GREEK DEBT CRISIS:

GOLDMAN SACHS COULD BE SUED 

FOR HELPING HIDE DEBTS WHEN IT JOINED EURO

GOLDMAN SACHS faces the prospect of potential legal action from GREECE over the complex financial deals in 2001 that many blame for its subsequent debt crisis.

A leading adviser to debt-riven countries has offered to help ATHENS recover some of the vast profits made by the investment bank.

The Independent has learnt that a former GOLDMAN banker, who has advised indebted governments on recovering losses made from complex transactions with banks, has written to the GREEK government to advise that it has a chance of clawing back some of the hundreds of millions of dollars it paid GOLDMAN to secure its position in the single currency.

The development came as GREECE edged towards a last-minute deal with its creditors which will keep it from crashing out of the single currency.

The deal is based on fresh economic reform proposals submitted by ATHENS which bear a striking similarity to the creditors’ offer rejected by the GREEK people in the referendum– sparking claims that Prime Minister ALEXIS TSIPRAS has effectively executed a huge U-turn in order to avoid a catastrophic “GREXIT”.

GREECE managed to keep within the strict MAASTRICHT rules for EUROZONE membership largely because of complex financial deals created by the investment bank which critics say disguised the extent of the country’s outstanding debts.

GOLDMAN SACHS THE BIG WINNER

GOLDMAN SACHS is said to have made as much as $500m from the transactions known as “swaps”. It denies that figure but declines to say what the correct one is.

The banker who stitched it together, Oxford-educated ANTIGONE LOUDIADIS, was reportedly paid up to $12m in the year of the deal. Now JABER GEORGE JABBOUR, who formerly designed swaps at GOLDMAN, has told the GREEK government in a formal letter that it could “right historical wrongs as part of [its] plan to reduce GREECE’S debt”.

Mr JABBOUR successfully assisted PORTUGAL in renegotiating complex trades naively done with LONDON banks during the financial crisis. His work helped trigger a parliamentary inquiry and cost many senior officials and politicians their jobs. It also triggered major compensation payments by banks to the PORTUGUESE taxpayer.

ILLICIT BANKING

Mr JABBOUR, who now runs ETHOS CAPITAL ADVISORS, has also helped expose other cases including allegations against GOLDMAN SACHS and SOCIÉTÉ GÉNÉRALE over their dealings with LIBYA relating to financial transactions that left the country’s taxpayers billions of dollars out of pocket. Both banks deny wrongdoing.

Based on publicly available information, he believes the size of the profit GOLDMAN made on the transactions was unreasonable. Scrutiny and analysis of the documents and email exchanges could give GREECE grounds to seek compensation and assess if the deals were executed for the sole purpose of concealing the country’s debts.

Background Information:

THE GREEK ISSUE: IN REALITY IT WAS A BAIL OUT OF SOME OF THE RICHEST PEOPLE IN EUROPEAN SOCIETY ON THE COST ON SOME OF THE POOREST

http://geopoliticsrst.blogspot.co.at/2015/02/greece-and-europes-debt.html

GRIECHENLAND: GEHEIMER DEAL MIT GOLDMAN SACHS LÖSTE EURO-KRISE AUS

http://geopoliticsrst.blogspot.co.at/2012/03/goldman-sachs.html

GERMANY DEMAND SELL-OFF OF GREECE’S STATE OIL COMPANIES!!!

http://geopoliticsrst.blogspot.co.at/2012/03/hostile-takeover.html

LENDERS TOOK GREECE’S EURO MEMBERSHIP AS A STAMP OF CREDITWORTHINESS

GREECE’S membership of the euro gave it access to billions of easy credit which it was then incapable of paying back, leading to its current crisis. Lenders took its euro membership as a stamp of creditworthiness, but the true state of its economy was far less healthy.

Under Ms LOUDIADIS’S guidance, GOLDMAN swapped debt issued by GREECE in dollars and yen for euros which were priced at a historical exchange rate that made the debt look smaller than it actually was. The swaps reportedly made about 2 per cent of GREECE’S debt disappear from its national accounts.

The size and structure of the deal enabled the bank to charge a far bigger fee than is usual in swap transactions, and GOLDMAN persuaded GREECE not to test the transaction with competitors to ensure it was getting good value for money.

GREECE DID NOT REPORT THE GOLDMAN SACHS TRANSACTIONS IN 2008

Such deals were not uncommon among smaller countries attempting to enter the EUROZONE club, but they were stopped by the EU economic statistics agency Eurostat in 2008. Eurostat has said GREECE did not report the GOLDMAN SACHS transactions in 2008, when it and other countries were told to restate their accounts.

Two of the men in charge of the debt management agency of GREECE at the time have argued the department did not understand what it was buying and lacked the expertise to judge the risks or costs.

One, CHRISTOFOROS SARDELIS, told BLOOMBERG news agency that Ms LOUDIADIS offered one swap which had what is known as a “teaser rate”, or three-year grace period. But the GREEK official realized three months after signing the deal that it was far more complicated than he first thought – a situation exacerbated by the 9/11 attacks’ downward impact on global interest rates. While GOLDMAN reworked the deal, GREECE continued to lose heavily.

SAUL HAYDON ROWE, a partner at TURING EXPERTS, a team of former bankers who advise in court cases involving bank derivatives, said: “GREECE would have to unpick the trades completely and look into what advice was given, and how much GOLDMAN might have expected to make over the course of the transaction.

“For a legal action to go ahead, GREECE would have to show that GOLDMAN SACHS said something it knew was untrue or which it did not care was true or not.”

GOLDMAN said its transactions were in accordance with Eurostat rules. It said they reduced GREECE’S foreign denominated debts by €2.37bn, or 1.6 per cent in terms of debt-to-GDP ratio, adding that they had “minimal effect on the country’s overall fiscal situation.”

Adapted by Geopolitical Analysis and Monitoring from the article originally published in The Independent

DATELINE GREECE:  GOLDMAN, JUST PAY UP
Below article was posted on this blog October 2011!

As GREECE teeters on the edge of sovereign default of around $300 billion and sends shudders of premonition throughout the global economy, the fingerprints of GOLDMAN SACHS are once again to be found, as in so many crises beforehand. SREERAM CHAULIA argues that GOLDMAN should accept moral responsibility and contribute funds to bailing out GREECE.

BANKING INSTITUTIONS ARE MORE DANGEROUS THAN STANDING ARMIES

http://geopoliticsrst.blogspot.co.at/2011/10/banking-institutions-are-more-dangerous.html

As more skeletons fall out of the closet, it is coming to light that GREECE'S profligacy was abetted and managed for several years by the top Wall Street financial firms via complex instruments.

Economies of developing countries have endured decades of bitter experiences of falling into debt traps that sap productive resources.

FOR CONSULTANCY, WHICH HELPED GREECE JOIN THE EURO BY HOOK OR BY CROOK, GOLDMAN RECEIVED FEES OF $300 MILLION

In 2001, before spendthrift GREECE could enter the EUROZONE by satisfying the deficit limit rules of the currency union, GOLDMAN SACHS entered the picture with a tricky currency trade deal that would hide billions of dollars of additional public borrowing and not make it look like debt. For this piece of consultancy, which helped GREECE join the euro by hook or by crook, GOLDMAN received fees of $300 million.

In 2005, GOLDMAN sold to the National Bank of GREECE an “interest rate swap,” one of the notorious derivatives that have come under scrutiny since the WALL STREET implosion of 2008. GREEK critics of such dubious debt-hiding transactions had warned their government of the mounting long-term liabilities to the likes of GOLDMAN, but to no avail.

GREEK ASSETS SELL OFF –HEAVILY PROMOTED BY GERMAN MINISTER OF FINANCE - WOLFGANG SCHÄUBLE AND GOLDMAN SACHS

According to news reports, GREECE mortgaged revenue-generating assets like the national lottery, airports and highways as part of the agreements with GOLDMAN in what amounted to "a garage sale on a national scale."

GOLDMAN SACHS is reported to have attempted a redux of 2001 when its president, GARY COHN, landed in ATHENS in November 2009 with a similar debt deferral proposal that would continue to fool investors and the EU. This time around, GREECE did not oblige.

SIMILAR BORROWING BINGES OCCURRED WITH PIGS, COURTESY OF FINANCIAL DODGING EXPERTISE OF GOLDMAN, JP MORGAN AND ENTIRE CADRE OF HEDGE FUNDS

But the damage had already been done over a decade of spiraling foreign debt that was repackaged and postponed with WALL STREET'S wizardry. We now know that similar borrowing binges were occurring in the rest of the PIGS (PORTUGAL, ITALY, GREECE and SPAIN) economies courtesy of the financial dodging expertise of GOLDMAN, JPMORGAN and the entire cadre of Hedge Funds.

It may not be unfair if the EU demands that GOLDMAN accept moral responsibility and contribute to bailing out GREECE.

Economies of developing countries, especially in AFRICA and LATIN AMERICA, have endured decades of bitter experiences of falling into debt traps that sap productive resources, benefit speculative financiers and weaken state capacities to govern.

In their cases, the BRETTON WOODS institutions acted as economic restructuring consultants and funding taps that only opened if the recipients met crushing conditionalities.

“ECONOMIC HIT MAN” LURE POOR COUNTRIES INTO ACCEPTING MASSIVE “DEVELOPING LOANS” FROM THE WORLD BANK AND USAID

JOHN PERKINS'S book, "Confessions of an Economic Hit Man," reveals how highly paid professionals with knowledge of macroeconomics and world affairs were deployed to convince political and financial leaders of poor countries to accept massive "development loans" from the WORLD BANK and USAID. Once ensnared, the supplicants would be subjected to pressure on different issues from WASHINGTON.

In the PIGS economies, it was not so much strategically motivated hit men working for the U.S. government but rather some freewheeling U.S. financial corporations that could make a killing out of clients who were addicted to reckless state spending.

In late February 2010, as the EU began investigating the WALL STREET shenanigans in ATHENS, GOLDMAN defended its GREEK misadventures by arguing, predictably enough, that they were legal actions consistent with the regulations of their time.

Of course, much of the fault lay with the GREEK politicians who were seduced by the WALL STREET financial advisers who, for their part, were simply pursuing the bread-and-butter business of circulating wealth for profit.

Of course, much of the fault lay with the Greek politicians who were seduced by WALL STREET financial advisers.

DID U.S. INVESTMENT BANKS DELIBERATELY DUG THE GRAVES OF PIGS TO WEAKEN THE EURO?

Had ATHENS been more disciplined in organizing its finances, there would not have been a window of opportunity for GOLDMAN and company to exploit its vulnerability.

But southern EUROPE'S debt-proneness has systemic consequences from which WALL STREET cannot easily extricate itself. While there is no evidence to suggest that U.S. investment banks deliberately dug the graves of PIGS to weaken the EURO, the disastrous social costs of their financial chicanery call for reparations.

It may not be unfair if the EU demands that GOLDMAN, which now leads the earnings chart on WALL STREET, accept moral responsibility and contribute to bailing out GREECE.

Who knows — now that even the U.S. Federal Reserve is making noises about investigating GOLDMAN’S practices, the firm may be in a hurry to pay up. 

Written by SREERAM CHAULIA 

Editor's Note: This feature is adapted from a longer version published in The Financial Express on February 25, 2010

GREEK CRISIS AND GOLDMAN SACHS

ECONOMY

How Goldman Sachs May Provoke Yet Another Major Financial Crisis

The banking giant had a role in Greece's financial problems too.

By Ellen Brown / Web of Debt blog

January 6, 2015

Print

109 COMMENTS

Greece and the troika (the International Monetary Fund, the EU, and the European Central Bank) are in a dangerous game of chicken. The Greeks have been threatened with a “Cyprus-Style prolonged bank holiday”if they “vote wrong.” But they have been bullied for too long and are saying “no more.”

A return to the polls was triggered in December, when the Parliament rejected Prime Minister Antonis Samaras’ pro-austerity candidate for president. In a general election, now set for January 25th, the EU-skeptic, anti-austerity, leftist Syriza party is likely to prevail. Syriza captured a 3% lead in the polls following mass public discontent over the harsh austerity measures Athens was forced to accept in return for a €240 billion bailout.

Austerity has plunged the economy into conditions worse than in the Great Depression. As Professor Bill Black observes, the question is not why the Greek people are rising up to reject the barbarous measures but what took them so long.

Ireland was similarly forced into an EU bailout with painful austerity measures attached. A series of letters has recently come to light showing that the Irish government was effectively blackmailed into it, with the threat that the ECB would otherwise cut off liquidity funding to Ireland’s banks. The same sort of threat has been leveled at the Greeks, but this time they are not taking the bait.

Squeezed by the Squid

The veiled threat to the Greek Parliament was in a December memo from investment bank Goldman Sachs – the same bank that was earlier blamed for inducing the Greek crisis. Rolling Stone journalist Matt Taibbi wrote colorfullyof it:

The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who’s Who of Goldman Sachs graduates.

Goldman has spawned an unusual number of EU and US officials with dictatorial power to promote and protect big-bank interests. They include US Treasury Secretary Robert Rubin, who brokered the repeal of the Glass-Steagall Act in 1999 and passage of the Commodity Futures Modernization Act in 2000; Treasury Secretary Henry Paulson, who presided over the 2008 Wall Street bailout; Mario Draghi, current head of the European Central Bank; Mario Monti, who led a government of technocrats as Italian prime minister; and Bank of England Governor Mark Carney, chair of the Financial Stability Board that sets financial regulations for the G20 countries.

Goldman’s role in the Greek crisis goes back to 2001. The vampire squid, smelling money in Greece’s debt problems, jabbed its blood funnel into Greek fiscal management, sucking out high fees to hide the extent of Greece’s debt in complicated derivatives. The squid then hedged its bets by shorting Greek debt. Bearish bets on Greek debt launched by heavyweight hedge funds in late 2009 put selling pressure on the euro, forcing Greece into the bailout and austerity measures that have since destroyed its economy.

Before the December 2014 parliamentary vote that brought down the Greek government, Goldman repeated the power play that has long held the eurozone in thrall to an unelected banking elite. In a note titled “From GRecovery to GRelapse,” reprinted on Zerohedge, it warned that “the room for Greece to meaningfully backtrack from the reforms that have already been implemented is very limited.”

Why? Because bank “liquidity” could be cut in the event of “a severe clash between Greece and international lenders.” The central bank could cut liquidity or not, at its whim; and without it, the banks would be insolvent.

As the late Murray Rothbard pointed out, all banks are technically insolvent. They all lend money they don’t have. They rely on being able to borrow from other banks, the money market, or the central bank as needed to balance their books. The central bank, which has the power to print money, is the ultimate backstop in this sleight of hand and is therefore in the driver’s seat. If that source of liquidity dries up, the banks go down.

The Goldman memo warned:

The Biggest Risk is an Interruption of the Funding of Greek Banks by The ECB.

Pressing as the government refinancing schedule may look on the surface, it is unlikely to become a real issue as long as the ECB stands behind the Greek banking system. . . .

But herein lies the main risk for Greece. The economy needs the only lender of last resort to the banking system to maintain ample provision of liquidity. And this is not just because banks may require resources to help reduce future refinancing risks for the sovereign. But also because banks are already reliant on government issued or government guaranteed securities to maintain the current levels of liquidity constant. . . .

In the event of a severe Greek government clash with international lenders, interruption of liquidity provision to Greek banks by the ECB could potentially even lead to a Cyprus-style prolonged “bank holiday”. And market fears for potential Euro-exit risks could rise at that point. [Emphasis added.]

The condition of the Greek banks was not the issue. The gun being held to the banks’ heads was the threat that the central bank’s critical credit line could be cut unless financial “reforms” were complied with. Indeed, any country that resists going along with the program could find that its banks have been cut off from that critical liquidity.

That is actually what happened in Cyprus in 2013. The banks declared insolvent had passed the latest round of ECB stress tests and were no less salvageable than many other banks – until the troika demanded an additional €600 billion to maintain the central bank’s credit line.

That was the threat leveled at the Irish government before it agreed to a bailout with strings attached, and it was the threat aimed in December at Greece. Greek Finance Minister Gikas Hardouvelis stated in an interview:

The key to . . . our economy’s future in 2015 and later is held by the European Central Bank. . . . This key can easily and abruptly be used to block funding to banks and therefore strangle the Greek economy in no time at all.

Europe’s Lehman Moment?

That was the threat, but as noted on Zerohedge, the ECB’s hands may be tied in this case:

[S]hould Greece decide to default it would mean those several hundred billion Greek bonds currently held in official accounts would go from par to worthless overnight, leading to massive unaccounted for impairments on Europe’s pristine balance sheets, which also confirms that Greece once again has all the negotiating leverage.

Despite that risk, on January 3rd Der Spiegel reported that the German government believes the Eurozone would now be able to cope with a Greek exit from the euro. The risk of “contagion” is now limited because major banks are protected by the new European Banking Union.

The banks are protected but the depositors may not be. Under the new “bail-in” rules imposed by the Financial Stability Board, confirmed in the European Banking Union agreed to last spring, any EU government bailout must be preceded by the bail-in (confiscation) of  creditor funds, including depositor funds. As in Cyprus, it could be the depositors, not the banks, picking up the tab.

What about deposit insurance? That was supposed to be the third pillar of the Banking Union, but a eurozone-wide insurance scheme was never agreed to. That means depositors will be left to the resources of their bankrupt local government, which are liable to be sparse.

What the bail-in protocol does guarantee are the derivatives bets of Goldman and other international megabanks. In a May 2013 article in Forbes titled “The Cyprus Bank ‘Bail-In’ Is Another Crony Bankster Scam,” Nathan Lewis laid the scheme bare:

At first glance, the “bail-in” resembles the normal capitalist process of liabilities restructuring that should occur when a bank becomes insolvent. . . .

The difference with the “bail-in” is that the order of creditor seniority is changed. In the end, it amounts to the cronies (other banks and government) and non-cronies. The cronies get 100% or more; the non-cronies, including non-interest-bearing depositors who should be super-senior, get a kick in the guts instead. . . .

In principle, depositors are the most senior creditors in a bank. However, that was changed in the 2005 bankruptcy law, which made derivatives liabilities most senior. In other words, derivatives liabilities get paid before all other creditors — certainly before non-crony creditors like depositors. Considering the extreme levels of derivatives liabilities that many large banks have, and the opportunity to stuff any bank with derivatives liabilities in the last moment, other creditors could easily find there is nothing left for them at all.

Even in the worst of the Great Depression bank bankruptcies, said Lewis, creditors eventually recovered nearly all of their money. He concluded:

When super-senior depositors have huge losses of 50% or more, after a “bail-in” restructuring, you know that a crime was committed.

Goodbye Euro?

Greece can regain its sovereignty by defaulting on its debt, abandoning the ECB and the euro, and issuing its own national currency (the drachma) through its own central bank. But that would destabilize the eurozone and might end in its breakup.

Will the troika take that risk? 2015 is shaping up to be an interesting year.

Ellen Brown is an attorney, chairman of the Public Banking Institute, and author of 12 books. In her latest book, The Public Bank Solution, she explores successful public banking models historically and globally. She is currentlyrunning for California State Treasurer on a state bank platform.

ISRAEL AND THE EU

ISRAEL SHOULD STOP COURTING EUROPE, TURN TO ASIA

EUROPEAN officials and EUROPEAN civil society often like to think of themselves as the pinnacle of human rights and morality. In reality, EUROPE has become a moral vacuum and, once again, a breeding ground for casual hate, racism, and Antisemitism. This has become clear not only through the example of sophisticated elites like former IRISH President MARY ROBINSON, BRITISH Labor politician JEREMY CORBYN, or DANIEL BERNARD, the late FRENCH ambassador to the UNITED KINGDOM, but also in the increasing EUROPEAN obsession with stable, democratic ISRAEL, while countries surrounding ISRAEL degenerate into anarchy, generate millions of refugees, promote genocide, and incite and sponsor terrorism.

ANTISEMITISM - OLD EUROPE VERSUS NEW EUROPE

A lot can be written about why so many in EUROPE — or, for that matter, within the OBAMA administration and increasingly among other Democratic stalwarts — have become so hostile to ISRAEL and its ability to defend itself against threats ranging from HAMAS, to HEZBOLLAH, to ISLAMIC State and AL QAEDA affiliates in SYRIA and the SINAI. Perhaps it was the end of conscription in many countries which widened the divide between those with military service and understanding, and those without. Perhaps it was the insulation that developed from having outside powers guarantee security so that individual states seldom had to. Perhaps it’s the legacy of EUROPEAN anti-SEMITISM, the most virulent kind, which can no longer be masked by EUROPEAN smug self-righteousness. And perhaps it’s the “old EUROPE, new EUROPE” divide once described by Secretary of Defense DONALD RUMSFELD. POLES, CZECHS, and ROMANIANS remember what it is like to live under tyranny while time has diluted “Old Europe’s” understanding of reality.

ISRAEL has long considered itself almost a EUROPEAN country; the EUROPEAN immigration that marked early Zionism shaped that character, even if geography and immigration from TURKEY, IRAN, INDIA, and the ARAB world also bestowed ISRAEL with a MIDDLE EASTERN character. Indeed, TEL AVIV is much like ALEXANDRIA and BEIRUT once were, and like ISTANBUL still is, at least for the time being: a veritable mixing grounds of east and west.

INDIA AND ISRAEL - COMMON GROUNDS

For too long, however, ISRAEL has if not ignored ASIA than put it on the back-burner. Sure, there was been sporadic outreach to CHINA, but this was both half-hearted and misguided: When it comes to the MIDDLE EAST, BEIJING is the ultimate realist. Immediate commercial concerns means everything, broader principle mean little if anything.

Background Information: Israel China

JUNCTION BETWEEN CONTINENTS

http://geopoliticsrst.blogspot.co.at/2012/05/china-and-israel-enter-dragon.html

CHINA’S ECONOMIC AND STRATEGIC FOOTPRINT IN ISRAEL IS GROWING

http://geopoliticsrst.blogspot.co.at/2014/07/china-and-israel.html

A MARRIAGE MADE IN HEAVEN, EXCEPT FOR ENERGY ISSUES

http://geopoliticsrst.blogspot.co.at/2012/08/israel-and-china.html

INDIA—the world’s largest democracy—was largely hostile to the JEWISH state for the same reason it was hostile to the UNITED STATES. INDIAN nationalist diplomat VENGALIL KRISHNAN KRISHNA MENON coined the term ‘non-alignment’ in a 1953 UNITED NATIONS speech, and the following year JAWAHARLAL NEHRU, INDIA’S first prime minister, co-founded the Non-Aligned Movement. In theory, it sought a third path separate from the Cold War rivalry between the SOVIET UNION and the UNITED STATES but in practice it was marked by disproportionate hostility to the WEST.

Non-alignment, a fondness for socialism, and a suffocating bureaucracy hostile both to direct foreign investment and free market enterprises long restrained INDIA’S economic potential. While INDIA still has a way to go, Prime Minister NARENDRA MODI has sought to bring INDIA’S economy, political culture, and foreign into the 21st century. He recognizes how much INDIA and ISRAEL have in common. They are both democracies in a region where democracies otherwise have not thrived. And ISLAMIST radicals target them both. In the case of both, land disputes — be they have JERUSALEM and its environs in ISRAEL’S case, or the KASHMIR in INDIA’S — are only an excuse for a far more murderous agenda.

BIAS UN HUMAN RIGHT COUNCIL

Earlier this year, MODI announced that he would become the first INDIAN leader to visit ISRAEL. Among tech-savvy INDIANS, the twitter hashtag #IndiaWithIsrael is trending. Nor does it seem that MODI’S looming visit will be the end-all and be-all of warming ties. As COMMENTARY readers know, the UN Human Rights Council has long been a cesspool of anti-ISRAEL and anti-SEMITIC bias. Consider these statistics of cumulative Council condemnations from its founding in 2006 to the present:

ISRAEL has been condemned more than 60 times, yet slave-holding MAURITANIA, blogger-whipping SAUDI ARABIA, journalist-repressing TURKEY, freedom-extinguishing CHINA, migrant worker-killing QATAR, and expansionist RUSSIA have faced no condemnation.

Condemning ISRAEL has become a knee-jerk reaction around the world and, for decades, it has been INDIA’S position as well. But on Friday, July 3, INDIA shocked the Council by abstaining on its condemnation of ISRAELI actions in last year’s GAZA War. Now an abstention isn’t the same as a vote against, but clearly INDIA-ISRAEL relations are on the upswing, or could be if ISRAELI leaders are willing to work hard to cultivate them.

EYEING EAST – STRATEGIC AND TACTIC ADVANTAGE FOR ISRAEL

But INDIA is not alone. The AUSTRALIA/ISRAEL & JEWISH Affairs Council (AIJAC) has long sought to cultivate ties between ISRAEL and other SOUTHEAST ASIAN countries—INDONESIA, THAILAND, SINGAPORE, the PHILIPPINES, and even MALAYSIA. The momentum is promising, as have been the results considering the relatively small scale. If ISRAEL made a concerted effort to cultivate these ties, they might find a much more receptive audience than in past years. Not only would this create a strategic buffer, but it might also correct the narrative that all MUSLIMS embrace the radical, anti-peace positions put forward by more rejectionist ARAB states and EUROPEAN and AMERICAN proponents of the Boycott, Divestment, and Sanctions (BDS) movement. After all, INDONESIA is the largest MUSLIM country on earth by population, and INDIA the second largest, even though it is not even majority MUSLIM.

SOUTH EAST ASIAN COUNTRIES FACING THE SAME ISLAMIST TERROR THREATS AS HAS ISRAEL FOR DECADES

Such diplomacy need not be an either-or scenario, but just as WASHINGTON navel-gazes and forgets that the UNITED STATES and the targets of our interest are not alone in the sandbox, so, too, do EUROPEANS forget that they are not the world’s moral barometer or the doyens of the elite club with which everyone wants favor. Not only is SOUTHEAST ASIA booming as many of its countries largely abandon ruinous socialist practices and authoritarianism, but many now also face the same ISLAMIST terror threat which ISRAEL has been confronting for decades. There is a convergence of interests; let us hope that ISRAELI officials stop wasting undue energy on the Sisyphean task of pleasing EUROPEAN officials inclined to dislike them and recognize that such efforts might lead to greater results with a new eastern push.

Adapted by Geopolitical Analysis and monitoring from the original article written by Michael Rubin

EMERGENCY LANDING BY TURKISH AIRLINES FLIGHT AFTER BOMB SCARE

A flight belonging to Turkish Airlines from Bangkok with 148 passengers onboard landed at the Indira Gandhi International Airport in New Delhi | File Photo: AP

Via TheNewIndianExpress (TNIE)

NEW DELHI: An Istanbul-bound Turkish Airlines flight from Bangkok with 148 passengers onboard landed at the Indira Gandhi International Airport here under full emergency conditions due to a bomb scare.

The plane, an Airbus 330, landed safely at 1341 hours today, taken to an isolation bay, sources said, adding "it appears to be a hoax".

"The pilot was informed of a message written with lipstick on the mirror of one of the plane's washrooms that there was a bomb in the cargo hold of the aircraft, leading the pilot to seek Nagpur ATC's permission to land the aircraft there. He directed the pilot to approach the Delhi ATC," the sources said.

Following this, the aircraft was diverted to Delhi and where it landed at 1341 hours, they added.

Minister of State for Civil Aviation Mahesh Sharma said NSG and bomb disposal squad were pressed into service. "No explosive was found inside the cabin. The cargo portion is being checked," he said, adding the process may take about three hours.

He said the entire area was cordoned off and the fire brigade was alerted.

SECRET TALKS BETWEEN HAMAS AND ISRAEL - MEDIATED BY GERMAN

GERMANY MEDIATING SECRET HAMAS-ISRAEL TALKS, 

SUPPORTED BY QATAR

By Richard Silverstein

Intelligence Online (IO) reported (paywall) last month that the visit of GERMAN foreign minister FRANK-WALTER STEINMEIER to both ISRAEL and GAZA involved far more than the humanitarian agenda suggested in the media.  IO writes that the GERMAN intelligence agency, BND, is conducting secret negotiations between the ISRAELI government and HAMAS aimed at achieving a durable, stable long-term ceasefire.  The GERMANS are encouraging HAMAS’ participation through a collaboration with QATAR’S state security service.  The QATARIS submitted a proposal to both ISRAEL and GAZA (presumably with the cooperation of the BND).  A key component that would make the plan attractive to HAMAS is that it would include building a floating seaport off GAZA that would be administered under NATO auspices.  This is the first time NATO has been mentioned as a potential force to monitor and enforce international agreements in ISRAEL-PALESTINE.  If the report is accurate, this could be a serious and important development, introducing a major international security force into the region.  Additional reports say TURKEY, which often acts in concert with QATAR in such matters, has also agreed to the plan.

Background Information:

HAMAS REAPS OVER HALF A BILLION DOLLARS A YEAR FROM TARIFFS ON THE EGYPT-GAZA TUNNEL TRADE

http://geopoliticsrst.blogspot.com.ar/2012/11/israel-and-gaza.html

MOST OF THE CITIZENS IN THE STRIP SEE HAMAS AS THE ONLY SOLUTION TO THEIR PROBLEMS

These developments may explain why the IDF Southern Command chief recently voiced surprisingly pragmatic statements concerning HAMAS and the need for ISRAEL to come to an understanding with it:

“Most of the citizens in the Strip see HAMAS as the only solution to their problems.  GAZA has an independent authority that functions like a country,” said [Sammy] TURGEMAN in comments reported by the ISRAELI daily YEDIOTH AHRONOTH, depicting HAMAS in terms as much akin to a functioning state as to a militant group.

“There is a government and an annual plan, with executive bodies and inspection authorities. Within the country there is a ruler that is called HAMAS which knows how to exercise power over the other authorities. As of now, there is no substitute ruler to replace HAMAS in the strip.

The only replacement for HAMAS is the IDF and authoritarian chaos. Other than HAMAS there is no other axis that could control [GAZA].”

TURGEMAN added: “The [PALESTINIAN] Authority cannot rule and this should be taken as an indisputable statement.”

Of course, the prime minister and his cabinet war hawks entirely dismiss this approach.  It remains to be seen whether whoever within ISRAEL is shepherding this process (possibly the army and intelligence services?) can win over the hardliners who would like nothing more than to torpedo such a peace initiative.

HAMAS HAS MUCH MORE TO GAIN FROM THIS PROJECT THAN ISRAEL, WHICH IS WHY IT’S LIKELY TO FAIL

Naturally, the PA is suspicious and mistrustful of any development that might present HAMAS in a more favorable light.  It hates the plan.  The PA intelligence service recently warned MAHMOUD ABBAS about it and suggested that he approach the EGYPTIANS to stop it.  This hasn’t happened, in part because the EGYPTIAN military government, facing increasing levels of unrest and terrorism in the SINAI, is considering a rapprochement with HAMAS.  Recently, EGYPT opened the border with RAFAH for several days as part of this reconciliation process.  The EGYPTIANS expected as a quid pro quo that HAMAS would aid EGYPT’S military and intelligence services in the hunt for ISLAMIST terrorists in SINAI.  Note, this contradicts repeated (and questionable) IDF claims that SINAI militants work together with HAMAS in perpetrating terror attacks.

HAMAS hardliner, MAHMOUD ZAHAR, leads a faction opposed to any deal with either ISRAEL or EGYPT.  He represents the view of HAMAS’ military wing.  The movement’s political wing is eager for any plan that would involve improving the quality of life for average GAZANS since the war last summer, which made life a sheer misery for most residents.  Further, an ISIS affiliate, ANSAR JERUSALEM, recently announced that it planned to challenge and defeat HAMAS in the enclave.  Though it’s doubtful the group has the muscle to fulfill its threat, just the name ISIS is enough to instill fear in the hearts of HAMAS’ political wing.

HAMAS has much more to gain from this project than ISRAEL, which is why it’s likely to fail.  But just its existence is a positive development.