Israel's Newest Strategic Asset: It's Economy

Daled Amos

Due to the economic policies implemented by Prime Minister Binyamin Netanyahu since his first tenure as prime minister in 1996, in the face of this economic disaster, Israel is likely to find itself in the unlikely position of standing along China and India as among the only stable, growing economies in the world.
Caroline Glick: Caution--Storm Approaching, July 15, 2011


The importance of Israel's hard-earned stability is more than just an issue of avoiding the fate of Arab countries such as Egypt and Syria--both of which are facing impending economic disaster. Glick writes that, putting aside the list of Muslim countries facing severe financial problems--it is becoming increasingly clear that besides Greece, there are a number of countries in the West that are not going to escape unscathed: It now appears increasingly likely that the EU is going to have to accept Greece defaulting on at least part of its debt. And the ramifications of Greek default on the European and US banking systems are largely unknowable. This is the case because as Megan McArdle at The Atlantic wrote this week, the amount of Greek debt held by European and US banks is difficult to assess.

Worse still, the banking crisis will only intensify in the wake of a Greek default. Debt pressure on Italy, Ireland, Spain and Portugal which are all also on the brink of defaulting on their debts will grow. Italy is Europe's fourth largest economy. Its debt is about the size of Germany's debt. If Italy goes into default, the implications for the European and US banking systems - and their economies generally -- will be devastating.

The current debt-ceiling negotiations between US President Barack Obama and the Republican Congressional leadership have made it apparent that Obama is ideologically committed to increasing government spending and taxes in the face of a weak economy. If Obama is reelected next year, the dire implications of four more years of his economic policies for the US and global economies cannot be overstated.

Israel's new-found economic stability gives Israel options and possibilities, but by the same token, the need to preserve this hard earned success places limits on Israel as well. Caroline Glick emphasizes that Israel will have to protect its accomplishment--especially in the current economically and politically turbulent times.

For one thing, Israel cannot afford to allow itself to become entangled in any new agreements with Arab regimes--least of all a commitment to the regimes of Assad for Abbas.

Then there is the possibility of economic collapse in Egypt along with the increasing power and influence of the Muslim Brotherhood. For the first time in nearly 30 years, the prospect of a war with Egypt again becomes a possibility.

In addition, the weak US economy also becomes a concern now, especially with the declared interest of the Obama administration in making overtures to the Muslim Brotherhood--this while the financial woes in Europe might exacerbate the current anti-Israel sentiment there.

Read the whole thing.

Apparently, it's economic success, and the need to preserve it, is only going to push Israel in directions even more at odds with those in Europe and the US who are convinced they know best what is in Israel's best interests.