Tag Archives: Iran War

Britain, Defence, Europe, Military, NATO, United States

Without the US, can NATO survive?

NATO ALLIANCE

Intro: If Trump follows through on his threat to pull out of the alliance, the West will face its most profound crisis in 80 years

For eight decades, NATO has weathered internal disputes, enemy plots, and shooting wars in Bosnia, Kosovo and Afghanistan. America’s departure of this historic alliance would be the biggest divorce in history.

If Donald Trump acts on his threat to finally pull the US out of NATO – having said publicly that he is “strongly considering pulling out” after allies failed to join his war on Iran – the transatlantic family will be torn asunder.

At which point, the club that calls itself the most successful alliance in history may as well close its doors.

And the pain could match that of the most acrimonious of break-ups.

The numbers are stark enough: the United States alone accounts for more than 60 per cent of NATO’s total defence spending and provides the bulk of the alliance’s firepower, particularly at sea, in the air, and in nuclear deterrence.

The US has 1.3 million active military personnel – a full million more than Turkey, the next largest NATO force.

The United States is, however, not simply the largest and richest member of the club. It is the linchpin, the tent pole around which the entire edifice has been constructed.

It has logistical capacities in airlift and shipping, as well as satellite and signals intelligence, that other NATO allies rely on to get them into battle and help them fight. And it has always provided the leadership that has kept the alliance together.

Europe

The most profound threat would be for European members, the primary beneficiaries of the Article 5 promise that “an armed attack against one or more of them in Europe or North America shall be considered an attack against them all”.

For the first time in 80 years, they would have to face Russia shorn of that basic security guarantee, even as war rages on the continent.

Trump allows other NATO countries to requisition US kit for Ukraine via a programme called The Prioritised Ukraine Requirements List, but has curtailed direct US military aid to Kyiv.

Nonetheless, Moscow has not doubted the seriousness of the NATO alliance. For four years, it has avoided risking a direct confrontation with NATO powers, to the point of refusing (for the most part) to bomb the airbases and railway depots in Poland that supply Ukraine.

But remove American conventional and nuclear power from the equation, and the risks of doing so suddenly look much more palatable. Vladimir Putin has long made the destruction of NATO and creation what he calls a “new European security architecture” one of his dearest and cherished ambitions.  

That does not make a direct Russian attack on Europe inevitable, should the US abandon the alliance. But the chances of Putin taking a gamble would increase substantially.

Greenland and Canada

Quitting the alliance would not only absolve Trump of the obligation to come to allies’ defence. It also opens the way – at least in theory – to one would-be former ally attacking another, a scenario NATO itself would never have been able to survive.

Canada, in particular, would face difficult new realities. Trump, who has ordered attacks across 13 countries since he returned to the White House, has coveted their country (a NATO founding member) as a future “51st state”. Suddenly uncoupled from its enormous neighbour and security partner, Ottawa would no longer live with the certainty that North America is a safe and secure home.

War is perhaps most likely in Greenland. In recent weeks, it emerged that the Danish military had secretly prepared to repel a possible American assault on the island amid repeated threats from Trump to annex it.

Troops were equipped and ordered to blow up key runways and even flew in blood bags to simulate treating the wounded from the anticipated battle.

These nightmarish prospects present serious dilemmas for Canada and Denmark’s remaining allies.

Would Britain, France, and Germany send troops and ships to fight off an American invasion? Or out of dependence on and fear of American might, would they turn their backs? Leaders in Britain will be praying that they never have to make such a choice.

Everything from Britain’s nuclear missiles, which must be serviced at American facilities, to GCHQ’s signals intelligence network, which overlaps with the US National Security Agency, is enmeshed in the apparatus of the US security system.

America

Like any major break up, the pain would not be one way. America, too, would suffer.

Since its founding, NATO has allowed the US to project power globally. US airbases in Britian and Germany, for example, are currently being used for American operations against Iran.

NATO states also house and accommodate American early warning systems. It is the UK and Norway, for example, whom the United States relies on to keep an eye on Russia’s nuclear missile submarines operating out of Kola Peninsula and the Barents Sea. And while some NATO members – France, Spain, and Italy – may have baulked at the war with Iran, the alliance has proved vital in other US-led engagements.

Its member states joined the Americans in ending the Serbian genocide in Kosovo in 1999, for example, and in the 20-year campaign in Afghanistan. Many also showed up for both the first and second Gulf Wars.

If the United States does find itself embroiled in the much feared and potentially epochal war with China in the Pacific, such former allies will be missed.

The consequences

For these reasons, and the fact that Trump cannot withdraw from NATO without approval of a two-thirds Senate majority or an act of Congress, it is possible the worst fears about transatlantic relations may not come to pass. Indeed, even in a future without the formal North Atlantic alliance, American will need allies and to maintain bilateral ties.

And since Trump’s public doubts about NATO and his threats against Greenland have already undermined the deterrent power of Article 5, perhaps losing it altogether would not do much more damage.

Conventional defence spending in Europe is already rapidly increasing, especially in the east and north of the continent. No sensible Russian general is likely to believe a fight with Poland would be a walk in the park.

Although small compared with America’s, Britain’s nuclear arsenal, which, unlike the French one, is committed to the defence of NATO, is potent enough to act as a serious deterrent. The UK would, however, have to develop a domestic delivery system if it is to eventually wean itself off dependence on US Trident missiles.

There is also the suggestion that the alliance could continue in some form, even shorn of the US. Trump’s repeated attacks on the alliance have already prompted some British and European strategists to think about how to preserve it without America.

The remaining allies could, for example, retain the North Atlantic Council, NATO’s main decision-making body, and the mutual defence clause.

Perhaps, then, there is a very narrow but plausible path to enduring a divorce and not suffering too greatly.

But should Trump or another incumbent president come to see Canada and Europe as enemies, the world will change profoundly.

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Britain, Economic, Government, Politics

The Government must allow markets to do their job

ECONOMIC

Intro: Fallout from the Iran war and the energy crisis that has followed is the ultimate test of the UK Government’s economic acumen

A famous story which used to be known by every schoolchild in the land, King Canute famously sat on his throne at the edge of sea during the early 11th century, and ordered the tide to stop coming in.

Needless to say, the tide did not obey. Some modern interpretations suggest that he wasn’t crazy or mad but was rather trying to demonstrate to his courtiers the limits of regal power. Even the King could not stop the tide.

Governments today need to recognise what little power they have in relation to the current energy crisis.

Although there isn’t a lot they can do, unlike King Canute and the tide governments are not completely powerless. But first comes the need for understanding. The energy crisis is a supply shock which changes the terms of trade, acting as a sort of tax that transfers money from net energy-consuming countries to net energy-producing ones. We are a net energy consumer. This crisis, then, makes us worse off, whatever we do.

And there are two major knock-on effects. First, the economy can be sent into recession as people react to the loss of income by spending less. Second, this “tax” takes the form of a rise in the price of energy that delivers an initial upward spike to the general price level, thereby increasing inflation in the short term, and carrying the danger of embedding higher inflation.

Although there is nothing that governments can do to stop the loss of net national income, there are things they can do to try to mitigate these two knock-on effects.

There could be a case for loosening fiscal policy to reduce the hit to consumer incomes and consumer spending and hence aggregate demand. The parlous state of the public finances, however, means that the scope to do that now is restricted. One way they could seek to limit both the hit to real incomes and the upward pressure on the price level is through granting subsidies and imposing caps on prices.

But this isn’t a free lunch because, unless the Government can justifiably and safely borrow more, which it really can’t at the moment, such things have to be paid for by the taxpayer. It is a case of robbing Peter to pay Paul or, most of the time, robbing Peter to pay Peter.

This is actually still the case if the money for such subsidies is found by more borrowing rather than through new tax rises. This simply defers when Peter and Paul have to cough up.

Most importantly, the Government needs to let market forces do their job. The increase in energy prices acts as a signal to consumers to minimise their use of energy and simultaneously sends a signal to producers to boost the output of energy.

If the help to consumers takes the form of artificially keeping energy prices down, then the signal to economise on energy usage is smothered. More importantly, in our case the signal to producers is cancelled by the Government’s net zero policy, which is preventing the new extraction of North Sea oil and gas.

The best that governments can do in these circumstances is to manage the economy and their own finances most efficiently. Of course, they should have been doing this anyway, but in these difficult and turbulent times the importance of doing the right thing increases significantly. In the UK’s case, the fundamental error in the Government’s economic policy has been to preside over huge increases in government spending, while passing on a good deal of the burden to employers in the form of higher National Insurance payments.

One thing the Government could do to mitigate the consequences of the current energy crisis is to reverse this policy and bring in substantial cuts to government spending. This is not to tighten fiscal policy. Rather, the money saved should be redistributed to the economy.

The best use of it would be a reduction in employers’ NIC, which would reduce their costs and thereby lead to lower prices. It would also encourage firms to retain their workers.

This, too, would make a contribution to staving off the inflation danger. Over and above this, the principle responsibility lies with the Bank of England and its monetary policy.

History provides an illustration of how different responses to the same adverse shock can produce quite different results. In the 1973-74 oil crisis, all the oil-consuming countries of the West – including the UK – suffered an adverse terms of trade shock. They were all made worse off.

But different countries responded differently to the spike in the general price level. In the UK, inflation peaked t almost 25pc. In Germany, by contrast, inflation peaked at just under 8pc.

It has become clear that this UK Labour Government doesn’t really understand or believe in markets. You can see this everywhere, from the wish to control rents in the belief that this will somehow make tenants better off to the recent blaming of price rises on retailers.

This Government cannot avoid the adverse economic shock that higher energy prices imply but it can limit its consequences by letting markets perform their function.

It should abandon at once the headlong pursuit of net zero and allow new production from the North Sea, while cutting government spending and reducing business costs.

We should understand the political forces standing against such action; it is unlikely that the Government will do anything like this. But that doesn’t mean that there is not an alternative course of action available, if only the Government had the insight and the courage to pursue it.

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Iran, Middle East, Saudi Arabia

Water: The Gulf’s most precious resource under attack

WATER AND DESALINATION PLANTS

The Gulf states may have been built on wealth from oil, but it is another liquid – water – that keeps these desert countries running day-to-day.

Recent attacks on desalination plants in countries on both sides of the Iran war have targeted the Gulf’s most precious commodity, and threatened to weaponise a resource needed to prevent the region’s megacities from collapsing.

Just days ago, Bahrain accused Iran of damaging a desalination plant, hours after the Iranians claimed a US air strike had hit one of theirs.

Securing plentiful water in a region with almost no underground supplies or rain has been central to the vaulting ambitions of the fast-growing Gulf countries. The solution has been desalination plants, which turn seawater into drinking water for millions of people in one of the world’s driest regions.

In Kuwait, about 90 per cent of drinking water comes from desalination, along with roughly 86 per cent in Oman, and about 70 per cent in Saudi Arabia.

Everyone thinks of Saudi Arabia and their neighbours as petro-states. But, in reality, they are saltwater kingdoms. They’re human-made fossil-fuelled water superpowers. It’s both a monumental achievement of the 20th century and a certain kind of vulnerability.

Nearly half the world’s total desalination capacity is in the Gulf. The processing of water is needed not only to quench the thirst of fast-growing populations, but also for hotels, resorts, shopping centres, golf courses, and other facilities.

Yet, what has been a marvel of engineering and economic planning, has also been recognised as the dangerous vulnerability it is. Gulf governments and their allies have long warned of the risks these systems pose to regional stability.

In 2010, a CIA analysis said attacks on desalination facilities could quickly trigger national crises in several Gulf states. If critical equipment were destroyed, water processing could be halted for months.

A leaked 2008 US diplomatic cable warned that Riyadh, Saudi Arabia’s capital, “would have to evacuate within a week” if either the Jubail desalination plant on the Gulf coast, or its pipelines or associated power infrastructure were seriously damaged. The cable added that “the current structure of the Saudi government could not exist” without the plant.

Gulf states are thought to have bolstered the resilience of their desalination networks since then, but the recent air strikes have again highlighted their vulnerability.

The Iran war is not the first conflict in the region in which water-processing plants have been targeted. After Saddam Hussein’s 1990 invasion of Kuwait and the subsequent Gulf War, Iraqi forces sabotaged power stations and desalination facilities as they retreated.

At the same time, millions of barrels of crude oil were deliberately released into the Gulf, creating one of the largest oil spills in history. Workers deployed booms around the intake valves of desalination plants to prevent the vast slick from contaminating seawater-intake pipes.

The destruction left Kuwait largely without fresh water and dependent on emergency water imports. Full recovery took many years. More recently, Houthi rebels have targeted Saudi desalination facilities.

In the Gulf, desalination facilities are not merely infrastructure. They are essential lifelines that supply drinking water to millions. Striking them risks turning a military confrontation into a direct threat to civilian survival.

Iran, too, uses desalination and must deal with acute water shortages. Tehran claimed that a US air strike had damaged one of its water processing plants last weekend.

Abbas Araghchi, the foreign minister, said the strikes on Qeshm Island, in the Strait of Hormuz, had affected the water supply for 30 villages. He warned that in doing so, “the US set this precedent, not Iran”. The US military denied striking the facility.

The Institute for Strategic Studies said it was unlikely the Americans had targeted the desalination plant. However, Qeshm was essential to Iranian plans to block the strait to shipping, and was probably being targeted for other strategic reasons – such as to hit underground stocks of drones and missiles.

What seems certain, given the conflagration, is that the Americans would have been pounding Qeshm Island to take out these underground facilities where the drones and the missiles basically embodied the last strategic option, or one of the last strategic options, of Iran.

For Iran, that would’ve been a nice coincidence to create an information operation to say the Americans are targeting civilian assets. And it would justify the retaliatory attacks on desalination plants without looking like the villain.

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