Feb
2012
Forget about Greece, it’s all about the oil
Following the second €130bn bailout for Greece, you could be forgiven for thinking that the Eurozone crisis might finally be abating. However, the increasing tensions between Iran, Israel and the West pose a significant threat to economic recovery.
As Gideon Rachman wrote this week, the threat of conflict with Iran is increasingly real. Israel’s Defence Minister, Ehud Barak, has stepped up the rhetoric against Iran, recently calling for tighter nuclear sanctions, to the extent a pre-emptive missile attack by Israel no longer looks out of the question. Similarly, whilst the Foreign Secretary, William Hague, explicitly said the Government are not advocating military action against Iran, Mr Hague would not support a backbench motion calling for the unilateral ruling out of it.
Added to this is the escalation of conflict in Syria. Despite the veto by Russia of a recent UN resolution that sought to put an end to Bashar al-Assad’s authoritarian regime, increased media attention of al-Assad’s crackdown, heightened by Marie Colvin’s untimely death this week, means some form of military intervention from external sources also looks more likely than previously believed. Such intervention is likely to provoke a response from Iran, a fierce ally of al-Assad, which could draw in other regional players, such as Saudi Arabia and Israel. Whilst such a scenario currently seems a long way off, as events across the Middle East have shown us in the last 14 months, anything is possible.
