Romania testing ground for ruthless corporations

In a sign of what to expect if US corporate interests are allowed free reign in Europe, as outlined by the planned transatlantic trade deal, an alliance of oil giant Chevron and the Romanian state has evicted villagers opposed to exploration for shale gas.

The country’s rural inhabitants who earn their livelihoods from small-scale farming know that industrialisation of the countryside is completely inimical to their way of life. For months, direct action has been their only option for resisting. But last week, an occupation of the site at Pungesti was forcibly ended in a dawn raid.

However, no sooner had the site been secured than the villagers were back, hauling down the steel fences and engaging in a confrontation with government/private security forces. This inspiring show of people’s strength has not yet not been enough to deter Chevron. The local village has effectively been turned into an armed camp to prevent further protest and the corporation has started activities on the site.

The way Romania’s democratic process is unravelling reflects the plans of energy and mineral extraction companies for the country. The government intends to make industrial interests sovereign above all existing rights to livelihood and property in the name of the “strategic national interest”.

This is in fact exactly what the ConDems in the UK have tried to achieve in order to open the door to fracking in Britain. The only difference is that to placate local communities, the priority given to natural resources over environmental protection was worked into the guidelines given to local councils who officially still grant planning applications.

In Romania, with a public that is less well-informed and with much higher rates of  poverty than western European nations, it becomes even easier for the spurious “national interest” line to legitimise any unwanted development and the state violence needed to enforce it.

In recognition of these changes that give corporate rights priority, the status of the country’s politicians has changed dramatically, as an activist in Romania explains.

Parliamentarians are no longer considered public officials and hence are immune to all charges or accusations of conflict of interest, misconduct or abuse of function. Officially then, politicians do not serve the people and have immunity in the same way that corporations are protected from action brought against them by people or states. At the same time, insulting public figures has become a criminal offence!  

This onslaught against democracy in Romania lays the groundwork for the dreaded “Mine Law”, written for the benefit of a single corporation that wants to destroy the Rosia Montana mountain region in order to carry out cyanide gold mining.

Aware of the influence of the American state in all this, the activist concludes: “Someone in the EU worked closely with someone in America in order for this to happen. Romania is the testing ground, the European Argentina. Romania is the precedent.”

These nightmare laws are there to protect the state as the enforcer of corporate affairs in the 21st century. The role played by state officials, legal systems and above all the police serves a dual function. They allow the extraction and use of fossil fuel and natural resources, which is driving climate change, while keeping human rights subservient to the need to consume these goods.

Politicians hide behind this farce to claim this is all necessary, while terrorising us by any means possible. In Romania and throughout much of the world, the corporations are beginning to sense that they can use naked violence to get their way.   

To counter this social crisis, which has converged with an ecological catastrophe, we need to draw strength from the progress human beings have made in the past in the struggle for democracy. We can establish states that provide the foundations of social justice and care and opportunities for all to flourish. Some positive proposals which can help us reach this goal are outlined in our new book, Fracking Capitalism. Get a copy if you haven’t already done so!

Matt Worsdale

Horsemeat scandal driven by cost-cutting and profit

The horsemeat scandal is easier to explain than to trace. What we have are profit-hungry, self-regulated major retailers using their power to force down prices paid to suppliers who in turn cut their own costs by sourcing raw materials more cheaply.

As the price of beef has risen – reaching a new high last year - the pressure on the suppliers in France and Ireland has grown. They were desperate to cut the price they were paying for what they thought would be beef.

Instead, horsemeat – which may itself contain traces of antibiotics dangerous to humans – entered the food supply chain throughout Europe. It was a disaster waiting to happen.

And the victims? Mostly poorer people who with food prices rising fast, have had little  choice but to buy “value” and other similarly labelled, comparatively low-priced, processed, frozen meat products they were led to believe contained beef.

The winners? Those who sold horsemeat under the label beef. Beef sells for around €4

kilo of beef costs while horsemeat fetches 90 cents.

A labyrinthine supply chain provided the opportunity. One investigation compared the chain to something money launderers would have been proud of. It involved “a  deliberately murky complexity of semi-regulated sources, abattoirs, suppliers, middlemen, imports, exports, labelling and relabelling”.

Originating in Romania, where cows are slaughtered and minced, some was imported to France and sold on to another French company before being despatched to a factory in Luxembourg. French government officials believe that another French company also bought the meat frozen from a Cypriot meat trader, who sublet part of the order to another trader in the Netherlands, who was supplied by an abattoir in Romania.

Of course, there was no testing despite strict rules on the traceability of meat that were imposed in France during the BSE crisis in the 1990s. In fact, there was no testing anywhere in Europe – apart from Ireland. The Irish authorities, acting on a tip-off, raided the firms that were supplying Tesco and discovered horsemeat destined for beef burgers.

A globalised, complex food chain dominated by a handful of retailers and suppliers, whose first concern is the bottom line, is the backdrop. Professor Karel Williams, at Manchester Business School, described the horsemeat scandal as  the inevitable result of processors “constantly ringing around to get the cheapest deal this week”.

The Food Standards Agency in the UK, set up in the wake of the BSE scandal, is generally regarded as being in the pockets of the supermarkets. They have lobbied for and succeeded in achieving what is known as “light-touch regulation”. This is essentially reduced to suppliers ticking boxes (New Labour also pioneered a similar approach in the banking sector and we know what happened there).

The ConDems have axed hundreds of meat inspectors and trading standards officers as part of the austerity cuts. Now the Coalition is saying the industry must sort itself out. Newspapers like The Observer are whistling in the dark with their call for more regulation. Well, it’s never going to happen and it’s bound to get worse as cost-cutting becomes more intense.

 “I think what we are seeing is just the tip of the iceberg,” says Professor Chris Elliot, director of the Institute for Global Food Security at Queen’s University in Belfast. “There are probably plenty of other problems lurking out there we aren’t aware of.”

The truth is that leaving food in the hands of a handful of retailers and suppliers is good for shareholders but dangerous for our health. Corporate control of food and agriculture is the problem. Successive scandals have shown that to be the case. No amount of regulation will alter that.

 .

Paul Feldman

Communications editor

How to end 'dictatorship of the market'

Protests and strikes are mounting throughout Europe as governments begin to carry out the austerity measures required to attract the investment funds needed to postpone state bankruptcy.

Mounting civil unrest is undermining investors’ confidence in European governments’ ability to impose the brutal measures on their populations.

It is patently clear that agreement on a €750 bailout package to prevent the collapse of the euro is hopelessly inadequate to stem the attack on the currency.

Panic moves in the USA, Germany and Venezuela yesterday against speculative investment markets are adding to the global instability as hedge funds look to move their headquarters and activities to the less-regulated East.

The German government banned “naked shorting” – the selling of shares and bonds that the sellers neither own nor have borrowed.

In the US, Chris Dodd, the Senate banking committee chairman, proposed letting regulators decide whether banks should be banned from dealing in all derivatives in a last-minute amendment to the financial regulation bill

Venezuela's Chavez-led government took control of foreign currency trading in an attempt to prevent further attacks on the bolivar.

The International Monetary Fund has forced Romania’s six-month old centrist government to promise cuts to state wages of 25% and to pensions of 15% as part of an effort to meet the requirements for the release of the next tranche of loans in a 20 billion-euro bailout package. This scale of attacks on living standards will prove to be just the down payment.

Trade unions in Romania have called a mass demonstration in Bucharest today. If their forecast turnout of 60,000 proves correct, the protest outside government headquarters will be one of the biggest since the revolutionary overthrow and execution of the Stalinist Nicolae Ceauşescu and his wife Elena in 1989.

Greek unions have called the fourth in a series of general strikes for tomorrow against a 10% cut in wages and spending in the public sector, an increased retirement age, VAT increases and the freezing of pensions.

A group of left-leaning members of the European Parliament – the United Left / Nordic Green Left (GUE/NGL) – are attempting organise co-ordinated protests in the week of 21 to 26 June against the power of the financial markets.

The MEPs have put together a series of left-sounding demands:

• Workers must not pay for the crisis - Make the super rich and bankers pay

• Solidarity with the Greek workers and for the unity of working people across Europe

• No to cutbacks, wage cuts, unemployment and increases in the retirement age

• No to privatisation of public services

• End the dictatorship of the financial markets, credit ratings institutions and the IMF

• Stop the bailouts of the banks - nationalise the banks and financial institutions in the interests of working people

But their intention to send use these protests to send “a clear message to the European establishments” and “building a European-wide resistance to the ongoing neo-liberal agenda” is wholly inadequate.

Financial markets are not susceptible to protest or even actions of the German state, representing the most powerful economy in Europe. Shares on European markets tumbled further, as did the euro, after Germany’s attempts to ban short-selling.

One London-based bond trader commented: "Nobody ever thought they'd do this in a million years and it raises the long-term question of who is now going to want to buy their debt."

A World to Win has a different set of aspirations to the MEPs. We’ll be discussing our plans to replace the dictatorship of financial market and the for-profit capitalist system with collectively owned, democratically managed not-for-profit system at our conference on Saturday.

Gerry Gold

Economics editor

Protests and strikes are mounting throughout Europe as governments begin to carry out the austerity measures required to attract the investment funds needed to postpone state bankruptcy.

Mounting civil unrest is undermining investors’ confidence in European governments’ ability to impose the brutal measures on their populations.

It is patently clear that agreement on a €750 bailout package to prevent the collapse of the euro is hopelessly adequate to stem the attack on the currency.

Panic moves in the USA, Germany and Venezuela yesterday against speculative investment markets are adding to the global instability as hedge funds look to move their headquarters and activities to the less-regulated East.

The German government banned “naked shorting” – the selling of shares and bonds that the sellers neither own nor have borrowed.

In the US, Chris Dodd, the Senate banking committee chairman, proposed letting regulators decide whether banks should be banned from dealing in all derivatives in a last-minute amendment to the financial regulation bill

Venezuela's Chavez-led government took control of foreign currency trading in an attempt to prevent further attacks on the bolivar.

The International Monetary Fund has forced Romania’s six-month old centrist government to promise cuts to state wages of 25% and to pensions of 15% as part of an effort to meet the requirements for the release of the next tranche of loans in a 20 billion-euro bailout package. This scale of attacks on living standards will prove to be just the down payment.

Trade unions in Romania have called a mass demonstration in Bucharest today. If their forecast turnout of 60,000 proves correct, the protest outside government headquarters will be one of the biggest since the revolutionary overthrow and execution of the Stalinist Nicolae Ceauşescu and his wife Elena in 1989.

Greek unions have called the fourth in a series of general strikes for tomorrow against a 10% cut in wages and spending in the public sector, an increased retirement age, VAT increases and the freezing of pensions.

A group of left-leaning members of the European Parliament – the United Left / Nordic Green Left (GUE/NGL) – are attempting organise co-ordinated protests in the week of 21 to 26 June against the power of the financial markets.

The MEPs have put together a series of left-sounding demands:

• Workers must not pay for the crisis - Make the super rich and bankers pay

• Solidarity with the Greek workers and for the unity of working people across Europe

• No to cutbacks, wage cuts, unemployment and increases in the retirement age

• No to privatisation of public services

• End the dictatorship of the financial markets, credit ratings institutions and the IMF

• Stop the bailouts of the banks - nationalise the banks and financial institutions in the interests of working people

But their intention to send use these protests to send “a clear message to the European establishments” and “building a European-wide resistance to the ongoing neo-liberal agenda” is wholly inadequate.

Financial markets are not susceptible to protest or even actions of the German state, representing the most powerful economy in Europe. Shares on European markets tumbled further, as did the euro, after Germany’s attempts to ban short-selling.

One London-based bond trader commented: "Nobody ever thought they'd do this in a million years and it raises the long-term question of who is now going to want to buy their debt."

A World to Win has a different set of aspirations to the MEPs. We’ll be discussing our plans to replace the dictatorship of financial market and the for-profit capitalist system with collectively owned, democratically managed not-for-profit system at our conference on Saturday.

Gerry Gold

Economics editor