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Tuesday 19 July 2011

We need Eurobonds and a new charter for Europe, but is it possible without ...

Susan George, in a recent interview, asks the Europeans to end the financial control of their governance, to issue Eurobonds, and to ceate a new charter for Europe. Read the interview at the Transnational Institute, here!

If we were to use our possibilities to discuss the current situation and arrive at common conclusions, then I would propose that we take this interview with Susan George as our starting point. Here the problems of the present are analysed in their historical setting, the much hyped "debt crisis" is reduced to realistic proportions, and some of the necessary steps towards the solution of the problems are explained. Let me repeat Susan George's proposals:

"How should social movements respond to the crisis? What alternatives can we put on the table? * Carry out debt audits to determine how much is "odious". * Develop a debt workout mechanism that isn't skewed entirely in favour of creditors. * We need Eurobonds and a new charter for Europe with an ECB that's much closer to the US Federal Reserve. * Use Keynes' bancor as the currency for trade. We'll need another interview to talk about that! * Meanwhile, I'd be more than happy with public, non-profit ratings agencies and governments that govern for citizens rather than for banks."

However necessary these economic and political measures, one may of course doubt that they are sufficient. In order to arrive aa an alternative to the Treaty of Lisbon, I think that we must also take on the problems which belong in the area of defence and military strategy, because

a) the present economy is militaristic, it is a war economy built around the military-industrial-academic complex, which is integrated with the nuclear complex, the aerospace and space industries, and so many other sectors of the economy. This is the elephant in our drawing room, which the media fail to see.

b) achieving "a new charter of Europe" is not possible without a common European understanding of human security in the age of nuclear weapons, nanotechnology, robotics and genetech. The road to a better future for our continent goes via denuclearisation and a military reform, which starts from the idea of human security.

Saturday 1 May 2010

Responses to the Open Letter on the Greek Crisis from Economists at the European Trade Union Institute (ETUI)

Below you may read my message (posted April 29, 2010) to the mailing list of the NIGD and the subsequent reply by Matti Kohonen, plus my reply to Matti Kohonen

Dear NIGD,

after this message, you find a copy of my personal signature to the open letter, which a group of economists, including Andrew Watt at the European Trade Union Institute (ETUI), has written to European policymakers, criticising their collective failure to address the Greek crisis as a European crisis.

As my "Organisational affiliation", I decided to enter "NETWORK INSTITUTE FOR GLOBAL DEMOCRATIZATION".

I can only hope that you will find my behavior to be appropriate and to accept it.

The text of the Open Letter from the trade union economists is found here:


Actually, I am far from enthusiastic about the content of this open letter; I only find it to be barely acceptable as a statement on the immediate Greek financial crisis. An ironical comment on this letter would be, that it represents a tradeunionistic point of view. If there would at this moment exist a European political force with the necessary power and authority to intervene positively and constructively in the present situation, it would no doubt start from the demand that Europe must unilaterally abolish its nuclear weapons.

"Stop there", I can hear some of you object, "and don't mix up things which must necessarily be kept apart!" My answer is, that the widespread mental habit of keeping economics and finance apart from politics and military strategy is based on sheer illusion, and that it shows a lack of intellectual courage, which is unadmissible on the side of those who make their living from research on human history and the social reality.

As the tradeunion economists write, the increased exports of Germany, Austria and the Netherlands has corresponded to a demand expansion in Greece, Spain, Ireland, and other members of the eurozone. "The problem is symmetrical and the solution must be as well."

However, "the solution" requires more than a common market and a common currency. Europe must become a real political union, a democratic federal state. And this, in turn, requires a basic political consensus concerning, in particular, the foreign policy and the military strategy. At the center of this issue are -- since 1945 -- the global weapons systems "of mass destruction".

What is to be done? One thing is clear: we should only undertake such tasks which are in our power to carry out. The denuclearisation of Europe certainly is one such task, because the European nuclear armaments, and the power plants based on the nuclear fuel cycle, are *solely our responsibility*, something which, if you excuse the dramatic example, could never be said about the climate on this earth, or the development of its general temperature.

Therefore, let us raise the demands put forward in the Appeal of Saintes: "

  • # 1. From the Atlantic to the Urals, no nuclear weapon must be stationed or installed in Europe any longer.
  • # 2. Nuclear weapons must not threaten Europe or any other part of the world.
  • # 3. Europe must initiate, pursue in good faith, and bring to a successful conclusion the process of abolishing nuclear weapons everywhere, as required by Article VI of the Non-Proliferation Treaty.
  • # 4. The Geneva-based Conference on Disarmament must achieve this result by whatever means are required.
  • # 5. The Vienna-based IAEA must cease its promotion of nuclear energy and devote itself exclusively to monitoring civilian and military nuclear installations, preventing the diverting of fissile materials towards the building of new weapons, and aiding in the dismantling of existing weapons and nuclear plants.
  • # 6. The Vienna-based Organisation of the Comprehensive Test Ban Treaty must become operational.
  • # 7. All possible light must be shed on the real causes and consequences of nuclear catastrophes such as Cheliabynsk and Chernobyl.
  • # 8. The 1959 agreement between the IAEA and the WHO, which forces the WHO to spread disinformation and lies about nuclear matters, must be abrogated.
  • # 9. The EURATOM Treaty must be abrogated and no new nuclear plant must be built.
  • # 10. Europe must become a totally nuclear-free zone, so as to contribute to total denuclearisation of the planet without waiting for similar action by other states or continents.
  • We call on Europe's citizens, NGOs, states and people to unite and take action to achieve these objectives in the shortest possible time.
  • Saintes, France, 11 May 2008 "
  • (http://acdn.france.free.fr/php_petitions/index.php?petition=12)

Who are the European nuclear armaments meant to "deter", if not the peoples of the global South? During a pause in the preparatory seminar in Dakar last November, I shortly discussed the issue of European Nuclear Disarmament (END) with Samir Amin. He agreed vividly to my opinion, that END is very much in the interest of the peoples of the global South, and should be placed high on the political agenda. So let's not be fooled by the efforts of the Western political establishment to focus everybody's attention on the Middle East. As far as "the nuclear issues" are concerned, Europe should still be our focus.

All the best,

- Mikael

Open letter to European policymakers: The Greek crisis is a European
crisis and needs European solutions

We urge you to read this open letter (see below).

If you broadly agree with its content, please manifest your support by
sending the following details to: openletter@etui.org
Please copy and paste this table in your email

First Name* MIKAEL
Family name* BÖÖK (BOEOEK)
E-mail* BOOK @ KAAPELI dot FI
Organisational affiliation
* Response necessary for us to include you.


To the above letter, Matti Kohonen replied as follows:


Dear Mikael, and NIGDers,

The Greek crisis is a major step in the global financial crisis as it enters its second year. I fear this the beginning of a second phase of the crisis where major states may start to have serious fiscal difficulties, as the stimulus packages are running out and fiscal deficits show some of the structural weaknesses of the global financial system which caused the Greek crisis, with rampant Greek corruption as the local link.

However I can't sign this petition, it has 100% wrong analysis on the crisis, is based on Neo-classical economics, and I don't agree with the 4 preambules of the petition.

" Greece's fiscal catastrophe has four causes. First, there is the past fiscal weakness of the Greek state, in particular the inability to generate tax revenues, as a share of GDP, in line with its European neighbours, but also inexcusable statistical manipulation. Second, Greece's relative competitiveness has steadily worsened, especially within the euro area, as reflected in a sustained current account deficit as a result of above-average increases in unit labour costs and prices and a stronger economic growth dynamic. Third the economic crisis - which, given the country's conservative banking sector was a classic external shock - has ravaged public finances, just as in other countries. And last but not least, fourth, the interest cost burden has dramatically increased, as genuine concerns about fiscal sustainability combined with speculation and misinformation to dramatically raise the rate of interest on new Greek government bonds."

  1. fiscal weakness of the Greek state is true, it has a tax per GDP of 32%, and only 8% for direct taxation while e.g. Germany manages to collect 12% in direct taxation (this explains the main part of the gap). This points to rampant corporate and self-employed tax evasion, meaning that the crisis in greece is of their own making in great part.
  2. since when are NGOs and trade unions asking for a reduction in unit labour costs, current account deficit may not be good, depending how much foreigners have your bonds and at what interest rate. Calling for lower labour cost for me is out of line.
  3. this is 100% wrong, the Greek banking system is rotten to core, as most banking systems in Europe that facilitate criminal capital flight to tax havens, and support offshore banking centres like Cyprus that is also a flag of convenience with little or no regulation on shipping labour, tax, safety, etc. The Greek banks have happily opened offshore accounts for Greek millionaires and billionaires assisting them to pay no tax, there you have the Greek 'tax gap'. Sure they don't have their own banking crisis based on lending, maybe this is the 'conservative' side of it, but for me I'd call that 'prudent' which is a virtue in banking, but 'conservatism' means you assist the wealthy to do what they want.
  4. speculation may have a role, but the rating agencies have done right to downgrade bonds of a government that runs a long-standing fiscal deficit without any idea of how it's going to be paid, it's a recipe for disaster. The problem is that they do it so abruptly, and not gradually as the secretive public finances in Greece, helped with Goldman Sachs have assisted in hiding the debt mountain, just like Lehman did in the banking world. This is totally corrupt from the Greek government's side, and they should be the ones responsible.

Just like the financial crisis in Finland in the early 1990s, Asian financial crisis in late 1990s, and now esp. the East European countries where salaries have been cut to bring fiscal balances... it's the ordinary people who are suffering from this, with unemployment, lower wages, so we should call for an end to the casino economy that plays on the fortunes of ordinary citizens.

This petition doesn't address the issues, and I have to say that trade unions should stop hiring orthodox economists so that we'd get better advocacy material to work on.

Mikael's petition seems much better on stopping the nukes!




My reply to Matti's answer follows here:


Hello Matti and all,

the open letter from the trade union economists addresses one issue, which you seem to miss completely, namely, that "The Greek crisis is a European crisis and needs European solutions". Would you agree that "a coordinated [European] economic policy" is needed? Or do you (and I do not mean only you, Matti) think that it would be better if the European Union disintegrated and disappeared altogether?

It also seems to me that you (Matti) misinterpret the economic analysis of the trade union economists, not taking into account their main argument, which concerns the economic imbalances within the EMU. They write:

"Due to strong differences in wage setting, Greek nominal unit labour costs increased by more than 30% since the start of EMU - and the increases in Italy, Spain, Portugal and Ireland were even higher - whereas in Germany they rose by just 8%."

The ETUI economists here join the analysis of former German deputy finance minister, UNCTAD economist Heiner Flassbeck, who is of the opinion that Germany has for long been outcompeting the PIIGS countries (Portugal, Italy, Ireland, Greece and Spain) by means of wage dumping. (Read the short article "The Greek Tragedy and the European Crisis, Made in Germany", by Heiner Flassbeck in the webzine of Monthly Review 13 March 2010, http://mrzine.monthlyreview.org/2010/flassbeck130310.html ).

As far as I can understand, the ETUI economists are not, as you seem to suppose, calling for a reduction in the wages of Greek workers and employees. They write:

"Greece must not be forced into massive demand deflation: having avoided the mistakes of the Great Depression at European level it makes no sense to repeat them at national level. On the contrary it is in Europe's vital interests to resolve the Greek crisis on the basis of rising incomes across the continent and to put in place the needed machinery to cope with competitive and fiscal imbalances in the future."

However, my own critique of the ETUI is based on my conviction that many of the economic and financial problems of the EU and its members are political and military in nature, starting from "the nuclear issues" (which also have strong ecological dimensions). Thus it is simply not possible for the EU to formulate a "coordinated economic policy" until it has settled for an independent foreign policy and security policy. Independent from the USA, that is. Denuclearization is not the panacea, it would not bring the solution to all problems, but it is a keyword, and the condition without which no favourable European economic, political and cultural solutions will be found.

In the discussion on the present Greek financial crisis, the excessive military spending of the Greek governments is rarely analyzed more closely. The ETUI economists do not even mention that 4-6 percent (?) of the Greek budget has for years been reserved for the military, e.g. for buying fighter jets and high-tech systems from coporations like Lockheed and Raytheon for thousands of millions of dollars. All too often, trade union economists avoid taking on the military-industrial complex, because the complex "creates jobs". For similar reasons, they keep silent about the necessary denuclearisation.

The weapons of mass destruction (WMD), and the missile defence and space war systems which have been constructed around the WMD, form the heart of the military-industrial-academic complex which plays such a big role in our social, economic and cultural life. That monster has to be killed.

Greetings from Finland,

- Mikael

PS "Greece remains among the top five largest recipient of major conventional weapons for 2005-2009, but has fallen from third place for 2000- 2004. The transfer of 26 F-16C from the United States and 25 Mirage-2000-9 combat aircraft from France accounted for 38 per cent of the volume of Greek imports." (SIPRI ).  Aucun rapport avec la crise financière et budgétaire de la Grèce ?

Wednesday 28 October 2009

And here's to you, Mrs. Robinson

Mary Robinson has by now made clear that she will not be available for nomination to the post as the President of the European Council. This probably means that the possibility to have her as the first President of the EU is gone. The reason, The Irish Times reports , is that she had become focused on climate change and its negative impacts on the developing world.

Anyway, let's hope that Mrs. Robinson helps to mobilize the opinion for the denuclearisation of Europe, and a Europe which defends human rights, because these goals should not be incompatible with her fight against the negative impact of the climate change. Take, for instance, the story of the lost ships with radioactive waste in the Mediterranean, and the findings of UNEP on the cost of Somalia in their report about the effects of the tsunami 2006. These crimes of the Italian and European (?) 'ecomafia' remain upublished by the main media, and, what is more, unpunished.

Or, consider the recent news about the 8-39 kilograms (!) of plutonium, which was found at Cadarache (France). In 2005, it should be remembered, Cadarache was chosen, in 2005, to become "the home for an experimental $13 billion nuclear fusion project scientists say will produce a boundless source of clean and cheap energy".

Well, Don't Nuke the Climate!

Quotation of the day:

"When the United States adopted torture as a weapon in its 'war on terror,' it was a turn to methods that shock the conscience, and when discovered, officials and their media surrogates went to great lengths to gain public acquiescence for their policies, It was not the first time the country betrayed its highest ideals, nor the first time U.S. citizens were led to deny that any betrayal had occurred. The United States had gone down the same road in 1945, when it used nuclear weapons to destroy two Japanese cities. One case involved the product of intensive scientific research, the other methods dating back hundreds of years, if not to prehistory. But in the way the U.S. government made and justified these fateful decisions, the two stories contain many disturbing parallels." -- Jon Reinsch

Saturday 11 July 2009

Support the new Irish "No to Lisbon" campaign!

An appeal to SUPPORT THE NEW IRISH "NO TO LISBON" CAMPAIGN  is circulating  through Susan George and others. I have just forwarded it to the board of Attac Finland with a wish that it be translated into Finnish, too (glad to see that a translation into Swedish, my first language, has already been done).

Although I support the campaign against the Lisbon treaty, I stay convinced that our YES TO EU must be clear and loud. Hence it feels good to read the two sentences at the end of the appeal: "We share the same vision of a Europe where the economy works to serve the needs of ordinary citizens - not corporate power or military ambitions. We seek a peaceful, social, democratic, demilitarised and ecological Europe."

However, the vision of a peaceful and democratic Europe was already found in the manifesto of Ventotene from 1941 and in the draft treaty from 1984, which introduced the concept of "European Union" and was approved by the elected European Parliament, but rejected by the ruling European elites. We should say so, and use the original Spinellian idea as a weapon against the Neoliberal idea of the EU. Otherwise, we cannot break the hegemony of the Neoliberals and take the lead.

To demand the "demilitarisation" of Europe, on the other hand, is not realistic. The EU has to constitute itself independently of the other powers; its military status could hardly be that of "a demilitarized zone" guaranteed by international treaty, like the Åland islands. But a European conscription army for territorial defence, in some respects resembling the Swiss army, is a realistic alternative to the European military forces envisaged by the Lisbon treaty, which in reality would subordinate them to NATO and the USA, and which engages them in perpetual wars of the West against the rest.

Therefore, I would have written 'denuclearised' instead of 'demilitarised'. In a world situation where nuclear weapons are proliferating and the nuclear powers play their bilateral and multilateral arms control games while they all, without exception, maintain and modernize their own WMD, it must be our top priority to revive the movement for unilateral European nuclear disarmament. Europe must be the exception!

The "ecological Europe", finally, implies a decision to successively dismantle the nuclear power stations. Attac has already adopted that anti-nuclear position, I think, and Ireland has no nuclear power plants. "The last thing any country needs, let alone a beautiful place like Ireland, is Nuclear Power", I read (on a website called "The good life - self-reliance in an uncertain world"; see http://the-goodlife.blogspot.com/2007/03/nuclear-power-in-ireland.html). So the Lisbon treaty should promise to keep Ireland nuclear-free. Does it?