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Feb 26, 2015

The Intersection of Three Crises

"The Intersection of Three Crises is republished with permission of Stratfor."

By Reva Bhalla

Within the past two weeks, a temporary deal to keep Greece in the eurozone was reached in Brussels, a cease-fire roadmap was agreed to in Minsk and Iranian negotiators advanced a potential nuclear deal in Geneva. Squadrons of diplomats have forestalled one geopolitical crisis after another. Yet it would be premature, even reckless, to assume that the fault lines defining these issues are effectively stable. Understanding how these crises are inextricably linked is the first step toward assessing when and where the next flare-up is likely to occur.

Germany and the Eurozone Crisis

Germany has once again become the victim of its own power. As Europe's largest creditor, it has considerable political leverage over debtor nations such as Greece, whose entire livelihood now depends on whether German Chancellor Angela Merkel is willing to sign another bailout check. Lest we forget, Germany is exporting the equivalent of about half its GDP, and most of those exports are consumed within Europe. Thus, the institutions Germany relies on to protect its export markets are the very institutions Berlin must battle to protect Germany's national wealth.

Many have characterized the recent Brussels deal as a victory for Berlin over Athens as eurozone finance ministers, including the Portuguese, Spanish and French, stood behind Germany in refusing Greece the right to circumvent its debt obligations. But Merkel is also not about to gamble an unlimited amount of German taxpayer funds on flimsy Greek pledges to cut costs and impose structural reforms on a population that, for now, still views the ruling Syriza party as its savior from austerity. Within four months, Greece and Germany will be at loggerheads again, and Greece will likely still lack the austerity credentials that Berlin needs to convince its own Euroskeptics that it has the institutional heft and credibility to impose Germanic thriftiness on the rest of Europe. The more time Germany buys, the more inflexible the German and Greek negotiating positions become, and the more seriously traders, businessmen and politicians alike will have to take the threat of a so-called Grexit, the first in a chain of events that could shatter the eurozone.

The Role of the Crisis in Ukraine

In order to steer Germany through an escalating eurozone crisis, Merkel needs to calm her eastern front. It is no wonder, then, that she committed herself to multiple sleepless nights and an incessant travel schedule to put another Minsk agreement with Russia on paper. The deal was flawed from the start because it avoided recognizing the ongoing attempts by Russian-backed separatists to smooth out the demarcation line by bringing the pocket of Debaltseve under their zone of control. After several more days of scuffling, the Germans (again leveraging their creditor status — this time, against Ukraine) quietly pushed Ukrainian President Petro Poroshenko to accept the battlefield reality and move along with the cease-fire agreement. But even if Germany on one side and Russia on the other were able to bring about a relative calm in eastern Ukraine, it would do little in the end to de-escalate the standoff between the United States and Russia.

The Connection Between Ukraine and Iran

Contrary to popular opinion in the West, Russian President Vladimir Putin is not driven by crazed territorial ambitions. He is looking at the map, just as his predecessors have for centuries, and grappling with the task of securing the Russian underbelly from a borderland state coming under the wing of a much more formidable military power in the West. As the United States has reminded Moscow repeatedly over the past several days, the White House retains the option to send lethal aid to Ukraine. With heavier equipment comes trainers, and with trainers come boots on the ground.
From his perspective, Putin can already see the United States stretching beyond NATO bounds to recruit and shore up allies along the Russian periphery. Even as short-term truces are struck in eastern Ukraine, there is nothing precluding a much deeper U.S. probe in the region. That is the assumption that will drive Russian actions in the coming months as Putin reviews his military options, which include establishing a land bridge to Crimea (a move that would still, in effect, leave Russia's border with Ukraine exposed), a more ambitious push westward to anchor at the Dnieper River and probing actions in the Baltic states to test NATO's credibility.

The United States does not have the luxury of precluding any one of these possibilities, so it must prepare accordingly. But focusing on the Eurasian theater entails first tying up loose ends in the Middle East, starting with Iran. And so we come to Geneva, where U.S. Secretary of State John Kerry and Iranian Foreign Minister Javad Zarif met again Feb. 22 to work out the remaining points of a nuclear deal before March 31, the date by which U.S. President Barack Obama is supposed to demonstrate enough progress in negotiations to hold Congress back from imposing additional sanctions on Iran. If the United States is to realistically game out scenarios in which U.S. military forces confront Russia in Europe, it needs to be able to rapidly redeploy forces that have spent the past dozen years putting out fires ignited by sprouting jihadist emirates and preparing for a potential conflict in the Persian Gulf. To lighten its load in the Middle East, the United States will look to regional powers with vested and often competing interests to shoulder more of the burden.

A U.S.-Iranian understanding goes well beyond agreeing on how much uranium Iran is allowed to enrich and stockpile and how much sanctions relief Iran gets for limiting its nuclear program. It will draw the regional contours of an Iranian sphere of influence and allow room for Washington and Tehran to cooperate in areas where their interests align. We can already see this in effect in Iraq and Syria, where the threat of the Islamic State has compelled the United States and Iran to coordinate efforts to contain jihadist ambitions. Though the United States will understandably be more cautious in its public statements while it tries to limit Israeli anxiety, U.S. officials have allegedly made positive remarks about Hezbollah's role in fighting terrorism when speaking privately with their Lebanese interlocutors in recent meetings. This may seem like a minor detail on the surface, but Iran sees a rapprochement with the United States as an opportunity to seek recognition for Hezbollah as a legitimate political actor.

A U.S.-Iranian rapprochement will not be complete by March, June or any other deadline Washington sets for this year. Framework agreements on the nuclear issue and sanctions relief will necessarily be implemented in phases to effectively extend the negotiations into 2016, when Congress could allow the core sanctions act against Iran to expire after several months of testing Iranian compliance and after Iran gets past its parliamentary elections. Arrestors could arise along the way, such as the death of Iranian Supreme Leader Ayatollah Ali Khamenei, but they will not deter the White House from setting a course toward normalizing relations with Iran. The United States, regardless of which party is controlling the White House, will rank the threat of a growing Eurasian conflict well ahead of de-escalating the conflict with Iran. Even as a nuclear agreement establishes the foundation for a U.S.-Iranian understanding, Washington will rely on regional powers like Turkey and Saudi Arabia to eat away at the edges of Iran's sphere of influence, encouraging the natural rivalries in the region to mold a relative balance of power over time.

Circling Back

Germany needs a deal with Russia to be able to manage an existential crisis for the eurozone; Russia needs a deal with the United States to limit U.S. encroachment on its sphere of influence; and the United States needs a deal with Iran to refocus its attention on Russia. No conflict is divorced from the other, though each may be of a different scale. Germany and Russia can find ways to settle their differences, as can Iran and the United States. But a prolonged eurozone crisis cannot be avoided, nor can a deep Russian mistrust of U.S. intentions for its periphery.
Both issues bring the United States back to Eurasia. A distracted Germany will compel the United States to go beyond NATO boundaries to encircle Russia. Rest assured, Russia — even under severe economic stress — will find the means to respond.

Feb 10, 2015

Germany Emerges

February 10, 2015 | 09:00 GMT

 "Germany Emerges is republished with permission of Stratfor."

By George Friedman
German Chancellor Angela Merkel, accompanied by French President Francois
Hollande, met with Russian President Vladimir Putin on Feb. 6. Then she met with U.S. President Barack Obama on Feb. 9. The primary subject was Ukraine, but the first issue discussed at the news conference following the meeting with Obama was Greece. Greece and Ukraine are not linked in the American mind. They are linked in the German mind, because both are indicators of Germany's new role in the world and of Germany's discomfort with it.

It is interesting to consider how far Germany has come in a rather short time. When Merkel took office in 2005, she became chancellor of a Germany that was at peace, in a European Union that was united. Germany had put its demands behind it, embedding itself in a Europe where it could be both prosperous and free of the geopolitical burdens that had led it into such dark places. If not the memory, then the fear of Germany had subsided in Europe. The Soviet Union was gone, and Russia was in the process of trying to recover from the worst consequences of that collapse. The primary issue in the European Union was what hurdles nations, clamoring to enter the union, would have to overcome in order to become members. Germany was in a rare position, given its history. It was in a place of comfort, safety and international collegiality.

The world that Merkel faces today is startlingly different. The European Union is in a deep crisis. Many blame Germany for that crisis, arguing that its aggressive export policies and demands for austerity were self-serving and planted the seeds of the crisis. It is charged with having used the euro to serve its interests and with shaping EU policy to protect its own corporations. The vision of a benign Germany has evaporated in much of Europe, fairly or unfairly. In many places, old images of Germany have re-emerged, if not in the center of many countries then certainly on the growing margins. In a real if limited way, Germany has become the country that other Europeans fear. Few countries are clamoring for membership in the European Union, and current members have little appetite for expanding the bloc's boundaries.

At the same time, the peace that Germany had craved is in jeopardy. Events in Ukraine have aroused Russian fears of the West, and Russia has annexed Crimea and supported an insurgency in eastern Ukraine. Russia's actions have sparked the United States' fears of the re-emergence of a Russian hegemon, and the United States is discussing arming the Ukrainians and pre-positioning weapons for American troops in the Baltics, Poland, Romania and Bulgaria. The Russians are predicting dire consequences, and some U.S. senators are wanting to arm the Ukrainians.

If it is too much to say that Merkel's world is collapsing, it is not too much to say that her world and Germany's have been reshaped in ways that would have been inconceivable in 2005. The confluence of a financial crisis in Europe that has led to dramatic increases in nationalism — both in the way nations act and in the way citizens think — with the threat of war in Ukraine has transformed Germany's world. Germany's goal has been to avoid taking a leading political or military role in Europe. The current situation has made this impossible. The European financial crisis, now seven years old, has long ceased being primarily an economic problem and is now a political one. The Ukrainian crisis places Germany in the extraordinarily uncomfortable position of playing a leading role in keeping a political problem from turning into a military one.

The German Conundrum

 

It is important to understand the twin problems confronting Germany. On the one hand, Germany is trying to hold the European Union together. On the other, it wants to make certain that Germany will not bear the burden of maintaining that unity. In Ukraine, Germany was an early supporter of the demonstrations that gave rise to the current government. I don't think the Germans expected the Russian or U.S. responses, and they do not want to partake in any military reaction to Russia. At the same time, Germany does not want to back away from support for the government in Ukraine.

There is a common contradiction inherent in German strategy. The Germans do not want to come across as assertive or threatening, yet they are taking positions that are both. In the European crisis, it is Germany that is most rigid not only on the Greek question but also on the general question of Southern Europe and its catastrophic unemployment situation. In Ukraine, Berlin supports Kiev and thus opposes the Russians but does not want to draw any obvious conclusions. The European crisis and the Ukrainian crisis are mirror images. In Europe, Germany is playing a leading but aggressive role. In Ukraine, it is playing a leading but conciliatory role. What is most important is that in both cases, Germany has been forced — more by circumstance than by policy — to play leading roles. This is not comfortable for Germany and certainly not for the rest of Europe.

Germany's Role in Ukraine

 

The Germans did play a significant part in the fall of Ukrainian President Viktor Yanukovich's government. Germany had been instrumental in trying to negotiate an agreement between Ukraine and the European Union, but Yanukovich rejected it. The Germans supported anti-Yanukovich demonstrators and had very close ties to one of the demonstration leaders, current Kiev Mayor Vitali Klitschko, who received training in a program for rising leaders sponsored by the Christian Democratic Union — Merkel's party. The Germans condemned the Russian annexation of Crimea and Moscow's support for the Ukrainian secessionists in the east. Germany was not, perhaps, instrumental in these events, but it was a significant player.

As the Germans came to realize that this affair would not simply be political but would take on a military flavor, they began to back away from a major role. But disengagement was difficult. The Germans adopted a complex stance. They opposed the Russians but also did not want to provide direct military support to the Ukrainians. Instead, they participated in the sanctions against Russia while trying to play a conciliatory role. It was difficult for Merkel to play this deeply contradictory role, but given Germany's history the role was not unreasonable. Germany's status as a liberal democracy is central to its post-war self-conception. That is what it must be. Therefore, supporting the demonstrators in Kiev was an obligation. At the same time, Germany — particularly since the end of the Cold War — has been uneasy about playing a direct military role. It did that in Afghanistan but not Iraq. And participating in or supporting a military engagement in Ukraine resurrects memories of events involving Russia that Berlin does not want to confront.

Therefore, Germany adopted a contradictory policy. Although it supported a movement that was ultimately anti-Russian and supported sanctions against the Russians, more than any other power involved it does not want the political situation to evolve into a military one. It will not get involved in any military action in Ukraine, and the last thing Germany needs now is a war to its east. Having been involved in the beginnings of the crisis, and being unable to step away from it, Germany also wants to defuse it.

The Greek Issue

 

Germany repeated this complex approach with Greece for different reasons. The Germans are trying to find some sort of cover for the role they are playing with the Greeks. Germany exported more than 50 percent of its gross domestic product, . .

Read more . .   https://www.stratfor.com/weekly/germany-emerges

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