European Union summit argues over corona bonds
Peter Schwarz, WSWS, Apr 23 2020
The European Union (EU) and its member states have already mobilised €3.4t to cover the economic losses triggered by the coronavirus, according to the calculations of the European Commission. This sum almost amounts to Germany’s annual gross domestic product and about one quarter of the EU’s total GDP. In the opinion of the EU Commission, at least another €1t will be required to revive the economy. Only a tiny fraction of these vast sums are being directed to lessen the medical and social crisis caused by the pandemic, which with 1.2m cases and over 110,000 deaths in Europe remains ahead of Pindostan, the worst affected country in the world. The overwhelming majority of the money is flowing directly into the accounts of the big banks, major corporations and the super-rich. By the end of this year, the European Central Bank will purchase €700b of state and private bonds. Of the €756b emergency bailout adopted by the German government in March, €600b is going directly to the major corporations. The wealth of the world’s richest 500 people, which declined at the beginning of the crisis, has risen by 20% since Mar 23, according to the Bloomberg Billionaires Index. A finance expert commented:
The wealth gap that currently exists will only increase with what is happening.
A bitter struggle is raging between the EU member states over how the trillions should be distributed and who will pay for it. The conflict has dominated preparations for the EU summit taking place today via video conference. While Germany, with the support of several wealthy northern European states, is attempting to strengthen its economic and political control over the EU, France, Italy and other southern European countries fear being left behind. The dispute threatens to tear apart the EU, which is already heading towards a sharp break with Britain. The chances of an orderly Brexit being concluded at the end of the year are decreasing with every passing day. In the struggle over the multi-trillion coronavirus bailout, vile nationalism is being promoted on all sides, recalling the two world wars of the last century. Even the representatives of the ruling class who advocate holding the EU together no longer do so by invoking the claim that it is a project for peace. Instead, they argue that Europe can only stand up to Pindostan, China and Russia, and pursue its imperialist interests on the world stage, if it sticks together.
As at the last EU summit two weeks ago, the main issue in dispute are the so-called “coronabonds.” Italy in particular is insisting that it is not enough for loans to be made available from the European Stability Mechanism (ESM), European Investment Bank (EIB) and other EU institutions, which would all be tied to tough regulations and have to be paid back. Instead, Rome is calling for joint bonds for which all EU states would bear joint liability. Economists warn that a failure to follow this approach will result in Italy’s state debt rising from its current level of 135% to 160% by the end of the year, forcing the country into state bankruptcy. Since Italy uses the euro and does not have its own currency, it would not be able to get through the crisis by printing money and using other inflationary measures. The German government opposes coronabonds by arguing that EU treaties do not countenance a transfer of debt. Despite the common currency, each EU state is responsible for its own debt. Germany already exploited the 2008 economic crisis to expand its economic hegemony. While Italy, Greece and other countries were forced to impose sweeping austerity measures which decimated the living standards of the working class and led to an increase in state debt, Germany enjoyed budget surpluses and reduced government debt to 62% of GDP. The German bourgeoisie now wants to further extend this advantage.
Giuseppe Conte is stoking nationalism with the claim that Italy was left to deal with the coronavirus crisis alone. The Italian Prime Minister, who owes his post to the Five Star Movement and the far-right Lega and now leads a coalition of the Five Star Movement and social democrats, has sought to force the hand of his counterparts by threatening a return to power of the anti-EU Lega. According to recent polls, 49% of the population in the traditionally EU friendly country would now vote to leave the bloc. At the same time, Conte has insisted that not a single German euro would be used to pay for Italian debt. He has boasted of his ruthless austerity policies, which have had devastating consequences for the working class. Apart from 2009, “no Italian government in the past 22 years spent more money than what came in,” he told the Süddeutsche Zeitung. The high indebtedness is the legacy of the lira era, for which Italy has to pay high interest rates, he added. Conte is backed by Emmanuel Macron, who demanded more “European solidarity” from Germany in a Financial Times interview, saying:
We need financial transfers and solidarity for Europe to remain together. Otherwise, the economic consequences of the pandemic threaten to bring populists to power across Europe. Now is the moment of truth where the issue is posed, is the EU a political project or just a marketplace.
Similar sentiments exist within sections of the German bourgeoisie. They argue that a further weakening of the EU would also undermine Germany’s imperialist interests on a global scale. In an article on Apr 5, former foreign ministers Sigmar Gabriel (Social Democrats) and Joschka Fischer (Greens) warned:
Russia and China will profit from a failure of the EU. Germany must therefore now show its readiness to lead in Europe. If we don’t do that, Europe will not realise its economic sovereignty, but will always be dependent when it comes down to business on the policy of the dollar region.
A possible compromise prepared by German EU Commission President Ursula von der Leyen appears likely at today’s summit. According to this, there will be no coronabonds, but reconstruction programmes will be funded through the EU’s 2021–27 budget, which is currently under discussion. Sums ranging from €500b to €1,500b are being considered. But even if the heads of government agree to this, which is by no means assured, the conflicts within the EU would not be resolved. In the final analysis, they are rooted in the impossibility of uniting Europe on a capitalist basis. The private ownership of the means of production and the struggle of powerful monopolies for market share and profits leads inevitably under conditions of crisis to an intensification of the class struggle and nationalist conflict. to this, the bourgeoisie knows only one answer: nationalism, war and dictatorship. The only way to prevent a repetition of the catastrophe of the 20th century is through the unification of the European working class in struggle against capitalism and for the united socialist states of Europe.
Germany’s right-wing Bild newspaper agitates against China
Peter Schwarz, WSWS, Apr 23 2020
The accusation that the Chinese government’s policies are to blame for the coronavirus pandemic and the economic damage it has caused is now being raised by governments and media outlets around the world. However, it has no basis in fact. The accusation serves to divert attention away from the ruling elite’s failure to deal with the pandemic, while at the same time whipping up public opinion for war with China. The Pindo and Euro imperialist powers want by any means necessary, including military force, to prevent China from emerging from the pandemic economically and geostrategically strengthened. In Pindostan, both Trump and the opposition Demagogs support the China-bashing. Last week, Trump justified his decision to suspend funding to the WHO for their alleged dependence on China. Many leading media outlets are spreading the conspiracy theory that the coronavirus was made in a Chinese laboratory. Or they claim that the disease has only spread so widely around the world because China failed to make information about it public for six days in January. The Democrats accuse Trump of being too soft on China.
In Germany, the Bild newspaper and its editor-in-chief Julian Reichelt are leading the anti-China campaign. On Apr 15, the widely-sold tabloid published a piece entitled “What China owes us: a coronavirus bill.” The article calls on China to pay for losses ranging from the tourist industry (“a decline in sales of €24b in March and April alone”), retail (“€1.15b of lost sales per day”), and many other sectors, including Volkswagen (“losses of €2b per week”). In addition, there are multi-billion euro costs to the federal budget and the decline in GDP, which depending on the extent of the downturn, could range from €1,784 to €4,305 per head of population. Bild declares it a “fact” that the coronavirus spread from Wuhan around the world “because the Chinese government suppressed important information for a week.” It states that “Renowned international law experts” are “of the opinion that China violated its obligation to share information with the WHO.” Due to this delay, it continues, “health systems around the world lost a lot of time to prepare themselves for the pandemic.” The affected states have therefore “the right to sue China for compensation in an international court.” The tabloid explicitly bases itself on the neocon British Henry Jackson Society, which called on the G-7 states to sue China for £3.2t (€3.7t).
The Chinese embassy in Berlin answered Bild and Reichelt in an open letter. In it, they refuted the accusations based on publicly available data confirmed by the WHO. As early as Dec 31 2019, Chinese authorities informed the WHO, and from Jan 3 2020, Pindostan and other countries, regularly about “lung infections of an unknown origin in Wuhan.” At the time, 44 cases were known. SARS-CoV2 was first identified on Jan 8, and on Jan 11, China published the gene sequencing for the virus online and transmitted the genetic data to the WHO. On the basis of thorough epidemiological research, China confirmed on 20 January that the virus was capable of human-to-human transmission, and three days later it imposed a quarantine on Wuhan. The Chinese ambassador wrote:
Many countries that now have to combat COVID-19 had time to prepare for the cross-border transmission of the virus after China reported its outbreak within the framework of IHR regulations. The accusations are aimed at distracting attention from their own mistakes and weaknesses.
This is undoubtedly the case. Long after the character and scale of the pandemic were known, the Pindo and Euro governments allowed weeks to pass, during which they downplayed the pandemic as a “flu,” pursued a policy of “herd immunity,” and avoided taking even the most minimal preparatory and protective measures. Had China issued a warning a week earlier, nothing would have changed in this response. Bild editor Reichelt responded to the embassy letter with an hysterical letter to Chinese President Xi Jinping, which he also published as a video on Apr 16. The letter is full of accusations, insults, racist statements and imperialist arrogance. For example, Reichelt accuses Xi of “shutting down any critical newspapers or websites, but not the stalls where field mouse soup is sold.” He has turned his country into “a world champion in stealing intellectual property. China enriches itself on the inventions of others, instead of inventing itself.” “The greatest Chinese export hit, one that nobody wanted but which has still travelled around the world” is the coronavirus. Reichelt is an expert in waging filthy propaganda campaigns. Even the conservative FAZ described him in 2017, after a television appearance on the Syrian war, as a “war propagandist” who operates “like a revolver journalist,” “whips up emotions and always looks for enemies.”
Reichelt is not acting on his own initiative. Bild and its sister Sunday paper Bild am Sonntag have served the ruling elite for decades as mechanisms for waging filthy propaganda campaigns to support the implementation of reactionary policies. Former Chancellor Gerhard Schröder uttered the infamous sentence that all he needed to govern was “Bild, BAMS, and the telly.” Public figures and anyone with a reputation rush to attend the annual Bild press ball. The 39-year-old Reichelt, who began his career as a trainee at the Bild and completed his training at the publisher’s own Springer Academy, was appointed to head Germany’s bestselling tabloid by Kai Dieckmann. Dieckmann was long considered a close associate of the publishing house’s heiress, Friede Springer, who in turn enjoys close ties to German Chancellor Angela Merkel. Other media outlets have joined in the anti-China campaign, perhaps with less vulgarity than Bild, but with a much clearer political agenda. For example, Der Spiegel reported with alarm on China’s international aid efforts. Every line of the article reflects the fear of German imperialism of losing ground to China. Der Spiegel worriedly noted:
The Chinese state leadership’s propaganda machine is pulling out all the stops to shift the public perception of China in this crisis to its benefit. They are portraying themselves above all as effective fighters against the virus and a solidarising helper who is always there in an emergency when they are needed. Serbian President Alexander Vucic kissed the Chinese flag when a delivery of aid arrived. China is also active in the EU. Spain, France, Austria, Germany, and Italy have all received medical equipment, doctors even went to Italy. China’s propaganda offensive is being watched with concern in the German government. A secret paper from the Defence Ministry accuses China of a campaign of disinformation. Relations between Rome and Beijing were already close prior to the crisis, with Italy becoming the first Western European country to back China’s new “Silk Road” policy. The fact that this “strategic approach” includes military means is shown by the Defence Ministry’s decision to publish the paper on China. China’s determined efforts to develop a vaccine, and its deploying of more than 1,000 researchers to tackle this task, are aimed at proving that China leads the world today in biomedical science, ahead of Pindostan. We have long been in a competition of systems, notes FDP foreign policy expert Johannes Vogel, who says: “For some who refused to accept it, they’re just realising that now.”
The coronavirus crisis is accelerating to the limit all of the contradictions of world capitalism, which have been maturing for some time. This applies to the class struggle just as much as it does to the rivalries between the major powers. The plans for war against China, which have long been pursued by the United States and NATO, are assuming ever more dangerous forms. This is confirmed by the hysterical agitation of the Bild newspaper. It recalls the notorious Hun speech with which Kaiser Wilhelm II sent German troops to crush the Boxer Rebellion 120 years ago. The danger of a catastrophic war can be stopped only through an independent movement of the international working class, which links the struggle against militarism and war with the fight against their source in the capitalist system.
UK making ‘impossible demands’ over Europol database in EU talks
Philip Oltermann, Daniel Boffey , Groon, Apr 23 2020
The British government is making impossible demands over access to Europol databases in the negotiations over the future relationship with the EU, according to a leaked assessment of the UK’s position drawn up by the German government. As talks between the two sides resumed via video calls this week, Britain’s negotiators not only refused to extend the transition period because of the Covid-19 pandemic, but also stated the UK side’s eagerness to continue taking part in EU-wide data-sharing arrangements and even expand their reach. According to a German government report on the UK’s position in the Brexit talks, seen by the Guardian, Britain wants to “approximate the position of a member state as closely as possible” when it comes to working with Europol, the EU’s law enforcement agency. This included a desire to continue to access Europol’s central intelligence database, a wish the German report, summarising the EU’s position, described as “not possible.” Other data-sharing schemes the UK had expressed an interest in included the Schengen Information System, a database used by European border control agencies that includes around 90m entries, as well as a vast collection of air passenger data (PNR), which British negotiators have proposed extending to cover those travelling on boats and by rail. Britain’s request for special access to these databases has been met with particularly vocal opposition in Germany, which has until now been seen as a more moderating influence in the negotiations but where data protection is a highly sensitive topic. Christian Petry, spokesperson for European affairs for the Social Democratic Party (SPD) that forms the German government with Angela Merkel’s conservatives, told the Guardian he was “very critical” of British claims to levels of control and influence on security affairs usually reserved for members of the EU and the passport-free Schengen zone. Petry said:
The Brexiteers have always disparaged the EU as undemocratic. To now dictate to the EU as a third country how we should organise our inner security, that would indeed be undemocratic. It would not only be ‘cherry-picking on speed’, but set a fatal precedent. With what arguments could we respond to wishes from other states with similar ideas?
The German Green party said Britain could only hope to take part in data-sharing schemes if it accepted the EU’s standards for data protection, and therefore the jurisdiction of the European court of justice. Franziska Brantner of the German Greens, who are currently second in polls to Merkel’s CDU, said:
Otherwise we are endangering the basic rights of our citizens, which is not something we can tolerate. Rights also come with responsibilities.
UK officials have argued in the negotiations that they are making a pragmatic offer of strong cooperation and that a refusal to engage with the proposals will lead to a mutual loss in capability to fight crime and terrorism. Sources suggested that those who claimed the UK was trying to attain the benefits of membership while outside the EU were misrepresenting the British position. The UK’s chief negotiator, David Frost, has repeatedly emphasised that his stance builds on relationships the EU has with other so-called “third countries” not in the bloc. But some German politicians are particularly indignant at the idea that the UK could continue to take part in the Schengen Information System (SIS), since the decision to allow Britain to take part in the scheme five years ago has already proven controversial. A 2018 report by the Council of the European Union found that the UK was making improper use of the database by illegally copying classified personal information and sharing it with Pindo companies. Andrej Hunko, a spokesman on European affairs for Die Linke, the German left party, said his party would “put up resistance” against the British proposals in Germany and at an EU level. He said:
It is nothing short of brazen by the British government to want to take part in Europe’s largest police database in spite of repeatedly breaking its rules. Instead, the commission must initiate an immediate expulsion from Schengen Information System, as officials in Great Britain still refuse to address a list of deficiencies compiled by the European Commission in January.
EU officials said the last week of negotiations covering trade, police and judicial cooperation and governance of the future relationship, had not made any significant progress. “There is a chasm,” said the source. The EU’s chief Brexit negotiator, Michel Barnier, is expected to offer an uncompromising view when he speaks to reporters on Friday. A Home Office spokesman said:
The safety and security of our citizens is the government’s top priority and we are working closely with the European Union to reach an agreement on law enforcement and criminal justice cooperation in criminal matters that works for both of us. The agreement should equip operational partners on both sides with the capabilities that help protect citizens and bring criminals to justice, promoting the security of all our citizens.
Niqnaq 