Seeing through the mist in the Eastern Mediterranean: Looking back

12 March, 2014 | Posted By: Vassilis Kappis

By Vassilis Kappis

In the coming years, the Israeli-Turkish antagonism in the Eastern Mediterranean will be one of the defining developments in the region and policy-makers in both Cyprus and Greece should not overlook its potential ramifications. As Cyprus assesses its options regarding its oil and gas industry, it is becoming apparent that a number of arguments stem from a rather problematic reading of history and a set of erroneous beliefs about the current state of play in the region. Here, we evaluate the implicit historical logic behind these arguments and try to shed light on their inherent weaknesses.
The early morning spring mist in the Mediterranean shores has an eerie feeling but quickly gives way to a comforting clarity. The same cannot be said, however, about regional politics.
The news that energy giants Noble Energy and Delek, both involved in the extraction of Cyprus’s natural gas, entertain the idea of a pipeline to Turkey has analysts perplexed. Why would Israel and Cyprus undermine their strategic relationship by becoming dependent on Turkey? Generally, two forces seem to be at play: The Americans (as always) and economics.
To begin with, few actually believed that the Turkish-Israeli relationship was over. The United States is after all favouring, if not imposing, a rapprochement and the proposed gas pipeline is only a manifestation of the Obama-brokered truce between Netanyahu and Erdogan following the 2010 Gaza flotilla incident. Without a doubt, Americans still regard the Turkey-Israel axis as THE stabilising factor in the Eastern Mediterranean.
There is an alleged economic logic as well: a pipeline to Turkey is portrayed by the media as the cheapest option for the transport of the Levantine basin gas to Europe. To make their narrative even more compelling, analysts point to the extensive trade ties between the two countries, with Turkey perceived by Israeli companies as a lucrative and indispensable regional market. Its burgeoning -- in both numbers and purchasing power -- middle class guarantees a robust outlet for the competitive and export-oriented Israeli economy. A gas pipeline would, according to this logic, be the icing on a mutually beneficial cake.
While both arguments are increasingly part of the diplomatic discourse, they represent little more than a misreading of the situation or, perhaps more alarmingly, a misreading of history.
In short, those suggesting that Israel cannot afford to alienate Turkey in favour of Cyprus (and Greece for that matter) imply that economics trump or even dictate international politics. In Nicosia and Athens, the conventional wisdom is that energy cooperation with Turkey could even constitute the quintessential leverage towards a settlement of the Cyprus issue and at a later stage a permanent settlement of the Greek-Turkish Aegean dispute. The underlying logic is that shared economic interests are key towards fostering a lasting peace.
But history tells us otherwise. Before the outbreak of the First World War, businessmen on both sides concurred that hostilities would pose such an economic catastrophe that war came to be seen as all but impossible, a “great illusion” in the words of Norman Angell. Some seventeen million dead and twenty million wounded beg to differ.
What history does tell us is that business decisions in sensitive areas are usually dictated by politics. The Baku-Tbilisi-Ceyhan pipeline connecting the Caspian Sea to Turkey’s Mediterranean shore was not constructed to make its shareholders rich. At a cost of $3.9bn, the pipeline currently carries only 1% of the global oil demand. Its biggest merit? It bypasses Russia and for this reason, it was “forced” to become a financially viable project, through the political and financial backing of its patrons. Of course, the pipeline is not an economic disaster either but when nations think about such grand matters, numbers take a backseat.
States also have the requisite tools to turn large-scale projects to financial success, provided they possess vision and sound planning. After the end of the Cold War, Greece’s neighbours contemplated a highway connecting Turkey to the Adriatic Sea with a view to securing trade flows from the Caucasus and Asia. In a country where constructing a dam may outlast a generation, Greek policy makers moved decisively to receive EU backing and built the modern Via Egnatia, a $10bn, 670km highway stretching from the Greek-Turkish border to the Ionian Sea. Today, the Egnatia motorway stands as the biggest infrastructure project ever undertaken by Greece, one whose value added to the Greek economy is hard to either measure or dispute.
The economic “inevitability” rationale, therefore, regarding strategically crucial projects rests on an erroneous reading of history that not only fails to stand its ground when subject to scrutiny, but may also deprive states from potential long-term financial and political gains.

Vassilis Kappis is a fellow with the European Rim Policy and Investment Council (ERPIC) in Larnaca and a PhD candidate in International Relations at the University of Sydney. The views expressed herein are those of the author and do not necessarily reflect the views of ERPIC.