On Monday, Israeli Prime Minister Benjamin Netanyahu sent the Israeli stock market into a fall by doing what he so often does: saying the quiet part out loud.
The market rebounded, as it always does from these sorts of brief panics. But Netanyahu and Israel in general are finally being forced to grapple with some of the real, long-term consequences of their actions.
Netanyahu told a group of American and Israeli business people at the “Fifty States, One Israel” conference (a name that, itself, inspires many associations of Israel being the fifty-first U.S. state, but also shows Israel’s permanent inability to truly stand alone):
“…I am a devotee of the free market, but we’ll have to have some signs of an autarky…We’ll need to develop weapons industries here. We’re going to be Athens and super Sparta. Over the next few years, we’ll have no other choice. We’ll have to defend ourselves and know how to attack our enemies…We need to cut back the bureaucracy in a draconian fashion. I know this matter will, as usual, meet rejection. There will be rejection by the legal sides. Life is more important than the law. We have no time. We need to act very quickly because the world is moving with tremendous speed. We need much more flexibility.”
Investors thought Netanyahu was warning of imminent economic isolation, trade deals being cancelled, and divestment from Israel across the globe. Such isolation is not imminent, as the world continues to tolerate the genocide in Gaza despite its words. But the stock market’s reaction reflects just how much panic concrete action to potentially stop the genocide in Gaza creates in Israel.
What Netanyahu is seeing is the real possibility that doing business in Israel is going to become less attractive to investors in the near term, especially when it comes to military equipment. There have already been some decisions in Europe to stop selling Israel military equipment. These are certain to expand.
The problem, of course, is that while the bulk of Israel’s trade may be with Europe, its military supplies come overwhelmingly from the United States, which has no intention of slowing its exports, in both military sales and grants, to Israel.
Netanyahu was saying that Israel would need to become more self-reliant in terms of its military supplies. As he later clarified, “Yesterday, I addressed one issue: Restrictions that are not economic but political. And that is the case in the defense industries.”
This is an old refrain from both the Israeli and the American neoconservative right wing. They have long dreamed of an Israel that can act independently of the United States, something which depends on Israel breaking away from its addiction to American military aid.
This was a fundamental tenet of the neocons’ policy goals from their earliest days in the Reagan administration. Yet Israel’s dependence on American weaponry has grown dramatically since then. There is no realistic scenario where Israel can escape its dependency on American weapons and funding in the foreseeable future.
Super Sparta
Netanyahu described the “threat” to Israel by employing his typical tactic of Islamophobia combined with trendy boogeymen, China (for the Americans) and Qatar (for the Israelis).
First, Netanyahu talked about the growing Muslim “influence” in Europe. “They aren’t the majority yet,” he said, presenting his own version of the Great Replacement Theory. “But [they are] a significant, very vocal and combative minority that bends governments. These things affect leaders.”
The idea that Muslims influence European politics is meant to echo Israel’s own influence in the U.S., to strike that similar chord and, thereby, become believable. But unlike American pro-Israel Jews (a diminishing sector of American Jewry), European Muslims, a small minority of Europeans outside of Muslim countries in the Balkans and Caucasus, do not have a much larger Christian Zionist partner, nor are they well-placed in European society. They are a marginalized group in Western Europe, many of them are still refugees, and they face intense discrimination in many European countries. They are hardly bending European policy to their will.
Netanyahu’s second component is to blame China and Qatar, whom he says, “sway public opinion through significant investments in social media.” There is neither evidence nor any logic to this accusation, but Netanyahu makes it, a well-worn trick to diminish the reality of what social media has done to publicize Israel’s all too real atrocities.
These obfuscations are meant to promote the massive conspiracy theory which claims that most of the world is antisemitic and obsessed with destroying the “Jewish state” (a truly offensive description of a genocidal, apartheid, settler-colonial state) as a result. That conspiracy theory, itself, is a coping mechanism for Israel and its supporters as they face some very real economic concerns.
Will Israel finally be isolated for its crimes?
It is not a coincidence that Netanyahu proposes his “Super Sparta” future for Israel at around the same time that there is a proposal from the European Commission to suspend the EU’s free trade agreement with Israel. At the same time, the UN Independent International Commission of Inquiry on the Occupied Palestinian Territory (The Commission) at long last confirmed this week that Israel is committing genocide in Gaza.
These developments are only first steps. The EU proposal is unlikely to succeed, mostly because Germany is unlikely to support it. But even Germany is being forced to consider it before rejecting it outright, as an overwhelming majority of the German public believes Israel is committing genocide and wants their government to stop selling it weapons.
If Germany does agree to this proposal, however, it would probably pass, and this is frightening Netanyahu. Additionally, more and more countries are threatening to boycott the next Eurovision contest if Israel is allowed to participate. That sort of cultural boycott has a profound impact on the Israeli public.
For all the scorn and contempt Israel and its American friends heap on the United Nations, they know very well that the UN imprimatur means a lot. They know as well that the report from The Commission calls for all states to stop selling weapons to Israel that might be used in Gaza—which, in terms of infantry and short-range armaments, aircraft, and drones, means all of them.
That directive might be widely adhered to, but the exceptions will likely be the only ones that matter: the United States and, to a lesser extent, Germany. Berlin has stopped selling some weapons to Israel, but there is a list of exemptions that includes most of the most important weaponry.
Any shortfall from other countries will doubtless be happily made up by U.S. corporations. The U.S. could, and likely would, even buy weapons from boycotting countries and resell them to Israel.
This increases Israel’s dependency on the United States enormously. Given the steep decline in American popular support for Israel, and the fact that they cannot be sure, even if Trump’s attempts at installing an authoritarian regime reminiscent of Viktor Orban’s in Hungary succeed, that the White House will remain as friendly as it is now, Netanyahu and other right-wing Israelis are justifiably concerned. They cannot be sure either that the U.S. will continue its supply to them at current or greater rates or that a future president might not assert what would be irresistible leverage against the Israeli government. The political costs to an American president doing so are diminishing under the weight of American distaste for the genocide in Gaza.
Netanyahu is pretending that Israel is capable of weaning itself off American support. But this is not the same world as the one American neocons were seeing at the end of the last century.
This is a world where Israel is now a pariah state in most of the world’s eyes, increasingly including the white, Western world. Israel may be a state that contributes a disproportionate amount to the sciences, tech, and defense industries, but cutting off that state would entail little risk, as many of Israel’s top experts in key fields are leaving the country. In any case, Israel’s contributions can be compensated for within a short time by other countries.
Israel exports nothing of substantial value that cannot be found elsewhere. And isolating the country would not be a permanent move; it would only last as long as Israel refused to change its policies. How big a change depends on how much political pressure popular forces can push for.
This is what Netanyahu fears, and why he would very much like Israel to become a “Super Sparta.” But Israel has never been self-sufficient. From the earliest days of the “Old Yishuv,” the name given to the pre-Zionist Palestinian Jewish community, the Jewish community in Palestine relied on support from outside. This held true through all of Zionist settlement from 1882 to the Nakba and the creation of Israel, and has been true ever since.
An isolated Israel is a failed Israel, and Netanyahu knows it. So do his business cronies. That’s why he was roundly criticized for the “Super Sparta” speech and had to walk it back, limiting it only to the military and a call for budget cuts to fund a drive toward military independence. But even that is a pipe dream.
In a recent article I wrote at Cutting Through, I analyzed what some see as Israel’s economic resiliency during the genocide. Of course, much of that apparent resiliency comes from the refusal of other states to take any action in response to Israel’s genocide. But even there, Israel’s economy is a lot more vulnerable than they’d like the world to believe.
As I noted, “Israel has financed its war effort (beyond the aid it gets from the U.S.) through borrowing and deficit spending. This has led to cuts in social services to service the debt, a problem which will get worse now that Israel’s credit rating has been downgraded by both Moody’s and the S&P… While the government may be able to balance the budget despite a dramatic uptick in military spending, it will be forced to do so at the expense of Israel’s social services. That is going to cause a severe backlash.”
All this means Israel is more vulnerable than ever to divestment and sanctions. That is what Netanyahu himself was saying when he talked of the need for Israel to take on some aspects of an autarky. But Israel can’t do that, it simply doesn’t have the internal resources.
Boycotts have brought awareness of Israel’s nature. The increased global attention by popular forces toward divestment and sanctions has been underway for some time. Israel is only making itself more vulnerable to those measures. It’s never been more important to redouble those efforts.
By : Mitchell Plitnick
Source: Mondoweiss
