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Our second quarter forecast began by declaring:
The second quarter of 2007 will brim with fury and froth as two states [Iran and Germany] attempt to challenge the geopolitical order imposed by others to stem their expansion, in hopes of regaining their long-lost position as major powers. Throughout the quarter, these two states will seek a louder voice and a stronger hand. The real conflicts, however, will come later.
That “later” is now.
The world has waited three years for Iran and the United States to strike a deal over the future of Iraq. At every stage of the talks, when either power believed it was in a weak position, it felt forced to generate a crisis in order to redefine negotiations. The United States hints that bombing Iran is an option, arrests several Iranian operatives somewhere or surges a few thousand more troops into Iraq; Iran waxes philosophic about its nuclear program, detains some British sailors or calls on the Mehdi Army to kill some Sunnis. Not to be left out, the Saudis and Syrians also stoke the jihadist fires in order to ensure their place at the table.
The Iranians and Americans are now closer than ever to reaching an agreement that would secure the Iranian border against a hypothetical Iraqi attack while preventing Iranian forces from ever crossing into Kuwait and Saudi Arabia. Iran will have influence in Iraq, but the United States will ultimately be responsible for Iraq’s borders. The Shia will hold most of the power while the Sunnis will be guaranteed influence. The Kurds may well have to be satisfied with scraps. Who will patrol the cities likely will be left exclusively to the Iraqis themselves.
But despite the progress made in the second quarter, this deal is not yet final. And typically, in such “final negotiations” there is normally one final big crisis. The Middle East in the third quarter will be about that “final” crisis between Washington and Iran exploding against the backdrop of those who fear an Iranian-American rapprochement doing everything they can to scuttle the deal.
It will be easy to tell if this “crisis” is simply the concluding negotiating ploy or the final collapse of any Iranian-U.S. understanding. If it is the former, Iraq will become somewhat ordered near the quarter’s end as the edges of the deal begin to come into focus and the violence concentrates on reining in or destroying Sunni and Shiite factions opposed to the settlement. In contrast, if the deal fails utterly, Iraq will heat up to full boil — and probably stay like that for years.
Regardless of how Iraq progresses, however, the United States must begin to turn its attention elsewhere. In the third quarter some of that attention will be focused on a power that Washington does not seek to either pressure or confront: China.
Far from seeking a competition with the Asian giant, the United States does not want the complications a hostile China could create. Luckily for Washington, China — knotted up in its internal issues — is attempting to maintain as low a profile as possible for fear of ruining its Olympic day in the sun in 2008. The third quarter will certainly see intensified high-level U.S.-Chinese diplomatic traffic, but the topic will be about how to quietly manage their evolving relationship, not about dealing with bilateral crises.
Stratfor expects the third quarter’s major drama to play out in Europe. In the second quarter, German Chancellor Angela Merkel launched a massive reassertion of German power within Europe. Her handling of both the EU presidency and G-8 chairmanship, while not flawless, was impressive enough that Berlin is once again a world capital where real deals are brokered by — and not behind the backs of — the hosts.
However, one of the issues Merkel so adroitly handled is about to become a flash point. Merkel’s airy announcement at the G-8 summit that Kosovo would be independent — and independent soon — flew in the face of the demands of a man standing an arm’s length away: Russian President Vladimir Putin. After investing much political capital in the Kosovo issue in the second quarter, Putin now stands to be made a fool of should Kosovo be allowed to break off from Serbia. Putin also proved unable to split European unity on issues of trade with Poland, transit with Lithuania, the use of polonium in the United Kingdom or the rights of ethnic Russians in Estonia. State leaders — especially Russian leaders — do not like being ignored.
And Russia could well be facing a period of greater Western pressure. The Russian government is undergoing transitions as it prepares for Putin’s planned March 2008 retirement. Moscow figured that with the United States bogged down in Iraq, the Kremlin would have at least until U.S. President George W. Bush leaves office in 2009 to manage that transition. Should Iran and the United States seal a deal, however, Washington’s attention could swing back to all things Russian in a matter of weeks.
Putin needs to distract the Americans, and he needs to do so soon. Luckily for him, Kosovo is only one in a constellation of grievances that can throw the West into disarray. Other bombshells include disarmament treaties and pending U.S. anti-missile defense facilities.
Putin will attempt to use these wedge issues particularly to intimidate the newly opinionated Germany. A Germany truly hostile to missile defense could probably cause it to be scrapped, a Germany neutral on the issue of the Baltics and Poland would allow great Russian advances and a Germany willing to give in on Kosovo would also likely give in on issues of greater importance. Germany’s position is key to the West’s position, and so targeting Germany is the centerpiece of the Russian strategy.
And since Kosovo is where Merkel’s credibility is on the line, Kosovo is where Putin is likely to move most decisively. If Putin can break Germany there, American power is simply insufficient to fill the leadership gap, and the European dominos will begin to fall.
Berlin is well aware of this, but it is also well aware that it could reap lavish political benefits if it forces Russia to back down. Both Russia and Germany are gunning for a crisis (likely over Kosovo), putting the United States in the bizarre position of seeking a tactical retreat in order to prevent a wider confrontation it simply is not ready for. In the third quarter, Germany and Russia will be probing for opportunities against each other, while the United States will try to delay everything until Iraq is settled. The level of strife in Eurasia will, therefore, be determined not by how aggressive the United States proves to be, but how efficient it is at shelving conflicts for another day.
Related Links:
The Maneuvering Before the Storm
Middle East: Internal Struggles and Continuing Talks
As in the past several quarters, the U.S.-Iranian negotiations will once again be the main issue driving events in the Middle East for the third quarter of 2007. The dealings between Washington and Tehran have reached a critical phase; both sides realize it is now or never, which explains their decision to make the previously back-channel negotiations public. Over the next three months, these talks will intensify, as will the violence in Iraq.
The fighting will escalate as both the Sunnis and Shia try to bring some method to the madness of their internal affairs against the backdrop of the ongoing Sunni nationalist insurgency, jihadist suicide bombings and Shiite militia activity. This will involve paring the number of political and militant actors down to a manageable level so that both communal groups can effectively negotiate and arrive at a power-sharing agreement. Some Iraqis will not want to take part in a power-sharing mechanism, and those trying to negotiate a settlement will have to deal with the uncooperative actors with an iron fist.
While the Sunnis and Shia deal with intra-communal issues, they also will be dealing with one another and the Kurds in terms of making progress on a number of thorny issues. These same issues will be the subject of talks between the United States and Iran. They include:
- The move to return the Baathists to the fold of both the state and mainstream society;
- Specifying the details of a hydrocarbon law, which will provide guidelines for sharing energy-related revenues among the three principal ethno-sectarian communities; and
- Amending the constitution in order to allow Sunnis more influence in Baghdad and a resolution of the disputes having to do with regional autonomy, especially the one related to the Kurdistan Regional Government (KRG).
Some incremental progress toward resolving these issues can be expected, but no major breakthrough is likely this quarter. The existing violence, the need for both Sunnis and Shia to rein in the militants within their sects and a pantheon of deal-spoilers will all prevent any significant headway. Furthermore, Iraq’s internal problems and the U.S.-Iranian talks will continue affecting each other; a meeting of the minds between Washington and Tehran could play a key role in significantly clearing up Iraq’s internal issues, but those issues feed back into the U.S.-Iranian dealings and further complicate matters.
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