Wednesday, April 6, 2016

Lezing Zygmunt Bauman, april 2016

Op zaterdag 2 april 2016 hield de Pools-Britse socioloog Zygmunt Bauman (1929) in het kader van het economie & filosofie-festival G10 in de Westerkerk in Amsterdam een indrukwekkend verhaal.

Bauman is oud en doof, maar spreekt krachtig en betrokken de mensen in de Westerkerk toe. 
Zijn verhaal werd ingeleid door de Amsterdamse filosofe Marli Huijer.

In haar inleiding legt Marli Huijer uit: Bauman ziet de holocaust als een gevolg van de moderniteit, als een veel te ver doorgevoerde technocratisering en bureaucratisering van het sociale leven. Volgens hem leven we nu in een tijdperk zonder morele verplichtingen. Het individuele leven wordt als belangrijker ervaren dan de gemeenschap. Het sociale is volatiel, steeds wisselend. Mensen lijken nu op toeristen, consumenten, die niet met anderen verbonden zijn maar allemaal op weg zijn om te consumeren en te genieten. Ze zijn niet meer geworteld; zijzelf en de wereld om hen heen zijn vloeiend. Ze zijn van een zware in een lichte moderniteit terechtgekomen, maar dat heeft existentiële problemen met zich meegebracht. Mensen voelen zich onzeker, ze zijn obsessief bezig met gezondheid en veiligheid en willen vreemdelingen op een afstand houden. Terwijl de Europeanen als toeristen op weg zijn in hun leven, vinden ze tegenover zich de vluchtelingen die noodgedwongen naar hen toe komen. 

“De wereld om ons heen is vloeibaar,” zegt Bauman aan het begin van zijn lezing. Alles is flexibel geworden: werk, ervaring, kennis, politiek, economie. De dingen die je gisteren leerde, zijn morgen waardeloos. We hebben niet meer een cultuur van leren, maar van vergeten. Na de lagere sociale klasse wordt nu ook de middenklasse onzekerder en armer, men heeft geen vaste grond meer onder de voeten. Er dreigen explosies, maar men weet niet waar en wanneer. 

Ook na de Eerste Wereldoorlog, in de jaren’20 van de twintigste eeuw hadden we zo’n periode. In de tijd voor de Eerste Wereldoorlog was het devies: je moest je scholen, de wereld zou steeds beter worden. Maar in de jaren ’20 kwam een periode van massale werkloosheid, je kon niet meer vertrouwen dat het leven beter zou worden. De staat en het kapitaal, die tot die tijd gescheiden entiteiten waren, gingen toen samenwerken. De staten kregen dictators, zoals Hitler en Stalin, en na de Tweede Wereldoorlog sterke leiders, die invloed konden uitoefenen op het kapitaal. Die staatsinvloed werkte tot de de jaren ’70 van de twintigste eeuw. Toen kwamen er een hoge inflatie en een grote werkloosheid, en toen werd er een magische ingreep gedaan om de boel weer te laten functioneren, met het neo-liberalisme van Friedman, Thatcher en Reagan. De staat trok zich terug en de markten zouden voortaan het werk doen. In het begin werkte het. Na ‘70 kwam er dertig jaar van consumentisme. De banken stimuleerden de mensen om creditkaarten te nemen en leningen aan te gaan. In 2008 knapte de ballon, en kwamen we in een depressie terecht die nu nog voortduurt. Een kleine bovenlaag heeft het veel beter gekregen, de meeste mensen boeren achteruit. 

Maar: deze keer is er geen gemakkelijke oplossing. De staat en het kapitaal zijn beiden in discrediet geraakt. De grote multinationals drijven, buiten het bereik van staten, over de aardbol, er is geen politieke instelling in de wereld die tegen ze opkan. Een land als Griekenland werd door het kapitaal gedwongen om de principes van democratie te schenden. We komen in een gewelddadige Hobbesiaanse wereld terecht. Vroeger hadden werknemers een band met hun bedrijf, ze bleven er lang, er was zekerheid. In plaats van waardering heerst er nu angst tussen het bedrijf en de werknemers, elk moment kunnen ze ontslagen worden. Voor bange mensen is het moeilijk om solidair met elkaar te zijn; afgunst en competitie gaan opspelen tussen mensen. 

Ook is er wantrouwen in de politiek; politieke partijen worden als ongeloofwaardig en corrupt gezien. Regeringen verliezen de band met de bevolking, die hen aan de macht bracht. Regeringen willen niet langer sociale maatregelen beloven, het tijdperk van de welzijnsstaat is voorbij. In deze omstandigheden zijn de terreuraanvallen op Parijs en Brussel bijna een godsgeschenk: François Hollande bijvoorbeeld, de minst populaire president van Frankrijk ooit, werd na zijn harde taal over oorlog tegen het terrorisme, het sluiten van de grenzen en het afkondigen van de noodtoestand opeens weer populair. In die zin hebben regeringen en terroristen baat bij elkaar: regeringen versterken de security, de politiecontrole van de staat, van sociale problemen worden veiligheidsproblemen gemaakt - en de terroristen krijgen maandenlang gratis publiciteit. 

Victor Orban, de premier van Hongarije, zei: Alle terroristen zijn migranten. Niet waar; de terroristen zijn bijna allemaal in Frankrijk en België geboren. In Frankrijk zijn 22 % van de jongeren werkloos, onder de allochtone jongeren is dat 50 %. 5000 jongeren in Europa lieten zich recruteren voor de jihad in Syrië. Bommen maken is gemakkelijk en goedkoop. De media zijn gretig om de terreur uit te zenden. Mensen worden bang gemaakt. De angst van mensen wordt geprojecteerd op buitenlanders. 
Op de korte termijn ben ik pessimistisch, zegt Bauman. Op de lange termijn ben ik optimistisch, net als de Italiaanse denker Antonio Gramsci. De Duitse filosoof Immanuel Kant benadrukt dat gastvrijheid belangrijk is, dat we allemaal mensen zijn. Ik woon al 46 jaar in hetzelfde huis in Leeds. Vroeger kwamen er alleen witte schoolkinderen voorbij, nu kinderen in alle kleuren. Bauman citeert de Franse filosoof Emmanuel Levinas: “Moreel zijn is geen recept voor een gemakkelijk, gelukkig leven. Je denkt steeds: ik heb niet alles gedaan wat ik kon doen.” Hij pleit voor een terugkeer van het morele, van bescheiden, zich verantwoordelijk voelende en handelende mensen. 


Verslag van Aafke Steenhuis

Tuesday, March 1, 2016

Syrian Crisis Revisited - Analysis and Possibilities for Action

The Roles and Responsibilities of Syria, Israel, US, Europe, Turkey, Iran, Russia and the Gulf States

Robert Simons
By Robert Simons
Robert Simons, a former correspondent in the Middle East, attended the last Golfgroep meeting on Syria. The appeal from the group to do something rather than just analyse and listen, prompted him to write about the current situation and the possibilities of action. 
As the political and military situation in and around Syria becomes complexer by the day there are quite a few means at our disposal in which public advocacy can work.

First of all we have to identify the players and the alliances in the Middle Eastern region in order to alert governments, parliaments, international organisations and public opinion.

Awareness should be raised through the media to put public pressure at work.

THE PLAYERS AND THE ALLIANCES

Syria, Iran and Russia
The Syrian leader Bashar al-Assad is being supported by Iran, Hezbollah and Russia.
While the Syrian army with the support of Iranian troops and Hezbollah fighters is fighting opposition forces mostly in the west and south of the country, the Russian air bombardments target mostly the Free Syrian Army and other moderate rebel groups.
It is remarkable, that Israeli prime minister Bibi Netanyahu flew to Moscow immediately after the Russian announcement about its participation in the Syrian war on the side of Assad. The Russian and Israeli leaders agreed not to attack each other. Apart from preventing attacks against each others air forces Putin agreed not to attack the Israeli occupied Golan heights, while Bibi promised not to attack Syrian troops. 

NATO
On the other side the western alliance formed by the US, France, the UK and smaller countries like The Netherlands has from the beginning been supporting the so-called Free Syrian Army.
While the Americans have mostly been targeting ISIS, they have also trained fighters in Jordan, who after completion of their training often joined ISIS. 
Allied, Russian and Syrian bombardments have led to hundreds of thousands of Syrian civilians being killed or injured, while millions of Syrians fled to neighbouring countries like Jordan, Lebanon and Turkey. 
From the last two countries many refugees tried to reach Europe. However, the Gulf States like Saudi Arabia, Qatar and the United Arab Emirates (UAE) kept their borders closed for  Syrian refugees.

The awkward situation of Palestinian refugees
It is not widely known, that Palestinian refugees in Syria have nowhere to go. Before the civil war there were for instance some 300.000 Palestinian refugees living in the Yarmouk Camp near Damascus. 
Israel was the first country, which refused to let these Palestinians cross over to the Israeli occupied West Bank. 
As these Palestinians do not hold a  passport, they were also refused entry to Jordan and the European Union.

The Gulf States
The oil rich Gulf States Saudi Arabia, Qatar and the UAE have their own proxies in the Syrian war. 
S.A. while fighting a bitter war against the Houthis in Jemen, is allied with Al Nusra. Qatar is supporting groups, which are ideologically and religiously close to the Muslim Brotherhood.
As there are nowadays more than 90 different opposition groups fighting in Syria, alliances are not always clear. 
Politically, militarily and economically Saudi Arabia is closely linked to the USA, which is supplying the country with an abundance of weapons and military aircraft.
Saudi Arabia is in the Middle East also allied with the military dictatorship of Egyptian president Sissi and not so surprisingly with Israel. 
The Wahhabi monarchy, Qatar and the Jewish State have common strategic interests,  business and security links.

The responsibility of Israel
Israel bears to a great extent responsibility for the crisis situation in Irak and Syria. 
On the basis of false information about weapons of mass destruction in Irak supplied by the Israeli intelligence and security services to then American Secretary of Defence Donald Rumsfeld and his Deputy Paul Wolfowitz the Bush administration decided  in 2003 to invade Irak. The American occupation of Irak led to the instalment of a sectarian Shiite government,  the dismemberment of the Iraqi military and security forces, and to the exclusion of the Sunni population in government and in the newly established armed forces. On the basis of the dismissed and unemployed Sunni military in Irak  ISIS came into being.
The extremist nationalistic - religious government of Netanyahu is a clear winner during the  fighting and bloodshed in its neighbouring country. 
The victims of Israeli policies are - as always - the Palestinians who see more land taken, more Jewish settlements built, more Palestinian houses and villages on the West Bank destroyed, while the ongoing Israeli policy of ethnic cleansing of the Palestinian population is continued on an ever increasing scale. 
The situation in the Gaza Strip, where 1.8 million Palestinians are living under an Israeli blockade, is approaching an explosive humanitarian disaster.
All these Israeli war crimes are being perpetuated,while Palestinian rights are even more severely violated, and more Palestinians are either being killed by the Israeli army and Jewish settlers or imprisoned. 
While Israel is committing all these crimes against the Palestinian people, governments and most politicians look the other way, giving Bibi a free hand to execute his policies against the Palestinians in Israel and in the occupied territories. Strangely enough Israel is practically working together with rebel groups like Al Nusra, which has established positions on the Syrian side of the cease fire line on the Golan heights. 
A 400 bed hospital is operating in northern Israel to treat injured rebels from Syria. 

The special case of Turkey
Turkey under president Erdogan is a very special case. As a member of NATO it is supposed to be part of the American led alliance. 
On the other hand Turkey is waging a brutal war against its own  Kurdish citizens and the PKK in the east of the country as well as against the Kurdish population in northern  Syria. 
In its fight against the Kurdish YPG forces in Syria Turkey is clearly allied with ISIS. As a fierce opponent of the Assad regime Turkey is also  closely cooperating with ISIS by facilitating its operations. 
ISIS derives a large part of its income  by selling Syrian oil via Turkey. While professing to fight ISIS, weapons for its fighters enter Syria mostly via Turkey. 
And tens of thousands of foreign jihadi’s join ISIS via the Turkish border.
The loose alliance between ISIS and Turkey might be explained by one remark from Erdogan, who not long ago said, that he was dreaming about a resurgence of the Ottoman Empire, which should be directed against the shiites.

A role for China in the Middle East?
As a powerful political bystander China should not be disregarded in the Middle East turmoil. Chinese involvement in negotiations to solve the Syrian quagmire should seriously be considered. 
Obtaining its position as the second economic power of the world  China has during the last eight years become increasingly nationalistic and  self conscious.  
The Chinese government under President Xi Jinping is clearly looking for opportunities to ascertain itself - also politically - on the world stage. 
Without elaborating, President Xi in January 2016 declared, that China should play a greater role in the Middle East. 

Since the end of January 2016 a fragile pause in hostilities has been agreed among most sides in the Syrian war. It remains to be seen whether this pause will lead to a more permanent cease fire among the parties.

WHAT CAN BE DONE?

- Being opposed to the senseless bombardments by the American led coalition, the Russians and the Syrians, it is first and foremost necessary to declare and enforce a no fly zone over Syria to protect the civilian population.
- No deals should be made with Turkey nor money transferred to the Erdogan government before the Turkish authorities close their border for jihadi’s on their way to join ISIS and ISIS shipments of oil and weapons
- NATO should not allow Turkey to establish a so-called security zone along its border in northern Syria to restrict the areas under control of the Kurds and other opposition groups.
- Turkey should not be allowed to attack Kurdish forces in Irak and Syria allied with the American led coalition.
- A weapons embargo should  be declared against Saudi Arabia and the other Gulf states participating in or supporting the fighting in Syria.
- The Gulf States and first of all Saudi Arabia should be pressured to take their share of the refugees from Syria including Palestinian refugees.
- The EU should not make a distinction between Syrian and Palestinian refugees from Syria.
- Pressure should be put on Israel to let Palestinian refugees from Syria enter the Israeli occupied territories to join their Palestinian brethren.
- The Israeli blockade of the Gaza Strip should be lifted under effective EU pressure.
- The EU should forbid the import of all produce from Israeli settlements from the occupied Palestinian territories.
- The Netherlands should forbid the export of dogs to the Israeli army. 
These dogs are being used against Palestinian civilians, like the Germans used dogs against Jewish deportees and prisoners during World War II. 
By allowing the export of these dogs The Netherlands is condoning a flagrant violation of the right to protection of the civilian Palestinian population.
- The EU should suspend indefinitely its association agreements with Israel, while it is continuing to expand Jewish settlements, expropriate Palestinian land and in general violate the rights of Palestinians.
- Economic sanctions should be issued by the EU against Israel, if it continues to refuse to end completely settlement building in the occupied territories, and continues with its policies of  expropriation of Palestinian land, ethnic cleansing etc. 
Those sanctions should also be applied, if Israel continuous to block the reconstruction of the Gaza Strip, severely destroyed again in 2014 by Israeli bombardments.
- Bilateral and multilateral dialogues should be started with ISIS and organisations like HAMAS, Hezbollah and the PKK in order to find political solutions for the Middle Eastern conflicts.
- In view of the necessity to formulate alternative and long term solutions for all the conflicts in the Middle East the 4 to 1 state solution *) should be promoted and after its implementation be expanded.
- As the most populous country in the world and as a permanent member of the Security Council of the United Nations the Chinese government should be engaged as a neutral and unbiased power broker in future negotiations in the Middle East.

*) The 4 to 1 state solution is an idea developed by me as a long-term solution to various problems concerning Israel, Palestine and its neighbours. For decennia western governments have continued to pay lip-service to the 2 state solution for the Palestinian - Israeli conflict. This solution has become outdated and unrealistic by Israeli sabotage through land expropriation, building of Jewish settlements as well as the destruction of Palestinian villages and houses. Offering alternatives to the common thinking pattern a breakthrough in the non-existing negotiating process can be accomplished. By enlarging the territorial scale and by uniting Israel, Jordan, Lebanon and the occupied Palestinian territories into one state most humanitarian and political problems in this region can be solved.

Friday, February 19, 2016

Syria - what can we do to end the tragedy?

Paul Aarts being interviewed by young people.
Paul Aarts on Syria and the Middle East

On Wednesday 18 February 2016, we had a very informative meeting about the situation in Syria and the surrounding Middle Eastern countries. Our 'guide' was Paul Aarts who gave a panoramic overview of the various groups and countries engaged in geopolitical warfare, in which all have their own agenda and interests.

In the discussion after Paul's introduction various participants raised the question of what we, or "the world", could do to end this tragedy.

Also, there was a participant who asked why we, in the Netherlands, are not demonstrating against the bombing in Syria by Dutch air force.

A good question!

What can we do?

So far the question about Dutch bombing in Syria has led to a brief exchange between me and another participant of the Golfgroep who has a lot of experience as prominent member of the peace movement.

As soon as we come up with something that might make sense, I will report here.

What banner should we carry? 

A slogan suggested by my experienced peace 'fighter' was: "Drop food packages instead of bombs".

In a newsletter of PAX (peace movement organisation in the Netherlands) that I received this morning, I read that PAX advocates an arms embargo for Saudi Arabia... Should there not be a more general arms embargo for the whole region around Syria? Is there a possibility that something can be done to reduce the availability and use of arms in the region?

What else can we do?

What else can be done to reduce the misery of common people who are suffering from the fights and the bombings?

If anyone knows of peace promotion inititiatives -- at the level of movements pressurising governments -- in other countries, please let me know.

Friday, October 17, 2014

Is Argentinië failliet?

Een van de zaken die Jan Pronk op onze Golfavond van 15 oktober 2014 aanstipte was hoe Argentinië in de tang wordt genomen door kapitalistische 'aasgier' fondsen, vulture funds, of hedge funds. Ik heb de afgelopen maanden regelmatig meegemaakt dat vrienden zeiden: "Argentinië is failliet, hè?" en dat ik dan nauwelijks mijn woede kon inhouden en probeerde rustig uit te leggen dat Argentinië niet falliet is... En daarbij dacht ik onmiddellijk aan hoe de regering-Allende in de tang werd genomen begin jaren zeventig, en dat dat mee leidde tot de staatsgreep van 11 september (9/11) 1973, en dat die staatsgreep door het leger werd uitgevoerd ten behoeve van een herstel van het kapitalisme in Chili.

Naar aanleiding van die woede schreef ik een paar stukjes op mijn FONDAD-blog Thoughts. U kunt die lezen door te klikken op "Argentina".

Een recent artikel hierover las ik vandaag in de Buenos Aires Herald, dat ik hieronder kopieer:

Thursday, October 16, 2014

Scioli confident about 'positive outcome' in vulture funds dispute

Buenos Aires province Governor Daniel Scioli trusts Argentina will manage to sail through the vulture funds crisis.
Buenos Aires province Governor Daniel Scioli has expressed his confidence that Argentina’s legal battle against “vulture funds” will reach a “positive outcome” by the beginning of 2015, leading to growth in the country.
“I see that by the beginning of next year there will be a positive outcome for Argentina’s interests in the external front and that will decompress the issues of foreign currency and inflation and will accelerate growth,” Scioli told reporters today.
In an interview with a radio show this morning, the leader of Argentina’s most populated province and a pre-candidate to run in the 2015 presidential elections affirmed “Argentina’s perspectives are very good,” adding it is a country that has got out of the red servicing its debt and reactivated its industrialization process.
According to Daniel Scioli, some sectors want to connect the country with a default scenario – following the dispute with vulture funds suing Argentina over its defaulted bonds more than a decade ago and a ruling by US Judge Thomas Griesa ordering the South American nation to pay these creditors in full -, but warned Buenos Aires “continues to pay” its debt.
Some opposition candidates, he said, want “the country to go into the red againt” and “request 20 billion dollars” to credit organizations. In a similar tone, he blasted anti-kirchnerite leaders who have questioned the nationalization of YPF, Argentina’s energy giant. “By the hand of YPF, energy sovereignty will be recovered and the dollar situation will decompress,” Scioli assured.
“I believe in a state that plays a present (active) role to give a push to those who need it,” the BA province governor told reporters, defending the national government strategy to face holdout creditors that refused the 2005 and 2010 debt restructuring and put an end to, what he called, "the nightmare of the karma of the (public) debt.”

Thursday, July 31, 2014

Capitalism is a Shame

The case of Argentina’s default shows it again: capitalism is a shame. Argentina has been declared in default, but the default is with them, the finance people ruling the world, supported by a judicial system that defends their interests.
Here is a report from Reuters:
 

Argentina braces for market reaction to second default in 12 years

BUENOS AIRES Thu Jul 31, 2014 1:58am EDT

A woman walks past a graffiti that reads ''No to the debt payment'' in Buenos Aires, July 28, 2014.    REUTERS/Marcos Brindicci
A woman walks past a graffiti that reads ''No to the debt payment'' in Buenos Aires, July 28, 2014.
Credit: Reuters/Marcos Brindicci

Related Topics

(Reuters) - Argentina defaulted for the second time in 12 years after hopes for a midnight deal with holdout creditors were dashed, setting up stock and bond prices for declines on Thursday and raising chances a recession could worsen this year.
After a long legal battle with hedge funds that rejected Argentina's debt restructuring following its 2002 default, Latin America's third-biggest economy failed to strike a deal in time to meet a midnight deadline for a coupon payment on exchange bonds.
Even a short default will raise companies' borrowing costs, pile more pressure on the peso, drain dwindling foreign reserves and fuel one of the world's highest inflation rates.
"It is going to complicate life for businesses like YPF which were going to look externally for financing," said Camilo Tiscornia, a former governor of Argentina's central bank. State-controlled energy company YPF (YPFD.BA) needs funds to develop Argentina's huge Vaca Muerta shale formation.
Argentina had sought in vain to win a last-minute suspension of a ruling by U.S. District Judge Thomas Griesa in New York to pay holdouts $1.33 billion plus interest. He ruled Argentina could not service its exchange debt unless it paid holdouts at the same time.
A proposal for Argentina banks to buy out the hedge funds' non-performing debt also fell through, sources told Reuters.
"This is a very particular default, there is no solvency problem, so everything depends on how quickly it is solved," said analyst Mauro Roca of Goldman Sachs.
As dire as it is, the situation is a far cry from the mayhem following the country's economic crash in 2001-2001 when the economy collapsed around a bankrupt government. Millions of Argentines lost their jobs.
This time the government is solvent. How much pain the default inflicts on Argentina, which is already in recession, will depend on how swiftly the government can extricate itself from its obligations.
Buenos Aires had argued that agreeing to the hedge funds' demands to pay them in full would break a clause barring it from offering better terms than those who accepted steep writedowns in the 2005 and 2010 swaps.
However, that clause expires on Dec. 31, after which the government would be able reach a deal with the funds. Many investors and economists still hope for a separate solution before then between the holdouts and private parties.
"Our base case is that a default would be cleared by January 2015," said Alberto Bernal, a partner at Miami-based Bulltick Capital Markets. He projected that a default would cause the economy to shrink 2 percent this year compared with a previous market consensus for a 1 percent contraction.
Failure to strike a deal will not cause financial turmoil abroad because Argentina has been isolated from global credit markets since its 2002 default on $100 billion, but domestic markets that had rallied on hopes of a deal in recent days will probably reverse course.
Yields on Argentina's key dollar bond due 2033 fell to the lowest level in about three and a half years on Wednesday, and the country's MerVal index .MERV hit a record.
"The correction will depend on perceptions of how long the default will take to solve," said Roca.
HOW DIRE A DEFAULT?
The default could get much messier and take longer to clear up if creditors force an "acceleration" for early payment on their bonds.
"How bad the outcome ends up being depends on whether bondholders accelerate," said Alejo Costa, strategy chief at local investment bank Puente.
"Acceleration would open a new legal battle for the government that could end up in a new restructuring."
Argentina has foreign currency restructured debt worth about $35 billion while its foreign exchange reserves stand at $29 billion.
U.S. ratings agency Standard & Poor's on Wednesday downgraded the country's long- and short-term foreign currency credit rating to "selective default". The default rating will remain until Argentina makes its overdue June 30 coupon payment on its discount bonds maturing in 2033, the agency said.
Holders of insurance against an Argentine credit default will have their eyes peeled for an announcement from the International Swaps and Derivatives Association (ISDA). If ISDA declares an Argentine default, the total amount of money that would be paid out is just over $1 billion.
After two days of talks with holdouts in New York, Argentine Economy Minister Axel Kicillof on Wednesday evening told reporters that Argentina was not in default because it had made the June $539 million interest payment to holders of exchanged bonds - even if this had not reached creditors by July 30, at the end of the month-long grace period.
Judge Griesa called the payment illegal and blocked the funds' onward transfer to creditors. It remains in limbo in the Buenos Aires account of trustee agent Bank of New York Mellon.
Argentines were sanguine about news of the default.
"We have been in a similar situation before, and we will make it through," said a 27-year old employee at an automobile firm who declined to give his full name. "The sun rises each day. It will get resolved, be it next week, or next month."
(Additional Reporting by Richard Lough and Eliana Raszewski; Editing by Ken Wills)
 

Tuesday, June 24, 2014

Argentina's debt restructuring attacked


Here is an interesting article in the New York Times about bondholders ('vulture funds') obstructing a reasonable restructuring of Argentina's debt.

The Debt Vultures' Fell Swoop


WASHINGTON — Last week, the United States Supreme Court decided not to review a ruling in the Second Circuit Court of Appeals whose effect is that Argentina must pay “holdout” creditors who refused to participate in debt restructuring agreements that Argentina reached with the majority of bondholders following the 2001 default on its sovereign debt. Argentina’s lawyers warned that the court’s decision created “a serious and imminent risk” that the country would again be forced to default. But the ruling also has profound and disturbing implications for the functioning of the international financial system, and even the United States would most likely be adversely affected.
Parties as diverse as the International Monetary Fund and leading religious organizations wanted the Supreme Court to overturn the decision, and briefs supporting this position were filed by the governments of France, Brazil and Mexico, as well as by the Nobel Prize-winning economist Joseph E. Stiglitz. The I.M.F. — which has had mostly sour relations with Argentina since its involvement in that country’s 1998-2002 recession — was also planning to file a brief on Argentina’s side to the Supreme Court, but was blocked by the American government from doing so. This action may have influenced the court’s decision not to hear the case.
Argentina defaulted on its international debt at the end of 2001, following a deep recession. After years of negotiations, the government reached a restructuring agreement with its private creditors, in which the bondholders accepted a loss of about two-thirds of the value of their bonds. In 2005, 76 percent of the creditors had signed on; by the end of 2010, more than 90 percent had. Argentina has made all of its payments on the new, restructured bonds, on time.
The complication was over a group of “holdout” bondholders who did not agree to the restructuring. The plaintiffs in the New York case are widely known as “vulture funds,” because they bought the bonds after the default at a fraction of their value, hoping to use court rulings like this one to force payment at the bonds’ original face value.
The appellate court ruled that if Argentina was paying the holders of restructured bonds, it must also pay the holdout or vulture fund creditors in full — and its decision implies that the punishment for an attempted default could be never-ending. This raises the question of how many decades a people should be forced to suffer for the mistakes or transgressions of earlier leaders — whether elected or, as is often the case, unelected. (Much of the Argentine debt, in fact, was incurred by a dictatorship.)
Another key implication of the ruling is that governments that are bankrupt would now find it difficult or impossible to negotiate a settlement with their creditors. Who will take a haircut on their bonds if they can refuse the terms and sue for the full value?
In the United States, and most other countries, there are bankruptcy laws designed to allow for companies and individuals facing unpayable debt to make a new start. There is no such legal mechanism for countries, so these restructuring agreements are an important way of resolving problems of unpayable sovereign debt.
The court’s decision would make it difficult to issue the new bonds needed for restructuring, as well as further debt in the future. Just one holdout bondholder or vulture fund creditor could torpedo the process.
In addition, Argentina’s default and devaluation in 2001-2 is widely regarded as a success. The country’s economy shrank for just three months after the default, and then began a rapid-growth recovery. By the end of 2011, Argentina had achieved a record rate of employment, reduced poverty by nearly 70 percent and allowed for a tripling of social spending in real terms.
A decade after the devaluation, the Argentine economy has run into trouble — partly because the vulture funds have prevented it from borrowing on international markets — but there is no doubt that Argentines are vastly better off for the path that was taken. For comparison, look at Greece: After six years of austerity-driven recession, which included a 40 percent cut in health care spending, the unemployment rate stands at 26.8 percent (and more than double that rate for youth) and the net public debt has grown to 169 percent of the country’s gross domestic product.
Most experts agree that the appellate court ruling would have a destabilizing effect on international financial markets. There is economic justice to consider, too. Argentine bondholders were paid high interest rates on their bonds because there was risk. Capitalism is not supposed to be a “heads I win, tails you lose” bet — but the Second Circuit Court’s decision would make it that way for sovereign debt bondholders.
Argentina may find a way around the court’s decision, by issuing new bonds and making payments that are outside of the court’s jurisdiction. But this ruling in favor of the vulture funds will do continuing damage to ordinary people around the world that will show up in future debt crises.

Mark Weisbrot is the co-director of the Center for Economic and Policy Research and the president of Just Foreign Policy

You may also be interested in this interview.

Saturday, June 21, 2014

March in London against austerity

Een bericht uit The Guardian:

Tens of thousands march in London against coalition's austerity measures

An estimated 50,000 people in London addressed by speakers, including Russell Brand, after People's Assembly march
Russell Brand
Russell Brand told the marchers there will be a 'peaceful, effortless, joyful revolution' against austerity in the UK. Photograph: Rex Features
Tens of thousands of people marched through central London on Saturday afternoon in protest at austerity measures introduced by the coalition government. The demonstrators gathered before the Houses of Parliament, where they were addressed by speakers, including comedians Russell Brand and Mark Steel.
An estimated 50,000 people marched from the BBC's New Broadcasting House in central London to Westminster.
"The people of this building [the House of Commons] generally speaking do not represent us, they represent their friends in big business. It's time for us to take back our power," said Brand.
"This will be a peaceful, effortless, joyful revolution and I'm very grateful to be involved in the People's Assembly."
"Power isn't there, it is here, within us," he added. "The revolution that's required isn't a revolution of radical ideas, but the implementation of ideas we already have."
A spokesman for the People's Assembly, which organised the march, said the turnout was "testament to the level of anger there is at the moment".
He said that Saturday's action was "just the start", with a second march planned for October in conjunction with the Trades Union Congress, as well as strike action expected next month.
People's Assembly spokesman Clare Solomon said: "It is essential for the welfare of millions of people that we stop austerity and halt this coalition government dead in its tracks before it does lasting damage to people's lives and our public services."
Sam Fairburn, the group's national secretary, added: "Cuts are killing people and destroying cherished public services which have served generations."
Activists from the Stop The War Coalition and CND also joined the demonstration.
The crowds heard speeches at Parliament Square from People's Assembly supporters, including Caroline Lucas MP and journalist Owen Jones. Addressing the marchers, Jones said: "Who is really responsible for the mess this country is in? Is it the Polish fruit pickers or the Nigerian nurses? Or is it the bankers who plunged it into economic disaster – or the tax avoiders? It is selective anger."
He added: "The Conservatives are using the crisis to push policies they have always supported. For example, the sell-off of the NHS. They have built a country in which most people who are in poverty are also in work."
The People's Assembly was set up with an open letter to the Guardian in February 2013. Signatories to letter included Tony Benn, who died in March this year, journalist John Pilger and filmmaker Ken Loach.
In the letter, they wrote: "This is a call to all those millions of people in Britain who face an impoverished and uncertain year as their wages, jobs, conditions and welfare provision come under renewed attack by the government.
"The assembly will provide a national forum for anti-austerity views which, while increasingly popular, are barely represented in parliament."
The Metropolitan police refused to provide an estimate. A police spokesman said the force had received no reports of arrests.
A spokesman for the prime minister declined to comment.