The BDS movement aimed at boycotting Israeli settlements seems unstoppable

President Barack Obama signed into law a Trade Promotion Authority (TPA) renewal bill this week in order to give the president greater negotiating powers to “fast track” trade deals, and access new trading partners in the international marketplace.

The pro-Israel lobby (AIPAC) secured an amendment to this law which obliged the US government to discourage EU countries from endorsing the fast growing BDS movement in Europe. The way it was worded was that trade with the State of Israel and with “Israeli-controlled territories” should not be undermined.

However, this implied that the US government supports the clearly illegal settlements. This led State Department spokesman John Kirby to say that this provision of the bill conflated “Israel” and “Israeli-controlled territories”, but then to insist that, just like every other administration since 1967, the Obama administration opposes Israeli settlement activity beyond the 1949 Armistice (the “Green”) Line.

In this way the State Department set the record straight and essentially nullified the intent of the amendment. So in the words of Israel’s Haaretz newspaper, AIPAC had bitten off more than it could chew in trying to manipulate domestic American legislation.

This follows on something this site reported on June 9th, when the US Supreme Court ruled in favour of the government against the family of one Menachem Zivotofsky, who had taken legal action to get the boy’s birthplace listed on official documents as “Jerusalem, Israel”. The court ruling was a essentially rejection of Israel’s claim to the occupied city. So, this week’s intervention by the State Department constitutes another blow to Israel’s anti-BDS campaign, given that Washington refuses to defend illegal settlements or criminalise the boycott against them.


Sisi orders his henchmen to murder innocents in cold blood

Sisi’s failed regime continues in its attempt to drive Egypt to civil war as the only way to ensure its continuation. 13 residents of Sixth of October City, Egypt, were arrested without charge, taken to prison for a few short hours then released to a team of security police, taken to a nearby flat, and shot in cold blood. The media put out a statement that 13 terrorists were killed in a firefight with police. One of the 13 was Nasser Hafi, Muslim Brotherhood MP and lawyer. Here he is reading from the Qur’an 14 August 2013 at Raba’a al Adawiyya, just before the massacre, which he survived:


Pictures of the 13 dead have gone viral on the internet – not of their faces but of their fingers, which were covered in ink from fingerprinting at the prison into which they had been admitted. This was all the proof people needed that these men had been dragged from prison and killed in cold blood. It comes as no surprise that Sisi ordered the arrest of all those who had taken those pictures. **evidence has been supplied that the 13 men, whilst in jail had been severely tortured (added 2nd July – ed.)**


The mystery: why Greeks want to hang on to the Euro

Despite the fact the Greeks are opposed to the Troika austerity plan, the latest poll over the weekend shows 57% of the respondents wanted to keep the euro and wanted their government to make a deal with the creditors; only 29% wanted a rupture from the Eurozone.

The drachma has always been seen by them as a way for the series of corrupt governments to steal from the people through devaluations and inflation. From 1981 through January 1, 2001, when Greece adopted the euro, the drachma lost most of its value against the euro and its predecessor, the ECU (European Currency Unit) . Over those two decades, the drachma plunged from 62 drachmas per euro (1 drachma = 0.0163 cents) at the high point in 1981, to 340 drachmas per euro (1 drachma = 0.00294 cents) on January 1, 2001. An 82% loss in value against the euro in 20 years.

But this Drachma devaluation was perpetrated by non-tax paying thieving oligarchs like Andreas Papandreou and Konstantinos Simitis who controlled the Greek government and the Greek banks, spending the country’s money on arms deals from which they profited. The same people then cheated government figures to take Greece into the Euro, and then to the brink. They are now watching the unfolding events form their Swiss chalets. The unacceptable austerity is the result. The Greeks must choose. Its about governance not about the currency.


Alexis Tsipras has called the Troika’s bluff

State capitalism and its money printing machine has been called to account by tiny Greece. The superstate apparatchiks of the IMF/ECB/EU “Troika” have been dealt a blow by Greek Prime Minister and leader of the Syriza government, Alexis Tsipras’ call for a referendum on the terms of their bail out. Finance Minister Yanis Varoufakis confirmed today Tuesday 30th June, ahead of the expiration of the bailout program at 8 p.m., that Greece will not pay its 1.6 billion-euro ($1.87 billion) debt to the International Monetary Fund (IMF).

In a strange twist Varoufakis vowed to sue the EU. This means that the Greek government in theory would sue the European Commission for the imposition of capital controls on Greek banks, and  also in reaction to European Commission President Jean-Claude Juncker threats of expulsion from both the euro and the European Union on Monday. In an emotional speech, Juncker had said that a ‘no’ vote in the referendum would automatically mean that Greece did not intend to remain part of the trade bloc.

This threat is clearly counter-intuitive since it is the wish of the Syriza government that the Greek public vote ‘no’ to the impossible terms of the bail out (a yes vote and they will all resign) and that country then goes back to the Drachma. Syriza can’t say that officially, however, because in theory 57% of the Greek public wants to stay in the Euro, unrealistically, although they voted Syriza into power. So this odd threat is actually pandering to public opinion, essentially saying if there is a Grexit then it is the fault of the EU not of Syriza. **There would still be the option after the plebiscite for the EU to back down and help Greece by meeting most of Syriza’s demands – point added, 1st July: ed.**

It is also an appeal to the Greek psyche and part of Syriza’s clever campaign for a ‘no’ vote. Nations are defined by certain events, and modern Greece was defined by the ‘no’ vote against Mussolini’s ultimatum at the beginning of WWII (called the ‘oxi‘), which was followed by the routing of invading Italian forces by the Greeks. Unlike the Spanish, Irish and Portuguese, Greeks see rejectionism almost as a way of life, and Syriza wants to use this to undermine the irrational desire of the public to remain in the Euro and not have austerity at the same time.

The Greek debt was a fraud perpetrated on the Greek people by the bankers, together with the politicians who had signed off on the deals that created the debt, These oligarchs had their own savings safely stashed away in Swiss bank accounts well away from the Greek tax authorities, and are all part of the same clique as the apparatchiks of the “Troika”, who are imposing austerity on the country.

As negotiations come down to the wire, it is clear that the Troika wants Greek workers, pensioners, and small businesses to pay for any further debt deal, while the Syriza government wants corporations and wealthy Greeks to pay more, together with the Troika absorbing more of the costs of any restructuring of the debt. Essentially, the Syriza solution is one which would allow the Greek economy to ‘grow out of’ the debt. The Troika, on the other hand, continues to insist on a continuation of spending cuts and tax hikes on workers, retirees and others—some now even more draconian than had been envisaged in the past—as the only possible solution.

The Troika’s stand has nothing to do with the Greek problem as such. It simply does not want taxes raised on principle. In line with the Euro-wide strategy of ‘labor market reform’ it seeks to have wages, benefits and costs cut across the board, as a business strategy for the Euro designed to reduce Europe-wide business costs,  making the currency-bloc more competitive in order to generate export-led growth for Europe. [Leon Podkaminer of The Vienna Institute for International Economic Studies, has written in issue 70 of Real World Economics – February 2015 – that the EU’s idea of the whole euro area  becoming – in economic terms – a ‘larger Germany’ with growth primarily driven by expanding trade surpluses is a mirage, given that the euro area has already become a chronic large trade-surplus region, without this actually helping to speed up growth at all.]

The Troika is negotiating with the expectation that Syriza will fail politically. But Tsipras did the unthinkable and called a referendum for July 5th. He obviously didn’t get the memo about the fact that the EU had cancelled democracy.

The liberal reforms in Britain 1906-1914, and the New Deal reforms of 1933-36 in the US were both attempts by liberal politicians to save the capitalist system from disastrous failure. Will we eventually get to that point if Greece votes “no”? The new generation of liberal politicians clearly have no interest in any kind of social or structural reform.



On the eve of June 30th, Egypt’s public prosecutor killed

Egypt’s Prosecutor General Hisham Barakat, who oversaw the Raba’a and Nadha massacres, and the slew of death sentences against opposition figures since December 2014, was killed today Monday 29th June after his convoy was bombed in Cairo. Nothing happened to the chauffeur and nine bodyguards, or indeed to any of the police in the area.

The Revolutionary Council has blamed junta leader Sisi for the assassination, citing the desperation of his régime, and its willingness to go to any lengths to raise the stakes towards a more violent confrontation with the population. Western media meanwhile is marketing the régime’s story that it is an ‘Islamist provocation’ before the anniversary of the 30th June demonstrations two years ago that brought Sisi to power.

حمل المجلس الثوري المصري, حكومة الانقلاب وقائده عبد الفتاح السيسي، مسئولية مقتل النائب العام “هشام بركات”, بإشعالهم مسلسل العنف وقتلهم وسجنهم آلاف الأبرياء.  وقال المجلس الثوري في بيان له, منذ قليل: “فاجأنا اليوم نبأ استهداف نائب عام سلطة العسكر، عقب انفجار مروع، ونحن نحمل الانقلاب في مصر مسئولية ذلك الحادث، كما نحمل قائد الانقلاب شخصيا مسئولية مسلسل العنف الذي تشهده البلاد منذ ٣ يوليو ٢٠١٣ وحتى الآن.  وتابع البيان: “ذلك العنف الذي تصنعه وتؤججه سلطة العسكر بسياساتها وأفعالها. لقد وضعتنا سلطة العسكر في طريق واحد ولا بديل غيره أن نتوحد جميعا على هدف واحد، هو إنهاء سلطة القمع والقتل والعنف والاستبداد، وإسقاط حكم العسكر تماما؛ من أجل تمكين الشعب المصري من حريته وتحرير إرادته دون خداع أو استعباد أو هيمنة أو خوف.  واختتم المجلس: “إننا ماضون من أجل ثورة ناضلت وضحت كثيرا من أجل العيش والحرية والكرامة الإنسانية، وإننا لمنتصرون بعزيمة وصدق وثبات وإقدام المخلصين، وإن غدا لناظره قريب

Propagandist Ahmad Moussa to Sisi:

The fifth column are saying the same thing as the Muslim Brotherhood – that you killed Hisham Barakat! If you don’t kill (President) Morsi, we’ll go and do it ourselves!


In Sisi’s Egypt corruption of the mind seamlessly follows the political, judicial and financial corruption

Shawki Ibrahim Abdel-Karim Allam is Grand Mufti of Egypt, a position which should in theory earn someone respect, yet Allam plagiarised Sayyid Qutb’s 1954 renowned book Fi-Zilal Al-Qur’an (In the Shade of the Qur’an) wholesale for an article in Egypt’s Youm7 newspaper, which he attributed to himself. The fact that he thought nobody would notice is absolutely astonishing.

Abbas and his government finally present their case to the ICC

We have followed the matter of the Palestinian Authority and the ICC closely on this site, and despite everything, Mahmoud Abbas signed the Rome Treaty in December 2014 and is now presenting the Palestinian case to the Hague tribunal.

In fact, today – June 25th, Riyad al-Maliki, the Palestinian foreign minister, is presenting a dossier to the ICC detailing war crimes and crimes against humanity allegedly committed on Palestinian territory by Israel and the Israel Defence Forces (IDF). The report deals with three main areas: illegal Israeli settlement activity, the treatment of Palestinian prisoners, and last summer’s war in Gaza. It covers the period from 13 June 2014 to 31 May 2015, and media reports suggest that among other things, it includes information about Israel’s development of 2,600 housing units in occupied East Jerusalem, and the killing of four boys on a beach in Gaza during the war. It details settlement expansion, house demolitions, land confiscation, and destruction of Palestinian property and olive trees by settlers and soldiers.

Greece and the astonishing EU game of plates on sticks

The EU will go to any lengths to give the impression that Greece is a viable entity and keep it locked in a game of financial smoke and mirrors, simply because the EU is working for the banks, especially the German ones. Greece bankrupted itself years ago because it was was able to borrow by issuing bonds in a debt market propped up by the European Central Bank (ECB). While this site has been following Japan’s economic demise with considerable interest, as a cornerstone of the impending implosion of the world financial markets, Greece is extraordinary because of the fact of such a small economy keeping the whole EU in thrall and threatening its very survival.

In 2001 Greece’s public debt was about $150 billion (100% of its nominal GDP). Because of the ECB’s artificial propping up of the European bond markets, by 2010, Greece’s public debt had soared to $380 billion, thus growing at a compound annual rate of 10% for the decade. This occurred despite the fact that Greece’s notoriously corrupt, inefficient, and special interest dominated economy was never reformed.  In fact, the ECB’s quantitative easing (QE) in the European bond markets rewarded the Greek government with a dramatic drop in the 10-year bond yield between 2001-2008, such that even by the time the crisis hit in early 2010 it was only 5.5%, a yield that would normally be impossible for a basket case like Greece to obtain.


The ECB had thrown money to the winds in that same 11-year period ending in 2010, its balance sheet soaring threefold, growing at an 11% annualized growth rate. So the QE printing presses in the Frankfurt European Central Bank so falsified euro bond prices, that even with yields on Greek bonds being above all other European yields to account for extra risk, the Greek state was able to borrow itself into bankruptcy.

greece 2 euro-area-central-bank-balance-sheet

Between 2001 and the 2009 peak, the Greek economy appeared to surge—-with nominal GDP expanding from $150 billion to $340 billion or by 10% annually, in a debt fuelled bubble of public and private construction investment and new household consumption on the part of Greece’s public employees and social beneficiaries. This boom in GDP based on a fake bond market, was thus a fake boom, giving the false appearance that the ratio of debt/GDP had only reached 115% by 2008—- when in fact the true underlying ratio was soaring. In this Alice in Wonderland world, Greek politicians drastically increased pensions and other social welfare programs.

Thus the debate between Alexis Tsipas and Yanis Varoufakis of Syriza and the troika apparatchiks about the “austerity” package is really, like everything else here, a fake one. Where Greece, in the graph below, has actually reduced nominal outlays for its pension and old age programs by 6 billion euro or 16% since the peak in 2009, in the prior 3 years alone it had increased these outlays by 35% (and by upwards of 60% since first joining the eurozone). The recent rollbacks and pension cuts, therefore, amount to some recoupment of unaffordable previous rises based on a debt-fuelled bubble economy.

Greek 3

So simple arithmetic tells us that the “austerity” to which Greece has been subjected is not the result of Troika (EU, ECB, IMF) policies, but the result of its shrinking GDP: Greece’s sustainable GDP in 2008 was never the $340 billion it actually posted. The drop toward $200 billion is simply the liquidation of a bubble economy that was dependent on massive unrealistic new injections of debt. To pretend that this mirage can be restored by the elimination of the fiscal constraints being imposed by Greece’s lenders is a commentary on today’s general financial madness.


Nevertheless the Troika bailouts and conditionalities have no merit whatsoever, saddling Greece with illegitimate, onerous, predatory debt that it should be ejected in a process of default, since Greece is in fact bankrupt. The $380 billion of gross public debt that existed in 2010 should have been shrunk to a fraction of that amount in what should have been a proper process of bankruptcy.

As it happened, most of that debt was simply transferred from the banks and bond managers of Europe to the taxpayers of the eurozone. The elected politicians of Greece did not want this bailout in the first place; it was forced on them by French, German and Italian authorities in order to bailout their own financial institutions.

So at present Greece’s current public debt ratio is 180% of GDP, and simply cannot be serviced over the long run. Given that interest rates must eventually normalize, since permanent QE is not possible, the potential rise of 3-5% on Greece’s debt service cost would have unconscionable results. Given that reality, the idea that Greece can work itself out from under its massive debt burden by running 1-5% of GDP primary surpluses in its budget is absolute rubbish, so the whole current exercise is a matter of kicking the can down the road.

Had the ECB’s Draghi not announced he would massively monetize euro sovereign debt in July 2012 through QE, Greece would have been bankrupt long ago, and the peripheral borrowers like Italy, Spain and Portugal would have had their day of fiscal reckoning, too. The eurozone would have blown sky high, and the ECB would be no more. Likewise, were not the ECB now supplying $125 billion of funding to the Greek banking system—or actually more than its current level of fast vanishing deposits—-the latter would also have crashed and burned months ago, thereby triggering a crisis which would have eventually destroyed the euro.

When Greece’s intrepid prime minister, Alexis Tsipras, despite everything, says that “We have no right to bury the European democracy in the land where it was born”, he is right in political terms, and, in that respect, if Greece’s democracy is to survive, it must be cut loose from the destructive regime of superstate dictation from Brussels and monetary falsification from Frankfurt. Then, going back to the Drachma would put Greece’s politicians right were they were before they were betrayed by the false monetary regime of eurozone central banking. They would be forced to run a primary surplus because they would not be able to borrow on world markets after a massive default on the debt forced upon them by the Troika.

The necessary mix then of taxing the rich, cutting the pensioners, catching the tax cheats, selling state assets, shrinking the bureaucracy and squeezing the crony capitalist companies which feed on the Greek state, would be up to Greek politicians, not the apparatchiks of the IMF and the European superstate, which is the way it should always have been. Furthermore, faced with an honest bond market, the Greek state would rediscover the requisites of sustainable fiscal governance. But Tsipras is now confronted with this kind of hard choice facing the Troika. If he sells out Greece one more time to the paymasters of his country’s crushing debt, it will be only a matter of time before another Greek prime minister will be forced to walk the same plank on which he now balances.

By doing what’s right for Greek democracy, by contrast, he would prove to be an angel of mercy. There is no way that the euro and ECB could survive a Greexit, nor could worldwide profligate central banking survive the blow that would emanate from this demise.

No wonder the assembled powers of the world will move heaven and earth in the days ahead to keep Greece locked in the debtor’s prison that has replaced honest free markets in sovereign debt. To this end, they may yet turn Tsipras into a faithless “trusty” of the wards, but to do so they will have to again make pigs fly——at least for a little while longer.

-with thanks to David Stockman for the substance of this post

Turkish coalition politics

Osman Can writes:

While the AK party remains by far the single biggest party, it needs a coalition partner if it is to form a majority government. Turkish media outlets have reported that the idea of partnering with the CHP has been becoming increasingly popular for the AK Party leadership. It is no secret, however, that the AK Party base would rather have their party work with the MHP. At this point, it looks extremely unlikely that the AK Party will partner up with the HDP.

Although big business is pushing for a grand coalition featuring the AK Party and the CHP, which might facilitate the drafting of a new constitution, and thus fulfil one of the important policy goals of the AK party in the next Parliamentary term, CHP voters are nothing like the AK Party base. The overwhelming majority of the CHP base leads secular lives and identify as center-left voters. Traditionally, tensions between this group of secular-minded leftists and conservative AK Party supporters have been quite significant.

A partnership between the two parties, in this regard, could possibly remedy the widespread polarization and have an overall positive influence on various social groups. It is perhaps more important to acknowledge that a coalition of polar opposites might generate the necessary momentum to implement legal and constitutional reforms. Considering that the CHP leadership has revised its position on the Kurdish question, there is a good chance that the prospective coalition government could devise a peaceful solution.

A coalition government with the MHP, in turn, would hardly create similar opportunities for Turkey. The AK Party would avoid political turmoil by partnering with the MHP, but the venture might indeed fail to play a constructive role while at the same time, placing the Kurdish reconciliation process at risk.


(Editor: so, on Can’s view, previous commentary here that the Kurdish reconciliation process might be the main casualty of the new Turkish coalition process, which would be the case if the best fit for the AKP is with the MHP, is not correct. On the other hand, if the reconciliation process with the Kurds continues and a coalition with the CHP is successful, Turkey would experience its first inclusive government, signalling a major new phase forward for the country)

Sisi régime punishing Gaza again

Egyptian authorities have started to dig a new tunnel in the Sinai Peninsula along the border with the Gaza Strip. The tunnel is intended to monitor the smuggling tunnels between Egypt and Gaza. These tunnels are Gaza’s lifeline – but the Sisi government  claims that they are a threat to its security. The tunnel is expected to be dug 2km from the actual border; it will be 20m underground and 10m wide.