The war in Palestine gives another twist to the geopolitical and economic ungovernability that has gripped the world in the last two decades. The crisis of globalization. At the same time, it reinforces the circle of fires that surrounds a powerless Europe: from the southern Mediterranean and the Sahel to Eastern Europe, passing through the Middle East, Turkey and the Caucasus (Nagorno Karabakh). With all the unknowns still to be cleared up some quite obvious consequences could be ventured.
Firstly, a new impulse to the militarization of international relations and with them the economy. The war in Ukraine made it clear that the US’s European partners had to spend more on weapons, which they will have to buy from the American friend; Now the crisis in the Middle East and the alignment chosen by Europe do not reveal any solution that does not involve a reinforcement of defense structures, especially those linked to facing a possible resurgence of attacks such as those at the beginning of the century. Expenses that, by definition, are as unproductive as they are inflationary and are paid for by resorting to more debt and public deficit.
The interpretation of what is happening in Israel and Gaza as a new conflict between the two axes that compete on a global scale is part of the official narrative. It will fuel protectionist trade wars between the West and China. Israel has expressed its displeasure with Xi Jinping’s regime for what it sees as its lukewarm reaction to the Hamas coup. Beijing is not on the same wavelength as Brussels and Washington. It is quite evident that after this episode things will get worse.
While last weekend’s Islamist attack was brewing, the European Commission was preparing to announce that it will investigate China’s subsidies for its steel. A demand from the US not to reimpose the tariffs on European steel that Donald Trump approved in 2018, according to the Financial Times. File that is added to that of electric vehicles and soon that of wind turbines.
In Europe, calls are growing to cut investment and relations with China, in line with Washington. The last one, that of the emblematic Bundesbank, the German central bank. If they prosper, German dependence on the US will be maximum. With the consequent drag effect for the rest of the European partners.
The first analyzes of the economic effects focus on the rise in oil and especially gas prices, an additional contribution to inflation. But the economy already accumulates many burdens and shadows; Any additional weight can be the trigger for a big fall.
Jamie Dimon, the president and CEO of JP Morgan, one of the main investment banks on Wall Street, has stated that “this may be the most dangerous moment the world has experienced in decades.” Alarmist, prosaic interest in doing business or militant patriotism?
The serious situation in the Middle East will go beyond the recurrence of previous clashes. The magnitude of the Hamas attack and the response announced by Israel point to an unknown escalation.
Its influence on Europe is already visible. They have been noticed. A simple example, the cuts in basic freedoms, such as the right of expression and demonstration, in the three most important countries of Western Europe (defender of those values): United Kingdom, France and Germany. Something not seen in decades. Unflattering trend at the door of the debate to approve new fiscal rules, reduction of taxes and deficit that will generate social tension and a macro process of expansion is being prepared. The pathetic presence of Ursula Von der Leyen in Israel, without powers in this matter, will aggravate European disorientation.
One possibility is that the immediate trigger for Hamas’ action was its desperate attempt to take advantage of a global power vacuum: the social division of an occupier governed by a questioned Benjamin Netanyahu; the internal political chaos in Joe Biden’s US; the focus of this superpower and its European satellites on the war in Ukraine and the competition with a more nationalist China; a general lack of understanding about the fate of the Palestinians, apparently resigned to their extinction and outside of global agendas. For the purpose, according to many analysts, of trying to block an agreement between Israel and Saudi Arabia and vindicating the role of the terrorist organization and its protector Iran in any future design of the area. A challenge to the US operation to normalize Israel’s relations with Arab countries, from Morocco to Saudi Arabia.
If that happens, the crisis of world order will worsen. It already has the great recession of 2008 as relevant chapters; the trade war between the West and China, the definitive decomposition of Afghanistan; the invasion of Ukraine; military coups in Africa; the migrations of millions of desperate people and the inability to confront climate change. A multiplication of problems that would place the main agent of order, the United States, in a situation of extreme tension if it does not properly adjust the reactions of its allies. In this case, Israel. If the result is the opposite, the US will have consolidated its hegemony. For this she needs the war not to spread.
Which in turn is linked to the strength of the military action that Israel undertakes. Depending on its size, it may invite groups like Hezbollah to intervene, in this case from Lebanon. On Friday, the second top leader of this group, Naim Qassem, assured: “Behind the scenes calls from the great powers, the Arab countries and the United Nations envoys, telling us not to interfere, will have no effect.” If you keep his word, the dominoes will start. The first affected were neighboring countries such as Egypt and Jordan, with already very precarious stability. Then Iran, Saudi Arabia, Türkiye….No one knows where the end is.
