By Roberto Savio
ROME, Mar 21 2015 (IPS)

The “surprise” re-election of incumbent Israeli Prime Minister Benjamin Netanyahu in the Mar. 17 elections has been met with a flood of media comment on the implications for the region and the rest of the world.

However, one of the reasons for Netanyahu’s victory has dramatically slipped the attention of most – the support he received from young Israelis.

According to the Israeli daily Haaretz, 200,000 last-minute voters decided to switch their vote to Netanyahu’s Likud party due to the “fear factor” and most of these were voters under the age of 35.

Roberto Savio

Perhaps the “fear factor” was actually an expression of the “Masada factor”. Masada is a strong element in Israeli history and collective imagination. The inhabitants of the mountain fortress of Masada, besieged by Roman legions at the time of Emperor Tito’s conquest of the Israeli state, preferred collective suicide to surrender.

Israelis today feel besieged by hostile neighbouring countries (first of all Iran), the continuous onslaught by the Caliphate and the Islamic State, overwhelming negative international opinion and growing abandonment by the United States.

Netanyahu played a number of cards to bring about his last-minute election success, including his speech to the Republican-dominated U.S. Congress on Mar. 3, which was seen by many Israelis as an act of defiance and dignity, not a weakening of fundamental relations with the United States.

His support for Israeli settlers in the West Bank and Gaza, his denial of the creation of a Palestinian state and his show of contempt for an international community unable to understand Israel’s fears led Netanyahu’s Likud party to victory.

In Israel, being left-wing mean accepting a Palestinian state, being right-wing means denying it. In the end, the Mar. 17 vote was the result of fear.“Taking refuge in parties that preach a return to a country’s ‘glorious’ past, blocking immigrants who are stealing jobs and Muslims who are challenging the traditional homogeneity of society, country … is an easy way out”

Israeli’s young people are not alone in moving to the right as a reaction to fear. It is interesting to note that all right-wing parties which have become relevant in Europe are based on fear.

Growing social inequality, the unprecedented phenomenon of youth unemployment, cuts in public services such as education and health, corruption which has become a cancer with daily scandals, and the general feeling of a lack of clear response from the political institutions to the problems opened up by a globalisation based on markets and not on citizens are all phenomena which are affecting young people.

“When you were like us at university, you knew you would find a job – we know we will not find one,” was how one student put it at a conference of the Society for International Development that I attended.

“The United Nations has lost the ability to be a place of governance, the financial system is without checks and corporations have a power which goes over national governments,” the student continued. “So, you see, the world of today is very different one from the one in which you grew up.”

As Josep Ramoneda wrote in El Pais of Mar. 18: “We expected that governments would submit markets to democracy and it turns out that what they do is adapt democracy to markets, that is, empty it little by little.

This is why many of those of who vote for right-wing parties in Europe are young people – be it for the National Front in France, the U.K. Independence Party (UKIP) in Britain, the Lega Nord (North League) in Italy, the AfD (Alternative for Germany) in Germany and Golden Dawn in Greece, among others.

Taking refuge in parties that preach a return to a country’s “glorious” past, blocking immigrants who are stealing jobs and Muslims who are challenging the traditional homogeneity of society, country, and bringing back to the nation space and functions which have been delegated to an obtuse and arrogant bureaucracy in Brussels which has not been elected and is not therefore accountable to citizens, is an easy way out.

This is a major – but ignored – epochal change. It was long held that an historic function of youth was to act as a factor for change … now it is fast becoming a factor for the status quo. The traditional political system no longer has youth movements and its poor performance in front of the global challenges that countries face today makes young people distrustful and distant.

It is an easy illusion to flock to parties which want to fight against changes which look ominous, even negative. It also partially explains why some young Europeans are running to the Islamic State which promise a change to restore the dignity of Muslims dignity and whose agenda is to destroy dictators and sheiks who are in cohort with the international system and are all corrupt and intent on enriching themselves, instead of taking care of their youth.

What can young people think of President Erdogan of Turkey building a presidential palace with 1,000 rooms or the European Central Bank inaugurating headquarters which cost 1,200 million euro, just to give two examples? And what of the fact that the 10 richest men in the world increased their wealth in 2013 alone by an amount equivalent to the combined budgets of Brazil and Canada?

This generational change should be a transversal concern for all parties but what is happening instead is that the welfare state is continuing to suffer cuts. According to the International Labour Organization (ILO), young people in the 18-23 age group will retire with an average pension of 650 euro. What kind of society will that be?

Without the safety net now being provided by parents and grandparents, how can young people in such a society avoid feeling left out?

We always thought young people would fight for social change, but what if they are now doing so from the right?

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Greeks protesting against austerity measures. Credit: Apostolis Fotiadis/IPS

By Mario Soares
LISBON, May 27 2013 (IPS)

The economic crisis began in the United States under the administration of then-President George W. Bush, following the collapse of the Lehman Brothers Bank. It came as a result of unregulated globalisation and a neoliberal ideology that places usurious markets, offshore bank accounts, and money for the sake of money, above state power. It is an ideology that ignores citizens, even as they starve.

At the time – between 2007 and 2009 – I wrote some books: “A Changing World”, “In Praise of Politics”, “Fighting for a Better World” and “Inside the Hurricane”, addressing in all of them my concerns about the risk of a neoliberal contagion of the euro and the European Union (EU) itself.

Mário Soares, former president and prime minister of Portugal. Credit: IPS

U.S. President Ronald Reagan and British Prime Minister Margaret Thatcher championed these disastrous neoliberal politics – which were later continued by the pseudo-labourite Tony Blair – whose negative consequences are now evident to all.

In view of the profound links between Europe and the United States, the spread of U.S. neoliberalism to the EU and particularly to the eurozone was inevitable. When the EU crisis began, chancellor Angela Merkel already headed Germany. In spite of being a Lutheran, Merkel was also a former militant of the East German Communist Party. After the fall of the Berlin Wall she stood in opposition to the German reunification to which European states contributed.

As is well known, the first victim of the crisis was Greece, the cradle of our civilization and thus a country that deserved better treatment. It got the opposite.

The German chancellor, a longtime ally of ultra-conservative liberals, heeded market demands. The situation in Greece, where German banks occupied a privileged position, deteriorated until the country was able to pay the exorbitant sum demanded by the Troika, a body comprised of Greece’s major creditors: the European Central Bank (ECB), the International Monetary Fund (IMF) and the European Commission (EC).

In the meantime, in the absence of financial assistance, the so-called peripheral states of the eurozone plunged into crisis. Ireland, Portugal, Spain, Italy (Europe’s third largest economy) and Cyprus were followed by the recent and surprising Dutch collapse. France is the latest addition to the list.

It all boils down to the criminal policy of austerity imposed by Germany, the IMF, the European Commission under the presidency of Jose Manuel Durão Barroso and, with greater discretion, Mario Draghi’s European Central Bank.

It has become more than evident that austerity favours merely usurious markets and those behind them. Austerity obliterates states and their respective populations, not only in the so-called “peripheral”, southern states, as was recklessly claimed. Take a look at the Netherlands, France and Germany. The crisis was bound to hit Germany as many economists, including Nobel Prize-winners Joseph Stiglitz and Paul Krugman, had predicted.

Currently Germany is struggling due to a policy of austerity that has shrunk many of its markets in the European states, which account for 50 percent of its exports. If austerity is maintained, Germany itself will enter a recession.

European public opinion has understood both the necessity and urgency of a break not only with current policy, but also with a political class that has proven incompetent.

The current ruling parties within the EU are mostly ultra-conservative and incapable of grasping the critical situation. Truth be told, the parties that built the EU – the socialists, the social democrats, the Labourites, and the Christian democrats, are no longer in power.

The sole exceptions are France and now Italy, where President Giorgio Napolitano was re-elected in spite of his age, and where we find a new prime minister in the figure of Enrico Letta. Both Letta and French President Francois Hollande have openly declared their opposition to austerity and their intention to restore the role of states in controlling markets, and not the other way around.

Hence, the citizens of all European countries have vociferously expressed their opposition to Troikas, the markets, pseudo-politicians and those governments committed to austerity.

It should be noted that the welfare state (a product of the postwar era), democracy as we conceived it, as well as the rule of law are all being jeopardised, creating the need for a profound and immediate political shift.

We face a straightforward dilemma: either we fight against unemployment, widespread poverty, recession and in defense of the welfare state in its broader sense, or, if we wait too long, the EU will fall into the abyss.

And not only would it be tragic for the U.S. to lose its only faithful ally, but many nations of the world would suffer: China, Russia, Japan, Brazil, India, Mexico and so on.

I am hopeful this won’t be the case. The world surely does not wish the disappearance of the European Union, the most original political project of all times and the one that brought so many benefits to its peoples. Its collapse could open the door to a global conflict. Its demise would represent an unacceptable regression of civilization, one that would set us more than a century back. May common sense and courage prevail.

(END/COPYRIGHT IPS)

Excerpt:

Activists at a G20 protest say no to 'welfare for the rich’. Credit: Tim and Selena Middleton/CC-BY-2.0

By Linus Atarah
HELSINKI, Oct 6 2012 (IPS)

The City of Helsinki added its voice to a growing global call against corporate tax evasion with the passage of a new responsibility strategy that leaves no room for unethical business practices.

Last week, 85 city councillors from Finland’s capital voted to sever business ties with companies operating in, or having links to, tax havens.

The resolution – which passed 78-4 in the City Council, the country’s highest decision-making body in charge of local affairs – acknowledged that tax evasion undermines the capacity of municipalities to provide social services.

The council also recognised that tax havens deprive developing countries of vital tax revenues and denies them the opportunity to benefit fully from world trade.

Tax havens are either territories or countries whose authorities allow businesses or individuals to deposit their wealth at very low tax rates or, in some cases, pay no taxes at all.

The London-based Tax Justice Network has identified 10 of the most attractive tax havens around the world, including Bahrain, the Cayman Islands, Jersey, Singapore and Switzerland.

Tax havens are quickly becoming an election issue here, as the country prepares to head to the polls for municipal elections in three weeks. Minister of Finance, Jutta Urpilainen of the Social Democratic Party, flagged the topic during a parliamentary discussion Thursday by supporting the proposal that municipalities boycott companies operating in tax havens.

Protecting the welfare state

The recent decision means Helsinki will no longer provide procurement contracts to companies whose operations are located in tax havens.

With a budget of about four billion euros, Helsinki is Finland’s biggest consumer of goods and services but it must now be more wary of who it chooses to do business with by demanding that companies reveal where they operate.

Taxes from enterprises are the primary source of income for Finnish municipalities, enabling them to provide public services such as education, health, housing and care for the elderly.

“Companies operating through tax havens pose a lethal threat to the welfare state in Finland and in all countries, especially in developing countries,” according to the resolution’s author, Thomas Wallgren, a Social Democratic councillor who has been leading the charge against tax havens.

“They also distort fair competition between companies, thereby threatening the survival of local and national small and medium-sized companies,” Wallgren told IPS.

He cited the example of Accra Breweries in Ghana, owned by South Africa’s SAB Miller. For five consecutive years, this multi-billion-dollar company paid no taxes at all to the Ghanaian government, while people who sold empty bottles on the streets paid, and continue to pay, value-added tax and municipal tax.

Implementation of the city council’s resolution may still run up against obstacles, according to legal experts here, who say the issue is compounded by the fact that European Union competition laws do not allow companies to be denied public procurement contracts on the basis of their location in tax havens.

Murky estimates

“The amount of money in tax havens is a big question mark,” Matti Kohonen, a researcher with the Tax Justice Network, told IPS. “We live in a world of high financial secrecy, which is a direct cause of the financial crisis. We don’t know where the money is and that is a very serious problem,” Kohonen said.

He estimates that global financial transactions that are either illicit, or involve some element of criminality or tax evasion, are in the order of one trillion dollars annually, about one-tenth of the United States’ gross domestic product (GDP).

The lost revenue stemming from these actions is somewhere close to 100 billion dollars, the amount the United Nations says is required to fulfil the Millennium Development Goals.

The Tax Justice Networks also estimates that 21 to 36 trillion dollars, about two to three times the GDP of the U.S., are hidden in tax havens.

Transfer pricing

According to Kohonen, another common method for avoiding taxes is through transfer pricing, a price-setting mechanism for selling goods or services between different departments of the same company or between a parent company and its subsidiary.

An estimate released two years ago by the Organisation for Economic Co-operation and Development (OECD), which sets the tax rules for transfer pricing, says this practice constitutes 70 percent of world trade.

This year the Finnish Tax Administration reported that the government loses 320 million euros of tax revenue annually due to price manipulations in transfer pricing. But Kohonen says that may only be the “tip of the iceberg” because most firms operating in tax havens are shrouded in secrecy.

Rather than have global transfer rules decided by the OECD, Kohonen believes it would be far more democratic for the U.N. to determine these regulations.

“It is a scandal that we have rules that govern world trade but no rules for the world of taxation apart from the rich countries’ lobby group, which is the OECD. We need multilateral rules or some other rules on how to tax multinationals,” he stressed.

Global movement

Helsinki’s initiative is not an isolated case but part of a global campaign to galvanise a groundswell of public support that could in turn create sufficient political will to take action against tax havens.

“The whole point of the campaign is to put additional pressure on national authorities, stock exchange regulators and on the European Union to have more stringent requirements for multinational companies,” Kohonen told IPS.

He says Helsinki’s initiative comes hard on the heels of similar measures taken in two Swedish cities, Malmö and Kalmar, as well as the municipality of Ulstein in Norway, all in an attempt to rein in the activities of tax evading companies.

Eight regions in France, including its wealthiest region, Île-de-France, have recently declared themselves ‘tax haven free zones’.

In spite of the legal obstacles impeding the implementation of Helsinki’s city council decision, Wallgren said many other Finnish municipalities have been encouraged by the momentum and are following suit. The decision is “catching on like wild fire” around cities and municipalities, he said.

“The fight against the tax havens will be a long one but because it is also a fight for the survival of the welfare state it is worth fighting,” he added.

Kohonen likened the current movement in Finland to the Jubilee Debt Campaign of 1990, which forced developed countries to reduce poor countries’ debt.

“Once it becomes the focus of millions of people around the globe, politicians can no longer avoid the problem,” he said.

(END)