They did it

July 13, 2015 admin

Or did they?

Greece or Iran? It doesn’t matter; they still did it. Or did they?

Tortuous multilateral negotiations between countries, regional groups and global institutions are like that. You wait for ages and then two come along at once, possibly. The week beginning Monday, July 13, 2015, could go down as the week when the world became a safer place, economically and strategically.

The agreement on July 13 between the euro zone’s 19 members on the terms of a third bailout for Greece will, if the Greek parliament can do the necessary and pass the required legislation in three days, restore stability to Europe, albeit at the cost of this latest bailout, some €85 billion ($Tk billion), and of newly opened wounds in the most important European relationship — that between France and Germany.

Details are still emerging, but it seems that the overnight discussions were fractious, and not just between Greece and the other euro zone members. Time will tell what will happen, and it could all unravel if the Greek parliament cuts up rough or if other euro zone parliaments fail to approve the deal. It was close, apparently; consensus Europe nearly got a conviction — Grexit, the exit of Greece from the euro zone — that would have fundamentally changed the political and socioeconomic fabric of the continent. Grexit is still not off the table. And the lot of the Greek people is still parlous.

An agreement between Iran and the world’s leading nations on limiting Iran’s nuclear ambitions — thought to be imminent — would also have profound implications for world security, particularly in the volatile Middle East. It is another negotiation where the issue of trust has come to the fore. Given the history of Iranian denial on intentions and of subterfuge on centrifuges, can Iran be trusted to actually implement what will be agreed? Will it stick to the terms of the agreement? Will it allow international monitoring? Again, time will tell what will happen.

Winston Churchill once said that “to jaw-jaw is always better than to war-war.” That works better when you trust the people that you are jaw-jawing with.

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RichardFlemingRichard Fleming is editor of The Institutional Real Estate Letter – Europe.

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