When nothing means everything

Two non-events – the lack of protests in Iran to mark the anniversary of the Islamic Revolution and the failure of the EU to come up with a specific strategy to support Greece – have important geopolitical ramifications.

Thursday will be remembered for its failure to deliver on heightened expectations of geopolitical significance. Iran marked its anniversary of the Islamic Revolution with little fanfare or protests, while the EU summit in Brussels ended without any significant movement from Europe on an expected bailout of Greece. The fact that very little happened during these two highly anticipated events provides an opportunity for STRATFOR to explain the geopolitical significance of non-events.

In Iran, the government finally got ahead of the curve in terms of dealing with opposition Green Movement unrest. The Greeners – encouraged by their performance on the occasion of Ashura on December 27, 2009 – were expected to stage even bigger protests on the occasion of the 31st anniversary of the 1979 revolution. The government, however, was well prepared this time around. It successfully held its anniversary celebrations and prevented the opposition from staging demonstrations of any worth.

Though not an existential threat, the Green Movement, born in the wake of the controversial re-election of Iranian President Mahmoud Ahmadinejad on June 12, 2009, had been a major thorn in the side of the clerical regime. For eight months, the Iranian state was seen as being on the defensive against an opposition movement that appeared to be gaining momentum. The poor performance of that movement today, however, confirms STRATFOR’s view that the Greeners were not about to stage a counter-revolution that would bring down the Islamic republic.

We are not saying that the Iranian state has successfully neutralized its opponents, but it is clear that the regime has successfully checkmated the Green Movement. More than just a function of domestic politics, this has significant implications for Iranian foreign policy as well. The success on the home front is only going to boost Tehran’s confidence about continuing to play hardball in the foreign policy arena, especially since tensions are reaching a boiling point over its nuclear program.

While the Iranian regime was celebrating the revolution that brought it to power three decades ago (and its success against its opponents now), Europe continued to struggle with the systemic financial woes plaguing much of the continent.

The European Union summit concluded with a very "EU-like” resolution. It cited grave concern, political unity and a commitment to address the economic issue at the next meeting, but offered little in terms of concrete action. This simply proved that despite the passing of the Lisbon Treaty – which was intended to streamline European decision-making – Europeans are no better at crisis management today than they were a year ago.

The EU did not even offer a strategy for what financial support to Greece would look like if it was needed. The world was simply told that one would be in place, that the EU stood "shoulder to shoulder” with Athens and that enhanced monitoring of the progress of Greek austerity measures would be conducted on a monthly basis. Pretty bland stuff considering the expectations of the investor community, which is now not only computing the severity of the Greek imbroglio, but also the apparent letdown of the EU not announcing specifics on the bailout. We are now exactly where we were a day ago, waiting for investors to stop participating in the Greek government debt markets. That could be tomorrow if investors decide that the failure to announce specifics is a sign that Germany and the EU "blinked” and fumbled the response to the crisis.

The inefficacy of the summit also reaffirmed the extent to which the Franco-German complex is quickly dominating the EU. In fact, the world’s media largely ignored new EU President Herman Van Rompuy’s press conference, preferring instead to focus on the joint press conference held by French President Nicolas Sarkozy and German Chancellor Angela Merkel that came later in the day. The 27-member state forum is understandably not the best place to decide how to act quickly, but it is becoming apparent that Berlin and Paris will lead the discussion about how to address the Greek crisis.

The question now is how soon will events force Germany and France to act. It could very well be tomorrow if the markets decide that now is time to bring Greece down. (That would make for a fun weekend for European leaders scrambling to prepare for Monday’s market opening.) It could also be after the last European Central Bank short-term liquidity provision on March 31, or when nearly 25 billion euros’ worth of Greek government debt comes up for repayment in April-May 2010. The bottom line is this: Today the EU showed that it is not ready to deal with Greece’s imminent comeuppance for lying about macro-economic statistics and chronic budget deficits.

Stratfor provides intelligence services for individuals, global corporations, and divisions of the US and foreign governments around the world.

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