EGYPT'S SOCIAL CRISIS: FINANCIAL BONANZA FOR WALL STREET INVESTORS AND SPECULATORS

 THE HIDDEN AGENDA 
BEHIND MUBARAK'S DECISION 
NOT TO RESIGN?

ByMichel Chossudovsky                                                                                                                                                     

February 6,2011

Global Research

Mubarak's  decision not to resign was taken in close consultation with Washington.  The US administration including US intelligence had carefully identified the possible scenarios. If Washington had instructed Mubarak to step down, he would have obeyed forthright. 

His decision not to resign indelibly serves US interests. It creates a situation of social chaos and political inertia, which in turn generates a vacuum in decision making at the government level. 

The continued social crisis has also resulted in a massive outflow of  money capital. More concretely, what this signifies is that Egypt's official foreign exchange reserves are being confiscated by major financial institutions.

The ransacking of the country's money wealth is an integral part of  the macroeconomic agenda. The newly formed government on instructions from Washington has not taken concrete steps to curtail the massive outward flow of money capital. A prolonged social crisis means that large amounts of money will be appropriated.  

According to official sources, Egypt's Central Bank had (prior to the protest movement) 36 billion dollars in foreign exchange reserves as well as an additional $21 billion of  deposits  with international banking institutions which are said to to constitute its so-called "unofficial reserves." (Reuters, 30 January, 2011). 

Egypt's external debt, which has increased by more than fifty percent in the last five years is of the order 34.1 billion (2009). What this means is that these Central Bank reserves are de facto based on borrowed money. 

In early 2010, there was a large influx of hot money deposits into Egyptian government debt instruments. 

Foreign exchange flows into the country and is exchanged for Egyptian pounds (EgP),  which are then used by institutional investors and speculators to purchase high yielding government bonds and treasury bills (denominated in Egyptian pounds) with short term interest rates of the order 10 percent. 

The interest rate on long term government bonds shot up to 7.2 percent at the outset of the protest movement. (Egypt Banks to Open Amid Concern Deposit-Run May Weaken Pound, Lift Yields - Bloomberg, January 2, 2011)

At the onset of the crisis, international investors owned about $25bn of Egyptian T-bills and bonds, almost a fifth of the total T-bill market and about 40 per cent of the domestic bond market. Foreign investors also accounted for about 17 per cent of the stock market’s turnover, and held about $5bn-$6bn of Egyptian shares. (Ibid)

Under its agreement with the IMF, Egypt is not allowed to implement foreign exchange controls. These hot money deposits are now leaving the country in anticipation of a devaluation of the Egyptian pound. In the days preceding Mubarak's speech, capital flight was running at several hundred million dollars a day. 

In a bitter irony, Egypt deposits 21 billion with the commercial banks as "unofficial reserves" on the one hand, while the commercial banks acquire $25bn worth of EgP debt, with a yield of the order of 10 percent. What this suggests is that Egypt is financing its own indebtedness. 

The protest movement started on a bank holiday. While the closure of the Cairo stock market and domestic banking system had put a temporary lid on the outflow of money capital,  large amounts of capital flight instrumented by major financial institutions had already occurred in the days leading up to the protest movement.  

Egypt's banking system reopened on February 5, leading to a renewed process of capital flight resulting in the depletion of central bank reserves and a corresponding increase in Egypt's foreign debt. 

A devaluation of at least 20 percent is contemplated. According to  UBS'  emerging markets currency division, "the pound could “easily” drop by a further 50 per cent or so to E£9 per US dollar". FT.com / Currencies - Banks weigh risk of capital flight, February 1, 2010)

A devaluation of more than ten percent would wreck social havock: Domestic prices of food are dollarized. If there is a devaluation of the Egyptian pound, this would inevitably trigger a renewed increase in the prices of essential food staples, leading to a further process of impoverishment. 

A scenario of currency devaluation, rising external debt coupled with a renewed  package of IMF sponsored austerity measures would inevitably lead to an accentuation of the social crisis and a new wave of protests.

The newly appointed Finance Minister Samir Radwan is firmly committed to the Washington consensus, which has served to impoverish the Egyptian people.  In a contraditory statement on February 3, Radwan confirmed that "the government won’t reduce subsidies even if global prices of food and commodities rise. Public spending will be used as a tool to “achieve social justice,” he told a news conference in Cairo."  (Bloomberg, February 5, 2011)

Radwan is abiding by IMF-World Bank guidelines: no restrictions will be placed on capital flight. The Central Bank will ensure the conversion of hot money deposits into hard currency by major financial institutions. The coffers of the central will be ransacked.

With capital flight, domestic debt is transformed into foreign debt, putting the country into the stranglehold of foreign creditors: 

Radwan said Egypt will honor its debt obligations and urged foreign investors to have confidence in the country. “All the bond obligations, everything will be honored on time,” Radwan said in a Feb. 4 telephone interview from Cairo. “We are not defaulting on any obligations.” (Bloomberg, February 5, 2011)

In a bitter irony, Mubarak's decision to remain as head of State with Washington's approval has served the interests of institutional investors, currency traders and speculators. 

Financial dislocation, rising debt and spiralling food prices:  
Before "democratic" elections are called, 
Egypt will have been pushed into the straightjacket

of a new set of deadly IMF conditionalities.

The important question is how will the various opposition forces tackle the demands of external creditors and financial institutions, not to mention the broader geopolitics of  US-NATO influence in the region.

PORTUGAL: 3 MILLION PARALYZE ECONOMY, "BIGGEST GENERAL STRIKE EVER"

Meanwhile, over in Portugal, the country  next in line for the bankers' slam........ 

THREE MILLION PARALYZE ECONOMY 
IN "BIGGEST GENERAL STRIKE EVER"

27/11/2010 

By Cedric Gerome 

Over three million workers laid down tools in Portugal on Wednesday, as a massive general strike ground the country to a halt. It is already being termed as the country’s “biggest strike action ever”. After months of growing resistance, strike actions, and massive demonstrations during the year, this general strike is a major turning point that will lift up to a new stage the raging class battle of the Portuguese working class against the market-dictated policies of the massively rejected ‘Socialist Party’ (PS) minority government. 

The freezing of the pensions, raising of VAT and various taxes, 5% cut in public sector wages, further attacks on welfare benefits, cuts of 15% in operational costs of public hospitals, and new road tolls are among some of the new measures planned for the 2011 austerity budget, which was approved in Parliament on Friday. 

Almost every day, Portuguese newspapers are announcing new attacks against the living and working conditions of the majority. The mainstream politicians, the media and their so-called specialists, the European Commission, the IMF, the bankers and the bosses, all repeat in chorus that “there is no alternative” to endless sacrifices, massive spending cuts and new austerity measures. 

Every sane person who was in Portugal on Wednesday knows that the figures given by the government, which spoke subsequently of a 29% participation rate, is nothing but pure propaganda. The Ministry of Labour noted, in support of the governmental figures, the fact that energy consumption in the country was “practically the same” than on a normal day.

In response to this, Carvalho da Silva, Secretary of the CGTP, declared ironically: “If this is true, we need to conclude that planes don’t spend any energy, that boats don’t spend any energy, and that a lot of private companies don’t spend any energy either. This is a phenomena.” 

In practice, the participation in the general strike exceeded every prediction. Part of this exceptional turn out was the involvement of new layers of workers who were engaging their first strike action, or sectors who have usually not been very active in previous mobilizations. In Lisbon and Porto, art workers surrounded theatres in big human chains composed of hundreds, shouting “General Strike, the struggle continues!” and in the capital, engaged in militant street blockades in front of a totally impotent police force.

Social tensions rising ~ Historic turnout

Wednesday’s General Strike drew impressive levels of involvement and support all over the country, being seen by many workers as a historic opportunity come together to display collectively their strength and will to fight back. For weeks, huge banners, placards, and graffiti were displayed across the country to urge workers to join the “Greve Geral” to fight against measures aimed at making the poor pay the price of a crisis not of their making. 

As a result, over 3 million workers stopped work, much more than the 1.7 million strikers registered in the 1988 general strike (the last one to have been called by a common front of the CGTP and the UGT). 

And this is despite the fact that many more people ~ especially in the private sector where the trade unions influence is weaker, jobs contracts much more precarious, and threats and intimidation from the bosses stronger ~ wanted to join the strike, but did not do so for fear of losing their jobs. 

In a situation where unemployment is at the biggest level ever registered (11.5% officially, with a rate approaching 25% for young people, and 54,000 jobs destroyed this year alone) and the government is slashing en masse the access to unemployment benefits, this factor played undoubtedly a role in the overall participation in the strike, especially in medium and small sized private companies. Figures show that about a third of privately employed workers do not have permanent contracts. 

For these reasons, the strike was more solid in the public sector. Public transport workers in particular were highly involved. Not one plane took off from or landed on Portuguese soil on Wednesday, the whole metro system was shut down in Lisbon and Porto, while buses, boats and trains were massively disrupted. 

Also, in public administration, education, healthcare, and justice, unprecedented turnouts were reported. More than 2,500 public schools were closed because of strike actions, and everywhere, uncollected rubbish in the streets testified to the massive participation of refuse workers. 

But strong, sometimes unprecedented, paralysations occurred in the private sector as well: the Volkswagen factory of AutoEuropa for example, the biggest industrial plant of the whole country, registered 98% of strikers from among its 3,400-strong workforce, preventing the production of a single car during the whole day.

The Portuguese ruling class is clearly sitting on social dynamite. Even the middle classes have expressed sharply their outrage against the present state of affairs. One commentator recently wrote: “If, as generally accepted, democracy relies on the stability of the middle class’ position, then in Portugal democracy is committing suicide”. 

Significantly, in order to avoid to sparking popular anger, Prime Minister Socrates remained enclosed in his Sao Bento palace for the whole day, not daring to come out, contrary to what happened in 1988 when the then right-wing head of government, Cavaco Silva, visited factories during the general strike. 

This is for an obvious reason: Socrates’ approval ratings stand at 21.7%; even the hated French President Sarkozy is doing better! Those figures contrast with the popular support for the leading figures of the Left Bloc (Francisco Louçã) and the Portuguese Communist Party (Jeronimo de Sousa), who stand at 32% and 28% respectively. 

Overall, the capitalist state dealt extremely cautiously with the general strike. The government decided to avoid any provocation that could fuel the movement in one way or another, and did not utter one word to confront the trade unions on that day. This is not to say that repression and strike-breaking operations by the state machine did not occur. 

One of the most prominent confrontations took place at the CTT Postal depot of Cabo Ruivo, the biggest of the Lisbon area, where the police intervened in order to protect scabs employed illegally by the management through a private company to replace the jobs of the 270 out of 276 workers who were on strike. 

The attempt by a more than 50 police, armed with helmets, shields, sticks, tear gas and pepper spray, and assisted by a private security force, to break the picket was resisted and prevented for 4 hours with bare hands by a courageous and collective effort of about 80 workers and trade unionists, assisted by a few Socialismo Revolucionário and other CWI members present there.

In its ongoing social war, the ruling elite will try to use every means and argument to attack the right to strike. This includes evoking the constantly repeated “right to work”. What hypocrisy! When, in the recent weeks, Portugal’s largest handling company, Groundforce, declared the ending of its operations at Faro airport and announced ~ overnight, and by email ~ the sacking of 336 workers, some of whom even learned the news first through the media, not many voices were heard defending their “right to work”. 

Attempts to roll back the right to strike will increase in the next period, and must be clearly opposed and offensively challenged by the trade unions. 

This includes the operation of “minimal services” in some sectors considered “imperative social necessities”. These measures are justified by the idea of “preserving the general interest”. What is the general interest when the majority of the workers are engaged in a general strike? 

The trade union organisations must have complete control over such measures, not letting governmental and bosses agencies to decide arbitrarily how and where they can undermine the efficiency of strike actions.

Trade unions declare “victory”…

but the fight is only starting

Wednesday’s successful general strike could have had much more impact if the trade union leaderships had not refused to organize proper demonstrations during the day. 

This was clearly a bureaucratic attempt to prevent momentum building up between the different sectors involved in the strike. The result is that no real space was offered for the workers from the various sectors to connect with each other, to bring their demands onto the streets, to exchange the experiences of their workplaces, etc. 

There is no “national interest” 

between workers 

and a corrupt government, 

sold to the capitalist class

Facing the growing threat of a bail-out from the IMF and ECB, the preservation of the “national interest” of the country will increasingly be used as a diversion to make Portuguese workers swallow the pill of austerity more easily. 

Such a logic can only be countered by the organisation of an international fight back of the working class. The left must make this point clearly, instead of echoing this nationalist propaganda, as the PCP is systematically tempted to do. 

Obviously, like we have seen with Greece a few months ago, with Ireland more recently, or with the intervention of the IMF in Portugal in the 1980s, the intervention of the IMF in Portugal would undoubtedly be coupled with new savage austerity conditions, all for the purpose of reassuring the bond speculators that their gambling operations are in good hands and that their orgy of profits can continue. 

The possibility of such a bail-out will be used as a Damocles sword upon Portuguese workers’ heads… to impose more drastic cuts anyway. 

The reality is that with or without such a bailout, the austerity policies have no end in sight, as long as we leave intact the present profit-driven system, in which the economic levers are controlled by powerful private hands, and workers’ lives depend on an immense and anarchic casino. 

The present wage cuts and tax increases, which they dare to call “courageous measures”, are the shortest road to plunging the country back to recession, with all that that implies for workers and the poor. 

All serious economists warn that the planned cuts will choke any possibility of already anemic growth, and slide the country back into recession from next year. The OECD and IMF both predict similar scenarios for Portugal, and even the Portuguese Economic Minister has openly declared that the present measures will have a “recessive effect”. 

And these are the same people who want us to believe that these measures are necessary to preserve jobs and living standards! It is like a doctor giving poison to his patient, then warning him that he is going to die, and at the same time continuing to tell him that the poison is good for his health! 

This shows blatantly once again that the capitalist system, in Portugal as elsewhere, has failed, and is driving the majority of ordinary people into the wall, provoking growing misery, mass unemployment, squeezed services and a return to 19th century working conditions as the only distinctive future. 

In those conditions, the only “courageous measures” would be to expropriate the banks, the financial institutions and the commanding heights of the economy, to put them under public ownership and democratic control of the working class, and to start the building of a democratic socialist society, based on the rational planning of the economy to satisfy the social needs of all.

This General strike was only the first step

The General Strike has demonstrated the potential power which exists on the workers’ side to impose such a programme However, many workers also expressed doubts and skepticism about the possibility of similar actions to really change the course of events. 

This goes back to the strategy and proposals coming from the trade union leaders and the left, most of them only seeing the strike as a symbolic action, or at best as a means towards further negotiations with the government. 

Socialismo Revolucionario thinks that the general strike announced in Greece for 15 December represents the perfect occasion to build upon the success of 24 November and to concretise a sentiment which is shared by an increasing number of workers in Portugal: the necessity for coordinated strike action on an international level.

Joint General strikes in Greece and Portugal on the same day would have a powerful impact, boosting the confidence of the working class in both countries to a new level, and would have strong repercussions for the outlook of the whole European working class. 

The determination of the all governments in Europe to continue, to satisfy their capitalist and speculator masters will require a determined and consistent programme of struggle by the working class, including by preparing a European-wide general strike response. 

This fight, at a certain stage, will pose the question of an alternative system to the crisis-ridden capitalism. SR wants to address consciously this question now, prepare the forces and build support for the genuine ideas of democratic socialism. 

We call on the Portuguese left organisations, especially the PCP and the LB, to start a dialogue between each other to draw the lines of a common fight against the unprecedented assault which is taking place against the future of millions of ordinary people.

As a contribution to the debate, SR is advocating:

Refuse to pay the debt created by the capitalists ! Open the books of the banks and big companies, to see where our money has been going! 

 

Down with the hedge funds and professional speculators! Nationalize the banks, insurance companies and other financial institutions under the democratic control of the working class and consumers’ organizations! 

 

Reduce the working week without loss of pay, to provide decent jobs for all the unemployed! 

 

Enough with the casino and anarchic market system: for a government by and for workers and the poor, based on a rational, socialist, plan of production, fulfilling the needs of the millions, not the profits and greed of millionaires! 

 

For massive and joint 24 hour general strikes in Portugal and Greece on 15 December! 

 

For international unity and solidarity of the working class! Prepare for a European-wide general strike!

100 000 IRISH TAKE TO THE STREETS TO PROTEST PROMISED CUTS

November 27, 2010

 More than 100,000 people gather in Dublin 

to demonstrate against four-year austerity plan to reduce debts

• Henry McDonald Dublin
• guardian.co.uk, Saturday 27 November 2010 14.23 GMT

More than 100,000 Irish citizens took to the streets of Dublin today to protest against the international bailout and four years of austerity.

Despite overnight snow storms and freezing temperatures, huge crowds have gathered in O’Connell Street to demonstrate against the cuts aimed at driving down Ireland‘s colossal national debt.

So far the march has passed off peacefully although there is a huge Garda presence with up to 700 officers on duty working alongside 250 security guards for the Irish Congress of Trade Unions.

Among the marchers there is deep anger that most of the more than €80bn (£67bn) from the EU and the International Monetary Fund will be given to shore up Ireland's ailing banks.

Marching in the rally was Irish builder Mick Wallace who has had to lay off 100 workers due to the crash in the construction industry. Wallace said it was time the Irish became more militant.

"We should be more like the French and get onto the streets more often. Because our politicians go over to Europe and tell the EU that our people do not demonstrate, they don't take to the streets. It's time we changed that and openly opposed what is going on," he said.

Placards carried by the marchers reflect the mood of anger and humiliation at having to be bailed out by the EU and IMF. One was designed to look like an estate agent's billboard and read: "3,599 square miles For Sale. Full Planning Permission Granted".

The protest has not halted at the GPO in Dublin, the scene of the 1916 rising where trade unionists and workers are denouncing the government's cost cutting programme which will take €15bn out of the Irish economy over the next four years.Read more at:  

http://www.guardian.co.uk/world/2010/nov/27/ireland-bailout-angry-demonstrators-dublin

ISRAEL TRAINING TO BLOCK FREEDOM FLEET

An Israeli navy vessel patrolling the waters near Haifa in northern
Israel on 13 July 2006. [MaanImages/Magnus Johansson]

URUKNET
Bethlehem
Ma'an

Israel's naval forces are allegedly in training to prepare to seize eight boats scheduled to dock in the Gaza Strip on 24 May from Europe, Arabic-language media reported on Wednesday.

"About half of the Israeli naval forces will participate in an operation that was approved by the cabinet. [Israeli] Defense Minister Ehud Barak will supervise the operation," an Israeli official told the Arabic-language satellite TV station Al-Hurra.

An Israeli security source told Ma'an that authorities will prevent the arrival of the boats "at any price."

The Freedom Fleet is scheduled to set sail from the UK, Greece and Turkey. The European Free Gaza campaign said Israeli authorities informed them that the flotillas would be prevented from docking in Gaza.

The boats will be loaded with prefabricated homes, cement, and medicine and will be accompanied by 600 individuals in a bid to break the siege on Gaza.

On Sunday, Jamal Al-Khudari, head of Gaza's Popular Committee Against the Siege, said Israeli threats to open fire at the boats reveal Israel's weakness.

"Such threats reflect the occupation's failure and embody state terrorism against peaceful individuals who come to support a people under siege and aggression," a statement issued by Al-Khudari said.

Under international law, the activists attempting to dock in Gaza have the right to participate in breaking the siege, Al-Khudari added, saying the threats will not deter participants from arriving in Gaza.

The popular committee organizer said the group was coming well-equipped, and would be ready should the Israeli navy surround them for a long period of time.

The Freedom Flotilla announced plans in late April, saying a group of ships would depart from several corners of the Mediterranean and gather in international waters with the intent to deliver some 5,000 tons of building and medical supplies to the population under siege.

According to flotilla organizers, 600 activists will sail three cargo ships and five passenger boats for Gaza in what a statement called the "biggest internationally coordinated effort to directly challenge Israeli's ongoing occupation, aggression, and violence against the Palestinian people."

Related posts:

1. Threats against flotilla show weakness, activist says
2. Protests held against Gaza siege
3. GazaFriends: Break the siege on Gaza, let them live in peace and dignity
4. GazaFriends: The Freedom Flotilla Sails to Gaza in May
5. Free Gaza and the Spirit of Humanity prevented from leaving Cyprus for Gaza
6. Gaza Friends: Together we can make this next voyage happen
7. Free Gaza Movement: ‘We’re Sailing Again – Join Us!’
8. Viva Palestina Gaza convoy has received a grand welcome at the Jaber crossing in Jordan!!!
9. Gaza Freedom March in Israel
10. Gaza Friends: One last plea before we sail

GREEK FINANCIAL WOES WITH THE GERMAN LED EU

The reason I actually include pieces regarding finances in Greece and Iceland is because few people can connect these actions with how the implementation of universal bondage is being set into place, step by step by step. One thing necessary is the destruction of the nation state and all of the allegiances of the citizens. This is necessary to bring around a one world order. This is where the IMF comes in, with others, as the financial hit man for the plan.

To my uneducated eye these last few stages of the process of breaking down a nation involves financial breaking of the government of the nation under attack; these include poverty, social breakdown and finally once the government has utterly failed to keep up its financial obligations to the highest level of monetary organizations, loss of freedoms of the common man in order to pay off debts which he had no part in creating.

I know I am playing fast and loose with this definition but this is a learning process for all of us. I do not profess to be an expert, just an observer trying to pull in some clues ~ clues that are all very significant for the lives of millions.

The EU PIGS nations, an intentional slur if ever there was one, are the poorer southern nations of the EU ~ Portugal, Italy, Greece and Spain. This seems to be another step of international amalgamation to a one world client state. It is of interest to watch this process of planned destruction being set into place. We saw it in Argentina and Russia in our lifetimes. It is well entrenched in America and now it is being implemented elsewhere as the banks begin the imposition of their international agenda.

So far, only the plucky Vikings of Iceland have resisted on all levels to invite the IMF in to fix things at their expense.

Here are a few of the causes of the Greek riots, most likely dictated by desperation to avoid the intervention of the bloodthirsty international arm of the bankers, the IMF.

Cuts of up to 8 % in public servants' income through reductions in basic pay and bonuses, including 30-per-cent cuts on holiday bonuses, saving €1.1-billion ($1.5-billion);

Raising general sales tax from 19 to 21 % to increase revenues by a projected €1.3-billion;

Luxury tax on yachts, private jets, jewelery, high-end automobiles, leather goods and other articles;

Taxes also increased on gasoline, cigarettes and alcohol;

Top-up the income tax of 1 % for Greeks who reported annual income of €100,000 or higher in 2009;

General income tax rate will also be raised to 45 % for Greeks in that income bracket;

Freeze in pensions, saving €450-million;

Raising the age of retirement to63;

Cuts of €500-million in public investment program;

New measures to raise total €2.4-billion in taxes and cut the same amount in spending, raising overall savings in 2010 to €16-billion.

But while they may have prevented a European crisis, they leave Athens far from a recovery, with only enough credit to finance the government through the end of March.

While the euro was meant to unify Europe's disparate economies into a self-supporting whole, the crisis has ended up creating a dangerous schism between the export-oriented economies of Western and Northern Europe and the more import-dependent ones in the Mediterranean and the Iberian peninsula, who lack the strong underlying economies to rebuild economic growth and pay off debt ~ even though their debts are only slightly higher than those in the larger economies.

A sustainable end to the debt crisis will likely require a bailout from either a German-led European debt-purchase plan, likely to discussed in a meeting with Germany or from the International Monetary Fund.

"This was a necessary decision. It was not a matter of choice," said a sombre-looking Mr. Papandreou after announcing the measures to President Karolos Papoulias. "It was a matter of survival for our country, allowing it to breathe and break free from the clutches of speculative forces."

Athens still faces profound challenges in avoiding a credit collapse, as the austerity measures could stall economic growth and reduce tax revenues, which would prevent the deficit from falling.

What can Papandreou do to revive Greece's investment-starved economy. His dramatic speeches this week have warned Greeks of potential catastrophe, but have offered no sense of what should be done once the cutting is over.

"The problem isn't just about finding the money, or securing another loan," said Savvas Robolis, a professor of economics at Athens University. "The problem is what comes next, after the bailout."

Nevertheless, the euro saw a sharp recovery and Greek bonds moved toward average European levels yesterday after the continent's monetary and political leaders declared that Papandreou had put his country on the road to fiscal stability, at least for now.

"Greece's ambitious program to correct its fiscal imbalances is now on track," said Jose Manuel Barroso, the European Commission president. German Finance Minister Wolfgang Schaeuble said the Greeks "are going in the right direction and deserve our respect." .

Greece still faces an onerous fiscal burden, with debts totaling more than 113 per cent of its national economy.

Greece currently has finances to keep its government operational through the end of March. Most analysts believe it will need a large-scale purchase of debt from an outside agency or government.

Mr. Papandreou yesterday told his cabinet that if a European rescue is not forthcoming, he will turn to the IMF for a bailout.

German leaders and taxpayers have bristled at using taxpayer money to bail out countries they see as having bloated public sectors and unaffordable pension schemes. Greece's retirement age is 61, while Germany's is rising to 67; the Greek public sector employs 1.05 million people, almost a quarter of the labour force.

They are forcing people to work later and later in life now. Bop till you drop is now the goal of such "civilized" countries as Germany therefor making wage slaves with less time to enjoy the fruits of their labour. I would not be surprised to see that elsewhere in the world.

It looks as if financial war has been declared on Greece and showing itself in all ways, presenting Greece very unpleasantly to the European public. The media has gone into overdrive to stir relations up.

For the Greeks, one source of rage was the front page of the Berlin tabloid, Bild, which Thursday carried the headline, “Sell your islands, you bankrupt Greeks ~ and the Acropolis too!” The article inside suggested that this sentiment had been uttered by two officials in Ms. Merkel's Christian Democratic Union party.

Greeks were even more offended by the cover of the German news magazine, Focus, which showed a statue of Aphrodite, her middle finger raised in an obscene gesture, beside the words, “Fraudsters within the European family.”

“They're saying we're all criminals, not just our leaders but every Greek. We have been named and shamed, we have been bashed and thrashed throughout this crisis,” a bearded pensioner said. “The European Union is supposed to represent a brotherhood, a collective response, but everyone has turned against those in the South.”

It doesn't help that Greece suffered a brutal Nazi occupation during the 1940s, during which hundreds of thousands were starved to death or enslaved and the treasury was robbed of its gold ~ a debt that Greeks feel has not been fully repaid.

That history erupted into an economic debate last week during which the Greek deputy prime minister Theodoros Pangalos declared in a BBC interview that the Germans were indebted to the Greeks for their Nazi crimes.

For Southern Europeans watching their pensions get slashed and their government services reduced, it all seems terribly unfair ~ and the economic anger has spilled out into symbolism-loaded political and cultural conflicts drawing on decades-old animosities.

“It's not just Greece ~ all of Southern Europe is under attack,” said Yiannis Michelakis, editor of the Athens newspaper Eleftheros Typos (Free Press). This week he put an image on his front page of the Brandenburg Gate topped with a cartoon swastika, not the sort of thing his paper is known for.

The financial markets are obsessed with the PIGS right now. All four of them, and especially Greece, are reeling under crushing government debts. Global investors have little confidence they'll be able to keep paying them, so their cost of borrowing money has gone way up, driving the PIGS into an even deeper hole.

AMERICANS NOTE THESE EVENTS IN REGARDS TO THE THUGS OF WALL STREET: Government bailouts help big banks and big companies get out from under their debts, but they do so by shifting the burden onto governments.And the governments shift it onto the people, that is YOU.

Wall Street and the media are making comforting sounds to Americans but do not be deceived. They are still tightening the noose on all whom they can still strangle for more money. There is still blood to be sucked from the American corpse.

The people of Portugal, Italy, Greece and Spain should brace themselves for severe austerity measures, but no Europeans should expect to escape the pain: "Europe faces a deeper and longer recession than anyone hoped."

The strength of the American economic recovery depends in no small part on the rest of the world getting back on its feet. It won't be good for American companies if Europe wallows in recession, especially with American consumers in little mood to spend.

While the euro was meant to unify Europe's disparate economies into a self-supporting whole, the crisis has ended up creating a dangerous schism between the export-oriented economies of Western and Northern Europe and the more import-dependent ones in the Mediterranean and the Iberian peninsula, who lack the strong underlying economies to rebuild economic growth and pay off debt ~ even though their debts are only slightly higher than those in the larger economies.

Efforts at preventing Greece's debt crisis from spilling over into other countries and destroying market confidence in Southern European bonds and the euro itself have created ugly tension this week between Southern Europe and Germany.

Meanwhile, Portugal, for its part, experienced its first one-day general strike over planned budget cuts Thursday (Greece will experience its third on March 16), and Spain's government is under pressure to cut its stimulus spending sooner.

At the financial level, some of the anger has abated. Thursday's successful bond issue, which saw the bonds oversubscribed, was seen as a sign that markets no longer believe Greece will default, and a boost in the euro shows reduced fears of a wider Southern European crisis.

But as the austerity programs and cutbacks spread along the Mediterranean, it seems likely that the symbolic battle will continue.

THE FALL OF GREECE ~ YES, IT IS A CAPITALIST PLOT

Currently it is mayhem in Greece. As the Greek government pushes ahead with its austerity programme, demonstrations have become daily affairs. Frequently they turn ugly. On March 5, 2010, demonstrators hurled rocks and bottles at the police who responded with volleys of tear gas.

I have done a lot of fudging with the original article by Diana Johnston. Many lengthy Snippits and Snappits comments and additions to round the original piece out so it shows more about the functioning of the IMF and the current state of the European Union, something most Americans and Canadians know very little (surprise, surprise) about.

By Diana Johnstone

March 4, 2010

Global Research

Bailing out countries or foreign banks?

The IMF practices double standards in its loan conditions. On one hand, it insists that local banks and companies should not be aided by the government as this would be against market rules. On the other hand, it ensures that the international banks avoid losses by getting the government to guarantee or take over the banks' loans to the private sector. This has earned the IMF, the label of chief debt collector for the foreign banks.

For Europe's poorest countries, European Union membership has long held out the promise of tranquil prosperity. The current Greek financial crisis ought to dispel some of their illusions.

Here we find another big crack in the wall of solidarity of the promised European Union. By swallowing up the weaker countries over time, it will be easier to erase nationalism. In the quest for the final goal of international rule by just a few players, the NWO wants only the financially fittest to survive ~ according to these rules which have no rules.

There are two strikingly significant levels to the current crisis. While primarily economic, the European Economic Community also claims to be a community, based on solidarity ~ the sisterhood of nations and brotherhood of peoples. However, the economic deficit is nothing compared to the human deficit it exposes.

To put it simply, the Greek crisis shows

what happens when a weak member

of this Union is in trouble.

It is the same as what happens on the world scale, where there is no such morally pretentious union perpetually congratulating itself on its devotion to human rights. The economically strong protect their own interests at the expense of the economically weak.

In the past, international banks lent heavily to Third World governments, mainly in Latin America and Africa. When these countries defaulted (or were on the verge of default) on their external loans, the IMF organized programmes of debt rescheduling and new loans.

The crisis broke last autumn after George Papandreou's PASOK party won elections, took office and discovered that the cupboard was bare. The Greek government had cheated to get into the EU's euro zone in 2001 by cooking the books to cover deficits that would have disqualified it from membership in the common currency.

In the past, international banks lent heavily to Third World governments, mainly in Latin America and Africa. When these countries defaulted (or were on the verge of default) on their external loans, the IMF organized programmes of debt rescheduling and new loans. Yes, we all know what has become of Africa under the kindly guidance of the international banking cabal.

Most of the debts owed to international banks and Northern governments, who also provide most of the roll over and fresh loans. Though its own share of the loans is small, the IMF (together with the World Bank) is asked by bankers and creditor governments to coordinate the rescheduling exercise.

THIS IS EXACTLY WHAT MOTIVATES

THE PEOPLE OF ICELAND TO REFUSE

THE DEBT PAYMENT DEMANDED

OF THEM BY FOREIGN BANKS.

The banks and creditor governments always agree to roll over old loans and give new loans only if the IMF gives a "good report" of the indebted country. This role of chief examiner gives the IMF and the World Bank the power to impose "structural adjustment" conditions on, at this point, more than 80 indebted countries which have required rescheduling.

The policies were based on the simplistic philosophy that, since governments could not be trusted, the economies should be liberalized (read further fiscal raiding by being opened to global trade, finance and investment), privatized and deregulated. This drastically reduce the role of the state, which is told not to intervene in the economy. Often the "leaders of the nation" have already been corrupted, if they were not already, and readily sign over the running of their nation, and the populace, over to what will become servitude to the cabal.

The IMF has and will insist that every dollar of foreign loan be repaid. IMF conditions become top priority on government budgets being skewed towards foreign debt servicing, even as social and economic spending was brutally cut.And so the populace is enslaved.

The European Treaties capped the acceptable budget deficit at 3 per cent and public debt at 60 per cent of GDP respectively. In fact, this limit is being widely transgressed, quite openly by France. But major scandal arrived with revelations that Greece's budget deficit reached 12.7 per cent in 2009, with a gross debt forecast for 2010 amounting to 125 per cent of GDP.

Of course, European leaders got together to declare solidarity. But their speeches were designed not so much to reassure the increasingly angry and desperate Greek people as to soothe 'the markets ~ the real hidden almighty gods of the European Union.

The markets, like the ancient gods, have a great old time tormenting mere mortals in trouble, so their response to the Greek problem was naturally to rush to profit from it.

For instance, when Greece is obliged to issue new bonds this year, the markets can blithely demand that Greece double its interest rates, on grounds of increased 'risk' that Greece won't pay, thus making it that much harder for Greece to pay. Such is the logic of the free market.

What the EU leaders meant by 'solidarity' in their appeal to the gods was not that they were going to pour public money into Greece, as they poured it into their troubled banks, but that they intended to squeeze the money owed the banks out of the Greek people.

Squeezing the people of Argentina.

The squeezing is to take the forms made familiar

over the past disastrous decades by

the International Monetary Fund:

the Greek state is enjoined to cut public expenses,

which means firing public employees,

cutting their overall earnings,

delaying retirement,

economizing on health care,

raising taxes, and

incidentally probably raising the jobless rate

from 9.6 per cent to around 16 per cent,

all with the glorious aim of bringing

the deficit down to 8.7 per cent this year

and thus appeasing the invisible gods of the market.

This just might propitiate both the gods and German leaders, who above all want to maintain the value of the euro. The financial markets will no doubt grab their pound of flesh in the form of increased interest rates, while the Greeks are bled by IMF-style 'shock treatment'.

And what about that great theater of human rights and universal brotherhood, the European Parliament? In that forum everyone gets to speak for a carefully clocked 1, 2, or 3 minutes, but when it comes to the most serious matter, the budget, the authoritative voices are all German.

This is standard IMF behaviour. These bloodthirsty international cabal of banking thugs has done this in many places ~ gone into a financially troubled nation and, while securing their own monies, proceed to make life harder for the natives as one "privilege" after another, disappears until the populace is impoverished and hopelessly indebted to the IMF.

Thus the chairman of the EP's special committee on the economic and financial crisis, Wolf Klinz, has called for sending a 'high representative' of the EU to Greece, an 'economies commissar' to make sure the Greeks carry out the austerity measures properly. The Greek crisis can allow the EU to put into practice for the first time its 'Treaty instruments' concerning 'supervision of budgetary and economic policy'. Interest rates may go up because of 'risk', but there is to be no risk. The pound of flesh will be delivered.

There was no such supervision of the financial fiddling which caused this mess. The EU statistics agency Eurostat recently discovered and revealed that in 2001, Goldman Sachs secretly (but legally, protest its executive officers) helped the right-wing Greek government meet EU membership criteria by using a complicated currency swap that masked the extent of public deficit and national debt. [See Andrew Cockburn and Marshall Auerback.] Who understands how that worked?

I think it is fair to guess that not even Angela Merkel, who is trained as a scientist, understands clearly what went on, much less the incompetent Greek politicians who accepted the Goldman Sachs trickery. It allowed them to create an illusion of success for a while.

Success meant being a 'member of the club' of the rich, and it can be argued that this notion of success has actually favored bad government at the national level. Belonging to the EU gave a false sense of security that contributed to the irresponsibility of incompetent political leaders.

And just WHO placed these leaders in position? We know full well that the Rothschilds and their posse, the international banking cabal, make sure only their favoured patsies in in position to "lead" nations so that the populace dances to the tune they, the cabal, wishes them to. In fact, they even write the entire script on targeted nations.

Having euros to buy imported goods (notably from Germany) pleased rich consumers, while the euro priced Greek goods out of their previous markets. Now the debt trap is closing. The traditional way out for Greece would be to leave the euro and return to a devaluated drachma, in order to cut imports and favor exports. This way, the burden of necessary sacrifices would not be borne solely by the working class.

But the embrace of EU 'solidarity' is there to prevent this from happening. German authorities are preparing to lay down the law to the Greeks, after reducing the income of their own working class in order to benefit Germany's export-oriented economy.

Austerity measures are the opposite of what is needed in a time of looming depression. Rather, what is needed are Keynesian measures to stimulate employment and strengthen the domestic market. But Germany is firmly attached to the export model, for itself and everyone else (globalization).

Ah, yes, globalization, the New World Order so lusted for by the cabal of elite bankers. Globalization and international mastery of the planet and every human living upon it. Mastery of their bodies, minds, souls, by the soulless elite who are led by those who pursue the luciferian of the Rothschilds.

For a country like Greece, which cannot compete successfully within the EU, exports outside the EU are crippled by its use of a strong currency, the euro. Bound to the euro, Greece can neither stimulate its domestic market nor export successfully. But it is not going to be allowed to extricate itself from the debt trap and return to its traditional currency, the drachma. Poverty appears to be the only solution.

Paying the price, most countries coming under the IMF are required to endure a long period of recession and austerity, from which they, in most cases, do not recover. Freedom of the masses is not the desired outcome of this whole exercise in human misery. The financial resources saved through cuts in government spending and reduced imports are channeled to pay the international banks. For example, today, most African countries are poorer and even more indebted, despite 15 or more years of "structural adjustment."

There is discontent within the German working class at their country's policies aimed at shrinking wages and social benefits for the sake of selling abroad. In an ideal 'social Europe', workers in Germany would come to the aid of workers in Greece by demanding a radical revision of economic policy, away from catering to the international financial markets toward building a solid social democracy. The reality is quite different.

The Greek financial crisis

exposes the absence of

any real community spirit in the EU.

The 'solidarity' declared

by the country's EU partners

is a solidarity with their own investments.

European nations watch and wait for Greece to sink or swim.

There is no popular solidarity between peoples.

The EU has established a surrogate ideology of internationalism: rejection of the nation-state as source of all evil, a pompous pride in Europe as the center of human rights, giver of moral lessons to the world, which happens to fit in perfectly with its subservience to United States imperial foreign policy in the Middle East and beyond.

The paradox is that European unification has coincided with decreasing curiosity in the larger EU states about what happens to their neighbors.

And why should they give a toot? After all, this is an increasingly cannibalistic capitalistic planet of nations. It is all about money and if you don't have it, or are proving to be failing the tests of success, you are just not "cutting the mustard". At the bottom of almost all this mess is a CLASS WAR but few are crass enough to admit such a war exists, let alone to speak of it. Instead, they just play the part.

Despite a certain amount of specialized training needed to create a Eurocrat class, the general population of each EU member is only superficially acquainted with the others. They see them as teams in soccer matches. They go on holiday around the Mediterranean, but this mostly involves meeting fellow tourists, and study of foreign languages has declined, except for English (omnipresent, if mangled).

Mass media news reports are turned inward, featuring missing children and pedophiles ahead of even major political events in other EU member states.

In other words, the Zionist controlled media are orchestrating as much as possible, the mindset of the European Union citizens in the same way that the American Zionist-controlled media does to its citizens, same techniques but different goals.

Northern European media portray Greece practically as a Third World country, peripheral and picturesque, where people speak an impossible language, dance in circles on islands, and live beyond their means in their carefree way. The crickets in the Aesop fable, scorned by the assiduous ants.

When I grew up we were taught, (incorrectly I might add) that from Greece sprang the foundations of civilization, home of perfection, the Olympics, beauty and all that was good in mankind. It is amazing how these perceptions are altered for the masses so that the will of the elite are served.

Media in Germany and the Netherlands imply that IMF-style shock treatment is almost too good for them. The widening polarization between rich and poor, between and within EU member states, is taken for granted.

The smaller indebted countries within the EU are amiably designated by the English-speaking financial priesthood as the PIGS "Portugal, Italy (perhaps Ireland), Greece, Spain' an appropriate designation for an animal farm where some are so much more equal than others.

Whether in Latin America, Asia, or Africa, the story has been the same: the destabilization of peasant producers by a one-two punch of IMF-World Bank structural adjustment programs that gutted government investment in the countryside followed by the massive influx of subsidized U.S. and European Union agricultural imports after the WTO’s Agreement on Agriculture pried open markets.

In the case of Africa, IMF policies destroyed the continent's productive base when African agriculture was turned towards serving corporate interests not the people of Africa. This is being done all around the world, America being NO exception to the rules.

Africa not only grew more than enough food, it was also a major source of income for many through exporting. At the time of decolonization in the 1960s, Africa was not just self-sufficient in food but was actually a net food exporter, its exports averaging 1.3 million tons a year between 1966-70.

Today, Africa imports 25% of its food, with almost every country being a net food importer. Hunger and famine have become recurrent phenomena, seeing food emergencies break out in the Horn of Africa, the Sahel, Southern Africa, and Central Africa. But the war goes on. Today, March 9, 2010, I found this headline as proof, for Africa, that the genocide goes on.

US WAGES FOOD WAR AGAINST SOMALIA

The World Bank and other aid donors forced the drastic scaling down and eventual scrapping of the (Malawi program), arguing that the subsidy distorted trade. Through various cutbacks to the farmers, food output plummeted. In the meantime, the IMF insisted that the government sell off a large portion of its strategic grain reserves to enable the food reserve agency to settle its commercial debts. The government complied.

When the crisis in food production turned into a famine in 2001-2002, there were hardly any reserves left to rush to the countryside. About 1,500 people perished.

The IMF, however, was unrepentant; in fact, it suspended its disbursements on an adjustment program with the government on the grounds that

“the parastatal sector will continue to pose risks to the successful implementation of the 2002/03 budget. Government interventions in the food and other agricultural markets…crowd out more productive spending.”

Kill off the useless eaters because they make it difficult to implement these new rules and cut backs to meet the budget to both the world bankers and the IMF.

When an even worse food crisis developed in 2005, the government finally had enough of the Bank and IMF’s institutionalized stupidity. A new president reintroduced the fertilizer subsidy program, enabling two million households to buy fertilizer at a third of the retail price and seeds at a discount.

The results: bumper harvests for two years in a row, a surplus of one million tons of maize, and the country transformed into a supplier of corn to other countries in Southern Africa.

If humanity would unite, we could do THIS!

In the immortal words of the late great George Carlin, this is the world the parasites have been working on for so long.

"But I’ll tell you what they don’t want, They don’t want a population of citizens capable of critical thinking.

They don’t want well-informed, well-educated people capable of critical thinking.

They’re not interested in that.

That doesn’t help them.

That’s against their interests.

They don’t want people who are smart enough to sit around the kitchen table and figure out how badly they’re getting f*cked by a system that threw them overboard 30 f*cking years ago.

You know what they want?

Obedient workers

~ people who are just smart enough
to run the machines and do the paperwork
but just dumb enough to passively accept
all these increasingly shittier jobs
with the lower pay, the longer hours,
reduced benefits, the end of overtime
and the vanishing pension that disappears
the minute you go to collect it.

And you know something? They’ll get it. They’ll get it all, sooner or later, because they own this f*cking place. It’s a big club, and you ain’t in it. You and I are not in the big club.”