STRATEGIC ALERT NEWSLETTER
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| | | | This holiday season in the trans-Atlantic world traditionally brings forth more profound reflections on the purpose of life and the love of humanity. It was in this spirit that the leaders of the major Christian communities in Bethlehem, including Greek Orthodox, Syriac, Armenian, Catholic and Lutheran denominations, composed a letter to U.S. President Biden in late November asking him to intervene in favor of a ceasefire in Gaza. Three of them, possibly three wise men -- carried the letter to Washington, Nov. 30. It reads, in part: |
| | “Next week, we were supposed to begin our advent and Christmas season. This should have been a time of joy and hope. This year, it is a season of death and despair…. This year, Christmas celebrations are cancelled in Bethlehem....This land has been crying for peace and justice for 75 years. It is time justice is served. It is time everybody can live with dignity in this land…. A comprehensive and just peace is the only hope for Palestinians and Israelis alike.”
“We are writing to plead with you to help stop this war. God has placed political leaders in a position of power so that they can bring justice, support those who suffer, and be instruments of God’s peace. We want a constant and comprehensive ceasefire…. This is a moral obligation.” |
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Unfortunately, President Biden did not heed their call. Nor did most European leaders. Just a few days later, on Dec. 8, the United States vetoed a resolution in the UN Security Council calling for a ceasefire, and the United Kingdom abstained. Despite the escalation of the killing in Gaza, the U.S. again voted against a similar resolution in the UN General Assembly on Dec. 12, while the UK, Germany, Italy, the Netherlands and 19 others abstained.
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Germany and the UK, through their Foreign Ministers Annalena Baerbock and David Cameron, then attempted to justify their government’s rejection of an “immediate” ceasefire in a joint article dripping with hypocrisy, published Dec. 16 in the Times and Die Welt. Professing support for a “sustainable ceasefire”, they argue that an end to the bombing before Hamas is completely wiped out (and presumably most of the Palestinian population as well) will only increase the violence later.
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The Biden Administration, for its part, is politely asking the Israeli government to “tone down” the genocide and allow more aid to dying, while Prime Minister Netanyahu himself has vowed to escalate the fighting over the holiday season, despite the growing opposition in Israel itself, and among the Jewish community worldwide.
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Fortunately, most of the world – the Global Majority -- rejects the blatant double standards applied by the “unipolar world”. They are demanding economic development and the freedom to grow and to contribute to building a better, more just world. They won’t accept the de-growth, de-industrialization and de-population sold under the label of a “green deal”, nor the permanent war policy.
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| The moment has come to “turn the swords into plowshares and the spears into pruning hooks”, to quote the Bible. The world needs massive mutual development programs to end wars, for the reasons tirelessly explained by Lyndon LaRouche. EIR is about to publish a fact sheet on how the current defense giants in the military-financial complex can be turned into productive capacities to make that happen (cf. below on the IPC). |
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| | | At a time when many world leaders do their best to avoid facing questions in public, Russian President Putin held a press conference for nearly four hours on Dec, 14, which was broadcast on all national television channels in Russia. The questions came from reporters and from ordinary citizens, with topics raging from the special military operation in Ukraine, to problems with receiving veteran benefits, and the price of eggs. While western media disparaged it as "choreographed" and "controlled", Putin demonstrated a confidence in speaking to his nation that one cannot find in European capitals today.
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Perhaps the most significant topic he took up was that of relations with the U.S. and Europe, at a time when NATO, with the full support of the EU, is engaged in a "proxy war" against Russia in Ukraine. Since the media have barely reported these remarks, we quote them here.
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On the insistence of western leaders that they are defending a "rules-based world order," Putin was sharply critical, saying that "there are no such rules in reality. They change every day depending on the current political situation and the immediate interests of whoever is talking about it."
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And while they push this idea, he said that "there are quite a large number of forces in the world, powerful countries that want to live not by these unwritten rules, but by the rules prescribed in fundamental documents, including the Charter of the United Nations, and those that are guided by their own interests and the interests of their partners. They do not impose anything on anyone, do not create any military blocs, but create conditions for joint effective development." He added, “This will be the focus of Russia’s work as BRICS chair next year."
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As for Europe's leaders, he suggested that while many think of themselves as a former French President Charles de Gaulle, they actually resemble Marshall Petain, who was "a Nazi collaborationist. He accepted the will of the occupying forces. Almost everyone behaves this way, except for a few people. Robert Fico became a new leader after the election, and Viktor Orbán in Hungary. I have said many times that they are not pro-Russia politicians, they are pro-national -- they are defending their countries’ interests. But there are too few politicians like this; I do not know why they do not exist. Maybe this has to do with Europe’s excessive dependence on the Big Brother -- the United States. But we are ready to build relations with them.
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“In fact, we are ready to build relations with the United States as well. We believe that America is an important country on the world stage. But this absolutely imperial policy the country pursues is bad for them, not even for us. Why? Because the public expects them to act like an empire, and if they agree to compromise on something or concede something to someone, their voters will see this as a failure or a flaw. That may partly be the reason the elites have to act in this way.
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| As western nations are mired in economic crises, costly and failing military adventures, and a growing polarization resulting from their neo-con, neo-liberal strategic and economic policies, their leaders would be wise to pay attention to what Vladimir Putin has to say. |
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| | | The decision taken on Dec. 15 by the European Council (minus Hungary, whose Prime minister Viktor Orban left the room before the vote) to start negotiations on Ukraine's entry into the European Union is, at best, divorced from reality and, at worst, a cruel deception. Immediate aid to Ukraine was blocked, while the process of entry into the EU, if ever concluded, will only take place long after all current EU heads of government are out of power.
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While the European mainstream media outdid one another in praising the decision, the Washington Post described quite aptly what it would mean for the EU to have Ukraine join as a member state.
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The article points out that Ukraine is the fifth most populous country in Europe, so that it would count for 9% in qualified majority votes (at least 55% of member countries with at least 65% of the population, the system with which many decisions are taken in the EU). And it is by far the poorest, so it would absorb most of the subsidies, assuming the rules remain the same.
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In terms of qualified majority voting, if Ukraine joins, Germany would be reduced from having 18.6% of the vote to 16.9%. Poland and Ukraine together would have the same power as Germany.
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Perhaps the Post does not suspect that this is exactly what some in the EU would like to see. Then, there’s the entire military-strategic angle, which is not touched upon, given that an EU member is de facto a member of NATO.
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There are many in Brussels, according to the Washington Post, who believe that to absorb Ukraine and other countries, the EU will have to reform its key institutions, including the Parliament, as well as its agricultural policies. If European farmers now receive subsidies of just over €183 per hectare farmed, Ukrainians are expected to receive billions of euros, given the extent of the land cultivated. In Poland, farmers have already been protesting against Ukrainian grain exports overland because of the negative impact on domestic prices. Before the war, Ukraine exported 20 million tons of wheat per year, amounting to the equivalent of one-third of total EU exports. Poland, in contrast, exports only 4 million tons a year.
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| GDP per capita in Ukraine in 2021 was $4,470. The same year in Bulgaria, the poorest country in the EU, it was at €10,700, according to IMF data. The cost of reconstruction and recovery once the war is ended will exceed €366 billion, according to an estimate by the EU Commission, the World Bank and the UN done after the first year of the conflict. Therefore, between promises and deeds, one can expect there will be a large gap. |
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| | | Farmers throughout the European Union have been up in arms for the past couple of years against the European Union’s insane “Farm to Fork” policy, which provides for radical cuts (up to 50%) in the use of pesticides and fertilizers, as well as the reduction of farmland available. This has already had political consequences in the Netherlands, where farmers founded a new party, BBB, which was elected to the national parliament a few weeks ago after entering the Senate in March. In Poland as well, the farmers' votes contributed to the victory of the opposition alliance in the Oct. 15 national election (cf. SAS 42/23).
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The effects of the European Commission's policy were also a factor in the break-up of CDU-Green coalition in the German state of Hesse, following the Oct. 8 state election, which was replaced by a CDU-SPD coalition that promised to defend farmers' interests. In France as well, farmers organizations have been protesting against the rise in farm diesel prices, and the restrictions on nitrate use, and warn of actions to come in January. In addition to the agricultural policy imposed by Brussels, farmers in both Western and Eastern Europe now fear that the entry into the Union of Ukraine, a major agricultural producer, will be to their detriment.
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German farmers had been relatively quiet in recent months, for various reasons. But that changed last week, after the Berlin government announced that state subsidies on the use of diesel fuel by farmers would be abolished, setting off a massive wave of protest on a local level.
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The national German Farmers' Association DBV organized in short order a demonstration in front of the Brandenburg Gate in Berlin on Dec. 18, with the participation of thousands of farmers, many of them in their tractors. Under the slogan "Too much is too much! Now it's over!", they demanded that the government withdraw its plans. Otherwise, there will be "massive resistance" as of January, warned DBV president Joachim Rukwied.
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| The backlash has prompted Agriculture Minister Cem Ozdemir of the Greens to distance himself from the government, to which he belongs, and he accepted an invitation to speak at the Berlin rally. In the ARD national television morning show, the opportunistic Ozdemir explained that although he is not against cuts in principle, he understood the farmers' concerns. The "pain threshold" had been "exceeded", he recognized, especially as there is "no alternative" to farm diesel. Moreover, Finance Minister Christian Lindner said he would be willing to re-instate the subsidies and find other items to cut to make up for the gaping hole in the government budget. |
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| | | The Purchasing Managers' Index (Markit PMI/S&P Global) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector, below indicates contraction. The PMI for Germany has been below 50, with ups and downs, for the last twelve months. Now, data released at the beginning of December are even worse than the forecasts, confirming that German industry remains deep in recession.
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Manufacturing industry: 43.1 (forecast of 43.2; previous month at 42.6); Services: 48.4 (forecast of 49.8; previous month at 49.6). Overall index: 46.7 (forecast of 48.2; previous month at 47.8).
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The government-sponsored German Institute for Economic Research has also corrected downward its prognoses for next year. In detail, they now forecast a 0.6 % growth instead of 1.2 %, which is a 50% plunge. But the worst is still to come, failing a 180% inversion of economic policy.
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The news of industrial activities being terminated in Germany as a result of the sanctions-induced energy crisis and of green policies sound like a war bulletin. The victims are often tradition-rich companies, that are leaders in the world market. Particularly hit is the automotive industry, which today produces 40% less than in 2019. A sample of the news from the first two weeks of December paints a clear picture.
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Volkswagen, the largest world car manufacturer, is now cutting several hundred jobs in Saxony. A spokesperson for the company announced that the employment contracts of more than 500 employees will not be extended. Temporary employment contracts had already expired in the previous year. The reason given by VW was the discontinuation of production of electric car models Cupra Born and ID.3. Sales were so poor that they are no longer being produced.
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Bosch, the world's largest automotive supplier, is planning to cut at least 1,500 jobs over the next two years, at two sites in Baden-Württemberg. Bosch, like other companies in the automotive sector, has invested huge capital in e-mobility technologies, and now faces losses due to the weak demand for e-cars.
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ZF, the automotive transmission and components giant (150,000 employees worldwide), has announced the closure of its Gelsenkirchen plants by the end of the year. Two hundred jobs will be cut, and several thousand more are at risk.
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Heinze Group, the automotive supplier from Herford is insolvent, due to cutbacks in production by Porsche, BMW and Co.
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Yanfeng, the automotive supplier’s factory in Lüneburg will lay off over 200 of its 570 workers.
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Umeta, world market leader for manual lubricating equipment and parts, is under the supervision of an insolvency administrator. Parts for machines have been produced there for almost 100 years. Umeta was receiving fewer and fewer orders.
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| Beuttenmüller, the traditional model constructor and prototype developer will cease business operations at the end of the year. Bitter news for the workforce,. 70 of whom will be made redundant in the next few days (liquidation team excluded). |
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| | | Israel’s Haaretz newspaper took issue with remarks made by President Biden on Dec. 12 in Washington, in which the latter had basically blamed Israeli Security Minister Itamar Ben-Gvir for blocking a two-state solution. The implication was that if Prime Minister Netanyahu dumps that minister, and makes a few changes in the government, he could then align with the U.S. on a workable policy.
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| There can be no doubt that Ben-Gvir as well as his ally Belzalel Smotrich are ultranationalist fanatics, but they are not the only problem, as Haaretz points out: |
| | “In describing the political situation in Israel, Biden even did Netanyahu a favor when he said the Prime Minister ‘is a good friend, but I think he has to change -- with this government.’ Later he explained that ‘this is the most conservative government in Israel’s history’... Ben-Gvir and company and the new folks, they — they don’t want anything remotely approaching a two-state solution.’”
The truth is, according to the daily, that "Netanyahu’s government is anything but conservative. It’s a revolutionary, rightist, radical, messianic government that advanced a regime coup and is dreaming of annexing the territories.” But also Netanyahu “prefers to flee from the option of a Palestinian state, as he has done for years, even at the price of fostering Hamas.... Netanyahu has turned his objection to a Palestinian state into the main part of the survival campaign he is conducting these days.” |
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Haaretz further accuses Prime Minister Netanyahu of “not acting for Israel’s good but only for his political survival. Biden, the problem isn’t ‘Ben-Gvir and the new folks,’ the problem is Netanyahu.”
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The former head of Israel's domestic secret service Shin Bet, Ami Ayalon, also views Israel's current policy in Palestine as a "huge failure". Speaking Dec. 11 at the Carnegie Endowment, he recognized that Israel’s policy was to use "divide and rule" tactics to foster a conflict between the leaderships of Hamas and the Palestinian Authority, which caused Hamas to grow stronger.
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On the current policymakers in Israel, he said the country is controlled by "chaos agents", whose goal is to create a "human disaster" in Gaza, because "from the chaos we shall start again." "This is exactly the theory of the most radical, fundamental Muslim organizations", of ISIS and al-Qaeda, he went on said. That is why you can't go to war without defining a political goal.
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| | | Since rescuing Brazil from the radically neocon, pro-Washington government of Jair Bolsonaro, President Lula da Silva has emerged as a solid spokesman for nations of the Global South. On the level of South America as well, he is assuming a leading role in pushing development. His statesmanship was again on display at the Dec. 7 heads of state summit in Rio de Janeiro of the Common Market of the South (Mercosur), a group not without its internal frictions. There, Lula put forward an ambitious regional infrastructure plan, consisting of five key routes designed to better connect and integrate some of the more remote areas of South America.
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Financing in the amount of $10 billion has already been confirmed, he said, and will come from Brazil’s Economic and Social Development Bank (BNDES) for $3 billion; the Inter-American Development Bank (IADB) for $3.4 billion; the Latin American and Caribbean Development Bank, for $3 billion; plus $600 million from FONPLATA, a bank owned by the five Mercosur member nations (Argentina, Bolivia, Brazil, Paraguay and Uruguay). BNDES President Aloizio Mercadante described this as the “biggest financial fund in the history of South American integration and for Mercosur in Mercosur’s history”.
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One purpose of the new and improved routes, which all connect to different parts of Brazil, is to boost trade with Asia, by reducing the transportation time for merchandise between the South American giant and Asian countries.
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One major question mark, however, is Argentina, under the newly elected libertarian president Javier Milei (cf. SAS 47, 49/23), who calls himself “Chainsaw Milei”. On Dec. 12, Finance Minister Luis Caputo, who held the same position in the conservative Macri government (2018-19), announced a first package of austerity measures, which is mind-boggling. At the top of his list is a 54% currency devaluation, which would fix the peso, now at 366/dollar, at 800/dollar. In addition, all subsidies on energy (electricity, gas, water) and transportation are to be removed, taxes on imports and on non-agricultural exports are to be increased, the bidding on all public works will be suspended and all such projects will now be taken over by the private sector. In addition, the number of ministries will be reduced from 19 to 9 and massive layoffs of personnel are slated in all public sectors.
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| Anticipating the social unrest such measures will provoke, Security Minister Patricia Bullrich announced Dec. 14 a draconian law enforcement protocol aimed at repressing public dissent and “maintaining order.” Human rights advocates are charging that the new law violates the constitutional right of free expression and to protest. |
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| | | The Dec. 8 online meeting of the International Peace Coalition, co-founded by the Schiller Institute, featured an exciting discussion of the defense industry based in the United States , otherwise known as the military-industrial complex. Just six major defense contractors dominate the market, and share a good chunk of a military budget, which is expected to reach close to $1 trillion in 2024.
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That money could be used for a very different purpose, namely to launch an in-depth economic recovery program. And paradoxically, much of the skilled labor force and the capital goods sectors required to do so can be found in such military procurement companies, be it in the U.S. or in Europe.
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At the IPC meeting, EIR editor Dennis Small outlined a project undertaken by a task force of the Schiller Institute related to the ways in which such firms could be converted from military equipment and re-tooled, with relatively little effort, so as to produce the goods needed for the civilian economy, under the motto “beat the swords into plowshares”.
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Small first described what he prefers to call the “military financial complex”, since in the final analysis, the nexus of defense procurement companies is owned and run by Wall Street and the City of London. There are six main defense contractors in order of importance: Lockheed Martin, Raytheon, Northrop Grumman, Boeing, General Dynamics and L3Harris Technology.
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If you look at the number one and number two shareholders of all six giants, only five names come up – and they are all among the largest asset management companies in the world: BlackRock, Vanguard Group (by far the two biggest firms in the U.S.), Capital Group, State Street Corp. and Longview Asset. They are the ones ultimately profiting from all that defense spending.
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As the re-tooling project was still being worked on, Small gave an idea of what to expect by citing two examples:
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- The General Electric company now produces engines for fighter planes and bombers. But it is also able to produce small modular nuclear reactors, which can be built in a period of 24-36 months. This is exactly the type of technology that is urgently needed in many countries around the world, including in Israel and Palestine as part of Lyndon LaRouche’s Oasis Plan.
- Northrop Grumman Aerospace is developing the B-21 strategic bomber (at an estimated cost of about $800 million per plane). But it also produces the HALO module for the Lunar Gateway project for space exploration, which costs about the same order of magnitude. The benefits for humanity of the latter are, of course, incomparably greater.
We don’t want to throw out the baby with the bath water, Small quipped, the baby being the skilled labor and equipment, but we do need to get rid of the dirty water. So, he said, “we are at the point where we have to beat swords into high-tech plowshares. We have to re-purpose the entire military-financial complex budget into productive activities. This will serve the purpose of ending wars in two ways: cutting off the money, and spurring development, which is the only lasting way to ensure peace.”
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| The project will soon be posted here. |
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| | | | We extend our best wishes to our readers for the holiday period. Your first issue in the new year will be dated January, 4, 2024 |
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