The ongoing pandemic will have an impact on geopolitics across the globe, but nowhere more than in the eastern Mediterranean.
When the geopolitics of the Covid-19 pandemic is discussed, it’s often framed as a high-level game between the USA and China where China is gaining on the US in terms of soft power, or in plain English that China is becoming more popular around the world due to its Covid-19 relief effort at the US expense. While the US-China competition is certainly exciting I think there is another region where the pandemic will do more to change the geopolitical landscape. In this week’s blog post I want to discuss the eastern Mediterranean where I believe the pandemic will speed up the decline of the European Union and the rise of Turkey, with Greece being the at the centre of these shifts.
As I’ve discussed in a previous post about the similarities between the Euro and the gold standard, the Euro is a bad deal for the weaker Eurozone economies as it makes them less economically competitive vis-à-vis the stronger Eurozone economies, as reflected in Germany’s current account surplus. No country has experienced these forces more forcefully than Greece, which as I stated in the aforementioned post I believe will continue to face increasing economic hardship under the current currency regime. Greece also happens to be located in an interesting region, the eastern Mediterranean. The eastern Mediterranean is geopolitically interesting for three reasons; there are oil and gas deposits, it is where the Suez Canal is located where some 9 % of global trade passes through (1), and it is where the Mediterranean and the Black Sea meet. Given that Turkey, the local rising regional power, has become more assertive in its near abroad in Syria and Libya and that Greece is looking especially vulnerable it seems likely that Ankara would take the opportunity to make a move against Greece, most likely in Cyprus. Cyprus is strategically located, has hydrocarbon deposits, and the Turkey backed Northern Cyprus provides a good base of operations should Turkey need it.
Greece is also, as I hinted at earlier, likely to be a key player in the Eurozone dispute which is forming around pandemic stimulus. Ultimately, Greece won’t be able to handle the post-Covid-19 recession without external help and Germany and the other northern European states will be very reluctant to provide any help given how politically difficult that would be. This in my view will lead to the southern states not getting the help they need, or if they do it’ll be too little too late, which will trigger a prolonged recession and slow recovery. In short, it will probably play out similarly to the Euro-crisis, as tragedy as it were, and while I don’t know if this cycle will need to repeat as farce the Euro-system will eventually break apart as the southern states with Greece at the forefront won’t be able to take the cycle repeating forever. The Eurozone breaking up is in my view inevitable, so the pandemic recession didn’t start the process it will certainly speed it up. I don’t think the European Union will survive the end of the Eurozone, at least not in any meaningful form.
What do you think? Is the pandemic an important factor in the geopolitics of the early 2020’s? I’d love to hear your thoughts! If you found my writing interesting I’d really appreciate it if you shared it with a friend or co-worker, and please come back next week for a new post!
Written by Karl Johansson
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