t really grasp that the European Union represents the organisational assassin of European Social Democracy. The European Union and Eurozone’s response to the Great Recession made it entirely clear: these are institutions which are perfectly hostile to Social Democracy’s minor redistributions and protections which fundamentally embolden the average worker and citizen.

Social Democracy was not born after World War II, just as “neoliberalism” was first on display back in 1871, with what was imposed after the destruction of the Paris Commune. Marx chronicled the birth of European Social Democracy, in 1848, when the Mountain Party (which initially claimed the mantle of neo-Jacobinism) sided with the small-traders in the June Days massacre instead of with the urban proletariat and rural peasantry, as the Jacobins had done in 1789. They went from supporting Socialist Democracy to calling themselves Democratic Socialists (Démocrate-socialistes) and this – and not the downward slope from Napoleon Bonaparte to Louis-Napoleon Bonaparte – should be considered the truest essence of Marx’s famous line of history repeating itself as farce.

“The revolutionary point was thereby broken off from the social demands of the proletariat and a (social) democrat turn given to them….”

That was the birth of Social Democracy: an ideology where the social demands of the recently-feudal masses (decent pay, health care, education, pensions, etc.) get only partially addressed while the political demands of an aristocracy opposing an absolute monarch (free speech, property rights, trial by jury, etc.) are fully met. Liberalism has always sought to limit progressive changes to the political question of how to move on from feudalism, and to stop progressive changes to the social question of how to move on from feudalism. The reformist ideology of Social Democracy has operated within Western Liberal Democracy for nearly 175 years and only partially prevailed for 30 of them.

The sooner the Yellow Vests realise that Social Democracy will never be a harmonious solution to the elitism dominant in Liberalism, the better, as Marx did:

“The peculiar character of Social Democracy is epitomised in the fact that democratic-republican institutions are demanded as the means, not to remove the two extremes – capital and wage-slavery – but in order to weaken the antagonism and transform them into a harmonious whole.”

Putting capital primarily in the hands of the recently-feudal masses so they can provide the broad economic stability and success which would end wage- and debt-slavery has never been a goal of Social Democracy, from the Mountain Party to Leon Blum to Francois Mitterrand to Francois Hollande to the “Democratic Socialists of America” led by Bernie Sanders in the 21st century United States.

Yellow Vest: “We are not beggars! What is 100 euros only given one time? State taxes compose 60% of the price of gasoline, so calling it 100 euros is totally false – the people truly only receive 40 euros. This is election nonsense, but Macron won’t win votes with these crumbs.”

Marx continued in his examination of France and gave us the key to the capitalist culture of both Liberal and Social Democracies: “This substance is the transformation of society along (Social) democratic lines, but a transformation within the boundaries of the small-trader’s class.” One extraneous sentence later: “It believes rather that the special conditions for its own emancipation are the general conditions under which alone modern society can be saved and the class struggle be avoided.”

Trotsky and the Yellow Vests saw that, due to the rise of financial capitalism, a leftist alliance must include the small businessman, but they reject the goal of Social Democracy to elevate their virtues and needs over those of the average worker and citizen.

Thus even when Social Democracy prevails in Liberalist capitalist cultures the virtues of the usually bourgeois-aspiring, individualistic, managerial small-trader class become the highest virtues to be promoted. Everyone must be a self-interested, competitive entrepreneur who aspires to be a boss and a “job creator”. This veneration of the small trader is the most obvious in American culture, and it is American culture which has been imposed on France via the pan-European project: at the alleged “end of history”, with the fall of the USSR, the United States shepherded the pan-European project, which is rightly said to be even more Liberalist (i.e. Bankocratic) than anything which could be created in the United States.

What we see in the modern era, and as this book proves, is that Liberalism, Social Democracy and Fascism have all joined together and “become bourgeois”. This amalgam of 18th century Liberalism, 19th century Social Democracy and 20th century fascism is ultimately not different from the aristocracy of the 17th century and earlier, which which ruled the 99% in an entirely autocratic manner. The extremely modest expansion of wealth and political power from a blood/marriage line to a line of the super-wealthy 1% still results in the exclusion of the recently-feudal masses from policy making, and this is what the Yellow Vests emphatically reminded. Their primary demand was not Socialist revolution but merely to get more public opinion into public policymaking.

The bourgeois bloc continually dangles Social Democracy as a reformist possibility, and thus they secure the loyalty of both the big and the small bosses and owners. However, when the moment of implementation comes, amid the next guaranteed bust in Liberalist capitalism, the response is the anti-Socialist virulence of Liberalism via the ruthless elite domination of a Fascism which has made peace with big capital.

Yellow Vest: “Macron’s repeatedly evaded the main problems. His solutions are not concrete, and it is certain that in a few months we will just be in the same situation. This is why we will keep protesting, for certain.”

Baudelaire wrote, “The most beautiful trick of the devil is to persuade you that he does not exist,” and this is what modern Western Liberal Democracy has done with the elitism, arrogance and autocracy which is the basis of absolute monarchy. Macron’s “Jupiterian” remove has pulled the sheet off of Western Liberal Democracy, again, and reminded that the idea of an autocratic ruler remains the preference of a Western elite which has always been totally opposed to Socialist-inspired measures.

The republican lie of Liberalism

When Western leaders communicate among themselves and with their foreign counterparts they use the language of Liberalism; when they implement policy they use the ruthlessness of Fascism; but when they communicate with the masses they know that republican language is paramount.When Western leaders communicate among themselves and with their foreign counterparts they use the language of Liberalism; when they implement policy they use the ruthlessness of Fascism; but when they communicate with the masses they know that republican language is paramount.

This is especially true in France and the United States, where royalism has been fully discredited from holding public power. Thus, there is a constant emphasis by contemporary French leaders and their mainstream media on maintaining “republican” values.

However, the republicanism of both is an antiquated one as it is based on Liberal and not Socialist Democracy. A perfect example of the inadequacy of their elite-led republicanism is found in the Orwellian name of the group which wages the actual physical repression of the Yellow Vests: the detested CRS riot police (Compagnies républicaines de sécurité – Republican Security Companies.) A woman wearing a full-body bathing suit – a “burkini” (combination of “burqa” and “bikini”) is breathlessly presented as a bigger threat to French republicanism than the repression of the Yellow Vests. Most obviously, there is the mainstream conservative party’s name change shepherded by Nicolas Sarkozy in 2015 – from L’Union pour un mouvement populaire (UMP) to les Républicains: the party had so many corruption scandals that a rebranding was deemed unavoidable.

Such is the false republicanism in Liberal Democracies.

The lip service towards republicanism allows the perpetuation of the outdated notion in France that the world still views them as the brightest beacon of progressive politics. They are different than almost all of Northern Europe, where royals still – bewilderingly – remain on thrones which hide mountains of the public’s rightful riches and influence. Indeed, an Iranian can find in France a refuge from the common Western toleration and whitewashing of monarchism.

The elite in the United States uses “freedom”, while monarchies like the UK use “human rights” in the same way – to insist that freedom and human rights for their modern aristocracies still represents the pinnacle of progressivism.

The legacy of 1789 exists in France today only in this constant demand to uphold “republicanism”, even if it is not at all the spirit of 1789 and only mouths its forms. The Yellow Vest repression will remind all of history that the freedoms offered by the republicanism of Western Liberal Democracy with French characteristics are a fantasy – there is only the autocracy of the bourgeois bloc.

France’s 21st century belief that “the republic” must jingoistically unite the French is ultimately a means used to falsely claim the legacy of 1789 while also ensuring that talk for progressive politics ends with this very initial answer to the “political question”, and with no answer to the “social question”, as well.

This also explains why there is so much forced discussion in France about what a huge threat Islam poses to this immoral republicanism: Islam correctly insists on God and morality being the highest allegiance, and certainly not laws forced through by a Fascist-allying, imperialist bourgeois bloc.

Nothing is more Liberalist than the European Union, and thus the ‘Social Fascist’ repression of anti-austerity movements and the Yellow Vests

We have already linked the European Union with the birth of neoliberalism and neo-imperialism, we have established how Fascism was subsumed and its tactics adopted, and we have shown how the goal of the third restoration of Western Liberalism is to roll back the modest gains of Social Democracy.

All that’s needed is to show how Western Liberal Democracy wields the power of the state as autocratically as royal families and their coteries used to – for this we simply have to look to the Yellow Vests.

Western Liberal Democracy and pre-1789 autocracy – there is no real difference.

Whether the form is a parliamentary republic based on Liberalism, or an executive-led republic based on Liberalism, or a constitutional monarchy based on Liberalism – the autocracy has been the same. Only the truly elite have the money to buy Liberalist rights and influence in public policy.

Yellow Vest: “As usual, no prison for the rich – everything goes fine for them, always. They never know hunger or poverty, but put everything on the average person’s back. Benalla should have been treated like anyone else – justice should be equal for everyone.”

Just as the trends of 250 years of Iranian or Chinese history can be summarised so too can the trend of the past 250 years of French and Western history, and this book has aimed to do that. Above all the trend of moving away from an autocratic monarch and towards an empowered people’s republic is discerned. The problem has been Western Liberal Democracy’s conception of a republic: what they have always had is an oligarchic republic, inspired by the English, which aims for perpetual repression of the recently-feudal (to Asian conceptions of time!) Western masses.

The early years of all revolutionary republics are always fraught with missteps and mistakes, but made with the sincere goal of broad societal progress. In 1789 the move away from absolute monarchy was met with great difficulty and international opposition. In 1848 the move away from a limited monarchy was met with great difficulty, also caused by great inexperience. In 1871 the move towards a social republic was met with great difficulty and international opposition, also caused by great inexperience. But inexperience is not the primary difficulty of the people today – they know how to rule, but they still face great international opposition. As Marx wrote:

“The cry of ‘social republic’ with which the February Revolution (of 1848) was ushered in by the Paris proletariat, did but express a vague aspiration after a republic that was not only to supersede the monarchical form of class rule but class rule itself. The Commune (i.e. the first appearance of Socialist Democracy) was the positive form of that republic.”

However, the social republic was annihilated by neoliberalism and would not appear until 1917 in the eastern frontier of Europe – Russia.

The Yellow Vests reminded those in the 21st century who believe that the “end of history” had occurred in 1991 that the people’s desires for a social republic are no longer vague. However the Yellow Vests have had the misfortune of living in the world’s only region – the West – where socialist-inspired revolutionary cultures have never won implantation.

To their great credit, the Yellow Vests created a revolutionary condition for all of France. When it was thwarted by Liberal Democratic politicians, media and unions the Yellow Vests continued to march to keep promoting what may truly turn into a revolutionary culture at the next major uprising over Liberalism’s endemic failures. The Yellow Vests have created a vast and reliable network – there’s no doubt they will spring into action at the next opportunity.

The next political progression for the Yellow Vests is the realisation that the pan-European project only dangled the illusion of mere Social Democracy, but that its “neoliberal” basis is actually Fascist and autocratic to its very core.

The analysis of that splendidly successful revolutionary Bolshevik, Trotsky, must be remembered today if the Yellow Vests are to break with the perpetual illusion of mere Social Democracy:

The program of the Communist International has the following to say on this subject: Side by side with the Social Democracy, which assists the bourgeoisie to stifle the proletariat and to lull its vigilance, Fascism appears.’ The Communist International failed to understand that it is not the mission of Fascism to function side by side with the Social Democracy, but to destroy all the existing workers’ organizations, including the reformist. The task of Fascism, in the words of the program, is to ‘annihilate the Communist strata of the proletariat, and their leading cadres.’ Fascism, then, does not at all threaten the Social Democracy and the reformist trade unions; on the contrary, the Social Democracy itself plays a “Fascist” role to an ever increasing degree. Fascism achieves nothing more than the consummation of the labours of reformism, by functioning ‘side by side with the Social Democracy’.” (Emphasis his)

The Communist Bolsheviks rejected mere Social Democracy and instead used Socialist Democracy as their guiding structure ideology, as do Socialist-inspired countries today, who then adapt its primary economic and political imperatives to local cultures and mores. They saw that Social Democracy and Fascism work together to destroy not just Socialist Democracy-inspired groups, unions, parties, countries, etc, but also groups, unions, parties and countries which attempt Social Democratic reforms of Liberalism. As time goes on the Yellow Vests will realise, thanks to their own repression, that Liberal Democracy and Social Democracy offer them no solution except the destruction of the Yellow Vests.

One sentence later – in which Trotsky expressed his usual disapproval with the Moscow-based Comintern – Trotsky continued:

We have here before us all the basic elements of the theory of social fascism. The leaders of the Communist International failed to understand that capitalism in decay is no longer able to come to terms with the most moderate and most servile Social Democracy, either as a party in power, or as a party in opposition. It is the mission of Fascism to take its place not ‘side by side with the Social Democracy’, but on its bones. Precisely from this there flows the possibility, the need and the urgency for the united front.” (Emphasis his)

(Recall that a united front (joining together in society’s leftist struggles), is not the same as a popular front (an electoral alliance).)

Call it what you want: Social Fascism, Liberalism, autocracy, Fascism, constitutional monarchy, rule by the 1% – it is all the same oligarchic autocracy for the recently-feudal masses. I call it Western Liberal Democracy to properly place it in a geographic and historical context.

As soon as the Yellow Vests stop trying to win back the Social Democratic measures which Nicolas Sarkozy, Francois Hollande and Macron rolled back, the sooner they will realise that Socialist-inspired countries have shown a better way, method and goal. Without a major reformulation of the pan-European project – which seems impossible to get off the ground in a Liberalist-dominated media – the pan-European project’s initial lure of even greater Social Democratic gains should be seen only as a chimera.

The Yellow Vests know enough to reject existing establishment institutions, as well as pathetic PFAXIst (Popular Fronts Against Xenophobia but for Imperialism) electoral strategies – they must realise the monarchist-elitist-reformist-fascist alliance which is Western Liberal Democracy must be rejected in favor of Socialist Democracy.

That, of course, will lead to even more repression.

But their bravery will earn them more and more comrades; their correctness will only increase as the repression accumulates; the guaranteed cycles of failure in capitalism and the clockwork greed of high finance all make the move away from autocratic Liberalism certain.

The combination of royalism, Liberalism and Fascism is doomed, but people must be liberated from the long-outdated and pernicious influence of Liberalism before the next political advancement can take place. Thus the Yellow Vests, and thus this book, which is another humble tally of Liberalism’s failures.

Yellow Vest: “The people I speak with express absolutely no desire to stop the movement and remain very positive. The Yellow Vests are, above all, the French people, and the French people recognize this and this is why the movement will have a second wind.”

So admirably, The Yellow Vests have cleared the path for France: the despairing working poor, middle and lower classes have a fighting force which can never, ever be called Fascistic. France is back to being the West’s leaders of progressive politics.

Marx’s most important passage on France – guiding France from 1789 to 2022 and beyond

Here we have the most important passage in Marx’s writings on France – from his writings on the Paris Commune – because it historically summarises a century of turbulent political and socio-economic changes and pinpoints the establishment of modern Western Liberal Democracy.

The passage covers the vital and obscured history of France for a century after 1789. The short parentheticals are mine and designed to add clarity to Marx’s meaning:

“If the parliamentary republic, as M. Theirs said, ‘divided them least’ (the different factions of the French ruling class in 1850), it opened an abyss between that class and the whole body of society outside their spare ranks. The restraints by which their own divisions had under former regimes still checked the state power were removed by their unionand in view of the threatening upheaval of the proletariat they now used that state power mercilessly and ostentatiously as the national (and imperialist) war engine of capital against labor.

In their uninterrupted crusade against the producing masses they were, however, bound not only to invest the executive with continually increased powers of repressionbut at the same time divest their own parliamentary stronghold – the National Assembly – one by one, of all its own means of defence against the Executive. The Executive, in the person of (President) Louis(-Napoleon) Bonaparte, turned them out. The national offspring of the ‘Party of Order’ (the dominant political party of the 2nd) Republic was the Second Empire (of Emperor Louis-Napoleon Bonaparte).

The (Second) empire, with the coup d’etat for its birth certificate, universal suffrage for its salvation and the sword for its sceptre, professed to rest upon the peasantry – the large mass of producers not directly involved in the struggle of capital and labor. It professed to save the working class by breaking down parliamentarianism and, with it, the undisguised subserviency of government to the propertied classes. It professed to save the propertied classes by upholding their economic supremacy over the working class; and, finally, it professed to unite all classes by reviving for all the chimera of national glory.

In reality it was the only form of government possible, at a time when the bourgeoisie had already lost, and the working class had not yet acquired, the faculty of ruling the nation. (As they would acquire, starting with the Paris Commune and then later the USSR, China, Iran, etc.) It (the 2nd French Empire) was acclaimed throughout the world as the saviour of society. Under its sway bourgeois society, freed from political cares, attained a development unexpected even by itself. Its industry and commerce expanded to colossal dimensions; financial swindling celebrated cosmopolitan orgies (Marx uses this last word literally, per scandals of the time); the misery of the masses was set off by a shameless display of gorgeous, meretricious and debased luxury. The state power, apparently soaring high above society, was at the same time itself the very scandal of that society and the very hotbed of all its corruptions. Its own rottenness, and the rottenness of the society it had saved (i.e. the bourgeois elite of the 2nd Republic), were laid bare by the bayonet of Prussia, herself eagerly bent upon transferring the supreme seat of that regime from Paris to Berlin.”

The globalist descendants of the victors of 1871 would eventually comprise on Brussels instead of Berlin. Belgium – the country fabricated so that France and Germany would have a place to fight their wars, it is often joked – became “the seat of that regime”.

Yellow Vest: “We are not proud, at least not yet, because we have many more victories to accomplish. We insist on having referendums initiated by citizens, in order to democratically give a voice to all of France and to the Yellow Vests. We will keep marching to ensure that our common future is serene and peaceful.”

If we make only minor substitutions in Marx’s passage to include contemporary developments, does this not make an up-to-date history of France and Europe covering over two centuries?

If the pan-European project “divided them least” (the different factions of national ruling classes in Europe) least, it opened an abyss between that class and the whole body of society outside their spare ranks. The restraints by which their own divisions had under former regimes still checked the state power were removed by their union; and in view of the threatening upheaval of the Yellow Vests they now used that state power mercilessly and ostentatiously as the international war engine of capital against labor.

In their uninterrupted crusade against the producing masses they (the pan-European project) were, however, bound not only to invest the national executive branches with continually increased powers of repression, but at the same time divest their own national parliamentary branches, one by one, of all its own means of defence against the Executive. The Executive, in the person of a modern Louis Bonaparte (or something new and revolutionary, perhaps similar to the Supreme Leader branch of government in Iran)could not be allowed to have turned them – Brussels – out. The national offspring of the pan-European project was the neoliberal Empire of the European Union.

The empire, with the fall of the USSR for its birth certificate, denying the national referendums which rejected the European Union and which were based on universal suffrage for its salvation and the sword for its sceptre, professed to rest upon the neo-peasantry – the large mass of producers not directly involved in the struggle of capital and labor and who desired to avoid more intra-European wars, free movement around Europe and the strengthening of a Social Democratic safety net. It also professed to save the working class by breaking down national parliamentarianism and, with it, the undisguised subserviency of government to the propertied classes. It professed to save the propertied classes by upholding their economic supremacy over the working class; and, finally, it professed to unite all classes by reviving for all the chimera of supranational glory via colluding with the United States to enforce Liberalist values worldwide.

In reality it was the only form of government possible, at a time when the bourgeoisie had fully acquired the faculty of ruling the nation, something they had no experience with in 1848. It (the pan-European project) was acclaimed throughout the West as the saviour of European society. Under its sway bourgeois society, freed from political cares, such as the profit drags and democratic nuisances created by the era of Social Democracy, attained a development unexpected even by itself. Its industry and commerce expanded to colossal dimensions; financial swindling celebrated cosmopolitan orgies; the misery of the masses was set off by a shameless display of gorgeous, meretricious and debased luxury. The state power, apparently soaring high above society, was at the same time itself the very scandal of that society and the very hotbed of all its corruptions. Its own rottenness, and the rottenness of the society it had saved – the royals threatened by 1789, the bourgeois threatened by 1848, the colluding Social Democrats threatened by 1917 and the Fascists threatened by 1945 – were laid bare by the bayonet of the Yellow Vests, herself eagerly bent upon transferring the supreme national seat of that regime from Brussels back to Paris.”

France is not Cuba, Iran, China or even Southern Lebanon – it will likely take a civil war for the Yellow Vests to ever use bayonets to finally win political and economic redistribution. However, the Yellow Vests emphatically prove the willingness of Western Liberal Democracy to use violence just as brutally as the autocracies of 1788.

The Yellow Vests also remind that Western Liberal Democracy does not even allow the rights which Liberalism claims to protect – how long can that persist in a country which regularly demands the right to publicly exercise such rights, and whose pens have been freed by the digital era?

If the French elite is not going to permit even the basic rights of Liberalism, then France needs a defensive force which can protect the Liberalist rights of protesters. That is the subject of the next chapter.

<—>

Upcoming chapter list of France’s Yellow Vests: Western Repression of the West’s Best Values.

Publication date: July 1, 2022.

Pre-orders of the Kindle version may be made here.

Pre-orders of the French Kindle version may be made here.

Chapter List of the new content

أوروبا دخلت الحرب على التوقيت الأميركيّ فهل تخرج أميركا منها على التوقيت الأوروبيّ؟

 الإثنين 27 حزيران 2022

ناصر قنديل

لم يكن التصعيد الأميركي الأوروبي بوجه إيران وصولاً الى تعليق المفاوضات في فيينا بشروط تعجيزية، واعتماد إجراءات عدائية عبر الوكالة الدولية للطاقة الذرية، معزولاً عن النظرة الأميركية الأوروبية لمفهوم الحرب الواحدة ضد روسيا والصين وإيران، بعد فشل محاولات الفصل بين الملفات، واحتواء أو إغراء أو ترهيب أي من اطراف المثلث الآسيوي الصاعد وصولاً الى تفكيك الحلف الثلاثي الذي يهدد الهيمنة الغربية. ومثل خط الصعود كان خط النزول، فالمبادرة الأوروبية المنسقة أميركياً نحو استئناف المسار التفاوضي بأفكار إيجابية مع إيران، هي تعبير شامل عن الخلاصات التي رسمتها موازين القوى، سواء في جبهة المواجهة مع روسيا أو مع الصين أو مع إيران.

يتباهى الرئيس الأميركي بأنه أسقط 30 سنة من الاستثمار الروسي على العلاقات المميزة مع أوروبا، وأثبت مناعة التحالف الأميركي الأوروبي، ودرجة تماسك حلف الناتو، لكنه لا يستطيع أن يتجاهل أن هذا الإنجاز الذي تجلى بنجاح أميركا في جر أوروبا وراءها وبتوقيتها لدخول الحرب الأوكرانية في مواجهة روسيا، يبقى مؤقتاً طالما أن الحفاظ على هذا التماسك الأميركي الأوروبي يستدعي ضبط إيقاع الخطوات الأميركية على حجم قدرة أوروبا على السير، وطالما أن الاستثمار الروسي على العلاقة مع أوروبا لم يكن حملة علاقات عامة، بل انطلاقاً من حقائق تفرضها الجغرافيا الاقتصادية وفي طليعتها حقيقة أن روسيا القريبة هي أفضل مورد للغاز والنفط لأوروبا، من زاوية المصلحة الأوروبية، وأن النجاح الأميركي أوروبياً مشروط بأحد أمرين: الأول هو الفوز برهان إسقاط روسيا بالضربة المالية القاضية عبر العقوبات، التي صمّمت لدفع الاقتصاد والنظام المالي في روسيا للانهيار، ما يضمن نهاية سريعة للحرب التي لا يمكن الرهان على الجانب العسكري الصرف للفوز بها، وعند الانهيار المالي الروسي يتحقق الخضوع الروسي للشروط الأميركية الأوروبية، كما كانت تقول الخطة المفترضة. والثاني هو النجاح بتأمين بدائل كافية وبأسعار معقولة توفر الطاقة لأوروبا، وجدول زمني مناسب مع تزامن الخروج من مصادر الطاقة الروسية، وعندها تتحضّر أوروبا للتأقلم مع حرب طويلة تستطيع تحمل تداعياتها.

فشل الرهانان الأميركيان، رغم سلاسة الانصياع الأوروبي، واقتربت ساعة الحقيقة، فقد شرعت روسيا بوقف ضخ الغاز، والمخزونات الأوروبية لا تكفي للحد الأدنى من حاجات ومتطلبات الشتاء المقبل، وقد امتلأت الغابات الأوروبية بالعائلات تحول أشجارها الى حطب، واستبدلت في البيوت تجهيزات التدفئة على الغاز بتلك القديمة على الحطب، وعاد الفحم الحجري رغم نسب التلوث المرتفعة التي يتسبّب بها للدخول على الكثير من أوجه الاستخدام الصناعي، والحديث على أعلى المستويات عن تناوب المصانع الكبرى على يومين للعمل في الأسبوع وإقفال صناعات لا تحتاج الأسواق الداخلية منتوجاتها المخصصة للتصدير ويمكن الاستغناء عنها، وبلغ ارتفاع الأسعار نسباً متصاعدة، تتراوح بين 50% و100%، وهي مرشحة للتزايد، ومعها الاضطرابات الاجتماعية والسياسيّة المقبلة، وأول المؤشرات جاءت من الانتخابات الفرنسية.

بالتوازي كشفت كل الاتصالات والمحاولات التجارية والسياسية لتأمين الغاز من مصادر أخرى أن سقف المتاح لا يغطي أكثر من 30% من حجم الغاز الروسي لأوروبا، 10% من أميركا بضعف السعر الرائج، و10% من قطر والجزائر، لكن بعد العام 2024، و10% من غاز شرق المتوسط، ودونه تعقيدات سياسية وأمنية، كحال الغاز المفروض استخراجه وضخه من بحر عكا والمرتبط بمستقبل ترسيم الحدود البحرية مع لبنان، وأمن الاستجرار عبر المتوسط، وكلها بأكلاف عالية والحاجة لاستثمارات ضخمة، وانتظار لشهور او سنوات، بينما لم يعد موضع نقاش أي رهان على تهاوي الاقتصاد الروسي او انهيار النظام المالي للنقد الروسي، فسعر صرف الروبل الذي استعاد مكانته بعد اهتزاز لم يدم لأكثر من ثلاثة ايام، يحقق ارباحاً تتخطى الـ 50% بالقياس لسعره قبل الحرب، عاكساً نهضة اقتصادية داخلية ونمواً متزايداً في قطاعات جديدة وفرتها عملية تشغيل البنى التحتية لمنشآت الشركات الغربية التي غادرت الأسواق الروسية بفعل العقوبات.

ساعة الحقيقة الأميركية هي الاختيار بين المضي قدماً في خيار المواجهة دون أوروبا، التي بدأت علامات الإعياء والإنهاك تظهر عليها، وبدأت الانقسامات تهدد وحدتها، وصارت فرضية انسحاب تدريجيّ لدولها من خيار المواجهة مطروحة على الطاولة. وهذا يعني فقدان زخم المواجهة، في لحظة تعاني هذه المواجهة أصلاً من العجز عن تحقيق تقدم، سواء في المسار العسكري، أو في المسار الاقتصادي، والانفصال الأميركي عن أوروبا يعني منح روسيا ربحاً استراتيجياً بتلقف هذه التشققات الأوروبية والتعامل معها، وتخلي الأميركي عما تباهى به من الحفاظ على تماسك أميركا وأوروبا معا، أو القبول باعتبار الحفاظ على الوحدة مع أوروبا يبقى الأمر الأهم في أولويات المرحلة المقبلة، وهذا يعني أنه كما دخلت أوروبا الحرب على التوقيت الأميركي، فقد آن أوان أن تبدأ أميركا بالاستعداد للخروج منها على التوقيت الأوروبي.

الاستجابة الأميركية للدعوة الأوروبية للعودة الى مسار التفاوض لإنقاذ الاتفاق النووي مع إيران، وقبول تقديم ما يوصف بالتنازلات المؤلمة لتحقيق هذا الهدف، هي تعبير عن مسار سيتكرر على الجبهة الأوكرانية بحديث مواز عن تنازلات مؤلمة على الغرب وأوكرانيا تقديمها، تحت شعار دفع خطر المجاعة عن البشرية، وقد بدأ الترويج لهذا الشعار تمهيداً لنقلات دراماتيكية في مسار الحرب الأوكرانية، والحملة البريطانية التحذيرية من إذلال أوكرانيا ليست إلا استباق لهذا المسار المقبل.

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THE PIPE DREAMS OF KIEV’S REGIME

 23.06.2022

South Front

While active hostilities continue on the front lines in Ukraine, the Kiev regime can boast of alleged political “victories”.

In recent days, there has been some progress in the process of Ukraine’s accession to the European Union.

On June 17, the European Commission recommended granting Ukraine the status of candidate for EU membership. The same intention was expressed in relation to Moldova. At the same time, Georgia was refused.

On June 22, the French Minister-delegate to Europe Clément Beaune, said that war-torn Ukraine will be granted the status of EU candidate in the coming days.

Brussel’s decision will surely become another reason for the pride of the Kiev regime, which cannot boast of any military victories on the front lines.

However, the granting of the status of EU candidate does not mean that Ukraine will ever become a member of the union.

The accelerated procedure for Ukraine joining the European Union is excluded, as well as other privileges in this matter.

The French delegate stressed in his statement that hostilities in Ukraine should be stopped as soon as possible, but they are not reason enough to abandon the fundamental rules of EU membership.

Any country that is a member of the European Union must meet extremely strict requirements in the fight against corruption, the rule of law, economic development, etc.

Kiev needs to carry out reforms in order to meet the all the requirements for EU membership.

In the case of Ukraine, the granting of EU member status is Brussel’s political demonstration directed against Russia. The decision is aimed not at the result, i.e. acceptance of a destroyed Ukraine into the European ranks. Rather, it is a sign of its readiness to begin a long process in which Brussels gains a direct means of pressure on Kiev.

Thus, Brussels seeks to implement its own policy towards Ukraine beyond Washington’s directives. In the current situation, the fact of granting candidate status is more important for Brussels than for Kiev.

A LEMMING LEADING THE LEMMINGS: SLAVOJ ZIZEK AND THE TERMINAL COLLAPSE OF THE ANTI-WAR LEFT

JUNE 23RD, 2022

JONATHAN COOK

Have you noticed how every major foreign policy crisis since the U.S. and U.K.’s invasion of Iraq in 2003 has peeled off another layer of the left into joining the pro-NATO, pro-war camp?

It is now hard to remember that many millions marched in the U.S. and Europe against the attack on Iraq. It sometimes feels like there is no one left who is not cheerleading the next wave of profits for the West’s military-industrial complex (usually referred to as the “defense industry” by those very same profiteers).

Washington learned a hard lesson from the unpopularity of its 2003 attack on Iraq aimed at controlling more of the Middle East’s oil reserves. Ordinary people do not like seeing the public coffers ransacked or suffering years of austerity, simply to line the pockets of Blackwater, Halliburton, and Raytheon. And all the more so when such a war is sold to them on the basis of a huge deception.

So since then, the U.S. has been repackaging its neocolonialism via proxy wars that are a much easier sell. There have been a succession of them: Libya, Syria, Yemen, Iran, Venezuela and now Ukraine. Each time, a few more leftists are lured into the camp of the war hawks by the West’s selfless, humanitarian instincts – promoted, of course, through the barrel of a Western-supplied arsenal. That process has reached its nadir with Ukraine.

NUCLEAR FACE-OFF

recently wrote about the paranoid ravings of celebrity “left-wing” journalist Paul Mason, who now sees the Kremlin’s hand behind any dissension from a full-throttle charge towards a nuclear face-off with Russia.

Behind the scenes, he has been sounding out Western intelligence agencies in a bid to covertly deplatform and demonetize any independent journalists who still dare to wonder whether arming Ukraine to the hilt or recruiting it into NATO – even though it shares a border that Russia views as existentially important – might not be an entirely wise use of taxpayers’ money.

https://cdn.iframe.ly/api/iframe?app=1&url=https%3A%2F%2Fwww.mintpressnews.com%2Fwatchdog-journalists-carol-cadwalladr-paul-mason-security-state%2F281146%2F&key=bab15327a66f873fa9c0d80b90a8205a

It is not hard to imagine that Mason is representative of the wider thinking of establishment journalists, even those who claim to be on the left.

But I want to take on here a more serious proponent of this kind of ideology than the increasingly preposterous Mason. Because swelling kneejerk support for U.S. imperial wars – as long, of course, as Washington’s role is thinly disguised – is becoming ever more common among leftwing academics too.

The latest cheerleader for the military-industrial complex is Slavoj Zizek, the famed Slovenian philosopher and public intellectual whose work has gained him international prominence. His latest piece – published where else but The Guardian – is a morass of sloppy thinking, moral evasion and double speak. Which is why I think it is worth deconstructing. It encapsulates all the worst geostrategic misconceptions of Western intellectuals at the moment.

Zizek, who is supposedly an expert on ideology and propaganda, and has even written and starred in a couple of documentaries on the subject, seems now to be utterly blind to his own susceptibility to propaganda.

COD PSYCHOLOGY

He starts, naturally enough, with a straw man: that those opposed to the West’s focus on arming Ukraine rather than using its considerable muscle to force Kyiv and Moscow to the negotiating table are in the wrong. Opposition to dragging out the war for as long as possible, however many Ukrainians and Russians die, with the aim of “weakening Russia”, as US Defense Secretary Lloyd Austin wants; and opposition to leaving millions of people in poorer parts of the world to be plunged deeper into poverty or to starve is equated by Zizek to “pacifism.”

“Those who cling to pacifism in the face of the Russian attack on Ukraine remain caught in their own version of [John Lennon’s song] ‘Imagine’,” writes Zizek. But the only one dwelling in the world of the imaginary is Zizek and those who think like him.

The left’s mantra of “Stop the war!” can’t be reduced to kneejerk pacifism. It derives from a political and moral worldview. It opposes the militarism of competitive, resource-hungry nation-states. It opposes the war industries that not only destroy whole countries but risk global nuclear annihilation in advancing their interests. It opposes the profit motive for a war that has incentivised a global elite to continue investing in planet-wide rape and pillage rather than addressing a looming ecological catastrophe. All of that context is ignored in Zizek’s lengthy essay.

Instead, he prefers to take a detour into cod psychology, telling us that Russian president Vladimir Putin sees himself as Peter the Great. Putin will not be satisfied simply with regaining the parts of Ukraine that historically belonged to Russia and have always provided its navy with its only access to the Black Sea. No, the Russian president is hell-bent on global conquest. And Europe is next – or so Zizek argues.

Even if we naively take the rhetoric of embattled leaders at face value (remember those weapons of mass destruction Iraq’s Saddam Hussein supposedly had?), it is still a major stretch for Zizek to cite one speech by Putin as proof that the Russian leader wants his own version of the Third Reich.

Not least, we must address the glaring cognitive dissonance at the heart of the Western, NATO-inspired discourse on Ukraine, something Zizek refuses to do. How can Russia be so weak it has managed only to subdue small parts of Ukraine at great military cost, while it is at the same time a military superpower poised to take over the whole of Europe?

Zizek is horrified by Putin’s conceptual division of the world into those states that are sovereign and those that are colonized. Or as he quotes Putin observing: “Any country, any people, any ethnic group should ensure their sovereignty. Because there is no in-between, no intermediate state: either a country is sovereign, or it is a colony, no matter what the colonies are called.”

SOVEREIGN OR COLONIZED?

The famed philosopher reads this as proof that Russia wants as its colonies: “Bosnia and Herzegovina, Kosovo, Finland, the Baltic states … and ultimately Europe itself”. But if he weren’t so blinded by NATO ideology, he might read Putin’s words in a quite different way. Isn’t Putin simply restating Washington realpolitik? The U.S., through NATO, is the real sovereign in Europe and is pushing its sovereignty ever closer to Russia’s borders.

Putin’s concern about Ukraine being colonized by the U.S. military-industrial complex is essentially the same as U.S. concerns in the 1960s about the Soviet Union filling Cuba with its nuclear missiles. Washington’s concern justified a confrontation that moved the world possibly the closest it has ever come to nuclear annihilation.

Both Russia and the U.S. are wedded to the idea of their own “spheres of influence”. It is just that the U.S. sphere now encircles the globe through many hundreds of overseas military bases. By contrast, the West cries to the heavens when Russia secures a single military base in Crimea.

We may not like the sentiments Putin is espousing, but they are not especially his. They are the reality of the framework of modern military power the West was intimately involved in creating. It was our centuries of colonialism – our greed and theft – that divided the world into the sovereign and the colonized. Putin is simply stating that Russia needs to act in ways that ensure it remains sovereign, rather than joining the colonized.

We may disagree with Putin’s perception of the threat posed by NATO, and the need to annex eastern Ukraine, but to pretend his speech means that he aims for world domination is nothing more than the regurgitation of a CIA talking point.

Zizek, of course, intersperses this silliness with more valid observations, like this one: “To insist on full sovereignty in the face of global warming is sheer madness since our very survival hinges on tight global cooperation.” Of course, it is madness. But why is this relevant to Putin and his supposed “imperial ambition”? Is there any major state on the planet – those in Europe, the United States, China, Brazil, Australia – that has avoided this madness, that is seeking genuine “tight global cooperation” to end the threat of climate breakdown.

No, our world is in the grip of terminal delusion, propelled ever closer to the precipice by capitalism’s requirement of endless economic growth on a finite planet. Russia’s invasion of Ukraine is causing great ecological damage, but so are lots of other things – including NATO’s rationalization of ever-expanding military budgets.


UKRAINIAN HEROISM

But Zizek has the bit between his teeth. He now singles out Russia because it is maneuvering to exploit the consequences of global warming, such as new trade routes opened up by a thawing Arctic.

“Russia’s strategic plan is to profit from global warming: control the world’s main transport route, plus develop Siberia and control Ukraine,” he writes. “In this way, Russia will dominate so much food production that it will be able to blackmail the whole world.”

But what does he imagine? As we transform the world’s climate and its trade routes, as new parts of the world turn into deserts, as whole populations are forced to make migrations to different regions, does he think only Putin and Russia are jostling to avoid sinking below the rising sea waters. Does he presume the policy hawks in Washington, or their satraps in Europe, have missed all this and are simply putting their feet up? In reality, maneuvering on the international stage – what I have called elsewhere a brutal nation-state version of the children’s party game musical chairs – has been going on for decades.

Ukraine is the latest front in a long-running war for resource control on a dying planet. It is another battleground in the renewed great power game that the U.S. revived by expanding NATO across Eastern Europe in one pincer movement and then bolstered it with its wars and proxy wars across the Middle East. Where was the urge for “tight global cooperation” then? To perceive Ukraine as simply the victim of Putin’s “imperialism” requires turning a blind eye to everything that has occurred since the fall of the Soviet Union three decades ago.

Zizek gets to the heart of what should matter in his next, throw-away line:

Those who advocate less support for Ukraine and more pressure on it to negotiate, inclusive of accepting painful territorial renunciations, like to repeat that Ukraine simply cannot win the war against Russia. True, but I see exactly in this the greatness of Ukrainian resistance.”

Zizek briefly recognises the reality of Ukraine’s situation – that it cannot win, that Russia has a bigger, better-equipped army – but then deflects to the “greatness” of Ukraine’s defiance. Yes, it is glorious that Ukrainians are ready to die to defend their country’s sovereignty. But that is not the issue we in the West need to consider when Kyiv demands we arm its resistance.

The question of whether Ukrainians can win, or whether they will be slaughtered, is highly pertinent to deciding whether we in the West should help drag out the war, using Ukrainians as cannon fodder, to no purpose other than our being able to marvel as spectators at their heroism. Whether Ukrainians can win is also pertinent to the matter of how urgent it is to draw the war to a close so that millions don’t starve in Africa because of the loss of crops, the fall in exports and rocketing fuel prices. And arming a futile, if valiant, Ukrainian struggle against Russia to weaken Moscow must be judged in the context that we risk backing Russia into a geostrategic corner – as we have been doing for more than two decades – from which, we may surmise, Moscow could ultimately decide to extricate itself by resorting to nuclear weapons.

INTELLECTUAL CUL DE SAC

Having propelled himself into an intellectual cul de sac, Zizek switches tack. He suddenly changes the terms of the debate entirely. Having completely ignored the U.S. role in bringing us to this point, he now observes:

Not just Ukraine, Europe itself is becoming the place of the proxy war between [the] U.S. and Russia, which may well end up by a compromise between the two at Europe’s expense. There are only two ways for Europe to step out of this place: to play the game of neutrality – a short-cut to catastrophe – or to become an autonomous agent.”

So, we are in a U.S. proxy war – one played out under the bogus auspices of NATO and its “defensive” expansion – but the solution to this problem for Europe is to gain its “autonomy” by …

Well, from everything Zizek has previously asserted in the piece, it seems such autonomy must be expressed by silently agreeing to the U.S. pumping Ukraine full of weapons to fight Russia in a proxy war that is really about weakening Russia rather than saving Ukraine. Only a world-renowned philosopher could bring us to such an intellectually and morally barren place.

The biggest problem for Zizek, it seems, isn’t the U.S. proxy war or Russian “imperialism”, it is the left’s disillusionment with the military industrial complex: “Their true message to Ukraine is: OK, you are victims of a brutal aggression, but do not rely on our arms because in this way you play into the hands of the industrial-military complex,” he writes.

But the concern here is not that Ukraine is playing into the arms of the war industries. It is that Western populations are being played by their leaders – and intellectuals like Zizek – so that they can be delivered, once again, into the arms of the military-industrial complex. The West’s war industries have precisely no interest in negotiations, which is why they are not taking place. It is also the reason why events over three decades have led us to a Russian invasion of Ukraine that most of Washington’s policy makers warned would happen if the U.S. continued to encroach on Russia’s “sphere of influence”.

The left’s message is that we are being conned yet again and that it is long past the time to start a debate. Those debates should have taken place when the U.S. broke its promise not to expand “one inch” beyond Germany. Or when NATO flirted with offering Ukraine membership 14 years ago. Or when the U.S. meddled in the ousting of the elected government of Ukraine in 2014. Or when Kyiv integrated neo-Nazi groups into the Ukrainian army and engaged in a civil war against the Russian parts of its own populace. Or when the U.S. and NATO allowed Kyiv – on the best interpretation – to ignore its obligations under the Minsk agreements with Russia.

None of those debates happened. Which is why a debate in the West is still needed now, at this terribly late stage. Only then might there be a hope that genuine negotiations can take place – before Ukraine is obliterated.

CANNON FODDER

Having exhausted all his hollow preliminary arguments, we get to Zizek’s main beef. With the world polarizing around a sole military superpower, the U.S., and a sole economic superpower, China, Europe and Russia may be forced into each other’s arms in a “Eurasian” block that would swamp European values. For Zizek, that would lead to “fascism”. He writes: “At that point, the European legacy will be lost, and Europe will be de facto divided between an American and a Russian sphere of influence. In short, Europe itself will become the place of a war that seems to have no end.”

Let us set aside whether Europe – all of it, parts of it? – is really a bulwark against fascism, as Zizek assumes. How exactly is Europe to find its power, its sovereignty, in this battle between superpowers? What vehicle is Zizek proposing to guarantee Europe’s autonomy, and how does it differ from the NATO one that is – even Zizek now seems to be conceding – actually just a vassal of the U.S., there to enforce Washington’s global-spanning “sphere of influence” against Russia and China.

Faced with this problem, Zizek quickly retreats into mindless sloganeering: “One cannot be a leftist if one does not unequivocally stand behind Ukraine.” This Bushism – “You are either with us or with the terrorists” – really is as foolish as it sounds.

What does “unequivocal” mean here? Must we “unequivocally stand behind” all of Ukraine’s actions – even should, say, neo-Nazi elements of the Ukrainian military like the Azov Brigade carry out pogroms against the ethnic Russian communities living in Ukraine?

But even more seriously, what does it mean for Europeans to stand “unequivocally” behind Ukraine? Must we approve the supply of U.S. weapons, even though, as Zizek also concedes, Ukraine cannot win the war and is serving primarily as a proxy battleground?

Would “unequivocal support” not require us to pretend that Europe, rather than the U.S., is in charge of NATO policy? Would it not require too that we pretend NATO’s actions are defensive rather intimately tied to advancing the U.S. “sphere of influence” designed to weaken Russia?

And how can our participation in the U.S. ambition to weaken Russia not provoke greater fear in Russia for its future, greater militarism in Moscow, and ensure Europe becomes more of a battleground rather than less of one?

What does “unequivocal” support for Ukraine mean given that Zizek has agreed that the U.S. and Russia are fighting a proxy war, and that Europe is caught in the middle of it? Zizek’s answer is no answer at all. It is nothing more than evasion. It is the rationalization of unprincipled European inaction, of acting as a spectator while the U.S. continues to use Ukrainians as cannon fodder.

MUDDYING THE WATERS

After thoroughly muddying the waters on Ukraine, Zizek briefly seeks safer territory as he winds down his argument. He points out, two decades on, that George W. Bush was similarly a war criminal in invading Iraq, and notes the irony that Julian Assange is being extradited to the U.S. because Wikileaks helped expose those war crimes. To even things up, he makes a counter-demand on “those who oppose Russian invasion” that they fight for Assange’s release – and in doing so implicitly accuses the anti-war movement of supporting Russia’s invasion.

He then plunges straight back into sloganeering in his concluding paragraph: “Ukraine fights for global freedom, inclusive of the freedom of Russians themselves. That’s why the heart of every true Russian patriot beats for Ukraine.” Maybe he should try telling that to the thousands of ethnic Russian families mourning their loved ones killed by the civil war that began raging in eastern Ukraine long before Putin launched his invasion and supposedly initiated his campaign for world domination. Those kinds of Ukrainians may beg to differ, as may Russians worried about the safety and future of their ethnic kin in Ukraine.

As with most things in life, there are no easy answers for Ukraine. But Zizek’s warmongering dressed up as European enlightenment and humanitarianism is a particularly wretched example of the current climate of intellectual and moral vacuity. What we need from public thinkers like Zizek is a clear-sighted roadmap for how we move back from the precipice we are rushing, lemming-like, towards. Instead he is urging us on. A lemming leading the lemmings.

Feature photo | Graphic by MintPress News

Jonathan Cook is a MintPress contributor. Cook won the Martha Gellhorn Special Prize for Journalism. His latest books are Israel and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle East (Pluto Press) and Disappearing Palestine: Israel’s Experiments in Human Despair (Zed Books). His website is www.jonathan-cook.net.

The views expressed in this article are the author’s own and do not necessarily reflect MintPress News editorial policy.

West beginning to show fatigue on Ukraine war – Global Times


21 Jun, 2022 

Source: Global Times

By Al Mayadeen English 

The North Atlantic Alliance’s Secretary-General urges Western countries not to cease support for Ukraine, despite frustrations already settling in.

NATO Secretary-General Jens Stoltenberg

In an interview published on Sunday with German newspaper Bild, NATO’s Secretary-General warned that the Ukraine war could last for years and that the West must prepare for it.

Jent Stoltenberg urged Western countries, despite the high costs of the war on Ukraine, not to cease support for Kiev.

Chinese military expert Song Zhongping told the Global Times that it is not the war that could last for years, but the state of confrontation between Russia and Ukraine.

“Such a state can stall Russia and will eventually weaken Russia, just as NATO and the US have anticipated,” Song said, adding that the matter of the duration of the war depends on the quantity of the military aid the West can provide Kiev, because even Ukraine’s forces cannot be engaged in a long military conflict.

Moreover, the expert said there is no way NATO can form a joint effort to prepare for a protracted war with Russia, as most members in the alliance supporting Ukraine are already feeling tired and frustrated.

Similarly, in an article published in The Sunday Times, Johnson said that “time is now the vital factor; everything will depend on whether Ukraine can strengthen its ability to defend its soil faster than Russia can renew its capacity to attack. Our task is to enlist time on Ukraine’s side.” 

Johnson foresaw a protracted war in Ukraine and outlined a four-point strategy to ensure Ukraine has the “strategic endurance to survive and eventually prevail.” Johnson also said on Saturday that some “Ukraine fatigue” is starting to touch the world.

Fatigue setting in

According to the Global Times, a recent survey conducted in 10 countries in Europe showed that despite support for Ukraine remaining strong, people’s concerns have shifted to the impact the conflict has had, with many being worried over the higher cost of living as a result of the war.

One prime example is the US, as even in the country that has invested the most in the Ukraine-Russia crisis, inflation and rising living costs “have eroded public support for the war,” according to an opinion piece in the Los Angeles Times entitled: War in Ukraine is a battle of wills and economic pain – and the West is showing fatigue.

Also, a poll conducted by AP in April showed that the majority of US voters called back then for tougher sanctions against Russia, regardless of the economic woes the US might have to endure.

A month later, the voters’ priority lay in limiting damage to the US economy.

To push for a years-long war in Ukraine is to cause even greater suffering in economic and societal terms for the West.

Forbes Warns of ‘Disaster’, Says Biden Policy to ‘Make People Poor’

June 21, 2022

Forbes Media CEO Steve Forbes has warned that President Joe Biden’s policy to raise the interest rates in order to solve the inflation problem will “make people poor”.

In an interview with conservative news outlet Newsmax, Forbes stressed that raising interest rates will have severe effects on American consumers.

“Let’s be blunt about it. When they talk about a soft landing or trying to slow the economy down, that means making people poor,” he said.

Rather than “punishing the American economy” with higher interest rates, the Federal Reserve should focus its efforts on stabilizing the value of the dollar, he added.

Many economists have voiced concern about a possible recession after the Fed last week announced its highest interest rate increase in 28 years.

Forbes stressed that the interest rate hikes will particularly hurt consumers when “mortgage rates are readjusted later this year” and heating prices rise in the winter.

“A big, bad thing is happening. And when heating oil prices come in this winter, when you’re paying twice as much as you were before and you have to heat your home, that’s going to be a disaster,” he said, adding that “whatever they want to call it, it’s not good.”

The US is grappling with rising prices and soaring inflation, with its population under severe pressure like many of the European countries.

Biden’s administration placed an embargo on Russian oil earlier this year, shortly after Russian President Vladimir Putin declared a military campaign against Ukraine on February 24. It prompted the gas and energy prices to hike all over the country. The move has also sent the prices of grain, cooking oil, fertilizers and food skyrocketing.

Source: Agencies (edited by Al-Manar English Website)

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‘Nothing Will Be As Before’

June 20, 2022

Source

By Batiushka

Western Europe and North America are now in dire economic straits. Four EU leaders, from Germany, France, Italy and Romania, have just been to Kiev to plead with Zelensky to start negotiating again and make territorial concessions. The Western media did not much report on the fourth Romanian/German leader, Klaus Iohannis, and showed few photograph of him; possibly because the racists who work in the Western media despise Romania (https://www.bing.com/news/search?q=Romanian+Leader+In+Kiev&qpvt=romanian+leader+in+kiev&FORM=EWRE). What they all forgot to mention is that Russia has no need to negotiate and, given the way that it has been treated since 2014 (indeed, since 1991), it is not going to make concessions.

The EU leaders once more made the illusory promise that the Ukraine might soon become a candidate for EU membership (despite the Dutch veto), if it restarts negotiations. This old carrot dangled before the Ukrainian donkey is irrelevant. The EU has more than four countries and four leaders, whatever promise that the Ukraine may become an EU member in 20 years time. Long before that, there will be no Ukraine and probably no EU. The day after their visit, the Johnson clown went to Kiev too, though we do not know what he spoke of. Presumably, he just wanted to show that the UK is a ‘Great Power’ – like the EU?

It is all too late. Negotiations on the Donbass failed for eight years because the West forbade them. They failed again last March in Belarus and Istanbul, for the same reason. The West in its arrogance believed that it could crush Russia using its Ukrainian cannonfodder. This has been displayed for nearly four months now by the reports of State propaganda mouthpieces like CNN, the BBC etc. with their nonsense that President Putin is dying and that Russia is running out of fuel and ammunition! Wishful thinking all the time. Originally Russia just wanted to liberate the Donbass. However, pig-headedness in Kiev means that they will now be forced to take control of the whole country – and perhaps more, if aggression from outside the Ukraine continues. It was all so unnecessary…

The West cannot go on with its suicidal and illegal sanctions against Russia – or rather against itself. The lack of oil, gas, fertilisers and essential raw materials is biting. Inflation is taking off all over the West. In the UK a wave of strikes is threatened. The incredibly unpopular Johnson’s days are numbered. The only problem for Russia is that the rouble keeps rising. Despite interest rate cuts from 15% to 8.5%, the rouble is again at 56 to the dollar. Clearly, further Russian interest rate cuts are, forgive the pun, in the pipeline. Meanwhile, African and Asian leaders have told Zelensky to stop fighting. They want grain (https://news.mail.ru/politics/ 51814770/ ?frommail=1).

Of course, it is true that many of the West’s woes began well before this year, not least with the absurd and totalitarian ‘covid’ restrictions from 2020 on, which bankrupted many companies and led to it printing ever more money and to ever higher and unpayable debts. The West is desperate for the conflict in the Ukraine to end before the autumn cold sets in. Otherwise there are going to be popular revolts in Western countries, with scenes of looting on the streets.

Western arms, usually third-rate from stocks anyway, are making hardly any difference in the Ukraine. Most, together with munitions, get destroyed before they can be used. Much that has been promised cannot be used because it will take months to instruct Ukrainians on how to use them. The rate of attrition of the Kiev Army, up to 1,000 a day according to Kuleba, the Kiev Interior Minister, is simply unsustainable. Once the fortifications in the Donbass, built by Kiev and NATO over the last eight years, have been overwhelmed, there will be a clear run to Odessa, Transdnestria, Kharkov and Kiev or indeed anywhere that Russia wants. This could happen soon.

Yesterday, the Russian Ministry of Defence released figures on mercenaries (https://news.mail.ru/incident/51803470/?frommail=1). The picture is dismal for the Ukraine. Of some 6,000 mercenaries in the Ukraine from 64 different countries, some 2,000 have been killed and some 2,000 have fled. Perhaps they thought that they were going to fight in a Third World country, where the enemy just had Kalashnikovs and not world-beating hypersonic missiles? How long the remaining 2,000 or so will remain alive remains to be seen.

Poland supplied the greatest number of mercenaries, with 1,831. Presumably as with other countries like Canada (601 mercenaries), USA (530), Romania (504), Germany and France, the majority of these were actually Ukrainians who have lived outside the Ukraine for some years, rather than native people. In third place for mercenaries from Europe comes the UK with 422, of whom 102 have been killed and 98 have fled. According to General Konashenkov who released the figures, the number of mercenaries coming has stopped and indeed been reversed. It is too dangerous to stay and get killed in the Ukraine.

This leaves the two foolish British mercenaries, not killed in action with the 102 others, but taken prisoner. And also it leaves two captured US mercenaries. There is speculation that the British might plea for their release in exchange for Julian Assange. That would upset the Americans. On the other hand, the British mercenaries, Eslin and Pinner, have already been sentenced to death. If that sentenced is carried out, it is going to make Johnson even more unpopular than he already is. Perhaps that is why Johnson went to Kiev to plead.

Thus, the first or military stage is coming to an end and should be over later this summer. However, this is only the start. The New Ukraine has to be formed. Then there is the demilitarisation and denazification of the rest of Eastern Europe. And there is the economic war, declared by the West, to be finished. On 17June at the International Economic Forum in his native Saint Petersburg, President Putin said:

‘After the Cold War the USA declared itself to be the emissaries of God on Earth, without any responsibility, only with interests….Today’s changes in economics and in international politics are tectonic and revolutionary. The Western elites are in a state of delusion, clinging on to the shadow of the past and denying changing reality…Nothing will be as before…The EU has definitively lost its political sovereignty. The current situation in Europe will lead to an outburst of radicalism and in the probable future a change of elites’.

Here is the future.

هكذا غيّر بوتين ونصرالله قانون الحرب

 الإثنين 20 حزيران 2022

ناصر قنديل

منذ العام 2000 والعالم يعيش إيقاع صعود حركتين، حركة يقودها الرئيس فلاديمير بوتين في روسيا، وحركة يقودها السيد حسن نصرالله في لبنان، وقد اعتمدت كل منهما منهجاً خاصاً ومختلفاً وجديداً في صناعة التوازن، وصولاً لتحقيق التفوق الاستراتيجي، ما أتاح لهما التربع على عرش القوة، وتغيير قانون الحرب.

انطلق بوتين من روابط الدين والقومية التي تجمع مواطنيه على استعادة أمجاد تاريخ العظمة التي أصيبت في الصميم مع انهيار الاتحاد السوفياتي، ما أعقبه من إذلال ومهانة للروس بصفتهم ينتمون للدولة الروسيّة لا غير، واستثمر بوتين على هذه النهضة ليبني معادلة القوة على توظيف الأصول الثابتة للأمة الروسية، بوجه معادلات العالم الافتراضي التي تصنع قوة الغرب. فاستند إلى الطاقة البشرية لبناء جيش مقاتل يستعدّ ضباطه وجنوده للموت والتضحية، مقابل شركات متخصصة للخدمات العسكرية والأمنية واللوجستية وشركات تجنيد المرتزقة والجامعات الإرهابية الرديفة القابلة للتوظيف مثل تنظيمات داعش والقاعدة وفرق النازيين الجدد، تحل مكان الجيش الوطني بمفهومه المتوارث من الحربين العالميتين، ووظف بوتين موارد روسيا من الأصول الثابتة في المعادن والخامات والقمح والحبوب والنفط والغاز، لتكوين اقتصاد يخدم بناء فائض القوة الذي تستدعيه الحروب، مقال اقتصاد المصارف والأسهم والبورصة الذي يستند إليه الغرب ويسيطر عبره على العالم.

بالتوازي انطلق السيد نصرالله، من منسوب الكرامة الذي حملته ومثلته المقاومة وعزّزه انتصارها الأول في تحرير الشريط الحدودي المحتل عام 2000، وانتصاره بالصمود والثبات والقدرة على منع جيش الاحتلال من دخول الأرض اللبنانية وتحقيق أهدافه بتدمير المقاومة عام 2006، ومعادلات الردع التي أنتجتها الانتصارات، لتشكيل نواة جيش صغير لا ينام وهو يتجهّز ويستعدّ بكل ما تحتاجه منازلة حاسمة مع الكيان الذي يمثل صفوة ونخبة وطليعة جيوش الغرب المقاتلة، راسماً معادلات التسليح والتمكين التقني بمعايير حرب حديثة تستند الى مشاة البر والصواريخ الدقيقة والطائرات المسيّرة، مقابل جيش يملك مئات الطائرات وآلاف الدبابات وقوة نار هائلة ونصف مليون جندي، ويصنف من أقوى جيوش العالم، وقد سبق وخاض حرباً شاملة على جيوش خمس دول عربية مجتمعة على ثلاث جبهات وانتصر فيها بصورة ساحقة خلال ستة أيام، وقد جاءت وقائع الحرب في أوكرانيا تقول إن الحرب الجديدة باتت حرب مشاة البر والصواريخ والدقيقة والطائرات المسيّرة، بعدما كانت كل الحروب التي سبقت منذ الحرب العالمية الأولى حرب الطائرات والدبابات.

جاءت حرب أوكرانيا لتضع وجهاً لوجه قانون الحرب الأميركية مقابل قانون الحرب الروسية، وفي مقابل عجز جيوش الغرب عن تحمل نزف الدماء قياساً بالجيش الروسي، بفعل تباين التكوين والبنية والأهداف، ولتجنب حرب نووية مدمّرة وغير مضمونة النتائج، مع الفوارق التي راكمها بوتين لصالح التفوق الروسي، بينما اعتمد بوتين على ضباطه وجنوده وتضحياتهم وثباتهم ومن خلفهم شعبهم، واعتمد الغرب وعلى رأسه الأميركيون، على الجيش الأوكراني، ومنظمات القومية المتطرفة والنازية الجديدة، وشركات تجنيد المرتزقة، وشركات الحروب الرديفة والاستخبارية، وقدموا أسلحة وذخائر بمليارات الدولارات لتأمين أعلى نسبة توازن ممكنة في الميدان، حتى يتسنى ربح الحرب في ميدان آخر، حملته حزمات العقوبات القاتلة الأميركية والغربية، التي تستند بصورة محورية على فعالية أنابيب المال الافتراضية والى جانبها أنابيب الاعلام والمعلومات الافتراضية ايضاً، لإسقاط روسيا بالضربة القاضية؛ وبالمقابل حافظ بوتين على برودة إدارته للحرب في الميدان المباشر لضمان تقدم ثابت وتدمير منهجي لمصادر القوة المقابلة، وكان محسوماً ان يأتي التفوق لصالح روسيا في ميدان الحرب التقليدية للجيوش بفعل فوارق القدرة البشرية والتسليحية الهائلة لصالح روسيا، ولذلك وضع بوتين مطمئناً ثقله في ميادين الحرب الموازية، والرئيسية، حرب صمود الاقتصاد الروسي، وحرب بدء إنهاك اقتصادات الغرب، ومع مئة يوم من بدء الحرب ظهر أن أنابيب الغاز والموارد الطبيعية أقوى من أنابيب المال المصارف، وان الأصول الثابتة تنتصر على الاقتصاد الافتراضي، وتكرّست معادلة قانون حرب جديد، حيث قوة الأنابيب الافتراضية تكمن في تدفقها، بينما قوة أنابيب الأصول الثانية تظهر عند توقفها، وعندما تتوقف الأنابيب، يربح من يملك أنابيب الأصول الثابتة ويفقد صاحب الأنابيب الافتراضية قدرة التأثير.

في احتفال حزب الله بأربعين ربيعاً على التأسيس وانطلاق المقاومة، يحضر كشف حساب التوازن في معادلة المواجهة بين فائض القوة المادي الناتج عن مراكمة المال والسلاح والقوة النارية، مقابل فائض قوة آتٍ من التأسيس على قيمة مضافة تمثلها القضية والفكرة والمعنويات والروح، ويثبت أن فائض القوة الناتج عن قيمة مضافة قابل بصورة متكررة للتحوّل إلى قيمة مضافة جديدة وفائض قوة جديد في عملية مستدامة لا تتوقف، والحفاظ على التفوّق الأخلاقي، يتيح تكرار العملية وتصاعدها، بينما فائض القوة الصافي قابل للتآكل، فيتحوّل إلى مجرد أكوام من الحديد والمعادن، أقرب إلى الخردة، يديرها روبوتات بلا روح، وحيث تهزم الروح تحسم الحرب لصاحب الروح المتوثبة بوجه الروح الخامدة، وتتكرس معادلة انتصار فائض القوة الآتي من قيمة مضافة لقدرته على العودة الى الأصل مجدداً كقيمة مضافة، بينما يبقى فائض القوة الجاف مجرد أرقام في جداول الحساب، تفقد قيمتها عند اختبار الميدان.

معادلتا الأصول الثابتة والقوة الافتراضية، وفائض القوة والقيمة المضافة من جهة موازية، معادلتان جديدتان نظرياً في علم الحرب، تؤكدان نظرية الاستقطاب التفاعليّ لكتابة التاريخ، حيث الحروب ليست مجرد تقابل بين الجيوش عدداً وعدة، وبين الدول مالاً ومقدرات.

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World War 3 for dummies

June 18, 2022

Source

By Gaius Baltar

Some knowledgeable people, apparently including the Pope, are beginning to suspect that there may be more going on in the world than just the war in the Ukraine. They say that World War 3 has already started and things will get worse from now on. This can be difficult to determine while we are participating in the unfolding events and do not have the benefit of the historical perspective. It is doubtful that people back in 1939 realized that they were looking at the start of a major worldwide conflict, although some may have suspected it.

The current global situation is in many ways like a giant jigsaw puzzle where the general public only sees a tiny part of the complete picture. Most don’t even realize that there may be more pieces and don’t even ask these simple questions: Why is all this happening and why is it happening now?

Things are more complicated than most people realize. What they see is the evil wizard Vladimir Saruman Putin invading innocent Ukraine with his orc army – for absolutely no reason. This is a simplistic view, to say the least because nothing happens without a reason. Let’s put things in perspective and see what is really going on – and why the world is going crazy before our eyes. Let’s see what World War 3 is all about.

The pressure cooker

The West (which we can define here as the US and the EU and a few more) has been maintaining pressure on the entire world for decades. This does not only apply to countries outside the West, but also to Western countries which strayed from the diktats of the West’s rulers. This pressure has been discussed widely and attributed to all kinds of motives, including neocolonialism, forced financial hegemony, and so forth. What is interesting, particularly during the last 20 years, is which countries have been pressured and what they do not have in common.

Among the pressured countries we find Russia, China, Cuba, Venezuela, Libya, Syria, Serbia, Thailand, and Iran to mention a few. There have also been recent additions, including India and Hungary. In order to understand why they have been pressured, we need to find out what they have in common. That’s not easy since they are extremely different in most ways. There are democracies and non-democracies, conservative and communist governments, Christian, Muslim and Buddhist countries, and so on. Still, many of them are very clearly allied. One must ask why conservative and religious countries such as Russia or Iran would ally themselves with Godless communists in Cuba and Venezuela.

What all these countries have in common is their desire to run their own affairs; to be independent countries. This is unforgivable in the eyes of the West and must be tackled by any means necessary, including economic sanctions, color revolutions, and outright military aggression.

The West and its NATO military arm had surrounded Russia with hostile countries and military bases, armed and manipulated Ukraine to be used as a hammer against it, and employed sanctions and threats. The same thing was and is happening in Asia where China is being surrounded by all means available. The same applies to all the Independents mentioned above to some extent. In the past 10 years or so the pressure has increased massively on the Independents and it reached almost a fever pitch in the year before the Russian invasion of the Ukraine.

During the year before the Ukraine war, the US sent its diplomats around the world to tune up the pressure. They were like a traveling circus or a rock band on a tour, but instead of entertainment, they delivered threats: buy this from us and do what we tell you or there will be consequences. The urgency was absolute and palpable, but then came the Ukraine war and the pressure went up to 11. During the first month of the war, the entire West’s diplomatic corps was fully engaged in threats against the ‘rest of the world’ to engineer the isolation of Russia. This didn’t work, which resulted in panic in political and diplomatic circles in the US and Europe.

All this pressure through the years, and all the fear and panic when it didn’t work, are clearly related to the events in the Ukraine. They are a part of the same ‘syndrome’ and have the same cause.

The debt dimension

There have been many explanations for what is going on and the most common is the fight between two possible futures; a multipolar world where there are several power centers in the world, and a unipolar world where the West governs the world. This is correct as far as it goes, but there is another reason which explains why this is happening now and all the urgency and panic in the West.

Recently the New Zealand tech guru Kim Dotcom tweeted a thread about the debt situation in the US. According to him all debt and unfunded liabilities of the US exceed the total value of the entire country, including the land. This situation is not unique to the US. Most countries in the West have debt that can only be paid back by selling the entire country and everything it contains. On top of that, most non-western countries are buried in dollar-denominated debt and are practically owned by the same financiers who own the West.

During the last few decades, the economy of the US and Europe has been falsified on a level that is difficult to believe. We in the West have been living far beyond our means and our currencies have been massively overvalued. We have been able to do this through two mechanisms:

  1. The first one is the reserve status of the dollar and the semi-reserve status of the euro which have enabled the West to export digital money and receive goods in return. This has created enormous financial power for the West and enabled it to function as a parasite on the world economy. We have been getting a lot of goods for free, to put it mildly.
  2. The second falsification mechanism is the increase in debt to a level where we have essentially pawned everything we own, including our houses and lands, to keep up our living standards. We own nothing now when the debt has been subtracted. The debt has long since become unserviceable – far beyond our ability to pay interests on – which explains why the interest rates in the West are in the neighborhood of zero. Any increase would make the debt unserviceable and we would all go formally bankrupt in a day.

On top of all this, the falsification has created artificially strong currencies in the West which has boosted their purchasing power for goods priced in non-western currencies. These mechanisms have also enabled the West to run bloated and dysfunctional service economies where inefficiencies are beyond belief. We have giant groups of people in our economies that not only create no value but destroy value systematically. What maintains the West’s standard of living now is a small minority of productive people, constant debt increase, and parasitism of the rest of the world.

The people who own all this debt actually own everything we think we own. We in the West own nothing at this point – we only think we do. But who are our real owners? We know more or less who they are because they meet every year at the World Economic Forum in Davos along with the western political elites who they also happen to own.

It is clear that our owners have been getting increasingly worried, and their worries have been increasing in sync with the increased pressure applied by the West on the rest of the world, particularly the Independents. During the last Davos meeting, the mood was bleak and panicked at the same time, much like the panic among the western political elites when the isolation of Russia failed.

What is about to happen

The panic of our owners and their politicians is understandable because we have come to the end of the line. We can no longer keep up our living standards by debt increase and parasitism. The debt is reaching beyond what we own as collateral and our currencies are about to become worthless. We will no longer be able to get free stuff from the rest of the world, or pay back our debt – let alone pay interest on it. The entire West is about to go bankrupt and our standard of living is about to go down by a massive percentage. This is what has our owners panicked and they see only two scenarios:

  1. In the first scenario most countries in the West, and everything and everyone within them, declare bankruptcy and erase the debt by diktat – which sovereign states are able to do. This will also erase the wealth and political power of our owners.
  2. In the second scenario, our owners take over the collateral during the bankruptcy. The collateral is us and everything we own.

It doesn’t take a genius to figure out which scenario was chosen. The plan for the second scenario is ready and being implemented as we speak. It is called ‘The Great Reset’ and was constructed by the people behind the World Economic Forum. This plan is not a secret and can be examined to a certain degree on the WEF website.

The Great Reset is a mechanism for the seizing of all debt collateral which includes your assets, the assets of your city or municipality, the assets of your state, and most corporate assets not already held by our owners.

This asset seizure mechanism has several components, but the most important are the following four:

  1. Abolishment of sovereignty: A sovereign (independent) country is a dangerous country because it can choose to default on its debt. The decrease in sovereignty has been a priority for our owners and various schemes have been attempted such as the Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership. The most successful scheme is undoubtedly the European Union itself.
  2. The down-tuning of the economy: The western economy (and indeed the global economy) must be tuned down by a very significant percentage. This down-tuning is necessary because the western economy is massively falsified now and must be taken down to its real level – which may be as low as half of what it is now – or more. The slow takedown has also the purpose of avoiding a sudden crash that would cause massive social unrest which would be a threat to our owners. A controlled takedown is therefore preferable to an uncontrolled crash. This controlled takedown is already happening and has been going on for quite some time. Many examples can be mentioned of this takedown, including the EU and US energy policy which is designed to sabotage the western economy, and the obvious attempts at demand destruction during and after the epidemic, including the fairly bizarre logistical problems which suddenly came out of nowhere.
  3. Asset harvesting (you will own nothing and be ‘happy’): All assets that can be considered to be collateral to our private and collective/public debt will be taken over. This is a clearly stated aim of the Great Reset but it is less clear how this would be carried out. Total control of western governments (and indeed all governments) would seem to be necessary for this. That precondition is closer than one might think because most western governments seem to be beholden to Davos at this point. The process will be sold as necessary social restructuring because of an economic crisis and global warming and will result in a massive decrease in living standards for regular people, although not the elites.
  4. Oppression: A great many people will not like this and an uprising is a likely response, even if the takedown is done gradually. To prevent this from happening, a social control mechanism is being implemented which will erase personal freedom, the freedom of speech, and privacy. It will also create absolute dependence of the individual on the state. This must be done before the economic takedown can be completed or there will be a revolution. This mechanism is already being implemented enthusiastically in the West as anybody with eyes and ears can see.

Russia, China, and other Independents

How do Russia and China, and the war in Ukraine, factor into all of this? Why all the pressure from the West throughout the years and why all this panic now? Part of the reason for the pressure on the Independents, particularly Russia and China, is simply that they have resisted western hegemony. That is enough for getting on the West’s naughty list. But why the increased pressure in recent years?

The reason is that Russia and China cannot be subjugated through bankruptcy and their assets harvested. They do not have much debt in western currencies which means that the people who own the West through debt do not currently own Russia and China (like they own the West and the indebted ‘third world’) and cannot acquire them through debt. The only way to acquire them is through regime change. Their governments must be weakened by any means, including economic sanctions and military means if necessary -thus the use of Ukraine as a battering ram for Russia and Taiwan for China.

Subjugating Russia and China is an existential issue for our Davos owners because when they take the western economy down, everything else must go down too. If the western economy is taken down and a large economic block doesn’t participate in the downfall, it will be a disaster for the West. The new block will gain massive economic power, and possibly unipolar hegemony of sorts, while the West descends into a feudal Dark Age and irrelevance. Therefore the entire world must go down for the Great Reset to work. Russia and China must be subjugated by any means, as well as India and other stubborn nations.

This is what has fueled the situation we now find ourselves in and will fuel the continuation of World War 3. The western owner-elites are going to war to keep their wealth and power. Everyone who resists must be subjugated so they can follow the West into the planned Great Reset Dark Age.

The reason for the current panic among western elites is that the Ukraine project isn’t going as planned. Instead of Russia being bled on the battlefield, it is Ukraine and the West that bleed. Instead of the Russian economy crashing resulting in Putin’s replacement by a Davos-compatible leader, it is the West’s economy that is crashing. Instead of Russia being isolated, it is the West that is being increasingly isolated. Noting is working, and to top it all off, Europe has given the Russians the means and motive to destroy the European economy by partly shutting down its industry. Without Russian resources, there is no European industry, and without industry, there are no taxes for paying for unemployment benefits, pensions, all the refugees, and pretty much everything else which holds European societies together. The Russians now have the ability to engineer an uncontrolled crash in Europe which is not what Davos planned. An uncontrolled crash might see Davos’s heads roll, literally, and that is causing fear and panic in elite circles. The only solution for them is to move on with World War 3 and hope for the best.

What to do

The Great Reset of the world economy is the direct cause of World War 3 – assuming that is what is going on. What can be done about this? From inside the West, little can be done. The only way is to somehow remove Davos from the equation, but that is most likely not going to happen for two reasons: The first one is that the Davos great resetters are too entwined in the western economy and politics. Davos is like an octopus with its arms and suckers inside every country’s elite circles, media, and government. They are too entrenched to be easily removed. The second reason is that the western population is too brainwashed and ignorant. The level of their brainwashing is such that a large part of them actually want to become poor – although they use the word ‘green’ for ‘poor’ because it sounds better. There are, however, some indications that there may be divisions within western elites. Some of them, particularly within the US, may be resisting the primarily Europe-designed Great Reset – but whether this opposition is real or effective remains to be seen.

However, outside the West, there are certain measures that can be taken and must be taken. Some of those measures are drastic and some of them are being done as we speak. Among the measures are the following:

  1. The Independents, led by Russia, China, and India, must create a block to isolate themselves from the radioactive West. This isolation must not only be economic, but also political and social. Their economic systems must be divorced from the West and made autonomous. Their cultures and history must be defended against western influences and revisionism. This process appears to be underway.
  2. The Independents must immediately ban all western sponsored institutions and NGOs in their countries, regardless of whether they are sponsored by western states or individuals. Furthermore, they must ban all media receiving western sponsorship and strip every school and university of western sponsorship and influence.
  3. They must leave all international institutions up to and possibly including the United Nations because all international bodies are controlled by the West. They must then replace them with new institutions within their block.
  4. They must, at some point, declare the dollar and the euro currencies non grata. That means that they should declare default on all debts denominated in these currencies, but not other debts. This will most likely come at a later stage but is inevitable.

This will create a situation where the West will descend into darkness without pulling others down with it – if we manage to escape the nuclear fire.

St. Petersburg sets the stage for the War of Economic Corridors

In St. Petersburg, the world’s new powers gather to upend the US-concocted “rules-based order” and reconnect the globe their way

June 18 2022

The Cradle

By Pepe Escobar

At St. Petersburg on Friday, backers of multipolarity pushed forward integration of their networksPhoto Credit: The Cradle

The St. Petersburg International Economic Forum  has been configured for years now as absolutely essential to understand the evolving dynamics and the trials and tribulations of Eurasia integration.

St. Petersburg in 2022 is even more crucial as it directly connects to three simultaneous developments I had previously outlined, in no particular order:

First, the coming of the “new G8” – four BRICS nations (Brazil, Russia, India, China), plus Iran, Indonesia, Turkey and Mexico, whose GDP per purchasing parity power (PPP) already dwarfs the old, western-dominated G8.

Second, the Chinese “Three Rings” strategy of developing geoeconomic relations with its neighbors and partners.

Third, the development of BRICS+, or extended BRICS, including some members of the “new G8,” to be discussed at the upcoming summit in China.

There was hardly any doubt President Putin would be the star of St. Petersburg 2022, delivering a sharp, detailed speech to the plenary session.

Among the highlights, Putin smashed the illusions of the so-called ‘golden billion’ who live in the industrialized west (only 12 percent of the global population) and the “irresponsible macroeconomic policies of the G7 countries.”

The Russian president noted how “EU losses due to sanctions against Russia” could exceed $400 billion per year, and that Europe’s high energy prices – something that actually started “in the third quarter of last year” – are due to “blindly believing in renewable sources.”

He also duly dismissed the west’s ‘Putin price hike’ propaganda, saying the food and energy crisis is linked to misguided western economic policies, i.e., “Russian grain and fertilizers are being sanctioned” to the detriment of the west.

In a nutshell: the west misjudged Russia’s sovereignty when sanctioning it, and now is paying a very heavy price.

Chinese President Xi Jinping, addressing the forum by video, sent a message to the whole Global South. He evoked “true multilateralism,” insisting that emerging markets must have “a say in global economic management,” and called for “improved North-South and South-South dialogue.”

It was up to Kazakh President Tokayev, the ruler of a deeply strategic partner of both Russia and China, to deliver the punch line in person: Eurasia integration should progress hand in hand with China’s Belt and Road Initiative (BRI). Here it is, full circle.

Building a long-term strategy “in weeks”

St. Petersburg offered several engrossing discussions on key themes and sub-themes of Eurasia integration, such as business within the scope of the Shanghai Cooperation Organization (SCO); aspects of the Russia-China strategic partnership; what’s ahead for the BRICS; and prospects for the Russian financial sector.

One of the most important discussions was focused on the increasing interaction between the Eurasia Economic Union (EAEU) and ASEAN, a key example of what the Chinese would define as ‘South-South cooperation.’

And that connected to the still long and winding road leading to deeper integration of the EAEU itself.

This implies steps towards more self-sufficient economic development for members; establishing the priorities for import substitution; harnessing all the transport and logistical potential; developing trans-Eurasian corporations; and imprinting the EAEU ‘brand’ in a new system of global economic relations.

Russian Deputy Prime Minister Alexey Overchuk was particularly sharp on the pressing matters at hand: implementing a full free trade customs and economic union – plus a unified payment system – with simplified direct settlements using the Mir payment card to reach new markets in Southeast Asia, Africa and the Persian Gulf.

In a new era defined by Russian business circles as “the game with no rules” – debunking the US-coined “rules-based international order” – another relevant discussion, featuring key Putin adviser Maxim Oreshkin, focused on what should be the priorities for big business and the financial sector in connection to the state’s economic and foreign policy.

The consensus is that the current ‘rules’ have been written by the west. Russia could only connect to existing mechanisms, underpinned by international law and institutions. But then the west tried to  “squeeze us out” and even “to cancel Russia.” So it’s time to “replace the no-rules rules.” That’s a key theme underlying the concept of ‘sovereignty’ developed by Putin in his plenary address.

In another important discussion chaired by the CEO of western-sanctioned Sberbank Herman Gref, there was much hand-wringing about the fact that the Russian “evolutionary leap forward towards 2030” should have happened sooner. Now a “long-term strategy has to be built in weeks,” with supply chains breaking down all across the spectrum.

A question was posed to the audience – the crème de la crème of Russia’s business community: what would you recommend, increased trade with the east, or redirecting the structure of the Russian economy? A whopping 72 percent voted for the latter.

So now we come to the crunch, as all these themes interact when we look at what happened only a few days before St. Petersburg.

The Russia-Iran-India corridor

A key node of the International North South Transportation Corridor (INTSC) is now in play, linking northwest Russia to the Persian Gulf via the Caspian Sea and Iran. The transportation time between St. Petersburg and Indian ports is 25 days.

This logistical corridor with multimodal transportation carries an enormous geopolitical significance for two BRICs members and a prospective member of the “new G8” because it opens a key alternative route to the usual cargo trail from Asia to Europe via the Suez canal.

The International North South Transportation Corridor (INSTC)

The INSTC corridor is a classic South-South integration project: a 7,200-km-long multimodal network of ship, rail, and road routes interlinking India, Afghanistan, Central Asia, Iran, Azerbaijan and Russia all the way to Finland in the Baltic Sea.

Technically, picture a set of containers going overland from St. Petersburg to Astrakhan. Then the cargo sails via the Caspian to the Iranian port of Bandar Anzeli. Then it’s transported overland to the port of Bandar Abbas. And then overseas to Nava Sheva, the largest seaport in India. The key operator is Islamic Republic of Iran Shipping Lines (the IRISL group), which has branches in both Russia and India.

And that brings us to what wars from now will be fought about: transportation corridors – and not territorial conquest.

Beijing’s fast-paced BRI is seen as an existential threat to the ‘rules-based international order.’ It develops along six overland corridors across Eurasia, plus the Maritime Silk Road from the South China Sea, and the Indian Ocean, all the way to Europe.

One of the key targets of NATO’s proxy war in Ukraine is to interrupt BRI corridors across Russia. The Empire will go all out to interrupt not only BRI but also INSTC nodes. Afghanistan under US occupation was prevented from become a node for either BRI or INSTC.

With full access to the Sea of Azov – now a “Russian lake” – and arguably the whole Black Sea coastline further on down the road, Moscow will hugely increase its sea trading prospects (Putin: “The Black Sea was historically Russian territory”).

For the past two decades, energy corridors have been heavily politicized and are at the center of unforgiving global pipeline competitions – from BTC and South Stream to Nord Stream 1 and 2, and the never-ending soap operas, the Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan-India (IPI) gas pipelines.

Then there’s the Northern Sea Route alongside the Russian coastline all the way to the Barents Sea. China and India are very much focused on the Northern Sea Route, not by accident also  discussed in detail in St. Petersburg.

The contrast between the St. Petersburg debates on a possible re-wiring of our world – and the Three Stooges Taking a Train to Nowhere to tell a mediocre Ukrainian comedian to calm down and negotiate his surrender (as confirmed by German intelligence) – could not be starker.

Almost imperceptibly – just as it re-incorporated Crimea and entered the Syrian theater – Russia as a military-energy superpower now shows it is potentially capable of driving a great deal of the industrialized west back into the Stone Age. The western elites are just helpless. If only they could ride a corridor on the Eurasian high-speed train, they might learn something.

The views expressed in this article do not necessarily reflect those of The Cradle.

President Putin: St Petersburg International Economic Forum Plenary session

June 18, 2022

Ed Note:  This transcript is not fully complete but we post it because of the renewed DDoS attacks on Russian infrastructure.  When it is complete, we will do an update.   (Mr Putin was on top form with an excellent, even exhaustive and detailed economic tour de force for Russia, and then of course for the sane world, or our Zone B).

Pepe Escobar created a very high-level summary:

THE NEW ERA

Top Ten Breakdown – as announced by Putin

  • The era of the unipolar world is over.
  • The rupture with the West is irreversible and definitive. No pressure from the West will change it.
  • Russia has renewed its sovereignty. Reinforcement of political and economic sovereignty is an absolute priority.
  • The current crisis shows the EU is not ready to play the role of an independent, sovereign actor. It’s just an ensemble of American vassals deprived of any politico-military sovereignty.
  • Sovereignty cannot be partial. Either you’re a sovereign or a colony.
  • Hunger in the poorest nations will be on the conscience of the West and Euro-democracy.
  • Russia will supply grains to Africa and the Middle East.
  • Russia will invest in internal economic development and reorientation of trade towards nations independent of the US.
  • The future world order, currently in progress, will be formed by strong sovereign states.
  • The ship has sailed. There’s no turning back.

A further summary from RT rounds it out:  https://www.rt.com/russia/557346-putin-spief-speech-takeaways/


http://en.kremlin.ru/events/president/news/68669

President of the Republic of Kazakhstan Kassym-Jomart Tokayev also took part in the session. President of the People’s Republic of China Xi Jinping and President of the Arab Republic of Egypt Abdel Fattah el-Sisi addressed the session via videoconference.

The theme this year is New Opportunities in a New World.

* * *

Plenary session moderator Margarita Simonyan: Good afternoon, or almost evening.

As you may know, we had a minor technical issue. Thankfully, it has been dealt with quickly. We are grateful to those who resolved this.

We are also grateful to the audience.

We are grateful to our leader, President Vladimir Putin, for traditionally fitting this forum into his schedule so that he can tell us about economic prospects and other plans.

We are grateful to President Kassym-Jomart Tokayev for attending our forum. We know that it is not an easy thing to do. Thank you for supporting our forum and our country. We really appreciate this.

We will have a lot of questions today. You may not like some of them, and I may not be happy to ask some of them. We would be much happier to speak only about good things, but this is impossible today.

Mr President, I would like to ask you to take the stand and to tell us what lies in store for us all. Thank you.

President of Russia Vladimir Putin: Thank you very much. President Tokayev, friends and colleagues,

I welcome all participants and guests of the 25th St Petersburg International Economic Forum.

It is taking place at a difficult time for the international community when the economy, markets and the very principles of the global economic system have taken a blow. Many trade, industrial and logistics chains, which were dislocated by the pandemic, have been subjected to new tests. Moreover, such fundamental business notions as business reputation, the inviolability of property and trust in global currencies have been seriously damaged. Regrettably, they have been undermined by our Western partners, who have done this deliberately, for the sake of their ambitions and in order to preserve obsolete geopolitical illusions.

Today, our – when I say “our,” I mean the Russian leadership – our own view of the global economic situation. I would like to speak in greater depth about the actions Russia is taking in these conditions and how it plans to develop in these dynamically changing circumstances.

When I spoke at the Davos Forum a year and a half ago, I also stressed that … the era of a unipolar world order has come to an end. I want to start with this, as there is no way around it. This era has ended despite all the attempts to maintain and preserve it at all costs. Change is a natural process of history, as it is difficult to reconcile the diversity of civilisations and the richness of cultures on the planet with political, economic or other stereotypes – these do not work here, they are imposed by one centre in a rough and no-compromise manner.

The flaw is in the concept itself, as the concept says there is one, albeit strong, power with a limited circle of close allies, or, as they say, countries with granted access, and all business practices and international relations, when it is convenient, are interpreted solely in the interests of this power. They essentially work in one direction in a zero-sum game. A world built on a doctrine of this kind is definitely unstable.

After declaring victory in the Cold War, the United States proclaimed itself to be God’s messenger on Earth, …without any obligations and only interests which were declared sacred. They seem to ignore the fact that in the past decades, new powerful and increasingly assertive centres have been formed. Each of them develops its own political system and public institutions according to its own model of economic growth and, naturally, has the right to protect them and to secure national sovereignty.

These are objective processes and genuinely revolutionary tectonic shifts in geopolitics, the global economy and technology, in the entire system of international relations, where the role of dynamic and potentially strong countries and regions is substantially growing. It is no longer possible to ignore their interests.

To reiterate, these changes are fundamental, groundbreaking and rigorous. It would be a mistake to assume that at a time of turbulent change, one can simply sit it out or wait it out until everything gets back on track and becomes what it was before. It will not.

However, the ruling elite of some Western states seem to be harbouring this kind of illusions. They refuse to notice obvious things, stubbornly clinging to the shadows of the past. For example, they seem to believe that the dominance of the West in global politics and the economy is an unchanging, eternal value. Nothing lasts forever.

Our colleagues are not just denying reality. More than that; they are trying to reverse the course of history. They seem to think in terms of the past century. They are still influenced by their own misconceptions about countries outside the so-called “golden billion”: they consider everything a backwater, or their backyard. They still treat them like colonies, and the people living there, like second-class people, because they consider themselves exceptional. If they are exceptional, that means everyone else is second rate.

Thereby, the irrepressible urge to punish, to economically crush anyone who does not fit with the mainstream, does not want to blindly obey. Moreover, they crudely and shamelessly impose their ethics, their views on culture and ideas about history, sometimes questioning the sovereignty and integrity of states, and threatening their very existence. Suffice it to recall what happened in Yugoslavia, Syria, Libya and Iraq.

If some “rebel” state cannot be suppressed or pacified, they try to isolate that state, or “cancel” it, to use their modern term. Everything goes, even sports, the Olympics, bans on culture and art masterpieces just because their creators come from the “wrong” country.

This is the nature of the current round of Russophobia in the West, and the insane sanctions against Russia. They are crazy and, I would say, thoughtless.They are unprecedented in the number of them or the pace the West churns them out at.

The idea was clear as day – they expected to suddenly and violently crush the Russian economy, to hit Russia’s industry, finance, and people’s living standards by destroying business chains, forcibly recalling Western companies from the Russian market, and freezing Russian assets.

This did not work. Obviously, it did not work out; it did not happen. Russian entrepreneurs and authorities have acted in a collected and professional manner, and Russians have shown solidarity and responsibility.

Step by step, we will normalise the economic situation. We have stabilised the financial markets, the banking system and the trade network. Now we are busy saturating the economy with liquidity and working capital to maintain the stable operation of enterprises and companies, employment and jobs.

The dire forecasts for the prospects of the Russian economy, which were made in early spring, have not materialised. It is clear why this propaganda campaign was fuelled and all the predictions of the dollar at 200 rubles and the collapse of our economy were made. This was and remains an instrument in an information struggle and a factor of psychological influence on Russian society and domestic business circles.

Incidentally, some of our analysts gave in to this external pressure and based their forecasts on the inevitable collapse of the Russian economy and a critical weakening of the national currency – the ruble.

Real life has belied these predictions. However, I would like to emphasise that to continue being successful, we must be explicitly honest and realistic in assessing the situation, be independent in reaching conclusions, and of course, have a can-do spirit, which is very important. We are strong people and can deal with any challenge. Like our predecessors, we can resolve any task. The entire thousand-year history of our country bears this out.

Within just three months of the massive package of sanctions, we have suppressed inflation rate spikes. As you know, after peaking at 17.8 percent, inflation now stands at 16.7 percent and continues dropping. This economic dynamic is being stabilised, and state finances are now sustainable. I will compare this to other regions further on. Yes, even this figure is too much for us – 16.7 percent is high inflation. We must and will work on this and, I am sure, we will achieve a positive result.

After the first five months of this year, the federal budget has a surplus of 1.5 trillion rubles and the consolidated budget – a surplus of 3.3 trillion rubles. In May alone, the federal budget surplus reached almost half a trillion rubles, surpassing the figure for May 2021 more than four times over.

Today, our job us to create conditions for building up production and increasing supply in the domestic market, as well as restoring demand and bank financing in the economy commensurately with the growth in supply.

I mentioned that we have taken measures to reestablish the floating assets of companies. In most sectors, businesses have received the right to suspend insurance premiums for the second quarter of the year. Industrial companies have even more opportunities – they will be able to delay them through the third quarter as well. In effect, this is like getting an interest-free loan from the state.

In the future, companies will not have to pay delayed insurance premiums in a single payment. They will be able to pay them in equal installments over 12 months, starting in June next year.

Next. As of May the subsidised mortgage rate has been reduced. It is now 9 percent, while the programme has been extended till the end of the year. As I have mentioned, the programme is aimed at helping Russians improve their housing situation, while supporting the home building industry and related industries that employ millions of people.

Following a spike this spring, interest rates have been gradually coming down, as the Central Bank lowers the key rate. I believe that that this allows the subsidised mortgage rate to be further cut to 7 percent.

What is important here? The programme will last until the end of the year without change. It means that our fellow Russians seeking to improve their living conditions should take advantage of the subsidy before the end of the year.

The lending cap will not change either, at 12 million roubles for Moscow and St Petersburg and 6 million for the rest of Russia.

I should add that we must make long-term loans for businesses more accessible. The focus must shift from budget subsidies for businesses to bank lending as a means to spur business activity.

We need to support this. We will allocate 120 billion rubles from the National Wealth Fund to build up the capacity of the VEB Project Financing Factory. This will provide for additional lending to much-needed initiatives and projects worth around half a trillion roubles.

Colleagues,

Once again, the economic blitzkrieg against Russia was doomed to fail from the beginning. Sanctions as a weapon have proved in recent years to be a double-edged sword damaging their advocates and architects just a much, if not more.

I am not talking about the repercussions we see clearly today. We know that European leaders informally, so to say, furtively, discuss the very concerning possibility of sanctions being levelled not at Russia, but at any undesirable nation, and ultimately anyone including the EU and European companies.

So far this is not the case, but European politicians have already dealt their economies a serious blow all by themselves. We see social and economic problems worsening in Europe, and in the US as well, food, electricity and fuel prices rising, with quality of life in Europe falling and companies losing their market edge.

According to experts, the EU’s direct, calculable losses from the sanctions fever could exceed $400 billion this year. This is the price of the decisions that are far removed from reality and contradict common sense.

These outlays fall directly on the shoulders of people and companies in the EU. The inflation rate in some Eurozone countries has exceeded 20 percent. I mentioned inflation in Russia, but the Eurozone countries are not conducting special military operations, yet the inflation rate in some of them has reached 20 percent. Inflation in the United States is also unacceptable, the highest in the past 40 years.

Of course, inflation in Russia is also in the double digits so far. However, we have adjusted social benefits and pensions to inflation, and increased the minimum and subsistence wages, thereby protecting the most vulnerable groups of the population. At the same time, high interest rates have helped people keep their savings in the Russian banking system.

Businesspeople know, of course, that a high key rate clearly slows economic development. But it is a boon for the people in most cases. They have reinvested a substantial amount of money in banks due to higher interest rates.

This is our main difference from the EU countries, where rising inflation is directly reducing the real incomes of the people and eating up their savings, and the current manifestations of the crisis are affecting, above all, low-income groups.

The growing outlays of European companies and the loss of the Russian market will have lasting negative effects. The obvious result of this will be the loss of global competitiveness and a system-wide decline in the European economies’ pace of growth for years to come.

Taken together, this will aggravate the deep-seated problems of European societies. Yes, we have many problems as well, yet I have to speak about Europe now because they are pointing the finger at us although they have enough of their own problems. I mentioned this at Davos. A direct result of the European politicians’ actions and events this year will be the further growth of inequality in these countries, which will, in turn, split their societies still more, and the point at issue is not only the well-being but also the value orientation of various groups in these societies.

Indeed, these differences are being suppressed and swept under the rug. Frankly, the democratic procedures and elections in Europe and the forces that come to power look like a front, because almost identical political parties come and go, while deep down things remain the same. The real interests of people and national businesses are being pushed further and further to the periphery.

Such a disconnect from reality and the demands of society will inevitably lead to a surge in populism and extremist and radical movements, major socioeconomic changes, degradation and a change of elites in the short term. As you can see, traditional parties lose all the time. New entities are coming to the surface, but they have little chance for survival if they are not much different from the existing ones.

The attempts to keep up appearances and the talk about allegedly acceptable costs in the name of pseudo-unity cannot hide the main thing: the European Union has lost its political sovereignty, and its bureaucratic elites are dancing to someone else’s tune, doing everything they are told from on high and hurting their own people, economies, and businesses.

There are other critically important matters here. The worsening of the global economic situation is not a recent development. I will now go over things that I believe are extremely important. What is happening now does not stem from what happened during recent months, of course not. Moreover, it is not the result of the special military operation carried out by Russia in Donbass. Saying so is an unconcealed, deliberate distortion of the facts.

Surging inflation in product and commodity markets had become a fact of life long before the events of this year. The world has been driven into this situation, little by little, by many years of irresponsible macroeconomic policies pursued by the G7 countries, including uncontrolled emission and accumulation of unsecured debt. These processes intensified with the onset of the coronavirus pandemic in 2020, when supply and demand for goods and services drastically fell on a global scale.

This begs the question: what does our military operation in Donbass have to do with this? Nothing whatsoever.

Because they could not or would not devise any other recipes, the governments of the leading Western economies simply accelerated their money-printing machines. Such a simple way to make up for unprecedented budget deficits.

I have already cited this figure: over the past two years, the money supply in the United States has grown by more than 38 percent. Previously, a similar rise took decades, but now it grew by 38 percent or 5.9 trillion dollars in two years. By comparison, only a few countries have a bigger gross domestic product.

The EU’s money supply has also increased dramatically over this period. It grew by about 20 percent, or 2.5 trillion euros.

Lately, I have been hearing more and more about the so-called – please excuse me, I really would not like to do this here, even mention my own name in this regard, but I cannot help it – we all hear about the so-called ‘Putin inflation’ in the West. When I see this, I wonder who they expect would buy this nonsense – people who cannot read or write, maybe. Anyone literate enough to read would understand what is actually happening.

Russia, our actions to liberate Donbass have absolutely nothing to do with this. The rising prices, accelerating inflation, shortages of food and fuel, petrol, and problems in the energy sector are the result of system-wide errors the current US administration and European bureaucracy have made in their economic policies. That is where the reasons are, and only there.

I will mention our operation, too: yes, it could have contributed to the trend, but the root cause is precisely this – their erroneous economic policies. In fact, the operation we launched in Donbass is a lifeline they are grabbing at to be able to blame their own miscalculations on others, in this case, on Russia. But everyone who has at least completed primary school would understand the true reasons for today’s situation.

So, they printed more money, and then what? Where did all that money go? It was obviously used to pay for goods and services outside Western countries – this is where the newly-printed money flowed. They literally began to clean out, to wipe out global markets. Naturally, no one thought about the interests of other states, including the poorest ones. They were left with scraps, as they say, and even that at exorbitant prices.

While at the end of 2019, imports of goods to the United States amounted to about 250 billion dollars a month, by now, it has grown to 350 billion. It is noteworthy that the growth was 40 percent – exactly in proportion to the unsecured money supply printed in recent years. They printed and distributed money, and used it to wipe out goods from third countries’ markets.

This is what I would like to add. For a long time, the United States was a big food supplier in the world market. It was proud, and with good reason, of its achievements, its agriculture and farming traditions. By the way, this is an example for many of us, too. But today, America’s role has changed drastically. It has turned from a net exporter of food into a net importer. Loosely speaking, it is printing money and pulling commodity flows its way, buying food products all over the world.

The European Union is building up imports even faster. Obviously, such a sharp increase in demand that is not covered by the supply of goods has triggered a wave of shortages and global inflation. This is where this global inflation originates. In the past couple of years, practically everything – raw materials, consumer goods and particularly food products – has become more expensive all over the world.

Yes, of course, these countries, including the United States continue importing goods, but the balance between exports and imports has been reversed. I believe imports exceed exports by some 17 billion. This is the whole problem.

According to the UN, in February 2022, the food price index was 50 percent higher than in May 2020, while the composite raw materials index has doubled over this period.

Under the cloud of inflation, many developing nations are asking a good question: why exchange goods for dollars and euros that are losing value right before our eyes? The conclusion suggests itself: the economy of mythical entities is inevitably being replaced by the economy of real values and assets.

According to the IMF, global currency reserves are at $7.1 trillion and 2.5 trillion euros now. These reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved. I think this has become a very real threat for many countries that keep their gold and foreign exchange reserves in these currencies.

According to analyst estimates, and this is an objective analysis, a conversion of global reserves will begin just because there is no room for them with such shortages. They will be converted from weakening currencies into real resources like food, energy commodities and other raw materials. Other countries will be doing this, of course. Obviously, this process will further fuel global dollar inflation.

As for Europe, their failed energy policy, blindly staking everything on renewables and spot supplies of natural gas, which have caused energy price increases since the third quarter of last year – again, long before the operation in Donbass – have also exacerbated price hikes. We have absolutely nothing to do with this. It was due to their own actions that prices have gone through the roof, and now they are once again looking for somebody to blame.

Not only did the West’s miscalculations affect the net cost of goods and services but they also resulted in decreased fertiliser production, mainly nitrogen fertilisers made from natural gas. Overall, global fertiliser prices have jumped by over 70 percent from mid-2021 through February 2022.

Unfortunately, there are currently no conditions that can overcome these pricing trends. On the contrary, aggravated by obstacles to the operation of Russian and Belarusian fertiliser producers and disrupted supply logistics, this situation is approaching a deadlock.

It is not difficult to foresee coming developments. A shortage of fertiliser means a lower harvest and a higher risk of an undersupplied global food market. Prices will go even higher, which could lead to hunger in the poorest countries. And it will be fully on the conscience of the US administration and the European bureaucracy.

I want to emphasise once again: this problem did not arise today or in the past three or four months. And certainly, it is not Russia’s fault as some demagogues try to declare, shifting the responsibility for the current state of affairs in the world economy to our country.

Maybe it would even be nice to hear that we are so powerful and omnipotent that we can blow up inflation in the West, in the United States and Europe, or that we can do things to throw everything into disorder. Maybe it would be nice to feel this power, if only there were truth in it. This situation has been brewing for years, spurred by the short-sighted actions of those who are used to solving their problems at somebody else’s expense and who have relied and still rely on the mechanism of financial emission to outbid and draw trade flows, thus escalating deficits and provoking humanitarian disasters in certain regions of the world. I will add that this is essentially the same predatory colonial policy as in the past, but of course in a new iteration, a more subtle and sophisticated edition. You might not even recognise it at first.

The current priority of the international community is to increase food deliveries to the global market, notably, to satisfy the requirements of the countries that need food most of all.

While ensuring its domestic food security and supplying the domestic market, Russia is also able to scale up its food and fertiliser exports. For example, our grain exports in the next season can be increased to 50 million tonnes.

As a priority, we will supply the countries that need food most of all, where the number of starving people could increase, first of all, African countries and the Middle East.

At the same time, there will be problems there, and not through our fault either. Yes, on paper Russian grain, food and fertilisers… Incidentally, the Americans have adopted sanctions on our fertilisers, and the Europeans followed suit. Later, the Americans lifted them because they saw what this could lead to.

But the Europeans have not backed off. Their bureaucracy is as slow as a flour mill in the 18th century. In other words, everyone knows that they have done a stupid thing, but they find it difficult to retrace their steps for bureaucratic reasons.

As I have said, Russia is ready to contribute to balancing global markets of agricultural products, and we see that our UN colleagues, who are aware of the scale of the global food problem, are ready for dialogue. We could talk about creating normal logistical, financial and transport conditions for increasing Russian food and fertiliser exports.

As for Ukrainian food supplies to global markets – I have to mention this because of numerous speculations – we are not hindering them. They can do it. We did not mine the Black Sea ports of Ukraine. They can clear the mines and resume food exports. We will ensure the safe navigation of civilian vessels. No problem.

But what are we talking about? According to the US Department of Agriculture, the matter concerns 6 million tonnes of wheat (we estimate it at 5 million tonnes) and 7 million tonnes of maize. This is it, altogether. Since global production of wheat stands at 800 million tonnes, 5 million tonnes make little difference for the global market, as you can see.

Anyway, Ukrainian grain can be exported, and not only via Black Sea ports. Another route is via Belarus, which is, incidentally, the cheapest way. Or via Poland or Romania, whichever you prefer. In fact, there are five or six export routes.

The problem is not with us, the problem is with the adequacy of the people in control in Kiev. They can decide what to do, and, at least in this particular case, they should not take their lead from their foreign bosses, their masters across the ocean.

But there is also the risk that grain will be used as payment for arms deliveries. This would be regrettable.

Friends,

Once again, the world is going through an era of drastic change. International institutions are breaking down and faltering. Security guarantees are being devalued. The West has made a point of refusing to honour its earlier commitments. It has simply been impossible to reach any new agreements with them.

Given these circumstances and against the backdrop of mounting risks and threats, Russia was forced to go ahead with the special military operation. It was a difficult but necessary decision, and we were forced to make it.

This was the decision of a sovereign country, which has еру unconditional right to uphold its security, which is based on the UN Charter. This decision was aimed at protecting our people and the residents of the people’s republics of Donbass who for eight long years were subjected to genocide by the Kiev regime and the neo-Nazis who enjoyed the full protection of the West.

The West not only sought to implement an “anti-Russia” scenario, but also engaged in the active military development of Ukrainian territory, flooding Ukraine with weapons and military advisers. And it continues to do so now. Frankly, no one is paying any attention to the economy or well-being of the people living there, they just do not care about it at all, but they have never spared money to create a NATO foothold in the east that is directed against Russia and to cultivate aggression, hatred and Russophobia.

Today, our soldiers and officers, as well as the Donbass militia, are fighting to protect their people. They are fighting for Russia’s future as a large, free and secure multiethnic country that makes its own decisions, determines its own future, relies on its history, culture and traditions, and rejects any and all outside attempts to impose pseudo-values steeped in dehumanisation and moral degradation.

No doubt, our special military operation goals will be fulfilled. The key to this is the courage and heroism of our soldiers, consolidated Russian society, whose support gives strength and confidence to the Russian Army and Navy and a deep understanding of the truth and historical justice of our cause which is to build and strengthen Russia as a strong sovereign power.

My point is that sovereignty cannot be segmented or fragmented in the 21st century. The components of sovereignty are equally important, and they reinvigorate and complement each other.

So, what matters to us is not only the defence of our political sovereignty and national identity, but also strengthening everything that determines our country’s economic, financial, professional and technological independence.

The very structure of Western sanctions rested on the false premise that economically Russia is not sovereign and is critically vulnerable. They got so carried away spreading the myth of Russia’s backwardness and its weak positions in the global economy and trade that apparently, they started believing it themselves.

While planning their economic blitzkrieg, they did not notice, simply ignored the real facts of how much our country had changed in the past few years.

These changes are the result of our planned efforts to create a sustainable macroeconomic structure, ensure food security, implement import substitution programmes and create our own payment system, to name a few.

Of course, sanction restrictions created many challenges for the country. Some companies continue having problems with spare parts. Our companies have lost access to many technological solutions. Logistics are in disarray.

But, on the other hand, all this opens up new opportunities for us – we often talk about this but it really is so. All this is an impetus to build an economy with full rather than partial technological, production, human and scientific potential and sovereignty.

Naturally, it is impossible to resolve such a comprehensive challenge instantly. It is necessary to continue working systematically with an eye to the future. This is exactly what Russia is doing by implementing its long-term plans for the development of branches of the economy and strengthening the social sphere. The current trials are merely resulting in adjustments and modifications of the plans without changing their strategic orientation.

Today, I would like to talk about the key principles on which our country, our economy will develop.

The first principle is openness. Genuinely sovereign states are always interested in equal partnership and in contributing to global development. On the contrary, weak and dependent countries are usually looking for enemies, fuelling xenophobia or losing the last remnants of their identity and independence, blindly following in the wake of their suzerain.

Russia will never follow the road of self-isolation and autarky although our so-called Western friends are literally dreaming about this. Moreover, we are expanding cooperation with all those who are interested in it, who want to work with us, and will continue to do so. … They make up the overwhelming majority of people on Earth.

I will not list all these countries now. It is common knowledge.

I will say nothing new when I remind you that everyone who wants to continue working or is working with Russia is subjected to blatant pressure from the United States and Europe; it goes as far as direct threats. However, this kind of blackmail means little when it comes to countries headed by true leaders who know the difference between their own national interests, the interests of their people – and someone else’s.

Russia will build up economic cooperation with these states and promote joint projects. At the same time, we will certainly continue to cooperate with Western companies that have remained in the Russian market despite the unprecedented arm-twisting – such companies exist, too.

We believe the development of a convenient and independent payment infrastructure in national currencies is a solid and predictable basis for deepening international cooperation. To help companies from other countries develop logistical and cooperation ties, we are working to improve transport corridors, increase the capacity of railways, transshipment capacity at ports in the Arctic, and in the eastern, southern and other parts of the country, including in the Azov-Black Sea and Caspian basins – they will become the most important section of the North-South Corridor, which will provide stable connectivity with the Middle East and Southern Asia. We expect freight traffic along this route to begin growing steadily in the near future.

But foreign trade is not our only priority. Russia intends to increase scientific, technological, cultural, humanitarian and sports cooperation based on equality and mutual respect between partners. At the same time, our country will strive for responsible leadership in all these areas.

The second principle of our long-term development is a reliance on entrepreneurial freedom. Every private initiative aimed at benefiting Russia should receive maximum support and space for implementation.

The pandemic and the more recent events have confirmed how important flexibility and freedom are in the economy. Russian private businesses – in tough conditions, amid attempts to restrain our development by any means – have proved they can compete in global markets. Private businesses should also be credited for Russia’s adaptation to rapidly changing external conditions. Russia needs to ensure the dynamic development of the economy – naturally, relying on private business.

We will continue to reduce administrative hurdles. For example, in 2016–2018, we imposed a moratorium on routine audits of small businesses. Subsequently, it was extended through 2022. In 2020, this moratorium was extended to cover mid-sized companies. Also, the number of unscheduled audits decreased approximately fourfold.

We did not stop at that, and last March, we cancelled routine audits for all entrepreneurs, regardless of the size of their businesses, provided their activities do not put people or the environment at high risk. As a result, the number of routine audits has declined sixfold compared to last year.

Why am I giving so many details? The point is that after the moratorium on audits was imposed, the number of violations by entrepreneurs – this was the result – has not increased, but rather it has gone down. This testifies to the maturity and responsibility of Russian businesses. Of course, they should be offered motivation rather than being forced to observe regulations and requirements.

So, there is every reason to take another radical step forward, that is, to abandon, for good and on a permanent basis, the majority of audits for all Russian businesses, except on risky or potentially dangerous activities. Everyone has long since understood that there was no need to check on everyone without exception. A risk-oriented approach should be at work. I ask the Government to develop the specific parameters of such a reform in the next few months.

There is another very sensitive topic for business, which has also become important today for our national security and economic resilience. To reduce and bring to a minimum all sorts of abuse and loopholes to exert pressure on entrepreneurs, we are consistently removing loose regulations from criminal law that are applied to economic crimes.

Last March, a law was signed, under which tax-related criminal cases against entrepreneurs shall only be brought before a court by the tax service – there is no other way. Soon a draft law will be passed on reducing the statute of limitations for tax-related crimes and on rejecting lawsuits to initiate criminal proceedings after tax arrears have been paid off.

Working comprehensively, although prudently, we need to decriminalise a wide range of economic offenses, for instance, those that punish businesses without a licence or accreditation. This is a controversial practice today because our Western partners illegitimately refuse to provide such licenses.

Our own agencies must not single-handedly make our businesses criminally liable for actually doing nothing wrong. The problem is this, and small businesses understand it very well – if a licence has expired, and Western partners refuse to extend it, what are businesses to do, wrap up operations? By no means, let them work. State oversight should continue, but there should be no undue interference in business.

It also makes sense to think about raising the threshold of criminal liability for unpaid customs duties and other such taxes. Additionally, we have not for a long time reconsidered the parameters of the terms ‘large’ and ‘very large’ economic loss for the purposes of economic offences despite inflation accruing 50 percent since 2016. The law now fails to reflect the current realities and needs to be corrected.

We need to reconsider the conditions for detaining entrepreneurs and for extending preliminary investigations. It is no secret that these practices have long been used inappropriately.

Businesses have been forced to cease operations or go bankrupt even before the investigation is over. The reputation of the owners and of the brand name suffers as a result, not to mention the direct financial loss, loss of market share and jobs.

I want to ask law enforcement to put an end to these practices. I also ask the Government and the Supreme Court to draft appropriate legislation before October 1 of this year.

In addition, at the Security Council, a special instruction was given to look into criminal cases being opened without later proceeding to court. The number of such cases has grown in recent years. We know the reasons. A case is often opened without sufficient grounds or to put pressure on individuals. We will discuss this in autumn to take legislative action and change the way our law enforcement agencies work.

It goes without saying that regional governments play a major role in creating a modern business environment. As is customary during the St Petersburg Forum, I highlight the regions that have made significant progress in the National Investment Climate Rankings compiled by the Agency for Strategic Initiatives.

There have been changes in the top three. Moscow and Tatarstan have remained at the top and were joined by the Moscow Region which, in a span of one year, went from eighth place to the top three. The leaders of the rankings also include the Tula, Nizhny Novgorod, Tyumen, Novgorod, and Sakhalin regions, St Petersburg and Bashkortostan.

Separately, I would like to highlight the regions that have made the greatest strides such as the Kurgan Region, which moved up 36 spots; the Perm Territory and the Altai Territory, up 26 spots; Ingushetia, up 24 spots; and the Ivanovo Region which moved up 17 spots.

I want to thank and congratulate our colleagues in the regions for their good work.

The federal government and regional and municipal governments should focus on supporting individual business initiatives in small towns and remote rural communities. We are aware of such stories of success. That includes developing popular software and marketing locally produced organic food and environmentally friendly products nationwide using domestic websites.

It is important to create new opportunities, to introduce modern retail formats, including e-commerce platforms, as I mentioned above, and to cut the logistics, transportation and other costs, including by using upgraded Russian Post offices.

It is also important to help small business employees, self-employed individuals and start-up entrepreneurs acquire additional skills and competencies. Please include corresponding measures tailored specifically to small towns and rural and remote areas as a separate line in the national project for promoting small and medium-sized businesses.

Today I would like to address our officials, owners of large companies, our business leaders and executives.

Colleagues, friends,

Real, stable success and a sense of dignity and self-respect only come when you link your future and the future of your children with your Fatherland. We have maintained ties with many people for a long time, and I am aware of the sentiments of many of the heads and owners of our companies. You have told me many times that business is much more than just making a profit, and I fully agree. It is about changing life around you, contributing to the development of your home cities, regions and the country as a whole, which is extremely important for self-fulfilment. There is nothing like serving the people and society. This is the meaning of your life and work.

Recent events have reaffirmed what I have always said: it is much better at home. Those who refused to hear that clear message have lost hundreds of millions, if not billions of dollars in the West, in what looked like a safe haven for their assets.

I would like to once again say the following to our colleagues, those who are both in this audience and those who are not here: please, do not fall into the same trap again. Our country has huge potential, and there are more than enough tasks that need your contribution. Invest here, in the creation of new enterprises and jobs, in the development of the tourism infrastructure, support schools, universities, healthcare and the social sphere, culture and sport. I know that many of you are doing this. I know this, but I wanted to say it again.

This is how the Bakhrushin, Morozov, Shchukin, Ryabushinsky, Akchurin, Galeyev, Apanayev, Matsiyev, Mamontov, Tretyakov, Arsanov, Dadashev and Gadzhiyev families understood their noble mission. Many Russian, Tatar, Buryat, Chechen, Daghestani, Yakutian, Ossetian, Jewish, Armenian and other merchant and entrepreneurial families did not deprive their heirs of their due share, and at the same time they etched their names in the history of our country.

Incidentally, I would like to note once again that it remains to be seen what is more important for potential heirs: money and property or their forefathers’ good name and service to the country. The latter is something that cannot be squandered or, pardon my language, wasted on drink.

A good name is something that will always belong to your descendants, to future generations. It will always be part of their lives, going from one generation to another, helping them and making them stronger than the money or property they might inherit can make them.

Colleagues,

A responsible and well-balanced macroeconomic policy is the third guiding principle of our long-term development. In fact, this policy has largely enabled us to withstand the unprecedented pressure brought on by sanctions. Let me reiterate that this is an essential policy in the long term, not just for responding to the current challenges. We will not follow in the footsteps of our Western colleagues by replicating their bitter experience setting off an inflation spiral and disrupting their finances.

Our goal is to ensure robust economic growth for years to come, reducing the inflation burden on our people and businesses and achieving the mid- and long-term target inflation rate of four percent. Inflation was one of the first things I mentioned during my remarks, so let me tell you this: we remain committed to this target of a four-percent inflation rate.

I have already instructed the Government to draft proposals regarding the new budget guidelines. They must ensure that our budget policy is predictable and enables us to make the best use of the external economic conditions. Why do we need all this? To put economic growth on a more stable footing, while also delivering on our infrastructure and technological objectives, which provide a foundation for improving the wellbeing of our people.

True, some international reserve currencies have set themselves on a suicidal path lately, which is an obvious fact. In any case, they clearly have suicidal intentions. Of course, using them to ‘sterilise’ our money supply does not make any sense. Still, the principle of planning one’s spending based on how much you earn remains relevant. This is how it works, and we understand this.

Social justice is the fourth principle underpinning our development. There must be a powerful social dimension when it comes to promoting economic growth and business initiatives. This development model must reduce inequality instead of deepening it, unlike what is happening in other countries. To be honest, we have not been at the forefront when it comes to delivering on these objectives. We have yet to resolve many issues and problems in this regard.

Reducing poverty and inequality is all about creating demand for Russian-made products across the country, bridging the gap between regions in terms of their capabilities, and creating new jobs where they are needed the most. These are the core economic development drivers.

Let me emphasise that generating positive momentum in terms of household income growth and poverty reduction are the main performance indicators for government agencies and the state in general. We need to achieve tangible results in this sphere already this year, despite all the objective challenges we face. I have already assigned this task to the Government.

Again, we provide targeted support to the most vulnerable groups – pensioners, families with children, and people in difficult life situations.

Pensions are indexed annually at a rate higher than inflation. This year, they have been raised twice, including by another 10 percent on June 1.

The minimum wage was also increased by 10 percent at the same time, and so was the subsistence minimum – a reference figure used to calculate many social benefits and payments – accordingly, these benefits should also grow, increasing the incomes of about 15 million people.

In recent years, we have built a holistic system to support low-income families with children. Women are entitled to state support from the early stages of pregnancy and until the child reaches the age of 17.

People’s living standards and prosperity are the most important demographic factors; the current situation is quite challenging due to several negative demographic waves that have recently overlapped. In April, less than a hundred thousand children were born in Russia, almost 13 percent less than in April 2020.

I ask the Government to continue to keep the development of additional support measures for families with children under review. They must be far-reaching and commensurate with the magnitude of the extraordinary demographic challenge we are facing.

Russia’s future is ensured by families with two, three and more children. Therefore, we need to do more than provide direct financial support – we need to target and direct the healthcare system, education, and all areas that determine the quality of people’s lives towards the needs of families with children.

This problem is addressed, among other approaches, by the national social initiatives, which regional teams and the Agency for Strategic Initiatives are implementing together. This autumn, we will assess the results of their work, review and rank the Russian regions by quality of life in order to apply the best experiences and practices as widely as possible throughout the country.

Prioritising the development of infrastructure is the fifth principle underlying Russia’s economic policy.

We have scaled up direct budget spending on expanding transport corridors. An ambitious plan for building and repairing the federal and regional motorway core network will be launched next year. At least 85 percent of the roads are to be brought up to code within the next five years.

Infrastructure budget lending is a new tool that is being widely used. The loans are issued for 15 years at a 3 percent APR. As I mentioned before, they are much more popular than we originally thought. The regions have multiple well-thought-out and promising projects that should be launched at the earliest convenience. We will look into how we can use this support measure. We debated this issue last night. What I am saying is that it is a reliable tool.

Upgrading housing and utilities services is a separate matter with a backlog of issues. The industry is chronically underinvested to the tune of 4.5 trillion rubles. Over 40 percent of networks need to be replaced, which accounts for their low efficiency and big losses. About 3 percent of the networks become unusable every year, but no more than 2 percent get replaced, which makes the problem even worse every single year.

I propose consolidating resources and launching a comprehensive programme for upgrading housing and utilities, and synchronizing it with other infrastructure development and housing overhaul plans. The goal is to turn the situation around and to gradually reduce the number of dated networks, just like we are doing by relocating people from structurally unsafe buildings or fixing roads. We will discuss in detail housing and utilities and the construction complex with the governors at a State Council Presidium meeting next week.

On a separate note, I propose increasing resources to fund projects to create a comfortable urban environment in small towns and historical settlements. This programme is working well for us. I propose allocating another 10 billion rubles annually for these purposes in 2023–2024.

We will allocate additional funds for renovating urban areas in the Far Eastern Federal District. I want the Government to allocate dedicated funds to this end as part of the programmes for infrastructure budget lending and housing and utilities upgrading, as well as other development programmes.

Promoting comprehensive improvements and development for rural areas is a top priority for us. People who live there are feeding the country. We now see that they are also feeding a major part of the world, so they must live in comfort and dignity. In this connection, I am asking the Government to allocate additional funding for the corresponding programme. Export duties on agricultural produce can serve as a source of funding here. This is a permanent source of revenue. Of course, there can be fluctuations, but at least this ensures a constant flow of revenue.

On a separate note, I suggest that we expand the programmes for upgrading and modernising rural cultural centres, as well as regional theatres and museums by allocating six billion rubles for each of these projects in 2023 and 2024.

What I have just said about cultural institutions is something that people are really looking forward to, something they really care about. Let me give you a recent example: during the presentation of the Hero of Labour medals, one of the winners, Vladimir Mikhailov from Yakutia, asked me directly for help with building a cultural centre in his native village. This was during the part of the ceremony where we meet behind closed doors. We will definitely do this. The fact that people are raising this issue at all levels shows that they are really eager to see these projects implemented.

At this point, I would like to make a sidenote on a topic that is especially relevant now, since we are in early summer, when Russians usually take their summer vacations.

Every year, more and more tourists want to visit the most beautiful corners of our country: national parks, wildlife sanctuaries and nature reserves. According to available estimates, this year this tourist flow is expected to exceed 12 million people. It is essential that all government bodies, businesses and tourists are well aware of what they can and cannot do in these territories, where they can build tourism infrastructure, and where such activity is strictly prohibited because it endangers unique and fragile ecosystems.

The draft law governing tourism in special protected territories and regulating this activity in a civilised manner is already in the State Duma.

In this context, I would like to draw your attention to the fact that we must figure out in advance all the relevant estimates and ensure that the decisions are well-balanced. We need to be serious about this.

I would like to place special emphasis on the need to preserve Lake Baikal. In particular, there is a comprehensive development project for the city of Baikalsk, which must become a model of sustainable, eco-sensitive municipal governance.

This is not just about getting rid of the accumulated negative environmental impacts from the Baikalsk Pulp and Paper Mill, but about setting a higher standard of living for the city and transforming it into a signature destination for environmental tourism in Russia. We need to rely on the most cutting-edge technologies and clean energy when carrying out this project.

Overall, we will be developing clean technology to achieve the goals we set in the environmental modernisation of production facilities, and to reduce hazardous emissions, especially in large industrial centres. We will also continue working on closed-loop economy projects, green projects and climate preservation. I spoke about these issues in detail at this forum last year.

Consequently, the sixth cross-cutting development principle that consolidates our work is, in my opinion, achieving genuine technological sovereignty, creating an integral system of economic development that does not depend on foreign institutions when it comes to critically important components. We need to develop all areas of life on a qualitatively new technological level without being simply users of other countries’ solutions. We must have technological keys to developing next-generation goods and services.

In the past years, we have focused a lot of attention on import substitution, succeeding in a range of industries, including agriculture, pharmaceuticals, medical equipment, defence production and several others.

But I should stress that there is a lot of discussion in our society about import substitution. And it is not a cure-all nor a comprehensive solution. If we only imitate others when trying to replace foreign goods with copies, even if very high-quality ones, we may end up constantly playing catch-up while we should be one step ahead and create our own competitive technologies, goods and services that can become new global standards.

If you remember, Sergei Korolyov did not just copy or locally upgrade captured rocket technology. He focused on the future and proposed a unique plan to develop the R-7 rocket. He paved the path to space for humankind and in fact set a standard for the entire world, for decades ahead.

Proactively – this is how founders of many Soviet research programmes worked at the time. And today, building on that groundwork, our designers continue to make progress and show their worth. It is thanks to them that Russia has supersonic weapons that do not exist in any other country. Rosatom remains the leader in nuclear technology, developing our fleet of nuclear-powered icebreakers. Many Russian AI and Big Data solutions are the best in the world.

To reiterate, technological development is a cross-cutting area that will define the current decade and the entire 21st century. We will review in depth our approaches to building a groundbreaking technology-based economy – a techno economy – at the upcoming Strategic Development Council meeting. There is so much we can discuss. Most importantly, many managerial decisions must be made in the sphere of engineering education and transferring research to the real economy, and the provision of financial resources for fast-growing high-tech companies. We will also discuss the development of cross-cutting technologies and progress of digital transformation projects in individual industries.

To be clear, of course it is impossible to make every product out there, and there is no need for that. However, we need to possess critical technologies in order to be able to move swiftly should we need to start our own production of any product. This is what we did when we quickly started making coronavirus vaccines, and most recently launched the production of many other products and services.

For example, after dishonest KamAZ partners left the Russian market, their place was taken by domestic companies, which are supplying parts for traditional models and even advanced mainline, transport and heavy-duty vehicles.

The Mir card payment system has successfully replaced Visa and MasterCard on the domestic market. It is expanding its geography and gradually gaining international recognition.

The St Petersburg Tractor Plant is another case in point. Its former foreign partner stopped selling engines and providing warranty maintenance. Engine builders from Yaroslavl and Tutayev came to the rescue and started supplying their engines. As a result, the output of agricultural equipment at the St Petersburg Tractor Plant hit a record high in March-April. It did not decrease, but hit an all-time high.

I am sure there will be more positive practices and success stories.

To reiterate, Russia possesses the professional, scientific and technological potential to develop products that enjoy high demand, including household appliances and construction equipment, as well as industrial and service equipment.

Today’s task is to scale up the capacities and promptly get the necessary lines up and running. One of the key issues is comfortable work conditions for the businesses as well as the availability of prepared production sites.

I ask the Government to submit key parameters of the new operating guidelines for industrial clusters by the autumn. What is critical here?

First – financing. The projects launched in these clusters must have a long-term credit resource for up to ten years at an annual interest rate below seven percent in rubles. We have discussed all these issues with our economic agencies as well. Everyone agreed, so we will proceed.

Second – taxation. The clusters must have a low level of relatively permanent taxes including insurance contributions.

Third – supporting production at the early, kick-off stage, forming a package of orders including subsidising the purchases of ready products by such enterprises. This is not an easy issue but I think subsidies may be required. They are needed to ensure the market. We just have to work it out.

Fourth – simplified administration including minimal or no inspections as well as convenient customs monitoring that is not burdensome.

Fifth, and probably the most important – we need to set up mechanisms of guaranteed long-term demand for the new innovative products that are about to enter the market. I remind the Government that such preferential terms and respective industrial clusters must be launched as early as January 1, 2023.

On a related note, I want to say that both new and already operating points of industrial growth must attract small businesses and engage them in their orbit. It is crucial for entrepreneurs, for small entities to see the horizon and grasp their prospects.

Therefore, I ask the Government together with the SME Corporation [Federal Corporation for the Development of Small and Medium Enterprises] and our biggest companies to launch an instrument for long-term contracts between companies with state participation and SMEs. This will ensure demand for the products of such enterprises for years ahead whereas suppliers can confidently undertake commitments to launch a new manufacturing facility or expand an existing one to meet that order.

Let me add that we have substantially shortened the timeframe for building industrial sites and eliminated all the unnecessary burdensome procedures. Still, there is much more we can do here. We have things to work on, and places to go from here. For example, building an industrial facility from the ground up takes anywhere from eighteen months to three years, while the persistently high interest rates make it harder to buy suitable land plots.

Given this, I suggest launching industrial mortgages as a new tool for empowering Russian businesses to quickly start making all the products we need. What I mean are preferential long-term loans at a five-percent interest rate. Companies planning to buy new manufacturing space will be entitled to these loans. I am asking the Government to work out all the details with the Russian banking sector so that the industrial mortgage programme becomes fully operational soon.

Friends,

Changes in the global economy, finances and international relations are unfolding at an ever-growing pace and scale. There is an increasingly pronounced trend in favour of a multipolar growth model in lieu of globalisation. Of course, building and shaping a new world order is no easy task. We will have to confront many challenges, risks, and factors that we can hardly predict or anticipate today.

Still, it is obvious that it is up to the strong sovereign states, those that do not follow a trajectory imposed by others, to set the rules governing the new world order. Only powerful and sovereign states can have their say in this emerging world order. Otherwise, they are doomed to become or remain colonies devoid of any rights.

We need to move forward and change in keeping with the times, while demonstrating our national will and resolve. Russia enters this nascent era as a powerful sovereign nation. We will definitely use the new immense opportunities that are opening up for us in this day and age in order to become even stronger.

Thank you for your attention.

Margarita Simonyan: Thank you, Mr President.

I would very much like to say that after such exhaustive remarks and such an exhaustive analysis, we have nothing left to talk about, because you have answered all the questions. Still, some questions remain, and we will certainly ask them.

And now I would like to ask President Tokayev to come over here and share with us his perspective on the processes taking place in his country, in our country, and in relations between our countries and in the world.

Thank you.

President of Kazakhstan Kassym-Jomart Tokayev: President Putin,

forum participants,

I congratulate everyone on a significant event – the 25th St Petersburg International Economic Forum. I thank President Putin for the invitation and for the warm and cordial welcome in the cultural capital of Russia.

Over the past quarter of a century, the St Petersburg Forum has deservedly gained respect as a prestigious expert platform and occupies a worthy place among other world discussion platforms.

Today, we are meeting in rather extraordinary circumstances – I am referring to the elevated political and economic turbulence. The global upheavals caused by the pandemic and the rising geopolitical tensions have led to a new reality. Globalisation has given way to an era of regionalisation, with all its inherent advantages and disadvantages. Be that as it may, the process of reformatting traditional economic models and trade routes is accelerating.

The world is changing rapidly – unfortunately, in most cases it is not for the better. Inflation in many countries is breaking ten-year records, global economic growth is slowing down, and competition for investment and resources is intensifying.

There are constraining factors for economic growth such as climate change, growing migration flows, and faster technological change. We certainly pay attention to these processes.

Speaking about the new reality, it is important to bear in mind the rapidly changing structure of the international order – even the seemingly stable East-West, North-South vectors of interaction are shifting. It is important for the countries in our region not only to find the right answers to all these challenges, but also to try to make the most of them. Therefore, we have to consistently reach our full potential for cooperation within the Eurasian Economic Union. The project to link Eurasian integration with China’s One Belt, One Road initiative is relevant here.

As you know, Kazakhstan is now implementing large-scale political and economic reforms. Their goal is to reset public administration and build a fair, new Kazakhstan. We are working to ensure that there is a correlation between economic growth and rising living standards for our people. We want to achieve sustainable development of trade and economic ties, open new production lines, support the growth of human capital, and make investments.

As part of our large-scale effort to modernise the country, we are drafting new rules of the game in the economy without glaring monopolies and rampant corruption. Our priority is to support businesses and improve the business climate with a view to providing the utmost protection for the rights of investors, and promoting stability and predictability. We will continue meeting all of our commitments to our traditional partners. Kazakhstan will continue building an inclusive, fair society without social inequality.

I believe that to ensure sustainable development of all countries of the region, it is necessary to determine new horizons of cooperation and create new growth points in our economies. Along with this, we must always remember the very important task of ensuring international and regional security.

In this context, I would like to draw your attention to the following points.

The first task, as I have already mentioned, is to strengthen the capacity of the Eurasian Economic Union. This task remains relevant for us. The aggregate size of the economies of its members exceeds $2 trillion. This is an enormous market with free movement of goods, capital, services and workforce. At any rate, this is what it should be.

Despite the pandemic and geopolitical upheavals, cooperation in the EAEU continues to grow stronger. Last year, its trade reached a record $73 billion, which is a third higher than last year.

Russia has been and remains Kazakhstan’s key economic partner in the EAEU. Last year, our trade went up by almost a third to exceed $24 billion. These are record figures for us. The dynamics remains positive this year as well. Our trade increased by over 12 percent in the first quarter of 2022.

I believe that, considering the new reality, it would be appropriate and useful to develop an innovative trade strategy within the Eurasian Economic Union. Instead of imposing counter-sanctions, which, frankly, are unlikely to be productive, a more proactive and flexible trade policy should be pursued covering the Asian and the Middle Eastern markets. Kazakhstan could be instrumental in its role of a buffer market.

Overall, the ultimate success of Eurasian integration largely, if not massively, depends on our effective common trade strategy. Kazakhstan and Russia can break new ground in industrial cooperation.

We have a special plan, a programme for industrial cooperation in the new circumstances. Investors from Russia will be provided with industrial sites complete with infrastructure, and a favourable investment climate will be created for them. As a matter of fact, this is already being done.

The full unlocking of our countries’ agricultural potential is particularly important in these circumstances. According to the FAO [the Food and Agriculture Organisation of the United Nations], Russia and Kazakhstan are global leaders in terms of available agricultural land. This fact is of particular importance in light of declining global food security. According to the UN, the number of malnourished people will go from 270 million to 323 million this year.

Providing people with high-quality and safe food remains a priority and a factor in maintaining internal stability.

To create a reliable food system, it is important to implement innovative solutions and advanced technologies, as well as to cut food losses.

Approaches to ensuring food security should be developed at the national level and within regional associations, including the EAEU with account taken of the interests of all state participants. Achieving declared goals in this extremely important area is unlikely without coordinated work.

In other words, fighting skyrocketing inflation and food shortages is our common challenge, which will remain a priority in the foreseeable future, because it directly concerns the well-being of our people. Our countries’ potential makes it possible to consistently and fully supply our markets with the necessary foods, as the President of Russia convincingly demonstrated today.

Secondly, I believe that it is essential that we continue expanding trade and economic cooperation with third countries. Kazakhstan is proactively involved in integration processes, and has always stood for mutually beneficial cooperation with other international organisations.

As far as I know, there has been much interest on the sidelines of the St Petersburg International Economic Forum in Russia’s initiative to build a Greater Eurasian Partnership. This concept consists of offering regional organisations a platform for creating a common space of equal cooperation. It is for this reason that Kazakhstan continues to have a positive outlook on the effort to build the Greater Eurasian Partnership.

This year, Kazakhstan chairs the Commonwealth of Independent States. Over the years, this structure has built up a positive track record despite all the geopolitical challenges, which proves that multilateral dialogue tools are effective.

I believe that the CIS is perfectly suited for serving as a foundation for this megaproject. I am referring to Greater Eurasia, or the Greater Eurasian Partnership. It can encompass the SCO, ASEAN, and the Eurasian Economic Union as its integral elements.

Over the next decade, China, India, as well as countries in the Middle East, South and Southeast Asia, which have traditionally been friendly to us, can become major investors in the economies of our region.

China has already emerged as Kazakhstan’s main economic and foreign trade partner. This country invested in our economy more than $22 billion over the past 15 years. For this reason, strengthening our multilateral cooperation with China is a very important goal for our country.

Of course, the economy matters today just as much as political considerations. I believe that we have to promote business-to-business ties and build new transport and logistics corridors. Today, we treat these matters as our top priorities when meeting with people from Russia and other interested nations.

There is a lot of potential for combining our efforts to develop a pool of breakthrough innovation and technology projects, as well as uninterrupted transportation and logistics chains. At the end of the day, this will create new economic growth opportunities for our countries.

Thirdly, Kazakhstan maintains its unwavering commitment to international efforts to combat climate change. We will be consistent in our efforts to promote green investment and carry out corresponding projects. Environmental problems are global in nature, affecting almost all countries without exception, including Kazakhstan.

Last year, our farmers had serious problems due to a draught that was triggered by low rainfall and low water level in rivers. The cross-border Ural River is in critical condition. We call it Zhayyq on our territory.

I believe we should tackle such problems together when faced with such long-term challenges to the sustainable development of our states. I think we should give serious thought to the prospects of introducing the principles of closed-loop or circular economy. We are working to reduce the GDP’s energy-output ratio, expand the renewable energy sector and reduce transit losses in this area.

The similarity of our economies, industrial infrastructure ties between our two countries and geography as such are prompting us to pool efforts in this strategically important area as well. I hope that together we will manage to draft effective approaches and specific measures for tangible progress in this field.

Fourthly. High quality human resources and constructive inter-cultural dialogue are a reliable source of economic growth. As part of the UN-proclaimed International Decade for the Rapprochement of Cultures, we will continue our policy of preserving the cultural diversity of our country and promoting international dialogue between civilisations.

In September our capital will host yet another congress of world and traditional religions. We welcome the participation of religious figures from Russia in this forum. Practically all of them confirmed their participation.

Kazakhstan is actively reformatting the system of its higher education with the participation of leading foreign universities, including Russian ones. The deepening of international academic ties has special significance for promoting the traditions of bilateral cooperation.

I am convinced that the successful implementation of a number of joint educational and cultural initiatives will allow us to make a tangible contribution to the steady economic advance of our country.

Participants of the forum,

Kazakhstan proceeds from its firm conviction that Eurasia is our common home and that all countries on our continent should closely cooperate in the community. We are confident that the building of a peaceful, stable and economically strong Eurasia will become a major factor of sustainable development and inclusive growth on a global scale.

I am convinced that this prestigious discussion venue that unites top class experts has great potential in searching for constructive ideas aimed at normalising the international situation and recovering the positive dynamics of the world economy.

Thank you for your attention.

Margarita Simonyan: Thank you very much, President Tokayev.

Eurasia is indeed our common home. We all want this home to be safe and prosperous through God’s help and our mutual efforts.

And now we will turn to Africa. We have a video address from President of Egypt Abdel Fattah el-Sisi. Can we have it on the screens, please? Thank you.

President of Egypt Abdel Fattah el-Sisi: In the Name of Allah, the Most Beneficent, the Most Merciful,

President of the Russian Federation Vladimir Putin,

Ladies and gentlemen,

At the outset, allow me to extend to His Excellency, President Vladimir Putin, my sincere congratulations on the silver jubilee of the St Petersburg International Economic Forum. Since 1997, when it has been held for the first time, the forum has become a leading platform for the business community and a remarkable economic event that seeks to discuss the key economic issues facing emerging markets and the world.

Ladies and gentlemen,

The Arab Republic of Egypt, as a guest country, will be part of this year’s session of the forum, which marks the 25th anniversary of its launch, thus confirming the distinguished level that Egyptian-Russian economic relations have reached over the recent years.

This year’s forum is being held amid unprecedented political and economic challenges of a strategic nature. We hope that the outcomes of the forum will contribute to finding effective solutions to these challenges in a way that mitigates the impact of the global economic crisis and its negative repercussions on many countries in the world, especially the economies of emerging countries, takes the concerns and interests of all parties into account, and achieves the security and tranquility of peoples.

This would be achieved through long-term political understandings that open the way for the growth of the global economy, especially in the wake of the severe coronavirus pandemic, which has cost our societies many victims and considerable money and resources, thus making us keen to avoid any slowdown in the global economy.

Ladies and gentlemen,

Let me use this opportunity to reiterate that the Arab Republic of Egypt values its firm, historic friendship relations with the Russian Federation, and values the tangible progress the two countries’ relations have been witnessing over the past years in a multitude of vital sectors, for the two countries’ economies and the prosperity of the two peoples.

The Arab Republic of Egypt and the Russian Federation have been engaged over the past years in the implementation of mega and ambitious projects that serve our countries and respond to the aspirations of our peoples to realise more economic progress.

The most prominent of these are: the project for the establishment of the Dabaa nuclear power plant, which comes within the context of the Egyptian State’s strategy to expand national projects for the use of new and renewable sources of energy.

Another project is the establishment of the Russian Industrial Zone in the Economic Zone of the Suez Canal, which is meant to become an important platform for industry in Africa.

This is in addition to cooperation between the two countries to upgrade the Egyptian railway network and other joint ventures that realise the benefit of the two peoples.

Ladies and gentlemen,

You must be aware that the exceptional events that have been taking place in the Arab Republic of Egypt over the past decade had their immense impact on the overall economic situation in the country. The Egyptian people stood up to surmount this crisis by supporting a clear vision, based on investing in the Egyptian citizen and developing his capabilities.

Therefore, Egypt Vision 2030 was launched to reflect the state’s long-term strategic plan to achieve the principles and goals of sustainable development, with its economic, social and environmental dimensions.

Based on this vision, the Government of Egypt has modernised its legislative structure to enable Egypt to attract more foreign investment. This qualified Egypt to become the top destination for attracting foreign investments in Africa and one of the few countries in the world capable of achieving a growth rate of up to 3.3 percent in 2021, despite the negative challenges posed by the spread of COVID-19 and their impact on the global economy. We expect the Egyptian economy to grow by 5.5% during the current fiscal year. The country’s non-petroleum exports also increased during 2021 to reach $32 billion.

Egypt has also succeeded, within the framework of its strategy to increase its capabilities, to implement mega agricultural projects that are aimed at increasing agricultural land by almost 2 million feddans.

This is in addition to the mega projects Egypt is implementing in the fields of transport, by expanding thousands of kilometers of roads and upgrading Egypt’s transport system by introducing new projects. Those include the high-speed rail that will constitute a means to link the Red Sea and the Mediterranean Sea, thus boosting and facilitating international trade.

Adding to this are the mega industrial projects and the numerous projects in the field of clean energy production, which have been established in Egypt at a rapid pace over the past period.

Despite the previously-mentioned national efforts, Egypt’s actions and efforts to achieve progress were hit recently by economic crises caused by the COVID-19 pandemic. The world was partially recovering from its effects and repercussions, when it was hit again by a great economic crisis that cast a shadow over growth rates and negatively affected states’ budgets, reflecting on the rise of fuel prices and the decline in the value of the national currencies in the face of hard currencies. This is in addition to the disruption in supply chains, the emergence of the food crisis, as well as the irregular movement of civil aviation. This sector is connected with vital fields of the Egyptian economy, primarily tourism and insurance.

Addressing this crisis, which has an international character, requires international efforts and collaboration among all parties in order to get matters back to their normal state, particularly the movement of maritime traffic and the regularity of supply chains, particularly foodstuff, such as grain and vegetable oil.

This also requires working toward restoring calm and stability at the international level, in order to mitigate the impact of this economic crisis on the peoples, who seek peace and development.

I also call on all companies participating in this forum and others to take advantage of this huge opportunity that is provided by investing in Egypt in all fields.

I would not miss, before concluding my speech, thanking the people of Saint Petersburg, this brave city throughout history, which at the same time represents an icon for culture and openness on the outside world.

Finally, I would like, once again, to thank His Excellency, President Vladimir Putin, for his kind invitation for Egypt to participate in this forum as a guest of this round, wishing the forum and the participants all success and blessings and wishing our friendly countries more constructive cooperation, prosperity and progress. We pray God Almighty to spread peace and stability across the world and to spare our peoples the scourge of war and its economic and social impact by giving priority to the language of dialogue, understanding and co-existence.

Thank you.

Margarita Simonyan: We are grateful to the President of Egypt. I think that the people of the host city should be especially pleased to hear his warm words about St Petersburg.

We have just a little time left before the discussion begins. They say anticipation increases desire.

We will now listen to an address by President of the People’s Republic of China Xi Jinping.

President of the People’s Republic of China Xi Jinping (retranslated): President Putin, ladies and gentlemen, friends,

I am delighted to have this opportunity to address the plenary session of the 25th St Petersburg International Economic Forum, which I attended in person three years ago.

In February this year, President Putin visited China and attended the opening ceremony of the Winter Olympic Games in Beijing. We had a detailed exchange of views, following which we reached a vital agreement on expanding our comprehensive practical cooperation and implementing the concept of global governance based on joint consultations, joint participation and joint use.

Cooperation between China and Russia is currently ascending in all spheres. Our bilateral trade reached $65.8 billion over the first five months of this year. We can expect to attain new records by year-end. This is evidence of the high resilience and ingenious potential of Chinese-Russian cooperation.

The world is entering a new period of turbulence and transformation amid the ongoing radical changes and the coronavirus pandemic. There is an obvious trend of anti-globalism, a growing divide between the South and the North, and a weakening of cooperation drivers in the area of development, which could plunge the erratically reviving global economy into a deep recession and create unprecedented challenges to the implementation of the UN 2030 Agenda for Sustainable Development.

According to ancient Chinese words of wisdom, a clever man sees a seed of crisis in every opportunity and an opportunity in every crisis. Danger and opportunity always go together. By overcoming danger, you get opportunity. Strength lies in confidence. The more there are difficulties, the more important it is to remain confident.

During last year’s session of the UN General Assembly, I proposed a Global Development Initiative, which was positively received and supported by a number of international organisations, including the UN, and about a hundred countries.

Today, at a time when the international community is ever more interested in achieving more equitable, sustainable and secure development, we should seize opportunities, meet challenges head-on, and work on the implementation of the Global Development Initiative to build a shared future of peace and prosperity.

First, we need to create conditions for development. It is important that we follow true multilateralism, respect and support all countries’ pursuit of development paths suited to their national conditions, build an open world economy, and increase the representation and voice of emerging markets and developing countries in global economic governance with a view to making global development more balanced, coordinated and inclusive.

Second, we need to strengthen development partnerships. It is important that we enhance North-South and South-South cooperation, pool cooperation resources, platforms and networks of development partnerships, and scale up development assistance in order to forge greater synergy for development and close the development gap.

Third, we need to advance economic globalization. It is important that we enhance the coordination of development policies and international rules and standards, reject attempts at separation, supply disruption, unilateral sanctions and maximum pressure, remove trade barriers, keep global industrial and supply chains stable, tackle the worsening food and energy crises, and revive the world economy.

Fourth, we need to pursue innovation-driven development. It is important that we unlock the potential of innovation-driven growth, improve the rules and institutional environment for innovation, break down barriers to the flow of innovation factors, deepen exchanges and cooperation on innovation, facilitate deeper integration of science and technology into the economy, and make sure the fruits of innovation are shared by all.

Ladies and gentlemen, friends,

The fundamentals of the Chinese economy are its strong resilience, enormous potential and long-term sustainability, which remain unchanged. We have full confidence in China’s economic development. China will continue to promote high-quality development, promote openness with firm resolve, and pursue high-quality Belt and Road cooperation.

China stands ready to work with Russia and all other countries to explore development prospects, share growth opportunities, and make new contributions to deepening global development cooperation and building a community with a shared future for mankind.

Thank you.

Margarita Simonyan: Thank you, Mr President.

Coming to learn Chinese wisdom and some of Chinese sagacity is always a good thing, especially now that Chinese wisdom might come in useful for the entire world.

Mr President, I would like to show you something that I have brought with me especially. It is juice, and it used to be so nicely coloured. It does not matter what sort of juice it is; you cannot even see the brand here, although it is a popular one. And now – do you see? A small picture and the rest is white. Why is that? And this is happening on a massive scale.

Because we ran out of paint. The producer of paint for such packaging has left Russia, and the producer of the packaging also announced that they are leaving. I bought this two weeks ago, and soon this will disappear. As a result, we will have to pour it into bottles or three-litre glass jars, like it was in my childhood, unless we discover that we do not produce bottles either.

There are conflicting opinions on this. You have touched upon this issue today. Some of the participants – a considerable part, maybe even the majority – came here by Sapsan trains. Some say “We will swap Sapsans for Chinese trains, they are even better,” since Siemens has gone. Others say “We will learn to make them ourselves.” Let me remind you that we launched our own high-speed trains in 1984, I think they were called ER200. I was four years old, did not go to school yet, but we already had high-speed trains – but we do not have them any longer. It is sad, isn’t it?

And there are also people who say that no, we cannot replace all that, we can use Sapsan trains for another couple of years and then we will just give up high-speed railways, which means we will step back from what we got used to. And it is like this with everything: telephones, computers, everything we got used to. This is a very sad, I would even say heartbreaking plan.

Maybe there is a different plan?

Vladimir Putin: Whenever any decisions are taken, the key issues must be to singled out. What is key for us? Being independent, sovereign and ensuring future-oriented development both now and for the future generations? Or having packaging today?

Unless we have sovereignty, we will soon have to buy everything and will only produce oil, gas, hemp fibre, saddles and sell rough logs abroad.

It is inevitable. I have already said so in my speech: only sovereign countries can expect to have a sovereign future. That does not mean, however, that we need to plunge back into a situation of 30, 40 or 50 years ago.

Regarding packaging. I do not think it is such a complicated thing that either our partners from other countries can replace, who will be pleased to occupy this market sooner or later, or we will be able to make ourselves.

Margarita Simonyan: You do not see it, but President Tokayev is nodding his head: they will probably be able to replace it.

Kassym-Jomart Tokayev: Absolutely, this is not a problem.

Vladimir Putin: Of course, we will able to replace it.

The question is about a totally different matter. We keep talking about import substitution. In my speech here I also said – and I will just add a couple of words so as not to take too much time while answering only one question.

The issue is not about import substitution, the issue is to establish our own capabilities based on progress in education, science and new promising schools of engineering. We will always be given packaging materials and other simple things, event telephones and smartphones. What we have never been given and never will be is critically important technologies. We have never been given them before even though we had problem-free relations with our Western partners in the previous decades. This is the problem.

And when we begin to stand up for our rights, we are immediately slapped with some sanctions and restrictions; this is what the problem is all about. Therefore, we must commit ourselves to that and have the capacity to reproduce critically important technologies on the basis of what I mentioned. And with that base we will always be able to manufacture the goods you mentioned: packaging materials, telephones and smartphones. If we realise that and keep focusing on solving fundamental issues, we will resolve everything else without a problem.

Let me reiterate: others are already coming to that place – those who produce the packaging materials, those who produce the paints. We are also starting to produce paints and other consumer goods as well as goods employed in industry in a broader sense. We can make anything – I have absolutely no doubt about that.

Obviously, some things will be lost, other things will be made on a new basis, much more advanced – the way it happened earlier. Therefore, when we talk about import substitution, we will substitute something while other things will have to be done on a totally new promising basis of our own making.

Margarita Simonyan: Thank you. President Tokayev, would you like to add anything?

Kassym-Jomart Tokayev: I think everything is clear here, and judging by President Putin’s extremely interesting speech, we can understand that he is thinking in the categories of historical perspective, so to say.

Margarita Simonyan: As always.

Kassym-Jomart Tokayev: And juice packaging has no place here.

Indeed, it is a small problem, nature abhors a vacuum: others will come who will be producing juice packaging that is just as good, and local producers will appear.

The issue is about something else. In particular, I said in my speech about the importance of Eurasian cooperation, about the importance of uniting efforts to resolve unexpected problems. I think we will arrive at the result we are seeking on this road.

To be continued.

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