Tag Archives: Poland

The Day Europe Died

On 1 September, 80 years ago last month, Adolf Hitler’s Nazi legions invaded Poland to start World War II; a war that was to prove the deadliest and the most destructive war in human history. It marked the day when Europe finally committed suicide. Eighty years on, world leaders convened in Warsaw to mark and remember that terrible moment in history.

World War II lasted from 1939 to 1945 and involved 30 countries from every part of the globe. The war killed an estimated 70-80 million people, or 4 per cent of the world’s population. If war is about breaking things and hurting people, then World War II’s impact was horrific. Soldiers and civilians alike were slaughtered; huge tracts of Europe and western Russia were devastated, with whole cities razed; South East Asia was wracked by war; millions starved; Jews and undesirables were murdered on an industrial scale by the Nazis; and the use of atomic bombs on Japan signalled a new and deadly way of wiping out humanity.

The facts are terrifying. The Soviet Union suffered most, with over 20 million killed. Almost 3.5 million Soviet prisoners of war died in German slave labour camps. German soldiers were ordered to exterminate all Jews, communist leaders, as well as any Soviet civilians resisting the Aryan ‘Master Race’ in order to take their grain and livestock. During the two-year siege of Leningrad, more than 1 million residents starved to death.

Germany fared little better. It lost around 9 million people: 5.3 million soldiers; and 3.3 million civilians. The Nazis murdered 300,000 of their own citizens and the Allied bomber offensive killed 600,000, leaving Germany as a heap of rubble by 1945.

Poland lost 5 million people: 16 per cent of its total population. Of those, 2.7 million were Jews, and 240,000 were soldiers. Yugoslavia lost 1 million people including 445,000 soldiers. France lost 568,000 people, of which 218,000 were soldiers. The United Kingdom lost 60,000 civilians to German air raids and 384,000 military. The United States lost 405,000 soldiers.

Further afield, the war killed 30 million in the Pacific. China lost 20 million, 80 per cent of whom were civilians. In just one incident, the 1937 Nanking massacre, Japan killed around 300,000 Chinese.

Japan’s brutal Samurai Code (‘the way of the warrior’) led to 6 million deaths in China, Japan, Korea, Indochina and the Philippines. This included the slaughter of civilians in villages, slave labour in Korea and China, and the use of human experiments to develop biological weapons. In addition, up to 400,000 ‘comfort women’ were forced into sexual slavery; 90 per cent of these unfortunate females had died by the end of the war.

This lengthy litany of horrifying statistics is vital because they rub home the key point, all too easily forgotten as memory turns to history: Hitler’s war was nothing less than the biggest disaster in recorded history.

The irony is that the war should have come as no surprise. Hitler had, years before, spelled out in cold print his plans for a war to end wars.

As he held court in 1924 as a prisoner in Bavaria’s Landsberg Castle for leading an attempted coup in Munich, Hitler committed his plans to paper. In a turgid and badly written book called Mein Kampf (My Struggle, in English), Germany’s future Führer drafted his battle plan. Germany would rise again and seize by force lebensraum (‘living space’) and raw materials to the east. The malign megalomaniac who caused World War II openly warned the world what he intended to do.

The problem really started in 1914, when the great powers of Europe blundered into a cataclysmic European civil war, thanks to a system of unwise military alliances and epic diplomatic miscalculation. By 1918, exhausted and bankrupt, the old ‘Europe’ had fallen apart. Four empires lay in ruins: Germany; Austro-Hungary; Russia; and the Ottoman-Turks. Out of the ruins the Peace Treaty of Versailles made things worse.

Versailles imposed savage terms on Germany, holding Berlin responsible for the whole war and demanding unheard of sums as reparations. The German Weimar government printed money to meet its exorbitant payments, thus creating hyperinflation: a wheelbarrow full of millions of Reichsmarks was needed to buy a loaf of bread.

As Germans lost buying power, they looked for salvation. The harsh economic conditions made people turn to new leaders, principally the Communists and the Fascists. Adolf Hitler, a spellbinding orator and embittered veteran of the trenches played on ordinary Germans’ fears. Leading his National Socialist Party, he blamed the Jews for Germany’s defeat and promised a return to power, full employment and prosperity. A generation of Germans welcomed his policies and his promise to make Germany great again.

Once again, nationalism was on the rise. In Germany, Mussolini’s Italy and Japan’s warrior state, new leaders advocated militarism, re-armament and the use of naked force to overcome other nations and seize their natural resources.

In 1931 Japan struck. The island nation required oil and food imports to feed its growing population. In what many consider to be the true start of World War II, Japan invaded China, intent on grabbing the mineral riches of Manchuria. The powder train to a wider war was burning, because the global economy was in crisis; the Wall Street Crash of 1929-31 changed everything.

The Great Depression and economic crisis reduced global trade by 25 per cent. In Germany, unemployment reached 30 per cent. Communism began to look attractive to the millions of unemployed and broke. To quell rioting on the streets, Germany’s politicians and industrialists turned to Hitler and his Nazi Party as a bulwark against this growing ideological threat from the east.

On 30 January 1933 they appointed him Chancellor. It was a grave mistake.

Within months Hitler and his henchmen had seized full power. Following a disastrous fire at the Reichstag – almost certainly ignited by the NazisPresident Hindenburg published a decree on 28 February 1933 as an emergency response to what was widely believed to be a Communist Coup. It suspended many of the civil liberties of German citizens. It was swiftly followed by an ‘Enabling Act’ on 23 March 1933, as ‘A Law to Remedy the Distress of People and Reich’, an amendment to the Weimar Constitution. It gave the Chancellor power to enact laws without the involvement of the Reichstag.

Hitler was now the legal dictator of Germany. With all power in his hands his plan for a war of conquest was now possible.

The rest, as they say, is history. Hitler, now ‘Supreme Leader’ of the Germans, tore up the Versailles Treaty, re-armed Germany and began his long European land grab for the Rhineland, Austria, Czechoslovakia and then Poland.

Finally Hitler did two things in that final summer of 1939 to make sure that no one stood in his way.

On 23 July, to the amazement of the world, Ribbentrop and Molotov signed a formal ‘Non-Aggression Pact’ between the two sworn ideological enemies. Unbelievably, Hitler’s Nazi Germany and Stalin’s Communist USSR were now allies.

Hitler’s final step towards the war he had dreamed about and planned for in Landsberg fortress was a typical deceit. Rather than openly declare war, he resorted to trickery.

On the eve of that fateful day – 31 August 1939 – a handful of doomed concentration camp prisoners were given Polish uniforms, unloaded rifles and ordered to attack an isolated German frontier post on the Polish border. The Wehrmacht machine gunners at Gleiwitz were waiting. The wretched prisoners were slaughtered to a man. Journalists were later invited to view the bodies at the scene as Doctor Goebbels’ Nazi propaganda machine swung into action to denounce a Polish atrocity.

At dawn the next day – 1 September 1939 – Hitler’s Panzers and Stukas attacked Poland to seize lebensraum to the East. World War II had begun. It had all been predicted by the Mein Kampf blueprint.

Hitler’s war would complete what 1914-18 had begun: the destruction of Europe. From 1945 onwards, America, fat on Europe’s gold and self-immolation, took over the role of world leader.

Curiously, that outcome does not feature in Mein Kampf….

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Money Makes the World Go Round

For the second time in a month, to my surprise, I find myself agreeing with President Putin.  Speaking at the International Economic Forum recently he warned: ‘We don’t need trade wars today … we need a comprehensive trade peace.’

Cuddly old Vlad was really warning us that there’s a financial firestorm brewing. Looking at what is going on with the euro and the Turkish lira, it’s hard to disagree.

The euro is really our old friend the Deutsche mark, cunningly devalued and disguised to pay for German re-unification, and now Europe’s chokehold currency of no choice. For example, any independent Scotland joining the EU would nowadays be ‘forced’ to accept the euro. Difficult for the Scots: not for nothing did Thomas Carlyle call economics the dismal science.’

Dismal science or not, money makes the world go round – and always has done. Even St Paul admitted: ‘The love of money is the root of all evil.’ This titanic battle for economic power rages around us every day, as China and America tussle behind the scenes over who owes how many dollars to whom and what they are worth, whilst a worried Commission in Brussels watches nervously as its great dream of a superstate called ‘Europe’ begins to disintegrate.

Because the UK’s ‘Brexit’ is the least of the EU’s problems. With Poland refusing to toe the Merkel party line, the Balkan states disobeying Juncker’s ‘diktats’ on immigration, and now a major trade war looming with the USA, Brussels has its hands full. Money is at the heart of it all. The unfolding Italian political train crash that is the new populist, anti-establishment Eurosceptic government is Brussels’ worst nightmare. It threatens their euro. Austrian chancellor Kurz gives the game away, bleating: ‘We saw in Greece how dangerous it is if a country has a bigger and bigger debt and I hope that we will not have a second Greece in our neighbouring country, Italy.’

The reason? Money and debt. Frightened hard currency has been haemorrhaging out of cash-strapped Italy for months, driving it even further into the red, amid fears of a Greek-style euro debt crisis which would bring the country to its knees. The new Italian government is even threatening to quit the euro and set up a parallel currency.

This is serious, because Italy is the eurozone’s third largest economy, nearly ten times the size of Greece’s.

The former chief economist of the IMF – Olivier Blanchard – believes the eurozone is heading for an ‘horrific crisis,’ denouncing Italy’s popular new government’s plans as ‘likely to violate all EU and domestic fiscal rules and put debt on an unsustainable trajectory’. What he means is that Rome is inviting an economic and political war, because the big French and German banks risk losing billions if Italy says, ‘no more pay offs.’

Brussels now has the beginnings of a serious rebellion on its hands. However, once again Italian voters have been over–ruled by EU technocrats, pressuring President Mattarella to ignore the voters, just as the Berlusconi government was toppled in 2011 by Brussels and the European Central Bank, in what was effectively a ‘soft coup.’

This is dangerous territory.

The Italian president’s refusal to accept the Lega-Gillini finance minister because he ‘could provoke Italy’s exit from the euro’ is dynamite. The political message to Italian voters is clear: whoever you vote for, the eurozone rules. A Lega spokesman explained: ‘You have to swear allegiance to the god of the euro in order to be allowed to have a political life in Italy. It’s worse than a religion.’

In Brussels,  Juncker openly threatens: ‘There can be no democratic choice against the European treaties. One cannot exit the euro without leaving the EU,’ and Günther Oettinger, European Budget Commissioner for Budget, actually said: ‘This will teach the Italians to vote for the right thing.’

Because the ECB and Brussels will fight to the last drop of Italian money to stop anyone escaping from their eurozone straitjacket.  The French Finance Minister warns: ‘If the new government takes the risk of not respecting its commitments [in other words, “If Italy doesn’t pay its huge debts to our big French and German banks”], the financial stability of the eurozone will be threatened. Everyone must understand that Italy’s future is in Europe and nowhere else. … there are rules that must be respected.’

This push to smother Italy’s eurosceptic rebellion, as they muzzled Syriza in Greece, comes from a worried Berlin, Brussels, and the EU power structure. But this time they may have blundered into a trap, because the EU’s economic problems grow worse every day. Now debt-ridden Spain admits it is in serious trouble. And Spain owes euro banks ‘zillions’, too. The bottom line for the EU is that if the Italians and Spanish welch on their euro debts, then the euro is finished – with huge international bankruptcies on the cards.

‘So what?’ says the man in the Kyrenia café, ‘How do big economic problems affect me, my family and my bank account? Who cares?’

The answer to the puzzled denizens of Turkish North Cyprus is ‘look at your money.’ Something very odd has happened to their Turkish lira. One year ago, 1 GBP pound sterling bought you 4.30 TRY; ten years ago, on 31 May 2008, a quid bought just 2.12 lira. And today? Going to press, a pound buys you around 6 lira. That’s what international currency fluctuations do to the expat, watching his pension. That’s how small Turkish Cypriot businesses, being paid in lira whilst paying for their rents in sterling, go bust. The reason? Money: because the Turkish lira is now in deep international doo-doo.

For years, Ankara’s AKP government has funded its massive vote-buying economic programme with money borrowed from overseas investors, attracted by Turkey’s generous interest rates. No less than 70% of Turkey’s deficit is covered by short-term foreign loans.

The problem is paying off those loans. Interest payments were biting deeper and deeper into Ankara’s Central Bank’s precious reserves of hard currency US dollars or euros. Loans began to dry up, so the Central Bank increased interest rates to tempt the punters and keep the all-important foreign dosh flowing. The problem is that at 13.5% the interest payments were expensive – but, at 16.5%, they could become ruinous.

At which point Turkey’s would-be President stepped in, boasting that he personally intends to run the economy when he wins the election on 24 June to become all-powerful leader. On his orders, interest rates will be slashed to 10% to save Turkey’s money. Result? Instant panic and predictable flight by spooked, nervous lira investors. Consequence? A market panic with foreigners desperate to unload their lira while they can. ‘Cheap? Your real, genuine Turkish lira. A real bargain, guv … Gotta sell.’

Because that’s what markets do. That’s how economics works: supply and demand. No demand for lira, they go dirt cheap. The result is that Turkey will either have to devalue, introduce capital controls or accept that, whatever their ‘Dear Leader’ thinks, foreigners will decide just what the Turkish lira is truly worth: and foreign investors are not impressed.

As an anonymous fund manager at a major asset management firm, complained: ‘Erdogan is fighting the extremists, he is fighting after the failed coup – now he is fighting the financial markets, and that is dangerous …. You can fight your domestic foes all you want; but when you are trying to take on the global financial market, that is a battle you can’t really win.’

And the EU? Watch this space. Of one thing we can be sure: the Commission, Berlin, Paris and Frankfurt will gang up in a darkened alley, ready to bludgeon, beat, bribe, browbeat and bully Italy to keep their precious euro together at all costs. Once again, the financial gloves are off. It’s going to get ugly. Just ask the Greeks.

Money really does make the world go round.

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