EIR Daily Alert Service, MAY 25, 2018

FRIDAY, MAY 25, 2018

Volume 5, Number 104

EIR Daily Alert Service

P.O. Box 17390, Washington, DC 20041-0390

EDITORIAL

Humanity’s Strategic Battle between Old and New Paradigm Evident in Italy Developments

May 24 (EIRNS)—Nowhere is the strategic battle between the old and new paradigms more evident than in European responses to developments in Italy where the assumption of a new Lega/M5S government, two of whose key platforms are the Glass-Steagall and development bank proposals embedded in the Four Laws of EIRFounding Editor Lyndon LaRouche, is provoking wild hysteria and vicious attacks from the defenders of the rotting, imperial Trans-Atlantic financial system.

As Schiller Institute President and founder Helga Zepp-LaRouche remarked in her international webcast today, this is quite extraordinary. Italy is being threatened with financial warfare, regime change and warned by other EU members that it will be “taught a lesson” if it dares proceed with anti-euro policies—as if Italy would somehow be responsible for the financial crisis already underway should it act to defend its own sovereignty and the wishes of its population.

What must be understood, Zepp-LaRouche said, is that the election of the Lega/M5S government is not an isolated phenomenon, but rather “is a long arc of revolt against the neo-liberal policies which were expressed in the Brexit, in the election of Donald Trump, in the ‘no’ to the Italian referendum changing the Constitution last year, in the Austrian election, and now in the Italian election—these are all the results [showing] that populations do not want to submit any longer to these completely unjust austerity regimes, which only benefit the banks, the speculators and the rich, at the expense of the masses of the population.”

It is revealing, Zepp-LaRouche said, that the most hysterical attacks on Italy are coming from those “who have made their gigantic, virtual fortunes … with this highly speculative system, the neo-liberal system connected with wars based on lies, with so-called ‘humanitarian interventions,’ regime change, color revolution. That whole model right now, is really what is not functioning any more.”

This really goes to the heart of the fight between the defunct old paradigm and the New Paradigm, “which is focussed on the common good of the people for economic growth,” Zepp-LaRouche emphasized. See the Italian developments as “a golden opportunity to get rid of the kind of extremely dangerous speculative excesses, and go for a unified Glass-Steagall separation of the banks as a first step to save the system in this way,” she proposed. Otherwise, “we are on the verge of a new financial crisis. We are sitting on a volcano.” The changes now underway at Deutsche Bank, which is beginning to divest itself of its toxic City of London-based investment bank operation, are instructive, she noted, because Deutsche Bank is the largest derivatives bank in the world and teeters on the brink of bankruptcy.

Directly related to this are the British intelligence-directed ‘Russiagate’ operations against President Donald Trump, a virtual spider’s web of MI6, MI5, GCHQ, working with Barack Obama’s FBI/CIA thugs to overturn the 2016 election. These “Spygate” operations, details of which are now being publicly exposed, were launched to ensure the U.S. President couldn’t follow through on his plans to have good relations with Russia and China or pull the U.S. back from involvement in foreign wars. And neo-con elements in his administration are constantly trying to lure him back, Zepp-LaRouche warned, which makes today’s cancellation of the June 12 summit with North Korean leader Kim Jong-un very unfortunate. But, Zepp-LaRouche underscored, “if Trump can be freed from this spiderweb, I think you will see he will be in a much better position to carry through with his intentions than you have seen so far.”

One way to cut through the Russiagate garbage, Zepp-LaRouche concluded, is to ensure that Trump and Russian President Putin hold the summit they discussed by phone back in March. Sign the petition to this effect on the White House website, she recommended, to ensure that 100,000 signatures are collected by June 20. Further, “make sure this webcast becomes better known and is being spread, because we are in an urgent need of a political discourse. Where should mankind go? and how can we organize the world so that it’s safe and beautiful for everybody to live in?”

COLLAPSING WESTERN FINANCIAL SYSTEM

Conte Gets Mandate as Italy’s Prime Minister; Savona Expected To Be Finance Minister

May 24 (EIRNS)—If Paolo Savona becomes Italy’s Finance Minister, as the Lega wants, the party for the EU is over. Savona, 82, is an establishment figure with government experience who in recent years turned his originally pro-euro position into a strongly anti-euro one. Savona has demanded Italy develop a Plan B, in case it realizes that staying in the euro is damaging to its national interests.

Two years ago, Savona commented on EIR Founding Editor Lyndon LaRouche’s proposal for saving Deutsche Bank in a private email: “I agree that we need an urgent plan for the European banking system, but the problem has deeper roots. The European architecture is badly built, and this will lead us from one crisis to the next. Probably the euro and the common market will survive, but weaker countries will be taken over by mere protest [political] forces, without solving the problem but just transferring it to the stronger countries.”

Savona waged a battle against the euro together with his university Prof. Giuseppe Guarino. Due to his positions, he was often ostracized by mainstream media, and only the website Scenarieconomici.it would publish some of his articles. Scenarieconomici.it is run by Prof. Antonio Maria Rinaldi, who was a student of Savona’s.

Nevertheless, on Dec. 27, 2017, Corriere della Sera published an article by Savona and Giorgio La Malfa, in which they urged the Italian government to “ask that Germany take the initiative of rethinking the single currency.”

The media portray him as a dangerous anti-German, and reprinted an older interview with Savona in which he compares the EU and German policy to the Nazi Funk plan. The German Manager Magazinwrote: “This 81-year-old-man is the real Euro-shock.”

Savona himself has issued no statement, but he has reportedly resigned from his current job in expectation of joining the government.

Yesterday, Giuseppe Conte received a mandate from President Sergio Mattarella. He will now form the government and go back for the swearing-in ceremony, followed by a confidence vote in the Chamber of Deputies and in the Senate.

Thus, the campaign started by the New York Times to Watergate Conte, alleging that he “embellished” his curriculum vitae failed.

Conte has a respected reputation as a lawyer, but is utterly inexperienced in politics. Thus, people expect that he will be a figurehead steered by the M5S and Lega heavyweights. Depending on the composition of the government, it will be clear which of the coalition partners will have gained more from the deal.

A key post to control Conte is the Undersecretary to the Prime Minister, a post which the Lega is expected to get, either for Giancarlo Giorgetti (if Paolo Savona gets the Finance portfolio) or Lorenzo Fontana (if Savona does not), in which case Giorgetti will become Finance Minister.

Lega head Matteo Salvini is expected to get the Interior Ministry, and M5S boss Luigi Di Maio the Labor Ministry. Di Maio also wants Industry and to merge the two, which is being negotiated.

The key post of Foreign Minister is expected to go to Giampiero Massolo, a former career diplomat, who has also chaired the domestic intelligence agency (2012-16) and is now head of the industrial firm Fincantieri.

It is not clear who will get the Transport and Infrastructure Ministry. The M5S has frightened everybody with their opposition to all infrastructure, and hopefully they won’t get it.

Deutsche Bank To Fire Thousands—LaRouche Was Right!

May 24 (EIRNS)—Deutsche Bank announced today that it is the slashing “well over” 7,000 jobs—some say 10,000—of its current 97,000 employees, and its corporate and investment bank is expected to lose 25% of its employees, mostly, according to Associated Press, in London and New York.

More will come out of the bank’s annual general meeting held today, where an attempt to oust Deutsche Bank’s Chairman Paul Achleitner, failed by a 90-9% vote to keep him.

However, the reorganizing of Deutsche Bank brings up the question raised by EIR Founding Editor Lyndon LaRouche, who called for the bank to return to the sound commercial bank principles of its martyred Chairman Alfred Herrhausen, who was assassinated on Nov. 30, 1989, rather than continue the failed universal casino banking model.

That very question exploded last month, when Deutsche Bank captured financial headlines April 9, when the bank’s board officially dumped its British CEO John Cryan, and today announced massive layoffs as it downsizes it toxic investment banking division.

Cryan was immediately replaced by Christian Sewing, who has been with the bank since 1989, and who indicated he was downsizing the investment bank side of the business.  “The priority is to leverage our strengths and to allocate our investments accordingly. And at the same time, we will look to free up capacity for growth by pulling back from those areas where we are not sufficiently profitable,” Sewing told the Guardian April 9. “We will continue our activity as an investment and corporate bank and we will remain international but we must concentrate on what we really know well.”

The Guardian also quoted Octavio Marenzi of the consultancy Opimas that, “We can expect a much stronger emphasis on the domestic German market, with a focus on commercial and retail banking, and wealth management. It looks like the board of directors is capitulating on the investment banking front.” He further warned, “this will hit Deutsche Bank’s London presence particularly hard, where the bulk of its investment banking activity is based. We expect to see those activities right-sized or sold off, with attendant headcount reductions.”

STRATEGIC WAR DANGER

Trump Cancels Summit with Kim Jong-Un in Cordial Letter, and North Responds

May 24 (EIRNS)—President Trump cancelled his scheduled June 12 summit with North Korea’s Chairman Kim Jong-un today in a highly cordial letter which invited Kim to reconsider in the future. The President said he was cancelling because of the “tremendous anger and open hostility displayed in your recent statement.”

Trump was referring to a statement issued by North Korean Vice Foreign Minister Choe Son-hui, responding to Vice President Mike Pence.

In testimony before the Senate Foreign Relations Committee this morning, Secretary of State Mike Pompeo stated that North Korea’s attitude had hardened since his trip there two weeks ago, and that North Korea had refused all offers for pre-summit consultations.

In response to Trump, North Korean Vice Foreign Minister Kim Kye-gwan issued a statement carried by the North’s state-run Korean Central News Agency (KCNA), South Korean Yonhap agency reports. “We express our willingness to sit down face-to-face with the U.S. and resolve issues any time and in any format,” he said.

Kim said that the U.S.’s unilateral decision to cancel the upcoming talks demonstrates how serious the animosity between the Pyongyang and the U.S. is, which he said underlines the urgent need for a summit between the leaders of the two countries.

“Our commitment to doing our best for the sake of peace and stability for the world and the Korean Peninsula remains unchanged, and we are open-minded in giving time and opportunity to the U.S.,” Kim Kye-gwan said.

Before Trump cancelled the summit, Kremlin spokesman Dmitry Peskov told Russia’s NTV that Russia would be in contact with the North Korean government to help the negotiations process. Foreign Ministry spokeswoman Maria Zakharova said that Russian Foreign Minister Sergey Lavrov will visit North Korea in the near future in response to their invitation. Some wire stories report that this visit will occur on May 31.

Pentagon Rescinds China’s Invitation to Naval Exercises

May 24 (EIRNS)—“Defense Secretary Jim Mattis, after weeks of internal debate within the Pentagon, concluded that China shouldn’t be allowed to participate in the American-led biennial Rim of the Pacific exercise, slated to begin in June,” the Wall Street Journal reported yesterday.  The reason was that China had supposedly placed surface-to-air and anti-ship cruise missiles on some South China Sea islands. In recent weeks, American officials had asked the Chinese to remove the missiles, but they declined.

The decision to rescind the invitation came after more than a month of internal Trump administration debate about China.  The State Department had initially advised against rescinding the invitation.

At a State Department press conference with Secretary Pompeo yesterday, China’s State Councillor and Foreign Minister Wang Yi was asked about the withdrawal of the invitation, and answered, “We find that a very unconstructive move, nonconstructive move. We hope the U.S. will change such a negative mindset.”

He said further, “China is only building civilian and some necessary defense facilities on our own islands. That is the right to self-defense and preservation of every sovereign state.”

Before being invited to participate in the 2018 exercise, China had earlier participated in the exercises in 2014 and 2016.

U.S. POLITICAL & ECONOMIC

Law Professor Turley: Trump Was Right about Surveillance of His Campaign

May 24 (EIRNS)—Interviewed on Fox News’s Tucker Carlson Show May 21, George Washington University Law Prof. Jonathan Turley asserted that President Donald Trump has been proven right when he claimed a year ago that his presidential campaign had been under surveillance. The President’s “unprecedented” allegations are important and should be investigated, Turley argued.

Instead, there has been “willful blindness” as to the President’s accusations, Turley continued, pointing out that not only were people in Trump’s campaign under surveillance, but “it turns out that it was much broader than we thought.”

Referencing British/FBI operative Stefan Halper, Turley elaborated that “now you have an individual who was reportedly offered to be an advisor in a campaign, when he was an asset for the FBI or the CIA or both.” You can try to split hairs, as to whether this was an investigation or surveillance, he continued, “but from Trump’s standpoint, this is a legitimate issue. You can tell a victim this isn’t a mugging, it’s just a forced divestiture, but it sure feels like a mugging unless you can prove to the contrary.”

President Trump has a “legitimate objection,” Turley concluded, and “we should know the truth and facts.” To those who object, he demanded, “what are you objecting to?”

FBI Field Agents Ready To Reveal How Comey, McCabe and Obama Thugs Ruined the Bureau

May 24 (EIRNS)—The May 22 Daily Caller provides details on the interview conducted by former U.S. Attorney for the District of Columbia Joseph diGenova, with an unnamed active FBI special agent from the Washington, D.C. Field Office, who revealed that FBI rank and file officers want to be subpoenaed by Congressional committees so they can tell what they know about how former Director James Comey, former Assistant Director Andrew McCabe, former Director of National Intelligence James Clapper and the array of Obama administration thugs contributed to the FBI’s destruction.

Agents all over the country love the Bureau, diGenova reported, and are “sickened” that the Comey/Obama clique turned it into “a tool of political intelligence.” Agents fear coming forward as whistleblowers, as they would have no protection and could fall victim to vicious retribution from the Comey/McCabe leftovers at the Bureau. A Congressional subpoena would provide them protection and funding for legal counsel.

The message from diGenova’s interlocutor is that the rank and file want McCabe prosecuted to the full extent of the law, but also warn that the corruption of the Bureau runs “much deeper and broader” than just McCabe and Comey. DiGenova offers his own view that it will take a decade for the Bureau to recover from the damage done to it by the Obama thugs.

Drug Crisis in West Virginia Costs Lives, with Losses up to 12% of State GDP

May 24 (EIRNS)—The West Virginia Secretary of Health and Human Services Bill Crouch briefed the state legislature May 21 on the terrible impact of the drug crisis in the state. He told the Joint Standing Committee on Finance, that West Virginia loses $8.8 billion a year from the scourge, which at 12% of the state GDP, ranks the state worst in the nation by this measure. Ohio is the next closest state, with losses amounting to 5.32% of state GDP. The economies of these adjacent states have been smashed in terms of the destruction of coal mining, manufacturing, and related activity in the deindustrialized Great Lakes/Ohio Valley region.

Crouch went into the awful social cost. The impact on children is “stunning,” he said. Per capita, West Virginia removes more children from their homes than any other state. Of these, 84% must go to foster care, because one or both parents have a drug or alcohol problem.

The number of overdose deaths is soaring, going from 735 in 2015, to 887 in 2016, and 934 in 2017 (a preliminary figure).

Crouch reported how state programs help, such as providing emergency response measures, and adding beds to treatment centers. But the import of his briefing is that what must be fixed is the economic breakdown, and lack of livelihoods and a future for people.

In the protocol for equipping first responders to overdose cases with the antidote naloxone, more than 34,000 doses (2 mg) have been distributed to Emergency Medical Staff. This standby medication is concentrated in eight priority counties in the state, where drugs are the worst. Of these, two are in former deep coal country—Mercer and Raleigh; and four border western Pennsylvania, also in crisis.

The state also operates many other programs, from recovery residences, to a “Drug Free Moms and Babies” project. There are 12 counties targetted as high risk, where programs try to counter underage drinking and prescription drug misuse.

Chinese Foreign Minister Wang Yi and Mike Pompeo Committed To Strengthening Ties

May 24 (EIRNS)—During his stopover in Washington on his return home from the G20 foreign ministers’ meeting in Argentina, Chinese Foreign Minister and State Councillor Wang Yi met with U.S. Secretary of State Mike Pompeo on May 23 and held in-depth discussions on bilateral and regional issues.

Following the meeting, the press availability posted on the U.S. State Department website quoted Foreign Minister Wang, “We commend the strategic guidance that our two Presidents provide to the China-U.S. relationship, and we are ready to work to implement the series of consensuses reached by the two Presidents, including respecting each other’s major interests and properly handling of Taiwan and other sensitive issues. And we need to stay clear of disruptions and overcome difficulties and work together to ensure that the China-U.S. relationship will continue to enjoy sound and healthy development.”

Pompeo endorsed Wang’s suggestion of implementing any agreement reached as soon as possible. “The two sides should work to solve their trade imbalance, open their markets further to each other and protect intellectual property rights,” Wang also urged. “Thirdly, the two nations should properly settle their differences and remove obstacles that could stifle relations, Wang said,” reported Xinhua.

SCIENCE & INFRASTRUCTURE

Kazakhstan Ambassador Presents Eurasia Canal at Singapore Belt and Road Forum

May 24 (EIRNS)—The proposed Eurasia Canal connecting the Caspian and Black Seas was presented in a lecture at the Institute of the South Asian Studies in Singapore by Kazakhstan’s Ambassador Usen Suleimen. A report on the canal was featured in the April 13, 2018 issue of Executive Intelligence Review. According to Kazakhstan’s Foreign Ministry, the Ambassador showed how his country’s transportation and logistics potential is in line with the Belt and Road Initiative (BRI) and the opportunities for connectivity between Central Asia and Association of Southeast Asian Nations, or ASEAN.

In his lecture, Ambassador Suleimen described how Chinese President Xi Jinping made the announcement of the Belt and Road policy on Sept. 7, 2013 during his visit to Astana, which clearly signaled that Kazakhstan had an important role to play in the implementation of this mega-project.

He also pointed out that the “Nurly Zhol” infrastructure program of Kazakhstan’s President Nursultan Nazarbayev is very similar to the Belt and Road, as it also places emphasis on the development of transportation and logistics infrastructure in Kazakhstan. Its synergy with the BRI now has the potential to boost Kazakhstan’s economic and infrastructural development. “Kazakhstan has already created infrastructural conditions which are necessary to firmly link the trade routes of Asia and Europe through Central Asia. Using these advantages, Kazakhstan is able to liaise between the other Central Asian countries and ASEAN region,” Suleimen explained. He then described President Nazarbayev’s idea to build a ship canal to link the Caspian Sea with the Black Sea, which can open an access for Kazakhstan and other Central Asian countries—many of them landlocked—to the Mediterranean Sea and Atlantic Ocean, which was announced during the May 14 Eurasian Economic Union (EAEU) member states summit in Sochi, Russia.

The Eurasia Canal was also mentioned by maritime affairs journalist Harry Valentine, in an article on “Sanctions on Iran May Foster Alternative Trade Routes” in the Maritime Executive magazine on May 20. Valentine explained: “A lowland area lies between the Caspian Sea and Sea of Azov, where a future direct navigation canal may be possible and built in the same manner as the Suez Canal. Such a navigation canal would also benefit the economies of Turkmenistan, Kazakhstan and even Azerbaijan and Uzbekistan. It is unlikely that any navy would intercept trading vessels sailing across the Black Sea.”

OTHER

St. Petersburg Forum To Be Center of Bilateral Meetings with President Putin

May 24 (EIRNS)—Russian President Vladimir Putin will hold several crucial bilateral meetings on the sidelines of the St. Petersburg International Economic Forum today, including with French President Emmanuel Macron, Chinese Vice President Wang Qishan, and IMF Managing Director Christine Lagarde.

Putin will have “full-format” talks with Macron and “plans to exchange opinions on current international and regional issues, including the situation in Southeastern Ukraine, ways to resolve the crises in Syria and Lebanon, and problems related to the Middle East peace process,” Kremlin aide Yuri Ushakov said.

The leaders “plan to discuss the prospects of maintaining the Joint Comprehensive Plan of Action on regulating the Iranian nuclear program after the U.S. unilateral withdrawal from the agreement,” he stated.

Also on the agenda is the participation of France’s Total in the Arctic LNG-2 project and, according to Ushakov, Putin and Macron plan to “sign several inter-ministerial and commercial documents,” aimed at boosting cooperation between Moscow and Paris. He did not elaborate on their contents, as “the list is currently a work in progress.”

The two Presidents will also meet with the participants of the French-Russian civil society forum, the Trianon Dialogue, and be briefed on the results of its work and discuss future agenda on May 25. The Trianon Dialogue was created as a result of Putin’s discussions with Macron when he made his official visit to France.

In the Russian President’s meeting with Chinese Vice President Wang Qishan, they will focus on further development of Russian-Chinese relations, primarily economic cooperation, Ushakov said.

During the meeting with IMF leader Lagarde, “an exchange of opinions on the situation in the global economy is anticipated,” Ushakov explained.

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