From Debunking to “Pre-bunking”: EU Opens Up Another New Front in Its War on Information

“If you think of information as a virus, instead of treating an infection once it has taken hold — that is, debunking — it is much better to vaccinate so that the body is inoculated.” Welcome to pre-bunking.

On Wednesday (May 28), just over a week before the EU elections commence, European Commission President Ursula Von der Leyen unveiled her latest (and hopefully last) censorship initiative: pre-bunking. This approach, she says, is “more successful than debunking” and will allow society to “build up… immunity to misinformation.”

Von der Leyen drew heavily on the vernacular of virology and vaccinology to describe her pre-bunking initiative. This, of course, is ironic given her present embroilment in the “Pfizergate” vaccine procurement scandal, which is the subject of not one, but two, criminal investigations. It is also disconcerting to hear one of the most powerful political leaders of the so-called “liberal” West liken information to a virus. As I will show in this article, she is not the only one.

As with medicine, Von der Leyen says, prevention is preferable to cure: “If you think of information as a virus (NC: which, to be fair, most right-thinking people probably don’t), instead of treating an infection once it has taken hold — that is, debunking — it is much better to vaccinate so that the body is inoculated.” That is where pre-bunking comes in.

Building “Immunity” Against Misinformation

Like vaccines, pre-bunking intentionally exposes people to a weaker dose of mis- or dis-information (as defined by the Commission, presumably), so that their minds can build up antibodies to resist real fake news stories later down the line. In the words of the concept’s creator, Sander van der Linden, “you preemptively try to refute falsehoods or the techniques that are used to dupe people online, so that people can build up cognitive or mental antibodies so that when they come across them in the future they are partly immune.”

Sander van der Linden is a Dutch professor of social psychology at the University of Cambridge. His books include Foolproof: Why Misinformation Infects Our Minds and How to Build Immunity and The Psychology of Misinformation. The titles speak for themselves.

Van der Linden’s lab is apparently partnered with the UK government, the US State Department, and CISA (Cybersecurity and Infrastructure Security Agency), the notorious censorship agency embedded within the Department of Homeland Security. That’s according to Mike Benz, a former State Department official who is arguably the top expert on the US censorship industry. CISA has its own subsidiary: the Office of Biometric Identity Management. This gives an idea of how digital censorship will soon be tied up with biometric digital identity…

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Are European Politicians Beginning to Worry About Their Own Possible Complicity in Israel’s War Crimes?

“If you are encouraging a party to undertake a war crime you become complicit in that crime itself.”

Unlike the United States and Israel, most Western European countries — including Germany, France, the United Kingdom, Italy and Spain — are signatories to the Rome Statute of the International Criminal Court, or ICC. As such, while lawmakers in Israel and the US can talk about ignoring or sanctioning* the ICC over its chief prosecutor’s decision to apply for arrest warrants for Israel’s PM Benjamin Netanyahu and Defence Minister Yoav Gallant, many governments in Europe are torn between their blind loyalty to Israel and their responsibilities as States Members of the ICC.

An interesting case in point is Berlin, which is until now one of the ICC’s biggest financial donors. But the German government is also a fervent supporter of Israel, which it calls its “reason of state” — a lingering legacy of the systematic murder of millions of Jews under the Nazi regime. As Deutsche Welle reported a few days ago, while the Biden administration can ridicule The Hague’s request as “outrageous”, Germany’s position is more complex. The Scholz government must choose between supporting The Hague or Netanyahu — that is, between obeying international rules or standing by a close ally:

At the regular government press conference on Wednesday, Chancellor Olaf Scholz’s spokesperson, Steffen Hebestreit, made it clear just how difficult it is for the German government to take a clear position in this case. Visibly tense, Hebestreit initially had to counter rumors on Wednesday that Scholz was “shocked” by the chief prosecutor’s announcement.

Hebestreit said: “I cannot report any shock or anger. We have made it very clear that we take a very critical view of the equation [of Netanyahu with Hamas]. And we pointed out differences in terms of how the state of Israel, its independent judiciary, is constituted…”

Another problem for Berlin is that Netanyahu’s government is increasingly isolated on the world stage and even within Israel itself, as an editorial in the FT acknowledges:

The International Court of Justice ordered Israel to halt its assault on the southern Gaza city of Rafah. Ireland, Norway and Spain committed, meanwhile, to recognise Palestinian statehood — a symbolic blow against an Israeli leader who rails against any talk of a two-state solution. This should be a wake-up call, a moment for moderate Israelis to realise that, despite worldwide sympathy over Hamas’s horrific October 7 assault, their far-right government’s actions are driving the country into greater isolation.

Some EU governments, including France, Belgium and Slovenia, have publicly expressed support for the ICC Prosecutor’s application for arrest warrants against leaders from Israel and Hamas for alleged war crimes and crimes against humanity. Belgium’s deputy prime minister has even called for the imposition of EU sanctions on Israeli imports. Others have slammed the ICC chief prosecutor’s decision. They include Hungary’s Foreign Minister Gergely Gulyas who said that Netanyahu can rest assured he would not be arrested or extradited if he entered Hungarian territory.

War Crimes Complicity

If granted, the ICC Chief Prosecutor Karim Khan’s application for arrest warrants for Netanyahu, Gallant and three Hamas leaders could have implications far beyond Israel and Palestine. If the ICC ends up ruling that the actions of Netanyahu’s government and the IDF in Gaza do indeed constitute war crimes and/or crimes against humanity, it opens up the possibility of Western leaders and ministers being prosecuted on charges of complicity in those crimes.

For the moment, it is only a possibility, and probably a slim one at that. Much will depend on whether the ICC’s judges actually issue the arrest warrants for Netanyahu and Gallant. The US government is mobilising all of its reserves of soft and hard power, including the threat of sanctions, to try to ensure that does not happen.

There is also the question of enforcement: as the ICC itself notes, it does not have its own police force or enforcement body and thus “relies on cooperation with countries worldwide for support, particularly for making arrests, transferring arrested persons to the ICC detention centre in The Hague, freezing suspects’ assets, and enforcing sentences. It is far from clear whether that cooperation will be forthcoming from many Western jurisdictions.

All that being said, the mere fact that the ICC’s chief prosecutor has applied for arrest warrants for Israel’s prime minister and defence minister is without precedent. Since its inception in 2002 the ICC has only ever conducted trials against African governments while sparing Western leaders from criticism. This has prompted accusations that the court is being used as “a tool of Western neo-colonial politics,” notes Alfred de Zayas, an expert in international law and former Special Rapporteur to the the UN Human Rights Council:

This is evidenced by its failure to indict Western political and military leaders, notwithstanding well-documented legal briefs submitted to three Prosecutors, particularly concerning war crimes and crimes against humanity in Afghanistan and Iraq, including torture in Abu Ghraib, Mosul, and Guantanamo.

De Zayas warns that after all that has happened, if the ICC judges fail to indict Netanyahu and Gallant, as recommended by Prosecutor Khan, “it risks a massive departure of members of the Statute of Rome,” especially those from Africa, and could even be the “final nail in the ICC’s coffin.” If, on the other hand, the indictments are granted, it could trigger the departure of a number of Western countries from the ICC…

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SouthCom Commander Laura Richardson Just Described “Plan Colombia” as a Success, a Model for the Region

Even the US House of Representatives Foreign Affairs Committee has admitted that Plan Colombia was a resounding failure from a counter-narcotics perspective while providing short-term benefits from a counter-insurgency perspective. 

As regular readers are by now well aware, the Commander of US Southern Command (SouthCom), General Laura Richardson, has a rare talent for saying the quiet parts out loud. She also has a penchant for dividing the world into a Manichean struggle between good guys — essentially countries and governments in the US’ neighbourhood that are aligned with “Team USA” and “Team Democracy” — and bad guys — primarily China, Russia and Iran, and their allies on the American continent, which has helped her to win hearts and minds on Capitol Hill and among the Neocon think tanks that help to shape foreign policy in Washington.

These two talents were on full display in a recent talk at the Woodrow Wilson Center, titled “Preserving and Strengthening Democracy in Latin America”. In one exchange with the moderator she laid out in disarmingly candid, unabashedly neo-colonial terms how SouthCom — the command unit of the US Department of Defense she heads up, which is responsible for providing contingency planning, operations, and security cooperation for Central and South America, and the Caribbean — views the role of Latin America and the Caribbean in the US’s great power rivalry with China and Russia:

I look at the defence of our homeland as a number one priority. And so I go back to being a good neighbour and what that means. You want to have good neighbours around in your community and where you live. That’s what you want, right? And to be a good neighbour and want to have good neighbours, you’ve got to be a good neighbour yourself.

Good Neighbourliness

It’s almost painfully ironic to hear a US military commander talking about the need for good neighbourliness in Latin America, a region that the US has spent the best part of the past 200 years invading, occupying, pillaging and, when necessary, regime-changing. Washington still to this day regularly meddles in the affairs of other American countries, including its direct neighbour to the south, Mexico. Back to the speech:

So, as we look at the Caribbean, Central America and South America, … a lot of reference is given to… the first and second island chain (in the Indo-Pacific region). Well, I would say we have the first and second island chain to our homeland with the Caribbean and Central America and South America. And really so if you replicate that and you look at all the investment in critical (dual purpose) infrastructure by the People’s Republic of China [through its Belt and Road Initiative]…, I’m a little suspicious that it’s maybe for extraction as opposed to investment.

In other words, the whole land mass of the American continent south of Guatemala and east of Florida is supposed to serve as a buffer zone for the US against its main strategic rival, China. At another moment in the interview, Richardson reiterated one of the main reasons why the US is showing a renewed interest in Latin America: the region’s abundant natural resources, including all heavy crude and light sweet crude oil, the Amazon (“31% of the world’s fresh water”),”60% of the world’s lithium, gold, copper,… over 50% of the world’s soybean, over 30% of the sugar and corn.”

Needless to say, the US government and military, and the corporations whose interests they serve, have their eyes on all of these resources. In an interview last year with the Atlantic Council, another Neocon think tank (which we covered here), Richardson explained that one of the main missions of USSOUTHCOM is to find ways of preventing the US’ biggest adversaries, China and Russia, from being able to purchase strategic resources in Latin America and the Caribbean. That is already in the process of happening in Argentina.

As I noted in that piece, this represents a rejigged form of the Monroe Doctrine, a 200-year old US foreign policy position that opposed European colonialism on the American continent. It held that any intervention in the political affairs of the Americas by foreign powers was a potentially hostile act against the United States. Now, it is applying that doctrine to China and Russia.

Later in this interview, in the Q&A section, she said that Plan Colombia, the US-designed drug-eradication program, had been a roaring success — indeed so successful that it has become an example for the entire region, beginning in Ecuador. This, to put it mildly, is a deeply controversial and worrying statement given the amount of damage Plan Colombia inflicted on Colombia’s communities, economy and environment:

Repeating an Unmitigated Disaster

If there’s one thing most historians can agree upon, it is that “Plan Colombia”, the US government’s anti-narcotics drug-eradication program, was an unmitigated disaster — at least from an anti-narcotics perspective. Signed in 1998 by President Bill Clinton and his Colombian counterpart, Andrés Pastrana, it burnt through $10 billion of US and other overseas funds over two decades, worsened the violence in Colombia, bathed more than a million hectares of farmland in a rich brew of toxic chemicals, including Monsanto’s “probably” carcinogenic weedkiller glyphosate and exacerbated organised crime — all while overseeing a significant upsurge in coca production.

Global cocaine production reached the highest level ever reported in 2016, with most of the production coming from Colombia, according to the United Nations’ World Drugs Report 2018.

One of the main architects of Plan Colombia was then-US Senator Joe Biden. In 2022, former Colombian President Ivan Duque personally thanked Biden for helping to draw up the plan, which, he said, allowed the Colombian government to “confront and defeat many challenges we had.” But two years earlier, the US House of Representatives Foreign Affairs Committee admitted that Plan Colombia had been a resounding failure from a counter-narcotics perspective…

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Why Is It Taking So Painfully Long for Spain, Ireland and Other EU Countries to Recognise Palestinian Statehood?

“We have found ourselves in a situation where we feel the need to move forward unilaterally because the European response has been so weak.”

Two months ago, Spain’s President Pedro Sánchez held a meeting in Madrid with the prime ministers of Slovenia, Ireland and Malta. When the meeting ended, the four heads of government announced they were ready to recognise the Palestinian state in a way that would contribute to the success of a new peace process [bizarrely, the nation of Malta already recognises Palestinian statehood, and has done since 1988]. There were even rumours that Belgium and Portugal might tag along for the ride. Yet two months later, none of the countries — apart from Malta, of course — have recognised Palestine, though they keep talking energetically about doing so.

Sánchez has been speaking about the need to recognise Palestinian statehood since mid-November, weeks after the bombs began raining down on Gaza. In fact, he has been talking about it since the day he became prime minister six years ago. One could go back even further in time, to November 17, 2014, when the Spanish parliament approved a non-binding motion calling for the recognition of the State of Palestine, with a crushing 319 votes in favour and 2 against. The motion was supported by all political parties (certainly not the case today, with both the People’s Party and the far-right VOX firmly in Israel’s corner), yet the then-President Mariano Rajoy did nothing.

Today (May 21, 2024) was supposed to be the day. Weeks ago, Sánchez announced that Spain’s recognition of Palestine would be made official at today’s Council of Ministers in Madrid. Even the EU’s chief diplomat-cum-head gardener, Josep Borrell, himself a former minister in Sánchez’s government, confirmed the plans. But three days ago Sánchez pushed the date back a day or two, so that he can make a joint announcement with other EU member countries. As each day goes by, the death toll in Gaza rises by a few hundred more. When a genocide is in full swing, talk is cheap.

Would it even make much of a difference if three more EU countries recognised Palestine’s right to existence? Probably not, especially with the EU’s three largest economies, Germany, France and Italy, showing no sign of doing the same. Some view recognition of a Palestinian state as a political tool to pressure Israel into accepting a two-state solution despite the Netanyahu government’s innate hostility to the idea. Doing something, they say, is surely better than doing nothing, especially of nothing essentially means supporting and enabling Israel’s genocide against the people of Gaza.

“We have found ourselves in a situation where we feel the need to move forward unilaterally because the European response has been so weak,” a European diplomat from one of the countries that is working on Palestinian statehood recognition told The National. “Of course it would be better if the EU could come to a proper agreement on our approach to Israel and Palestine. But we have been unable to do that, which has massively weakened our influence in the region.”

It could also be argued, as Yves has done, that recognising Palestine at this stage in proceedings is likely to be a futile exercise given that a two-state solution is as good as unworkable anyway:

John Mearsheimer has stated a two-state solution is impossible and everyone advocating it ought to know that….which would seem to suggest their motives for touting it are cynical. One insurmountable obstacle is that a Palestinian state would have its own military, something Israel would never tolerate. A second issue is the way Israel has balkanized the area between Gaza and the West Bank, making any integration or even, say, land bridge very hard to implement. Third is what to do with the settlers. They ought to be expelled, again something Israel would never accept.

Current State of Play

Of the world’s 193 countries, 143 have recognised Palestine as a state — representing over three-quarters of the global population — with the Bahamas the latest to do so, on May 7. That’s four more countries than on October 7.

Only nine of those countries are in the EU, and of those nine, six (Bulgaria, Hungary, Slovakia, Czechia, Poland and Romania) recognised Palestine during the early 1980’s when they were still members of the Warsaw Pact and most definitely not members of the European Union, or the European Economic Community as it was then known. Another two — Cyprus and Malta — did so before joining the EU. In fact, the only country to do so as an EU member was Sweden, in 2014.

Yet Sweden may already be having second thoughts. In a vote at the UN General Assembly earlier this month on whether to “upgrade Palestine’s rights at the world body as an Observer State, without offering full membership,” the country’s centre-right coalition government abstained. For their part, Hungary and Czechia were among just nine countries (including, of course, Israel, the US and Argentina) to vote against the motion. The governments of Hungary and Czechia are two of Israel’s closest allies in Europe. Which begs the question: will they soon be reversing their recognition of Palestine? Is that even possible?

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EU Commission Plans to Strip Funding From Public Prosecutors Investigating Ursula von der Leyen’s Pfizergate Scandal

Surely just a coincidence!

As regular readers are well aware, EU Commission President Ursula von der Leyen is facing a number of legal challenges over the Pfizergate scandal, including from the New York Times, the governments of Hungary and Poland, a Belgian lobbyist and the European Public Prosecutor’s Office, or EPPO. In early April, we discussed the possibility that her reelection campaign may be over-shadowed by these multiple lawsuits as well as other corruption allegations. At that time, the EPPO had just proposed taking over a Belgian criminal probe into the highly opaque vaccine negotiations between von der Leyen and the CEO of Pfizer, Albert Bourla.

Since then, the Commission, it seems, has gone on the offensive. According to an article published earlier this week by POLITICO EU, the EU executive plans to reduce the EPPO’s funding, prompting the EPPO, in a rare move, to threaten to sue the Commission. Founded in 2017 with the mission of “investigating transnational and complex financial crimes, notably serious organised crimes and money laundering flows,” the EPPO last year launched more than 200 fraud investigations related to the EU-wide Recovery and Resilience Facility, which has provided €800 billion of EU cash to help support post-COVID economic recovery.

Also last year, the EPPO launched an investigation into the Commission’s procurement of 4.5 billion COVID-19 vaccines — for a continent of 450 million people (I’ll let readers do the maths) — after the Commission had refused to provide EU auditors with records of its preliminary discussions with Pfizer, whether in the form of minutes, names of experts consulted, agreed terms, or other evidence. The EPPO has warned that the Commission’s plans to slash its budget will make it difficult for its prosecutors to continuing fulfilling their duties. From the POLITICO EU piece:

On April 9, Laura Codruța Kövesi, who heads the European Public Prosecutor’s Office (EPPO) — tasked with investigating serious financial crimes affecting the EU’s interests — took the unusual step of launching a so-called “amicable settlement procedure” with the Commission. This is the last legal step before litigation and if no agreement can be found, the fight could go as high as the EU’s General Court.

The prosecutors fear they will be unable to do their job properly if the Commission goes through with a plan to squeeze its budget — a move that was announced in February and came as a surprise, EPPO claims.

Kövesi’s letter was shared in early April with three senior officials from the Commission, according to the document obtained by POLITICO. In it, the EPPO chief alleges that the Commission is depriving it of the means to carry out its work effectively by putting pressure on its budget, notably on the amount spent on IT.

When EPPO was launched in summer 2021, the Commission agreed to provide IT facilities with no end date given. The Commission has now told EPPO it wants to withdraw the IT supportThe amount of money involved is around€5 million, according to EPPO’s estimates.

“The unilateral decision … to terminate, on 31 December 2024, the provision of the mentioned services to the EPPO risks that the Union’s independent prosecution office will be in the impossibility to carry out its tasks and achieve its mission,” Kövesi wrote, adding that “it is incumbent on the Commission to abstain from any measure that could jeopardize the attainment of the Treaty objective entrusted to EPPO in combating crimes affecting the financial interests of the Union.”

In response to the EPPO’s letter, a Commission spokesperson said:

“The Commission has replied to EPPO within the designated period for an amicable settlement. In its reply, the Commission has expressed willingness to continue to support the IT services of EPPO for the foreseeable future under specific conditions. We cannot comment further.”

What Conditions?

What are the Commission’s “specific conditions”?  Who knows? Presumably, Kövesi or someone else at the EPPO will soon find out in a private meeting — and certainly not by text message — if they haven’t already. As for the rest of us, we will probably never know. By all outward appearances, the Commission is sending a message to the EPPO to stay in its lane, and not ruffle any feathers at the Berlaymont, particularly those of the president as she prepares to secure a second term. Otherwise, the flow of funds will slow.

If that is indeed the case, it raises serious questions about the EPPO’s operational independence. That in turn throws up yet more questions about the state of the rule of law, democracy and judicial independence in the very heart of the EU, especially given how the Commission has been using judicial independence and rule of law issues (largely) as a pretext to withhold billions of euros of EU funds from Hungary over the past two years. In reality, the main reason for freezing the funds is President Viktor Orban’s unyielding opposition to project Ukraine, as Conor Gallagher explained in a previous post.

It is uncommon for an EU institution like the EPPO to threaten to sue the Commission, but according to the POLITICO EU piece, tensions have been building:

Through an open letter sent to MEPs and public remarks at the European Parliament, Kövesi has for weeks been asking the Commission to reevaluate its decision to cut a substantial part of the support it provides to the Luxembourg-based EPPO team, who have recently taken over a case looking into von der Leyen’s handling of Covid vaccine deals.

The “Pfizergate” story was first broken in April 2021 by the New York Times when it revealed that European Commission President Ursula von der Leyen had negotiated a contract for 1.8 billion COVID-19 vaccine doses during the pandemic with Pfizer CEO Albert Bourla in mobile phone texts. Those texts remain undisclosed to this day. They may have already been destroyed. In May 2021, the journalist Alexander Fanta tried to obtain a copy through an FOI request but the Commission refused.

Since then the New York Times has presented a legal complaint against VdL based on articles 41 and 42 of the Charter of Fundamental Rights of the European Union — articles that recognise the right of access to the documents of the European Parliament, the European Council and the European Commission. In April 2023, Fedéric Baldan, a Belgian lobbyist specialising in EU-China trade relations, lodged a criminal complaint at the Lieges courthouse, accusing VdL of “interference in public functions”, “destruction of public documents” and “illegal conflicts of interests and corruption.”

A dozen other organisations, individuals, and even the countries of Hungary and Poland (under the previous PiS-led government), have joined his complaint. The governments of Poland and Hungary did so after Pfizer and its German vaccine partner, BioNtech, announced they were suing both countries over their refusal to take delivery of millions more doses of their COVID-19 vaccines, many of which would never be used. There have already been at least €4 billion worth of wasted vaccine doses in the EU.

More Questions Than Answers

In its investigation, the EPPO can theoretically seize phones and other relevant material from the Commission’s offices or in other countries in Europe. That doesn’t appear to have happened yet. In fact, it is unclear just how far the EPPO investigation has progressed. There are still far more questions than answers regarding this case…

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Why Are Argentina’s Highest-Denomination Currency Bills Being Printed By a State-Owned Company in China?

Javier Milei on the campaign trail, eight months ago: “Not only am I not going to do business with China, I am not going to do business with any communist.”

During his relatively short but surprisingly meteoric political career, Argentina’s faux libertarian President Javier Milei has not exactly been shy about his feelings toward the People’s Republic of China. On the campaign trail, he told Tucker Carlson that he would never trade with China, which was then Argentina’s second largest trading partner, due to its government’s left-wing, authoritarian proclivities:

Not only am I not going to do business with China, I am not going to do business with any communist… I am a defender of freedom, peace and democracy. The Chinese don’t fit in.”

In an interview with Bloomberg, he referred to the Asian nation as an “assassin,” saying:

People are not free in China, they can’t do what they want and when they do it, they get killed. Would you trade with an assassin?

The Chinese government was typically tight lipped in its response. When Milei won the election, Beijing congratulated him.

“We congratulate Argentina on its presidential election and congratulate Mr. Milei on his election,” Chinese Foreign Ministry spokeswoman Mao Ning said at a regular press briefing in Beijing on Monday. “China values its relations with Argentina and we are ready to work with Argentina to continue nurturing our friendship and contribute to each other’s development.”

All of these statements of Milei’s were made on the campaign train. When Milei the candidate became Milei the president, he quickly softened his position, as he has with many of his other more radical positions, such as his pledge to shutter Argentina’s central bank and to dollarise Argentina’s economy. In relation to China, he now said he wouldn’t stand in the way of private business deals between Argentinian and Chinese companies. “We are liberals,” he said. “And if people want to do business with China, they can.”

But his government would not be engaging directly in business with the Chinese government or, for that matter, Chinese state-owned enterprises. Or so his voters were led to believe. But that, it turns out, was also not true.

A Very Sensitive Business

The Milei government is doing some very important — indeed, highly sensitive — business with the People’s Republic of China. That business is printing money.

With official annual inflation still raging at an eye-watering 289% in March — though the monthly rate is gradually coming down as the country’s economy is starved of internal demand by the government’s crushing austerity measures — new high-denomination notes are desperately needed. The highest denomination note currently in circulation is the 2,000 peso bill, which right now (11:26 pm, GMT+1, May 13) is worth just $2.26, according to Argentina’s official exchange rate.

The Central of the Republic of Argentina is about to begin the process of putting into circulation a larger denomination bill: the 10,000 peso note (with a current value of $11.31). The new bill will be distributed progressively to bank branches and ATMs throughout the country over the coming months.

What isn’t getting much attention — for obvious reasons — is the fact that the first batch of the new currency, consisting of 770 million bills, was manufactured not by Argentina’s national mint but by the China Banknote Printing and Minting Corporation (CBPMC), a state-owned corporation that carries out the minting of all renminbi coins and printing of renminbi banknotes for the People’s Republic of China, and which has a rapidly-growing list of government clients from around the world (more on that later).

This, understandably, has raised a few eyebrows among members of Milei’s La Libertad Avanza (Freedom Advances) coalition party. As an article in Clarín notes, some are questioning the wisdom of entrusting the manufacturing of a resource as “sensitive and strategic” as the country’s national currency to a company that is essentially owned by China’s communist government.

The new banknotes were not manufactured in-house by the Argentine Mint for an apparently simple reason: it has unpaid debts with many foreign suppliers of the technologies and resources needed to print new bills. That’s according to government sources cited by the Argentine newspaper El Cronista. A recent article by Clarín suggests that the Milei government’s wholesale slashing of public spending means there may not be enough money in the future either to pay for local manufacturing of most of the country’s banknotes.

In other words, Argentina is likely to become even more dependent on international suppliers for its own physical money supply. And as with so many manufacturing industries today, few can compete on price with the Chinese.

World’s Oldest Central Bank Keeps Sounding Alarm on Fragility of Cashless Economies. Are Other Central Banks Listening?

At a time when the dominant narrative around cash is that its demise is all but inevitable, as well as broadly desirable, the 2024 payment report by Sweden’s Riksbank may offer a cautionary tale.

In October last year, in More Good News for Cash in Europe, More Bad News for Digital Dollar in US, we reported that recent developments suggest that the trend away from cash and toward purely digital-only payment systems may not be quite as smooth or as seamless as some may have wished or expected. One of the developments we highlighted in that report was growing concern among central bankers and politicians in Sweden, one of Europe’s most cashless economies, about the unintended consequences of driving cash out of the economy:

Even by late 2020, Sweden had less cash in circulation than just about anywhere else in the world, at around 1% of gross domestic product, according to the latest available data. That compares with 8% in the U.S. and more than 10% in the euro area. As a recent piece in Interesting Engineering notes, Sweden is already “officially cashless”:

Cash is never needed, not even for small purchases like hot chocolate at a Christmas market in Stockholm. All vendors have a mobile payment chip-and-PIN card reader like the one offered by Stockholm-based mobile payments company iZettle, or they accept payments through the mobile application Swish. Swishing is perhaps the easiest way of payment for everyone.

The Risks of Going Fully Cashless

But now the country is beginning to realise that an almost exclusively digital payments system comes with significant risks, especially at a time of heightened geopolitical tensions. In time-honoured fashion, the article in the UK Telegraph began with a spot of fearmongering about Vladimir Putin.

“People started to realise that it is very easy for Vladimir Putin to switch everything off,” Björn Eriksson, a retired police chief, former head of Interpol and leading cash advocate, told the Telegraph.  “At first we were arguing for vulnerable people, the elderly, women in abusive relationships who rely on cash… Now we are talking about national security. And it’s not only Putin, it could also be organised crime.”

In 2021, the Riksbank, Sweden’s central bank (and the world’s oldest), introduced a new directive obliging the country’s six largest credit institutions to continue providing their customers with certain basic cash services.

But while that may have meant that people in Sweden can continue to access cash from their local branch, it is becoming increasingly difficult to use it as fewer and fewer retail businesses accept notes and coins.

This is partly due to the greater convenience of handling digital payments while the card processing fees are substantially lower than the US. But it is also because most Swedes, including many pensioners, prefer to use cards or mobile payments. As a baker in Stockholm told the Telegraph, “the only people who bring cash to the shop are tourists. I feel bad for them because they just take the krona home, where it is useless.”

But even that trend may be reversing. According to Eriksson, a growing number of young people are joining the pro-cash movement — and mainly over privacy concerns.

Rediscovering the Benefits of Cash

Earlier this week, Heise Online, a German online news service that covers IT, telecommunications, and technology sectors, published a long, in-depth report about the Riksbank’s apparent rediscovery of some of the benefits of cash. The article also explores some of the Riksbank’s concerns about the potential fragility of a fully cashless payment system, as outlined in its 2024 Payments Report, published in March.

At a time when the dominant narrative around cash — as espoused by senior bankers, central bankers, big tech and fintech executives, politicians and economists, and of course, their ever-faithful servants in the media — is that its demise is all but inevitable, even in countries where cash is still King (Germany, Spain, Austria, Mexico, Thailand, Japan…), the Riksbank’s report may offer a cautionary tale. From the Heise Online piece (machine translated):

“The Swedish payments market has been digitized rapidly,” states the Riksbank. Cash and manual payment services have been replaced by cards, mobile phones and internet services. “As a result, payments have become faster, smoother and cheaper overall,” which the institute points out is “a positive development.” However, there are groups in society “who do not have access to digital payment services or find it difficult to use them and are therefore marginalized”. There are also “serious fraud problems that could undermine trust in the payment system.”

Digitalization also makes payments “more vulnerable to cyber attacks and disruptions to the power grid and data communication,” the bank points out. At the same time, the geopolitical developments of the past few years required “Sweden to have strong civil defense.” The developments suggested “that we should concentrate more than before on the challenges of digitalization.”

Put another way, cash does not crash. It does not fail in a power cut or seize up during a cyber attack (though, of course, ATMs might). By contrast, digital payment systems need a stable and continuous internet connection to process transactions. When these connections fail, the result is often chaos. Digital payment outages have caused significant disruption in a host of countries in recent years, including the USthe UKAustraliaIndonesiaGermanyCanadaSpain and Norway. Generally speaking, the more cashless the country, the greater the disruption…

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In BBC Interview, Javier Milei Shows His True Colours on Falklands Issue While Praising His “Idol”, Margaret Thatcher, to the Skies

In a sharp departure from established practice, Milei admits that the Falkland Islands, or Malvinas, are, to all intents and purposes, British. And he is no rush to change that.

For most Argentines, Margaret Thatcher is a controversial figure, to put it mildly. It was she who, as British Prime Minister, ordered the torpedoing of the ARA Belgrano, an Argentine cruiser, leading to the deaths of 323 people on board — practically half the total casualties suffered by Argentina during the 1982 war over the Falklands (or Malvinas, as they are known in Spanish). The attack took place outside the exclusion area the British Government had established around the islands. It is also the only case of a ship sunk in war by a nuclear submarine.

So, when Argentina’s faux libertarian president, Javier Milei, described Thatcher as “brilliant” in an interview with the BBC this week, it turned a few heads:

Criticising someone because of their nationality or race is very intellectually precarious. I have heard lots of speeches by Margaret Thatcher. She was brilliant. So what’s the problem?..

There was a war and we were the ones who lost. That does not mean that one cannot consider one’s adversaries as people who did their job well.

This is not the first time that Milei has heaped praise on Thatcher in public, but it is, to my mind, the first time he has done so since becoming president. The fact that he made these remarks during an interview with the UK’s national state broadcaster gave them added prominence. During the election campaign Milei described Thatcher as an “idol” who played a significant role in the fall of the Berlin Wall. He steadfastly ignores the fact that Thatcher’s legacy of failed privatisations and strict adherence (aka TINA) to monetarism, loose financial regulation and so-called free trade have left the British economy in tatters while, of course, being exported around the world, including to Argentina.

“In the history of humanity,” Milei told the BBC interviewer, “there have been great leaders. Mrs Thatcher was one, as were Reagan, Churchill and De Gaulle.”

In this latest interview, not only did Milei reiterate his admiration for the “Iron Lady”, he also did something that no other Argentine president of the post-Falklands War era has done: he admitted that the Falkland Islands, or Malvinas, are, to all intents and purposes, British. Asked if he considered the recent visit by UK Foreign Minister David Cameron to the Falklands to be a provocation, Milei said: “No, because that territory today is in the hands of the United Kingdom. In other words, he has every right to [visit the Falklands].”  

Located 250 miles off the southern tip of Argentina and 8,000 miles from British shores, the Malvinas/Falklands, home to 3,500 mostly British people, have been the subject of a territorial dispute between the UK and Argentina ever since 1833, when a British expedition invaded the islands, evicted their inhabitants and planted the British flag. After the Suez disaster of 1956, the British government began divesting itself of most of its colonial holdings in Africa, Asia and the Caribbean (while, of course, building a vast web of tax havens in their place). However, London made sure to hold on to the Falklands, for its obvious geostrategic benefits.

Now classified as a British Overseas Territory, the islands are technically self-governing, with defence matters and foreign affairs handled by the UK government. London regularly wheels out the fact that almost 100% of the residents of the archipelago approved remaining under British control in a referendum held in 2013. During his visit to the islands in February, Cameron stated that he hopes that the territory will want to remain under the administration of the United Kingdom “for a long time, possibly forever.”

Milei, however, has a cunning plan, of the sort that even Blackadder’s Baldrick would be proud, to resolve this centuries-old territorial dispute once and for all, which he shared with the BBC during his interview. He and his ministers, he said, will talk about the issue to their British counterparts in an adult, cordial manner until the British finally agree to hand back the territory like true gentlemen. This despite the fact that the British government insists that sovereignty over the islands is not up for debate.

Here’s a transcript of the brief exchange (the Spanish sections translated by your truly):

— You have promised Argentines a road map to making the Falklands, known here as the Malvinas, Argentinian. What specifically does that road map look like?”

— We believe this always must be done in a framework of peace and as the result of a long-term negotiation in which an adult discussion takes place between countries that have a great deal in common as well as a source of discord. And we have to try to resolve it in an adult way. Obviously this is not going to be an instant solution, it will take time. So we are not going to give up our sovereignty nor are we going to have a situation of conflict with the UK. What we are looking to do is to initiate a dialogue so that at some point the Falkland Islands become Argentinian.

—  What makes you think the UK will agree to that, because they have been very clear they do not want to negotiate it?

— It could be that today they don’t want to negotiate but some time later they do. Many of these positions have changed over time.

— But how will you convince them. What tools would you use to convince them?

— I’m going to try to convince them that the territory is Argentinian. I am going to try to convince them that this territory is Argentine and that according to the specifications that are usually used to define it that way, Argentina has the right and sovereignty over the islands.

But when they have said very clearly that they are not willing to negotiate and use the referendum held on the islands as proof that they do not want to discuss this issue again. How will you convince them? What tools would you use?

Well, it won’t be discussed now. It will be discussed later.

And that is pretty much it. In other words, Milei is going to appeal to the British establishment’s better nature without applying any kind of political or diplomatic pressure, as previous Argentinian governments have tried to do, albeit with little success. Nor does Milei appear to be in any hurry to press the issue. Now, he said, is not the time to discuss the territorial dispute, which, he added, could take decades to resolve…

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Tony Blair and His Associates Are Waiting in the Wings to Take Back Power in UK

Blair is closer than ever to regaining political power, albeit through a proxy Labour government led by Keir Starmer. The beauty (for Blair) is that he will be able to continue expanding his global political consulting empire at the same time.

One of the great contradictions of British political life over the past 15 years is Sir Tony Blair. The three-term prime minister is broadly reviled by the British public, even among many Labour Party voters, yet he continues to be feted and fawned over by the British establishment and media. Even after the “crushing verdict” (in The Guardian‘s words) of the Chilcott Inquiry — that the Blair government’s case for the Iraq war was “deficient” — was finally made public in 2016, Blair remained a go-to person for the British and international media on all manner of topics, particularly the COVID-19 pandemic.

It is a very different story for the British public. In a recent YouGov opinion poll, only 22% of respondents said Blair had had a positive effect on the Labour Party, with 38% saying his impact was broadly negative. Even among Labour Party voters, only 26% labelled his impact as positive compared to 38% who saw it as negative. According to another YouGov survey, this time from 2022, a mere 14% approved of his knighthood and only 3% strongly so, while 63% disapproved, 41% strongly so. Over a million people signed a petition demanding the knighthood be revoked.

In other words, the last thing most people in the UK want to see is Blair making a political comeback. Yet the former PM is closer than ever to regaining political power, albeit through a proxy Labour Party government led by the current party leader, Keir Starmer, who is hotly tipped to win the next general election, which must take place by January 28, 2025. Starmer is favourite to win not because of a groundswell of support for his vision or candidacy — the UK public view the party under Starmer even less favourably than under Ed Miliband — but because support for the governing (if you can call it that) Conservative Party is in freefall:

Blair will probably have no official role in the resulting Starmer government, but he will wield plenty of power from behind the scenes. The beauty of such an arrangement (for Blair) is that he will have zero public accountability or responsibility while at the same time being able to continue serving his corporate clients and expanding his global political consulting empire.

Many of the key positions in a Starmer government will be filled by members of the Blairite wing of the Labour Party, which has spent the past four years purging the party of its genuine left-wing politicians and members, including former party leader, Jeremy Corbyn, and the veteran British filmmaker Ken Loach. As the veteran US journalist Robert Kuttner writes, Starmer “has virtually outsourced his entire program to Tony Blair” and his modestly named non-profit foundation, the Tony Blair Institute for Global Change (often shortened to TBI).

TBI was spawned in 2017 by rolling together all of Blair’s for-profit and non-profit ventures, including  the Tony Blair Faith Foundation, the Tony Blair Sports Foundation, the Tony Blair Governance Initiative, and his consulting firm Tony Blair Associates, into one vehicle. Some of those ventures had begun to attract a little too much attention for their opaque tax structures, fragrant conflicts of interest and dodgy client lists, including the despotic governments of Saudi Arabia, Kazakhstan and Azerbaijan – all, of course, rich in mineral deposits. TBI continues to take money from the Saudis as well as large corporations and philanthropic foundations…

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