Syria: Next Move?

Three days ago, facing strong Chinese and Russian resistance, the US and its European allies dropped their draft Security Council resolution to impose sanctions on Syria.

Yesterday, they abandoned any hope that they might find agreeable language for a watered down version of that resolution.

Enter Turkey:

Turkey is pressing ahead with plans to impose its own sanctions on Syria, despite European powers backing down from using the UN to punish the regime for its crackdown on the protest movement. (...)

In the absence of UN security council action, Turkey's move could be decisive in a six-month standoff between Syrian security forces and anti-government activists which has seen more than 2,700 civilian deaths and sharply destablised the region. 

Erdogan is preparing for a range of economic, military and political sanctions which will further damage the once-close relationship between the two states.

The timing and location of the expected announcement are interesting.

Is this the Beginning of the End for the Euro?

The first time I wrote about the economic crisis in Europe and the Greek debt issue I suggested that the most logical scenario for them is to default and get out of the Eurozone. With the new drachma they could devalue at will, I said, and they could increase their exports and get a large portion of the budget vacationers who are nowadays leery of traveling to North Africa and Egypt. Since staying within Euro was conditional upon accepting crippling austerity measures which makes the repayment of their massive debt impossible, I thought this was the sanest choice.

I even offered the relatively recent examples of Argentina and Russia, both of whom found rapid prosperity after defaulting. Yet they suffered mightily while vacillating towards that decision.

Fast forward two months, yesterday, Stergios Skaperdas, a professor of economics at the University of California at Irvine wrote this:

The demands go well beyond those prescribed by conventional economics. They will deepen the depression and make full debt repayment even less likely than it now is. Therefore, the clear, strong nudge is for Greece to default as soon as practicable. (...) 

Since Greek banks will become insolvent, they will have to be nationalised and preparations will need to be made for that. The insurance and pension funds will need to be bailed out, too. For both banks and funds to be bailed out, the country will need its own currency. Therefore, exit from the eurozone would follow. 

Professor Skaperdas believes that Greece's exit from the Euro is necessary because without its own currency the country could never recover:

"There is little doubt among economists that the easiest mechanism for a country to gain competitiveness is to have its currency depreciate. Hence, Greece having its own currency is the easiest path to gaining international competitiveness. Cars and iPhones will become more expensive but food might actually become cheaper and employment will pick up within a few months after the introduction of the new drachma. By contrast, unemployment and deprivation with no end in sight are the predictable results of following the troika's policies."

Moreover, he feels that, with and without Greece in it, the future of the Euro is rather bleak (and therefore it is best for Greece to leave now):

For the countries of the eurozone it has become apparent that there are only two clear options: political integration or breakup. Anything else is politically or economically unsustainable. Since there is no appetite for political integration, exit from the eurozone can be expected later anyway, when it could be even less advantageous for Greece.

Syrian End Game

I am not sure how many people saw this news item from a couple of days ago:

Turkey has seized a Syrian-flagged ship loaded with weapons, Turkish Prime Minister Recep Tayyip Erdogan has said.

He did not say where or when the vessel was stopped, but vowed to confiscate any arms shipments for Syria coming through Turkish waters or airspace.

As the Syrian army blocked any exodus to Turkey to prevent them using this as a pretext to intervene, I wonder if the recently announced enhanced patrolling of the Eastern Mediterranean, is less threatening for Israel and more problematic for Syria.

After all, he vowed to do it over and over again.

And as we know, statements are more important than actions.

Pakistan Worries

It looks like I am the only person worrying about Pakistan.

Two days after I posted my worries, on 13 August, someone abducted Warren Weinstein, an American development specialist, from his home in Lahore, Pakistan. He was 48 hours away from leaving the country indefinitely. Today, I wanted to find out what happened to him and after 20 Google pages, I realized that no one reported much about the story after his abduction. There was a mistaken news of his release on 25 August (which was promptly denied by the American authorities) and that was it.

Weinstein was identified as a development consultant working on a project called Pakistan Initiative for Strategic Development and Competitiveness (PISDAC). Following the Raymond Davis debacle, many people assumed that he was probably a CIA agent. The oddly militaristic name of the project and its affiliation with the US government (albeit through USAID) seemed to strengthened their assumption. Others vehemently denied that, pointing to the fact that he was an old man trying to do some good for humanity (interestingly the "old man's" age was reported as 63, as "believed to be in his sixties" and as 70).

Regardless of whether he was a NOC or a well-paid humanitarian, several things happened after his abduction (it is just a timeline, I am not making a causal assumption as in post hoc ergo propter hoc fallacy).

Palestinian Move and What It Means for the Region

A couple of nights ago, at a dinner party, someone told me that I was wrong about my analysis of the Middle East. As Mahmoud Abbas'  application for Palestinian statehood was met with a Netanyahu rebuke and an American veto, my interlocutor took this as a confirmation that "plus ça change, plus c'est la mème chose."

They said that they always knew that this would be the case, because "Jews would never let Palestinians have a state and they would never let the US to accept Palestinian statehood."

If you digest news on a day by day basis, I realize that you could presume that I was wrong in predicting that a Palestinian state was going to be a reality in the next little while. And if you took the threatened American veto at face value, you could conclude that, despite the Arab Spring and regime change in several countries, there was no change in the American and Israeli perspectives.

As you know, I see things differently. Just look at the subheading of this blog. And, nothing I observed in the last few days seem to disprove my hypothesis. I still believe that there is a grand plan to change the face of the Middle East and that the US is behind because it has no choice but control the global distribution of oil and natural gas (as the Middle East is the hub for 70-plus percent of both of these). I also think that, for the same reason, they had a hand in those recent regime changes and in encouraging Turkey to act like a regional super power willing to confront Israel.

Given my assumptions, I think the Abbas move fits nicely in that gambit as it provided several advantages:

a) It brought the issue back on the agenda. That sounds trite but it was not self evident until a few weeks ago. With a global economic crisis going, Europe in disarray and American political institutions completely paralyzed there was no way to start a new process. Now they have to.

It presented the Israelis with a new deadline to start talking in earnest. Their Cold Peace partner Egypt is no longer able to support their every move, their only ally in the region is acting with open hostility and one of their neighbors, Syria, is about to implode bringing with it most of Lebanon. They simply cannot rely on the US veto and act like the world has not changed.

The Americans were hoping to push Netanyahu government to the negotiation table and now they know that even if they veto the UN statehood bid, Israel has no choice but talk to the Palestinians. And this time not for appearances but to achieve a lasting peace, as everything around them is about to go up in flames.

Instead of using Egypt to send this message to the Israeli government (which might have led to undesirable responses given the imminent security issues) the US used Turkey and its willing PM Erdogan to let them know that it is time to adapt to the new regional realities.

b) It made Abbas look presidential. Unlike Hamas leaders, Abbas is internationally well-known and well-regarded. The UN bid made him look good, like he was capable to stare down the mighty US.

Actually, if the US pressure was genuine, I believe he would have folded quickly, as he has no money, no power and no real friends and the move has only symbolic value. Interestingly, this time around when Lieberman suggested that Israeli government withhold customs duty payments to the Palestinian Authority, Arab countries stated that they would make up any shortfall. As we know from the chronic fiscal problems of the PA, those oil-rich Arab states were never that generous in the past. And the EU said that it would continue its financial assistance to the PA.

Abbas emerged from this fake confrontation as a leader and as the undisputed leader of the Palestinian people. This will prove to be invaluable for the subsequent steps. No one from Hamas will be able to make a claim to that position and no one will challenge his authority to represent all Palestinians. He is the preferred interlocutor both for the Israelis and the Quartet and he now looks like he was chosen by his people for the historic journey.

c) It gave the US cover. They looked like they opposed it and were prepared to veto it. As Jeremy Bowen put it:

President Barack Obama says that now the US will veto the application if ever it comes to the vote in the Security Council. He made a speech that was so pro-Israeli it shocked even the Israelis.

This is important for domestic consumption where AIPAC has extraordinary access to media and can influence the debate and the Republican candidates can fake sincerity when it comes to Israel.

It also enables them to go to Likud folks and say, "look we tried everything but you know the regional realities, there is no way we can put down Turkey and Egypt and even if we could that would leave Iran as the regional power. Do you really want that?"

In other words, from where I sit, all of this makes sense. As I suggested before, there will soon be major steps towards a Palestinian state.

Having defended my contrarian logic, let me just make a side note about the "because Jews will never let..." argument, as it is more common than most people realize. This is the danger of conflating Israel with Jewish people that I have been talking about. It enables people to project their pre-existing prejudices onto a community using the actions of a specific government with a specific ideology.

Let me explain it this way: When people talk about WWII, they always refer to Nazis, as in, Nazis did this and Nazis did that, and they are always very careful not to substitute Nazis with Germans or a whole host of Central and Eastern European people, even though, from the perspective of shared ideology (antisemitism) they could easily do so. In this case, they are doing the opposite: they are conflating Israel with Likud and Ysrael Beiteinu and then conflating that specific Israel with Jews everywhere.

Thank you neocons! Mission accomplished.

As I said before, I am not Jewish. But I am quite capable of seeing that Jews don't have much to do with Likud government's self destructive refusal to negotiate in good faith with Palestinians for a two state solution. As far as I know, a majority of the Jewish people in diaspora and in Israel are in favor of that solution. Josh Marshall, a self-defined Zionist, is very representative of that preference and this is what he says:

I'm a Zionist. I deeply believe in a two-state solution, with the '67 borders as the starting point for the discussions. I believe that for many reasons. But the most important of those is that I believe it is the best and only viable path forward for Zionism and the State of Israel.

So, it is not the American Jews who are in cahoots with Likud but AIPAC, the neocons and of course the evangelical Christians who believe the end of times is tied to the eventual destruction of Israel (which, paradoxically, makes it a desirable event for them).

In fact, when you look at the electoral results, American Jews have always voted overwhelmingly for Democratic candidates. Clearly, if they were the masters of the universe everyone seems to believe, they would have supported the Republicans and especially their evangelical wing. I will grant  that the neocons and AIPAC are very loud with excellent access to media and their views are presented as the views of American Jews but they really are a tiny minority among Jewish people.

Greece, Eurozone and Banksters: An Update

A while back, when I commented on the Greek debt and the Eurozone crisis, I suggested that the most obvious solution for Greece is to default, pull out of the Eurozone and rely on cheap drachma to get all the budget tourists who are too afraid to go back to Tunisia and Egypt.

It sounds like facetious advice but I thought that since default was inevitable (considering the size of the debt and crippling austerity measures) instead of making people suffer for a long time to end up at the same place, why not rip the bandage quickly and hope that tourism and exports fueled by cheap drachma will pull them out of that pit.

I also said that the reason Eurozone countries are being targeted by banksters and their clients, the rating agencies, is because, in this high stakes poker game, they are hoping to persuade European governments to create new and safer mechanisms that would back their high risk sovereign debt bets. To that effect, I gave the example of Irish government who got persuaded by Merrill Lynch that if they guaranteed the private debt of Irish banks, all would be fine. Overnight, the Irish taxpayers ended up with $100 billion new debt and the banksters got all their money secured. Just like Goldman Sachs taught Greek government how to hide those massive debts while giving them cheap money, Merrill Lynch conned them into bailing out the folks who made those risky bets.

The Irish case opened a new chapter for the banksters. Why take a haircut? Ever? Why not make risky bets, gets huge bonuses and then push governments into a corner and make them assume the risk behind those investments. So, when they realized that a likely Greek default was not enough to budge European governments, they downgraded Portuguese debt to junk to strongly suggest that a Greek default will be contagious and that the ensuing crisis may not be contained an the Euro will be in jeopardy. They kept saying ominously that Spain and Ireland will be next.

But the vacillation did not end.

Politicians are politicians. Clearly, Merkel has been in a tough spot with her support declining and the support for her coalition partner (FDP) collapsing. Her other partner, the conservative Bavarian CSU, is adamantly opposed to any bailout that will cost money to German taxpayers.

To make European governments understand the stakes, they chose a bigger target this time and downgraded Italian debt. The threat is real and the target is well chosen:

Any further adverse developments in Greece will precipitate a run on Italy – involving investors selling Italian government debt.  

With Berlusconi mired in scandals and Italy holding five times the sovereign debt of Greece, the assumption is that Eurozone governments cannot let that happen.

And if that threat does not work, France is next. Don't think France is immune because Sarkozy pretends to be Merkel's equal. France's fundamentals are worse than Spain, with debt hovering around 85% of GDP (Spain's is just 65%).  And as I mentioned in June, French banks have a huge exposure to Greek debt (and to Irish, Portuguese and Spanish debts). The French and German banks are holding more than a $900 billion of risky bonds in Greece, Ireland, Spain and Portugal. That is not chump change.

Just today, Siemens, who had previously applied and received bank status, moved 500 million euros from a French bank and deposited to ECB. That's one way of signalling that French banks are shaky.

The thing to remember is that they will not pull the trigger. They will simply make the target bigger and bigger and hope that someone will blink.

Someone will.

My money is still on the banksters.

Two Interesting Articles

Recently, I came across two interesting articles. They were written by Saudi writers and published by Saudi papers on 7 June 2011.

On June 7, 2011, two Saudi columnists – the liberal Khalaf Al-Harbi, of the Saudi daily 'Okaz, and Fawaz Al-'Ilmi, of the Saudi daily Al-Watan – published articles comparing Israel's situation to that of the Arab countries. Al-Harbi opined that the secret to Israel's success lay in its democratic regime and its respect for the human rights of its citizens, while Al-'Ilmi wrote that Israel's prosperity was due to its investment in education and science. It should be noted that these articles are a rare phenomenon in the Saudi government press.

I honestly don't know what to make of this.

The last sentence of the excerpt is a huge understatement. Saudi papers do not publish articles that openly praise Israel, especially for its democracy and respect for human rights. Besides their deep seated hatred of Israel such a statement would invite an obvious comparison with Saudi Arabia where democracy and respect for human rights of its citizens are almost sacrilegious concepts.

I wonder if it should be taken as a sign of the things to come.

Speaking of that, I hear that Netanyahu has just offered direct talks with Abbas on Palestinian statehood.

BBC notes that

The Jerusalem Post said this would have Israel agreeing "with reservations" to enter talks on the basis of the 1967 borders with mutual land swaps while the Palestinians would agree to the mention of Israel as the nation state of the Jewish people.

Do you remember who predicted that?

The Problems With Neo-con Perspective

A friend of mine and a reader of this blog sent me a link to David Warren's latest column entitled "the Man Who Could Trigger a World War."

Warren claims that the Turkish PM Erdogan is a dangerous antisemite who is very keen on creating a casus belli with Israel to start a world war.

This is in stark contrast to what I have been saying on this humble soapbox.

To me, Erdogan's real or perceived antisemitism is besides the point. What I am interested in is looking a large number of variables (beyond statements) and trying to understand the meaning and direction of the large scale changes that are taking place in the Middle East.

In that vein, I claimed that the so-called Arab Spring in Tunisia and Egypt was actually a military coup d'etat. And given the beholden nature of their armies to the US, for a coup d'etat to be possible the US had to be in on it. Which means (without sounding like a functionalist) these acts had to fit a larger purpose. I also suggested that Israel was a reluctant actor for some of it (i.e the Arab Spring and regime change in Egypt) and a willing participant for other aspects of this grand design (i.e. the kabuki theater with Turkey).

Obviously, one of us is dead wrong.

Normally, the intellectual gap that separates me from neo-cons is such that I would not comment on their arguments. Nothing I could say would be intelligible to them and nothing they could say would be meaningful to me. But looking more closely to that gap might be interesting for my tiny readership.

The neo-con understanding of the world is a basic and permanent us-vs-them framework with simple ideological filters.

The first one is the importance of political discourse and messages of strength and toughness conveyed to your friends and foes.  Their most often used phrase is "sending a message" and because of that they often advocate extreme military measures and a shoot-first-talk-later approach.

Secondly, they firmly believe in American exceptionalism. As you know, American exceptionalism is the ideological filter that enables you to condemn Act X when done by another country but hail the same Act X as legitimate and good when performed by the US. The filter's indispensable ingredient is the assumption that your side is inherently pure and well-intentioned. And as such it is an integral part of all your explanations.

With such a simple framework this is how you make sense of these recent events:

Two Hints About The Future

Turkish Prime Minister Erdogan is in Egypt.

He was greeted by large and enthusiastic crowds and his speech was carried live on TV. He has just addressed the League of Arab Nations and his trip will cover all three countries that experienced regime change, namely Tunisia, Egypt and Libya.

Clearly, this is a show of force on the part of Turkey, claiming not only the Middle East but North Africa within its zone of influence. Even Somalia was not too far away for Erdogan. If the term Muslim Brotherhood was not taken (and somewhat tainted) he would have claimed it. As Al Arabiya News reported:

Egypt has traditionally seen itself as the leading diplomatic player in the Arab region. But its position has been eroded by wealthy Gulf countries, such as Qatar, and lately overshadowed by Turkey, with its fast expanding economy.

What was interesting (and what prompted me to comment on it) was this:

He told the Arab League that before the year's end "we will see Palestine in a very different situation".

The Downside of Turkey's Regional Ascent

My initial motivation for starting this blog was to dispel some erroneous notions about the Arab Spring. Consequently, almost without realizing, I ended up writing more than I wanted to about the Middle East in general and Turkey's new regional role in particular.

Lately, I noticed that, while trying to argue how the mainstream narrative does not explain the regional realities, I might have given the impression that I view Turkey's regional power status positively. That is a misleading impression. I believe that Turkey's actions will be beneficial in stabilizing the region and solving two of its long-running problems. But I seriously doubt that Turkey will benefit from these actions in the long run.

Let's take a look at the overall picture.

Turkey and Israel: Is This For Real?

While I was away, my theory about Turkish Israeli tension being essentially a kabuki theater came under attack.

It became a tale told by an idiot full of sound and fury, signifying...well, let's see.

My Turkish friends are telling me that I have been wrong about the whole thing, as it has become clear that Lieberman is a belligerent idiot and Netanyahu is an empty suite who is only interested in being a Prime Minister. Neither of them cares about the long term interests of the Jewish state, they say. According to them, this dynamic duo is doing everything to alienate Israel's only friend in the region.

My Jewish and Israeli friends are telling me that Erdogan is clearly an out-of-control antisemite playing a dangerous game. They say that he began by asking for an apology, he escalated it to a demand for lifting of the Gaza blockade and now he is pretending to be the Sultan of the Middle East. They claim that he is doing all that on purpose to make it impossible to normalize Turkey's relations with Israel.

I will grant that Lieberman is probably a belligerent lightweight and as Netanyahu is likely a poseur. And Erdogan looks and sounds like an antisemite with delusions of grandeur.

But there is a big jump from these observations to a conclusion that these two countries are at each other's throat.