Diplomatic Peregrinations in the Holy Land of a Lacklustre Strategist

By Con George-Kotzabasis October 7, 2011

The “lion” appointed by President Obama to the office of Secretary of Defence Leon Panetta, who purportedly is defending America and the West from deadly foes, in his latest visit to the Middle East is advising Israel, from his Olympian heights, ‘to take risks for peace.’ This advice, however, is redundant, superfluous, and otiose and Prime Minister Netanyahu has every reason to reject and oppugn such crass “displaced” advice. Israel had already taken risks in the past with no benefit accruing to it, least of all peace. It had withdrawn from Gaza and re-settled its citizens within the borders of Israel with the result that Gaza was taken over by the terrorist organization Hamas and Israel had to defend itself from a rain of rockets fired by the militants of Hamas; and it had likewise withdrawn from South Lebanon only for the latter to be taken over by the other blade of the terrorist scissors Hesbollah, that also started firing rockets against Israel forcing the latter to invade South Lebanon to protect its citizens from being killed. Israel had taken all these risks for peace. But what did it get in return, a deluge of rockets. What other risks Secretary Panetta has in mind for Israel that would bring the up till now eluding peace to the Middle East? For the Israelis to wait until Hamas and Hesbollah load the tips of their rockets with nuclear devices supplied in the near future by Iran? And what precautions and preventive measures the U.S. is taking to stop Iran from acquiring nuclear weapons?

The answer to these questions lies in the further advice that the Secretary of Defence is giving to Israel. He tells it not to take “lone” action against Iran in its threat to develop nuclear weapons. Preventing Iran from acquiring a nuclear arsenal, he says, is the responsibility of major nations taking concerted diplomatic action. But this is a “Looney” policy that the Secretary is recommending to the Israelis. It has been tried so many times in the past and it has failed resoundingly. The Islamist regime is not going to change course in its determination to possess nuclear weapons by a truckload of diplomatic carrots but only by an “armada” of bristling porcupines that will pierce its thick skin. Diplomacy can succeed with the Iranian regime only if it is accompanied by the explicit threat of arms.

Leon Panetta has the sinews of a lamb disguised under the skin of a lion. His peregrinating debut in the Holy Land and his attempt to bring, as the “envoy” of the also weak President Obama, Palestinians and Israelis to the negotiating table will prove to be an abject failure, like all the previous efforts of his predecessor Senator Mitchell, also appointed by Obama. As we have predicted, the Obama presidency is a circus of underperforming political tyros, both in the international and domestic arena and more and more Americans are realizing this and are becoming disenchanted with Obama’s performance. The “sprightly colt”, who won the race to the White House with overwhelming support only two and a half years ago, is presently underwhelmed and is conceding to be the underdog in the 2012 elections. (See Obama’s interview with George Stefanopoulos on the ABC.)

Is the European Central Bank the Shy Bride of Lender of Last Resort?

By Con George-Kotzabasis—December 1, 2011

It goes without saying, that merely a new European treaty, as proposed by Chancellor Merkel and President Sarkozy, no matter how strong its teeth, will not resolve the crisis. But the solving of the crisis might lie in a fecund combination of new rules to be observed strictly, and new bold economic measures, including the ECB as lender of last resort. And Mario Draghi’s hesitation might only be a ruse. His guise of being the shy bride of decisive intervention might only be a pretension, and he may surprisingly shock everybody by sprightly stepping boldly and marrying the groom of lender of last resort. This unexpected nimble move from shyness to boldness will be a powerful incentive to rally the markets behind the Eurozone. And one might not dismiss lightly that “magic” and a Deus ex machina might have a role in this tragic play.

P.S. Since the above was written, Mario Draghi lowered the discount rate of the ECB to 1% and distributed to European banks nearly 500 billion euros to lend to their customers. This is equivalent of using the instrument of lender of last resort by the ECB although doing this by roundabout means and not in a formal manner. And apparently this bold and imaginative initiative of the ECB has stabilized the European markets.