Saturday, July 11, 2015

"US Geopolitical Concerns as Athens Rekindles Ties with Western Foe Russia" Finian CUNNINGHAM

US Fears Euro Crisis Unravelling Anti-Russia Project

Finian CUNNINGHAM | 11.07.2015 | 00:00

As leaders of the European Union meet this weekend to decide on whether Greece is to be ejected from the eurozone, Washington is pulling out the stops to prevent such an outcome.
What is alarming Washington is not the technical, financial arguments over Greece’s eligibility to remain inside the EU’s monetary system. Nor, we can aver, are the pressing human concerns about the poverty-stricken Greek people from the collapse of their country’s economy. What has the US rattled is that the monetary crisis in Europe could lead to much bigger geopolitical consequences: in particular, the EU’s bickering threatens to unravel Washington’s carefully constructed anti-Russian agenda in which, for the US, a coherent Europe plays a vital role.
If the Greek financial crisis spreads to other EU member states the result could see the 28-member bloc become riven with acrimonious splits; splits that will crack wide open to undermine the American strategy of trying to isolate Russia through a US-imposed cleavage between Moscow and the rest of Europe. Even the future of the US-led NATO military alliance could be at risk if the EU financial crisis gets out of control.
The main target for US diplomatic efforts at keeping the 19-member single-currency system together is Germany. Berlin’s insistence, led by Chancellor Angela Merkel, that no debt write-off can be afforded to Greece is raising the stakes that Athens will be forced into a»Grexit» from the eurozone. Germany, along with Latvia and Lithuania, has been strident in its demands that Greece must pay off its debts in full through a mixture of austerity and «fiscal consolidation».
The Greek government of Alexis Tsipras, on the other hand, says that there must be a substantial measure of debt write-off for its continued membership. Tsipras seems prepared to cave in on the question of exacting more austerity from the Greek population. Nevertheless, his avowedly anti-austerity Syriza government will not survive the Greek electorate if it doesn’t also deliver on a major debt write-off for the nation in order to mitigate the next round of austerity cuts – a debt write-off that would perhaps amount to one-third of the total, or around €100 billion.
To that end, Washington is pushing Berlin to relinquish its hardline creditor position, and to make concessions on the Greek debt that would involve at least a partial cancellation of its €320 billion total arrears.
This week, ahead of the EU «deadline summit» scheduled for Sunday, the Obama administration and the Washington-dominated International Monetary Fund (IMF) issued strenuous statements urging Germany to give way on debt relief.
The Financial Times reported: «US Treasury Secretary Jack Lew and the IMF’s Christine Lagarde on Wednesday sought to increase pressure on European [German] leaders to grant debt relief to Greece and help the country avoid an exit from the eurozone. In separate interventions in Washington both said it was clear that Greece was in need of a ‘debt restructuring’ in an implicit call for Germany and others to drop their opposition to any forgiveness of Greek debts».
Noting that «the US has become an important advocate for granting Greece debt relief», the FT added: «Warning that a Greek meltdown would cause hundreds of billions of dollars of economic damage around the world, Jack Lew issued the Obama administration’s loudest call yet for compromise».
For several weeks now, Washington has been urging EU leaders and Athens to come up with a financial solution to the crisis, and one that keeps Greece within the eurozone.
In another report this week, the Wall Street Journal  headlined: ‘Obama Urges Germany, Greece to Compromise on Emergency Financing’.
«President Barack Obama on Tuesday urged German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras to compromise on an emergency financing deal that could keep Greece in the eurozone,»reported the WSJ.
According to the WSJ: «White House spokesman Josh Earnest said the president was encouraged by assurances from both leaders in separate phone calls that ‘it’s in their collective and mutual interest for Greece to remain part of the eurozone’».
Obama reportedly stressed in the phone call to Merkel «that the only way that we’ll succeed in achieving that goal is for all of the parties to agree to a package of reforms and financing that puts Greece back on a path toward economic growth and debt sustainability’».
The phrase «debt sustainability» entails cancellation.
In the Financial Times’ report cited above, the US Treasury Secretary Jack Lew is quoted as saying: «There’s a lot of unknowns if this goes to a place that completely melts down in Greece. I think that is a risk that the Europeans and global economy don’t need. I think geopolitically it would be a mistake».
Alluding to the bigger, underlying concerns, the Wall Street Journal warned about the consequences of a Greek exit from the EU currency:»That prospect worries the US. Not only could the Greek crisis weigh on US exports and fuel market turmoil but also a Greek exit could raise geopolitical concerns as Athens rekindles ties with Western foe Russia and risks turning into a failed state».
So, reading between the lines here, it soon becomes clear that it is the «geopolitics» of the EU crisis that is most animating Washington, and how that relates to Russia in particular.
The real US perspective was spelled out in a Voice of America  report dated on June 29, when the current crisis came to a head between the Berlin-led EU creditors and Greece. VoA quotes Gary Hufbauer, from the hawkish Washington-based Peterson Institute for International Economics, who said the US government is alarmed over the potential wider implications of the Greek financial crisis.
Hufbauer said: »The US is concerned that the chaos in Greece could be infectious and will lead to doubts about Portugal and Spain and Italy and cause trouble, and will cause disunity in Europe’s resolve with respect to Russia over the Ukraine situation».
Such disunity in Europe, which the US fears, would inevitably unravel the anti-Russian economic sanctions that the EU has implemented, primarily at Washington’s beckoning since the Ukraine crisis erupted last year. The disunity would also undermine the US-led policy of NATO hostility toward Russia that Brussels has adopted and to large extent has imposed on the European bloc despite the misgivings of several EU member states.
The tensions over the EU financial crisis are driving a fundamental contradiction between Washington and Berlin. Germany is concerned that if any debt write-off is afforded to Athens, then other equally indebted countries in the EU will also want similar massive debt cancellation. As the biggest creditor in the EU bloc, Germany stands to lose heavily from any such serial write-offs. Chancellor Merkel has put the credibility of her government on the line with the German electorate, promising that the resolution of the crisis will not impinge on their nation’s economy. But taking a $100 billion haircut, if Germany is forced to do so, is going to make a lot of Germans angry as hell.
However, if Germany refuses to yield to debt restructuring then Greece will in all likelihood be forced into an exit from the monetary system. That will in turn lead to Greece having to seek financial help from other international creditors to shore up its crippled economy. Cut off from the European Central Bank and the IMF, Greece will have to turn to Russia, China and other BRICS nations to save itself from disintegration. That is the very thing that Washington is loathe to contemplate, and that is why the Obama administration is pushing Berlin to relent on its hardline debt stance towards Athens.
If Greece were to exit the eurozone, there will be recriminations across the EU, from countries such as France, Italy and Spain, which have also been urging Berlin to take a more accommodating line on Athens. Even Britain has been cajoling Berlin to make a deal with Greece, no doubt for the same unspoken ulterior geopolitical reasons as Washington.
The contradiction in Europe over the financial crisis is thus putting Washington on a head-on confrontation with Berlin. Washington needs Berlin to take a severe creditor hit in order to keep the EU coherent for its geopolitical objective of isolating Russia. But Berlin’s subservience to Washington is going to be severely strained if it is eventually forced to take such a hit to its economy. Berlin has talked itself into a political corner with its hardline creditor rhetoric towards Athens. How will Merkel explain a capitulation to her people?
One thing is sure, however. The American NSA phone-tappers at the German Chancellery are working overtime these days.

UFA and Beyond: “Gone are the days of unchallenged US domination”

The BRICS/SCO Summit(s) in Ufa Marks the Start of a Silk World Order
Mahdi Darius NAZEMROAYA | 10.07.2015 | 00:00
Get ready for ground shattering geopolitical changes. At the crossroads of Asia and Europe, it has been decided that the Russian city of Ufa will be the point of convergence for all the initiatives and projects of the Silk World Order of trade and integration that China and Russia are spearheading. Ufa, which is the capital of Russia’s Bashkortostan, is being used to simultaneously host an extraordinary summit for both the BRICS—which has increasing become an alternative forum to that of the G7—and the Shanghai Cooperation Organization (SCO) respectively from July 8 to 9 and from July 9 to 10, 2015.
The Coming Together of Eurasia and Beyond
The joint BRICS and SCO summit in Ufa has been organized by Moscow as the simultaneous holder of both the rotating chairmanships of the BRICS and the SCO. It is no coincidence, however, that the Seventh BRICS and Fifteenth SCO summits have been amalgamated as one large international summit. The Kremlin has used has used the opportunity to bring Russia’s partners together. This is part of the integration process of the Silk World Order. There will be joint BRICS and SCO sessions and many important exchanges and discussions about a new archetype for the world.
One informal session at Ufa will not only include all the members of the BRICS and the SCO, but will also include all the members of the Eurasian Economic Union (EEU), according to information disclosed by Russian President Putin’s aide Yury Ushakov to the Russia media days before the summit in Ufa. Aside from Brazil and South Africa, since all the members of the BRICS and the SCO are located in Eurasia, the Kremlin saw it as pertinent that the EEU be involved in some type of discussion about the development of the Eurasian space. In essence this means that Armenia will be attending the joint BRICS and SCO summit in Bashkortostan, since all the other members of the Eurasian Economic Space are either full SCO members or, in the case of Belarus, an SCO dialogue partner. According to the Mercator Institute for China Studies (MERICS) in Berlin, which asserts that the BRICS-SCO-EEU talks are «a sign that Russia is aiming for political block-building», the Republic of Azerbaijan and Turkmenistan will also take part in informal meeting of the BRICS, SCO, and EEU. [1]
The Eurasian and global convergences in Ufa are clear. Using the links that already exist between the two, China’s New Silk Road and the Russian-led Eurasian Economic Union will begin a roadmap to fuse together in Bashkortostan as pivotal axis of rotation in the Eurasian space. This is a continuation of the high-level discussions that were announced by both Chinese President Xi Jinping and Putin on May 8 on the Xi Jinping’s arrival to Moscow, ahead of the Victory Day celebrations on May 9, 2015.
After failed attempts at different venues, Indian Prime Minister Narendra Modi and Iranian President Hassan Rohani will finally meet in Ufa. India and Iran are rekindling their strategic bonds that had been neglected by the government of Modi’s predecessor, Prime Minister Manmohan Singh. The use of the Iranian port Chabahar by India for gaining access to Russia and Central Asia through the North-South Corridor will definitely be discussed by Indian and Iranian officials at Ufa.
The Coming Silk World Order Being Unveiled in Ufa
While the New Silk Road and the EEC come together in Ufa, the BRICS will put together a development map while the SCO will outline its expansion plans for new full members. The applications of India, Iran, and Pakistan for full membership will be addressed. Moreover, Egypt and several other countries have applied to join the SCO in come context.
Ufa is being used to stamp out a roadmap for the «Eurasian Century» and a Silk World Order that goes beyond Eurasia, which includes everything from a transcontinental mega railroad network connecting the Iberian Peninsula to the South China Sea and to what has been dubbed as the «modern city of the Eurasian continent» in Belarus.
The US is clearly worried about the Silk World Order that is emerging. It has begun to pull out all the stops, from courting Brazil on the eve of the summit in Ufa to call for the European Union to not join China’s banking project. The Pentagon’s 2015 Military Strategy that addresses the possibility of confrontation with an updated «Axis of Evil» composed of China, Russia, Iran, and North Korea is catered to Washington’s proclivity to confront the countries that are challenging a US-dominated international order.
While Washington and NATO are making a general call to arms, the Chinese are busy building trade infrastructure and transport networks. In Belarus, the Chinese are building the first «modern city of the Eurasian continent» in the forests next to the Minsk National Airport as part of what Bloomberg calls «a manufacturing springboard between the European Union and Russia.» [2] Upon completion, the new export-oriented city in Belarus, which is being built on the route of the European highway that links Berlin, Warsaw, Minsk, and Moscow, will be the largest manufacturing and industrial park in Europe.
The US Dollar and Bretton Woods are Finished
The Silk World Order that is being shaped in Ufa will see the existing Bretton Woods financial architecture of the world unraveled and replaced by one that is no longer dominated by the trilateral grouping of the United States, Western Europe, and Japan. The monopoly of the World Bank and the International Monetary Fund, which has benefited Washington, is at its end. The US dollar as a currency in bilateral and multilateral trade is being scraped by the BRICS, SCO, and EEU— Washington’s flooding of oil markets was partially aimed at derailing this by forcing renewed dependence n the US dollar for energy trade.
The BRICS New Development Bank (NDB), the first institution of the BRICS, is being launched by Brazil, China, India, Russia, and South Africa. It is joined by the SCO Development Bank and by the recently launched Asian Infrastructure Investment Bank (AIIB) in the assault on Bretton Woods.
Gone are the days of unchallenged US domination. The architecture of the post-Second World War or post-1945 global order is now in its death bed and finished. With or without Washington, a Silk World is emerging and its coming is being trumpeted from Ufa as the SCO strengthens and the BRICS institutionalizes itself as the cornerstone of a new multi-polar world order.
[1] Gabriel Domínguez, «What to expect from the SCO, BRICS summits in Russia», Deutsche Welle, July 6, 2015.
[2] Aliaksandr Kudrytski, «China Builds EU Beachhead With $5 Billion City in Belarus», Bloomberg, May 26, 2013.