Column : Europes economic war of attrition

Dec 05 2012, 01:48 IST
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SummaryLike Egypts late-1960s war of attrition, the eurozones underlying economic, financial and social ferment continues.

I was nine years old when Egypt entered what became known as its war of attrition with Israel. During this period of no war and no peace, underlying tensions festered, and a fragile tranquillity was periodically interrupted by armed skirmishes.

The war of attrition followed the June 1967 war, in which Egyptto the immense surprise of most of its citizens and the outside worldwas soundly defeated. Its air force was crippled and its army was virtually overrun, with Israel capturing the entire Sinai Peninsula.

Positioned on the eastern bank of the Suez Canal, Israels army was just over 100 kilometres from Cairo. And, with Israeli jet fighters still controlling the airspace, Egypts capital and its major population centres were greatly exposed.

The official narrative reflected little of this. Whether on state television or in government-controlled newspapersat the time, there was no free press, Internet, or cable newscitizens were reassured that Egypt had regained control of its destiny. But they knew better.

To this day, I remember vividly the sense of general anxiety that prevailed among citizens, accentuated by deep concern about what the future might hold. People were afraid to invest, and many wondered whether they should emigrate in search of a better future.

With the underlying issues left unaddressed, the war of attrition was followed by another full-scale war in 1973one that again surprised most people inside and outside Egypt. This time, the Egyptian armed forces won a number of early battles and secured a cease-fire that regained part of the Sinai, setting the stage for the 1979 peace agreement with Israel.

I recount this history not to draw a parallel with todays Israeli-Palestinian conflict, which, just a couple of weeks ago, resulted in many civilian deaths, overwhelmingly in Gaza. Rather, it is because I see too many parallels with what is happening in the European debt crisis.

European citizensparticularly in peripheral economies such as Greece, Portugal and Spainare anxious. Unemployment is unacceptably high, and is still rising. Their economies continue to implode, leading to cumulative contractions that are setting tragic new records. Poverty is on the rise. Not surprisingly, increased emigration to the stronger eurozone countries (such as Germany) has been accompanied by higher outflows of financial capital.

Admittedly, and fortunately, the parallels are far from perfect. Europe does not have armed conflicts. Feelings of intense insecurity are not related to bombs and sirens. The threat is economic rather than military. Yet there is a real

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