Tag Archives: Russia

Turkey at a Crossroads?

‘Peace at home; peace in the world.’ Atatürk’s homely ambition has never been more important for Turkey. However, a number of crises are coming together inexorably to force Ankara to think long and hard about its future intentions. Turkey is at a major crossroads.

There are three main reasons: first Ankara’s relationship with the USA; second, Turkey’s position in the Middle East; and lastly, its delicate economic position.

The biggest snowball rolling down the hill is defence, surprisingly. Ankara has insisted that it will take delivery of a Russian-made S-400 advanced anti-aircraft missile system this month, but the US Congress says it will impose penalties on Turkey if it does so. The sophisticated Russian SAM system poses a direct threat to the latest hi-tech US F-35 fighter, also being supplied to Turkey.

Turkey faces a position in which it must either back away from Moscow’s S-400 deal, or accept the possible economic damage of sanctions and its eventual ejection from the US F-35 programme. The result would have been that, whether by levying economic sanctions, or by cancelling Turkey’s participation in the highly advanced (and very expensive) F-35 stealth fighter programme, the US could retaliate and hurt Turkey’s economy badly.

However, risks to its economy and the threat of US sanctions have not stopped Turkey from acquiring Moscow’s air defence system. Ankara stood firm. A government spokesman was defiant: ‘We are a serious country. Our deal with Russia continues.’ Ankara clearly believes that it can withstand US pressure over the issue – because America needs Turkey.

Then, in late June 2019 (in the margins of the G20 Osaka meeting), the Turkish president claimed that a deal had been struck. President Trump had told him there would be no sanctions over the Russian deal and that Turkey had been had been ‘treated unfairly’ over the move.

President Recep Tayyip Erdoğan told reporters that the first delivery of the S-400s would take place within 10 days and that he believed the dispute would be overcome ‘without a problem’ and without sanctions over Ankara’s purchase of Moscow’s missiles. The results were immediate; the Turkish lira soared nearly 3 per cent on 1 July 2019 to its strongest level since April 2019.

However, Ankara’s optimism is a risky calculation. A USAF spokesman later said: ‘Nothing has changed …  Turkey will not be permitted to have both systems.’ Moreover, if the US Congress follows through on its threat to impose sanctions on Turkey by 31 July 2019 and ignores President Trump, that pressure will have a much wider impact on Turkey’s political and economic future than just defence.

Should the USA remove Turkey from the F-35 programme and impose sanctions on its NATO ally, it would be one of the most significant ruptures in recent history in the relationship between the two nations. It would be one more policy dispute that over the years have tested the complicated relationship between Turkey and the USA.

From Turkey’s military intervention to stop the Greek coup and civil war in Cyprus in 1974, to the US invasion of Iraq in 2003 and, more recently, US support for the Kurdish-dominated People’s Protection Units in Syria’s civil war, ties have frequently been strained between the supposed allies. The danger is that Turkey is, for many reasons, drifting away from the West.

This brings us to foreign policy. Turkey is being forced to recalibrate its foreign and regional policy at a time when the Middle East is undergoing a major transformation. Both Russia and Turkey are seeking more influence in an unstable region. Their relationship is a curious mix of cooperative and competitive. Whilst Ankara is well aware of the dangers of creating new risks to its already weakened economy, it also needs to demonstrate its power as a major regional player.

The problem is that Turkey and Russia have serious form going back to the days of the Tsars. For example, the Crimean War in the 1850s was really all about Russian and Turkish rivalry. Since the days of the Ottoman Empire, Turkey has always sought to deny Russia a significant presence to the south or in the eastern Mediterranean. But that is now where Russia is becoming increasingly active – especially in Syria. As Russian influence grows, Turkey’s room for regional influence shrinks. Turkey’s recent accommodation of Russia is therefore historically and geopolitically unusual.

However, given Russia’s military involvement in the Syrian civil war in 2015 – and its determination to support President Assad in power – some form of engagement between Russia and Turkey, Syria’s neighbour, was inevitable. The two sides seem, for the moment, to have settled on a wary cooperation. Russia controls northern Syria on Turkey’s border. When Turkey is frustrated with the West – as it is now over US support for Syrian Kurdish forces and the EU’s doublespeak on enlargement –- it finds in Russia a sympathetic ear.

The third factor is economics. Turkey is a major energy-importing country. It needs low energy prices, particularly given its alarming level of borrowing and an unsustainable current account deficit, much of it caused by its increasing energy needs. Ankara is however in serious economic trouble. This spills over on to the streets of Turkey itself, as recent elections have shown.

The ruling Justice and Development Party (AKP) has won support on the streets by using nationalism to highlight frequent challenges from alleged EU and Western hostility, fear of Islam and foreign pressure against the country. The fragile state of Turkey’s economy now however threatens social and political stability. The country’s economy dipped into a recession since the last quarter of 2018. The lira has lost 30 per cent on the global money market.

Over the next year, the Turkish private sector must pay back at least $150 billion in debts, and in foreign currency too. Unfortunately, it doesn’t have the money. Financially, Ankara is drifting towards national bankruptcy without serious economic reforms – or getting a lot of new money.

However, there are four more years until the next scheduled elections in 2023. The AKP leadership is banking on having time to stabilise the economy, as Ankara believes it can find alternative sources of money.

Two obvious pots of gold are the hydrocarbons beneath the sea off Cyprus and the lure of a sell-out to the East. To deal with the latter first, China’s ‘Belt and Road’ initiative (to buy up ports and infrastructure across the Middle East and eastern Europe) could be a tempting offer for Ankara. Turning to the East offers easy cash – but at a heavy price.

The second cash cow could be hydrocarbons off Cyprus, and Ankara has shown itself determined to get as much as it can and, in the process, warn off any competition. South Nicosia’s optimistic alliance of Italian, French, Israeli, US and Egyptian backers to support their national oil companies’ ambitions is being met with hard words and the threat of maritime force. The balance of power in the eastern Mediterranean is being challenged.

Inside Turkey the first tremors of a domestic political earthquake are being felt, too. With the country in economic turmoil, AKP’s legitimacy is suddenly facing serious challenges. It suffered stinging defeats in municipal elections in March and was humiliated in the recent mayoral election in İstanbul, the key to national political power. Already there is talk of a rival party based on AKP’s original blend of Islamism with democracy and liberal market policies. Both former deputy prime minister Ali Babacan and former president Abdullah Gül are now looking to create a rival party and bid for power themselves.

The result is that politically, economically and abroad, Turkey is at a crossroads; ‘peace at home and with the neighbours’ is a fine slogan, but is looking to be an increasingly distant dream …

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Versailles – The Terrible Treaty

One hundred years ago, one of the most important conferences in the 20th century began (on 28 June 1919) culminating in the negotiation of a portentous document (finalised on 10 January 1920) that has had ramifications ever since. The Treaty of Versailles – signed to put a formal end to Word War I – turned out to be a disastrous script offering nothing but grief. It would lead in future decades to the death of millions and the chaos of the world in which we continue to live today.

For the first six months of 1919, the leaders of the great powers descended on Paris to reshape their world. Empires were broken up and horse-traded over tea and biscuits in the Quai d’Orsay as new countries were discussed and confirmed – or not. Royalty, journalists, economists, bankers, prostitutes, politicians and other con men poured in to make their unique contributions to building a ‘new world order.’

Although 27 nations attended the Peace Conference at Versailles, it was President Woodrow Wilson of the USA, Prime Minister David Lloyd George of Britain, and Prime Minister Georges Clémenceau of France who dominated the proceedings. They came to the table determined upon a settlement that would keep Germany down, albeit tempered by liberal-democratic ideals: a settlement intended to get rid of the catalysts for future conflict, or at least control them.

The problem was that everyone attending the negotiations had a different agenda. Belgium and France wanted payback and security from the warlike Germans across the Rhine. Britain had already got most of its war aims. Wilson insisted that there should be ‘peace without victory’, believing that that if Germany was treated too harshly she might seek revenge, and start another war. He came to Europe determined to preach that the sacred legacy of the Founding Fathers and American political ideas were universally intended for the good of all mankind. Cynics – including Lloyd George and Clémenceau – were sceptical.

The cracks emerged early on in the proceedings. Unlike the high-minded President, the British PM was a slippery, unprincipled pragmatist: in the US advisor’s words, he was ‘a mischief-maker who changes his mind like a weather cock’; and Clémenceau’s judgement was even harsher: ‘Lloyd George is a trickster…  Lloyd George has deceived me. He made me the finest promises, and now he breaks them.’ Clémenceau was heard to growl: ‘Between the crooked Lloyd George and the saintly Wilson, it’s like sitting between Napoleon and Jesus Christ.’

Wilson’s demand for a League of Nations to control his new world order was dealt with rapidly. Lloyd George agreed with the idealistic American to keep him happy, as did Clémenceau, both believing that although the League was theoretically a good idea, it would never work. Wilson virtuously lectured them all on ‘American values and principles of liberty and independence as a perpetual charter for the whole world.’ The startled delegates moved on rapidly to safer topics.

Russia was not represented at Versailles, even though the country was theoretically one of the victorious belligerents. The new Bolshevik regime spurned international diplomacy, concentrating instead on exporting revolution to their erstwhile allies’ home countries. The problem was that Russia was still legally an ally. However the subversive aims of Bolshevism, Lenin’s flat refusal to pay Russia’s debts, and the murder of Tsar Nicholas II and his family, sent a shiver down the spines of European politicians, aware that they were seeing something new and alarming on the international scene.

The other important reason was that war-weary Western public opinion was decidedly hostile to any new war; in many places (such as Red Clydeside and Liverpool) people actually supported the Bolsheviks. In 1919 Whitehall was terrified of a British revolution. So the powers opted to isolate Red Russia by blockade and provide dwindling support for the anti-Bolshevik Whites. It was a policy that would cost the unfortunate Russian masses dear over the next 70 years.

The other big absentee from the negotiating table was Germany. Most Europeans were understandably bitter about the legacy of the ‘Second Reich’. Their millions of dead stood as a mute reproach to any calls for leniency towards German militarism. Clémenceau of France, demanding ‘victory with vengeance’, insisted that the defeated must expect little mercy from the victors. His aims were clear: to punish Germany; to make the Germans pay for all the damage they had done to France and Belgium; to recover Alsace and Lorraine; and to restrict Germany military power to ensure that it was forever weaker than France. The Germans were not consulted. Berlin was, in historian Norman Stone’s dry comment, ‘just expected to sign on the dotted line.’

Meanwhile the peacemakers turned their attention to creating a new and supposedly more peaceful Europe. New countries sprang up in the Balkans, where the war had started in 1914. Hungary, Czechoslovakia, Bulgaria and Greece all got new borders. The Slavs got a national home in Yugoslavia and an independent Poland was created with a curious corridor to Danzig on the Baltic, isolating East Prussia, and creating a serious international hostage to fortune. The Baltic states of Lithuania, Latvia and Estonia suddenly appeared. Italy’s frontiers took in former Austrian territories inhabited by Italians. Ottoman Turkey lost everything as their empire was parcelled out. Further east the French got Syria – much to TE Lawrence and the Arabs’ dismay – and the British got the oil in what was now Iraq and Persia. (Kurdistan was completely overlooked, because Lloyd George had never heard of it and didn’t know where it was.)

When the details of the treaty were published in June 1919 German reaction was surprised and outraged. The still-blockaded German government was given just three weeks to accept the terms of the treaty, take it or leave it. Its immediate response was a lengthy list of complaints, most of which were simply ignored. The terms of the treaty were seen as an unreasonable Diktat, clearly intended to ensure that Germany remained militarily and economically powerless. After all, argued the militarists of the ‘stabbed-in-the-back’ nationalists, Germany had never actually ‘lost’ the war.

The final terms of the Treaty were indeed harsh. The blame for the whole war was placed firmly on Germany. The ‘War Guilt Clause’ (Article 231) in particular was judged very unfair. How could Germany be the only country to blame for the war? The war had been caused because a Serbian hothead had assassinated an Austrian Prince. Germans believed that they were being made the scapegoats for everything.

Berlin was also ordered to pay reparations of around 226 billion gold marks. The German army was reduced to 100,000 men, the navy to six warships and no submarines; and all military aircraft were to be destroyed. Heavy artillery, gas, tanks and military aircraft were banned. In addition, there was to be no military presence within 30 miles of the east bank of the Rhine. Kaiser William II and some German army officers were found guilty of ‘war-crimes.’

The Allies also foisted a new form of government on Germany to prevent the country from being taken over by a dictatorship. Instead ‘proportional representation’ would lead to more than 30 political parties, and the Weimar Republic’s eventual weakness and collapse.

The final act of Versailles was overshadowed by German’s refusals to sign. Political chaos reigned in Germany. The government folded and no politician was prepared to put his signature to what was seen as a dishonourable capitulation. Without a government there could be no Treaty. The Germans said that if the offending articles were removed, then they would sign. Paris refused, threatening to start Foch’s armies marching again. Germany backed down, sending two subordinate ministers to sign.

On 28 June 1919, in a glittering ceremony in the Hall of Mirrors at Versailles, the Peace Treaty to end World War I was finally signed. Next day Paris rejoiced, en fête; but in Germany the flags were at half mast.

Later generations would be left to deal with the problems of a resurgent Germany and the USSR, let alone Hitler, Stalin, the Cold War, the Arab-Israeli wars, Palestine, Iraq, Syria and control of global oil supplies.

All consequences of Versailles: the 20th century’s political Pandora’s Box…

The New Face of War?

Like many others, I was surprised by the announcement by Air Chief Marshal Sir Stephen Hillier, Chief of the Air Staff, that his Reaper drone crews will be eligible for the new Operational Service Medal for their contribution to the war in Syria and the defeat of ISIS (also known as Daesh). Traditionally, medals have always been awarded based on risk and rigour. It may seem a reasonable assumption that there is not much risk sitting in a nice warm office up at RAF Waddington in Lincolnshire where they operate their Unmanned Air Vehicles (UAVs). More like playing computer games, perhaps? Where is the risk and rigour in that?

On digging deeper, however, I have changed my mind. There is no doubt that the RAF’s drone operators have made a major contribution to the defeat of ISIS and deserve official recognition.

An unnamed pilot said the drone operators’ job is very different to his Typhoon force operations. The RAF pilot, with 30 long and dangerous combat missions over Syria during his Akrotiri tour, made the point:

‘In some ways it is identical, in some way it is totally different … I think they have it a lot harder in some ways …

‘What people don’t realise is the emotional investment they end up having in it. They will watch a target for weeks on end and they will understand every part of that target’s life.

‘You can’t not become emotionally involved – we need to give those boys and girls a lot more credit that I think people are giving them.’

The pilot’s comments echo the words of the Defence Secretary, Gavin Williamson, who has said: ‘The campaign against Daesh is one of which our Armed Forces can be extremely proud. I am pleased that today those who have bravely fought against such untold evil will get the recognition they deserve.’

During the campaign to destroy the extremists in Iraq and Syria, drones were used to carry out strikes, gather intelligence and conduct surveillance. While front-line operational aircrew do operations for maybe six months or a year at a time, drone operations staff face different challenges The Reaper force is on duty 24/7/365, monitoring an enemy that is elusive, dangerous and determined to attack the West in any way it can in pursuit of its twisted, fanatical world view. The personal strain and pressure watching the every move of these individuals is immense and unrelenting.

Drone crews have been doing that for every working day on Operation Shader (codename for the Syrian campaign) for four years. ACM Hillier pointed out that for the drone pilots, sensor operators and mission intelligence co-ordinators of the Reaper crews, ‘It is not some remote support operations – they are doing operations, engaged in active operations every minute of every day. This often involves weeks of monitoring individuals and then, once a strike has been executed, another vast amount of time is spent ensuring it was successful.’

Of course, in addition sometimes taking the decision to kill whole groups by remote control is made before going home to the family for supper and to help put the kids to bed. Drone pilots face questions like: ‘What did you do today, Daddy?’

As a result the pressure has taken its toll. ACM Hillier confirmed that drone crews are monitored ‘extremely closely for the risk of psychological harm … these people see some quite stressful things. So we have provided the opportunity for counselling, and an environment where we look after each other – a full support network exists. We need to make sure we don’t end up with them [the drone pilots] getting psychologically fatigued.’

This insight into the combat stress of the new warfare is a reflection of how in the last decade drones have become a new battlefield in the ‘vertical flank’. As long ago as 2004, the militant group Hezbollah began to use ‘adapted commercially available hobby systems for combat roles’. These modified toys can be bought easily, as the Gatwick debacle in December 2018 demonstrated, and – at prices ranges from US $200 to $700 – they are as cheap as chips to the military.

Also, adapted drones are lethal. For example, in August 2014 well-directed Russian-backed artillery fire was used to devastating effect in Ukraine, leaving three mechanised battalions a smoking ruin. This mission reached its goal because the units and their positions were identified by a mini-drone with a TV camera: the Ukrainian government lost 200 vehicles – and very-short-range air defences weren’t able to detect the deadly eye in the sky.

Armed services worldwide are taking this new threat very seriously indeed – as well as the new opportunities drones offer.  Whilst much attention has been focused on hypersonic weapons and long-range missiles, small UAVs pose new risks and are a serious challenge to air defences on land and sea.

In America, Dan Gettinger (Co-director: Center for the Study of the Drone) warns, ‘The US military – and any other military – have to prepare for an operating environment in which enemy drones are not just occasional, but omnipresent … Whether it’s a small, tactical UAV, mid-size or strategic, drones of any size will be commonplace on the battlefield of the future.’

He recognises the asymmetrical nature of the drone, armed or reconnaissance. Drones are cheap, hard to detect and don’t bring politically embarrassing body bags to the attention of the media or the folks back home. Drone technology has become a cat-and-mouse game, as militaries struggle to deal with the big threat of little drones.

For example, whilst US ‘supercarriers’ – with 80 warplanes and 5000 sailors – can dominate the narrow waters of the Persian Gulf, these 100,000-tonne behemoths are intensely vulnerable to hundreds of tiny Iranian attack drones – or a swarm of radio-controlled, fast-attack craft. The only remedy is lots of close-range defensive small calibre guns – and the chances are that some of the enemy will still get through. Half a dozen US $1000 missiles can easily disable a vessel costing US $50 billion. As the Americans say: ‘You do the math – go figure.’

Inevitably the market place has latched onto the commercial possibility of drones. Driven by a global increase in the use of mini-drones by terrorists and criminals, the anti-drone market is expected to grow to US $1.85 billion by 2024, according to the US business consulting firm, Grand View Research.

‘As drones become deadlier, stealthier, faster, smaller and cheaper, the nuisance and threat posed by them is expected to increase, ranging from national security to individual privacy,’ Grand View warns. ‘Keeping the above-mentioned threat in mind, there are significant efforts – both in terms of money and time – being invested in the development and manufacturing of anti-drone technologies.’ The Dutch have even trained eagles to attack drones.

Britain’s drone policy appears to be primarily defensive, as the RAF is well aware that the F-35 Lightning (at GBP £65 million a throw) is unlikely to be available in large numbers. Reaper drones and their UAV successors (at about GBP £14 million a copy) can offer a better bang for the taxpayers’ buck. In a speech at the Royal United Services Institute on 11 February 2019, UK Defence Secretary Williamson announced that the United Kingdom was ready to develop and deploy a swarm of drones before the year was out. ‘I have decided to develop swarm squadrons of network enabled drones capable of confusing and overwhelming enemy air defences,’ he said. ‘We expect to see these ready to be deployed by the end of this year [2019].’

This is interesting: it suggests a ‘weapons mix’, where drones accompany crewed fighters as robotic wing mates. It’s cheap – and the technology already exists in the US: for example, the manoeuvrable target drone developed by Kratos Defense & Security Solutions.

The danger, as ever in UK defence procurement, is that the dead hand of Ministry of Defence jobsworths will – once again – gold plate and change the specification, starve it of funds, double the cost and, finally, draft a rotten contract just in time for the next round of defence cuts.

But that’s another story …

ISIS: The Final Countdown?

Winston Churchill once famously said, ‘battles are the punctuation marks of history.’ Well, we have just avoided a potentially disastrous ‘exclamation mark’ in the bloody history of the Middle East. Whilst the post-colonial Versailles settlement of 1919 is being brutally readjusted to take account of the harsh realities of today’s Muslim world, a major crisis has just been avoided. At Russia’s Black Sea resort of Sochi, Turkey and Russia have agreed to form a joint, demilitarised buffer zone around Syria’s embattled north-western province bordering Turkey: Idlib.

This agreement defuses a growing crisis between Ankara and Moscow by preventing any major Russian-backed government offensive from exploding into ISIS’s final rebellious Syrian redoubt. However, significant obstacles remain; Idlib could still become a flash point.

The problem is that the Middle East is as much of an unexploded bomb today as Europe was in 1914. Sunni Saudi Arabia hates Iran, and Shi’a Iran loathes the Saudis. Shi’ite Assad’s remaining chunk of Syria is the close ally of Iran. Behind the Saudis stand the USA, Britain and France. Behind the Iranians stand the Russians, sometimes the Turks, ever keen to obliterate the Kurds, and perhaps China – and watching nervously from its ringside seat is Israel.

For the past ten years we have all been living with this savage struggle to the death. Muslim has been slaughtering Muslim, all in the name of the Prophet of the religion of Peace and Love – ‘May his name be blessed.’ Now this round is nearly over; or is it?

The Turkish-Russian Sochi deal has been welcomed by all sides as an opportunity to avert the suffering that any major offensive would inflict on the province’s 3 million civilians. UN Secretary-General António Guterres welcomed the agreement, saying that the ‘creation of a buffer zone in Syria’s rebel-held Idlib province should avert an all-out military assault and provide reprieve for millions of civilians.’

It would also avoid the heavy losses that would be incurred by government forces in launching the biggest battle yet of the Syrian war against the cornered rebels. Turkey, the UN and aid groups have warned that any major assault by Russian and government forces backing President Bashar al-Assad against the trapped rebel fighters would lead to a massacre. It could also send 800,000 new refugees fleeing across the border into an already overwhelmed Turkey.

Many of the civilians in Idlib are already refugees from other parts of Syria following the collapse of the opposition resistance in cities such as Aleppo. The consequences of an all-out offensive against Idlib with its hapless civilians and the risk of Turkish troops fighting Russians could have led to a bloodbath.

The agreement is specifically designed to halt this major Russian-Syrian-Iranian attack on Idlib, with its trapped civilians.  The agreement calls for a 9- to 12-mile demilitarised  zone around the borders of the region, safe from Syrian and Russian air-force attack and which must be in place by 15 October. Heavy weapons including tanks, mortars and artillery will be withdrawn and Russian and Turkish troops will police the neutral zone. The Syrian government said that it ‘welcomed any initiative that stops bloodshed and contributes to security and stability.’ President Recep Tayyip Erdogan added, ‘With this memorandum of understanding, I believe we have prevented a major humanitarian crisis in Idlib.’

However, the devil is in the detail. The deal’s success hinges on the withdrawal of an estimated 10,000 fanatical jihadi rebel fighters from the buffer zone, fighting under the banner of Hayat Tahrir al-Sham (HTS), the Syrian franchise of al-Qaida and listed as dangerous terrorists by Russia, the USA and the UN.

These are some of Syria’s fiercest rebels, battle-hardened over years of gruelling warfare. HTS will fight to the death rather than surrender and they have good reason to do so: talks with the government have gone nowhere. In recently recaptured parts of the country, Assad’s goons have promptly arrested former rebels and opposition officials despite assurances of amnesty. Many have disappeared into Assad’s torture dungeons. ‘It’s either die, or surrender – and then die,’ says one rebel leader.

Despite these problems, Iranian Foreign Minister Mohammad Javad Zarif (a staunch supporter of Assad) tweeted: ‘Diplomacy works.’ However, he added that his visits to Turkey and Russia in recent weeks had achieved ‘a firm commitment to fight extremist terror.’ Putin himself added, ‘Russia and Turkey reiterated their commitment to continue anti-terrorism efforts in Syria in any of its forms or manifestations.’

Quite how this agreement to quarantine Idlib helps to stamp Islamic terrorism remains unclear because the deal is very fragile. With jets from at least six countries – Israel, Russia, Syria, Turkey, Britain and America – roaming the skies over Syria, the risk of mistakes leading to further escalation of the fighting are just a pilot’s blink away. Also, where will the rebels go?

Nevertheless, the international consequences of Sochi are important. Russia has scored a major diplomatic victory by striking a deal with Turkey. Moscow has avoided damaging its growing strategic relationship with Ankara, whilst achieving its own aims in Syria without more bloodshed. The Syrian war may be ending.

However, some things have not changed. ‘Russia doesn’t like the rebels and they want to help Assad lock down his victory; but they also have strong incentives to continue courting the Turks,’ said Aron Lund, an expert on the region. ‘Syria is just a small part of what Putin cares about. If he can just make the Syrian conflict quiet and unthreatening with Assad still in power, then Russia has won the war ….’

Idlib’s locals have mixed emotions about the Sochi deal. Abdulkafi Alhamdo, a 32-year-old teacher living in Idlib remains wary. ‘After seven years, if we trusted anyone we would be fools. Whenever we trust anyone they trick us,’ said Mr Alhamdo, who lived through the siege of Aleppo before fleeing to Idlib.  He added that he was ‘so happy, and so sad’ about the deal, because it still leaves them in limbo.  ‘People might be able to live again. Children might know there is tomorrow without planes. But we are still in nowhere. Refugees forever.’

Others have spotted the loopholes in the agreement. Thanassis Cambanis of The Century Foundation warns: ‘The gaping hole is that “terrorists” are still fair game. Putin has endorsed a lot of truces, but then Russia proceeded to bomb groups it defines as terrorists, because it says they weren’t part of the wider deal.’

This truce might be different. Putin’s own credibility is at stake, having made such a high-profile deal with President Erdogan. Turkey and Russia are increasingly becoming trade and diplomatic partners. Russia is building Turkey’s first nuclear reactor. The Kremlin also sees the strains between Turkey and western countries as a wonderful opportunity to divide and weaken the NATO alliance, to which Turkey provides the second largest number of troops. Putin has a personal stake in the Idlib agreement.

However, whilst for the Jihadis the battle may be lost, their long war is not over, because crushing ISIS in Syria will not eradicate the real problem. If the jihadis escape, the deadly spores of terrorism will merely disperse to spread their Islamist terrorism, which is already ‘global and growing.’ Islamist extremists caused 84,000 deaths in 2017 and intelligence agencies have identified 121 groups sharing a common ideology, now operating worldwide. They killed 84,000 people – nearly 22,000 of them civilians – in 66 countries in 2017, according to latest reports.

Even Whitehall admits that a convicted jihadi terrorist is being released onto the streets of Britain nearly every week. Home Office figures show that 46 prisoners held for terrorism offences were released in 2017 (The Telegraph, 13 September 2018)

ISIS and al Qa’ida are still very dangerous. Whatever happens in Idlib, we have not heard the last of them. The fallout from Syria will be with us for years.

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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Watch Out! There’s a War About

For once I find myself in total agreement with Vladimir Putin, who observed recently in a Blinding Glimpse of the Obvious that ‘the world is becoming a more chaotic place.’ Whilst Pres-for-life Vlad’s BGO doesn’t exactly qualify him as a great thinker, this time he is absolutely right. There’s a definite feeling abroad of an unravelling in world affairs; an uneasy sense that something nasty is lurking round the corner of history ….

As Nigel Molesworth put it so succinctly in Down with Skool: ‘History started badly and hav been getting steadily worse.’ Looking at our increasingly troubled world, maybe ‘the gorilla of 3B’ got it right.

But first, the good news. A few months ago we were all nervously observing a ‘mad, bad and dangerous to know’ US President threatening fire and fury at North Korea’s ‘Little Rocket Man’ over nuclear missiles. It was definitely steel helmet (and don’t forget your respirator) time. Now, thanks to Trump’s interesting blend of diplomacy, brutal economic sanctions and the threat of violence, Kim Wrong ’Un seems to have a sudden change of heart and is smiling for the cameras and shaking hands across the border. Sigh of relief all round?

However, let’s not get too excited. North Koreans have a consistent track record in talks with the South and the US: consistently lying and trousering the ‘Danegeld’ paid to them to behave themselves, whilst they ignore any agreements. We need to watch this ‘deal’ very carefully.

And let us not forget that Dictator Kim was threatening nuclear war whilst still presiding over appalling human-rights abuses as he ruthlessly executed friends and family alike to eliminate his rivals. Nonetheless, if President Trump really succeeds in negotiating an end to Kim’s nuclear provocations and the Korean War (‘Neutral ground or dramatic backdrop?‘, Telegraph, 23 April 2018), he will have defused a potentially apocalyptic global crisis.

Good luck with that.

Now for the bad news; and there is far too much, as Putin warns.  Intelligence analysts are warning that trouble is looming from at least three other directions: Syria and Iran; Israel; and a global economy deep in debt.

First, Syria, where the endless civil war to keep Assad and his Shi’a allies in power has morphed into something new – and much more worrying. UN Secretary General Guterres warns: ‘The Cold War is back with a vengeance – and a difference.’ The difference is that it is no longer cold. Something very dangerous is unfolding in the war-torn Middle East. A little-known Iranian-backed Shi’a group calling itself the ‘Baqir Brigade’ has declared jihad on US forces in Syria,  where Russian and American troops are only a rifle range apart.  The US, UK and France have already attacked Syrian military targets as a reprisal for the latest gas attack. The dangers are obvious. Any Russia and US fighting in Syria could detonate a hot war and set the entire Middle East on fire.

Further north, Turkey has invaded Syria to crush the Kurds – the warriors who really defeated ISIS on the ground. Meanwhile the Iranians and their Lebanese Shi’a proxy, Hezbollah, have set up a new battle front on Israel’s border. Iran effectively runs Syria now and is turning its malevolent eye against Israel.

This time the Mullahs are really playing with fire. Israel is not a normal country. Tel Aviv will fight like a cornered cat against an enemy that has sworn to ‘sweep the Jews into the sea.’ And Israel possesses nuclear weapons precisely to deter anyone stupid enough to threaten Israel’s very existence. Israel has warned that ‘it will retaliate with every means possible,’ if attacked by Iran and its friends.

Ironically, Iran’s nuclear ambitions may be unravelling at the very moment it tries to intimidate Israel. Tehran thought that it had pulled a stroke with nice Mr Obama with his 2016 no-nukes deal to get sanctions lifted, whilst continuing to build its Shi’a empire in Iraq, Lebanon, Syria, and now Yemen. Trump is having none of that. Despite Macron’s pleading for a cosy continuation of flogging French and EU goodies to oil-rich Iran, Trump pulled the plug on 12 May 2018 and re-imposed economic sanctions, blocking Iranian oil sales and wrecking Tehran’s not-so-secret nuclear plans.

This is bad news for the world economy, which is now just as vulnerable to a financial crisis as it was in 2008. Oil is the motor of commerce. Oil prices, which dropped to $30 a barrel in 2009 and 2016, are now rising as production cuts by OPEC and Russia have finally sold the world glut of oil; so supply dries up. Iranian sanctions alone will remove 500,000 barrels a day from the market.

Even America’s new oil-shale output cannot fill this gap between supply and demand. Now Brent crude has risen to $72 a barrel and will probably go higher now that Trump has re-imposed sanctions. This could be a global economic bombshell as various geostrategic crises explode. Saudi Arabia is already talking about $100 crude, setting off a speculators’ scramble;  ‘We are pretty confident that oil will be in triple digits by next year,’ opines Jean-Louis Le Mee from Westbeck Capital.

IMF reports warn of a chain-reaction for world finance. One is well-understood: debt. Global debt has been alarmingly high since the 2008 financial crisis. Since then, nations have continued to borrow hand over fist, pushing worldwide debt to $200 trillion (a trillion is a million, million million.)  That is nearly three times the size of the entire global economy.

The second economic problem is that the Chinese and German economies are going into reverse. Germany’s economy in particular is stalling surprisingly quickly. The economic miracle by the EU’s motor of industry is over and now even Berlin faces economic problems, warns Düsseldorf’s Macroeconomic Policy Institute: ‘The danger of recession has increased markedly. It is a more critical picture than just a month ago.’

All this is happening as Korea teeters on a knife edge, Washington and Moscow go head to head, Syria faces multiple wars, Israel and Iran are shaping up for a catastrophic showdown, and the proxy war between Saudi Arabia and Iran over Yemen gets out of control with missile attacks on Saudi targets by Iranian-backed Houthis. A full blown religious war between Sunni and Shi’a has started. One intelligence analyst warns: ‘All it will take is one Houthi missile sinking a 200,000-ton oil tanker in the Gulf and the consequences would be global.’

Even here, on our island in the sun, alarming events are going on all around us. Suddenly bankrupt Greece is preparing to lease two French multi-purpose frigates to bolster its defences in the Aegean Sea, amid rising tensions with Turkey. Fighters are again on the alert over contested islands. Turkey sails warships to Cyprus to protect hydrocarbon finds. Hostages are being held on both sides. President Erdogan suddenly announces a snap election to choose the country’s next president and parliament on 24  June 2018, to give himself greater executive powers.

All this at a time when the Turkish economy is overheating, raising the possibility of another financial crisis like 2001, when the AKP first came to power promising a strong economy. With Turkish national borrowing skyrocketing and Ankara having to lure foreign money with promises of 13% interest on government bonds, this doesn’t look much like economic competence. The truth is that we are ‘living through interesting times,’ as the old Chinese curse puts it.

Whilst most normal people are just trying to get on with their lives, get to work, earn enough to raise a family and enjoy themselves, all around us alarming events look like coming to the boil. Politically we are living through world-changing history.

It’s an increasingly unstable and dangerous world.  We need to watch out for what is really going on out there.

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