Europe’s economic crisis is slowly but steadily eroding the political systems of many countries on the Continent. New actors are emerging and threatening the supremacy of the traditional players. Alliances and events that seemed impossible only a few years ago are now being openly discussed across Europe. On Dec. 3, for example, Sweden announced it would hold early elections, partially because of political moves from the far right.

Europe’s economic crisis is slowly but steadily eroding the political systems of many countries on the Continent. New actors are emerging and threatening the supremacy of the traditional players. Alliances and events that seemed impossible only a few years ago are now being openly discussed across Europe. On Dec. 3, for example, Sweden announced it would hold early elections, partially because of political moves from the far right. In Spain, the ruling center-right party is openly discussing the possibility of entering an alliance with its traditional center-left rivals to prevent a protest party from taking over. Key members of the European Union, including Sweden, Spain, the United Kingdom and possibly Greece, will hold elections in 2015. In most cases, these countries will see outcomes nobody would have thought possible in 2008.

Sweden

Swedish Prime Minister Stefan Lofven announced the snap elections after his center-left government lost a budget vote less than three months after coming to power. Lofven’s announcement was precipitated by a decision by the far-right Sweden Democrats party to support the opposition during a budget vote. Sweden’s early elections, the first for the country in almost 60 years, will be held March 22, with the anti-immigration Sweden Democrats likely playing a central role. In Sweden’s parliamentary elections in September, no coalition managed to form a majority government, but the elections were marked by the strong performance of the far-right party, which received 12.9 percent of the vote, up from 5.7 percent in 2010, when it entered parliament for the first time.

While Sweden is one of the fastest growing economies in Europe, unemployment remains above pre-crisis levels. More important, Sweden has the largest number of asylum applications per capita in the European Union. Last year, violent riots shook Stockholm’s immigrant-heavy suburbs, revealing Sweden’s struggle to integrate its immigrants into mainstream society. Opinion polls show that Swedes still largely support the idea of living in a country that is open to asylum-seekers, but they are also worried about the economic and cultural impact of increased immigration. If the Sweden Democrats hold their place as the country’s third-largest party, they will probably become key in the formation of a new government. This would put a far-right party in a position of power in one of Europe’s main economies.

Spain

Spain’s general elections, which will be held in late 2015, will likely have an even greater impact on its political system. The country’s enduring economic crisis and a series of corruption scandals involving the ruling party led to a dramatic rise in popular support for Podemos, a left-wing protest party that wants to renegotiate the European Union’s debt and deficit targets and restructure the Spanish debt. Podemos was created less than a year ago, but recent opinion polls put its popularity at around 28 percent — above that of the mainstream center-right Popular Party and center-left Spanish Socialist Workers’ Party, commonly known as PSOE. Podemos’ rise in Spain has been so resounding that on Dec. 2, Popular Party chief Maria Dolores de Cospedal said her party would consider an alliance with PSOE in order to form a government.

PSOE rejected the idea, while members of the Popular Party had backed away from it by Dec. 3. However, Cospedal’s statements highlight the extent of the threat to Spain’s two-party system, which was created after the end of the Franco dictatorship in the late 1970s. Before the crisis, Spain’s mainstream parties normally captured between 70 and 80 percent of the vote. The 2015 elections will probably mark the first time in modern Spanish history that their combined support falls below 50 percent. The situation is particularly awkward for PSOE, which recently moved slightly more to the left to appeal to some of Podemos’ voters. The party has yet to decide whether it wants to risk losing voters to the left by siding with the Popular Party or risk losing moderate voters by siding with Podemos.

Greece

Greece offers an example of what Spanish politics could look like in the future. Like Spain, Greece had a relatively stable two-party system that saw the center-right and the center-left alternate periods in power. But the economic crisis led to the rapid rise of the left-wing Syriza party, which opposes the EU austerity measures supported by the mainstream parties. In 2012, it took two elections for the mainstream parties to form an alliance to keep Syriza at bay. In Greece, where political rivalries are old and deep, such an alliance would have seemed impossible before the crisis.

Greece will probably return to the center of the European crisis next year when the Greek parliament attempts to elect a new president. If the parliament fails, it will be forced to hold early elections. With Syriza still at the top of the opinion polls, it would be more difficult to keep the upstart party from power this time around. Syriza has promised to restructure Greece’s debt, a move that would probably make financial markets nervous and generate uncertainty across the Eurozone at a time when Europe thought it had found some stability. When the European Central Bank promised to intervene in financial markets almost two years ago, the European Union lost the sense of urgency it had in the early stages of the crisis. The European Union, and particularly Germany, chose caution instead of action. Should Greece generate financial turmoil in Europe again, the Europeans will have to go back to the negotiating table and discuss all the issues that have so far been avoided.

United Kingdom

Finally, Euroskepticism will also be a key player in the United Kingdom, which will hold elections in May. Britain also had a functioning two-party system before the crisis, making coalitions relatively uncommon. But the rise of the anti-immigration UKIP party is seriously threatening this system. A coalition between the Conservative Party and the Labour Party or an agreement between the Tories and UKIP both seem impossible for now, but either would be conceivable if no party wins enough seats to govern on its own.

The current norm in Europe would have seemed impossible only five or six years ago. Most people would not have believed that unemployment in Spain or Greece could go above 25 percent or that nationalist, protest and Euroskeptical parties would become key players in European politics. More important, most Europeans would never have thought that the survival of the European Union would be under such a serious threat. For many Spaniards, Greeks, Swedes and Britons, the transformation of their political systems may still seem unlikely, but for some a surprise is likely coming next year.

Europe: When the Unthinkable Becomes Possible is republished with permission of Stratfor

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The crisis in Syria has quickly morphed into a U.S.-Russian confrontation. Russia’s goal is to be seen as an equal of the United States, while Obama must tackle both domestic and international sentiment to dispel doubts about America’s preeminent global status.

In the wake of President Barack Obama’s change of tack from a strike on Syria, the threat of war has not dissolved. It has, however, been pushed off beyond this round of negotiations. 

The crisis in Syria has quickly morphed into a U.S.-Russian confrontation. Russia’s goal is to be seen as an equal of the United States, while Obama must tackle both domestic and international sentiment to dispel doubts about America’s preeminent global status.

In the wake of President Barack Obama’s change of tack from a strike on Syria, the threat of war has not dissolved. It has, however, been pushed off beyond this round of negotiations. 

The president’s minimalist claims are in place, but they are under serious debate. There is no chance of an attack on chemical weapons stockpiles. Therefore, the attack, if any, will be on command and control and political targets. Obama has options on the table and there will be force in place for any contingency he selects. Nothing is locked in despite public statements and rhetoric in Washington, London, Paris or Moscow.

Remember that all public statements now are meant to obscure real plans and intentions. They are intended to shape the environment. Read them, but do not look at them as anything more than tactics.

The issue has morphed into a U.S.-Russian confrontation. Russia’s goal is to be seen as an equal of the United States. It wins if it can be seen as a protagonist of the United States. If it can appear that Washington has refrained from an attack because of Russian manoeuvres, Moscow’s weight increases dramatically. This is particularly the case along Russia’s periphery, where doubts of American power abound and concern over Russian power abides.

Related: Has ‘Partial Intervention’ In Syria Failed?

Related: Behind Syria’s Crisis: How Oil & Gas Limits Contributed To The Civil Unrest

The Russian ploy on weapons controls was followed by the brilliant move of abandoning strike options. Obama’s speech the night of Sept. 10 was addressed to the U.S. public and Obama’s highly fractured base; some of his support base opposes and some – a particular audience – demands action.

He cannot let Syria become the focus of his presidency, and he must be careful that the Russians do not lay a trap for him. He is not sure what that trap might look like, and that’s what is unnerving him as it would any president. Consequently, he has bought time, using the current American distaste for military action in the Middle East. But he is aware that this week’s dislike of war can turn into next week’s contempt on charges of weakness. Obama is an outstanding politician and he knows he is in quicksand.

The Russians have now launched a diplomatic offensive that emphasizes to both the Arabs in the Persian Gulf opposing Bashar al Assad and the Iranians supporting him that a solution is available through them. It requires only that they ask the Americans to abandon plans for action. The message is that Russia will solve the chemical weapons problem, and implicitly, collaborate with them to negotiate a settlement.

Obama’s speech on Sept. 10, constrained by domestic opinion, came across as unwilling to confront the Russians or al Assad. The Russians are hoping this has unnerved al Assad’s opponents sufficiently to cause them to use the Russians as their interlocutors. If this fails the Russians have lost nothing. They can say they were statesmen. If it succeeds, they can actually nudge the regional balance of power.

Related: Russia’s Return To The Middle East: Rebirth Of A Superpower?

Related: Is A New US Foreign Policy Doctrine Emerging?: George Friedman

At this point, all signs indicate that the domestic considerations dominate U.S. decision-making. If the Russian initiative begins to work, however, Obama will be forced to consider the consequences and will likely act. The Arabs suspect this and therefore will encourage the Russians, hoping to force the U.S. into action.

The idea that this imbroglio will somehow disappear is certainly one that Obama is considering. But the Russians will not want that to happen. They do not want to let Obama off the hook and their view is that he will not act. Against this backdrop, they can appear to be the nemesis of the United States, its equal in power and its superior in cunning and diplomacy.

This is the game to watch. It is not ending but still very much evolving.

By Stratfor

Analytic Guidance: The Syria Crisis is republished with permission of Stratfor.

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Winning a stunning victory in the country’s six-way presidential race, Iran’s new leader Hassan Rouhani has vowed to integrate Tehran into the international community, bolstering hopes for better relations with the West. A skilled negotiator and a moderate, Rouhani’s election could be the best news in many years for the future of the whole region – for Iran, its economy, the nuclear standoff, as well as diplomatic relations with Israel.

Winning a stunning victory in the country’s six-way presidential race, Iran’s new leader Hassan Rouhani has vowed to integrate Tehran into the international community, bolstering hopes for better relations with the West. A skilled negotiator and a moderate, Rouhani’s election could be the best news in many years for the future of the whole region – for Iran, its economy, the nuclear standoff, as well as diplomatic relations with Israel.

Iranians went to the polls Friday to elect outgoing President Mahmoud Ahmadinejad’s successor. Candidates reported few serious problems with the process, and the losers sent congratulations to the eventual winner, Hassan Rouhani.

Compared to the political instability that followed Ahmadinejad’s 2009 re-election, this process was relatively boring. But however the news media felt about the election, Iran needs domestic stability if it is going to change its foreign policy in a very challenging geopolitical environment.

Domestic Stability

Domestic stability has been the first goal for any regime that would project power from Iran’s central highlands. The Persian Empire first emerged only after a central power subjugated the various groups of Indo-Iranian, Turkic and Semitic peoples within its borders. The suppression of 2009’s Green Movement is only a recent example of a strong state apparatus quelling internal dissent. For millennia, various Persian regimes have sought to keep such domestic pressures at bay while foreign powers have sought to exacerbate these tensions to distract Iran or make it vulnerable to invasion.

Much of the Western, and especially U.S., coverage of the Iranian elections centered on Rouhani, a figure known to many in the West. He took part in the Islamic Revolution and had ties to Ayatollah Ruholla Khomeini, the founder of the Islamic republic. He also has ties to Ayatollah Ali Akbar Hashemi Rafsanjani, Iran’s second clerical president, and is a representative of the current supreme leader, Ali Khamenei, on the Supreme National Security Council. Rouhani served as secretary of Iran’s Supreme National Security Council for 16 years. As an extension of this position, he was Iran’s chief nuclear negotiator from 2003 to 2005. It was during this period when Rouhani’s foreign policy credentials became best known in the United States and Europe. It was also during this period when Western and Iranian nuclear negotiators came closest to reaching a deal. 

Related: MAD For Oil: Will US Sanctions On Iran Lead To Mutually Assured Economic Destruction?

Related: Iran to Subsidise Food for Poor As Sanctions and Inflation Cripple Economy

Paradoxically, Rouhani combines conservative and reformist tendencies. As a cleric, he does not seek fundamental changes in Iran’s power structure of the sort Ahmadinejad sought, but he also advocates cooperation with, and outreach to, other branches of Iran’s power structure such as the military and civilian politicians. While defending Iran’s nuclear program and regional agenda, he understands that simply issuing ultimatums to the West and escalating tensions rather than striking compromises will not win relief from sanctions. In this regard, he resembles the reformist former President Mohammed Khatami, under whom Rouhani served as chief nuclear negotiator. Rouhani can be expected to adopt a less incendiary tone in foreign policy than Ahmadinejad and to cooperate with other domestic power centers, like those of the supreme leader and the military and security forces.

Iran’s domestic woes give it an incentive to pursue the kind of pragmatic engagement and dialogue with the West Rouhani was known for, especially on issues such as Iran’s nuclear program and Tehran’s interests in the Levant, Iraq and Afghanistan. This means Friday’s election represents a relative success for the Islamic republic, though it denied the West’s desire for a disruptive election that would see Iran’s clerical regime fall.

Ahead of any meaningful traction on its foreign policy agenda, the Iranian government had to re-engage its electorate, something it has accomplished with this election. Tellingly, aside from current nuclear negotiator Saeed Jalili, seven of the eight candidates approved to run in this election campaigned on moderate or even reformist platforms, in stark contrast to the nationalist rhetoric of the firebrand Ahmadinejad.

Although largely unaffected by the regional unrest in 2011, the clerical regime needed to demonstrate both to its citizens and foreign capitals that the Iranian people could still bring about change at the ballot box, not just through the streets. Given the choice, the Iranian people chose pragmatism in relatively free and fair elections.

Though the Islamic republic cannot be changed overnight — long-term structural changes are needed to revive the Iranian economy — Rouhani’s campaign and election have provided a relatively immediate, low-cost way to lessen some of the domestic pressures on the regime. Large-scale demonstrations in support of the president-elect following the announcement of his victory took place in Tehran and throughout many of Iran’s urban centers, without the involvement of state security forces. For now at least, this suggests Iran’s large and increasingly frustrated electorate seems to have been appeased. 

While it is, of course, too early to know how his presidency will play out, the Rouhani administration at the very least will not begin its tenure plagued with doubts regarding its legitimacy of the sort that greeted Ahmadinejad’s second term. Also unlike Ahmadinejad, the president-elect has the opportunity to bridge deep divisions within the clerical elite. With clerical authority and the supreme leader no longer under attack from the presidency, and with convincing electoral support behind him, Rouhani has already overcome the largest hurdles to amending Iranian policy at home and abroad.

Foreign Policy Shifts

It is in this framework that the West hopes to eventually re-engage Rouhani and Iran. Fiery rhetoric aside, Ahmadinejad also sought a strategic dialogue with the West, especially as his competition with the supreme leader prompted him to seek foreign policy wins. But the infighting that resulted from Ahmadinejad’s attempts to undermine the pro-clerical structure of the republic impeded any progress in this arena.

If Rouhani can get the clerics behind him and accommodate the interests of Iran’s military and security forces and the broader electorate, his chances of reaching a dialogue or negotiated settlement with the West will be much improved.

Guiding much of this will not be just the change in personalities but Iran’s shifting geopolitical environment. Since it is no longer on the regional offensive, Tehran’s previous defiant rejection of American interests is now incompatible with long-term Iranian goals in the region. 

Related: Iran Could Stop Oil Exports If Sanctions Intensify

Related: Iran Evading Sanctions By Trading Oil For Gold With Turkey: Report

There is still much work to be done at home before Iran can switch gears, and Iran’s president-elect still faces considerable challenges to enacting any major shifts in policy. Rouhani must still convince many of the stakeholders within the regime that he can be trusted. He must protect the economic interests of the powerful Islamic Revolutionary Guard Corps while building a relationship with Iran’s larger and often overlooked regular army. He must also manage his relationships with Rafsanjani, his most influential political backer, and with the supreme leader. Rafsanjani and Khamenei are competitors, and although the approval and eventual success of Rouhani’s candidacy may hint at a broader clerical rapprochement, the supreme leader will not take kindly to attempts by Rafsanjani to rule through Rouhani. Rafsanjani, however, is unlikely to stop trying to capitalize on the successes of his protege.

Against a backdrop of domestic political reconfiguration, gradual diplomatic outreach to and from Iran can be expected. Parliamentary elections in 2015 will provide greater insight into how much change Rouhani can attempt, and it is along this timeline we should expect to see Iran seriously re-engage in negotiations with the West. In the meantime, little substantive change will occur beyond more careful rhetoric regarding both Iran’s nuclear program and Tehran’s support for the embattled Syrian regime. While challenges to both Iran’s domestic policy realignment and outreach to the United States thus remain, Western and regional hopes for such change endure. 

Related: Iran Offers $1 Billion Credit Line To Syrian Regime

By Michael Nayebi-Oskoui and Kamran Bokhari

The Foreign Policy Impact of Iran’s Presidential Election is republished with permission of Stratfor.

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The shrinking icecaps in the Arctic have opened up new opportunities for trade, shipping and natural resource exploration at the top of the world. While the Arctic Council, representing countries with territory above the Arctic Circle, has no meaningful decision-making power at present, its decision to granted six new countries observer status could be a precursor for greater importance in the future.

The shrinking icecaps in the Arctic have opened up new opportunities for trade, shipping and natural resource exploration at the top of the world. While the Arctic Council, representing countries with territory above the Arctic Circle, has no meaningful decision-making power at present, its decision to granted six new countries observer status could be a precursor for greater importance in the future.

The Arctic is expected to become more important in the coming decades as climate change makes natural resources and transport routes more accessible. Reflecting the growing interest in the region, the Arctic Council granted six new countries (China, India, Italy, Japan, South Korea and Singapore) observer status during a May 15 ministerial meeting in Kiruna, Sweden. By admitting more observers, the Arctic Council – an organization that promotes cooperation among countries with interests in the Arctic – will likely become more important as a forum for discussions on Arctic issues. However, this does not necessarily mean it will be able to establish itself as a central decision-making body regarding Arctic matters.

Analysis

The Arctic Council was established in 1996 by the eight countries that have territory above the Arctic Circle – the United States, Canada, Iceland, Denmark, Norway, Sweden, Finland and Russia. Its main purpose was to be an intergovernmental forum (also involving Arctic indigenous groups) that promoted cooperation primarily regarding environmental matters and research. The Arctic Council’s central focus has remained on environmental issues in the Arctic, and the body has had no meaningful decision-making power.

However, during this year’s meeting, the council’s members signed a legally binding agreement coordinating response efforts to marine pollution incidents. The council signed a similar agreement on search and rescue collaboration in 2011. These agreements, as well as the interest from countries around the world in gaining observer status, highlight the growing relevance of the Arctic Council and the Arctic region.

The Arctic’s Economic Value

Satellite data collected since 1979 shows that both the thickness of the ice in the Arctic and range of sea ice have decreased substantially, especially during the summer months. According to the United States’ National Snow and Ice Data Center, the amount of Arctic ice (usually at a minimum during September) was 3.61 million square kilometers (1.39 million square miles) in September 2012 – close to 49 percent lower than the average amount of ice seen between 1979 and 2000.

The melting of the ice facilitates natural resource exploration in the high north. U.S. Geological Survey estimates from 2008 suggest that 13 percent of the world’s undiscovered oil and 30 percent of undiscovered natural gas reserves are located in the Arctic Circle.

Moreover, the retreating and thinning of the ice opens up new trade routes. In 2012, 46 ships transporting a total of 1.3 million tons reportedly used the Northern Sea Route, which runs along the northern coast of Russia; this represents a considerable increase from 2011, when 34 ships transported approximately 820,000 tons. In response to the route’s growing importance, Russia set up the Northern Sea Route administration in March to supervise shipping.

Interest in profiting from greater access to the high north is not limited to countries around the Arctic Circle. Europe has a vested interest in alternative shipping routes to Asia becoming more economically viable, since such routes would allow trade to circumvent numerous bottlenecks like the Suez Canal and increase access to Asia’s growing consumer markets.

China has also shown a particular interest in the Arctic, and has lobbied the Nordic countries to support Beijing’s bid for observer status in the Arctic Council. For countries like China that lack direct access to the Arctic, diplomatic ties and good bilateral relations with the Arctic countries, as well as participation in groups such as the Arctic Council, are important to improving their chances of profiting from the new access to shipping lanes and natural resources.

Related: China May Ship $700 Billion In Commercial Trade Via Arctic By 2020

Related: Arctic Circle Holds 90b Barrels of Oil

Related: Black Ice: The Dangerous Race For Oil At The Top Of The World

Even though the observer status does not give countries direct influence in council matters, participating in meetings and research helps these countries know what the main Arctic players are planning. Countries may even intensify relations with individual Arctic Council members to gain better access to resources (China’s interests in Greenland and Iceland illustrate this).

Sailing along the Northern Sea Route rather than through the Mediterranean Sea and Suez Canal significantly reduces the trip between Rotterdam and Shanghai – the Northern Sea Route is around 20 percent shorter. This translates into significant savings in terms of fuel and crew costs. But despite the melting of the ice, the difficulty of navigation, seasonal constraints on use, high insurance costs and weak infrastructure along the route will continue to limit the economic viability of the Arctic route.

The Arctic Council’s Rising Profile

The Arctic Council is just one of many bodies dealing with regional collaboration in the Arctic. The Barents Euro-Arctic Council, the Nordic Council and the Conference of Parliamentarians of the Arctic Region also coordinate intergovernmental or interregional collaboration in the Arctic on a number of issues. Allowing six more countries to become observer states shows that the members of the Arctic Council – even those initially skeptical of expansion, such as Canada and Russia – see the expansion as an opportunity to give the Arctic Council greater relevance.

But while the Arctic Council is likely to gain attention as a forum for policymakers to broadly discuss Arctic-related issues, it will struggle to coordinate decision-making as the number of interested parties in the Arctic grows. On May 10, the U.S. government presented its new general strategy for the Arctic. Little concrete information was revealed, but a clearer plan for implementing the strategy reportedly will be worked out in the coming months.

This shows that national Arctic strategies are still being defined, and countries are still considering what kind of resources to commit to the region. As the priorities for countries in the Arctic become more concrete, the differences that will have to be resolved and issues that will have to be debated will become more difficult for bodies like the Arctic Council to deal with.

The Growing Importance of the Arctic Council is republished with permission of Stratfor.
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