Argentina Slams Obama Administration on Vulture Fight; Says Sovereignty Is the Only Relevant Issue

After having been declared in “selective default” on July 30, after no agreement was reached with the Queen’s vulture funds, the Argentine government has made very clear it will not—and did not—capitulate on the fundamental issue of sovereignty and national dignity, and laid blame right where it belongs, on the doorstep of the White House, for the failure of negotiations.

In his press conference Thursday morning, Chief of Staff Jorge Capitanich slammed the U.S. government directly for its lack of “rationality,” and biased court officers, accurately characterizing Judge Thomas Griesa and special master Daniel Pollack as “agents of the vulture funds.”

In developing his arguments, Capitanich made very clear why Obama should be immediately impeached.

“The United States is responsible for not acting appropriately,” Capitanich said. “Don’t come to us with the excuse that the judiciary is independent.” What the United States is independent of “is rationality. It is independent of decisions that are compatible with the functioning of the international financial system, but it is not independent of the vulture funds.”

The U.S. judicial system has shown “bad praxis,” Capitanich charged. “We’ve seen the marked incompetence” of [special master] Pollack, who failed to “create the conditions for reasonable negotiations…he didn’t understand the process, or respect Argentina’s condition as a sovereign nation.”

Griesa’s failure to reinstate the stay on his ruling, was deliberate, the chief of staff charged, for the sole purpose of diminishing the “government’s decision-making possibilities. But, make no mistake,” he warned. “The government will meet its responsibilities… Let there be no doubt that… Judge Griesa is not an independent judge; he is an agent of the vulture funds. Pollack is an agent of the vulture funds. So, what justice system are you talking about? What independent judiciary are you talking about? We are talking about the responsibility of a State, that is, the United States, to create the conditions of respect for the unrestricted sovereignty of nations. This is Argentina’s position — a rational position. …Argentina will stand up for its rights before the international community,” especially because it has overwhelming international support.

Capitanich also addressed the insanity of the global situation, both in strategic and financial terms. “The international community cannot endorse the actions of minuscule groups which aim to undermine the process of a sovereign country’s voluntary restructuring,” he said. “But, what can we expect from a world leadership which is not even capable of intervening in wars, where people are killed? They don’t even care—it doesn’t matter to them that the sovereignty of nations is undermined. They don’t care that people get killed, and they won’t do what they’re supposed to do in dealing with these tiny groups” (of vultures).

“This situation can’t go on indefinitely,” he warned. “It is not possible for the world to coexist with these types of minuscule agents who distort the functioning of the international financial system, relations among nations, the exercise of sovereignty and, above all, the will of nations.”

Argentina’s position is totally firm and clear, he stated. “The defense of the Argentine position is the defense of our sovereignty, the defense of our resources, the defense of our children’s daily bread….[International leaders] haven’t hesitated to provoke wars, to intervene in nations for the sole purpose of appropriating resources…”

“We are going to continue what we’re doing,” he said, “in a complex world.”

Capitanich outlined several options Argentina is considering, including taking its case to the International Court at The Hague, or initiating a debate at the United Nations. He also mentioned the need to “convene an international conference” to deal with regulatory issues that would prevent vulture funds from running amok.

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Chinese Strategic View of Global Changes Reflected

There has been considerable coverage in the Chinese media regarding to heightening tensions between the U.S. and Russia, and although the Chinese are playing their cards close to the vest with regard to the conflict, they are watching it very closely, including the military preparations which the Russians are taking in response to the ever-more strident voices coming from the West. The following article in Global Times by Zhang Ming, a researcher at the China Institute of Contemporary International Relations, no doubt reflects some of the thinking going on within leading Chinese circles:

“The current international order is in a process of transformation. The U.S. hegemonic system is gradually eroding, with a new international order growing into its place. It is fair to say that the Ukraine crisis has served as a catalyst for these changes. The current order took shape after the end of the Cold War, with the fall of communism in Eastern Europe, the dissolution of the Soviet Union and the collapse of the Yalta system. The U.S. built up an absolute monopoly on power through the Gulf War and the war in Yugoslavia. It also exported to the world its own relations of production, social systems and an ideology of international monopoly capitalism thoroughly dominated by Washington itself.

“However, countervailing trends are inevitable once certain limits are reached. Washington’s efforts to disseminate its values and hegemonic system around the world have encountered a crisis. Washington’s power has been spent following its geopolitical expansion in the name of the war on terror. The outbreak of the global financial crisis of 2008 in particular exposed a wide spectrum of systematic and social problems that had accumulated over a long period of time within U.S. society. The decline of Washington has gone from rumor to reality, not only triggering a domestic social crisis but also accelerating the collapse of the current international system.

“Russia has gradually rediscovered the confidence it lost after the Cold War. As other regions occupied the attention of the U.S. and the EU, Russian President Vladimir Putin has been busy reforging economic integration among the countries that were once members of the Soviet Union. When the EU’s Eastern Partnership initiative expanded to Ukraine, Moscow chose to strike back. Putin managed to keep Ukraine within the framework of the Commonwealth of the Independent States through policy levers that included energy agreements and huge loans. He incorporated Crimea into Russia after the regime change in Kiev. The current crisis reflects severe mistrust between Russia and the West.

“The collapse of a unipolar world has led to new contradictions between the East and the West, leaving peripheral zones mired in constant turmoil. The MH17 incident reminded us once again of the various conflicts binding together the parties involved. It reminds us also that unilateralism and hegemony will only lead to more confrontation and that compromise and cooperation constitute the only choice for resolving the crisis.”

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Bail-in Coming in Portugal with Contagion

Portugal’s biggest commercial bank, Banco Espirito Sancto (BES), is roughly a $100 billion bank, not in the trans-Atlantic megabank league, but about the size of the German Landesbanken which started to go insolvent in 2007.

BES’s massive $5 billion first-half loss announced late July 30 (comparable, say, to a $100 billion loss by JPM Chase) is the penultimate step in the collapse process of the whole Espirito Santo Group. Although belatedly ordered July 31 by the Bank of Portugal to raise capital and purge its management, BES has been too systematically mismanaged to be bought by a giant, and has dumped too many big losses on its recent new-capital providers, to be able to raise the suddenly-needed $5 billion more.

See LPAC’s Dodd-Frank Kills: How the U.S. Joined the International Bail-In Regime

So, the probable next step is either bail-out (consuming Portugal’s entire bank bail-out fund) or bail-in, or the poison cocktail of both. BES’s stocks and bonds are both collapsing in anticipation.

Beyond the Portugal and Brazil Telecoms, which have both already been dropped to junk by BES Group’s defaults against them, bail-in threatens France’s Credit Agricole bank, which had over $1 billion in BES stock as of a month ago, and other financial firms which are big stockholders.

The big losses BES is taking from debts owed to it by the holding companies and other units of the BES Group, which are already bankrupt, were known. But the surprise in BES’s shocking loss announcement was a roughly $1.5 billion “proviso against debt sold to BES clients but booked off-balance sheet through special-purpose vehicles.” This apparently includes BES Group debt which was dumped on unsuspecting depositors through “retail branch sales.” So, a bail-in will hit those depositors, too. This was what made the Cyprus and Spain (Bankia Group) bail-ins the drivers of such deadly austerity.

The secondary surprise was that BES did not provide for any significant loss on its $4 billion loan to BES Angola, which is already in trouble, and thus its losses may be even worse than reported.

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Inspectors Finally Arrive at MH17 Crash Site; Ukraine’s Rada Capitulates to IMF Austerity Demands

For the first time on Thursday, international inspectors arrived at the crash site of MH17 in eastern Ukraine, after the Ukrainian government announced a 24-hour ceasefire of shelling in the area immediately around the crash site. As the result of the ceasefire, Dutch and Australian investigators, along with OSCE monitors, were able to put in a full day of work at the site, concentrating on recovering the remaining bodies and beginning the collection of personal items and parts of the plane in order to conduct the in-depth forensic investigation to determine what happened. Russia has sent a team of aviation experts to Kiev to join the investigators, and, in a meeting on Thursday, the Prime Ministers of Malaysia and the Netherlands, Najib Razak and Mark Rutte, agreed that 68 Malaysians would go to the site to assist in the security and investigation. The Ukrainian Rada convened a special session also on Thursday to ratify the Dutch-Ukrainian agreement on the crash investigation mission. At the same time, the Rada rejected Prime Minister Yatsenyuk’s resignation and caved in to IMF demands for further austerity, wage cuts, and a 1.5-percent additional tax, referred to as a “military duty” to fund further arming of the Ukrainian military.

The 24-hour ceasefire came as the result of a direct request from UN Secretary General Ban Ki-moon to President Poroshenko.

In a related development, the London Independent reported on Thursday that German Chancellor Merkel has been conducting quiet negotiations with both Ukrainian President Poroshenko and Russian President Putin in pursuit of a global deal that would end the conflict in Ukraine. According to the Independent, elements of the deal would include recognition of Crimea’s separation from Ukraine and rejoining of Russia, Russian compensation for Ukraine’s loss of revenue from the leasing of the Sevastopol naval base on the Black Sea, a renewed gas deal at an agreed-upon price, and an end to the fighting in the east between separatists and the Ukrainian Army. The talks stopped with the crash of the MH17 flight, but could resume at any time. Although a German government spokesman denied the accuracy of the Independent story, a US source familiar with the behind-the-scenes negotiations said that much of the account was in fact true.

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European and Russian Policymakers Call for Action To Prevent Nuclear Confrontation

A task force of very prominent European and Russian policymakers issued a paper calling for a new crisis- management mechanism in Europe to stop the current crisis from “pitting nuclear armed adversaries against each other.” Entitled “Crisis Management in Europe in the Context of Events in Ukraine,” it was released on Thursday under the auspices of the European Leadership Network (ELN) in London; the Russian International Affairs Council (RIAC) in Moscow; the Polish Institute of International Affairs (PISM) in Warsaw, and the International Strategic Research Organization (USAK) in Ankara.

Among the authors are Malcolm Rifkind, former U.K. Foreign and Defense Secretary; Vyacheslav Trubnikov, former director, Russian Foreign Intelligence; Igor Ivanov, former Russian Foreign Minister; Hervé Morin, former French Defense Minister; and Volker Ruhe, former German Defense Minister (see below).

In their press release announcing the report, the Task Force on Cooperation in Greater Europe wrote that they believe “the current crisis is putting the security of everyone in Europe at risk and is potentially pitting nuclear armed adversaries against each other in a highly volatile region.”

This paper follows one published in January warning that if greater cooperation between East and West were not pursued immediately, then the situation would degenerate into a “new period of confrontation in Europe.” Now, they write they are sorry to say this has come to pass, and therefore, in this second position paper on Crisis Management in Europe, the task force calls for both sides to:

“Exercise full military and political restraint not only among themselves but also on the part of all of their relevant allies and partners in the wider East and South-East European region. Other frozen conflicts in Georgia, Transdniestria, and Armenia-Azerbaijan exist. Escalations in any of them, triggered by third parties acting independently, as in the case of the recent downing of flight MH17, could deepen and widen the crisis between Russia and the West even if neither side intends it.”

The task force paper then outlines the parameters for a new crisis-management mechanism:

“Embrace increased military-to-military communication, information exchange and transparency measures in the interests of avoiding unintended military engagements between NATO and Russia. There have already been several near misses and action is needed both to reduce their likelihood and increase leadership decision time in a context where thousands of nuclear weapons remain on high alert on both sides.

“Engage in direct dialogue with each other on underlying issues of concern in the NATO-Russia relationship, not least on fundamentally differing interpretations and narratives with regard to the principles enshrined in the Helsinki Final Act.”

The paper recognizes the security interests of both Russia as well as minorities, and clearly states agreement that Ukraine should not join NATO, and that the only hope for its development is in the concrete cooperation between Europe and Russia. “Given this reality,” they write, “the EU and Russia should continue a quiet dialogue on the future creation of a possible economic space from Lisbon to Vladivostok,” although they add that this could be complementary to “both the idea of a Eurasian Union on the one hand and a Transatlantic Trade and Investment Partnership on the other.”

They call for full support of the efforts of the OSCE and urge that the NATO Russia Council should once again start meeting. This current crisis should be solved, they write, so that cooperation can continue and be more effective in Afghanistan, with the Iranian nuclear program, and for the EU, NATO, and Russia to cooperate on countering radicalism and terrorism in Syria and elsewhere in the Middle East and Central Asia.

Given who the signatories are, this paper it cannot be easily dismissed. Other signatories include: Des Browne, former U.K. Defense Secretary; Adam Daniel Rotfeld, former Polish Foreign Minister; Paul Quiles, former French Defense Minister; Anatoly Adamishin, former Russian Deputy Foreign Minister and Ambassador to the U.K.; Özdem Sanberk, former Turkish Undersecretary for Foreign Affairs; Alexei Gromyko, acting Director of the Institute of Europe of the Russian Academy of Sciences; and Tarja Cronberg, former Finnish Member of European Parliament and former Director of the Copenhagen Peace Research Institute.

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New Washington Times Ad Warns of “Road Map to World War III”

In the fourth of a series of wrap-around ads in the Washington Times, the American University in Moscow again makes a pungent argument against the anti-Putin/anti-Russia brainwashing in Washington, D.C.

First, “Why Would Putin Shoot Down a Plane,” by Prof. Stephen Cohen. Then, an attack on “How Critics of Western MH17 Coverage Are Bullied Into Silence,” which comes from an article in RIA Novosti and mentioned critics Ron Paul, Stephen Cohen, Robert Parry, and Daniel McAdams.

Most dramatic is the back page, which is entitled “Road Map to WWIII: Afghanistan, Iraq, Syria, Libya, Ukraine. Blame It all on Putin.” It’s about attempted regime change, not Ukraine, they say. “It is no longer the struggle for Ukraine, but a battle for Russia. If Vladimir Putin manages to keep the Russian people on his side, he will win it. If not, another geopolitical catastrophe might follow.”

Warning delivered.

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India in the Cross-Hairs of the Obama Administration on WTO

Both U.S. Secretary of State John Kerry and Commerce Secretary Penny Pritzker are in New Delhi exerting pressure on the administration of Prime Minister Narendra Modi, to get it to make a compromise and support WTO’s Trade Facility Agreement (TFA). According to the Bali Agreement, the TFA must be approved by midnight July 31. Kerry will be meeting Prime Minister Modi on Aug. 1, and it is almost a certainty that the WTO issue will feature prominently in their discussions.

India has been insisting for weeks that it will not sign off on the Bali pact unless the group comes to an accord on exempting food subsidy and stockpiling programs like India’s from WTO rules. The Bali meeting had produced a truce: WTO members agreed not to file complaints against India’s food subsidies for the time being, and said a permanent solution would be found by 2017. India says it will not go along with the TFA unless the permanent solution is written in now. New Delhi points out that the language in the present draft is vague and doesn’t explicitly say the interim agreement will continue beyond a 2017 deadline penned in at the Bali meeting. If the truce is called off, India could be subjected to sanctions because of its violation on the food subsidy clause.
See: India Decides: No to WTO Food Control
Both Kerry and Pritzker indicate that they are hopeful that a “solution” can be found whereby the TFA will get signed—maybe not tonight but within a couple of days. “There’s been a real effort to try and find a common ground, because going forward is really in the best interest of all the members of the WTO, and particularly for India,” Pritzker told the NDTV network. Keith Rockwell, a WTO spokesman, said the group’s director-general was “working hard to find a solution that would be acceptable to all members.” Kerry said the deal struck in Bali includes food security, and said India would miss an opportunity if it doesn’t agree to the terms. “Right now India has a four-year window where it is given a safe harbor, nothing happens,” Kerry told NDTV. “If they don’t sign up and be part of the agreement, they will lose that and then be out of line or out of compliance with the WTO.”

As of now a number of possibilities are being discussed to break the logjam. To begin with, India will make a compromise and allow delaying of its demand. A second possibility is to go along with the TFA with India remaining out of it. That would cause a precedent and violation of the WTO rule which calls for consensus. The third possibility is to delay the signing a few days to allow India to come in with a deal.

Meanwhile, in Washington, U.S. Trade Representative Mike Froman, in his remarks at the Brookings Institution on July 30, did not directly identify India as the one blocking TFA, but his reference was only towards India and the few other countries like Cuba, Bolivia, Venezuela, and Ecuador, which have supported New Delhi’s stand for delay in adoption of TFA. “Unfortunately, a couple of countries now appear to be revisiting their commitment to implement the WTO Trade Facilitation Agreement later this week,” Froman said.

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