For the past two weeks stores members of First Union (formerly NDU) at Bluebird Foods have been running raffles on the worksite. They wanted to do something to show solidarity with wharfies fighting for their jobs. The union members raised $1120 and delegate Wayne Harrold handed over the money to the wharfies on the picket line today. It was the first day of the strike called for the next three weeks.

On the picket line a big bunch of wharfies  crowded around and started shaking our hands. One striker said, “People think we don’t need the money but we’ve got to run the picket, run the campaign, and keep up our international contacts, and it all costs money”.

A old Sikh man in his 70s or 80s came up to the picket and started talking to the wharfies.  At first they thought he was lost as he spoke little English. But he said, “no, this is where I want to be. I want to say I’m here to support you. The union is where the strength is.” He stayed on at the picket talking to the guys.

Workers said any inefficiencies on the wharf are due to the management. We don’t need the managers, we could run this port far more efficiently and all the wharfies could be fully employed, they said.

The strikers are quietly confident and told us “we are going to win this”.

*Mark Muller is an organiser with First Union

Further Redline articles on the dispute:
Why wharfies are striking – in their own words
Public support for wharfies
Ports of Auckland: what should the left be doing?
Wharf boss suddenly for women’s lib?
Ports dispute an issue for all workers
Thanks to the wharfies

So there we have it.  Greece’s technocrat-led government finally got the Euro leaders to agree to a second bailout package to fund the government through to end-2014.    Greek capitalism is now in a straitjacket strapped on by the Euro leaders and guarded by the dreaded Troika (the EU Commission, the IMF and the ECB).  Troika officials will move into offices in Athens and check every euro coming in and out of the government to see that the targets for public spending, taxation and privatisation are kept to.  In addition, all the funds guaranteed by the Eurozone governments and raised through the emergency funding body, the EFSF, will be placed in an escrow account run by the Troika and will be doled out as and when creditors must be paid.  The Greeks will not control this account and must wait for handouts from the Troika.  It is as though a private company had gone bust and called in the administrators who now run the company, hiring and firing.  Greek capitalism is on its knees and bowed.

This straitjacket will be in place at least until 2014, but probably until the end of the decade.  As most private sector holders of Greek bonds are participating in the so-called bond swap (PSI) at a loss of 53% on the face value of the bonds they hold, around 85% of the remaining outstanding debt of the Greek government, at around E280bn, will be held by the IMF, the ECB and the EFSF, as well as by Greek state pension funds and its banks.  So most of the bailout package money will be used to pay back these loans!  What a roundtrip farce!

The reason it is happening is that the Greek government can no longer raise funds in the private bond markets except at ludicrously high interest rates.  At least, the official creditors will charge a much lower rate and won’t ask for any money back for three years.  So instead of paying 25% on bonds to the private market, Greece will pay about 3.5% a year.  But this means nearly all the funding is going to pay bond holders and very little is going to help the Greek economy recover from its deep slump, now in its fifth year.  On the contrary, the bailout package has only been delivered under the most draconian conditions.

On top of the already imposed cuts in public spending, the government was forced to agree to an extra budget for 2012, cutting spending by another 1.5% of GDP through reductions in public investment projects and defence as well as yet further cuts in pensions.  Public sector wage reductions are being brought forward, while the monthly minimum wage is to be slashed by 22% (and 32% for young people under 25 years!).  Up to 15,000 state workers will be put in ‘labour reserve’ for a year reducing their incomes to 60% and then sacked.  The aim is to cut the state workforce by 150,000 by 2015.  The government has now to run a significant surplus on its annual budgets (an excess of taxes over spending excluding interest payments) for the foreseeable future.

The problem is that these measures of fiscal austerity increase the difficulty of the economy recovering from its depression.  The IMF has still to sign up to the deal (it meets next week), but in its published debt sustainability analysis, it reckons that after the PSI, the public sector debt would still be around 168% of GDP in 2013 because of the falling GDP.  The idea is that annual primary surpluses will drive that figure down towards 120% of GDP by 2020.  But it does not take much to miss that target.  If the government does not sell enough state assets (it is planned to sell off E46bn by 2020), or if economic growth does not recover as quickly as expected, or if interest rates across Europe start to rise over the next few years, then the debt ratio could spiral upwards and not get much below 160% in 2020, which is where Greece is now.

The bailout plan assumes that the Greek people will stick to what their technocrat government has agreed and start selling off huge chunks of their country’s wealth, while at the same time imposing enormous budget cuts.   We shall see if that is the case in the upcoming elections, mooted for early April.  Current opinion polls show that the conservative New Democracy is polling just 19%, while the social democrat PASOK party is polling 11%.  Both these parties are pledged to honouring the bailout.  The opposition left parties are not and they are polling over 40% together (but they are split and bickering).

The Euro leaders know this.   They’re buying time with markets to avoid catastrophic capital flight from Greece and give them more time to work out how to shore up the likes of Portugal if and when that happens.  We shall know if they have succeeded in hoodwinking the Greek people and the markets within a month or so.

This article first appeared on Michael’s site here.

The urgent need for wider workers’ support for the Auckland wharfies has led to the Council of Trade Unions (CTU) launching a major campaign aimed at saving 320 Auckland union wharfies’ jobs.

The campaign, called Save Our Port, is fronted by the Maritime Union (MUNZ), with Council of Trade Union’s president Helen Kelly playing a central role and financial support from the CTU and affiliate unions.

Save Our Port was launched at the end of January following months of failed negotiations  over the watersiders’ collective employment contract. Ports of Auckland first demanded concessions, then made it clear they wanted a complete union clean out. They are now progressing plans to contract out the work.

Save Our Port operates a two-pronged strategy in support of the ongoing MUNZ strike action. 

One part is arousal of public sympathy for the workers. The union campaign began with a letter drop to 360,000 households in the Auckland area. Workers and supporters have also operated information stalls at community events, as well as distributing thousands of postcards to rush hour commuters.

The second element of the union campaign seeks to exploit differences among Auckland employers. Mainfreight, corporate consultancy firm Grant Samuel, the CTU and the central Auckland business association Heart of the City formed a coalition calling for Auckland Council to get rid of its focus on maximising profit from the council-owned port and draw up a new management charter. The council’s elected representatives want the port to lift its return on investment from 6 percent to 10-12 per cent over the next three to five years. On Friday (17 February) the CTU sent out a letter inviting interested parties to a meeting on March 6 to discuss policy changes for the port. Kelly said the Westhaven Marina Users Association and the Auckland Architects Association had confirmed they will attend.

In a way, this campaign is a step up from previous CTU efforts.  It is difficult to imagine past president  Ross Wilson leading such a vigorous counter attack. It is quite impossible to  imagine Wilson’s predecessor, Ken Douglas, in such a role. Wilson was a hardworking  ACC advocate in the wrong position, Douglas crowned his career by neutering the CTU’s active regional structures and helping usher in the Employment Contracts Act. Helen Kelly has kept up the CTU tradition of misleading workers down Labour’s blind alley, but her current campaign is a genuine battle to defend wharfies’ jobs.

In some ways Save Our Port is the best shot the CTU has fired for years, possibly since its formation.

That is not saying much, as can be seen by a glance at the CTU’s undistinguished record. Its central strategy has been to lobby Labour MPs instead of organising working class campaigns. The result of this strategy has been a steady decline of union numbers, and a deep decline of union relevance as a real force in society.

At the moment the CTU is using contradictions in the enemy camp and appealing to the public because they have next to no back-up troops to support the wharfies. This is partly a problem of the CTU’s own making. Industrial muscle has atrophied through lack of use. Union office acceptance of anti-strike laws has silent-smothered a whole generation’s sense of class solidarity.

The present weakness of the union movement is not just down to bad leadership. This weakness is also, and I think mostly, a result of various capitalist attacks under Labour- and National-led governments. It’s  also about the inherent weakness of trade unionism itself.

There is a persistent unfortunate tradition in the New Zealand left to view almost any union action as some sort of step towards a socialist future.

The socialist view of industrial struggles was summed up by Marx in the Communist Manifesto:  ”Now and then the workers are victorious, but only for a time. The real fruit of their battles lies, not in the immediate result, but in the ever expanding union of the workers.”

Romantic notions aside, trade unionism doesn’t really give a shit about ever-expanding union of the workers. Trade unionism just wants to get the dispute resolved, with the preservation of the government-registered union as the bottom line. Trade unionism is not only pragmatic and flexible on principles. It describes itself as a “movement”, but is in reality a collection of snarling little fiefdoms, competing for members and suspicious of one another to a high degree. Running counter to this is a current of  spontaneous worker solidarity which ebbs and flows, seemingly without apparent logical cause. At the moment the tide is still a fair way out. Solidarity strikes are something to read about in history books rather than an urgent present day workers’ option.

I do hope the wharfies win this one, by whatever means. A defeat would be a massive setback for NZ organised labour and I think Kelly is very conscious of that. If the wharfies do manage something like a win, though, I wonder how much “real fruit” it will yield outside of the Auckland waterfront.

Further Redline articles on the dispute:
Why wharfies are striking – in their own words
Public support for wharfies
Ports of Auckland: what should the left be doing?
Wharf boss suddenly for women’s lib?
Ports dispute an issue for all workers
Thanks to the wharfies

This is a small but significant victory.  The Israeli authorities can usually be relied on to be adopt a thoroughly inhumane and put-the-boot-in approach, with little of the subtlety one finds among most sophisticated imperialists.  In this case, however, the Israelis may well have feared a Palestinian backlash if Khader Adnan had have died.

His wife, Randa Musa, noted, “The occupation has decided, under pressure, to free my husband in April, but hundreds more will continue to languish in putrid cells under the same illegal, inhuman scheme. Khadar has, however, delivered his message: that this long night of tyranny and inhumanity will come to an end.”

As an article in the New York Times noted, an important factor was also that the agreement to release Adnan “forestalled an emergency hearing at the High Court of Justice that could have set off a broader review of Israeli military courts’ practice of administrative detention, which has been used against thousands of Palestinians. . .”  The Adnan case, however, has shone a bright light on this issue.

Further reading:
Solidarity with Palestinian hunger striker Khader Adnan
Article in The Guardian by Randa Musa

by Phil Duncan

Over the past two years there have been 15 general strikes in Greece.  Workers, students and layers of middle class people have been in rebellion against harsh austerity measures which the ‘Troika’ of European Commission (EC), International Monetary Fund (IMF) and European Central Bank (ECB) bureaucrats are trying to impose on the mass of the population.

The global finance and banking sector part meltdown over the past few years has exposed the weakness of the Greek economy, until now classified as a First World and high-income economy (depending on which measures are used Greece has the 32^nd or 37^th biggest economy in the world and, until the crisis hit, around the 30^th highest per capita income of any country in the world.  Even as recently as last year it ranked number 22 in the world on the Economist’s global quality-of-life index.

Greece is a classic case of the appearance of economic growth disguising a reality of a highly problematic capitalist economy.  For instance, the Greek economy looked to be doing well for a long time – it grew every year from 1993-2008.  But the growth was in no small part fueled by borrowing and credit rather than any real dynamism.  The global financial and banking sector woes brought this weakness to the fore as the cost of borrowing rose significantly.  At the same time, Ireland and Portugal were going into crisis.  If only Greece had’ve been experiencing severe problems, the EU power-brokers, in particular France and Germany’s leaders, might have decided it was in the overall interests of capitalist stability across the continent to bail out Greece without imposing harsh conditions.  However, the wider economic malaise ruled this out.  The Greek economy went into rapid freefall.

At present, the Greek debt is about €330 billion; this is about 160% of GDP.

Massive cuts to government spending, resulting in layoffs and wage and pension reductions, are being imposed.  On February 9, for instance, the coalition government agreed to the latest demand of The Troika to sack 150,000 state employees, cut the minimum wage by over 20%, bring in more ‘flexible’ labour laws, carry out several proivatisations and make a further €3.3 billion in cuts.  Previous austerity already means there are 1.5 million people in the country with no income.

Unemployment had reached 21% by November 2011, with youth unemployment at 48%.

The workforce in Greece was already working the second highest number of hours a year in the OECD.  Workers in Greece also worked more hours than any workers in Europe.  Now they face mass lay-offs, cuts to wages, benefits and pensions.  Homelessness is growing as more and more people are unable to pay rent or meet mortgage payments.

One thing is sure – the Greek masses, who have a long history of struggle against dictatorship and exploitation, are putting up serious resistance.  What seems to be lacking, however, is an authoritative revolutionary political movement that can channel their struggles into a struggle for power, for the overthrow of the system and the creation of a new one based on meeting human need rather than the profits of bankers, industrialists and other capitalists.

PART TWO: Update

by Michael Roberts, February 15, 2012

Today, New Democracy leader Antonis Samaras finally buckled down to the demands of the Eurozone finance ministers and the Troika to pledge in writing that he would back the fiscal austerity measures and the other conditions of the EU-IMF bailout package.  Samaras said he was “committed” to the“objectives and key policies” of the country’s new loan deal with its foreign creditors, adding that “if New Democracy wins the next election in Greece, we will remain committed to the program’s objectives, targets and key policies”.

Samaras, when voting for the package in the Greek parliament on Sunday had hinted that he wanted to renegotiate the terms of the bailout if he formed a government after an election mooted for April.   That was too much for the Euro finance ministers and they called off the euro meeting planned for today to approve the deal.  The Euro ministers demanded that Samaras make a written pledge on the deal, that the current bankers government under Lucas Papademos identify exactly where some $320m in cuts would be made to meet the Troika’s fiscal target and to show that the proposed ‘voluntary’ public sector debt default was in place.  There was a shortfall because Samaras opposed cuts in supplementary (occupational) pensions demanded by the Troika.  Now it appears that the government cannot find enough cuts from defence, health and elsewhere and so it is reverting to the pension cuts after all!

Of course, Samaras was not holding out because he wanted to protect the interests and living standards of the Greek people.  Remember he had already expelled 20 of his MPs on Sunday for opposing the bailout agreement.  He wanted to appear to the electorate before the election as defending their interests.  But in reality, his plan to adjust the bailout package is designed to protect the interests of the Greek capitalist class.  His proposed changes to the fiscal austerity package are to be ‘fiscally neutral’ ie they still deliver the same amount of austerity that the Troika wants.  But Samaras wants to cut taxes for corporations and introduce a flat tax on personal incomes (again delivering lower taxation on the rich), while cutting public spending even more and introducing even greater measures of privatisation of state assets than the Troika proposes.

However, even the capitulation by Samaras is not enough for the Euro leaders.  They are worried that Samaras might backtrack on his pledge or that an April election will produce an unviable coalition at best, or, at worst, elect a leftist coalition government that opposes the bailout package and the Troika.  So the Germans, Finns and Dutch are proposing that the package be delayed in part or in full until the election is over.

By refusing to provide funds to pay off the bond holders, the Euro leaders hope to pressure the Greek people into voting for the parties that support the deal or face calamity in the form of expulsion from the Eurozone and the EU.  Remember that over two-thirds of Greeks asked want to stay in the euro and yet nearly 80% oppose the package.  The proposed delay by the Euro leaders is trying to break the will of the Greek people.

Now it may be that the French, Italians and Spanish, who also have debt problems, will not back this idea.  After all, on 20 March the Greek government is supposed to pay back around €16bn to bondholders.  It does not have the money, unless the EU leaders cough up the funds and/or the private sector haircut on the debt is implemented.  And that is before the election takes place.  Most likely, the EU leaders will find the funds for that payment, but then hold back on any more until the Greeks capitulate.

There is another problem with funds too.  If the voluntary ‘haircut’ deal to reduce Greek government debt goes ahead, then €35bn must be found to sweeten the deal for the bondholders and another €58bn must be found to recapitalise the Greek banks or they will go bust and have to be nationalised.

Is there any way out of this?  One of the leftist parties opposed to the Troika is the Coalition of the Radical Left (SYRIZA).  It has called for a renegotiation of the Greek government debt to exclude any losses for the state pension fund that the Troika plans to include in the deal; an end to interest payments on any outstanding debt (costing €17bn a year) and a switch of resources from bailing out the banks to investing in public sector projects for investment and employment.

Such an approach, moderate as it is (there is no call to leave the euro), is anathema to New Democracy, the Troika and the Euro leaders.  But SYRIZA leads the public opinion polls on such a programme.  The decisive test between the interests of Greek capitalism as represented by New Democracy and the interests of the capitalist European Union (as represented by the Troika) on the one hand, and the interests of the Greek and European people on the other, is coming to a head in just the next few weeks.

PART THREE: A Sysephean Task

by Michael Roberts, February 13

The Greek coalition party leaders carried through their capitulation to the Troika’s demand (see my post, Greek capitulation, 8 February 2012) by passing the terms of the new fiscal austerity package in the Greek parliament.,  The legislation was passed by 199 votes in favour to 74 against, with the party leaders expelling about 20 MPs from each of the two major parties who refused to vote for the deal, while  ignoring the massive street demonstrations outside parliament.  The Troika is now demanding that the party leaders commit themselves to implementing the measures whatever the result of the upcoming parliamentary election that the conservative New Democracy is demanding for early April.

As I explained in my last post (see above), the leftist parties that are opposed to the Troika deal are actually commanding around 40% of the vote in public opinion polls, enough to ensure the defeat of the existing coalition of conservative New Democracy, social democrat PASOK and far right LAOS (which has now quickly left the coalition).  So it is very likely that the Greek people, the majority of which are opposed to the Troika’s measures, will vote out the capitulators.  Remember under the deal, another 15,000 public sector workers are to lose their jobs with a target of 150,000 losses by 2015.  There will be a 20% cut in the minimum wage, the end of job security and union rights, the sacking of all supply teachers in schools and massive cuts in health spending.  Indeed, the Greek economy has already lost 500,00 jobs since 2008 and the share of employment among the working age population is now at it lowest since the overthrow of the military regime in the 1970s.

The shocking feature of this deal is that 90% of all these fiscal austerity measures are going to repay bondholders and not to promote economic growth or investment in jobs in the Greek economy.   Instead. by the end of next year, real GDP in Greece will have fallen by 20%, almost three-quarters of the total decline during the US Great Depression (29%).  The human cost of all this is difficult to comprehend.  This has provoked even the conservative Archbishop of the Greek Orthodox Church to protest.  Archbishop Ieronymos of Athens and All Greece sent a letter to Prime Minister Lucas Papademos saying that “the phenomenon of the homeless and the famished, a reminder of WWII conditions, has taken the dimensions of a nightmare,” adding that “the homeless increase by the thousands everyday, while small and medium-sized enterprises are forced to go out of business. Young people, the country’s best minds, choose to emigrate, while our fathers are unable to live after the dramatic cuts in pensions. Family men, particularly, the poorest, those with many children, wage earners, are in despair due to repeated wage cuts and unbearable new taxes. The unprecedented tolerance of the Greek people is being exhausted, rage pushes fear aside and the risk of social upheaval cannot be ignored anymore by those who are in the position to give orders and those who execute their lethal recipes.”

He went on:  “in these difficult and undoubtedly, crucial times, we should realise that every Greek home is plagued by insecurity, despair and depression, which unfortunately, have caused, and sadly enough, continues to cause the suicides of those unable to bear the ordeal of their families and the pain of their children.”   The Archbishop warned the ruling Greek elite that “it is obvious that the drama our country is experiencing will not end here but it could take up new uncontrollable dimensions.”  The Archbishop then went on to condemn the Troika’s imposition of what is called ‘internal devaluation’ of Greek production costs (see my last post).   “Even tougher, more painful and unfair measures are being demanded within the same ineffective and unsuccessful policy that is being followed. We are forced to have even larger dosages of a medicine that has proven to be deadly. We are being demanded to undertake commitments that do not solve the problem and only temporarily postpone the foretold death of our economy while, at the same time, we surrender our national sovereignty. They use as collateral our country’s wealth and the wealth that we can recover from our land and our seas,”   The Archbishop added“the voices of the desperate, the voices of the Greek people, are being provocatively ignored in decision-making.”

He then outright opposed the deal with the Troika:  “Greece will be able to make it if it will resist the blackmail that comes from abroad and rejects these deadly recipes … the Greece of culture, history and traditions cannot be lost because a few believed that this is possible.”  Such is the opposition of the majority to this capitulation to the Troika that it is no wonder the Greek police union has threatened to issue warrants for the arrest of the EU and IMF Troika officials!  The police unions stated that it “refuses to stand against” fellow Greeks.   And yet the coalition leaders continue with the mantra that THERE IS NO ALTERNATIVE (TINA) , the infamous slogan of the UK’s ‘Iron Lady’, Margaret Thatcher, when her government carried through the rape of British industry in favour of a rentier economy and the bankers in the 1980s.

The irony is that, once the proposed ‘voluntary’ default agreement on Greek government bonds is implemented by getting Europe’s banks and pension funds to agree to a ‘haircut’ of up to 70% in the value of the bonds they hold in return for new Greek bonds and a cash sweetener worth €30bn, Greek government debt will still be around 140% of GDP, more than double where it is supposed to be under Eurozone rules.  And up to 80% of that debt will now be owned by the official creditors (the EU, the ECB, the IMF and the EFSF).  The banks and pension funds will have been paid off (even if they take a small hit) and the Greek banks will be bailed out with public money to the tune of another €30bn.  The remaining problem will now be with the Greek people and Eurozone taxpayers.

In Greek myth, Sisypheus was a king punished by being compelled to roll an immense boulder up a hill, only to watch it roll back down and to repeat this throughout eternity.  This is what the Troika is asking the Greeks to do now.  The policy of austerity being imposed won’t work, as the Archbishop says.  The model that the EU and the IMF are following is that of Latvia.  Latvia is a small Baltic state with a currency that is pegged to the euro.  During the Great Recession, foreign creditors stopped lending to the small country.  Latvia’s leaders, on the advice of the IMF, decided to maintain its currency peg and reduce costs to get ‘competitive’ by ‘internal devaluation’.    As a result of public spending cuts, tax increases and the slashing of wages and employment, Latvia suffered the worst loss of output in the world during the Great Recession, a fall of 24% of GDP.   Unemployment rose from 5% to 20%, as it has now reached in Greece.  Unemployment would have been closer to 30% if some 10% of the labour force had not left Latvia for other parts of Europe looking for work.  Latvia’s small population fell 120,000.

Did the policy of internal devaluation restore Latvia’s fortunes?  No,  employment is still some 15% below its peak in 2007 and three years after the crisis, Latvia’s GDP is still 21% below its peak.  It would have been worse but the Latvian government finally decided to stop further its fiscal austerity measures in 2010 and the economy began to make a small recovery last year.  Despite a drop in unit labour costs of over 21%, net exports (after imports) have still made little contribution to economic growth.   So internal devaluation has achieved nothing.   Of course, this does not mean to say that if the Latvians had adopted a policy of devaluing their currency and expanding  spending, that Latvia’s small capitalist economy would have been in great shape by now.  Latvia is not Argentina, where devaluation and state spending (and outright government debt default) did enable a significant economic recovery after the deep recession and crisis of 2001 (at a time when the rest of the world was not in deep recession too).  It’s quite possible that if Latvia had adopted the Argentine solution, it would have ended up defaulting on its debts and would have needed a bailout from EU and IMF money that may well have not been forthcoming.

The choice for weak and small capitalist economies like Greece or Latvia is fiscal austerity or devaluation (but probably both) or a willingness on the part of the stronger capitalist economies to subsidise the weak.  That is the issue for the Eurozone leaders with Greece. In a way, this is a political issue for European capitalism.  If the strong capitalist states want to ‘unify’ Europe through a federation with fiscal and monetary transfers, they must pay a price in transferring back some of the surplus value they have captured through trade and capital flows out of the weaker states.

Take the UK.  This is a centralised nation state.  But regions like London and South East capture most of the value generated by the workforce.  As a result, London’s tax revenues constitute 45% of its regional GDP compared to public spending of 35%, a surplus of 10% of regional GDP compared to the national figure of a 10% deficit.  The North East of England raises only 29% of its region’s GDP in revenues while public spending reaches 62% of GDP, a deficit of 33%!  Wales, an annexed province of the UK from medieval times raises only 30% of its GDP in taxes but spends 66%.  Northern Ireland, another annexed part of the UK from the 16th century, raises 27% and spends 67%.  Thus the weaker region shave to be subsidised by the nationbal government to balance their books.  The British ruling class and the bulk of British citizens allow these fiscal transfers because they see the UK as a unified country or state that they wish to preserve.  If the political will changed, then maybe some of these ‘deficit’ regions would be ‘let go’ (the Scots are thinking about doing so anyway).

Is there political will on the part of Europe’s ruling class and the citizens of Germany to go on subsidising Greek capitalism while forcing it to accept bitter poison?  Greek capitalism is too weak to get out of this debt crisis on its own either through fiscal austerity and cutting costs internally or by devaluation and export growth.  So either the EU leaders must agree to subsidise economic recovery with more funds or they must cut Greece loose to its own fate.  Up to now, the EU leaders have been reluctant bail Greece out or to cut it loose.  To do the latter would set a precedent for other weak EU states and damage the status of the currency in world markets and the EU on the world political stage.  Remember what EU Commissioner Joaquin Almunia said at the start of the Greek debt crisis back in May 2010:  “Greece will not default.  In the euro area, default does not exist”.  But now a default agreement will be implemented this week.

Whatever the Greek coalition leaders agree to and try to implement, such is the weakness of Greek capitalism, it will not be able to meet its fiscal targets or get its debt down to reasonable levels.  Before the end of the year, the Troika will have to report that Greece is not delivering.  Then the EU leaders will have to decide whether they ‘let Greece go’ or not.  The EU leaders have agreed to more money for Greece  (or more accurately its bondholders and banks) in return for draconian cuts in living standards in order to provide more time to try and ‘ring-fence’ other vulnerable Eurozone states like Portugal and Ireland (where they are preparing extra funding).  So when Greece goes down, it will not affect the rest (or so the EU leaders hope).  Of course, the Greek people may force the issue earlier if they vote in an anti-Troika government in April.

PART FOUR: Greek Capitulation

by Michael Roberts, February 8

As I write, the leaders of the three main parties in the current ‘bankers’ government’ in Greece are preparing to capitulate yet again to the demands of the dreaded ‘troika’ of the IMF, the EU and the ECB to make yet further cuts in the living  standards, public services and jobs of the Greek people in order to receive yet another bailout package.  This is a package designed to make Greece pay debts built up by successive governments owed to the banks of Europe and to restore the competitiveness of Greek capitalism so it can stay in the euro.

The draft of the bailout includes plans to cut the minimum wage by about 20-22%.  This will lower the minimum wage to the level of social benefit. Private sector pensions worth over 1,200 euros a month will be cut by 15-20%.  This time, the bailout package will include private sector involvement (PSI), namely Europe’s banks will accept a ‘haircut’ on the value of the debt they are owed of up to 70% of the value of the Greek government bonds they hold.  This sounds a lot but it will cut Greek government debt by only 20% of GDP, still leaving the debt ratio at around 140% by the end of the decade.  And the banks will receive new Greek government bonds with a maturity of 30 years earning 3.5% a year guaranteed by all the Eurozone governments plus a little cash as a sweetener.  Even this deal is unacceptable to some speculative hedge funds who are holding out for their full pound of flesh, comforted by the thought that they have insured fully against default in the credit derivatives market.   On top of this, the privately owned Greek banks will receive up to €50bn of taxpayers money to recapitalise after their losses so that they remain in private hands.

But there is no such aid to the Greek people.  The party leaders are being asked to impose 150,000 job losses in the public sector (civil servants, hospitals and teachers), along with the wage cuts on top of the already imposed austerity measures (mainly massive tax increases) introduced in previous bailouts and Troika demands.   The Troika is furious that Greece has not kept to its side of the bargain in imposing austerity up to now.  In May last year, then Finance Minister George Papaconstantinou announced a plan to collect an extra 2.5 billion euros in 2011 from fighting tax evasion and 4.4 billion euros this year.  But the plan was abandoned because revenues were too weak and Greece now aims to collect 1.5 billion euros in overdue payments this year, which officials view as more realistic. Tax officials have seen their own pay cut, reducing for some the incentive to tackle reforms.  The shadow economy still accounts for more than a quarter of the 220-billion-euro official output — the highest proportion in the euro zone. Annual tax evasion stands at 40-45 billion euros.   Tracking down rich Greeks who have not paid taxes and sneaked their money abroad or getting them into court to pay up is failing.

The negotiations have been stretched and tortuous because the main party leaders in the coalition are basically being asked to capitulate to the Troika.  They have been reluctant to agree because they know that when it comes to the planned election in April, the electorate is likely to give them a sharp message.  A recent poll showed that 90% of those asked were not prepared to accept this new round of austerity measures! The former government party, the social democrat PASOK, has seen its poll rating plummet from 44% it got in the 2009 election to just 8% now!  Even the conservative New Democracy party which likes to claim that it opposes austerity (it is in favour of the decimation of the public sector, but not in favour of higher taxes on the private sector) can only poll 30% of the vote.  If there was an election tomorrow, the smaller leftist parties outside the coalition would probably hold the balance of power in the new parliament and they are opposed to the Troika demands.  No wonder PASOK now wants the election called off and the banker Papademos to continue as prime minister.

Nevertheless by the weekend it will probably be announced that the party leaders have all lined up like ducks to agree to Troika demands – indeed, the current PASOK finance minister Venezelos has said that his reputation depends on it!  For the social democrats and conservatives alike, they see no alternative way out.  That’s because they accept the economic arguments of the Troika that, if Greece is to stay in the euro, then it must cut costs and become ‘competitive’.  Thus, there must be what is called an ‘internal devaluation’ of production costs of the Greek economy.  Greek capitalism is not efficient and so is not pricing for its goods and services competitively.  Consequently, it runs a huge deficit in its trade with the rest of the world and runs up more debt to pay for these deficits.  Compared to Germany, its unit labour costs (the cost of labour per unit of production) are higher.  This is because Greece’s productivity level is lower, even though Greek wages are much lower than in Germany.

The answer to this problem from mainstream economics is that, to get costs down, wages must be cut.  Chief economist at the Bank of America, Mickey Levy tells us that the answer for the ‘bloated south’ of Europe is to “keep wages low”(See Diverging competitiveness among EU nations: Constraining wages is the key: http://www.voxeu.org/index.php?q=node/7536).  He admits that productivity growth in Greece, Portugal and Spain in the last decade has kept pace with Germany or surpassed it (Greece) – see my post, Europe: default or devaluation?, 16 November 2011.  The reason for Germany being more competitive in the last decade “contrary to the commonly held notion that German workers are more productive, was German wage restraint”.  As Levy admits, this was forced on German workers through companies moving production to cheaper eastern Europe and employing more temporary labour, while governments cut social benefits to force workers accept lower rates.  Levy sums up the policy answer for the Greeks: “For Eurozone nations unable to devalue their currencies and with limited upside potential to increase productivity, there is only one way to restore competitiveness: deflationary reductions in real wages”.

Internal devaluation means a massacre of real wages.  But does it work?  This was the policy adopted in the small state of Latvia when economic crisis hit them back in 2008.  They cut wages by over 50%.  Latvia has become more ‘competitive’.  But that has done little to restore production to pre-crisis levels, let alone the living standards of the people.  They remain some 25% below where they were in 2007.   This ‘supply-side’ policy has been a manifest failure for the people.  Yet it is what the Troika and the Bank of America offer.

They present Germany itself as the model for this policy.  Germany’s competitiveness has been sustained in the last decade not by rising productivity. Productivity growth has not been high. Competitiveness has not been maintained by cutting jobs.  German unemployment rates are relatively low.  It has been done by cutting wages for a whole layer of workers.  Under various reforms, first introduced under a social democrat government and followed by the conservatives, wages for a whole range of low value added jobs were slashed.  This kept unit labour costs from rising.

The social consequences for a whole layer of German workers has been devastating.  Poverty wages are the order of the day in one of the richest economies in the world.  The German low wage sector grew three times as fast as other employment in the five years to 2010. Germany has no nationwide minimum wage and wages can go well below one euro an hour, especially in the former communist east German states. Data from the European Statistics Office suggests people in work in Germany are slightly less prone to poverty than their peers in the euro zone, but the risk has risen: 7.2% of workers were earning so little they were likely to experience poverty in 2010 versus 4.8% in 2005. It is still lower than the euro zone average of 8.2% but the number of so-called “working poor” has grown faster in Germany than in the currency bloc as a whole.

According to the commonly-used international definition of low-wage work i.e  earning less than two-thirds of the median hourly wage, about one-fifth of German workers are low-wage compared to one in eight in Greece and one in 12 in Italy .  In Germany, the number of full-time workers on low wages rose by 13.5% to 4.3 million between 2005 and 2010, three times faster than other employment.  Jobs at German temporary work agencies reached a record high in 2011 of 910,000 — triple the number from 2002 when Berlin started deregulating the temp sector.  But no prizes for guessing where this super-exploitation of workers is most prevalent in advanced capitalist economies!

So there is a layer of German workers in what are called mini-jobs that don’t provide a living, along with casual, temporary jobs at poverty rates. Temporary jobs have been key to ‘competitiveness’ in Spain, where temporary workers have become a way of life for millions: no security of employment, no training, no holidays or benefits.  This forces millions to join the so-called ‘informal economy’ where incomes are paid on the sly by employers without taxes or social security.  This divorce is a deliberate way of keeping many EU capitalist economies ‘competitive’.

Ironically, there is a growing realisation from mainstream economics that such an approach is destroying the value of human capital, lowering its productivity.  And yet, this will be the result of the Troika’s demand to sack 150,000 government workers, cut the minimum wage and rights of the private sector workers and ‘liberalise’ labour markets.  The Troika highlights ‘protectionism’ in Greek (and other) labour markets. It has tried to break various safeguards that workers have established over the years: an expensive licensing system for truck drivers was scrapped in a 2010 law hailed as a victory over vested interests. It has yet to be implemented. The government agreed to open up ‘closed professions’ such as taxi drivers, where operators cannot work without hard-to-obtain licences.  And the Greek parliament resisted a measure from Papademos to ‘free up’ and extend pharmacy opening hours.

The problem is that the Troika demands won’t work and indeed are impossible.  Greece has reduced its public deficit from over 15% of GDP in 2009 to 9.4% last year.  But as a result, the country has just entered a fifth consecutive year of recession, making it harder to bring the debt and deficit ratios down.  Greece’s debts, both public and private, are too large; its capitalist sector is too weak.  So tax revenue targets cannot be met as the economy slumps into a major depression.  The government has fallen far behind on a Troika target to raise €50 billion from privatisations by 2015.  It raised just €1.7 billion last year, mainly from a pre-arranged stake sale in telecoms company OTE and gaming concessions, missing an initial €5 billion target and even a revised €4 billion target.  The government has promised to raise another €9.3 billion this year by selling assets such as buildings and stakes in oil refinery Hellenic Petroleum and gas companies DEPA and DESFA.  But  privatisation agency chairman Ioannis Koukiadis has said that the target is not achievable and the agency is now aiming for €4.7 billion.  The main reason is that the market value of state-owned companies has plunged, together with most Greek stocks. And Greek workers are already experiencing the policy advocated by the Troika and Bank America: to cut real wages.  Hourly earnings fell 4% in 2011, or over 6% in real terms and yet Greece is still not ‘competitive’.

Default on Greece’s debts is inevitable.  Indeed, a ‘voluntary’ default is about to be announced. But even that will not save Greek capitalism.  Down the road, probably in not more than six months, Greece will have to admit defeat on meeting the Troika’s demands.  It could happen earlier if Greeks elect a government opposed to more austerity.  Then a new policy will have to be adopted.

I have discussed an alternative policy in previous posts (An alternative programme for Europe, 11 September 2011).  It would mean a programme aimed at creating jobs and restoring incomes to get the economy going, not the opposite.  This is not utopian if the banks and major industries come under public control and are used to invest in new projects (Chinese-style if you like), ideally with EU help.  If a Greek government adopted a policy based on negotiating away its current debts and applying a state-led investment and employment programme, no doubt the current conservative European leaders (as well as Greek conservatives) would oppose it and wash their hands in ‘bailing out’ Greece.  They would probably demand that Greece leave the euro.  The government could mount a pan-European campaign to win support for its policies.  Even if that failed, at least Greeks would have some control over their own destiny instead of capitulating to the Troika.

The three pieces by Michael Roberts are reprinted from his blog here.

In April 1961, the CIA sent a force of Cuban exiles to overthrow the revolutionary government led by Fidel Castro and Che Guevara.  This resulted in the Bay of Pigs fiasco.  Fifty years later, a new documentary shows that US-backed violence against Cuba continued for decades.  The new film, with Danny Glover, anti-Cuba terrorists, and Fidel Castro himself (filmed recently) is combined with fascinating archival footage and a rare recorded interview from prison with one of the Cuban 5.  These men are serving long sentences in US prisons for trying to stop terrorism against tourist sites in their country.

More Information on movie: here

7.30 pm, Monday, February 20                                                                                                                        Canterbury WEA                                                                                                                                                                          59 Gloucester Street                                                                                                                                   Christchurch
map: here

Further info: email: cusolch@gmail.com; phone: 027 226 9950

The series will kick off at the start of March.  For further details check out Redline regularly.  Or contact us and we’ll keep you in touch with developments.

In the meantime, check out the Pages from New Zealand history series at the WEA, here.

Activists Tame Iti, Te Rangikaiwhira Kemara, Emily Felicity Bailey and Urs Signer are appearing before the High Court this week on charges of belonging to a criminal organisation and possessing guns; charges they deny.

They were arrested in October 2007 along with 13 others as part of Operation 8, one of the most embarrassing episodes in police history in New Zealand. It was supposed to be a big anti-terrorism sting; it turned out to be a huge fiasco and there were no terrorism charges laid.

The charges against all but four have been dropped. Read our interview with Valerie Morse, one of the 17 arrested and editor of the book The day the raids came: stories of survival and resistance to the state terror raids, Rebel Press, 2010

For nearly five years the defendants have been dragged through the courts as the police attempt to make a case against them.

Here’s what I wrote back in 2007:

The terrorism fiasco

How Operation 8 got its name no-one has explained. Perhaps the police put two and two together and came up with eight.

On October 15 when the police breathlessly announced 17 arrests had been made and terrorism charges may follow, the whole country sat up and watched. What played out was a picture of state terror. The real menace were the 300 armed and masked police who stormed homes and communities, illegally detained people and locked up disparate political activists.

The raids netted just four weapons. There were no terrorism charges, and even the firearms penalties may not stick. As political analyst Paul Buchanan points out, molotov cocktail ingredients are not firearms but hazardous substances.

Besides, if uttering the words “someone should kill George Bush” is enough to spook the spooks, then the world is teeming with would-be terrorists.

The logic behind the police actions is not clear. Perhaps there was no logic, and it was just a ridiculous operation conducted by clueless plods with oversized budgets. Once they made their move the police “intelligence” units put all their energy into a frame-up of the accused.

Another forgery

Early in the piece, Helen Clark applauded and endorsed the police. She went on with a flurry of accusations, saying those arrested had “at the very least illicitly used firearms, constructed molotov cocktails and trained themselves in how to use napalm”.

Disregarding the right of the accused to a fair trial, the prime minister was determined to paint a picture of sinister activities in the Tuhoe region. Needless to say, it was not first her first forgery.

The solicitor general, presented with the evidence, had to conclude that terrorism charges could not be laid. He noted the Terrorism Suppression Act was not coherent, but in a piece of incoherence of his own he commended the police.

This system of checks and balances is all part of how the capitalist state functions. So, if one part of the state apparatus (such as the police) screws up, there is a check in the state apparatus (the solicitor-general) to rescue the screw-up. Had terrorism charges proceeded the trials would have greatly discredited the police. Instead, the solicitor general steps in and saves the police from scrutiny.

The “evidence” was then carefully leaked (no prizes for guessing where from) to the media, and quotes from a couple of delusional individuals were splashed about. The big lie about “terrorists in New Zealand” was then perpetuated in screaming headlines for days.

Terrorising Tuhoe

While the government and its spokespeople put a positive spin on the police fiasco, there is still widespread anger about the operation. Peter Williams QC, a lawyer representing the people of Ruatoki, says they are looking at whether or not there was a form of terrorism by the police themselves.

Police racism was blatant in the raids on Ruatoki. The rural Maori settlement was locked down and barricaded. There were reports of the police detaining a woman for six hours, keeping her children in the woodshed without food, water or toilet facilities for the duration. Some people were made to lie spreadeagled on the ground. Even elderly residents were stopped and photographed, and children had guns pointed at their heads.

Moana Jackson, a lawyer acting for the accused, observed, “As with all government agencies, the talk of cultural sensitivity or partnership or biculturalism is largely window-dressing, and when the crunch comes it is ignored.” (Listener, 24-30 November 2007.)

The Tuhoe community have fought back. On 19 October a thousand people protested in Whakatane, and a few weeks later they set off on a hikoi to Wellington. When they asked to see Chief of Police Howard Broad they were met by a four-deep police cordon armed with batons.

Spy epidemic

Beyond these front-line defenders of the system there is a proliferation of secret police. Since 9/11 and the creation of the Terror Bogeyman, the Security Intelligence Service’s annual budget has expanded from $12 million to $33 million. The SIS is now flush with 150 staff (Sunday Star-Times 21 October 2007). There is also an assistant commissioner for counter-terrorism, an anti-terrorism Strategic Intelligence Unit, and a Special Tactics Group which specialises in terrorism (www.police.govt.nz).

As if that was not enough, there is the Government Communication Security Bureau and there are “national security” police with a million dollars’ worth of new spy equipment. To cap it all off, police and SIS officers have been stationed in Washington to work with US intelligence and security agencies.
That New Zealand lacked terrorists would prove to be no obstacle to these well resourced units.

It is an experience repeated in other countries. In the United States, after 9/11, terrorism investigations saw 400 suspects being charged. In the end, over 90% of the cases were thrown out through lack of evidence. Likewise in Britain, the number of accused is far higher than the number of successful cases.

Using terror laws not only justifies the special units’ existence, but offers heftier penalties. Whereas participating in a criminal organisation has a maximum sentence of three years, participating in a group labelled terrorist by the United Nations carries a maximum penalty of 14 years. As Ahmed Zaoui found, once the police have stuck the terrorist label on, it is a battle to get it off. It took him nearly five years of legal struggle to get the SIS to reveal its case against him and for him to prove his innocence.

A civil rights defence campaign has led the protest against the raids and is calling for a repeal of all terror laws. (See www.civilrightsdefence.org.nz.)

The time to stand up for civil rights is now. Having failed to find bona fide terrorists, the government is now seeking wider surveillance powers for police. They must be stopped.

Netanyahu - Looking for war against Iran

by Moshe Machover

One thing is beyond any doubt: a major aim of Israel’s foreign policy is the overthrow of the Iranian regime. What is not generally understood are the motives behind this aim, and the present Israeli government’s preferred means of achieving it. In this article I would like to say something about the motives, and then explain why prime minister Binyamin Netanyahu’s preferred means is war – one likely to ignite a major conflagration.

Motives

In my 2008 article ‘Zionism: propaganda and reality’,[1] I quoted a recent Jerusalem Post report on a conference at Israel’s Institute for National Security Studies. That report deserves to be read very carefully, so here it is again:

“Iran’s success in obtaining a nuclear capability will deter Jews from immigrating to Israel, cause many Israelis to leave and will be the end of the ‘Zionist dream’, former deputy defence minister Ephraim Sneh said Tuesday.

“‘A nuclear weapon in Iranian hands will be an intolerable reality for Israel,’ Sneh said during a conference on Iran’s nuclear programme at the Institute for National Security Studies (INSS) in Tel Aviv. ‘The decision-making process in Israel will be under constant [Iranian] influence – this will be the end of the Zionist dream.’

“Former Mossad chief Ephraim Halevy slammed Israeli political leaders for calling Iran’s nuclear threat ‘an existential threat’. ‘There is something wrong with informing our enemy that they can bring about our demise,’ Halevy said. ‘It is also wrong that we inform the world that the moment the Iranians have a nuclear capability there is a countdown to the destruction of the state of Israel. We are the superpower in the Middle East and it is time that we began behaving like [a] superpower,’ he said.

“Iran’s real goal, Halevy said, was to turn itself into a regional superpower and reach a ‘state of equality’ with the United States in their diplomatic dealings.

“Sneh said that, while the military option was not preferred, Israel needed to keep it on the table, since such a possibility was the motivation for the international community’s efforts to use diplomacy to stop Iran. Sneh added that he was confident that the [Israeli Defence Force] was capable of successfully carrying out a military strike against Iran. ‘We grew up in a place that when the political echelon wanted something, the professional echelon knew how to do it,’ he said. ‘I believe this has not changed in 2008.’”[2]

Two points in this report are particularly noteworthy. First, one of the experts, a former chief of the Mossad (Israel’s counterpart of MI6 and the CIA) is talking here about the prospect of Iranian nuclear capability rather than actual production and possession of a nuclear weapon. As all experts are well aware, there is no evidence that Iran has a programme for producing such a weapon. This is as true today as it was in 2008. Indeed, the US defence secretary, Leon Panetta, confirmed this quite recently.[3] (Nuclear capability is the ability to produce a usable nuclear weapon at fairly short notice. It is a policy pursued by several other governments, and is not prohibited by the Nuclear Non-Proliferation Treaty, of which Iran – but not Israel! – is a signatory.)

Second, contrary to Israeli and western hype, neither expert claims that Iran is actually planning to attack Israel, let alone subject it to a nuclear holocaust. The former Mossad chief is dismissive of the scaremongering propaganda alleging that Iran poses a credible military threat to Israel. Ephraim Sneh, a former brigadier general and senior Labour Party politician, does mention the (purely hypothetical) prospect of Iran producing a nuclear weapon, but even he believes that the threat it would pose to Israel is political rather than a direct military one.

Indeed, Israel’s worry regarding Iran is the real political threat it poses to Israel’s regional hegemony, not the imaginary threat of being attacked by the Islamic Republic. Possession of nuclear capability is certainly a component of this political threat, inasmuch as it would contribute to Iran’s diplomatic muscle in its dealings with other Middle Eastern states and with the US. But it is only a component. Even without the nuclear issue, the Zionist state has a clear interest in replacing the present Iranian regime by one compliant with global US hegemony.

Divergence

As far as this aim is concerned, the interests of US and Israel are in complete agreement. But, as regards the means, there appears to be a divergence between the Obama administration and the Netanyahu government.

The US, smarting from the wounds of its adventurous wars in Afghanistan and Iraq, would like to avoid an outright open military conflict with Iran, a state that can inflict serious damage to its attackers. Moreover, in the present economic climate a sharp rise in the price of oil – an inevitable concomitant of war in the Middle East – may have catastrophic consequences for the global capitalist economy. True, the scary game of ‘chicken’ the Obama administration is playing against Iran can inadvertently get out of hand and lead to disastrous unintended consequences. (Recall the classic James Dean film, Rebel without a cause …). But the administration is hoping to keep this danger under control and avoid outright war – at least for the time being.

Not so the Israeli government: there are increasing signs that Netanyahu and his defence minister, Ehud Barak, are considering – against the advice of some of their military and intelligence experts – a provocation that would lead to a major war. This causes the Obama administration serious worry: they do not wish to be dragged into such a war by their Israeli junior partner.

On January 20, while on an unadvertised and little noticed visit to Israel (no press conference, no public statement), general Martin Dempsey, chairman of the US Joint Chiefs of Staff, “told Israeli leaders … that the United States would not participate in a war against Iran begun by Israel without prior agreement from Washington … Dempsey’s warning, conveyed to both prime minister Binyamin Netanyahu and Israeli defence minister Ehud Barak, represents the strongest move yet by president Barack Obama to deter an Israeli attack and ensure that the United States is not caught up in a regional conflagration with Iran.”[4]

His warning seems to have fallen on deaf ears. On February 2, Associated Press reported:

“US defence secretary Leon Panetta won’t dispute a report that he believes Israel may attack Iran this spring in an attempt to set back the Islamic republic’s nuclear programme.

“Panetta was asked by reporters to comment on a Washington Post opinion column by David Ignatius that said Panetta believes there is a ‘strong likelihood’ that Israel will attack in April, May or June. Ignatius did not say who told him this.

“Asked whether he disputes the report, Panetta said, ‘No, I’m just not commenting’ …

“He noted that Israel has stated publicly that it is considering military action against Iran. He said the US has ‘indicated our concerns’.”[5]

In my opinion this is not just sabre-rattling on Israel’s part. There is reason to believe that Netanyahu is seriously considering a provocation designed to trigger off a major Middle East conflagration, despite the enormous risks, that include Iranian retaliation causing loss of many Israeli lives.

To explain Netanyahu’s reckless calculation we need to turn our attention to Zionism’s nightmare: the Palestinian ‘demographic peril’.

One state, Zionist style

By now most people are aware that the present Israeli government has done all in its power to torpedo a so-called ‘two-state solution’. What is less well known is that opposition to a sovereign Palestinian state in any part of Eretz Yisrael is not a mere quirk of a rightwing Israeli government, but a deep-seated and fundamental principle shared by all mainstream Zionist parties.

In 1975, General Moshe Dayan put it like this: “Fundamentally, a Palestinian state is an antithesis of the state of Israel … The basic and naked truth is that there is no fundamental difference between the relation of the Arabs of Nablus to Nablus [in the West Bank] and that of the Arabs of Jaffa to Jaffa [in Israel] … And if today we set out on this road and say that the Palestinians are entitled to their own state because they are natives of the same country and have the same rights, then it will not end with the West Bank. The West Bank together with the Gaza Strip do not amount to a state … The establishment of such a Palestinian state would lay a cornerstone to something else … Either the state of Israel – or a Palestinian state.”[6]

Thus, for mainstream Zionism any admission that “the Palestinians are entitled to their own state because they are natives of the same country and have the same rights” would undermine the legitimacy of the Zionist state, and eventually its very existence.

This has remained a cornerstone of Israel’s political strategy. For this reason, no Israeli government has ever signed a legally binding commitment to accepting a Palestinian Arab state. This applies, in particular, to the Oslo accords of 1993, which the second government of Yitzhak Rabin co-signed with the Palestinian leadership under Yasser Arafat. In this treaty there is no mention of a Palestinian state. This was not an accidental omission: when presenting the Oslo accords to the Knesset for ratification – on October 5 1995, a month before he was assassinated – Rabin pointedly stressed that what Israel was going to insist on was a Palestinian “entity which is less than a state”.

Many observers have been puzzled by Israel’s adamant rejection of any Palestinian sovereign state, however small, west of the Jordan River. This seems terribly short-sighted. For, if the whole of pre-1948 Palestine is to remain under Israeli sovereignty, that would mean that Israel would have to rule over a hostile Palestinian Arab people. In effect, the whole of that territory will be one state. Right now there is a rough numerical parity between the two national groups. Since no large-scale Jewish immigration is expected, and since the natural rate of increase of the Palestinian population is higher that that of the Hebrew population, the former will considerably outnumber the latter within a few decades. Surely, the Palestinian majority cannot indefinitely be denied equal rights; but equal rights would lead to the demise of the Jewish state. For Zionism this ‘demographic peril’ is worse even than a sovereign Palestinian mini-state. So it would seem that by sabotaging the creation of such a state, Israel is heading for what its own ruling ideology regards as the abyss.

This apparent contradiction disregards a third option: neither a two-state solution, nor a single state with an Arab majority, but ‘population transfer’. Large-scale ethnic cleansing of Palestinian Arabs would result in a single state in the entire territory, with a large Jewish majority, which is the ultimate aim of all mainstream Zionist parties.

But implementing ethnic cleansing on a sufficiently large scale – while technically quite easy, as explained by the Israeli military theorist, Martin van Creveld[7] – is politically very tricky. It cannot be done in normal, politically tranquil circumstances. It requires what in Zionist parlance is called she’at kosher: an opportune moment of major political, and preferably military, crisis.

Interestingly, quite a long time ago, on November 16 1989, a junior minister in the Shamir government made precisely this point in a speech delivered at Bar-Ilan University, a hotbed of clerical ultra-chauvinist Zionism.

The Jerusalem Post of November 19 1989, quoting a tape recording of the speech, reported that the deputy foreign minister (roughly equivalent to parliamentary under-secretary of state in Westminster) “has called for Israel to exploit political opportunities in order to expel large numbers of Palestinians from the [occupied] territories”. He told students in a speech at Bar-Ilan University that “the government had failed to exploit politically favourable situations in order to carry out ‘large-scale’ expulsions at times when ‘the damage would have been relatively small. I still believe that there are opportunities to expel many people’.”

Oh, the name of that junior minister: Binyamin Netanyahu.

A sacrifice worth making

A war with Iran would present a golden opportunity for large-scale expulsion of Palestinians, precisely because (unlike the Iraq invasion of 2003) fighting would not be over too soon, and major protests and disturbances are likely to occur among the masses throughout the region, including the Palestinian Arabs under Israeli rule. What better way to pacify such disturbances than to “expel many people”.

Of course, a decision to ignite a war against Iran is not one that any Israeli leader would take lightly. There is a non-negligible risk that Israel would suffer many casualties. This is not a price that even the most adventurous prime minister would consider paying, unless the expected prize is extremely high. But in this case the prize is the highest possible one from a Zionist point of view: eliminating the demographic threat to the future of Israel as a Jewish ethnocracy. So Netanyahu will be sorely tempted to make a sacrifice of his own people for the greater national good.

I assume that American policy-makers are aware of Israel’s special interest in a military denouement of the conflict with Iran, an interest not quite shared by the US. This is why they are worried, and issue stern warnings to Netanyahu and Barak – discreetly and behind the scenes, of course, because especially in this election year, when he will face Republican crazies, Obama cannot afford to appear pusillanimous.

However, Netanyahu cannot flagrantly go ahead and start a war without US approval. Therefore the most likely scenario is a series of provocations instigated by Israel, mostly by devious and covert means, in order to escalate the conflict and drag the US by degrees into mission creep.

I do not wish to sound too alarmist, but the coming few months may well be ‘interesting’ in the Chinese sense.

Notes

1. Weekly Worker, September 18, 2008.

2. ‘Iranian nukes mean end of Zionism’, The Jerusalem Post internet edition, September 9, 2008.

3. ‘Panetta: Iran has not yet decided to make a nuclear bomb’, Associated Press, January 8 2012; reported by Fox News: www.foxnews.com/politics/2012/01/08/panetta-iran-has-not-yet-decided-to-make-nuclear-bomb.

4. IPS report, February 1, 2012: http://ipsnews.net/news.asp?idnews=106621.

5. Washington Post, February 2, 2012.

6. Ha’aretz, December 12, 1975.

7. Martin van Creveld, ‘Sharon’s plan is to drive Palestinians across the Jordan’, The Sunday Telegraph, April 28, 2002: www.telegraph.co.uk/news/worldnews/middleeast/israel/1392485/Sharons-plan-is-to-drive-Palestinians-across-the-Jordan.html.

Original article here: http://www.cpgb.org.uk/article.php?article_id=1004712