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John Perkins, author of “Confessions of an Economic Hit Man,” gives his take on the Greek crisis

“Greece is being ‘hit’, there’s no doubt about it!” …Via John Perkins, author of Confessions of an Economic Hit Man: “[Indebted countries] become servants to what I call the corporatocracy … today we have a global empire, and it’s not an American empire. It’s not a national empire… It’s a corporate empire, and the big corporations rule.”

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Post originally appeared on Truth-Out.

John Perkins, author of Confessions of an Economic Hit Man, discusses how Greece and other eurozone countries have become the new victims of “economic hit men.”

John Perkins is no stranger to making confessions. His well-known book,Confessions of an Economic Hit Man, revealed how international organizations such as the International Monetary Fund (IMF) and the World Bank, while publicly professing to “save” suffering countries and economies, instead pull a bait-and-switch on their governments: promising startling growth, gleaming new infrastructure projects and a future of economic prosperity – all of which would occur if those countries borrow huge loans from those organizations. Far from achieving runaway economic growth and success, however, these countries instead fall victim to a crippling and unsustainable debt burden.

That’s where the “economic hit men” come in: seemingly ordinary men, with ordinary backgrounds, who travel to these countries and impose the harsh austerity policies prescribed by the IMF and World Bank as “solutions” to the economic hardship they are now experiencing. Men like Perkins were trained to squeeze every last drop of wealth and resources from these sputtering economies, and continue to do so to this day. In this interview, which aired on Dialogos Radio, Perkins talks about how Greece and the eurozone have become the new victims of such “economic hit men.”

Michael Nevradakis: In your book, you write about how you were, for many years, a so-called “economic hit man.” Who are these economic hit men, and what do they do?

John Perkins: Essentially, my job was to identify countries that had resources that our corporations want, and that could be things like oil – or it could be markets – it could be transportation systems. There’re so many different things. Once we identified these countries, we arranged huge loans to them, but the money would never actually go to the countries; instead it would go to our own corporations to build infrastructure projects in those countries, things like power plants and highways that benefitted a few wealthy people as well as our own corporations, but not the majority of people who couldn’t afford to buy into these things, and yet they were left holding a huge debt, very much like what Greece has today, a phenomenal debt.

“[Indebted countries] become servants to what I call the corporatocracy … today we have a global empire, and it’s not an American empire. It’s not a national empire … It’s a corporate empire, and the big corporations rule.”

And once [they were] bound by that debt, we would go back, usually in the form of the IMF – and in the case of Greece today, it’s the IMF and the EU [European Union] – and make tremendous demands on the country: increase taxes, cut back on spending, sell public sector utilities to private companies, things like power companies and water systems, transportation systems, privatize those, and basically become a slave to us, to the corporations, to the IMF, in your case to the EU, and basically, organizations like the World Bank, the IMF, the EU, are tools of the big corporations, what I call the “corporatocracy.”

And before turning specifically to the case of Greece, let’s talk a little bit more about the manner in which these economic hit men and these organizations like the IMF operate. You mentioned, of course, how they go in and they work to get these countries into massive debt, that money goes in and then goes straight back out. You also mentioned in your book these overly optimistic growth forecasts that are sold to the politicians of these countries but which really have no resemblance to reality.

Exactly, we’d show that if these investments were made in things like electric energy systems that the economy would grow at phenomenally high rates. The fact of the matter is, when you invest in these big infrastructure projects, you do see economic growth, however, most of that growth reflects the wealthy getting wealthier and wealthier; it doesn’t reflect the majority of the people, and we’re seeing that in the United States today.

“In the case of Greece, my reaction was that ‘Greece is being hit.’ There’s no question about it.”

For example, where we can show economic growth, growth in the GDP, but at the same time unemployment may be going up or staying level, and foreclosures on houses may be going up or staying stable. These numbers tend to reflect the very wealthy, since they have a huge percentage of the economy, statistically speaking. Nevertheless, we would show that when you invest in these infrastructure projects, your economy does grow, and yet, we would even show it growing much faster than it ever conceivably would, and that was only used to justify these horrendous, incredibly debilitating loans.

Is there a common theme with respect to the countries typically targeted? Are they, for instance, rich in resources or do they typically possess some other strategic importance to the powers that be?

Yes, all of those. Resources can take many different forms: One is the material resources like minerals or oil; another resource is strategic location; another resource is a big marketplace or cheap labor. So, different countries make different requirements. I think what we’re seeing in Europe today isn’t any different, and that includes Greece.

What happens once these countries that are targeted are indebted? How do these major powers, these economic hit men, these international organizations come back and get their “pound of flesh,” if you will, from the countries that are heavily in debt?

By insisting that the countries adopt policies that will sell their publicly owned utility companies, water and sewage systems, maybe schools, transportation systems, even jails, to the big corporations. Privatize, privatize. Allow us to build military bases on their soil. Many things can be done, but basically, they become servants to what I call the corporatocracy. You have to remember that today we have a global empire, and it’s not an American empire. It’s not a national empire. It doesn’t help the American people very much. It’s a corporate empire, and the big corporations rule. They control the politics of the United States, and to a large degree they control a great deal of the policies of countries like China, around the world.

John, looking specifically now at the case of Greece, of course you mentioned your belief that the country has become the victim of economic hit men and these international organizations . . . what was your reaction when you first heard about the crisis in Greece and the measures that were to be implemented in the country?

I’ve been following Greece for a long time. I was on Greek television. A Greek film company did a documentary called “Apology of an Economic Hit Man,” and I also spent a lot of time in Iceland and in Ireland. I was invited to Iceland to help encourage the people there to vote on a referendum not to repay their debts, and I did that and encouraged them not to, and they did vote no, and as a result, Iceland is doing quite well now economically compared to the rest of Europe. Ireland, on the other hand: I tried to do the same thing there, but the Irish people apparently voted against the referendum, though there’s been many reports that there was a lot of corruption.

“That’s part of the game: convince people that they’re wrong, that they’re inferior. The corporatocracy is incredibly good at that.”

In the case of Greece, my reaction was that “Greece is being hit.” There’s no question about it. Sure, Greece made mistakes, your leaders made some mistakes, but the people didn’t really make the mistakes, and now the people are being asked to pay for the mistakes made by their leaders, often in cahoots with the big banks. So, people make tremendous amounts of money off of these so-called “mistakes,” and now, the people who didn’t make the mistakes are being asked to pay the price. That’s consistent around the world: We’ve seen it in Latin America. We’ve seen it in Asia. We’ve seen it in so many places around the world.

This leads directly to the next question I had: From my observation, at least in Greece, the crisis has been accompanied by an increase in self-blame or self-loathing; there’s this sentiment in Greece that many people have that the country failed, that the people failed . . . there’s hardly even protest in Greece anymore, and of course there’s a huge “brain drain” – there’s a lot of people that are leaving the country. Does this all seem familiar to you when comparing to other countries in which you’ve had personal experience?

Sure, that’s part of the game: convince people that they’re wrong, that they’re inferior. The corporatocracy is incredibly good at that, whether it is back during the Vietnam War, convincing the world that the North Vietnamese were evil; today it’s the Muslims. It’s a policy of them versus us: We are good. We are right. We do everything right. You’re wrong. And in this case, all of this energy has been directed at the Greek people to say “you’re lazy; you didn’t do the right thing; you didn’t follow the right policies,” when in actuality, an awful lot of the blame needs to be laid on the financial community that encouraged Greece to go down this route. And I would say that we have something very similar going on in the United States, where people here are being led to believe that because their house is being foreclosed that they were stupid, that they bought the wrong houses; they overspent themselves.

“We know that austerity does not work in these situations.”

The fact of the matter is their bankers told them to do this, and around the world, we’ve come to trust bankers – or we used to. In the United States, we never believed that a banker would tell us to buy a $500,000 house if in fact we could really only afford a $300,000 house. We thought it was in the bank’s interest not to foreclose. But that changed a few years ago, and bankers told people who they knew could only afford a $300,000 house to buy a $500,000 house.

“Tighten your belt, in a few years that house will be worth a million dollars; you’ll make a lot of money” . . . in fact, the value of the house went down; the market dropped out; the banks foreclosed on these houses, repackaged them, and sold them again. Double whammy. The people were told, “you were stupid; you were greedy; why did you buy such an expensive house?” But in actuality, the bankers told them to do this, and we’ve grown up to believe that we can trust our bankers. Something very similar on a larger scale happened in so many countries around the world, including Greece.

In Greece, the traditional major political parties are, of course, overwhelmingly in favor of the harsh austerity measures that have been imposed, but also we see that the major business and media interests are also overwhelmingly in support. Does this surprise you in the slightest?

No, it doesn’t surprise me and yet it’s ridiculous because austerity does not work. We’ve proven that time and time again, and perhaps the greatest proof was the opposite, in the United States during the Great Depression, when President Roosevelt initiated all these policies to put people back to work, to pump money into the economy. That’s what works. We know that austerity does not work in these situations.

“What I didn’t realize during any of this period was how much corporatocracy does not want a united Europe.”

We also have to understand that, in the United States for example, over the past 40 years, the middle class has been on the decline on a real dollar basis, while the economy has been increasing. In fact, that’s pretty much happened around the world. Globally, the middle class has been in decline. Big business needs to recognize – it hasn’t yet, but it needs to recognize – that that serves nobody’s long-term interest, that the middle class is the market. And if the middle class continues to be in decline, whether it’s in Greece or the United States or globally, ultimately businesses will pay the price; they won’t have customers. Henry Ford once said: “I want to pay all my workers enough money so they can go out and buy Ford cars.” That’s a very good policy. That’s wise. This austerity program moves in the opposite direction and it’s a foolish policy.

In your book, which was written in 2004, you expressed hope that the euro would serve as a counterweight to American global hegemony, to the hegemony of the US dollar. Did you ever expect that we would see in the European Union what we are seeing today, with austerity that is not just in Greece but also in Spain, Portugal, Ireland, Italy, and also several other countries as well?

What I didn’t realize during any of this period was how much corporatocracy does not want a united Europe. We need to understand this. They may be happy enough with the euro, with one currency – they are happy to a certain degree by having it united enough that markets are open – but they do not want standardized rules and regulations. Let’s face it, big corporations, the corporatocracy, take advantage of the fact that some countries in Europe have much more lenient tax laws, some have much more lenient environmental and social laws, and they can pit them against each other.

“[Rafael Correa] … has to be aware that if you stand up too strongly against the system, if the economic hit men are not happy, if they don’t get their way, then the jackals will come in and assassinate you or overthrow you in a coup.”

What would it be like for big corporations if they didn’t have their tax havens in places like Malta or other places? I think we need to recognize that what the corporatocracy saw at first, the solid euro, a European union seemed like a very good thing, but as it moved forward, they could see that what was going to happen was that social and environmental laws and regulations were going to be standardized. They didn’t want that, so to a certain degree what’s been going on in Europe has been because the corporatocracy wants Europe to fail, at least on a certain level.

You wrote about the examples of Ecuador and other countries, which after the collapse of oil prices in the late ’80s found themselves with huge debts and this, of course, led to massive austerity measures . . . sounds all very similar to what we are now seeing in Greece. How did the people of Ecuador and other countries that found themselves in similar situations eventually resist?

Ecuador elected a pretty remarkable president, Rafael Correa, who has a PhD in economics from a United States university. He understands the system, and he understood that Ecuador took on these debts back when I was an economic hit man and the country was ruled by a military junta that was under the control of the CIA and the US. That junta took on these huge debts, put Ecuador in deep debt; the people didn’t agree to that. When Rafael Correa was democratically elected, he immediately said, “We’re not paying these debts; the people did not take on these debts; maybe the IMF should pay the debts and maybe the junta, which of course was long gone – moved to Miami or someplace – should pay the debts, maybe John Perkins and the other economic hit men should pay the debts, but the people shouldn’t.”

And since then, he’s been renegotiating and bringing the debts way down and saying, “We might be willing to pay some of them.” That was a very smart move; it reflected similar things that had been done at different times in places like Brazil and Argentina, and more recently, following that model, Iceland, with great success. I have to say that Correa has had some real setbacks since then . . . he, like so many presidents, has to be aware that if you stand up too strongly against the system, if the economic hit men are not happy, if they don’t get their way, then the jackals will come in and assassinate you or overthrow you in a coup. There was an attempted coup against him; there was a successful coup in a country not too far away from him, Honduras, because these presidents stood up.

We have to realize that these presidents are in very, very vulnerable positions, and ultimately we the people have to stand up, because leaders can only do a certain amount. Today, in many places, leaders are not just vulnerable; it doesn’t take a bullet to bring down a leader anymore. A scandal – a sex scandal, a drug scandal – can bring down a leader. We saw that happen to Bill Clinton, to Strauss-Kahn of the IMF; we’ve seen it happen a number of times. These leaders are very aware that they are in very vulnerable positions: If they stand up or go against the status quo too strongly, they’re going to be taken out, one way or another. They’re aware of that, and it behooves we the people to really stand up for our own rights.

You mentioned the recent example of Iceland . . . other than the referendum that was held, what other measures did the country adopt to get out of this spiral of austerity and to return to growth and to a much more positive outlook for the country?

It’s been investing money in programs that put people back to work and it’s also been putting on trial some of the bankers that caused the problems, which has been a big uplift in terms of morale for the people. So Iceland has launched some programs that say “No, we’re not going to go into austerity; we’re not going to pay back these loans; we’re going to put the money into putting people back to work,” and ultimately that’s what drives an economy, people working. If you’ve got high unemployment, like you do in Greece today, extremely high unemployment, the country’s always going to be in trouble. You’ve got to bring down that unemployment, you’ve got to hire people. It’s so important to put people back to work. Your unemployment is about 28 percent; it’s staggering, and disposable income has dropped 40 percent and it’s going to continue to drop if you have high unemployment. So, the important thing for an economy is to get the employment up and get disposable income back up, so that people will invest in their country and in goods and services.

In closing, what message would you like to share with the people of Greece, as they continue to experience and to live through the very harsh results of the austerity policies that have been implemented in the country for the past three years?

I want to draw upon Greece’s history. You’re a proud, strong country, a country of warriors. The mythology of the warrior to some degree comes out of Greece, and so does democracy! And to realize that the marketplace is a democracy today, and how we spend our money is casting our ballot. Most political democracies are corrupt, including that of the United States. Democracy is not really working on a governmental basis because the corporations are in charge. But it is working on a market basis. I would encourage the people of Greece to stand up: Don’t pay off those debts; have your own referendums; refuse to pay them off; go to the streets and strike.

And so, I would encourage the Greek people to continue to do this. Don’t accept this criticism that it’s your fault, you’re to blame, you’ve got to suffer austerity, austerity, austerity. That only works for the rich people; it does not work for the average person or the middle class. Build up that middle class; bring employment back; bring disposable income back to the average citizen of Greece. Fight for that; make it happen; stand up for your rights; respect your history as fighters and leaders in democracy, and show the world!

References:

http://www.truth-out.org/news/item/26112-an-economic-hit-man-speaks-out-john-perkins-on-how-greece-has-fallen-victim-to-economic-hit-men

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Some Russian monarchists want Tsar Vladimir Putin

Latest news from Russian monarchists highlight the debate over bringing the Russian Empire back to life in modern times.

Seraphim Hanisch

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A December 13 report in The Wall Street Journal shone light on a notion that has been afoot in the Russian Federation since the fall of Communism in 1991 – the restoration of the Monarchy as the form of government, complete with a new Tsar of all the Russias.

Of course, some of these monarchists have a top contender in mind for that post, none other than President Vladimir Putin himself.

This idea has long been used in a pejorative light in the West, as various shadowy and not-so-shadowy elements in the American media speculated over the years that Mr. Putin was actually aspiring to become Tsar. This was thrown around until probably the time that the Russian president spoke, lamenting the fall of Communism, and since then the prime accusation has been that President Putin wants to bring back the Soviet Union.

This is not true. It also does not appear to be the case that the Russian president wants to be Tsar. But the monarchists are not fazed in the slightest. Here is excerpted material from the WSJ piece, with emphases added:

The last time term limits forced Russian leader Vladimir Putin to step down from the presidency, he became prime minister for a few years.

This time around, a group of pro-Kremlin activists have a different idea: Proclaim him Czar Vladimir.

“We will do everything possible to make sure Putin stays in power as long as possible,” Konstantin Malofeyev, a politically active businessman, said recently to thunderous applause from hundreds of Russian Orthodox priests and members of the country’s top political parties gathered at a conference outside Moscow. They were united by one cause—to return the monarchy to Russia…

Even among those who want a monarchy, however, there are splits over what kind it should be. Is an absolute monarchy better than a constitutional monarchy? Should a blood line be established or should the czar be elected? For those who favor male succession, would it be a problem that Mr. Putin reportedly only has two daughters? Some have even suggested others besides Mr. Putin should accede to the throne.

There is a very keen interest indeed among some in Russia that propose various options as to who might best become Tsar in the event that the Monarchy is restored.

Grand Duke George Mikhailovich Romanov and his mother, Grand Duchess Maria Vladimirovna of Russia, together with Metropolitan Hilarion Alfeyev, head of the Russian Orthodox Church Department of External Relations

One candidate that has received significant attention is a man by the name of George Mikhailovich Romanov. He is an actual member of the Royal family, the heir apparent to Maria Vladimirovna Romanova, Grand Duchess of Russia. There are other heir apparents as well, and the issue as to who it should be has not been settled among the surviving members of the Romanov family.

The restoration of the Russian monarchy is unique because to carries strong religious significance. As far back as the 8th and 9th centuries, A.D., a host of saints and prophets appear to have foreseen the advent of the Soviet times and the restoration of the Tsar after their conclusion.

Some such prophecies are attributed to anonymous sources, but some are named. Here are two with rather extensive editing, so please go to the site linked for the fullest description of the prophecies.

Monk Abel the Prophet (+1831).

In a conversation with Tsar Paul I (+1801), after prophesying the destinies of all the Tsars from Paul I to Nicholas II:

“What is impossible for man is possible for God. God delays with His help, but it is said that He will give it soon and will raise the horn of Russian salvation. And there will arise a great prince from your race in exile, who stands for the sons of his people. He will be a chosen one of God, and on his head will be blessing. He will be the only one comprehensible to all, the very heart of Russia will sense him. His appearance will be sovereign and radiant, and nobody will say: ‘The Tsar is here or there’, but all will say: ‘That is him’. The will of the people will submit to the mercy of God, and he himself will confirm his calling. His name has occurred three times in Russian history. Two of the same name have already been on the throne, but not on the Tsar’s throne. But he will sit on the Tsar’s throne as the third. In him will be the salvation and happiness of the Russian realm.”

“Russian hopes will be realized upon [the cathedral of Hagia] Sophia in Tsargrad [Constantinople]; the Orthodox Cross will gleam again; Holy Rus will be filled with the smoke of incense and prayer, and will blossom like a heavenly lily.”

And from one of the most famous saints in Russian history:

St. John of Kronstadt (+1908):

“I foresee the restoration of a powerful Russia, still stronger and mightier than before. On the bones of these martyrs, remember, as on a strong foundation, will the new Russia we built – according to the old model; strong in her faith in Christ God and in the Holy Trinity! And there will be, in accordance with the covenant of the holy Prince Vladimir, a single Church! Russian people have ceased to understand what Rus is: it is the footstool of the Lord’s Throne! The Russian person must understand this and thank God that he is Russian.”

“The Church will remain unshaken to the end of the age, and a Monarch of Russia, if he remains faithful to the Orthodox Church, will be established on the Throne of Russia until the end of the age.”

What may surprise those in the West is that there are a great many people in Russia and in Orthodox Christian countries in general who take these prophecies quite seriously.

Interestingly enough, when the idea of restoring the monarchy was brought to President Putin’s attention, he regarded the idea as “beautiful” according to Lt. General Leonid Reshetnikov, but also expressed concern that it would lead to stagnation within the country.

A second statement, this one by Kremlin spokesman Dmitry Peskov, noted that President Putin does not like the idea of bringing back the monarchy, but offered no comment on the conversation with Mr. Reshetnikov.

The idea of restoring the monarchy is not completely absurd. Britain overthrew its own monarchy in 1649 during that country’s Civil War, but it was restored shortly afterwards under King Charles II. Spain cast aside its monarchy in 1931, with its king, Alfonso XIII going into exile, but after sixteen years this monarchy, too, was restored.

Both of these monarchies have become largely ceremonial, with most governing functions carried out through some kind of Parliament and Prime Minister. It is therefore not clear what a ruling monarchy in Russia would look like.

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US confirms pullout from INF treaty, Moscow will respond if missiles placed in Europe – deputy FM

Moscow will respond to possible attempts to place short and intermediate range nuclear-capable missiles in Europe if the US decides to go on with this plan.

RT

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Washington has confirmed its decision to withdraw from the INF treaty is final, Russia’s deputy foreign minister said, adding that Moscow will ‘take measures’ if American missiles that threaten its security are placed in Europe.

“Washington publicly announced its plans to withdraw from the treaty (the Intermediate-Range Nuclear Forces) already in October. Through the high-level bilateral channels it was confirmed to us that this decision was final and wasn’t an attempt to initiate dialogue,” Sergey Ryabkov told the Kommersant newspaper.

The Deputy FM said that Moscow will respond to possible attempts to place short and intermediate range nuclear-capable missiles in Europe if the US decides to go on with this plan.

“We’ll be forced to come up with effective compensating measures. I’d like to warn against pushing the situation towards the eruption of new ‘missile crises.’ I am convinced that no sane country could be interested in something like this,” he said.

Russia isn’t threatening anybody, but have the necessary strength and means to counter any aggressor.
Back in October, President Donald Trump warned that Washington was planning unilateral withdrawal from the Intermediate-Range Nuclear Forces (INF) treaty because “Russia has not adhered to the agreement.” The US leader also promised that the country would keep boosting its nuclear arsenal until Russia and China “come to their senses.”

Earlier this month, US Secretary of State Mike Pompeo announced that Washington will suspend its obligations under the treaty within 60 days if Russia does not “return to compliance.”

Signed in late 1988, the INF agreement was considered a milestone in ending the arms race between the US and the USSR.

In recent years, Moscow and Washington have repeatedly accused each other of violating the INF deal. While the US has alleged that Russia has developed missiles prohibited by the treaty, Russia insists that the American anti-missile systems deployed in Eastern Europe can actually be used to launch intermediate-range cruise missiles.

The deputy FM said that Washington “never made a secret” of the fact that its INF treaty pullout “wasn’t so much about problems between the US and Russia, but about the desire of the Americans to get rid of all restrictions that were inconvenient for them.”

The US side expressed belief that the INF deal “significantly limits the US military’s capabilities to counter states with arsenals of medium-range and shorter-range ground-based missiles,” which threaten American interests, he said. “China, Iran and North Korea” were specifically mentioned by Washington, Ryabkov added.

“I don’t think that we’re talking about a new missile crisis, but the US plans are so far absolutely unclear,” Mikhail Khodarenok, retired colonel and military expert, told RT, reminding that the Americans have avoided any type of “meaningful discussion” with Moscow in regards to its INF deal pullout.

While “there’ll be no deployment of [US missiles] in Europe any time soon,” Moscow should expect that Washington would try to void other agreements with Russia as well, Khodarenok warned.

The INF deal “just stopped being beneficial for the US. Next up are all the other arms control treaties. There’ll be no resistance from the NATO allies [to US actions],” he said.

“The neocons who run Trump’s foreign policy never have liked arms reduction treaties,” former Pentagon official Michael Maloof told RT. “The new START treaty which comes up for renewal also could be in jeopardy.”

“The risk of a new nuclear buildup is really quite obvious” if the US withdrawals from the INF treaty, Dan Smith, the director of the Stockholm International Peace Research Institute, told RT.

“I think the relations between the great powers – the US and Russia as well as the US and China – are more difficult than they’ve been for a long time,” he added.

However, with Washington having indicated that it wants China to be part of the new deal, “there are still possibilities for negotiations and agreement,” according to Smith. Nonetheless, he warned that following this path will demand strong political will and tactical thinking from the leadership of all three countries.

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US Pressures Germany To Ditch Huawei Over ‘Security Concerns’

This news will likely not go over well in Beijing, which is still struggling with the US and Canada over the arrest of Huawei CFO Meng Wanzhou in Vancouver.

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Via Zerohedge


First it was Australia, New Zealand and Japan, now the US is pressing the German government to refuse to use equipment manufactured by Chinese telecom giant Huawei as Europe’s largest economy seeks to build out its 5G infrastructure.

According to Bloomberg, a US delegation met on Friday with German Foreign Ministry officials in Berlin to talk about the security risks presented by Huawei’s equipment, which the US says is vulnerable to spying. The meeting in Germany follows a report from late last month claiming the US had launched an “extraordinary outreach campaign” to warn its allies against using Huawei equipment (while its vulnerability to Chinese spying has been cited as the reason to avoid Huawei, it’s also worth noting that the US and China are locked in a battle for who will dominate the global 5G space…a battle that Huawei is currently winning).

Germany is set to hold an auction early next year to find a supplier to help expand its 5G network. The Berlin meeting took place one day after Deutsche Telekom said it would reexamine its decision to use Huawei equipment.

US officials are optimistic that their warnings are getting a hearing, though any detailed talks are in early stages and no concrete commitments have been made, according to one of the people.

The US pressure on Germany underscores increased scrutiny of Huawei as governments grapple with fears that the telecom-equipment maker’s gear is an enabler for Chinese espionage. The Berlin meeting took place a day after German carrier Deutsche Telekom AG said it will re-evaluate its purchasing strategy on Huawei, an indication that it may drop the Chinese company from its list of network suppliers.

France is also reportedly considering further restrictions after adding Huawei products to its “high alert” list. The US has already passed a ban preventing government agencies from using anything made by Huawei. But the telecoms equipment provider isn’t taking these threats to its business lying down.

U.S. warnings over espionage are a delicate matter in Germany. Revelations over the scale of the National Security Agency’s signals intelligence, including reports of tapping Merkel’s mobile phone, are still fresh in Berlin five years after they came to light.

Huawei is pushing back against the accusations. The company’s rotating chairman warned this week that blacklisting the Chinese company without proof will hurt the industry and disrupt the emergence of new wireless technology globally. Ken Hu, speaking at a Huawei manufacturing base in Dongguan, cited “groundless speculation,” in some of the first public comments since the shock arrest of the company’s chief financial officer.

This news will likely not go over well in Beijing, which is still struggling with the US and Canada over the arrest of Huawei CFO Meng Wanzhou in Vancouver. In an editorial published Sunday, the Global Times, an English-language mouthpiece for the Communist Party, warned that China should retaliate against any country that – like Australia – takes a hard line against Huawei. So, if you’re a German citizen in Beijing, you might want to consider getting the hell out of Dodge.

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