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      The Bologna Attack of 1980: Italy’s Unhealed Wound

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      The clock struck 10:25 am on August 2, 1980, when a bomb exploded at Bologna’s Central Train Station. The attack plunged the city, known at the time for its left-wing politics and home to one of the oldest universities on the continent, into chaos. One of the deadliest terrorist attacks in Europe, the explosion had a devastating effect, killing 85 people and injuring over 200. After years of investigations, trials and false leads, Francesca Mambro and Giuseppe Fioravanti, members of the right-wing terrorist organization Armed Revolutionary Nuclei (NAR), were sentenced to life imprisonment in November 1995. Both, however, have always maintained their innocence.

      Many others were also put on trial, some of whom eventually received prison sentences for supporting the terrorists or for obstruction of justice. Among them were Licio Gelli, head of the infamous Propaganda Due lodge, and Pietro Musumeci, an officer in the Italian military secret service.

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      Despite these convictions, the Strage di Bologna, or the Bologna massacre, as the attack is now known, continues to be a source of heated debate in Italy, and serious doubts remain as to whether the masterminds behind the attack have really been caught. Every now and then, for example, the Italian judiciary issues new sentences in connection with the attack. Moreover, as recently as January this year, nearly 40 years after the incident, Gilberto Cavalli was found guilty of aiding and abetting Mambro and Fioravanti.

      The ongoing sentencing seems to confirm the widespread belief that we still do not know the whole story and that Italy has struggled to come to terms with this horrible act of terrorism. This state of seeming paralysis is symbolized by the fact that the main station’s clock has not been replaced and, as a reminder for future generations, still shows the exact time of the attack.

      A New Lead? The Palestinian Theory

      Former politicians, judges and magistrates, as well as investigative journalists and academics, have often added to the confusion and uncertainty surrounding the attack. Manifold theories about the true masterminds exist, alternately accusing left-wing terrorists, the Mafia or Gladio of having orchestrated the attack. In 2008, Francesco Cossiga, member of the former Christian Democratic Party (DC) who served as minister of interior between 1976-78 and held the title of prime minister between 1979-80 and president of Italy from 1985 to 1992, cast doubt on the culpability of the neo-fascists.

      In an interview with an Israeli newspaper, he argued that the Bologna attack was an act of retaliation by Palestinian terrorists because the government in Rome had violated the so-called Lodo Moro — a decades-old secret agreement between Rome and the Palestinian Liberation Organizations (PLO), in which the Palestinians offered to spare Italy from PLO orchestrated terrorist attacks in return for Rome’s diplomatic support and for allowing the PLO to roam freely in Italy. In July 2016, Rosario Priore, who has investigated right-wing terrorism in Italy for years, propagated Cossiga’s thesis in his book, “I segreti di Bologna: La verità sull’atto terroristico più grave della storia italiana” (“The Secrets of Bologna: The Truth About the Most Serious Attack in Italy’s History”).

      According to Priore, everything started in November 1979 when the Carabinieri arrested three left-wing extremists — Daniele Pifano, Giuseppe Nieri and Giorgio Baumgartner — and a Palestinian man, Abu Anzeh Saleh, for arms smuggling. When the Italian government declined to release Saleh, the Popular Front for the Liberation of Palestine (PFLP) under George Habash contacted Libyan leaders Muammar Gaddafi, who in turn asked the Venezuelan militant Ilich Ramirez Sanchez — better known as Carlos the Jackal — to retaliate against the Italians. The German Thomas Kram, a member of Carlos’ group, was duly dispatched to Bologna to carry out the bombing. However, Kram and Carlos denied any involvement, arguing that Kram was under constant surveillance by the Italian police as soon as he entered Italy and therefore could not have carried out the attack undetected.

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      Nevertheless, the question remains: Were the Palestinians really responsible, in one form or another, for the terrorist attack in Bologna? As time goes by and more and more archives declassify their documents and make them available for researchers, we may be able to get closer to the truth. In the meantime, however, as historians, we can try to sort myth from reality by contextualizing the events and critically examining the arguments presented. This approach reveals that the Palestinian theory is not as cut and dried as Priore and others claim.

      We do not currently have any evidence that the PFLP and its main leaders, Habash and Bassam Abu Sharif, or any other Palestinian group actually demanded the release of Saleh. Furthermore, bombings were not typically the first weapon of choice for Palestinian terrorists, who preferred kidnappings and taking hostages at the time. In addition, the Palestinians usually claimed responsibility for terrorist attacks they committed. Even Carlos, who worked for the PFLP until 1975, usually claimed responsibility for his actions.

      Moreover, neither the Palestinians nor the Italian government would have gained anything from a stand-off caused by the arrest of one person and the confiscation of weapons. Given the vulnerability of the Italian economy and its dependence on Arab oil, Rome continued to negotiate with rather than confront the PLO. In June 1980, for example, the European Council under Italian leadership issued a statement in favor of the PLO. In addition, in 1980, the various factions within the PLO — including Habash’s PFLP — supported Yasser Arafat’s more cautious and diplomatic approach toward the European countries.

      Why would the PFLP, whose leadership had been weakened when Habash suffered a stroke in 1980, go through all this trouble when there was really nothing to gain? Only when Arafat’s leadership role was challenged in 1982 did Palestinian attacks in Europe resume, with the Achille Lauro affair of 1985 serving as a prime example.

      Going back to Francesco Cossiga’s testimony, it seems that he used the 2008 interview primarily to present himself in a favorable light for the newspaper’s Israeli readership by rejecting any involvement in the pact between Rome and the PLO. He claimed that the secret service did not tell him any details about the agreement between Rome and the Palestinians, which, considering his positions at the highest level of government, is hardly convincing. In addition, by blaming foreign terrorists for the deadliest attack in Italy’s history, he avoided taking responsibility for neglecting and underestimating homegrown terrorism.

      Moreover, we should not forget the tensions between the leadership of what was formerly known as the Christian Democratic Party and the Italian judiciary. Cossiga’s interview shows his distrust toward the judiciary and might have also been an attempt to undermine their authority, by implying that they were unable to find and prosecute the real perpetrators of the attack despite all these years that have passed since.

      A Familiar Pattern: Right-Wing Terrorism

      Considering these points, it seems unlikely that the Bologna attack was an act of retaliation against Italy orchestrated by the PFLP. The extent of Gaddafi’s involvement might tell a different story, but only further investigation and declassification of documents will clarify that case. As it stands, all the concrete evidence and indications we do have point to Italy’s extreme radical right.

      The Bologna attack mirrored how right-wing terrorists have previously operated in Italy, particularly during the strategy of tension period between 1969 and 1974. Though skeptics may claim that the attack was designed to mimic the tactics of the extreme radical right and thus shift blame, it was not just the attack itself — the indiscriminate bombing without anyone claiming responsibility — but also the target that reminded many contemporaries of the chaos right-wing terrorists inflicted on Italy a decade earlier: placing bombs in or close to trains in the summertime, thus causing maximum civilian casualties.

      On August 4, 1974, for instance, right-wing terrorists of the group Black Order carried out an attack on the Italicus express, killing 12 people and injuring 48. The Italian singer and songwriter Claudio Lolli commemorated the attack in his famous song “Agosto”— August — which experienced a revival after the Bologna attack.

      One important aspect of the strategy of tension, however, was missing in 1980, thus implying that it was not just a copycat attack. In contrast to the early 1970s, the attempts to blame the Italian left for the attack were marginal and had not been picked up by Italy’s major newspapers. It shows that the perpetrators were able to adapt to a new socio-political situation. Blaming the Italian left, which had established itself as an integral part of the Italian political landscape in 1980, for the Bologna attack would have been a lost cause.

      That does not mean, however, that the right-wing terrorists did not attempt to influence Italian politics. Bombings, bloodshed and chaos on the streets usually favor conservative groups who claim to be the protectors of law and order. Why right-wing terrorists thought 1980 would be a good year to launch another campaign to push Italy further to the right can only be fully understood when we contextualize Bologna within Italian and European history of the time.

      Given the rising tensions between the West and the Eastern Bloc since 1979, anti-communism became a powerful recruitment tool for the radical right in Europe and again offered an opportunity to form alliances with the conservative milieu, including elements of the state secret services. Thus, it comes as no surprise that everywhere in Europe, extreme parts of the radical right started a new campaign of terror to influence the politics of their respective countries and push them further to the right. The campaign started in February 1980 and lasted, with pauses, at least until 1984-85, when the regime in Moscow began to noticeably decline.

      France and Spain experienced a series of right-wing attacks, and after Bologna, a bomb exploded at the Oktoberfest in Munich on September 26, 1980, killing 13 people. Given the latter’s proximity to the Bologna attack, rumors quickly circulated that some kind of connection must have existed between the Italian terrorists and the German perpetrator, Gundolf Köhler. In 2014, the German federal prosecutor general decided to reopen the case due to inconsistencies and omissions in the original investigations. Until July 2020, when the case was closed again, over 300,000 pages of evidence were examined and over 1,000 witnesses interviewed. In the end, however, the prosecutor could not find additional co-conspirators or backers as possible evidence was carelessly — some would argue deliberately — destroyed early on.

      He did, however, establish that Köhler indeed committed a right-wing terrorist attack to shape West Germany’s politics and was more than just a disgruntled youth. Köhler wanted to influence the political landscape in his country in favor of conservative change — after all, parliamentary elections in West Germany occurred only a couple of days after the bombing, and Franz-Josef Strauß, the candidate of the conservative CDU, was known for his anti-communist stance.

      Fluid Politics

      In Italy, the political situation in 1980 was also fluid, even though no general election was on the horizon. Francesco Cossiga formed a fragile coalition government in April 1980 between his Christian Democratic Party, the Republican Party and the Socialist Party under Bettino Craxi. In the regional election in June 1980, the Christian Democrats gained new seats, and right-wing terrorists might have thought that by destabilizing public order this trend could be pushed even further, maybe resulting in an end to the Socialist’s government involvement.

      Also, the city of Bologna as a target can be taken as a clear sign that it was the extreme radical-right milieu that sought to benefit from public turmoil: Bologna was a, if not the symbol in Italy for a successful, leftist local government: Since 1970, Renato Zangheri, a member of the communist party, has served as the mayor of the city.

      Last but not least, we should also consider the Italian extreme right-wing terrorist scene at the time. Internal rivalry between different factions within a terrorist milieu is often an important factor to explain a process of radicalization. While the strategy of tension of the early 1970s was dominated by a form of reactionary right-wing terrorism, the second half of the decade saw the emergence of a heterogenous right-wing “armed spontaneity” that showed similarities to the American idea of leaderless resistance of the 1970s and 1980s.

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      During the second half of the 1970s, former heroes of the strategy of tension like Stefano Delle Chiaie were sidelined. When the security apparatus was able to arrest exponents of the armed spontaneity faction, and when the Cold War tensions once again increased, the old guard of Italian right-wing terrorism might have seen an opportunity to regain control over the country’s radical-right extremist milieu.

      One last question remains, however: Why do the arrested right-wing terrorists deny all the charges? Should we believe them? Despite the fact that nearly everyone who was accused of having committed the terrorist bombing in Bologna has denied their involvement, the right-wing terrorists have another motif: Spreading terror and fear is a core aspect of every terrorist group. So, when they deny their involvement in the attack, which remained shrouded in mystery for decades, they increase a sense of unease, fear and terror — a feeling that something similar can happen anywhere and at any time because the true puppet masters are still out there, giving even those who have been accused of or arrested for a crime the opportunity to advance the group’s agenda.

      On this 40th anniversary of the Bologna attack, the citizens of Bologna will observe a minute of silence as they have done every year since 1980, commemorating the 85 victims whose names are enshrined on a plaque with the title “Victims of Fascist Terrorism.” Like each year before, the anniversary will be accompanied by newspaper articles and commentaries, continuing the controversial debates surrounding the attack. These discussions, however, should not distract from the fact that currently the judicial and the historical evidence point only to one group of perpetrators: right-wing terrorists.

      However, as long as theories and rumors circulate and documents remain classified, the victims and their families still await closure. Even if the terrorists might have not succeeded in their ultimate goal, the fear and terror they unleashed on August 2, 1980, still haunts Italy’s public memory — and Bologna’s main station, with its stricken clock — to this day.

      *[The Centre for Analysis of the Radical Right is a partner institution of Fair Observer.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      The Latest Version of Russiagate

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      The New York Times keeps slogging away at a four-year-old theme that it refuses to allow to die a natural death. Should we call it Russiagate 2.0 or 3.0 or 7.0? Whatever we call it, Russiagate has made its way back into The NYT’s headlines. Perhaps we should adopt the same convention as the health authorities who called the disease caused by the novel coronavirus COVID-19 because it first appeared in 2019. So, this could be Russiagate-20, although the number of minor versions that have appeared since the beginning of the year might make it Russiagate-20.3.

      The latest article’s title is “Russian Intelligence Agencies Push Disinformation on Pandemic,” followed by the subtitle, “Declassified U.S. intelligence accuses Moscow of pushing propaganda through alternative websites as Russia refines techniques used in 2016.”

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      The logic of the crime perpetrated by the recidivist known as Russia is well-known. The scenario is as familiar as any Hollywood remake. The authors of the article, Julian E. Barnes and David E. Sanger, want to make sure that the new variation on a story about Russian interference with American democracy does not suffer from the criticism leveled at anticlimactic events such as the Mueller report. Some will remember that in August 2019, The Times’ executive editor, Dean Baquet, embarrassingly admitted that the paper was “a little flat-footed” when it doggedly followed an editorial line that consisted of hyping Russiagate on the pretext that it looked “a certain way for two years.” It was the look that kept the story alive even though the narrative contained no substance.

      To make their point about the seriousness of this story, Barnes and Sanger take the trouble to cite, though not to name, “outside experts” who can confirm its reality. “The fake social media accounts and bots used by the Internet Research Agency and other Russia-backed groups to amplify false articles have proved relatively easy to stamp out,” The Times reports. “But it is far more difficult to stop the dissemination of such articles that appear on websites that seem legitimate, according to outside experts.”

      Here is today’s 3D definition:

      Dissemination:

      A synonym for publication that subtly suggests something underhanded, implying that the content of what is being broadcast consists of lies or disinformation

      Contextual Note

      What all these stories boil down to is a pair of simple facts with which readers should now be familiar. The first is the revelation that Russians and, more particularly, Russian intelligence agencies lie, just in case readers weren’t aware of that. The second is that the Russians are clever enough to get at least some of their lies published on the internet.

      For these well-known and oft-repeated “truths” to become newsworthy, the reader must believe something exceptional has occurred, following the man-bites-dog principle. The exceptional fact The Times wants its readers to understand is that, unlike the stories that looked “a certain way” for two years with reference to the 2016 US presidential election, this one is no remake. It is undeniably news because it is about the COVID-19 pandemic, which only became an issue this year.

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      To the discerning reader, the message is exactly the same as the idea behind the “flat-footed” campaign Baquet mentioned. But the content has changed. In both cases, processing the message requires that readers accept the implicit premise that Russians have a monopoly on lying or, alternatively, that that’s the only thing Russians know how to do. They are the only people on earth who invest in inventing contestable takes on the news and getting their lies published on the internet. There can be no legitimate reason to suspect any other nation, especially the United States, of telling lies about other nations and even managing to get them published on the web. How does The Times know that? Because its anonymous sources hailing from the very reliable US intelligence agencies have dutifully provided it with the data.

      If the story had focused only on COVID-19, it probably would not have justified a full-length article. Understanding this, the journalists sought evidence of Russian interference on “a variety of topics,” including a major one: NATO. “The government’s accusations came as Mandiant Threat Intelligence, part of the FireEye cybersecurity firm, reported that it had detected a parallel influence campaign in Eastern Europe intended to discredit the North Atlantic Treaty Organization,” Barnes and Sanger write.

      How extraordinary, Times readers must be thinking, that Russia might be trying to discredit NATO. That really is news, at least for anyone who has failed to pay attention to everything that has happened in Eastern Europe since the fall of the Berlin Wall in 1991. Do readers of The New York Times belong to that category of the deeply (or simply willfully) ignorant readers of the news? The Times has, after all, published a few articles at least since 1994 alluding to what historians now understand was a persistent act of betrayal by Western powers of the promises made to Russian leaders Mikhail Gorbachev and Boris Yeltsin not to expand NATO… before aggressively doing the contrary over decades.

      In an article in The Nation from 2018, the distinguished Russia expert Stephen Cohen highlighted the role of Western media — and The New York Times, in particular — in failing (or refusing) to cover that ongoing drama. It should surprise no one that even today, The Times not only neglects that vital bit of context, but it also uses its feigned ignorance to express its shock at the idea that the Russians might feel impelled to discredit NATO in Eastern Europe. This is not a case of Russian meddling in US elections. It’s an attempt to limit the damage the Russian government feels has resulted from Western perfidy.

      The latest Times article doesn’t stop there. It offers us this insight: “While the Mandiant report did not specifically name Russia and its intelligence agencies, it noted that the campaign was ‘aligned with Russian security interests’ in an effort to undermine NATO activities.” In other words, the reporters admit there is no direct evidence of Russian involvement. They simply expect Times readers to conclude that because there appears to be an “alignment,” Russia is to blame. This is a perfect encapsulation of everything that took place around Russiagate. Alignment is proof of collusion.

      Historical note

      During the Cold War, Americans were thrilled to find their vocabulary enriched when the word “propaganda,” derived from Latin, was imported from their enemy, the Soviet Union. The term literally means “what is to be propagated.” The Soviets used it as the official term to describe their communications operations modeled on the same logic as the “voice of America.” In both cases, it was all about teaching third parties why their system was better than their opponent’s.

      Americans sneered at the dastardly evil concept of propaganda. They clearly preferred the idea of PR (public relations). This was about the time that Vance Packard’s best-seller, “The Hidden Persuaders,” revealed how — as The New Yorker described it at the time — “manufacturers, fundraisers and politicians are attempting to turn the American mind into a kind of catatonic dough that will buy, give or vote at their command.”

      The monumental effort of Madison Avenue stepping in to dominate a rapidly expanding economy conveniently distracted most people’s attention from the magnificent work the CIA was undertaking across the globe in the scientific (or pseudo-scientific) dissemination of misinformation. The more Americans suspected advertising was lying to them, the less concerned they were by the skullduggery of the military-industrial complex and its intelligence agencies. It clearly went well under their radar as they focused on consumer pleasures.

      That gave the US a double advantage over the Soviet Union. It had two powerful industries working in parallel to feed a regular diet of lies to the American people, whereas the Soviet Union had only the government to supply them with glaringly obvious lies. The Russians were already beginning to receive its messages with growing skepticism. The US enjoyed another advantage to the extent that the fun of advertising and the pleasures of the consumer society took the sting out of their growing awareness that they too were being constantly lied to.

      Can there be any doubt today that The New York Times is committed to propaganda? Like most of the media sympathetic to the Democratic Party, it not only accepts uncritically the “assessments” of the intelligence community, but it also amplifies its messages. It even extrapolates to draw conclusions they dare not affirm.

      If the notion of dissemination has a negative connotation linked to the idea of propaganda, The New York Times is a master disseminator.

      *[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Click here to read more of The Daily Devil’s Dictionary on Fair Observer.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      What Has COVID-19 Done to Small Businesses?

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      Small and medium-sized enterprises (SMEs) are businesses with revenues, assets or employees below a certain threshold. SMEs are important to the health of any country as they tend to form the backbone of the economy. When compared to large enterprises, SMEs are generally greater in number, employ far more people, are often situated in clusters and typically entrepreneurial in nature. They drive local economic development, propel job creation and foster growth and innovation.

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      According to the World Bank, SMEs represent about 90% of businesses and 50% of employment worldwide. In the United States, 30 million small businesses make up 44% of GDP, 99% of the total businesses and 48% of the workforce, amounting to 57 million jobs. In India, the SME sector consists of about 63 million enterprises, contributing to 45% of manufacturing output and over 28% of GDP while employing 111 million people. SMEs in China form the engine of the economy comprising 30 million entities, constituting 99.6% of enterprises and 80% of national employment. They also hold more than 70% of the country’s patents and account for more than 60% of GDP, contributing more than 50% of tax collections.

      Different Countries Define SMEs Differently

      Though most experts agree on the crucial role SMEs play in any economy, the definition of an SME varies by country. In the US, the Small Business Administration (SBA) defines SMEs broadly as those with fewer than 500 employees and $7 million in annual receipts, although specific definitions exist by business and sector. Annual receipts can range from $1 million for farms to $40 million for hospitals. Services businesses such as retail and construction are generally classified by annual receipts, while manufacturing and utilities are measured by headcount. In June, the Indian government revised its SME definitions, expanding the revenue caps on medium and small enterprises from $7 million and $1.5 million to $35 million and $7 million respectively. In the United Kingdom, a small business is defined as having less than 50 employees and turnover under £10 million ($12.7 million), whereas a medium business has less than 250 employees and turnover under £50 million. 

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      Proper definitions matter. If SMEs are classified well, their access to capital and other resources can improve. They can apply for grants, get tax exemptions, collaborate on research with governments or universities or access other schemes. This gives SMEs better opportunities to survive and thrive.

      Since SMEs tend to be the biggest employers in most economies, a good policy to promote them creates jobs and develops worker skills. Furthermore, proper definitions enable governments to focus their efforts regarding SMEs and level the playing field for them vis-a-vis large corporations.

      Given the scale and nature of their business models, SMEs operate at the mercy of vagaries of the economy, geopolitical events and local policies. They battle competition from multinational giants, volatile cash flows, fickle customers, demanding suppliers and constantly churning employees. But the COVID-19 pandemic has crossed all boundaries. While the 2000 crisis was a dot-com bust and 2008 was a collapse of the financial systems, 2020 is clearly the SME crisis. It is Murphy’s Law at its extreme — anything that can go wrong has indeed gone wrong.

      The coronavirus crisis started off in early 2020 as a supply shock, which has now turned into a demand shock, impacting customers, employees, markets and suppliers alike. The consequences can be potentially catastrophic with the International Monetary Fund estimating that SME shutdowns in G20 countries could surge from 4% pre-COVID to 12% post-COVID, with bankruptcy rates in the services sector increasing by more than 20%.

      SMEs are bearing the brunt of the economic and financial fallout from the COVID-19 pandemic, not least because many were already in duress before the crisis. This could have a domino effect on the economy, given the pivotal role played by SMEs. Therefore, it comes as no surprise that most governments have sought to intercede legislatively with their fiscal might to ameliorate the predicament of SMEs.

      Indian and American Response

      It is instructive to note how different countries have responded to the economic crisis. India is a good country to start with. In early May, the government announced a 20-trillion-rupee ($250 billion) stimulus package called Atmanirbhar, equivalent to 10% of India’s GDP. It was a mixture of fiscal and monetary support, packed as credit guarantees and a slew of other measures. The centerpiece was an ambitious 3-trillion-rupee ($40 billion) initiative for SMEs, including instant collateral-free loans, subordinate debt of 200 billion rupees ($2.5 billion) for stressed micro, small and medium enterprises (MSMEs), and a 500-billion-rupee ($6.5 billion) equity infusion. Perhaps the largest component of the stimulus was the Emergency Credit Line Guarantee Scheme (ECLGS) that provides additional working capital and term loans of up to 20% of outstanding credit. 

      Although the scheme received positive feedback, the initial uptake was slow. On the supply front, bankers fretted about future delinquencies arising out of such accounts as the credit guarantees only covered incremental debt. On the demand side, SMEs were worried about taking on additional leverage when there is uncertainty about economic revival. Moreover, a 20% incremental loan may not suffice to service payrolls and operating expenses and keep business alive.

      Also, while this scheme addressed existing borrowers, the fate of those who are not current borrowers is unclear. While initial traction for the scheme was low, the recent momentum has been encouraging. The finance ministry reports that as of July 15, banks have sanctioned 1.2 trillion rupees ($16 billion), of which 700 billion rupees ($9 billion) have been disbursed largely by public sector banks, although private sector banks have joined in lately.

      Meanwhile, even the largest global economy has struggled with its SME relief program. In mid-March, US President Donald Trump approved a $2.2-trillion package under the Coronavirus Aid, Relief and Economic Security (CARES) Act to help Americans struggling amid the pandemic. One of the signature initiatives under the act was the $660-billion Paycheck Protection Program (PPP) aimed at helping small businesses with their payroll and operating expenses. This program was distinct from its peers in its loan forgiveness part, in which the repayment of the loan portion used to cover the first eight weeks of payroll, rent, utilities and mortgage would be waived. 

      The program, though well-intentioned, has struggled with execution issues exacerbated by labyrinthian rules. Matters came to a head when the initial tranche of $349 billion ran out in April. The program had to be refinanced but, by June, it was closed down with $130 billion of unused funds in its coffers. The program was restarted again and extended to August by Congress.

      Worse, the program saw refunds from borrowers who were unclear about the utilization rules. Loan forgiveness would be valid only if the amount was utilized within eight weeks. This stipulation made SMEs wary because their goal was to use cash judiciously and optimize the use of the borrowed amount to last as long as possible. These rules have since been amended by the Small Business Administration. It now gives SMEs 24 weeks to use the borrowed funds and allows them more flexibility on the use of funds. In any case, questions have been raised about capital not reaching targeted businesses and unintended parties benefiting instead. 

      Despite the changes in SBA rules, the jury is still out on whether more SMEs will take out PPP loans. Some are lobbying for full loan forgiveness. However, dispensing of repayment requirements essentially creates handouts that could lead to the lowering of fiscal discipline and increasing incentive for fraud. A recent proposal by two professors, one from Princeton and the other from Stanford, suggests “evergreening” of existing debt, a practice that involves providing new loans to pay off previous ones. Though innovative, it is not quite clear how such a policy would provide better benefits compared to a loan repayment moratorium, especially when it comes to influencing future credit behavior. 

      In addition to the PPP program, the SBA has announced the Economic Injury Disaster Loans (EIDL) program. This offers SMEs working capital loans up to $2 million to help overcome their loss of revenue. The program was closed down on July 13 after granting $20 billion to 6 million SMEs. Maintaining equitability and efficacy in the distribution process has been a challenge, though.

      European Responses

      Europe’s largest economy, on the other hand, has fared relatively better. In early April, German Chancellor Angela Merkel announced a €1.1-trillion ($1.3 trillion) stimulus termed the “bazooka.” This constituted a €600-billion rescue program, including €500 billion worth of guarantees for loans to companies. The German state-owned bank KfW is taking care of the lending. The program also includes a cash injection of €50 billion for micro-enterprises and €2 billion in venture capital financing for startups, which no major economy has successfully managed to execute. Notably, the centerpiece of the German program is the announcement of unlimited government guarantees covering SME loans up to €800,000. These loans are instantly approved for profitable companies.

      Berlin’s relief measures were specifically targeted at supporting Germany’s pride, the Mittelstand. This term refers to the 440,000 SMEs that form the backbone of the German economy. They employ 13 million people and account for 34% of GDP. Many of these firms manufacture highly-specialized products for niche markets, such as high-tech parts for health care and auto sectors, making them crucial to Germany’s success as an export giant. Not surprisingly, these companies have seen a contraction in revenues, especially the ones that depend on global supply chains. 

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      The swift implementation of these initiatives, coupled with the resilience of the Mittelstand, is demonstrating that SMEs can survive and thrive in this environment. The Germans have also been preaching and practicing fiscal prudence in normal times, which has now worked in their favor. Germany can afford to inject capital and do whatever it takes to save its SMEs.

      Since its first stimulus, Berlin has followed up with an additional €130-billion package consisting of tax, SME loans and spending measures aimed at stimulating demand. This included a €46-billion green stimulus focused on innovation and sustainable projects such as e-mobility and battery technology. In keeping with the German tradition, the SMEs who make the Mittelstand have stayed agile as well. They are diversifying their customer base and pivoting their business models to more recession-proof sectors. 

      The UK, another major world economy, also launched an array of relief measures, including the Coronavirus Business Interruption Loan Scheme (CBILS) worth £330 billion ($420 billion). This was designed to support British SMEs with cash for their payroll and operating expenditure. It also announced the Bounce Back Loan Scheme (BBLS) focused on smaller businesses. This enjoyed a better launch than CBILS because the latter, with its larger loan quantum, required more vetting and paperwork.

      Loans from the CBILS initiative, although interest-free for a year, are only 80% guaranteed by the government. This makes banks less willing to lend during these troubled times because they are afraid of losing 20% of the loan amount. This slows credit outflow and starves SMEs of much-needed capital. As of July 15, less than 10% of the allotted capital had been utilized, which banks blame on an inadequately designed scheme. By mid-July, only £11.9 billion had been disbursed to 54,500 companies through the CBILS and £31.7 billion to 1 million smaller firms through the BBLS.

      Businesses have sought modifications from policymakers to existing schemes. These include hiking government guarantees for loans to 100% and waiving personal guarantees for small loans. The Treasury has agreed to some of these demands. Critics also point to structural deficiencies in the system. They believe the administrative authority for SME loans should be a proper small business bank instead of the British Business Bank, which was not designed for SMEs. Already, the UK government has warned that £36 billion in COVID loans may default. More drastic measures seem to be on the way, including a COVID bad bank to house toxic SME assets.

      Responses Elsewhere

      Economies around the world have been responding to disruption by COVID-19. It is impossible to examine every response in this article, but Japan’s case deserves examination. The world’s third-largest economy had been battling a recession even before the pandemic. Declining consumption, falling tourism and plunging exports were increasing the pressure on an aging society with a spiraling debt of over $12.2 trillion. The pandemic has strained Japan’s fiscal health further.

      In response to the pandemic, the Bank of Japan announced a 75-trillion-yen ($700 billion) package for financing SMEs, which included zero-interest unsecured loans. Additionally, the National Diet, Japan’s parliament, enacted a second supplementary budget, which featured rent payment support and expanded employment maintenance subsidies for SMEs.

      Embed from Getty Images

      The execution of these programs has been tardy. The government’s 2015 digitalization drive is still incomplete, impacting the distribution of subsidies and the implementation of other relief measures. Of the more than 400,000 applications for employment adjustment subsidies, only 80,000 companies received aid by mid-June. Application procedures are unnecessarily complex, adding to the woes of SMEs.

      Any discussion on SMEs in the global economy would be incomplete without examining China, which was the first country to deal with the COVID-19 disease. In February,  the government announced a 1.2-trillion-renminbi ($174 billion) monetary stimulus. Large state-owned banks were ordered to increase lending to SMEs by at least 30% in the first half of 2020. Three of these banks alone were supposed to lend 350 billion renminbi ($49.7 million) to small businesses at preferential rates. In addition, Beijing encouraged local policymakers to provide fiscal support to keep SMEs afloat.

      China’s stimulus seems more understated compared to other major economies and their own 2008 bailout package. After controlling the first COVID-19 wave in March, the Chinese have focused on restarting the economy and reopening businesses instead of relief measures and bailouts.

      In February, surveys in China showed that 30% of SMEs had experienced a 50% decline in revenue. Surveys also found that 60% of SMEs had only three months of cash left. At the end of March, almost half a million small businesses across China had closed and new business registrations fell by more than 30% compared to last year. The resumption of work has been an uphill struggle. In April, the production rate of SMEs had crossed 82% of capacity, but the sentiment had remained pessimistic. Notably, the Small and Medium Enterprise Index (SMEI) had risen from 51.7 in May to 53.3 in June, indicating that SMEs are slowly reviving.

      With the easing of lockdown measures, domestic demand in China has picked up, driving SME sales. In turn, greater demand is increasing production activity and accelerating capacity utilization, causing a mild rise in hiring. The green shoots of recovery of Chinese SMEs should encourage authorities worldwide. 

      Policy Lessons for the Future

      Governing nation-states is an arduous task at the best of times and especially so in a nightmarish year of dystopian proportions. No wonder governments worldwide have appeared underprepared to combat the COVID-19 crisis. Whilst predicting a global pandemic of this scale would be next to impossible, there were early warning signs that severe disruptions to global health care, supply chains and business models were imminent. Yet scenario planning and stress testing of economic models has been flawed, impacting the swift rollout of relief measures.

      The crisis has also underlined the importance of fiscal discipline when economies are doing well. Countries that do so can build a robust balance sheet to leverage during troubled times. This crisis also brings home the importance of evaluating and reevaluating the efficacy of the entities that deal with SMEs. Policymaking is an iterative process, especially when it comes to SMEs and bodies that oversee them must be overhauled periodically.

      Importantly, policies pertaining to SMEs must have inputs from those with domain expertise. Structures must take into account execution capabilities and speed of delivery. Instant loan approvals with suboptimal due diligence have to be constantly balanced against longer vetting but slower turnarounds. Similarly, policymakers have to analyze the various types of instruments, fiscal and monetary, that can be used for SMEs. What works in one country may not work for another. 

      It is important to remember the nuances of different policy measures, such as guarantees, forgiveness, monitoring and moratoriums. Guarantees are a sound instrument for relief but are potential claims on the government’s balance sheet and contingent liabilities. They also have little economic value if capital is not promptly delivered to SMEs. Forgiveness provisions have their own issues. They may be important in a crisis but could incentivize subpar credit behavior in the future. Similarly, monitoring is important but is impractical when millions of SMEs are involved. There is no way any authority can keep a tab on the intended usage of funds. Finally, moratoriums have their own problems. Businesses could misuse moratoriums, putting pressure on banks and making accounting difficult. They were cheered at the onset of the crisis but further extensions could be costly to the ecosystem. 

      Going forward, governments need to prepare for the long haul. The consequences of the COVID-19 pandemic will stay with us for the foreseeable future. What began as a liquidity crisis might well become a solvency crisis for SMEs despite the best attempts to avoid that eventuality. If that does happen, governments will need to plan for efficient debt restructuring. They will have to institute insolvency management processes while figuring out how to handle bad asset pools. In simple language, governments will have to make tough decisions as to distributing gains and losses not only among those living but also future generations.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Only Losers Pay Taxes: Apple and the Ingenuity of Tax Avoidance

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      July 15 was a very good day for Apple. Not so much for the European Commission, nor for the Organisation for Economic Co-operation and Development (OECD). What happened? In 2016, the European Commission (EC), following a lengthy investigation, ruled that Ireland had granted Apple “illegal tax benefits” that “substantially and artificially lowered the tax paid by Apple in Ireland since 1991.” The taxes “saved” Apple some €13 billion ($15 billion). The Irish government set up and escrow account at the cost of €3.9 million in consultancy and other fees as Apple appealed to courts in Luxembourg.

      On July 15, the EU General Court rendered its landmark verdict. In a stinging rebuke of the European Commission, the court charged that the EC had failed to demonstrate “’to the requisite legal standard’ that Ireland’s tax deal broke state-aid law by giving Apple an unfair advantage.” The Apple case was supposed to be a hallmark for the EU Competition Commissioner Margrethe Vestager’s “crackdown on preferential fiscal deals for companies” by member states. In the words of a tax lawyer quoted in the Irish Times, the decision marked a “comprehensive defeat for the Commission.”

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      At the same time, it was a significant setback for the OECD’s initiative on “base erosion and profit shifting” or, put in less arcane terms, tax avoidance. Engaging top law firms, the new tech giants such as Apple, Amazon and Google have mastered the fine art of avoiding as much of the tax burden as possible. There are numerous reasons for this development, greed probably topping the list. On a more structural level, however, it is to a large extent the result of the process of financialization, which has been the dominant game worldwide over the past several decades.

      Part of the Package

      Financialization fundamentally changed corporate rationale, with shareholder value becoming the new doctrine. Shareholder value holds that the primary metric of success lies in the ability of managers to increase shareholder return. Forget about corporate responsibility, forget about corporate outreach to the community: The only thing that counts is raising a company’s stock value no matter what.

      Tax avoidance is part of the package. Over the past few decades, Fortune 500 companies have devised a range of ingenious strategies that allow them to legitimately avoid paying taxes. Many are so opaque that even specialists have a hard time figuring out what is happening, how and where. One of the more exotic strategies is the “double Irish with a Dutch sandwich.” Investopedia defines it as a tax avoidance scheme that “involves sending profits first through one Irish company, then to a Dutch company and finally to a second Irish company headquartered in a tax haven.”

      A second scheme that was popular in the United States a few years ago is corporate inversion. This “occurs when a U.S.-based multinational corporation restructures itself so that the U.S. parent is replaced by a foreign parent and the original U.S. company becomes a subsidiary of the foreign parent.” Ireland, Bermuda, England and the Netherlands were among the popular destinations.

      The case of Apple provides a perfect illustration of the ingenuity behind tax avoidance. The scheme hinges on Ireland’s sweetheart deal with Apple, which allowed the US-based company to avoid Ireland’s corporate tax of 12.5%. Instead, Apple paid as little as 0.005% in taxes. The profits Apple made in Europe were transferred to Apple subsidiaries located in Ireland — perfectly legally —  and the taxes were paid on the basis of Ireland’s rate instead of the country where Apple products were actually purchased. This saved Apple billions of euros.

      It needs mentioning that Ireland joined the Apple lawsuit. After the verdict, the Irish government hailed the outcome as a victory for Ireland, which, in the process, lost €13 billion in tax revenue — a rather perverse sense of accomplishment, given the dramatic impact COVID-19 has had on the country’s economy and public life. Like elsewhere in Europe, the measures introduced by the Irish government caused a dramatic surge in unemployment and drove the economy into a recession. It is likely to take years to recover from the pandemic. Under the circumstances, the money would have been quite welcome.

      The Curious Case of the Netherlands

      Over the past several decades, avoiding taxes has become big business. Estimates from 2017 suggest that tax avoidance and profit shifting by multinational corporations amounted to a global loss of somewhere around $500 billion. Not surprisingly, tax havens have multiplied throughout the world. To be sure, there are exotic offshore locations that have specialized in sheltering money, such as the Cayman Islands, Samoa, Mauritius or the British Virgin Islands.

      This, however, is only half of the story. The case of Ireland shows that advanced capitalist countries are hardly innocent. In fact, Europe — and even the European Union — abounds in tax havens, from the British island of Jersey to Luxembourg, Liechtenstein and Malta to the Netherlands.

      Recently, the Dutch have provoked much resentment among the EU’s southern members. At the height of the pandemic in Italy and Spain, both countries called on the member states to show solidarity with its southern neighbors. One of the ideas was to issue so-called corona bonds, which would have combined securities from different countries and “mutualized” debt. The idea was vigorously promoted by Italy but equally vigorously rejected by Germany and the Netherlands, alongside Finland and Austria, collectively known as the “Frugal Four.”

      The connotation was obvious. The fiscally responsible members were loath to subsidize countries they considered frivolous spenders — even in a situation that brought Italy to its knees. The Germans are accustomed to suspicion and hostility from other EU members. But the Dutch? After all, the Netherlands is a small country, known for their openness and liberal attitudes on sex and drugs. COVID-19, however, has changed these perceptions, at least in the southern parts of the EU.

      Embed from Getty Images

      And for good reasons. Not for nothing, one of the most egregious tax avoidance schemes has “Dutch” in its title. It turns out that the Netherlands is an important tax haven right in the heart of the EU — a tax haven that has done considerable harm to other member states. Earlier this year, the Tax Justice Network claimed that the Netherlands “cost EU countries $10bn in lost corporate tax a year.” Analysis revealed that US firms in Europe, instead of declaring profits in the EU countries where they were generated, “shifted billions in profits into the Dutch tax haven each year ($44 billion in 2017) where corporate tax rates in practice can be under 5 per cent.” In fact, “the Netherlands’ low effective tax rate and its frequent use as a conduit for profit shifting to other corporate tax havens like Bermuda, results in a huge transfer of wealth out of Europe and into the offshore bank accounts of the world’s richest corporations and individuals.”

      Estimates for Italy alone were that the country had lost €1.5 billion in revenue a year, “equivalent to more than twice the annual cost of running San Raffaele Hospital, one of the largest hospitals in Italy with approximately 1350 beds.” Under the circumstances, Italian ire and disenchantment with the EU at the height of the pandemic, which cost the lives of thousands of Italians and paralyzed life in the country, are more than understandable. In this sense, the Apple verdict is nothing more than a Pyrrhic victory for Ireland and like-minded members of the European Union.

      The pandemic has drastically illustrated the importance of solidarity. Strategies that cater to the narrow interests of shareholders systematically subvert solidarity. Under “normal” circumstances, that might be fine. These days, it is disastrous, not least because the notion of shareholder value (aka individual egoism) has penetrated every aspect of social life. Margaret Thatcher once remarked that society did not exist — there were only individuals and families. The disastrous current state of the US and Britain is a blatant indictment of this kind of thinking.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Are We Ready to Drop the Term “Islamist” in Reference to Terrorism?

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      On July 20, The Times released a report indicating that UK police held a forum to explore a request to change the terminology surrounding terror attacks now commonly defined as “Islamist.” The discussion, which included the head of Counter Terrorism Policing, Assistant Commissioner Neil Basu, and some 70 individuals with personal or professional experiences with terrorism, came as a result of the National Association of Muslim Police’s (NAMP) initial request for the abandonment of terms such as “Islamist” and “jihadi” on the grounds that they adversely impact public perceptions of the Muslim community.

      Far-Right Terrorism Is Now Britain’s Fastest Growing Problem

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      Proposed alternatives to present terminology include “faith-claimed terrorism,” “adherents of Osama bin Laden’s ideology,” “terrorists abusing religious motivations” and “irhabi” — an Arabic term common in the Middle East to reference terrorists. The mere suggestion of a change has since sparked passionate debates online, which reveal a great deal about public perceptions of terrorism and how it is policed in the UK.

      Finding the Right Words

      As the initial report stated, according to the NAMP, the existing lexicon has contributed to Islamophobia, itself on the rise in recent years. Among the reported comments was one that noted how far-right terrorist Anders Breivik, whose 2011 attacks in Norway killed nearly 80 people, mostly children, and others have invoked Christian imagery relating to the Crusades, yet their attacks are not identified as “Christianist.” Presently, counterterrorism experts employ the terms “Islamist extremism,” “extreme right-wing” and “Northern Ireland-related” when discussing terrorist ideology.

      News reports included lines such as “The police emphasized to The Times that the reform was not certain to go ahead,” and Chief Superintendent Nik Adams also stated that “We have no plans to change the terminology we use at present but welcomed the debate and contributions.” Yet within hours of the article going to print, news outlets around the world have covered the story, opinion pieces have been printed, and thousands of comments have been posted online arguing about the implications of a name change. Notably, many of the reasons against any alterations evidence troubling narratives circulating in society.

      One of the most frequent points employed by critics of the proposal resides in the belief that “Islamist terrorism” and “jihadism” are the most fitting terms because they recognize the centrality of Islam to these group’s ideologies and motivations. A significant portion of comments agreed with the assessment that the current vocabulary may prove harmful to their Muslim neighbors and colleagues. Nevertheless, they claimed that, as terrorists justified their actions in relation to Islam, the description of their actions should be identified as such. Also, worryingly, in many instances, such arguments spiraled out to present Islam as an inherently or even uniquely violent religion. Some writers posted snippets of Islamic texts that appear to reference the use of terror or how to treat non-Muslims. Others responded to the news by arguing that Islam and democracy or its values are mutually exclusive.

      Emblematic of others, one advised that the UK should establish “an enquiry into why so many Muslims become radical; terrorists; grooming gangs etc. The scriptures/teachings must be challenged, not terminology watered down.” Meanwhile, comments such as “As far as I’m aware, the Jews don’t have a section that advocates genocide of unbelievers. Neither do Christians, or Sikhs or the Hindus. Neither do the atheists. This is a uniquely Islamic problem” and “What other religion does this? Genuinely…which?” can be found repeated across the internet.

      In particular, many commenters took issue with the National Association of Muslim Police’s observation about the double standard at play in failures to identify certain far-right terror attacks as linked to Christianity. Exemplifying arguments found repeatedly across various platforms, one widely-liked tweet argued that “We don’t talk about ‘Christianist’ terror because there’s no such Christian movement.” This narrative defies reality. As noted by some online, the Troubles in Northern Ireland had a clear sectarian Christian element, Catholic identity played a fundamental role in the Spanish Falangist movement, and the attacks on abortion clinics and providers by groups such as the Army of God were motivated by a particular view of Christianity. These are just the tip of the iceberg.

      Christian Identity

      The Christian identity movement has been in operation for upward of a century in the United Kingdom and around the world. Its vitriolic anti-Semitism and racism are rooted in an alternative interpretation of Biblical stories. In the United States, the iconic cross-burning of the Ku Klux Klan has served merely as a symbol of the organization’s long history of a particular racist Protestant theology, and the knights of the Ku Klux Klan’s party envisions the establishment of a “White Christian government.” Other groups known to have engaged or encouraged violence in relation to a hybrid Christian, racist ideology include White Aryan Resistance, Aryan Nations, The Order and the National Alliance.

      Bible passages were cited as justification by the suspected perpetrators of both the Tree of Life and Poway synagogue shootings. Meanwhile, Anders Breivik’s manifesto shows his ideology to have been anchored in his interpretation of Christian beliefs. He viewed himself as part of a crusade against the multiculturalism he viewed to be destroying Christian European culture. Brenton Tarrant, whose two attacks in Christchurch killed more than 50 people last year, likewise published a manifesto with references to his as a crusade and citing quotations from Pope Urban II, who is widely considered to have orchestrated the First Crusade. One of the most famous neo-Nazi authors, James Mason — who has been of significant influence to extremist organization Atomwaffen Division — wrote a book linking Adolf Hitler’s “Mein Kampf” to the Bible.

      The reality is that each of these groups uses or has used Christian symbols and religious writings to justify their violence and racist aspirations. They have also done so while claiming to be the true expression of Christianity. Literally hundreds of people have died, and many others been injured, at the hands of those claiming that they were acting in the name of Christian values.

      While debates may and can be had about the fact that certain terrorist organizations do identify with terms such as “jihad” or self-identify as “jihadis,” and that, thereby, counterterrorism’s use of the term is merely mirroring terms on the ground, it is important not to claim that Christianity has no links to extremism and terrorism. This leaves aside arguments about the lack of violence perpetrated in the name of other religions, of which there are also ample examples.

      PC Culture

      The other potential worrying element to the critical narratives surrounding the proposal are those about why such a discussion happened. Hundreds of users have cited it as evidence that the UK has fallen victim to politically correct, or PC, culture. Charles Moore’s Telegraph opinion piece, for instance, implies this, linking Basu’s participation in this terminology discussion with his previous comments about media’s role in radicalization or about Boris Johnson’s comments likening women in niqabs to letterboxes. “You might think Mr Basu would eschew political or media disputations,” Moore observes. “Not so,” he goes on, before concluding that the name should not change and that “AC Basu should forget this elderly argument and get back to proper work.”

      Embed from Getty Images

      Others take this to a greater extreme, viewing the news as a sign that the UK is now in the hands, or at the mercy, of dangerous ethnic and religious minorities, or that those in charge of counterterrorism policing are weak-willed, apathetic or even side with the terrorists. References to George Orwell’s “1984” abound.

      “The police are now part of the Islamist problem,” one user wrote. “They have been extensively ‘Common Purposed’ and are riddled with fifth columnists.” Another asked: “Who is representing the majority white population of the UK? The majority is the least needy; the country revolves around minorities.” Frequently, Basu and other senior law enforcement officers, as well as politicians, are urged to quit or are called out by name as being unfit for service based on accusations that this discussion signals their pandering to the Muslim population.

      At times, these accusations amount to declarations that a change to the terminology would make the UK less safe. Many claim that this discussion could be linked to the UK’s “grooming gangs.” As one user posited, this mentality was “the same sort of PC mindset that let child abuse rings thrive in this country.” While not often fleshed out, the apparent logic relies on the idea that a police force, unwilling to specifically name the nature of a terrorist’s ideology for fear of perceived discrimination, would also be less capable of policing and preventing crime.

      Debates about the use of terms such as “jihad,” “Islamic” and “Islamist” are not new. Since at least the inception of the war on terror, law enforcement officers, scholars, media and community advocates have clashed over the best terminology to employ when discussing terrorism. As only one more moment in this ongoing dialogue, UK law enforcement’s discussion this summer is not yet set to change anything, and even if law enforcement changed its classification, this would by no means ensure a change in media reporting or popular vernacular.

      Yet thousands of people took to the internet to express their opinions, and that fact must be viewed as significant. In particular, the rush to criticize the police for even entertaining such an idea, as well as the commonality in the rhetoric used to defend existing terms, is illuminating. They point to implicit (or potentially willful) blindness about who perpetrates terrorism in the name of religion, outright racism and Islamophobia, and genuine distrust of major government institutions. These reactions, in fact, implicitly reinforce the argument made by the National Association of Muslim Police that vocabulary does make a difference.

      *[The Centre for Analysis of the Radical Right is a partner institution of Fair Observer.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      London’s “Mega Mosque:” Islamophobia in the COVID-19 “New Normal”

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      During the lockdown, the US-based news service, Breitbart, ran a story about plans for a new “mega-mosque” in central London. Proposed for the historic Trocadero building near Piccadilly Circus in the heart of London’s entertainment and theater districts, Breitbart claimed that plans had been submitted to Westminster’s local authority to convert parts of the building into a mosque with a capacity to host around 1,000 worshippers.

      Having been widely shared on social media, the Breitbart story not only claimed that local residents were shocked by the size of the mega mosque, but so too was it alleged that some had voiced concerns about the increased risk of terrorism, that worshippers would try and enforce an alcohol ban in the surrounding area, and that there would be a conflict with those frequenting Soho, London’s gay quarter.

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      While some of those lodging complaints about the mosque will no doubt have had legitimate claims, the Breitbart article clearly acted as a catalyst for the radical right in Britain to jump on the opposition bandwagon. By using the term “mega-mosque,’ Breitbart reverted a tried and tested trope that has been successfully deployed in other parts of the country by various radical-right groups to derail plans for other new mosques. While this affords an opportunity to consider how the radical right have focused on size when it comes to opposing mosques, so too does it give us a timely insight into how the radical right’s campaigns of Islamophobia might change in the “new normal” of a post-COVID-19 world.

      The “Old Normal”

      Standing on the corner of Shaftesbury Avenue and Piccadilly Circus, the Trocadero was built in 1896. Home to a restaurant until 1965, the building remained largely redundant until the early 1980s, when it was renovated and relaunched as an indoor entertainment complex, housing the UK’s first IMAX cinema and various other attractions, including the gaming arcade Segaworld. With every new initiative, however, came failure, and the building eventually became derelict in 2006. A year beforehand, Criterion Capital had purchased it along with another nearby building. Since then, the Trocadero has undergone significant changes: Today, for example, it houses a 740-bedroom hotel with a rooftop bar.

      Embed from Getty Images

      The man behind Criterion Capital is Asif Aziz. He also established the Aziz Foundation, an education charity for British Muslims that has its headquarters near Piccadilly Circus. The foundation was behind the plans submitted to the local authority to request permission to convert the basement and part of the ground floor into a prayer space and community center. With the intention of serving Muslims who live and work in the area, the plans state that it was likely that the prayer space would only attract near-capacity attendance for Friday prayers; on all other days, the plans claimed that no more than 100 worshippers would be in attendance. When the public consultation closed, nearly 9,000 comments had been filed about the plans. While the majority were supportive, a flood of comments opposing the mosque appeared once the mega mosque story was “broken” by Breitbart.

      Among these were a number of tropes that the radical right have been deploying about Muslims and the religion of Islam for some time: from changing the “character” of the area to the mosque being a potential “Islamist hotspot,” from Islam not being welcome in a “secular” society to the mosque being evidence of the further “Islamification” of Britain. Of course, the size of the mosque was also routinely cited as a problem.

      Under the “old normal,” the radical right have been scaremongering about the size of mosques for almost two decades. As the simple yet effective narrative goes, the bigger the mosque the bigger the threat posed. This was used to good effect in Dudley, a town on the outskirts of Birmingham in the West Midlands. While much was made of the size of the prayer hall, it was the height of the proposed minaret adjoining the “super-mosque” that garnered the most opposition.

      Alleged to be taller than the steeple of the town’s oldest church, opponents claimed Muslims were doing so in order to claim the supremacy of Islam over Christianity. Prompting more than a decade of radical-right protests, including some of the largest by the anti-Islam street protest movement, English Defence League, the plans for the mosque were withdrawn in 2018.

      Three years prior, a similar outcome met plans to build a 9,000-capacity “mega mosque” in Stratford, East London. There, more than a quarter of a million people signed a petition opposing the mosque following radical-right groups campaigns alleging that those behind the mosque had links with the 7/7 suicide bombers.

      The “New Normal”

      In the “new normal,” while various radical-right groups have jumped on the anti-mosque bandwagon, it has been by former anti-Islam political party and vigilante group, Britain First, that has led the way, at the time of writing acquiring near 125,002 signatures on its online petition to block the plans. Most interesting, however, are the reasons Britain First cites for opposing the new mosque.

      Alongside all of the old-normal reasons for doing so, it is the new attribution to the size of the mosque that is most insightful. As it states: “Local people have strongly objected to the application on the basis that the area was already heavily overcrowded even before the coronavirus pandemic introduced the need for social distancing – and that adding another 1,000 people, congregating in and around the mega mosque during prayer times would cause serious [problems].” As such, the new mosque should be opposed because it will increase the risk of spreading COVID-19 and thereby poses a threat to the health of local residents.

      While much has been made about the new normal that will ensue in the wake of the COVID-19 pandemic, what the Trocadero mosque shows is that some elements of the old normal will not only survive but will continue to thrive. As was the case in the old normal, mosques are problematic, the size even more so. Irrespective of any pandemic, little would appear to have changed.

      What does seem to have changed in the new normal, however, is how size is problematized. While the simple yet effective narrative technique used to be “the bigger the mosque, the bigger the threat posed” could, in the wake of 9/11,  always be understood as being either cultural or violent. As regards the former, this typically focused on the “takeover” of Britain, its values, way of life and so on. For the latter, this typically focused on terrorism and radicalization. Post-COVID-19, if Britain First is anything to go by, a more insidious dimension to that threat might now emerge. As the petition infers, the threat now posed by the mosque is also a biological one.

      Irrespective of whether such claims are true, one can see how effective and immediate this kind of claim could be among local people who are already fearful of the effects and impact of an invisible virus. Reshaping the narrative to “the bigger the mosque, the bigger the biological threat posed” may have the potential to be an even more effective means of mobilizing and opposing in the new normal than it was before. If Britain First is successful, expect others within the radical right to rapidly follow this new narrative technique in anti-mosque campaigns and other forms of Islamophobic mobilization throughout the UK.

      *[The Centre for Analysis of the Radical Right is a partner institution of Fair Observer.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Albania’s Ancient Blood Feuds Trap Entire Generations

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      Basmir Gjeloshaj, a young man from the north of Albania, has been confined to his home for most of his life, as described by Vincenzo Mattei for Al Jazeera. Walking outside could be deadly, not because of the novel coronavirus, but because his father’s murder has pulled him into a gjakmarrja (pronounced Jyak-MARR-Ya) — an Albanian blood feud. In recent months, the COVID-19 pandemic has swiftly halted daily life around the world and forced millions into isolation in their homes. The same fate has befallen hundreds of Albanians trapped inside, some for years on end, as a result of the region’s tradition of revenge killing.  

      These blood feuds are part of an ancient Albanian code of justice that obliges murder to be repaid with murder. Many of those involved in the feuds, including children or teenagers born into feuding families, are only safe from retaliation killings inside their homes. To step outside is to risk your life.

      A Question of Honor

      “I’m well, I’m isolating at home,” Nikollë Shullani said by phone from Shkodër, 100 kilometers (62 miles) north of the capital Tirana. He was referring to the government orders to self-isolate amid the spread of COVID-19 that has even reached his remote city. “Ngujim në shtëpi,” he said, using the same word for coronavirus-related isolation that is used for those locked inside because of a gjakmarrja. Shullani heads an organization called Missionaries of Peace and Reconciliation of Bloodshed, whose aim is to mediate the conflicts between feuding families.

      The goal is pajtimi, or reconciliation, which is achieved through a negotiation process between families. Traditionally the elderly, who are highly respected in Albanian culture, play a central role in these negotiations. Often, negotiations only begin years after the start of the conflict. Shullani has been successful in resolving 12 feuds, but he says that there are still at least 400 currently ongoing in northern Albania.

      These numbers are difficult to verify. In 2016, the chairman of the Committee of Nationwide Reconciliation (CNR) estimated that some 12,000 people have died in Albania’s blood feuds since 1991. The authorities recorded just three revenge killings in 2018, and Operazione Colomba, a volunteer organization, counted six murders “with blood feud elements” in 2016, two in 2015, four in 2014 and seven in 2013, according to a UK government report. But according to the CNR, as many as 1,000 families have been affected by the problem in 2018, with some 300 families living in fear for their lives.

      Blood feuds can begin from theft, threats or even insults — any action that questions one’s honor, which is of extreme importance in rural Albanian society. When such a dispute escalates to murder, the family of the victim is expected to obtain justice by killing the murderer or another male in his family. Then, the burden falls on that family to seek vengeance. This cycle can continue for generations, pulling in descendants who had nothing to do with the original conflict.

      The feuds are rooted in a code of laws known as the Kanun of Lekë Dukagjini, which dates as far back as 5th century B.C., according to some scholars. It is named for the 15th-century Albanian nobleman Lekë Dukagjini, who codified the rules of the Kanun, which consists of 12 books and 1,291 articles. These laws are still well known among the northern malisors, or mountain people, and cover all aspects of life, from family and marriage to personal property and justice. They also lay down strict social rules, including that women cannot be targeted in blood feuds and that those who owe blood may not be targeted while inside their homes.

      This is why the men of families involved in gjak (blood) are often confined to their homes at risk of being killed, relying on the women in the family to bring home food and supplies. Even young boys can be targeted according to the Kanun, and lose their chance at an education unless their school sends a teacher to instruct them at home. Some children who were born into feuding families have been trapped indoors for most of their lives. 

      Many are paying for crimes they did not commit. In his article, Mattei recounts the plight of Gjion Mhilli, who “will forever remember the date of September 19, 1992, as the day his brother shot and killed a neighbour in a dispute over land. On the few occasions that Gjion has ventured outside since, he has been threatened or chased, often having to hide in the store rooms of sympathetic shopkeepers.”

      After centuries of practice, the Kanun was outlawed during the second half of the 20th century by Enver Hoxha, Albania’s communist dictator who ruled with an iron fist. Under his authoritarian regime, the practice completely halted. However, it saw a resurgence in rural Albania after the country’s turbulent transition to democracy in the 1990s, which left behind a frail and corruption-ridden government. The Kanun is still applied in the northern and central parts of Albania, and research from the British Embassy in Tirana concluded that these blood feuds are “largely restricted to remote pockets in the mountain north of the country.”  

      The Other Path

      Judges in Albania can often be bribed to dramatically reduce prison sentences, even in cases of murder, and Shullani explains that this weakness in Albania’s justice system is why the Kanun has reemerged in recent times. “The first best thing is the rule of law,” he said. “But when the law fails, the Kanun is the other path.” 

      Shullani recalled one feud that left a particularly strong impression on him — the story of a widow in a village near Shkodër. Her husband’s murderer was released from prison after only two years, which added insult to the pain of her loss. Her four sons lived abroad in Italy, and preferred to forgive the blood rather than initiate a feud, but the widow refused to pardon the murderer. She could not live with the dishonor that this would bring on her relatives and ancestors.

      Those who do not avenge a murdered relative face intense stigma in the region. “In some areas, the tradition of ‘coffee under the knee’ still exists, [whereby] on feast or wedding days coffee is not served at the table but at the level of the feet for those who did not avenge their killed relative,” writes Mattei. 

      Shullani has visited this widow 16 times, even with the village’s kryeplaku, or wise man, and other local elders in an effort to make peace. Her sons have begged her to forgive the murder, saying, “Mother, we want to forgive the blood of our father because we want to live,” Shullani related. “That is not a problem for me,” she replied. “I have four sons; one should give his life in the name of his father.” This widow took it upon herself to seek vengeance, even though feuds are usually fought among men in Albania’s patriarchal society. Her husband’s murderer is still in hiding out of fear that she will kill him, Shullani says.

      Embed from Getty Images

      Despite the barbaric nature of this ancient system, Shullani points out that the strict rules and established process for peacemaking set the blood feuds apart from the random, merciless crime that happens elsewhere. However, some have observed that the rules of the Kanun have begun to erode in recent years. The BBC quotes Liljana Luani, a teacher of children “involved in blood,” as saying: “Nowadays neither the Kanun nor the laws of the state are being followed. It has happened that there have been women killed and children killed” — a violation of the ancient Kanun. “I think the state law enforcement authorities should do more and that they are not working properly.”

      The Albanian Penal Code carries a 30-year sentence for blood feud murders and recent years have seen renewed efforts by police to squash the problem. Still, a report by Cedoca, the Documentation and Research Department of the Office of the Commissioner General for Refugees and Stateless Persons of Belgium, cited meeting with “two experts who expressed strong doubt that the police is capable of controlling, monitoring, preventing and prosecuting the contemporary blood feud phenomenon,” stating that suspects are often released again after an initial arrest.

      Nonetheless, the British Embassy report quoted a local representative of the national ombudsman as saying “the presence of the law has very much advanced nowadays. In the last 5-6 years the law and order were reestablished. Closed cases have been re-opened and potential blood feud cases are treated with particular attention, even in the remote areas. If something happens, the police will intervene nowadays.”

      Shullani and Luani have both dedicated their life’s work to the victims of these feuds. They both agree that the blood feuds will not end until Albania’s government revitalizes its justice system once and for all.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in World Politics

      Armenia and Azerbaijan Clash Again

      by

      The on-again, off-again conflict between Armenia and Azerbaijan over the border region of Nagorno-Karabakh became hot again on the weekend of July 11. Skirmishes are common in the contested region, which is known as Artsakh to the Armenian side, but this recent round of deadly attacks is the most serious escalation since the Four Day War in 2016 and is outside the typical point of contact. As usual, international calls for restraint and a diplomatic solution have been voiced, but internal politics between the two sides continue to amplify their serious disagreements. It seems as though the situation will continue to escalate, but the current circumstances are unlikely to spark a full-scale confrontation.

      As in the case of other post-Soviet frozen conflicts — as well as land disputes in the North Caucasus — the dispute over Nagorno-Karabakh is intrinsically linked to the early history of the 20th century. Shifts of power resultant from the loss of the Ottoman Empire in World War I, the collapse of the Russian Empire and the territorial delineations configured in the formative days of the Soviet Union and its subsequent break-up created borders that did not appease all sides of the local populations. Nagorno-Karabakh has an ethnic Armenian majority, but political maneuvering in the 1920s handed its jurisdiction, and thus international recognition, to Azerbaijan. Armenia continued to voice its discontent over this arrangement, but matters of borders and ethnicity remained contained while the territories were part of a wider empire with one central government.

      As the Soviet Union neared its end, the question of Nagorno-Karabakh reemerged as Karabakh Armenians sought the reconnection of the territory with Armenia proper. Subsequent political actions, including an unofficial referendum and a petition to the Supreme Soviet of the USSR to sanction the territorial transfer, infuriated the Azeri public. In 1988, the Nagorno-Karabakh War officially broke out just as inter-ethnic relations deteriorated, killing between 20,000 and 30,000 people. A further referendum in 1991, boycotted by Azerbaijan, quashed the prior plea to join Armenia in favor of the pursuit of independence for Nagorno-Karabakh. Fighting escalated to the point that both Armenia and Azerbaijan accused each other of ethnic cleansing. It was at this point that the international community turned its attention to the regional conflict in the South Caucasus.

      Contemporary Crisis

      In 1994, the Russian Federation mediated a ceasefire between Armenia, Azerbaijan and the Republic of Nagorno-Karabakh (as of 2017, officially the Republic of Artsakh). For the most part, this agreement has kept hostilities contained, minus the ongoing instances of low-level clashes and explicit violations by both sides. For example, the Four Day War in April 2016 witnessed Azerbaijan regain “two strategic hills, a village, and a total of about 2,000 hectares.” Nonetheless, Armenia has not fulfilled concessions required by UN Security Council resolutions, such as the withdrawal of its troops, leaving Azerbaijan perpetually frustrated.

      There has been a continued push for engagement and peace talks by the international community, primarily the Organization for Security and Co-Operation in Europe’s (OSCE) Minsk Group, chaired by Russia, France and the United States, since 1992. Still, there are no official relations between Armenia and Azerbaijan as a result, and it has been difficult to breathe life into peace talks in a decades-long conflict.

      It is unclear what exactly sparked the current round of hostilities between Armenia and Azerbaijan, but both sides blame the other for the escalation. The heightened tensions came only days after Azerbaijan’s president, Ilham Aliyev, declared that peace talks to resolve the conflict had essentially have stalled. One key difference between the current situation and those in the past is that the deadly encounter between forces did not occur directly in Nagorno-Karabakh, but rather in the northern Tavush section of the Armenian border.

      On July 12, the Defense Ministry of Azerbaijan announced that Armenia launched an offensive that consequently killed two Azerbaijani servicemen and left five others wounded. In retaliation, Azeri forces launched a counterstrike, setting the scene for yet another protracted spat. Attacks have continued almost on a daily basis since the outbreak of the current impasse, and there have been numerous reports of shelling, tank movements and the use of combat unmanned aerial vehicles and grenade launchers.

      While actions on the ground may be dramatic, they remain at a low level. On the other hand, authorities in Armenia and Azerbaijan up the ante through heightened threats and verbal tit-for-tats. This is typical of ethnic spats that rely heavily on nationalist rhetoric to amplify cohesive public support for military actions, whether offensive or defensive. In a case of a highly provocative statement that should raise eyebrows, the head of Azerbaijan’s Ministry of Defense press service stated that “The Armenian side should not forget that the latest missile systems, which are in service with our army, allow hitting the Metsamor Nuclear Power Plant with high precision, which can lead to a huge catastrophe for Armenia.”

      A retort by the Armenian Ministry of Foreign Affairs noted that such possible violations of international law are “an explicit demonstration of state terrorism and genocidal intent of Azerbaijan” as well as “leadership of Azerbaijan acts as a menace to all the peoples of the region, including its own people.”

      Too Late for Diplomacy?

      After 30 years of a tense and barely tolerated relationship, it seems unlikely that any political or diplomatic solution will result from this latest round of tensions. Indeed, a significant diplomatic effort has been expended to resolve the Nagorno-Karabakh conflict and wider disputes between Armenia and Azerbaijan to no avail. At this time, it is simply enough that the sides generally adhere to the 1994 ceasefire and engage with the Minsk Group. For instance, the OSCE institution released a press statement that the belligerents of the conflict must “resume substantive negotiations as soon as possible and emphasize the importance of returning OSCE monitors to the region as soon as circumstances allow.”

      International voices have all chimed in and called for restraint by both Armenia and Azerbaijan. Besides being a co-chair for the Minsk Group, Russia is understandably concerned about the clashes in its neighborhood. Deputy Foreign Minister Andrey Rudenko reiterated sentiments similar to the OSCE, calling on “both parties to immediately ceasefire and start negotiations in order to prevent a recurrence of these incidents.” On the other hand, Turkey’s Foreign Minister Mevlut Cavusoglu called on Armenia to “pull its head together” and subsequently expressed that “Whatever solution Baku prefers for the occupied lands and Karabakh, we will stand by Azerbaijan.”

      The Ministry of Foreign Affairs of the Republic of Artsakh consequently slammed the Turkish position, condemned the destabilizing actions of Azerbaijan in the Tavush region, and echoed the need to return to the OSCE table. With numerous political actors and geopolitical interests at play, the fight over such a small but strategically important swathe of land becomes much more complex once compounded by the factors of ethnicity, history and national pride.

      Embed from Getty Images

      But it seems unlikely that the current situation will transition into another full-scale war. Rather, it is fair to assume that actions on the ground could escalate for the short term, but any protracted operation would be a serious regional blow to civilian populations and the energy sector. The Nagorno-Karabakh War of 1988-1994 displaced some 860,000 on both sides, and a similar outcome is possible today, with skirmishes occurring in populated areas.

      Secondly, the Armenia-Azerbaijan borderlands are important transit points for oil and gas pipelines. Entities and media that follow energy markets have already raised concerns over the current fighting and how it may influence the flow of hydrocarbons. The ongoing situation around Tavush province is certainly more serious because it is closer to the South Caucasian Pipeline (SCP) that runs from the Azeri capital Baku to Tbilisi, Georgia, and then Erzurum, in Turkey. Furthermore, the SCP is part of the wider Trans-Anatolian Natural Gas Pipeline (TANAP) and Trans Adriatic Pipeline (TAP) — a network set to deliver gas to Europe upon completion later this year. These factors will obviously be taken into consideration by Azerbaijan’s strategists as they move forward with their plans in the region. It would be short-sighted to destabilize this network when diplomatic options are at hand to at least keep the status quo for the sake of business.

      Additionally, the South Caucasus is a busy neighborhood, geopolitically speaking. In the case that the situation escalates and interests are at risk, one could expect greater involvement from Russia and Turkey. Although the Turkish Foreign Ministry gave a statement in strong support of Baku, it does not mean that Ankara would be willing to send forces. Moscow has little taste for engagement in a military operation either. Further, even the Collective Security Treaty Organization (CSTO) — a military alliance composed of countries from the Commonwealth of Independent States, including Armenia and Russia — promote a political solution rather than a military one. The international community and organizations openly promote a return to the Minsk Group’s negotiation table and, ideally, this will be the immediate result of the ongoing skirmishes.

      The clashes between Armenia and Azerbaijan are likely to continue in the short term just as their non-existent diplomatic relations will endure without the political will for an inclusive political solution. Tavush province has taken the spotlight between the foes right now, but the recent occurrences are being widely viewed as the greater Nagorno-Karabakh conflict due to the proximity and the historical antagonism over the border. While it is unfortunate that cross-border shelling and conflict has attracted international interest to the South Caucasus yet again, it is not unexpected as matters never really settle to a level of peaceful monotony in the region.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More