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NightWatch 20120514

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For the night of 14 May 2012

Iran:  Defense Minister Ahmad Vahidi said on 13 May that Iran will launch a Fajr (Dawn) satellite sometime after 21 May, during the Iranian month of Khordad. The satellite will remain in space for a year and a half, Vahidi said. He did not say what its purpose is.

Comment: An odd double standard seems to govern issues of missile proliferation. Unlike the North Korean space launch attempt, no nation has accused Iran of using a space launch to disguise a test of systems useful in long range ballistic missiles.

NightWatch could find no warnings or mention of this event by the US State Department or any other government. The irony is that North Korea likely will be a beneficiary of this proliferation program because North Korea and Iran already have collaborated in three ballistic missile programs.

Saudi Arabia: Saudi Arabia and Bahrain discussed a political union at a meeting in Riyadh on 13 May. The arrangement under discussion would allow Bahrain to retain its seat at the United Nations, but the two states would merge foreign relations, defense and economic policy, according to press sources. The details have not been released.

Bahrain's Prime Minister, the Army Chief of Staff and the Foreign Minister - all members of the al-Khalifa royal family -- have stated their support for the union.

Comment: The King of Bahrain and the royal family are Sunni Muslims who govern a population of mostly Shiite Muslims. Thus, the news that a union with Saudi Arabia is under discussion has prompted widespread criticism that Saudi Arabia intends to make Bahrain a vassal state so as to keep the Shiites disenfranchised and subjugated.

On the other hand, the limited information in the public domain suggests Bahrain's administration of internal affairs will not be changed by the union proposal. Bahrain, by itself, is not defensible against an Iranian attack or subversion, but in a union arrangement with Saudi Arabia it would not be alone.

Saudi King Abdallah has warned Iran repeatedly against meddling in Arab affairs. This union is consistent with his policy decision to stop Iranian meddling in Arab countries as well as the spread of Shi'i Islam which the Sunnis consider a heresy.

One advantage of the union would be that it would bypass tricky conditions attached to US foreign military sales. Conditions of the sales include that US military equipment can only be used for defense, cannot be resold without US permission and cannot be used outside the recipient country without US permission. Under a union arrangement, the Saudis would not need to consult the US before sending Saudi forces equipped with US tanks and armored personnel carriers back to Bahrain, unless they chose to.

Syria: A video posted online in the name of a shadowy militant group is claiming responsibility for twin suicide bombings in the Syrian capital last week that killed 70 people. In the video posted late Friday, a group calling itself the Al-Nusra Front says the bombing was in response to attacks on residential areas by the regime of President Bashar Assad.

Comment: The group has claimed responsibility for other attacks in the past, but little is known about it. The claim puts to rest opposition claims that the government was responsible for the attacks.

The United Nation's call for all parties to stop fighting recognized that the opposition is as responsible as the government for the continuous breaches of the so-called cease fire. The US statement seemed to blame the government for the bombings.

The threat is growing that an increasing number of more experienced foreign fighters from outside Syria will seize control of or become dominant in the opposition movement. That portends that opposition attacks will become more savage with less regard for civilian casualties without making progress in overthrowing the Assad government.

Politics. The election commission announced that the final results of the Syrian parliamentary elections will be announced on 15 May. The final tally was delayed because complaints of irregularities compelled officials to hold elections in several districts a second time. (Hunh?)

Algeria: Last Friday, the election commission declared that Algeria's ruling party for the past 50 years, the National Liberation Front (FLN), won the parliamentary election. Arab spring-style reform parties lost badly.

Interior Minister Daho Ould Kablia, who oversaw Thursday's election, said the FLN would form the largest bloc in the new parliament, with 220 of the 462 seats. That means it increased its share of the seats from 34 to 47 per cent.

Second place went to the National Democratic Rally (RND), with 68 seats. The RND is led by Prime Minister Ahmed Ouyahia and was in second place to the FLN in the outgoing parliament.

The Green Algeria alliance, a grouping of moderate Islamist parties with links to the ruling establishment, was in third place with 48 seats.

In fourth was the secularist Front of Socialist Forces, Algeria's oldest opposition group, which ended more than a decade of boycotts to run in the election.

Comment: The Bouteflika government promised the elections would usher in a new era of reform. Voter turnout was significantly higher than in past elections. The outcome indicates that the voters chose to maintain, if not reinforce, the status quo. There is no Arab spring in Algeria, either in support of secular, ideas or in support of the Islamists.

Greece: President Karolos Papoulias has failed in attempts to form a coalition government on Sunday and Monday. Greek press indicates he intends to try again in order to avoid another election in a month.

Comment: The inability to form a coalition government means there is no confidence in public institutions.  Today, international news services reported the beginning of runs on Greek banks, as depositors began to withdraw savings. This means that the Greek debt crisis has moved beyond calculations of risk into indications of threat. Greek banks are in danger of collapse, as the latest manifestation of a widespread breakdown of public confidence in institutions.

Loss of confidence is contagious. Italy and Spain are vulnerable.

Financial expert opinion is polarized about the consequences and implications of the run on the Greek banks. Some analysts predict the loss of confidence will sweep southern Europe. Others predict it will remain local and episodic. Neither group provided any auditable and replicable evidence to support its positions about how people will react.

The behavioral indicators of loss of confidence in public institutions are common across southern Europe. They strongly favor expectations of a spreading crisis, though probably in slow motion.

Germany: Germany's Social Democrats (SPD) party is likely to win 39 percent of the North Rhine-Westphalia state vote with Chancellor Angela Merkel's Christian Democrat party winning only 26 percent, according to German media.

Comment: This outcome indicates a significant weakening of Merkel's political position. The Germans apparently have had enough of bailing out southern Europe which matches southern Europe's fatigue with German ideas on how its populations should live and work.

The fundamental contradictions and incompatibilities of the economies of the euro zone states are creating instability in the economic system, manifest in all recent elections, including the German state elections. Under conditions of stress, the integrated European economic system under present management is failing to satisfy the needs and wants of northern and southern Europeans, which is a more precise way to understand the recent election results.

Spain: For the record. Last week the government announced a reform that will force banks to maintain a 30-billion ($39 billion) reserve and to separate property assets from balance sheets. Two independent auditing firms will evaluate banks' exposure to the property sector, Economy Minister Luis de Guindos said.

Comment: This looks like an attempt to insulate other assets from the effects of a property bubble burst. That implies the Economy Ministry is preparing for a major economic crisis.

End of NightWatch for 14 May.

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