The Week in Review
Middle East
The European Union agreed to tough new sanctions against Iran on Thursday targeting its oil and gas industry in addition to its financial sector. Reuters reports that the measures go substantially beyond those approved by the United Nations on June 10. EU leaders said in their statement that “new restrictive measures have become inevitable” as a result of Tehran’s refusal to negotiate over its nuclear program and that time was running out for Iran. Watch for concern over Iran to grow in Europe.
Two Iranian cargo ships carrying aid for the Gaza Strip were due to set sail this week, with one of them traveling via Istanbul, according to Iran’s official news agency, irna. Another flotilla is also expected to leave from Lebanon. The deputy commander of Israel’s navy said the navy will assume provocateurs are aboard any such ships that attempt to break the sea blockade of Gaza. “We believe that there will be groups that will try to cause provocations and repeat what happened on the Marmara,” Rear-Adm. Rani Ben-Yehuda said. Ben-Yehuda confirmed that all nine of those killed on board Turkey’s Mavi Marmara ship at the end of May were terrorists. Responding to the international uproar over the incident, Israel’s security cabinet voted Thursday to expand the range of goods allowed into Gaza via land, while maintaining the sea blockade.
The prime minister of the Palestinian Authority, Salam Fayyad, has been photographed burning Israeli products as a means of boosting the PA’s political standing among Palestinians. The PA government has been running an aggressive campaign over recent months against products that originate in industrial areas beyond the Green Line, the Jerusalem Post reports. In addition to the incitement of burning Israeli products, this campaign involves “the boycott of these products from stores, the seizure of trucks with these goods and even threats of imprisonment against those who dare to engage in the trading of such products” (June 12). How this is meant to benefit the 25,000 Palestinians who work in these Israeli factories and have no alternative employment is clearly not a consideration. “The objective of the boycott is not an economic one,” the Post wrote. “The boycott is a political act, by which the PA wishes to compete with Hamas for public support, and does so using Hamas tools of incitement and provocation.” This is yet another indication that the Fatah-controlled PA is not the moderate force for peace that much of the Western media and governments portray it as.
A large number of Iranian troops have deployed to the country’s northwestern border, where Iran meets with Turkey and Iraq, with an outpost having been set up on the Iraqi side of the border, according to reports. While the move appears to be a response to Kurds seeking autonomy for Kurdish areas of Iran, an Islamic Revolutionary Guard Corps (irgc) commander said on Tuesday that Tehran has deployed troops to the area in response to an alleged U.S. and Israeli presence there, according to state-owned Iranian Press tv. Stratfor comments that while such mobilizations are somewhat regular occurrences, the timing of this one together with the irgc commander’s claims could mean Iran is looking to increase pressure on the United States by raising a military threat in Iraq.
Europe
Rumors surfaced this week that financial problems in Spain could cause a bigger financial crisis in Europe than Greece’s financial woes already have. Some fear that Spain is in talks with the European Union, the International Monetary Fund and the United States about a €250 billion rescue fund—a bailout over twice as large as the €110 billion Greece received. European leaders met on June 17, but EU officials denied that a Spanish rescue package was being discussed. That hasn’t stopped traders worrying, however. Foreign banks are refusing to lend to Spanish banks, firms and government. “Financial markets have withdrawn their confidence in our country,” said Francisco Gonzalez, one of the country’s senior bankers. “For most Spanish companies and entities, international capital markets are closed.” A Spanish financial crisis would be far worse than a Greek one, simply because Spain’s economy is five times larger.
European leaders are warning that this kind of a financial meltdown could have grave social and political implications for Europe. European Commission President José Manuel Barroso and the general secretary of the European Trades Union Congress, John Monks, agree that Europe is headed for a repeat of the 1930s, though they disagree as to how this will come about. “This is extremely dangerous. This is 1931, we’re heading back to the 1930s, with the Great Depression, and we ended up with militarist dictatorship,” Monks said in an interview with the EU Observer published June 14. “I’m not saying we’re there yet, but it’s potentially very serious, not just economically, but politically as well.” Monks fears that the austerity measures being enacted across Europe will push the Continent to the brink of dictatorship. Barroso disagrees, believing instead that without the austerity measures, Europe is bound to fail. “I had a discussion with Barroso last Friday about what can be done for Greece, Spain, Portugal and the rest, and his message was blunt: ‘Look, if they do not carry out these austerity packages, these countries could virtually disappear in the way that we know them as democracies. They’ve got no choice, this is it,’” said Monk. “He’s very, very worried. He shocked us with an apocalyptic vision of democracies in Europe collapsing because of the state of indebtedness.” These men are warning of a real danger. They are well-informed leaders of Europe. And they are saying that 1930s-style dictatorships could very well return! Think about what this could mean: 1930s-style dictatorships led to 1940s-style war.
France is bracing for social trouble as the French government announced that it is planning to raise the minimum retirement age from 60 to 62. The change will come into force in 2018. On June 15, the day that France’s labor minister announced the change, tens of thousands took to the streets of Paris to protest. This is just one example of how economic problems can easily turn into social unrest.
Asia
Following a week of ethnic violence in Kyrgyzstan, the country’s interim Deputy Prime Minister Azimbek Beknazarov said on Thursday that Bishkek would shut down the U.S. military airbase in Manas if the United Kingdom does not extradite Maxim Bakiyev, the son of the country’s former president. Kyrgyzstan’s interim government has been seeking the extradition of the exiled former president and his family members on charges of fomenting chaos in the country. The Kremlin, which is likely behind Bishkek’s threats, has been pressuring Kyrgyzstan to close Manas, which is America’s only remaining military base in Central Asia. Speculation is rife that Moscow is awaiting a commitment by Kyrgyzstan to shut Manas down before it agrees to intervene and bring an end to the ethnic violence. With 50,000 American troops passing through Manas on their way to and from Afghanistan, the base is vital to Washington, but Moscow hates the U.S. presence in its backyard. Whether because of London’s refusal to extradite Bakiyev, or as a means of securing Russian assistance, Bishkek appears prepared to close the crucial U.S. base. In 2005, theTrumpet.com wrote: “The eviction of America from Central Asia will constitute a severe geopolitical defeat for the U.S. and significant win for Russia and China. … We can expect Russia and China to succeed in evicting America from Central Asia” (Aug. 8, 2005). Moscow will likely exploit Kyrgyzstan’s crisis to obtain a promise by Bishkek to shut Manas down. Whether blatantly or subtly, Russia will use its growing leverage to steer the situation to accelerate the demise of U.S. influence, and to further tip the scales of power toward Moscow.
On Sunday, officials from Taiwan and China arrived at an agreement on the structure of a broad trade agreement that would entwine the two economies even closer together. The deal, which includes services, trade and investment cooperation, will remove many of the economic obstacles currently separating Beijing and Taipei. “Signing [the agreement] will strengthen the trade and investment relations between the two sides and will establish a cooperation that will benefit prosperity and development for the economies on both sides of the strait,” said a statement from Taiwan’s Straits Exchange Foundation. The minister of the Taiwan Affairs Office of China’s State Council said the pact will likely be signed this month. In 1949, China and Taiwan split amid a civil war, but China lays territorial claim to the island. Since Taiwanese President Ma Ying-jeou took office in May 2008, Taiwan and China have made a series of cross-strait deals, and now the two governments are fast-tracking negotiations to bring about a bilateral free-trade agreement. Over 50 years ago, Herbert W. Armstrong predicted Taiwan’s fate, saying, “Will Red China invade and capture [Taiwan]? In all probability, yes …. The Red Chinese ‘save face,’ and the United States, with many American troops now on Taiwan, will again lose face!” The quickly warming relationship between China and Taiwan is a step toward the realization of this prediction. China’s “invasion,” at this point, is through soft power and diplomacy as Beijing forges deep inroads into the Taiwanese economy. But Taiwan’s desire to cozy up to China will eventually lead to the end of its autonomy.
Africa/Latin America
Two bombs exploded at a crowded political rally in Nairobi, Kenya, on June 13. The blast and the subsequent stampede killed five people, and wounded over 100. The blast brings back memories of the bloody 2008 post-election violence. The rally was organized to oppose a new constitution that will be put to the vote in August. This attack could be a prelude to more violence as the voting gets underway.
The Honduran government announced on June 15 that the assassination of Gen. Julian Aristides Gonzalez, director of counternarcotics operations, that took place in 2009 was the work of a subsidiary of the Mexican drug cartel, the Sinaloa Federation. The fact that a Mexican cartel can murder a high-ranking official of another government is proof of the cartels’ growing strength and reach. This could herald an increase in Mexican-type violence in South America.
Anglo-America
U.S. stocks fell on Thursday on a private index of leading indicators and a manufacturing report from the Federal Reserve, the Wall Street Journal reported. Investors had expected stronger figures, and the Dow Jones Industrial Average and Standard & Poor’s 500 both fell, while the Nasdaq barely increased. The Labor Department said the number of new unemployment claims rose last week, also a surprise for investors, particularly in construction, manufacturing and educational services.
Thursday also saw American politicians fight British businessmen in Washington. BP ceo Tony Hayward went to Capitol Hill to face down lawmakers out to skewer the company and its leadership for the oil disaster still polluting the Gulf of Mexico. Earlier in the day, the White House forced BP into setting up a $20 billion escrow fund for spill victims, the biggest compensation payment in corporate history. But additional and ongoing cleanup costs, plus waves of legal and possibly criminal lawsuits, will increase the total financial damage to the British company. The American Bar Association estimates criminal fines against BP for violations of environmental laws could put the company’s legal costs alone at $62.9 billion. The quandary facing the U.S. government, however, is if the disaster destroys BP financially, American taxpayers will be forced to pay the bill for years to come.
The British government has axed £10 billion in commitments that the previous administration had made, the London Timesreports. A total of 24 projects were cut by the Treasury, which said the decision was “difficult and painful” but that the Labor administration had promised to spend money “it simply did not have.”
Advocates of Internet safety raised concerns Tuesday that children are being exposed to pornography on the Web of “epidemic proportions.” At the U.S. Capitol Visitor Center, researchers spoke not so much on new laws to protect children, but on enforcing existing obscenity laws. Advocates called for Congress and the Department of Justice to make enforcement of existing laws a priority. The Washington Times reported that 7 in 10 children have accessed pornography on the Internet accidentally and 3 in 10 had accessed it intentionally. One in four accidentally saw Internet pornography through innocent word searches. The average age of exposure was 11, with some viewing it as early as 8 years old.
