Irish Blog Whacked

Wednesday, March 20, 2013


Reports from Nicosia suggest that the bailout plan — negotiated between the Cypriot government and the so-called “troika” of the European Commission, European Central Bank (ECB), and International Monetary Fund (IMF) — doesn’t have the votes to pass that country’s unicameral legislature. Update: The budget failed Tuesday afternoon, garnering 0 votes in parliament.
This comes despite President Nicos Anastasiades amending the plan’s most controversial provision, a haircut on bank deposits. Initially, the plan was to confiscate 6.75 percent of the first €100,000 of each bank account and 9.9 percent of any money above that, but Anastasiades changed the plan to exempt the first €20,000 in deposits. That likely means the plan wouldn’t raise the €5.8 billion demanded by the troika, but the hope was to mitigate the effect on average Cypriots. But even that more measured plan appears to be dead in the water.
So what are Cyprus’s options now? Here are a few.
Negotiate another European bailout, complete with haircut.

Dutch Finance Minister Jeroen Dijsselbloem, who leads the European Commission’s finance ministers, talks with IMF head Christine Lagarde on Friday. (Virginia Mayo — AP)
The troika is clearly still worried that the Cyprus situation is spiraling out of control, and so might be amenable to a different bailout package. One possibility is to slightly amend the plan beyond Anastasiades’s changes, for example by increasing the exemption at the bottom and increasing the cut of large accounts, which would both meet the troika’s €5.8 billion target and possibility ameliorate the concerns of Cypriot legislators. This approach would have the same pros and cons as the previous plan, more or less, and given that that planfailed to rattle world markets or cause bank runs in larger vulnerable economies like Italy and Spain, the pros could well outweigh the cons.
But there are other concerns. The central bank chief of Cyprus, the aptly named Panicos Demetriades, has said that 10 percent of the country’s bank deposits will flee should any kind of bank levy take effect. That would likely increase the necessary scale of the bailout, perhaps to a level the troika is unwilling to tolerate. Worse, it could prompt an even larger haircut, leading to further capital flight, and so on, creating a deadly spiral. Demetriades, the central bank, and the ECB all want to exempt deposits under €100,000, which aresubject to government guarantees which the bank levy would abrogate, but his warnings suggest he doesn’t think that change would be sufficient to stop significant withdrawals as soon as banks open on Thursday.
There are also geopolitical concerns. Russia, a patron of sorts to Cyprus and source of about a third of its bank deposits, is firmly against any kind of bank levy. President Vladimir Putin has described the plan as “unfair, unprofessional and dangerous,” while Prime Minister Dmitri Medvedev said it “was just like a confiscation of someone else’s money.” Medvedev ominously warned that Russia may be forced to “correct” its relationship with Cyprus if the levy should go into effect. It may be that preventing that sort of “correction” is important enough to Cypriot legislators to render any deal including a haircut a non-starter.
A more traditional European bailout.

Greek austerity, ladies and gentlemen. (Yannis Behrakis — Reuters)
Most countries in Europe receiving bailouts have been forced to raise money as a condition of receiving emergency funds, but usually that money is raised through austerity measures. Greece, for example, typically has to agree to debt reduction to be achieved through some combination of spending cuts and tax increases as a condition of getting bailout funds. Cyprus could, in theory, agree to raise its €5.8 billion share of the European bailout through these means.
There are a number of disadvantages to this approach, however. The experience of Greece, Spain and Britain in recent years confirms what Keynesian economists have always known: Austerity is a great way to make a recession worse, or even cause one to come back. Should the pattern repeat itself in Cyprus, the country could, paradoxically, see its debt situation worsen as tax revenues fall with incomes and government social transfers increase as more citizens fall into poverty.
What’s more, €5.8 billion is a huge figure for Cyprus. For context, the country’s GDP in 2012 was about €17.9 billion. Their share of the bailout, in other words, amounts to 32.4 percent of GDP. For context, in 2012 government spending was 47 percent of GDP. Presumably, their payments of the bailout money would have to be spread out over the course of a number of years to avoid economic catastrophe, which might be less attractive to their European lenders. And even that would likely deepen the country’s already bad recession.
Bail out the banks themselves.

Neel Kashkari, seen here straight chillin’, managed TARP, the largest bank bailout financed by a country on its own without international help. (Linda Davidson — The Washington Post)
The main problem in Cyprus is that the country’s banks have taken on toxic Greek assets which wrecked their balance sheets and put them in danger of failing. It’s commonly assumed that Cyprus is incapable of financing its own bailout, given its high 7 percent interest rate on long-term government debt. Any bailout package it puts together itself would have to be financed through some combination of expensive debt and crippling austerity measures. But worst comes to worst, the country could loan a ton of money on the open market (as opposed to from the Troika) to finance that. Whether the country would have a functioning economy or a non-bankrupt government after that is an open question.
A Russian bailout.

Who could say no to that face? (Associated Press)
Russia has a vested interest in Cyprus not collapsing in on itself. For one thing, the Russian government relies on it as a means of funneling arms to Syria to help it kill its citizens, a project that most governments understandably shy away from. But more importantly, Russian banks have lent $40 billion to Russian-controlled businesses on Cyprus.
If the Cyprus situation worsens, to avoid capital fleeing the country it’s likely the government will impose capital controls. That means less money leaving Cyprus and going to Russia to repay those loans. That’s a big deal. The AP quotes Ivan Tchakarov, chief economist at the investment bank Renaissance Capital in Moscow, as estimating that capital controls would lead to Russian bank losses on the order of 2 percent of GDP. That’s a genuine economic catastrophe for Russia.
But Russia would likely demand something in return. That something might be a share of Cyprus’s bountiful natural resources, not least of which are its significant natural gas deposits. Gazprom, the world’s largest extractor of natural gas which Putin nationalized in his previous tenure as president, has offered to bailout Cyprus itself. All the island has to do in return is give Gazprom all of its natural gas. It’s also possible that Russia would want Cyprus to crack down on the many Russian oligarchs who use the island for money laundering and tax evasion. That would deprive the Cypriot banking sector of a significant source of revenue.
An American bailout.

Ben Bernanke’s got 99 problems, and Cyprus probably doesn’t have to be one. (Reuters — David Stubbs)
Yeah, right, I know, but Ben Bernanke can technically decide that the latest round of asset buys the Fed is conducting should be switched from mortgage-backed securities to Cypriot bonds. If he buys those at bargain basement rates, Cyprus could finance the bailout without bankrupting itself. Same goes for any other central bank, like the Chinese or Indian banks. Brazil could get involved, maybe Britain or Canada. Who knows, it could be a whole party. Whether any of these countries think it’s worth the political risk of bailing out a tiny island in the Mediterranean which none of their constituents care about is another story. That’s why discussion focuses around Europe’s central bank rather than any institutions outside the European Union.
Leaving the Euro.
The Cypriot pound, before the country joined the Euro in 2008. (
The Cypriot pound, before the country joined the Euro in 2008. (
This is the scenario where everyone’s justified in panicking and freaking out. The reason Cyprus has very little control over its interest rates is that it does not have control over its own currency. The ECB controls its currency. However, if it were to leave the euro and start issuing Cypriot pounds again — or, even worse, start converting bank deposits and obligations into Cypriot pounds from euros or rubles or dollars — that problem goes away. It could default on its debts, not an option while still in the euro, or it could use financial repression to pull down interest rates to a manageable level, or it could pile on more debt, bail out the banks, and then inflate its way out of debt.
That would definitely cause bank runs in Cyprus, as a key component of that strategy is devaluing the Cypriot pound to well below the current value of the euro, so people would want to take their money out of Cypriot banks before that happened, and their money became worth much less. But it would also raise fears that Greece and possibly Spain, Portugal, or Italy was about to leave too, which could trigger bank runs in those countries. It would be really, really, really, really bad.
That’s why President Anastasiades’s statement over the weekend that failing to pass the bailout could force Cyprus to leave the euro was so terrifying, so countries like Ireland continue to suck it up!

10 Year Legacy in Iraq of Britain's Dirty War in Ireland

10 Year Iraq Legacy of Britain's Dirty War in Ireland

category national | anti-war | opinion/analysis author Tuesday March 19, 2013 17:04author by Brian Clarke - AllVoices Report this post to the editors
Ulster on the Euphrates
As a dozen car bombs exploded in Shia districts around Baghdad today, another 50 people are dead and many more injured, on the tenth anniversary of the US-UK invasion of Iraq. Britain's international legacy of hate continues, as yet another result of its poisonous, divide and conquer policies around the world it invaded, with the exception of just 10 countries. Sunni factions linked to al-Qaeda, continue attacks on Shias. A wing of al-Qaeda, has vowed to regain ground lost to the invading US/UK armies.A decade after US and British invaded, Iraq still struggles with fostered sectarian feuding among Shia, Sunni and Kurdish tribes..The cabinet has postponed elections in two provinces, Anbar and Nineve for six months because of violence there, further proof of absurdity of the invasion.
Wanted for Murder
Wanted for Murder
Ulster on the Euphrates

The British Dirty War in Iraq

Most of this article was first published at

A city torn with sectarian strife, competing mentored death squads roaming the streets; mentored state terrorists staging horrific attacks. Local authorities, distrusted, discredited and weak. The general populations protect their freedom fighters in their midst, both out of loyalty or fear. A detested, military occupation exacerbating tension at every turn, while offering prime targets for bombs and snipers. Behind the scene, in a shadow world of double-cross and double-bluff, covert units of the occupying power run agents on both sides of the mentored civil war, countenancing and sometimes directing assassinations, state sponsored terrorist strikes, torture sessions and ethnic cleansing.

Is this a portrait of Belfast during "The Troubles" in British Occupied Ireland? Or a picture of Baghdad 10 years ago or their legacy today after the departure of the invaders ? It is both; and in both cases, one of Britain's most secret and most criminally compromised military units which plied its trade in the dark, "turning" and controlling state sponsored, terrorist killers in a dangerous bid to wring actionable intelligence from blood and betrayal. They trained America's covert soldiers who were right there with them, working side-by-side with the British in the aptly named "Task Force Black," the UK's Sunday Telegraph reported.

The right-wing, warmongering paper published an early valentine to the "Joint Support Group," the covert unit whose bland name belies its dramatic role at the centre of the Anglo-American "dirty war" in Iraq and worldwide. In gushing, lavish, uncritical prose that could have been (and perhaps was) scripted by the unit itself, the Telegraph lauded the team of secret warriors as "one of the Coalition's most effective and deadly weapons," running "dozens of Iraqi double-agents," including "members of state sponsored terrorist groups."

What the story failed to mention was the fact that in its Ulster incarnation, the JSG known as the Force Research Unit (FRU) actively colluded in the murder of at least 15 civilians by Loyalist deaths squads and an untold number of victims killed, maimed and tortured by double-agents controlled by the unit. What's more, the man who commanded the FRU during the height of its depredations Lt. Col. Gordon Kerr, headed the hugger-mugger Special Reconnaissance Regiment (SRR), a large counter-insugency force made up of unnamed "existing assets" from the infamous days in British Occupied Ireland and elsewhere.

This despite the fact that a 10-year, $100 million investigation by Britain's top police officer, Lord Stevens, confirmed that elements within the British Cabinet along with the Kerr-led FRU "sanctioned killings" through "institutionalized collusion" at with militias during the 1980s and 1990s. Stevens sent dossiers of evidence against Kerr and 20 other security apparatchiks to the Blair government's Director of Public Prosecutions, in the expectation that the fiery Scotsman and the others would be put on trial.

But instead prosecuting Kerr, Blair promoted him: first to a plum assignment as British military attaché in Beijing, effectively the number two man in all of UK military intelligence, as Scotland's Sunday Herald noted with the SRR posting to Baghdad, where Kerr and his former FRU mates applied the "methods developed on the mean streets of Ulster during the Troubles," as the Telegraph breathlessly related.

The Telegraph puff piece was naturally coy about revealing these methods, beyond the fact that, as in Ireland, the JSG used "a variety of inducements, ranging from blackmail to bribes" to turn Iraqis into Coalition agents. So to get a better idea of the techniques employed by the group in Baghdad, we must return to those "mean streets of Ulster" and the unit's reign of terror and collusion there, which has been thoroughly documented not only by the exhaustive Stevens inquiries, but also in a remarkable series of investigative reports by the Sunday Herald's Neil Mackay, and in stories by the BBC albeit with a distinctive British slant, the Guardian, the Independent, the Times and others.

We will also see how the operations of the JSG and "Task Force Black" dovetail with U.S. efforts to apply the lessons of its own dirty wars, such as the "Salvador Option" to Iraq, as well as long-running Bush Administration initiatives to arm and fund "friendly" militias while infiltrating groups in order to "provoke them into action." It is indeed a picture painted in black, a glimpse at the dark muck that lies beneath the high-flown rhetoric about freedom and civilization forever issuing from the lips of the war leaders.

II. Whacking for the Peelers

Gregory Burns had a problem. He was one of Gordon Kerr's FRU informers planted deep inside the IRA, along with two of his friends, Johnny Dignam and Aidan Starrs. But as Mackay noted in a February 2003 story, the already-partnered Burns had acquired a girlfriend on the side, Margaret Perry, 26, a "civilian" Catholic with no paramilitary ties. Forbidden fruit is sweet, of course – but pillow talk is dangerous for an inside man. "Burns didn't keep his mouth shut and [Perry] found out he was working for British intelligence," an FRU officer told Mackay. "He tried to convince her he was a double-agent the IRA had planted in the [British] army – but she didn't buy it."

Burns called his FRU handlers and asked to come in from the cold. He'd been compromised, he said, and now he and his friends needed to get out, with new identities, relocation, good jobs – the usual payoff for trusted agents when the jig was up. But Kerr refused: "He said [Burns] should silence Perry," the FRU man told Mackay. Burns, panicking at thought of the IRA's horrific retributions against informers, insisted: he would have to kill the woman if they didn't bring him in, he told Kerr. Again Kerr refused.

And so Burns arranged a meeting with his lover, to "talk over" the situation. His friends, Aidan and Johnny, volunteered to drive her there: "On the way, they pulled into a forest, beat her to death and buried her in a shallow grave," Mackay notes. Two years later, when her body was found, the IRA put two and two together – and slowly tortured Burns and his two friends to death, after first extracting copious amounts of information about British intelligence operations in Ireland.

'In Kerr's eyes, Burns just wasn't important enough to resettle," the FRU source told the Sunday Herald. "So we ended up with four unnecessary deaths and the compromising of British army intelligence officers, which ultimately put soldiers' lives at risk. To Kerr, it was always a matter of the ends justifying the means."

Then again, Kerr could well afford to sacrifice a few informers here and there to the wrath of the IRA's dreaded "security unit" – because his own prize double agent was the head of that security unit. Codenamed "Stakeknife," Kerr's man presided over, and sometimes administered, the grisly torture-murders of up to 50 men during his tenure in the IRA's upper ranks. The victims included other British double agents who were sacrificed in order to protect Stakeknife's cover, as the Guardian and many other UK papers reported when the agent's work was revealed in 2003. ("Stakeknife" was later identified in the press as Alfredo Scappaticci – an Irishman despite the Italian name, although he continues to deny the charge.)

The FRU also "knowingly allowed soldiers, [police] officers and civilians to die at the hands of IRA bombers in order to protect republican double agents," the Sunday Herald's investigations found. As Mackay reports: "FRU sources said around seven police and army personnel died as a result of military intelligence allowing IRA bombs to be placed during Kerr's time in command of the FRU. They estimate that three civilians also died this way, with casualties in the hundreds."

But some of the worst excesses came from the FRU's handling of operatives on the other side, in the fiercely pro-British Protestant militia the Ulster Defense Association (UDA). Here, among the Loyalists, Kerr's top double agent was Brian Nelson, who became head of intelligence for the UDA. As John Ware put it in the Guardian: "Kerr regarded Nelson as his jewel in the crown… For the next three years [from 1987], Nelson colluded with murder gangs to shoot IRA suspects. Month after month, armed and masked men crashed into homes. Sometimes they got the wrong address or shot the wrong person."

Such as Gerald Slane, a 27-year-old Belfast man shot down in front of his three children. A gun had been found dumped on his property; this, and his Catholicism, was enough to get him assassinated at the order of Kerr's man Nelson. Afterwards, it was found that Slane had no IRA connections.

Another "wrong person" killed by the FRU's agents was the Belfast attorney Pat Finucane, who was shot 14 times in front of his wife and children. Finucane was a civil rights activist who had defended both Catholics and Protestants, but was considered an IRA sympathizer by Loyalists and a thorn in the side by British authorities. He was killed at Nelson's order by a fellow FRU informer in the UDA, Ken Barrett, who was convicted of the murder but freed after as part of an amnesty program in the now defunct peace process. Barrett was unapologetic about his FRU "wetwork" on Finucane. "The peelers [authorities] wanted him whacked," he told a BBC documentary team after his release. "We whacked him and that is the end of the story."

Kerr gave Nelson packages of intelligence files to help facilitate the assassination of UDA targets, including at least four "civilians" with no IRA ties, the Stevens inquiry found. The FRU also obtained "restriction orders" from other British security and military units in Northern Ireland, whereby they would pull their forces from an area when Kerr's UDA agents were going to make a hit there, allowing the killers to get in and get out without hindrance, investigator Nick Davies reports.

Yet the FRU was wary of sharing its own intelligence with other security services, which was the ostensible reason for running the double-agents in the first place. Instead, Kerr engaged in fierce turf wars with other agencies, while "stovepiping" much of his intelligence to the top circles of the UK government, including the cabinet-level Intelligence Committee chaired by then-Prime Minister Margaret Thatcher. Indeed, when Nelson was finally exposed and brought to trial on five counts of conspiracy to commit murder, Kerr testified in his behalf, noting for the court that Nelson's intelligence "product and his reporting was passed through the intelligence community and at a high level, and from that point of view he has to be considered a very important agent."

As one FRU man told Mackay: "Under Kerr's command…the mindset was one of 'the right people would be allowed to live and wrong people should die.'"

This is the "mindset" still operating in the heart of the Green Zone in Baghdad, 10 years after the invasion, where the JSG undercover are still carrying out we are told in glowing terms, precisely the same mission it had in Ulster. a unit which has allowed its agents to torture, murder and commit acts of state terrorism, including actions that kill local civilians, soldiers and intelligence operatives of their own country.

III. The White House Green Light

Of course, Kerr and his Baghdad black-op crew are not alone in the double-dealing world of Iraqi counterinsurgency. The Pentagon's ever-expanding secret armies are deeply enmeshed in such efforts as well. As Sy Hersh has reported ("The Coming Wars," New Yorker, Jan. 24, 2005), after his re-election in 2004, George W. Bush signed a series of secret presidential directives that authorized the Pentagon to run virtually unrestricted covert operations, including a reprise of the American-backed, American-trained death squads employed by authoritarian regimes in Central and South America during the Reagan Administration, where so many of the Bush faction cut their teeth – and made their bones.

"Do you remember the right-wing execution squads in El Salvador?” a former high-level intelligence official said to Hersh. "We founded them and we financed them. The objective now is to recruit locals in any area we want. And we aren’t going to tell Congress about it." A Pentagon insider added: "We’re going to be riding with the bad boys." Another role model for the expanded dirty war cited by Pentagon sources, said Hersh, was Britain's brutal repression of the Mau Mau in Kenya during the 1950s, when British forces set up concentration camps, created their own terrorist groups to confuse and discredit the insurgency, and killed thousands of innocent civilians in quashing the uprising.

Bush's formal greenlighting of the death-squad option built upon an already securely-established base, part of a larger effort to turn the world into a "global free-fire zone" for covert operatives, as one top Pentagon official told Hersh. For example, in November 2002 a Pentagon plan to infiltrate terrorist groups and "stimulate" them into action was uncovered by William Arkin, then writing for the Los Angeles Times. The new unit, the "Proactive, Pre-emptive Operations Group," was described in the Pentagon documents as "a super-Intelligence Support Activity" that brings "together CIA and military covert action, information warfare, intelligence and cover and deception."

Later, in August 2004, then deputy Pentagon chief Paul Wolfowitz appeared before Congress to ask for $500 million to arm and train non-governmental "local militias" to serve as U.S. proxies for "counter-insurgency and "counterterrorist" operations in "ungoverned areas" and hot spots around the world, Agence France Presse (and virtually no one else) reported at the time. These hired paramilitaries were to be employed in what Wolfowitz called an "arc of crisis" that just happened to stretch across the oil-bearing lands and strategic pipeline routes of Central Asia, the Middle East, Africa and South America.

By then, the Bush Administration had already begun laying the groundwork for an expanded covert war in the hot spot of Iraq. In November 2003, it created a "commando squad" drawn from the sectarian militias of five major Iraqi factions, as the Washington Post reported that year. Armed, funded and trained by the American occupation forces, and supplied with a "state-of-the-art command, control and communications center" from the Pentagon, the new Iraqi commandos were loosed on the then-nascent Iraqi insurgency – despite the very prescient fears of some U.S. officials "that various Sunni or Shiite factions could eventually use the service to secretly undermine their political competitors," as the Post noted.

And indeed, in early 2005 – not long after Bush's directives loosed the "Salvador Option" on Iraq – the tide of death-squad activity began its long and bloody rise to the tsunami-like levels we see today. Ironically, the first big spike of mass torture-murders, chiefly in Sunni areas at the time, coincided with "Operation Lightning," a much ballyhooed effort by American and Iraqi forces to "secure" Baghdad. The operation featured a mass influx of extra troops into the capital; dividing the city into manageable sectors, then working through them one by one; imposing hundreds of checkpoints to lock down all insurgent movements; and establishing a 24-hour presence of security and military forces in troubled neighborhoods, the Associated Press reported in May 2005. In other words, it was almost exactly the same plan now being offered as Bush's "New Way Forward," the controversial "surge."

But the "Lightning" fizzled in a matter of weeks, and the death squads grew even bolder. Brazen daylight raids by "men dressed in uniforms" of Iraqi police or Iraqi commandos or other Iraqi security agencies swept up dozens of victims at a time. For months, U.S. "advisers" to Iraqi security agencies – including veterans of the original "Salvador Option" – insisted that these were Sunni insurgents in stolen threads, although many of the victims were Sunni civilians. Later, the line was changed: the chief culprits were now "rogue elements" of the various sectarian militias that had "infiltrated" Iraq's institutions.

But as investigative reporter Max Fuller has pointed out in his detailed examination of information buried in reams of mainstream news stories and public Pentagon documents, the vast majority of atrocities then attributed to "rogue" Shiite and Sunni militias were in fact the work of government-controlled commandos and "special forces," trained by Americans, "advised" by Americans and run largely by former CIA assets. As Fuller puts it: "If there are militias in the Ministry of Interior, you can be sure that they are militias that stand to attention whenever a U.S. colonel enters the room." And perhaps a British lieutenant colonel as well

With the Anglo-American coalition so deeply embedded in dirty war, infiltrating groups, "stimulating" them into action," protecting "crown jewel" double-agents no matter what the cost, "riding with the bad boys," greenlighting the "Salvador Option" – it is simply impossible to determine the genuine origin of almost any particular terrorist outrage or death squad atrocity in Iraq. All of these operations take place in the shadow world, where apparent fredom fighters, are sometimes government operatives and vice versa, and where secret service agencies and liberation groups, interpenetrate in murky thickets of collusion and duplicity. This moral chaos leaves "a kind of blot/To mark the full-fraught man and best indued/With some suspicion," as Shakespeare's Henry V says.

What's more, the "intelligence" churned out by this system is inevitably tainted by the self-interest, mixed motives, fear and criminality of those who provide it. The ineffectiveness of this approach can be seen in the ever-increasing, many-sided civil war that is tearing Iraq apart. If these covert operations really are intended to quell the violence, they clearly have had the opposite effect. If they have some other intention, the pious defenders of civilization – who approve these activities with promotions, green lights and unlimited budgets – aren't telling.
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