Common cause for Washington and Tehran in Iraq?

June 16, 2014

Iraq is going up in flames and there appears to be no question of the West putting boots back on the ground in contrast to 2003 when the United States and Britain invaded to topple Saddam Hussein and set in train a decade of chaos that has now exploded again.

Iraq’s most senior Shi’ite Muslim cleric has urged his followers to take up arms against a full-blown Sunni militant insurgency to topple Shi’ite Prime Minister Nuri al-Maliki. The chances of ISIL militants taking heavily armed Baghdad are slim but that doesn’t mean conflict will not continue and, with Iraqi Kurdish forces seizing control the oil hub of Kirkuk just outside their autonomous enclave in the north, the prospect of the country splitting along sectarian lines is real.

Over the weekend, ISIL’s advance on Baghdad slowed but spread northwest, with Sunni militants seizing Tal Afar, a town close to the Syrian border.

President Barack Obama said he was reviewing military options, short of sending combat troops. Unusually, the United States may have common cause with Iran in shoring up Maliki’s administration. Iranian president Rouhani said Tehran could cooperate with Washington to restore security and a senior U.S. official said the Obama administration was mulling possible discussions with Iran over the mounting crisis in Iraq.

Whether that reads across to Syria, where ISIL is also active, and negotiations over Tehran’s nuclear negotiations is too early to say.

Senior negotiators from six world powers and Iran are due to meet for 4-5 days of talks on Tehran’s contested nuclear programme. Western diplomats have said their last round in May went worse than expected, accusing their Iranian counterparts of not being realistic and flexible enough.

Iranian officials asked for a six-month extension to the July 20 deadline for a substantive deal and France said last week  talks on curbing its uranium enrichment had “hit a wall”. But with Iraq erupting, Iran is now spreading itself thin both there and in Syria and could do with some relaxation of international sanctions, though as ever there are competing impulses within Tehran. Rouhani said on Saturday he believed it was possible to conclude a comprehensive agreement with major powers by July 20.

Any thoughts of Ukraine coming off the boil have been dashed after pro-Russian separatists shot down a Ukrainian army transport plane with an anti-aircraft missile, killing all 49 military personnel on board and inflicting the heaviest loss of life on government forces in a single incident since they launched operations to halt a rebellion in east Ukraine.

So where did the rebels get that sort of kit? Could it be anywhere other than Russia? Washington thinks not, saying Moscow had sent tanks, heavy weapons and rocket launchers to Ukraine in recent days in support of separatists. If so, that would pretty clearly cross one of the red lines set to trigger more wide-ranging sanctions against Russia but as before the EU seems more reticent than the United States.

The deadline for a deal between Moscow and Kiev over unpaid gas bills has just passed, raising the threat of supplies to Ukraine, and through there to the EU, being cut off. Last ditch talks failed and Gazprom has put out a statement saying it expects a payment of nearly $2 billion this morning and that it has not turned up. Ukraine’s prime minister has given the order to prepare for supply cuts.

U.S. Treasury Secretary Jack Lew is in the Middle East – visiting Abu Dhabi today, then Saudi and Israel before winding up his trip in Berlin. He could have something to say on any or all of the above.

Russia’s central bank has a monetary policy meeting and after raising interest rates by two full points in March and April to curb a rouble selloff it is unlikely to ease policy. Annual inflation rose to 7.6 percent in May way above the 4 percent target so there is little prospect of help for the struggling Russian economy from that source, unless the bank is put under political pressure and buckles, which has not happened so far.

Poland’s central bank governor has had something of a torrid weekend after a leaked audio tape appeared to show Mario Belka telling a government minister he could help ease the country’s economic troubles if the finance minister was fired. He also talked of colleagues in derogatory terms. The central bank said snippets of the conversation had been taken out of context and that Belka had not breached the bounds of his authority.

At least 48 people were killed when more than two dozen unidentified gunmen attacked buildings in the coastal Kenyan town of Mpeketoni overnight. Israeli forces searching for three teenagers believed to have been kidnapped swept into a second West Bank city, touching off street confrontations in which they killed a Palestinian, according to witnesses.

Finland’s ruling conservative party elected EU affairs minister Alexander Stubb as its new leader on Saturday, putting him on track to take over as the country’s prime minister after incumbent Jyrki Katainen steps down later this month.

Against a backdrop of a struggling economy, talks will now get underway led by Stubb and a new finance minister from the Social Democrats, on how to proceed with previously-agreed austerity. New SDP leader Antti Rinne wants to launch new stimulus and cancel some of the planned cuts.

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