2023 Israel–Hamas war #4

Israel’s Credit Rating Cut by Fitch as Gaza War 'Could Last Well Into 2025', by Svetlana Ekimenko for Sputnikglobe.com. 08.13.2024.

Moody's Investors Service first lowered Israel's credit rating from A1 to A2 in February amid blowback from the country’s war on Hamas in Gaza. At the time, it issued a grim warning suggesting the potential for a future decline.

Israel’s war with Hamas continues to batter its public finances, with the country’s sovereign debt rating cut a notch from “A+” to “A” by Fitch Ratings.

The agency retained a negative outlook on the credit, signaling it could cut the rating further in the future.

As the firm listed the rating drivers, such as heightened geopolitical risks amid ongoing military operations, it voiced the opinion that the conflict in Gaza “could last well into 2025,” and cited “risks of it broadening to other fronts.”

“The downgrade to ‘A’ reflects the impact of the continuation of the war in Gaza, heightened geopolitical risks and military operations on multiple fronts,” Fitch said in a statement on August 12.

The rating agency went on to cite Israel’s projected budget deficit of 7.8% of GDP in 2024, and a debt set to “remain above 70% of GDP in the medium term.” Credit metrics were seen as likely to deteriorate as a result of hiked up military spending, destruction of infrastructure, and further damage to economic activity and investment.

Back in February, Moody’s Ratings gave Israel it’s first-ever sovereign downgrade. At the time, it cut its credit rating by one notch to A2 with a negative outlook. In response, an overly-optimistic Prime Minister Benjamin Netanyahu assured that Israel’s credit rating would “go back up the moment we win the war – and we will win the war.”

Israel's economy suffered a contraction in the final quarter of 2023 as the Gaza war took its toll. Gross domestic product shrank by almost 20%. Consumption dropped by 27% and investment by 70%. Exports of goods and services from Israel shrank by 18%, according to CBS data. Exports continued to drop at the beginning of 2024. In terms of growth per capita, GDP fell in the first quarter of 2024 by some 3% compared to the first quarter of 2023.

However, scrolling forward to the present day, we see that Israel is continuing to wage the war in the Gaza Strip, which has killed tens of thousands since October 2023. The killings of Hamas political leader Ismail Haniyeh and Hezbollah commander Fuad Shukr have further ignited tensions, with Hamas and Iran blaming Israel for the assassinations and vowing retaliation. Israel's ally the US has not only failed to put out the flames, but has further stocked the Middle East with deadly military equipment.

The Palestinian Hamas movement turned down an invitation from the US, Qatar, and Egypt to participate in a final round of talks with Israel on a ceasefire in the Gaza Strip, scheduled for August 15, it was reported, citing new conditions recently presented by Israeli Prime Minister Benjamin Netanyahu, the assassination of Hamas political leader Ismail Haniyeh, and Israel's latest strikes on the Gaza Strip as reasons for its decision.

https://sputnikglobe.com/20240813/israels-credit-rating-cut-by-fitch-as-gaza-war-could-last-well-into-2025-1119748674.html

This is their own newspaper reporting this

Lots of good comments, including Al Jazeera reporting on this a couple of months ago. Including the classic at the bottom of this post.

Nothing changes. This from 2006

Biden’s Desperation for ‘Foreign Policy Win’ Explains Why Blinken Jumped the Gun on Gaza Deal, by Ilya Tsukanov for Sputnikglobe.com. 08.21.2024.

Speaking to reporters Monday after his meeting with Benjamin Netanyahu, Secretary of State Blinken announced that the Israeli PM had accepted the US’s hostages-for-ceasefire “bridging proposal.” Israeli officials haven’t commented, while Hamas accused Tel Aviv of trying to sabotage the deal with intolerable new terms. Here’s what’s behind the mess.

“The US administration is particularly eager to announce an agreement, driven by both diplomatic and domestic pressures,” Dr. Imad Salamey, an assistant professor of political science at Lebanese American University, told Sputnik, commenting on why Israeli officials haven’t confirmed Tel Aviv’s readiness to accept the “bridging proposal” announced by Secretary Blinken on Monday.

“The Biden administration views the success of such an agreement as a potential foreign policy win, which could bolster its position ahead of upcoming elections,” Salamey explained.

By contrast, “the Israeli government may face significant internal challenges regarding the deal,” the observer said. “Prime Minister Netanyahu’s government is deeply divided, and any official confirmation could exacerbate these divisions, potentially leading to resignations or even the collapse of the coalition. Thus, while the US is keen to publicize progress, Israel might be more cautious, weighing the domestic repercussions of any public acknowledgement of the agreement.”

Blinken’s public announcement “could [also] be interpreted as a strategic move to exert public pressure on Israel,” according to the scholar. “The pressure serves multiple purposes: it advances US diplomatic interests in the region, reinforces the image of the US as a global leader, and garners domestic support by showcasing the administration’s proactive role,” Salamey said.

Netanyahu Has No Interest in Deal

But Israeli media reports indicate that the government has no intention of agreeing to the agreement announced by the US and “at least in Israel, it’s clear to everyone that there will be no deal,” Tel Aviv-based international affairs observer Dr. Simon Tsipis told Sputnik.

“Netanyahu has started to refer to the fact that the point of the agreement that does not suit him is the Hamas demand that Israel withdraw its troops from the Philadelphi Corridor border” between Gaza and Egypt Tsipis said, referring to Tel Aviv’s unwillingness to let go of the border area to prevent the resumption of arms smuggling.

“But in my view this is just an excuse for the fact that Netanyahu is not interested in making any deal with Hamas, no matter its contents,” the observer noted. Tsipis recalled that for Netanyahu, the conflict in Gaza has become not just a matter of his government’s political survival, but his personal freedom, given the multiple Israeli criminal investigations hanging over his head, which would inevitably resume if the conflict were brought to a peaceful conclusion.

“Plus, it’s becoming increasingly clear to people whose relatives and friends are being held hostage by Hamas with each passing day that there are practically no more of them left alive. Yesterday, six bodies of hostages were pulled out of one of the tunnels. If earlier, several months ago, it was assumed that there were more than 220 of them being held there, now it’s assumed that there are no more than 100 still alive. The rest are dead, and the pressure inside Netanyahu is growing. By showing society that there are no more living hostages, he’s trying to let off the political pressure building up within Israeli society,” Tsipis said.

As far as the US and Blinken’s hasty announcement of an agreement, Tsipis believes it’s tied to the fact that the Biden administration is effectively running on autopilot at this point after the president announced that he would not be seeking another term, and the Democrats began preparing Vice President Harris to take the reins.

“These remaining months before the elections are accompanied by total confusion, and this, naturally, is reflected in US officials’ statements. The American side is now completely inactive and has virtually no influence, and this is felt in Israel too,” Tsipis said. “There is no pressure from the US because there is no one to apply this pressure, because even if the US is not yet in a state of anarchy, it is in a transitional period and has a kind of temporary government.”

“Netanyahu’s government and he personally have been left to float freely. They do not depend on anyone and there’s no pressure on them from anyone. This is a dangerous situation, because returning to the above, Netanyahu’s main goal is his survival – political survival and simply remaining a free man. That could lead to a military escalation, and in fact, we are already on the threshold of an escalation and war with Lebanon,” Tsipis warned, pointing to the intense back-and-forth shelling across the Israel-Lebanon border in recent days.

https://sputnikglobe.com/20240821/bidens-desperation-for-foreign-policy-win-explains-why-blinken-jumped-the-gun-on-gaza-deal-1119862969.html