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INTERVIEW

‘I have no doubt that there will be another crisis, on a bigger scale than 2008’

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Financial hegemony suffered its first major blow in the 2008 crisis. This crisis, fuelled by the over-indebtedness of low-income borrowers in the US, revealed that financial assets were bubbles that had nothing to do with real wealth.

Throughout the Great Depression, the euro crisis and the Covid-19 pandemic, the authorities have always talked about “financial stability”. In 2020 and 2021, for example, to prevent the effects of the lockdown from leading to an economic collapse, the European Central Bank almost doubled its balance sheet, providing liquidity and buying €4 trillion worth of securities: That was about a third of the eurozone’s income, or €12,000 per person.

Today, there are more important concerns than market volatility. And it may be time to say goodbye to financialisation for good.

Economist Ann Pettifor of the Progressive Economy Forum and the Political Economy Research Centre at Goldsmith’s College answered our questions. Pettifor, whose work focuses on the global financial system and sustainable development, and who is known for her accurate prediction of the 2008 financial crisis, says she has “no doubt that there will be another crisis on a larger scale than 2008”.


Why are mainstream economists’ explanations for the causes of the housing crisis flawed? In September 2023, you wrote an insightful blog post about the reverse effect of debt deflation after a period of debt inflation. Why do you think rents are rising at record rates? It is a serious problem in Turkey, as it is in the UK and Ireland.

The flaw in mainstream economics is the over-emphasis on the concept of supply and demand; and the exclusion of the role of excessive, globalized and mobile capital flows in inflating house prices, and housing markets in virtually every country in the world (including poor countries like Ghana, where house prices in Accra have rocketed).

And there has been a steady decline in the prices of assets, goods and services in China. In one of your articles you wrote: “We’re in for ‘higher for longer’ interest rates; another deflationary era … and more crashing asset markets”. What are the risks of China’s deflation for the rest of the world?

Assets act as collateral against borrowing. When interest rates rise, borrowing (debt) becomes less affordable. That means that borrowers that have taken out a mortgage (borrowed) and then bought property (or any other asset) to rent out, make lower returns on the rent. In other words, a higher proportion of their income from rents has to go to repaying the rising cost of debt. When the cost of debt makes renting unprofitable, they sell the asset, in order to pay down the debt. Hence the shortage of rented properties in London.

If private equity firms for example, have borrowed money to buy up a water company (like the UK’s Thames Water) — then they too suffer from higher rates of interest slashing the rental profits from the water company. And so, they either go bust, or sell the company (asset) to pay down the debt.

The sale of assets begins to cascade prices downward… If the owner of London properties does not sell quickly, she will get caught up in the fact that many others are selling, and that therefore the prices of properties (assets) will fall…

So higher rates lead to the deflation of asset prices.

To keep its economy churning, and to keep jobs and incomes at a level expected by the Chinese people, China has oriented its economy towards exports. Exports create jobs and are very profitable for the big exporting corporations. But its export-orientation is also a consequence of its inequality. Chinese workers are paid too little to be able to consume all that China produces. The same applies to Germany where wages have been repressed in real terms. German workers can’t consume all that is produced in Germany. The excess is sold (dumped) on to global markets.

The problem is that demand (consumption) is low in the countries China is trying to sell into, also because of low wages and austerity essentially. When external demand is insufficient to absorb excess production, prices fall, and are the channel through which China (and other surplus countries like Germany) exports its deflation to the rest of the world.

Belief in the Bank of England’s ability to control inflation has begun to crumble, why do you think Britain has struggled to control inflation?

Because Britain’s inflation has not been caused by action (including wage rises) at home — as the governor of the Bank of England wrongly asserted. Britain’s inflation – just like inflation the world over- was caused by a) supply bottlenecks post-pandemic (think of the blockages in ports post-pandemic, the invasion of Ukraine and the subsequent disruption to energy and grain flows etc). b) inflation is worsened by speculation by the holders of huge financial assets (think pension funds, asset management funds (Blackrock, Blackstone etc); private equity firms and oil traders). Speculation takes place in global markets for commodities – not in British markets. The prices of oil and gas, of grains and other commodities are settled not in countries, but e.g. at Chicago’s Mercantile Exchange, or London’s Metals Exchange, where speculators use futures and derivatives contracts to bet on movements in prices. The ‘wall of money’ aimed at finite supplies of assets (oil, gas, copper, grains) can and has inflated the price of these assets. The Bank of England does not choose to regulate such speculation, and ignores the role of global markets in fueling Britain’s inflation.

Do you agree with the view that we are facing a second 2008 crisis? The most important political event of the 21st century so far remains the Great Recession, which triggered the populist uprisings and the collapse of neoliberalism that have characterized our recent history.

I have no doubt that there will be another crisis, on a bigger scale than 2008. That will be because there was not substantial change made to the globalized financial system as a result of that crisis. Furthermore, Wall Street banks and other financial institutions that could go bust before 2007-9 – no longer face that threat. They are all now ‘too big to fail’ and ‘too big to jail’. Furthermore, they have the backing of the mighty Federal Reserve – and therefore can take greater risks with speculation than before the GFC. In other words, they now look more like Soviet-style banks, than American capitalist banks.

The other reason that we are bound to have a global financial crisis, can be found in the system’s imbalances. Global financial assets (assets, debts and liabilities) according to the Financial Stability Board are in the region of $213 trillion dollars. Global real income, (GDP) is less than 100 trillion dollars. Imbalances in trade – i.e. between countries in surplus and countries in deficit – are leading to trade wars. Trade wars threaten global political, social and economic instability.

I worry most about pension funds, caught up in the speculative frenzy of the globalized financial system. If pension funds were to fail, the social and political impacts would be profound.

INTERVIEW

“The state elections in September will be a victory for the AfD and BSW”

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In the aftermath of the European Parliament (EP) elections, analyses of the rising right-wing on the continent play a major role in commentary on the future of the EU. In France, Marine Le Pen’s National Union (RN) came first, while in Germany, the Alternative for Germany (AfD) overtook the Social Democrats to become the second party. The anti-establishment Saharan Wagenknecht Alliance (BSW) also made a significant debut in the first elections, winning around 6% of the vote.

Former Left Party MP and political scientist Alexander S. Neu believes that although the composition of the EP has not changed significantly, the AfD and the BSW have come to the fore and will continue to do so, especially in the context of migration, social security and relations with China and Russia.

Neu argues that the “unipolar” era in the international system is over and in this context, the “right-left” distinction can hardly be mentioned, however, in domestic politics, especially in economic policies, the BSW is on the left and the AfD on the right, and in this context, these distinctions are still valid. It is also noteworthy that the AfD, which is known in our country only for its stance against immigration, acts as a typical neoliberal party as an economic platform. Moreover, it is also important to question the extent to which it is possible to switch voters between the AfD and the BSW.

Let me start with the echoes of the European elections in the continent. Lots of people seem to worry about the rise of the so-called “far-right” across Europe after the elections. What would you say about this phenomenon? After all, it seems that the European Parliament’s “centre” remains intact.

Yes and no. Yes, the majority is still with the conservative party and social democrats and liberals, of course. But the result of the elections shows one thing. Europe goes to the right side more than ever before.

And we have two different dimensions. We have the political sphere and the media sphere, fighting against AfD, fighting against the right wing political parties like Le Pen, Meloni, on one side. But the other side is we have a population, for example, in Germany, but not only in Germany and all over Europe, who is more and more worried about migration and would try to give an answer to the established political parties saying, no, we don’t want to have more migrations. We have a lot of criminal acts in Germany, in France and so on. And we need more control over Germany, over France, not to have so many migrations.

And their political is AfD, for example, or Marie le Pen in France, for example. We had a long and a lot of anti AfD campaign driven by the media and by the government and so called NGOs in the last couple of months. But the result is still good for IfD.

But what do you think about Europe’s future, for example, the Ukrainian war, the Green Deal, or about migration? Could the new European parliament change its course about those policies?

The majority is still in the hands of the green party, conservative party and liberals. So there will be no big change. Nevertheless, the air is becoming thin for these political parties regarding Ukraine. More and more people see that the war between Ukraine and Russia, and the intervention of the west, for example, the European Union and Germany and America is not good for the people in Germany and Europe. More and more people don’t want to be involved in this war. And even some people have some understanding of the Russian position. In Germany, particularly in eastern Germany, we can see this phenomenon.

Green Deal. Yes and no. The Green party and other parties made a very hard and aggressive campaign for the new Green Deal. And many people are fed up with this because they lose more and more money because of this. And the Green party is not doing a good job. So the new green deal is indeed in danger because of this aggressive way some political party, German government are acting.

And migration, the last question. Yes, in Germany, but not only in Germany, in Scandinavia, in France, more and more people are very angry about this massive migration we have, in particular in 2015. You probably remember when people from Syria, Iraq, even Kosovo migrated between February and Autumn 2015, and more than 1 million came to Germany. And Councillor Merkel said at that time, we will achieve this, we will make it, but it is not done.

We have a lot of problems. Competition between people who are looking for work, who want to have more salary or less salary, competition with migrant people, competition in the question of flats and houses and so on. So we have a very tense atmosphere in Germany, and not only in Germany, in Austria, in France, in Italy. The tension is increasing because of this. As the German government says, oh, it’s everything okay, but nothing is okay.

But also the SPD government tries to harden their stance against migration…

Verbally yes, but operationally no. Social democrats and the Green party, they are very open to migration. And this is a real problem.

People see this and they don’t believe social democrats anymore. This is one reason why the Social Democrats had lost almost 2% and the green party almost 9% the last election. Because nobody believes them anymore.

One of the most remarkable things about elections is the rise of AfD in Germany. I saw an article on Die Welt that claims AfD is the new Arbeiterpartei in Germany. Also, there are some statistics about the german blue collar workers who voted for AfD. How do you evaluate the rise of AfD? Is German politics now headed towards a far right takeoff? Or what platform does AfD represent? Because we know that some other right-wing parties, for example, the French National Rally, distanced itself from it.

Thereafter we observed, as I said before, we have seen a huge campaign against AfD done by the German government, NGOs and media. But nevertheless, AfD is still strong and got even a better result in this election five years before, and in particular in eastern Germany. People don’t believe these established political parties anymore. They believe more in AfD.

And I look at some surveys. Criminality. Too many migrants came to Germany. These are the questions people are engaged with. And AfD is very, very smart to use exactly this question and to try to give answers.

For me, it’s interesting because AfD is a neoliberal party, like social democrats, like the Green party or the conservative party.

Nevertheless, the working class is voting even more for AfD than, for example, Sahra Wagenknecht Alliance. At the moment, at least, so many people, people of the working class, don’t even understand the economic and social questions and topics of AfD. The main topics they see are migration, migration, migration. And AfD is solving this with the agendas they have.

So in the end, the working class is not voting in their own interest. Because AfD is a neoliberal party. It’s a party for rich people. It’s a party for people who have a high academic level, who have money and so on and so on. It’s not a real working party, according to their manifesto.

It’s very important because lots of people also in Turkey do not know about the AFD’s economic or political stance. Also in Turkey we have a migration question, as you know, and some anti migration parties are now establishing in Turkey. But still, as you say, they have liberal economic platform. And it’s interesting here that you mention the AfD’s neoliberal economic program.

Yes, it is. Alice Weidel is a typical neoliberal lady. And she comes from the western Germany.

You have to see that AfD is a little bit split in two parts. Eastern Germany Afd and western part Afd. Western Germany is more neoliberal. Like Alice Weidel. Eastern Germany is indeed more social oriented. Tine Chrupalla, the co-chairman, is more socially oriented. But nevertheless, the manifesto, the program of this party is typical neoliberal.

And also in eastern Germany, the CDU, the establishment party of Germany, the Christian Democrats are now the second party in the eastern part of Germany. And they came first in the whole of Germany. So how do you evaluate the CDU’s rise? Because the party, the Christian Democrats, are also pro-Ukraine. They want to send arms to Kiev and they want to continue the war against Russia. And also they cut the Merkel era policy regarding Russia and cheap Russian energy. Why did people choose CDU when it is also a war party?

This is probably the most interesting question you can raise. I have never understood the German political behavior of the population regarding voting for this or another political party.

CDU is doing exactly the same thing that social democrats are doing regarding phones regarding Ukraine and so on. Regarding America, the transatlantic position, CDU is exactly doing the same like the Greens, like the liberal party. And people say, okay, traffic light, we are fed up, we vote for CDU. This shows to me people are not really interested in reading and understanding politics. Otherwise they would vote for another party. Let’s say for BSW, for the animal protection party, for AfD, whatever. We have a lot of political parties. More than 40 parties in Germany can vote for.

This is the traffic light coalition. Doesn’t work. CDU will be the next government. After two years, oh, I will not support CDU. So I will vote for the Social Democrats again. So hip hop between one party to another party, from another party to the first party, but not a real alternative.

And this shows to me that people are not really interested in political programs. They don’t read, they don’t understand them. They just say, oh, there’s a party from last time, it’s better now to do the same. And this is what I don’t understand, really. This is for democracy. It’s a really bad position to work like this.

So do you think, will there be a snap election in Germany?

No, I don’t think so. It’s now less than two years until the next election, in September 2025. And what I have understood during my time in parliament, people like to be in parliament, like to be in their position to earn money, to get attention from the media and so on. No, they will stay together as the traffic light coalition, even if they don’t achieve anything anymore. They will stay until the last day. This is a human behavior, at least in Germany. I don’t think that the traffic light coalition will split up, and will finish before the end of term. It won’t happen.

So the state elections in September; Thüringen, Saxony and Brandenburg…

These are really important indications, like the European Parliament election. Very important indications for what would be the result most probably in 2025 on German level.

Let’s talk about new parties. Sahra Wagenknecht Alliance, BSW. After the elections, Wagenknecht claimed that the new party has now proved itself and the new aim of BSW is to be represented in state governments in September state elections. How do you see the future of this party? Could it be an alternative for AfD, especially in eastern Germany?

No, not so much. The most voters who came to BSW are from the CDU and the social democrats. 1 million voters came from both parties and just 140,000 voters came from AfD. So to say that BSW will take the voters for AfD is not verified, at least not verified regarding this election.

Last weekend the people who voted for AfD, for example, 46% said migration was their first topic. And just 17% was saving peace. Regarding BSW, things exactly turn around. Saving peace was 37%. And migration, just 25%. So there is no real competition. They have different understandings.

So the two parties now are establishing two separate voter bases.

Yes. This is my impression after this election. And for example, social security, welfare and so on, BSW voters 22%, AfD voters just 15%.

BSW is indeed a left party. And this is the debt of the original Left Party. I was a member until November last year when I left this party. A lot of people left the Left Party, and the Left Party is more or less dead. And BSW is replacing this Left Party more and more.

So do you think BSW can be represented in some state governments?

After the elections in September, we have a similar situation like the AfD. AfD is in eastern Germany much stronger than the western Germany. And BSW is stronger in eastern Germany than in western Germany. So in my opinion, these three elections taking place in September in Thuringen, in Sxony, in Brandenburg, will be a big victory for BSW and AfD.

And it seems that the Die Linke is now finished.

It’s finished regarding the question of the political party, Die Linke. But the idea of the left is not finished. It will survive in the name of BSW.

But you know, when I read BSW leaders’ statements, it seems that they are no longer dividing the political spectrum as left and right. Also, Sahra Wagenknecht said, after the elections, the people are not interested in the left and right.

I think we need to differentiate the internal questions like crime, like economic questions and social questions. There is still between left and right categories to think about.

But the international questions regarding Russia, Ukraine, China, United States-transatlantic relationship, there is no, indeed no category left and right anymore. We have left parties, or more or less left parties and conservative parties were completely transatlantic, completely subordinate to the United States, completely serving the United States, not using their own national interest.

And we have other parties, like BSW or AfD, completely different in internal questions. But they are the same regarding some international questions. BSW, for example, wants to have peace and a good relationship with Russia and China. So we have a new epoch. The unipolar world order is over. AfD sees a similar future. So this is an international question and there’s no left or right categories anymore. But internal questions, there are still [left and right].

Then we could say that for incoming elections, like state elections or Bundestag elections, BSW is going to pursue peace politics and also social security policy in domestic politics. And AfD is more and more going towards migration politics.

Yes. But migration is even a topic for BSW, not as strong as AfD. But BSW also says we have to control the migration to Germany and to Europe. It’s too much. We need to control.

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INTERVIEW

‘After the elections, the EU will become more centralised, more militaristic’

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The European Parliament (EP) elections held on 6-9 June seem to have caused great repercussions both in and outside the EU. The debate revolves mainly around the rising ‘far right’ in Europe. The rise of the Alternative for Germany (AfD) as the second party in Germany and the National Rally (RN) as the first party in France has revived fears of a return to the Europe of the 1930s.

However, while the ‘centre-right’ European People’s Party (EPP), which we can call the former EP centre, has also increased its strength, the balance of forces within the EP has remained almost the same. Moreover, in some countries we observe a decline of right-wing forces, let alone a particular rise in the ‘far right’.

At this point, rather than the rise of the far right, we may be heading towards a hybrid regime where the centre and the right are more intertwined, where political differences are policed by militarisation and centralisation, and where the election results in the UK and the US will also have an impact.

Journalist Ben Wray, editor of Brave New Europe, also analyzes the balance of power in the EP after the elections and emphasises that he does not expect a radical and rapid change in Brussels’ policies. In his view, the EU will become more militarised, austerity will return to the continent and the anti-EU discontent of the European people, including the working class, will grow.

In this context, according to him, it is important not to exaggerate the rise of the ‘far right’, as all mainstream politicians already sound like ‘far right’ politicians.

It seems that the balance of forces in the European Parliament have not changed so much, but some important EU countries like France and Germany face substantial national changes. What would you expect for the EU after the elections?

To briefly summarise the result of the election, the far-right is stronger and the Greens and liberals are weaker, but the overall balance of power is not radically altered in the European Parliament.

The far-right has made significant advances in western Europe, especially in Germany and France, while sliding back somewhat in Scandinavia and central Eastern Europe. Overall, the two far-right groups in the European Parliament have 13 seats more than they did in 2019.

This slightly underestimates the strength of the far-right, because German far-right group AfD also gained six seats (up to 15) and is non-aligned. If you combine all of the far-right forces together, they have a similar strength in the Parliament as the second largest group, the centre-left Socialists and Democrats (S&D).

The Greens and liberals were the big losers from this election, with both parties losing between a quarter and a third of their seats in the Parliament. The largest group, the centre-right European People’s Party (EPP), has grown marginally, by nine seats (to 185), winning more than a quarter of all the seats in the Parliament. The smallest parliamentary group, The Left, has pretty much stayed where it was, dropping just one seat to 36.

Overall we can say that the European Parliament will take on a more right-wing flavour following this election, with two possible majorities forming.

One majority is what could be described as ‘the radical centre’: those committed to policies which maintain the neoliberal and atlanticist status quo. This consists of the EPP, S&D and the liberals. In combination, these parties still have a majority in the Parliament as they did in 2019, although that majority is narrower than it was previously.

It was this radical centre coalition which voted for Ursula Von Der Leyen, who is a German centre-right politician and thus part of the EPP group, to be President of the European Commission in 2019. Von Der Leyen has already indicated since the vote that she will try to hold this coalition together for her re-appointment to a second term as President which requires the support of the Council (the member-states) and a majority of the Parliament. That might be complicated this time for Von Der Leyen due to her avid support for Israel’s genocidal war in Gaza, which some Social Democratic parties in Europe are unhappy with, and corruption question marks which surround her.

The second possible majority is a right-wing alliance combining the EPP, the far-right forces in the Parliament and the liberals. Von Der Leyen has been cultivating such an alliance in recent years, building an alliance with Italian far-right Prime Minister Giorgia Meloni, especially on the question of refugees and border controls.

The problem here is that the two far-right groups are themselves divided over a number of key issues. For example, the group around Meloni is much more pro-Nato than the ‘Identity & Democracy’ group, which includes the French far-right party, National Rally, which has a different perspective on Ukraine. Other important dividing issues including EU enlargement and Europe’s relationship with China. The liberals will also not want to be seen holding hands with the far-right very often, so that’s another crack in this potential coalition.

What I think you will see is that Von Der Leyen, or whoever becomes the next President of the European Commission, will try to take advantage of these two different possible majorities in the European Parliament as and when it suits the EU machine to do so. When it is in there interest to move closer to the far-right the Commission will do it, in fact it already has done it on many issues. But the radical centre majority will be the most prominent one.

In conclusion, the EU will go on largely as before, becoming more centralised, more militaristic, and the return of austerity to the continent is also likely in coming years. That will only increase the discontent of millions of EU citizens, especially the working class, towards the EU.

Do you think, on major issues, such as the support of Ukraine, migration pact or the Green Deal, can the EU change its course immediately?

Let’s take each issue in turn. In Ukraine, the EU is a supporting actor in the conflict, largely following whatever diktats come from Washington. The United States and Russia hold the key to the Ukraine war. The US Congress has stepped up arms and funding to Ukraine and this has been followed by increased support from within Europe. NATO is also moving its red lines so that Ukraine can attack Russian territory with NATO weapons and logistical support. All of this is very dangerous escalations but it’s unlikely to be enough to stop Ukraine from losing the war. At some point there is going to have to be a peace deal negotiated which is likely to not be favourable to Ukraine, but surely it would be preferable to never-ending slaughter.

In any case, under Von Der Leyen’s leadership, the EU is becoming increasingly militarised and I suspect this will continue regardless of how the Ukraine war ends. Von Der Leyen’s whole campaign for a second term at the head of the European Commission has been about rearming Europe, playing up the idea that we are on the precipice of a third world war. This is extremely reckless but unfortunately there is not currently the sort of anti-war movement in Europe that is needed to stop this drive to imperial conflict.

On migration, the EU believes that its policy of externalising the EU’s borders by paying handsome sums of cash to Turkey, Egypt, Tunisia and all the other countries on its southern border is the right one because it means the EU doesn’t have to get its hands dirty with the ugly business of repressing desperate migrants and refugees. But the problems which drive people to migrate towards Europe – including climate breakdown and war – are only getting worse, so the movement of people from the global south to global north will only grow.

On the Green Deal, it’s interesting to compare and contrast now to the last European elections, in 2019. At that time, there was a youth movement marching all across Europe for climate action, Greta Thunberg was on all of our TV screens and it seemed like no politician could ignore the importance of the climate issue. Fast forward five years, and despite the problem of climate breakdown only intensifying, the political climate is completely different, and mainstream politicians are not only ignoring their prior climate commitments, they are publicly campaigning to scrap net-zero policies in an attempt to win back voters from the far-right.

In this context, the EU has already severely watered down its Green Deal proposals, which in any case were not nearly ambitious enough. I would expect that this watering down will continue further given the election result. With China making rapid advances in clean energy technology and emissions reductions, Europe is quickly moving from a climate leader to climate laggard, a shift which will further entrench Europe’s position as a declining and increasingly irrelevant force in the world.

It is a common analysis that the “far-right” is now leading Europe. Is there really a rise of the ‘far right’ in Europe, including in the United Kingdom? What should we expect from the British and American elections?

On the one hand, it is important not to exaggerate the rise of the far-right. Not only is their electoral support not close to a majority across Europe, but as a political force they are incoherent and inconsistent, with no clear programme to transform the continent.

On the other hand, it is evident that the far-right is leading Europe currently in the sense that it is dominating the debate to such an extent that the centre-right increasingly takes on all of the political talking points of the far-right as their own. On immigration and attitudes towards Muslims and the Islamic religion, many centre-right politicians sound just like far-right politicians today.

We see this in the UK, where Conservative Prime Minister Rishi Sunak’s big election campaign promise is to ‘stop the boats’ – migrants trying to cross the English Channel – and to send the migrants who do cross to Rwanda. This could easily be the words of a far-right politician. In the United States, Donald Trump has managed to fuse the far-right and the centre-right together through his domination of the Republican party.

It’s very clear that the Labour Party will win the election in the UK in July. It’s likely to be a historic defeat for the Conservatives, one of their worst in modern times. The problem is that Labour under Keir Starmer’s leadership does not represent a genuine alternative to 14 years of Conservative rule in Britain, in which time living standards have fallen significantly.

In the United States, it is very difficult to say at this moment who will win the election. US President Joe Biden has massively discredited himself with his handling of Israel’s barbaric war in Gaza. But I’m not sure many Americans have changed their mind about Trump four years after he lost the Presidency to Biden in 2020. Whoever wins, the contest between two geriatric politicians shows how hollowed out democracy is in the United States, and neither the Democrats or the Republicans represent the socialist, working class politics which Americans desperately need.

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INTERVIEW

‘The Development Road is also promising for trade between Europe and Asia’

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Atheer Dawood Al-Ghreiri, Minister of Trade of Iraq spoke to Harici: “The Development Road Project is a reality and a promising future for the road and form of trade between Europe and Asia in addition to the Iraq market”

Iraqi Trade Minister Atheer Dawood Al-Ghreiri answered the questions of Dr. Esra Karahindiba from Harici. The Iraqi Minister made evaluations on the Development Road Project, Türkiye-Iraq relations, other foreign investments in the region and the country’s economy.

What are your projections about the Iraqi Development Road Project? Turkish top diplomat Hakan Fidan mentioned about the project during his visit in China. Türkiye is attaching great significance to the project. What does it mean to Iraq?

It’s a very important project. Today, Türkiye has become a part, an essential part, after the signing of an agreement with Iraq and Memorandum of Understanding between Iraq, Qatar, the United Arab Emirates, and Türkiye. The Development Road project is a reality and a promising future for the road and form of trade between Europe and Asia in addition to the Iraq market considering Türkiye is the third largest trading partner with Iraq today.

Can you tell me about Iraq and China trade relations? Talking about the project’s linkage to China’s Belt and Road project and the Middle Corridor… After the American invasion, Iraq’s image was totally destroyed. Do you think Iraq will be the star of Middle East again with this project and its benefits?

The deals between two countries are still good, and the trade relations between Iraq and China are very large. The largest role is played by most Iraq consumption. It is the foreign trade volume of goods in general is 73 billion dollars. The lion’s share or the largest share in it is from China.

Meanwhile, we are also focusing on the volume of trade and its development between Iraq and Türkiye. Iraq has the best relations with all countries, and the visit of the Turkish President Recep Tayyip Erdoğan was a proof of this. Establishing a real footprint for signing important memorandums of understanding that will develop this trade.

What are the roles of UAE, Qatar, Türkiye and Iraq in the project? How is the 20 billion dollars investment shared among the countries? 

This is very early to speak about the shares, but the main partner for Iraq is Türkiye. Of course, we will get support from Qatar and the United Arab Emirates. 

Türkiye promised anti-terror operations in Sulaymaniyah in this summer and Iraqi support is promised to Türkiye against PKK and its branches. So, if terror will be erased from Iraq, how this will affect trade and international relations and the peaceful environment of trade?

 Iraq is not satellite because of the new agreement. I think because the new government is very effective. Iraq has safety and more development. After the visit of President Erdoğan, a new relationship is established in general especially with trade.

This government decided to have positive role and to very welcome for any country which wants to do investment in Iraq. Iraq is really keen, through actual steps, to be a positive element for the region, and indeed it is. It started to be a mediator. Nowadays, Iraq is in the middle between Türkiye, Iran and the USA and between USA. And regarding what happens in Gaza, Iraq supports the people in Palestine. It’s just wants to take a positive role for all conflicts in this area, you know the Middle East. The main target of this government is just the development the environment of investment and business. And the first thing is of course the business, foreign trade.

What’s your latest strategies for growing Iraqi business, foreign business around the region and globally?

Today, Iraq is very different than Iraq before 2003, because before then political system was socialist, but now turned into a capitalism. Private sector was not allowed to enter the market. There were limited sectors. After 2003, Iraq and the economy have changed. Businesses changed. Contracts changed. That’s why we have many partners in private sector from neighboring countries and foreign countries. And those companies are allowed to operate inside Iraq and make business under the control of government. Today we have dozens of private banks. We started banking and money transfer and all these things which were not allowed before 2003. Nowadays, business in Iraq has changed. The map has also changed. We have more and more safety and stabilization. You know, this government started before 2 years that the they want to finish terror all because you know, you were suffering from the ISIS problems. And nowadays you have more than 85 Turkish company which work in Iraq safely. There is no problem during this last two years.

But the transformation is hybrid after the exceptional circumstances that Iraq went through over the past 20 years. Now we have begun with reforms, legislation and a draft law for real economic reform, giving a major role to the private sector and private companies to play this role. Therefore, they are much worthier than the public sector. The government is to give a major role to the private sector and improve the business environment and digital and electronic transformation, eliminating corruption, bureaucracy and red tape, which in fact mars every process or hinders every process of growth or development in Iraq. So, we started with real steps, and all the concerned institutions indicated that, and many countries pointed out the success of Iraq and it began with real steps towards safety and industrial cities soon, God willing, the first of which is.

Last question… Do you want the Americans to stay or to go? 

Any country due to the interest of Iraq is welcome. It does not matter if it is America or not. The US is a friendly country. We do not look at America as the terrorist country. It is also a partner. We have many agreements with the US and China. We have to respect each other. Also for equal international relations, there is no difference between any countries.

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