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Shkruar nga Lorenzo Torrisi
How much could the possible involvement of other Middle Eastern countries in the already open confrontation between Israel and Iran affect fears about energy prices?
The spring meetings of the International Monetary Fund and the World Bank started in Washington on Monday. They were preceded over the weekend by Iran's attack on Israel in retaliation for the killing earlier this month of General Mohammad Reza Zahedi and several Iranian embassy officials in Damascus during an Israeli airstrike.
The situation remains uncertain and tense despite requests for an extension of the situation that have come from the United States. Stocks stabilized somewhat after Friday's sharp decline, but what's the risk on the economic level? "The main element that must be kept under observation are the prices of energy raw materials" - says Mario Deaglio, professor of International Economics at the University of Turin, Italy.
Many important producers of oil and liquefied natural gas (LNG) are concentrated in the Middle East. At the moment there are no alarming signs. However, the expert says that one should be careful.
Should we analyze gas and oil prices for the effects they may have on inflation and therefore the decisions of central banks regarding the interest rates they set?
Right now, it seems that the issue of lowering the base interest rate is not discussed both for the US Federal Reserve and for the European Central Bank. And this at least for the next 2-3 months. After this period, as the saying goes, 'who lives will see'.
I believe that it is necessary to closely monitor the course of energy prices, since it has already fallen from the highest levels of about two years ago. The German economy is facing many difficulties at the moment. Therefore, an increase in prices at this moment would not help it to get out of the recession it has been in for some time, even if it is of a mild form. It is clear that the more problems the German economy has, the more we here in Italy will suffer.
Could the bilateral emergency solidarity agreement on gas supplies, signed by Italy and Germany last month, somehow alleviate this problem in Europe?
I'm not sure to what extent something like this can happen. In fact, political agreements are one thing, while their implementation in practice is another. Let me explain this better: in the event that Germany was in difficulty in supplying gas, how much and through which channels could Italy supply it in the absence of a direct gas pipeline between the two countries?
How much could the possible involvement of other Middle Eastern countries in the already open confrontation between Israel and Iran affect fears about energy prices?
It affects a lot, although we must not forget the division that exists in the Islamic world between Shiites and Sunnis. In general, Israel has not too tense relations with the latter. Therefore, it is difficult to think that Iran can find much support in this area, where after all the prospects look little better than a month ago.
Can the alliances that Iran has outside the Arab world, i.e. those with Russia and China, have an impact?
I believe not. Moscow and Beijing have not taken sides, not even in the Gaza issue. Beijing is keen to see merchant ship transits through the Suez Canal return to levels earlier this year. Meanwhile, Moscow already has many other things to think about, including major challenges on the domestic front. Among other things, China and the US, as I explained last week, are continuing to talk to each other. Meanwhile, Russia and the United States may have started to dialogue about Ukraine.
It is safe to say that the "Spring Meetings" of the IMF and the World Bank did not get off to a good start this time. Because the prospects and forecasts were immediately questioned by geopolitical tensions...
Unfortunately, there have been many errors in estimation in the past. I believe that the IMF and the World Bank looking each other in the eye can agree on one thing: their inability to influence events on the ground. Despite the large reserves they possess, they do not enjoy a particular autonomy in their use.
Above all, these 2 important international institutions have no political instruments to independently set specific objectives. In any case, an agreement between the main member states is needed in advance. Therefore, I do not believe that any initiative can be born from there to mitigate the great uncertainties and tensions at the global level.
Is a new initiative of the G7 countries needed?
I think more than any kind of effective solution can only come from confrontation and dialogue between the United States and China. From what little we understand, in recent months we have gone from diametrically opposed positions to minimal cooperation between Washington and Beijing. I believe that this approach, however minimal, is also influenced by the current Chinese economic situation, which is not as rosy as it may seem from its growth rates but also from its indisputable leadership in the extraction and processing of rare minerals. /Adapted Pamphlet, taken from "Il Sussidiario"
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