Jul 24th 2009

Obama's Peace Offensive

by Alon Ben-Meir

A noted journalist and author, Dr. Alon Ben-Meir is professor of international relations and Middle East studies at the Center for Global Affairs at New York University. Ben-Meir holds a masters degree in philosophy and a doctorate in international relations from Oxford University. His exceptional knowledge and insight, the result of more than 20 years of direct involvement in foreign affairs, with a focus on the Middle East, has allowed Dr. Ben-Meir to offer a uniquely invaluable perspective on the nature of world terrorism, conflict resolution and international negotiations. Fluent in Arabic and Hebrew, Ben-Meir's frequent travels to the Middle East and meetings with highly placed officials and academics in many Middle Eastern countries including Egypt, Israel, Jordan, the Palestinian territories, Syria and Turkey provide him with an exceptionally nuanced level of awareness and insight into the developments surrounding breaking news. Ben-Meir often articulates

With a significant majority of Israelis and Palestinians in favor of a two-state
solution with peace and normal relations, why then there is no national drive in
either camp to push for a solution? The United States cannot equivocate with the
Israelis, the Palestinians or the Arab states as to what is required to forge a
lasting peace.
------------

On a recent trip to the Middle East I had the opportunity to meet with many Israelis and Palestinians from all walks of life including high government officials, settlers and members of the Peace Now movement. I also met with academics, poll takers, journalists, former military and intelligence personnel, and scores of other ordinary people. Paradoxically, while repeated polls confirm that a majority (between 68 and 72 percent) of Israelis and Palestinians seek peace based on a two-state solution, no such unity exists between the various groups and factions who continue to promote their own agenda regardless of the consensus of the majority. What I heard and saw simply reconfirmed the profound lack of political cohesiveness within both Israeli and Palestinian communities.

Political factionalism coupled with intense personal rivalry too often prevents majority support of one leader or party. This is the case for Netanyahu's coalition with Shas, Yisrael Betanu and other right wing elements just as it is for Mahmoud Abbas' support within Fatah and with Hamas. More alarming is that while disconnect within each community persists; there is still a misperception between Israelis and Palestinians about each other's national aspirations,
requirements and ultimate intentions. Too many Arabs and Israelis remain highly suspicious and oblivious to each other's psychological dispositions. Yet with a significant majority of Israelis and Palestinians in favor of a two-state solution with peace and normal relations, why then there is no national drive in either camp to push for a solution? The answer may be attributed to the following:

First, both sides generally have little faith in their own leadership's ability to deliver peace with security and dignity anytime soon. Israelis and Palestinians lack determined, visionary and courageous leaders. In Israel, the nature of a coalition government often prevents the Prime Minister to rise above the fray and take decisive measures toward peace without risking the collapse of the government. While Netanyahu's coalition represents a majority within the
Knesset, it by no means represents the overwhelming number of Israelis who are ready for a leader who can maintain a united government and deliver peace.

The Palestinians, on the other hand, suffer from a chronic factionalism making it impossible for a leader to make the necessary concessions without risking his position of power. Mahmoud Abbas is meant to represent the moderates, although most moderates have a hard time fully backing him because he has been unable to achieve any significant gains for them. Hamas' charter-which calls for Israel's destruction-is both offensive and intolerable to Israel and much of the international community, yet they are far more organized and enjoy popular grassroots support in Gaza. Without reconciling the political agenda of these two groups, Israel and the US will not have a strong partner with which to negotiate. Moreover, both sides often use this internal division and lack of consensus as an excuse for inflexibility.

Second, many Israeli and Palestinian leaders still feel that more time may further improve their position and lead to more concessions, hence they argue against;rushing' into any agreement. This is coupled with strong rejectionist elements in both camps. In Israel there are those who still seek "Greater Israel" especially among the settlers. On the Palestinians side there are several groups, such as Islamic Jihad and Hamas, who want all of mandated Palestine including Israel. They believe if they cannot take it by force thenthey can wait and use demographics to overwhelm the Jewish majority; as the idea of a one state solution has began to gain some currency among Palestinian radicals.

Third, neither the Israeli nor Palestinian government has been preparing the public over the years for the inevitability of peaceful coexistence based on a two-state solution. Whereas Israeli officials talk about the lack of a worthy Palestinian interlocutor and complain about continued violence perpetrated against Israel, the Palestinian media and public condemnations of Israel
continue to incite the public against Israel, often using venomous language that makes the possibility of coexistence seem beyond repair.

Fourth, both sides are wrapped up in a tit-for-tat process where neither party wants to show its cards first. Both remain internally conflicted as to how far they can go to accommodate each other while maintaining the upper hand in negotiations. For example, on the surface it appears that the Israeli government would not compromise on the future unity of Jerusalem as "Israel's eternal capital" while the Palestinians would presumably not compromise on the issue of the right of return of the refugees. In reality however, both sides have substantially modified their positions and reached agreements in principle on both of these critical issues in previous negotiations.

Lastly, there has not been consistent pressure exerted from the outside to prompt both Israelis and Palestinians to settle their differences. Although the United States has exerted some effort over many years, it was neither consistent nor did it display the leadership needed to bring parties together to forge peace. The Clinton and the Bush administrations focused on the
Israeli-Palestinian conflict largely at the eleventh hour of their presidencies. The US has failed to assert itself as the most influential power, and has too often allowed excessive violence to severely undermine the peace process as happened during the second Intifada under the Bush administration's watch between years 2000 and 2006. The Arab states too have often used the Palestinian plight to cover for their domestic failures. It is only in the past few years that some Arab states have put forth a concerted effort to advance the Arab Peace Initiative that calls for a comprehensive Arab-Israeli peace. Although historical in its dimensions and implications, the Initiative remains static because neither side is ready or willing to translate it into a real peace
process.

Considering this paradoxical reality, both Israelis and Palestinians have shown that they are simply incapable of resolving this conflict on their own. This is why the Obama administration must pursue an aggressive political agenda with unwavering commitment to produce concessions from all sides to provide the basis for an agreement. The United States cannot equivocate with the Israelis, the Palestinians or the Arab states as to what is required to forge a lasting peace. But for peace to occur, the Obama administration must secure a number of prerequisites to avoid the pitfalls of previous administrations and capitalize on the changing political environment in the Middle East especially among the Arab states that favor peace with Israel.

Ending the Settlements Expansion:


Ending the settlements expansion is one of the most critical elements in changing the dynamic of the Israeli-Palestinian negotiations. More than anything else the settlements send a clear message that Israel has no intention of seriously relinquishing territory and that the idea of a two state solution is dead. If Israel were to stop expansion, it could strengthen Mahmoud Abbas' hand as he would be able to claim credit for an extraordinary Israeli concession. To resolve the conflict on this issue between the Obama administration and Israel, both sides must agree on a moratorium for a specific period of time (instead of an open-ended freeze) pending a resolution to the borders dispute. The expansion can then be resumed on the settlements that would be incorporated into Israel proper by agreement with the Palestinians. The Israeli government must also control the settlers currently residing in the West Bank who have on a number of occasions resorted to violence against the Palestinians. In return for an Israeli cooperation and a moratorium on the settlements, the Obama administration must demand and receive from the Palestinian Authority an immediate cessation of all incitements against Israel in the Palestinian media, especially those in Arabic. This must include the revision of text books, as is being promoted by the Peace Research Institute in the Middle East. Moreover, although violent attacks against Israel have been reduced dramatically since the Gaza war, the PA must demonstrably continue to take whatever action needed to prevent future acts of violence. In addition, the PA must undertake a major public relations campaign to foster the virtues of peaceful coexistence with
Israel.

Promoting a Palestinian Unity Government:


Establishing a unity government remains central to promoting a lasting Israeli-Palestinian peace. The Obama administration must exert tremendous pressure on Egypt and Saudi Arabia to do everything in their power to advance a unity government between Hamas and the Palestinian Authority. Every effort must be made to pressure Hamas to accept the Arab Peace Initiative. It is unlikely that Hamas will abandon their charter and recognize Israel outright; therefore, accepting the Arab Peace Initiative as an act of solidarity with the 22 Arab states may allow its leadership to save face. It would also allow Israel and the US to come to an indirect agreement with Hamas should they start looking seriously at the Arab Peace Initiative as a viable framework for peace. Having been substantially weakened by the Israeli Gaza offensive late last year, the continuing closure of border crossings and the growing disenchantment of its policies by Palestinians in Gaza and other Arab states, Hamas may now be more inclined to forge a unity government than at any time before. Moreover, Hamas' leadership seems more open to discuss a two-state solution in order to have a say in the peace process. Otherwise, the growing chasm between Hamas and the PA will not serve the interest of any of the players in the conflict and will only
perpetuate the possibility of large scale violence.

Reducing Tension in the Territories:

Although there has been significant progress in the West Bank and the Palestinians are enjoying greater freedom and relative economic prosperity, Israel can do considerably more to make the life for the Palestinians in the West Bank easier. Israel moreover, must further strengthen Mahmoud Abbas. Israel cannot weaken Abbas, and then blame him for being weak and inconsequential. Israel should continue to remove scores of road blocks, release thousands of
prisoners and allow thousands more Palestinians to work in Israel. These concessions should be awarded to Mahmoud Abbas as a triumph and result of negotiations. Israel must also grant more construction tenders to Palestinians living in overcrowded housing that need to build schools and housing units. Between years 2000 and 2007 a meager 91 construction permits were given to
Palestinians in West Bank while 18,472 housing units were built for Israeli settlers in the same area, which can only breed more resentment. Changing this status quo will first and foremost strengthen Abbas in the eyes of ordinary Palestinians and allow him to make important concessions to Israel especially in connection with border adjustments and the issue of Palestinian refugees. In addition, these efforts would further bolster Abbas in his negotiations with
Hamas to form a unity government as he can demonstrate that he is the more effective interlocutor with the Israelis. Finally, Israeli concessions will help to create the contrast in the quality of life and personal freedoms for Palestinians in the West Bank, to demonstrate that moderation pays and is rewarded.

Translating the Arab Peace Initiative into Confidence-Building Measures:

The Obama administration must persuade the Arab states to translate the Arab Peace Initiative into confidence building measures. Such an historic document that calls on Israel to return territories captured in 1967 for peace while finding a just solution to the Palestinian refugees is not only momentous but provides the foundation for a comprehensive Arab-Israeli peace. In a recent Op Ed in the Washington Post, The Crown Prince of Bahrain, Shaikh Salman bin Hamad
al-Khalifa expanded on the necessity for Arabs to back the Peace Initiative in a more robust way: "We must stop the small minded waiting game in which each side refuses to budge until the other side makes the first move, we've got to be bigger than that. All sides need to take simultaneous good-faith action if peace is to have a chance." The Arab states for example can take specific actions, however symbolic, such as allowing Israeli passengers and cargo aircraft to fly over Arab territory, opening trade offices in Arab states other than Jordan and Egypt, holding cultural exchanges and lifting the ban on Arab officials from meeting with their Israeli counterparts to demonstrate their sincerity behind the Initiative.

Jordan and Egypt, as designated by the Arab League to promote the Initiative, must also start to take greater gestures to garner support for it from the Israeli people. Their representatives should make it clear to the Israeli public that the Arab Peace Initiative is a framework for negotiations and a comprehensive peace, and is not simply a take-it-or-leave-it offer. Those Arab states who do not yet have diplomatic relations with Israel should back Jordan in Egypt in these efforts and be seen as publicly supporting a large-scale Arab effort to win over the Israeli public.

Israelis too need to be more proactive in their support for the Arab Peace Initiative to counter what has been seen as a tepid government response thus far. The academics, former military and intelligence officials and ex-ambassadors who discuss and support the Initiative in their offices and private meetings need to take on a more public presence to make this dialogue
resonate with the Israeli street.

It should be noted that the Arab Sunni states including Saudi Arabia, Egypt, and Jordan have a grave concern over Iran's nuclear program and want to put the Arab-Israeli conflict behind them in order to focus on Tehran's threat. They should be far more in tune to make important concessions to Israel at this juncture as they view Israel as ultimately the best defense against Iran's nuclear ambitions. To assuage the Israelis, US Secretary of Defense Bob Gates
and the Obama administration will need to work closely with Israel on the Iranian threat and consequently be in a better position to coax the Israelis to embrace the Arab Peace Initiative.

Advancing the Israeli-Syrian Peace Process:

Advancing the Israeli-Syrian peace negotiations has to be part and parcel of Obama's peace offensive. Syria holds the key to regional stability and enjoys a very important geo-strategic position with far reaching regional implications. Although the Obama administration seems to be leaning toward an Israeli-Palestinian accommodation first, it must pursue the Israeli-Syrian track with the same tenacity. Peace between Israel and Syria will have serious ramifications on Damascus' influence over Hamas, Hezbollah and its relationship with Iran and consequently could facilitate an Israeli-Palestinian agreement. The current post-election domestic strife in Iran is of particular note, as Syria may reconsider its strategic alliance with Iran while it is in a state of turmoil. Israel's deep concerns over Iran's nuclear program should encourage its government to focus on Syria. Indeed, the way to distance Iran from the Mediterranean is to distance Syria from Iran, and that can happen only when Israel comes to the conclusion that peace with Syria is more valuable than the Golan Heights. Focus groups of settlers in the Golan Heights have stated their willingness to leave their homes if it would mean peace between Israel and its Arab neighbors, and yet Netanyahu and his advisers are still stalling on moving forward with the Syria track. Syria is willing to resume the negotiations with Israel from where it was left under Turkish mediation with the Olmert government. Israel, on the other hand wants to restart the talks unconditionally with no regard to any prior understanding. For these reasons, the Obama
administration must bring whatever pressure necessary to bear on Israel to reach an accord with Syria. In return, Damascus must unequivocally demonstrate that peace with Israel remains Syria's strategic option and the leadership is prepared to fully embrace complete normalizations of relations with Israel.

Staying the Course:

The question now is will the Obama administration stay the course? This will be a key test in judging the US credibility on the ground, as this conflict has outlived countless US attempts at reconciliation that were too short lived or lacked the political capital necessary to reach an agreement. Having started his peace offensive on day one of his administration President Obama has shown his commitment to finding a solution. He must now demonstrate his resolve to stay the course. The Obama administration must expend tremendous political capital, at least initially, to achieve the tangible results that the 62-year-old intractable conflict will require. President Obama himself must remain relentless as both the Israelis and the Palestinians will continue to check and test his resolve. He must demonstrate evenhandedness in his demands from both Israelis and Palestinians without necessarily compromising America's commitment to Israel's national security. Moreover, President Obama must up the ante on his public relations offensive in Israel to extol the virtue of a two-state solution. He must explain why the administration is investing so much political capital behind its push for peace. Both the Israeli and Palestinian public must be made fully aware about what the enormous benefits are and what would be the price of failure. The Israeli public will not tolerate a government that alienates the United States, which they view as an indispensable guarantor for their national security. Orchestrated pressure on Netanyahu and Abbas will also provide both leaders the political cover they need to make the necessary concessions for peace.

The Obama administration cannot retreat in the face of Israeli or Arab resistance because the price of failure will be unacceptable in a region that is critical to America's strategic interests and President Obama's ability to lead. Deferring the peace process will not offer a respite for reassessment but a prelude for unimaginable violent escalation of the conflict from which only the
detractors of peace can reap the greatest benefit.

Browse articles by author

More Current Affairs

Sep 29th 2022
EXTRACTS "Ever since she became a prominent political figure 12 years ago, Truss has been a shapeshifter. She started as a Liberal Democrat before becoming a Conservative, and she voted to remain in the European Union before championing Brexit. As a minister, it is hard to think of anything she accomplished. She signed a few EU trade deals as Secretary of State for International Trade, but most of those were rollovers." --- "But if until recently it seemed that Truss was driven solely by political ambition, her government’s 'mini-budget' proposal sheds light on her deeper ideological affinities."
Sep 20th 2022
EXTRACT: "Russia’s focus on Ukraine and Putin’s choice to frame this as a civilisational struggle with the west has created opportunities for China to enhance its influence elsewhere – at Russia’s expense."
Sep 20th 2022
EXTRACTS: ”The Ukrainian army is making spectacular advances,” --- “…the European Union has fully mobilized to confront the energy crisis.” ---- “we are helping our partners in the Global South to handle the fallout from Russia’s brutal aggression and cynical weaponization of energy and food.” ---- “In short: the overall strategy is working. We must continue to support Ukraine, pressure Russia with sanctions, and help our global partners in a spirit of solidarity.”
Sep 8th 2022
EXTRACT: "In 1950, a team of sociologists, including the philosopher Theodor Adorno, conducted an empirical study, later published as The Authoritarian Personality, which ....... “If a potentially fascistic individual exists, what, precisely, is he like? What goes to make up antidemocratic thought? What are the organizing forces within the person?... what have been the determinants and what is the course of his development?”
Aug 29th 2022
EXTRACT: "Russian aggression certainly poses a threat; but it is a familiar one that we know how to deal with. Rising temperatures, dry riverbeds, parched landscapes, falling crop yields, acute energy shortages, and disruptions to industrial production are something else."
Aug 25th 2022
EXTRACTS: "As the revolutionary founder of a new Chinese state, Mao emphasized ideology over development. For Deng and his successors, it was the opposite: De-emphasis of ideology was viewed as necessary to boost economic growth through market-based 'reform and opening up.' Then came Xi. Initially, there was hope that his so-called 'Third Plenum Reforms' of 2013 would usher in a new era of strong economic performance. But the new ideological campaigns carried out under the general rubric of Xi Jinping Thought, including a regulatory clampdown on once-dynamic Internet platform companies and associated restrictions on online gaming, music, and private tutoring, as well as a zero-COVID policy that has led to never-ending lockdowns, have all but dashed those hopes." ----- "With the upcoming 20th Party Congress likely to usher in an unprecedented third five-year term for Xi, there is good reason to believe that China’s growth sacrifice has only just begun."
Aug 23rd 2022
EXTRACTS: "Less widely noted, however, is that the prices of many commodities fell this summer. The price of oil decreased by about 30% between early June and mid-August. The politically sensitive price of gasoline in the United States fell by 20% over the same period, from $5 per gallon to $4 per gallon. The overall index fell 12%." ---- "There are two macroeconomic reasons to think that commodity prices in general will fall further. The level of economic activity is a self-evidently important determinant of demand for commodities and therefore of their prices. Less obviously, the real interest rate is another key factor. And the current outlook for both global growth and real interest rates suggests a downward path for commodity prices."
Aug 22nd 2022
EXTRACT: "How Trump planned to use the classified documents remains a question that investigators presumably have made a high priority. Depending on the answer and the resulting charges, if any, one thing is certain: Trump will play hardball, including by amplifying his claims of victimhood at the hands of the fictional Deep State, and denying any wrongdoing in purloining the documents. His lies and hyperbole, however, don’t preclude seeking a plea deal. In his previous tangles with the law, such as his Trump University scam, he agreed to compensate the victims (in that case $25 million) after his prevarications were exhausted."
Aug 21st 2022
"On one side, there is the foreign secretary, Liz Truss, for whom all but the most partisan Tory would struggle to count many successes during her lengthy cabinet career." ---- "Rishi Sunak, whose proposed policies appear more attuned to the imperative of tackling inflation and the hardship it is causing. But on the big issues of the past few years, Sunak has been wrong. He backed Brexit from the beginning, denies the damage it is doing, and enthusiastically supported Johnson’s bid for the premiership." ---- " Which of these two can offer honesty to the British people, who deserve to be treated like grown-ups? To paraphrase the US Democratic politician Adlai Stevenson, the average man and woman are better than average."
Aug 10th 2022
EXTRACT: "Central banks are thus locked in a “debt trap”: any attempt to normalize monetary policy will cause debt-servicing burdens to spike, leading to massive insolvencies, cascading financial crises, and fallout in the real economy. ---- With governments unable to reduce high debts and deficits by spending less or raising revenues, those that can borrow in their own currency will increasingly resort to the “inflation tax”: relying on unexpected price growth to wipe out long-term nominal liabilities at fixed rates."
Jul 29th 2022
EXTRACT: ".... the likelihood is that Biden, who spent his life as a senator, played a central behind-the-scenes role in turning Manchin around and keeping the Democratic Party Senators together on this pared-down version of Build Back Better. Biden’s legislative accomplishments, not to mention his administrative ones, will likely end up being very impressive for the first two years of his presidency. ------ In matters of climate, every ton of CO2 you don’t put into the atmosphere is a decrease in how hard life will be for our grandchildren. They will have reason to be grateful to President Biden and the Democratic Party if this bill becomes law."
Jul 29th 2022
EXTRACTS: "Right-wing media outlets including Fox News, One America News (OAN), Newsmax, and talk radio are grossly abusing the right to free speech and are causing profound, if not irreparable damage to our country at home and abroad. They have been engaged in these deliberate practices of spreading poisonous misinformation all in the name of free speech." ---- "A team at MIT, analyzing propaganda techniques in the news, underscores the use of logical fallacies – such as strawmen (the misrepresentation of the other’s position), red herrings (the provision of irrelevancies), false dichotomies (offering two alternatives as the only possibilities), and whataboutism (a diversionary tactic to avoid directly addressing an issue). ---- Whataboutism is worth considering more closely because it is becoming ubiquitous among Republicans – perhaps this is not surprising given that it is certainly Trump’s “favorite dodge.” It is one of the fundamental rules by which he operates: when you are criticized, say that someone else is worse. In an interview with Trump, Bill O’Reilly states the obvious fact that “Putin is a killer,” and who can forget Trump’s response: “There are a lot of killers. You got a lot of killers. What, you think our country is so innocent?” That is classic whataboutism. And it is also of course all over Fox News’ most popular line-up."
Jul 24th 2022
EXTRACTS: "For three hours, against the unequivocal advice of his counsel, friends, and family, Trump purposefully and steadfastly declined to give the mob he had summoned any signal to disperse, to exit the building peacefully, or to simply cease threatening the life of his vice president or other members of Congress." ------ "Trump is corrupt to the core, a traitor who deserves nothing but contempt and to spend the rest of his life behind bars because he remains a menace to this country and an existential threat to our democratic institutions."
Jul 21st 2022
EXTRACT: "For some countries, diasporas also are not new. Just ask the Russians. For three-quarters of a century, Stalin’s NKVD and its successor, the KGB, kept close tabs on expatriate Russians, constantly worrying about the threat they might pose. And now, Russian President Vladimir Putin’s security service, the FSB, is continuing the tradition. According to recent FSB estimates, almost four million Russians left the country in the first three months of this year. Obviously, FSB statistics are hard to verify. But the sheer magnitude of this year’s departures is striking."
Jul 20th 2022
EXTRACTS: "We need leaders who will be honest about our problems in the short, medium, and long term. We are becoming poorer than our neighbors, with our per capita growth and productivity lagging behind theirs. We confront surging energy prices, soaring inflation, and public-sector strikes. Our fiscal deficit is uncomfortably high. Our influence is diminished. Far from recognizing these challenges, let alone proposing sensible solutions, the candidates to succeed Johnson are trying to win votes with reckless proposals like ever-larger tax cuts." ----- "There is one exception. Former Chancellor of the Exchequer Rishi Sunak refuses to abandon the notion that expenditure should bear some relationship to revenue. "
Jul 13th 2022
EXTRACT: "Looking ahead, five factors could make today’s energy crisis even worse. First, Putin has opened a second front in the conflict by cutting back on the contracted volumes of natural gas that Russia supplies to Europe. The goal is to prevent Europeans from storing enough supplies for next winter, and to drive prices higher, creating economic hardship and political discord. In his speech in June at the St. Petersburg International Economic Forum, Putin made his reasoning clear: “Social and economic problems worsening in Europe” will “split their societies” and “inevitably lead to populism … and a change of the elites in the short term.” ...... As it is, Germany is now anticipating the need for gas rationing, and its minister for economic affairs, Robert Habeck, warns of a “Lehman-style contagion” (referring to the 2008 financial crisis) if Europe cannot manage today’s energy-induced economic disruptions."
Jul 5th 2022
EXTRACT: "Fortunately, I am not alone in claiming that the survival of democracy in the US is gravely endangered. The American public has been aroused by the decision overturning Roe. But people need to recognize that decision for what it is: part of a carefully laid plan to turn the US into a repressive regime. We must do everything we can to prevent that. This fight ought to include many people who voted for Trump in the past."
Jul 2nd 2022
EXTRACT: "The Israeli philosopher Avishai Margalit described this succinctly in his book On Compromise and Rotten Compromises. In “politics as economics,” material interests are “subject to bargaining, everything is negotiable, whereas in the religious picture, centered on the idea of the holy, the holy is non-negotiable.” This, then, is why politics in the US is now in such a perilous state. More and more, the secular left and the religious right are engaged in a culture war, revolving around sexuality, gender, and race, where politics is no longer negotiable. When that happens, institutions start breaking down, and the stage is set for charismatic demagogues and the politics of violence."
Jul 2nd 2022
EXTRACT: "...EU enlargement is essentially a political decision by member states, based on a multitude of considerations that sometimes include dramatic events. Russia’s war of aggression against Ukraine is such a turning point."
Jun 29th 2022
EXTRACT: "Most market analysts seem to think that central banks will remain hawkish, but I am not so sure. I have argued that they will eventually wimp out and accept higher inflation – followed by stagflation – once a hard landing becomes imminent, because they will be worried about the damage of a recession and a debt trap, owing to an excessive build-up of private and public liabilities after years of low interest rates." ----- "There is ample reason to believe that the next recession will be marked by a severe stagflationary debt crisis. As a share of global GDP, private and public debt levels are much higher today than in the past, having risen from 200% in 1999 to 350% today (with a particularly sharp increase since the start of the pandemic). Under these conditions, rapid normalization of monetary policy and rising interest rates will drive highly leveraged zombie households, companies, financial institutions, and governments into bankruptcy and default."