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The Black Swans of 2014

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The Black Swans of 2014

Albert Einstein, once said for – at his time – emerging scientific area of International Relations that is a “challenge to the human mind”, implying that it could verify his own theory of Relativity. One of the oddities of the International Relations is that while it aims to predict, it admits that it cannot offer verifiable forecasts for political events.

Decision-making and Negotiation theories can be used to interpret models with non-conventional logic. In short, there are limitations to the model of the rational actor and only a posteriori we could express opinions such as “the Second World War started in a beer house in Munich”. Hence, small causes can produce large effects that are either positive or dangerous, while prediction becomes extremely risky and uncertain.

With the term “black swans” we define events which have three specific characteristics: 1) They are unlikely to happen 2) They are producing catalytic effects on the general environment when they have been carried out 3) They tend to be “rationalized” by individuals once they become reality.

Within this theoretical framework, this report is not trying to predict the forthcoming events of 2014 but it is a logical and intuitive attempt to approach unanticipated developments relating to the field of International Relations. In conclusion, the actors who are well-informed of the consequences that extreme political, social and economic events may cause can organize better their decisions and actions.

1) Political crisis in Greece causes the breakdown of financial adjustment program

In this case, Greece is passing through a period of political instability that has as a consequence the collapse of the financial adjustment program. Political stability is directly correlated with normal economic adjustments in Greece. National elections would be added to Euro elections and local administration’s elections. National elections are going to destabilize the Greek political system because none of the parties will achieve the capable percentage to establish a one party government. The worst scenario would be the negation of political powers to cooperate.

2) Turkish economic crisis

In Turkey, a new circle of political instability has begun since last summer. The party of AKP, is trying to transform the republican (the so called Kemalism) status of Turkey to an Islamic one. Moreover, the huge scandal of corruption that got recently revealed, increases the Turkish political problems. As a result of political distortion, an investing panic would be a very possible scenario that will cause a top down sequence of dangerous effects concerning Turkish economy. National banking system, the private loans that Turkish middle class has taken and the construction sector are threatened directly.

3) A collapse of the recent agreements on Iran’s nuclear program

Iran’s issue which is strongly related with its nuclear program has been taken in international consideration for many years. The U.S.A and Russia have to protect important geopolitical interests. However, Obama’s government is boosting a conciliatory policy about Iran. In case that Washington and Moscow will end to a clash about Iran, Tehran’s government will probably return to its previous objective. Israel’s options will have been decreased and an Israeli attack against Iran will be more possible than ever before. The Tehran’s reaction will probably take place on tactics that centered to its “Shiitic advantages”. The consequences of this conflict could affect the fragile stability of Middle East.

4) Conflict between Russia and Germany

Russian-German relations are profoundly very complicated. There are sectors that the two powerful states tend to be cooperative, but this tendency is just the one side of the coin. On the other side, Russia and Germany have very adversarial relations. For example, the Russian depositors’ haircut that took place in Cyprus the last March, showed one of the cases that the struggle of power between them, is alive and kicking. The Ukraine’s issue is deeply a zero-sum game. A possible worsening of Russian-German relations would cause dangerous circumstances concerning Eurasia and energy safety of E.U.

5) Significant increase of radical right’s parties in Euro-elections

The destabilization that girdle the Union’s issues (especially those which refer to economic depression) has affected a new rise of movements and parties which support the radical right wing. An outstanding percentage of European society supports political parties that have xenophobic and nationalistic agenda. France’s nationalistic party “National Front”, the Jobbik (Hungary’s one) and the “Freedom Party of Austria” are some of them. The elective indifference and absence, could be replaced by votes of anger, showing the emerging power of the euro-sceptics. There is an increasing tendency concerning the extreme right wing in E.U.

6) War episode in the area of East Asia

The balance of power which stabilizes the states of East Asia, has being put to the test for years. For example, the Sino-Japanese relations have been enclosed by brinkmanship policies. However, they have strong economic ties between them. The same frame envelops the relations among North Korea, South Korea and U.S.A. Moreover, the growth of nationalism in China and Japan, the nuclear threats that North Korea mounts against South Korea and U.S.A, are incidents that are aggravating the region’s balance. It is more possible than ever before in the last decade, to be observers of a war episode between China and Japan because of the Senkaku’s-Diaoyu’s dispute.

7) An Ukrainian Civil War

Ukraine has a past which is full of foreign interventions in its internal. Ukraine’s government has decided to deny the Connection Agreement with E.U. Thousands of citizens are resisting on that decision by provoking chaotic social riots. The political stability of Ukraine also depends on both Russia’s and German’s behavior. Furthermore, a possible consolidation of Ukrainian citizens that believe in emancipation of their country, (from Russia) and on the other hand, the consolidation of the people who support the strong Ukraine-Russian ties, could cause a civil war.

8) Economic Recession in Germany

A dangerous sequence of international economic factors, are leading Germany to economic recession. The Euro is more “expensive” than the dollar. Also, the Chinese economic strategy which enforces the internal consumption, (to avoid the “trap of middle income”) and the extended economic depression of South Europe, threaten German economy directly. Despite the economic growth that the increase of wages will cause, the last, will also make the German products less competitive internationally.

9) Political instability in Russia due to terrorist attacks

Russian Federation had supported the U.S.A on war against terrorism, because Moscow has its own problems with terrorism (especially in its southern territories). The terrorist activities of October and December, (2013) proved the existence of those dangers that faces Russia. At the same time, Putin’s popularity is not at its best. Moreover, Russian government has a lot of fronts, including the economic adjustments of Russian state and its area’s geopolitical “reconstruction”. There is a strong possibility that Russia goes through a political crisis which could increase the prices of hydrocarbons. Taking in consideration the geostrategic competition referring to Ukraine and Iran, the recent year is crucial for Russian affairs.

10) Civil War in Egypt

Egypt is passing through a long-term “Arab Spring”. The banning of Muslim Brotherhood’s political action has caused a strong reaction by Brotherhood’s side. However, John Kerry made clear that the Muslim Brotherhood is neither illegal nor a group of terrorists. Despite the American support, Muslim Brotherhood could call for external support. Islamic groups that are sympathized with Brotherhood’s recent position, will probably create a dangerous gather-up, bringing the scenario of civil war closer. The destabilization of the biggest Arabic state is crucial for the whole balance of Middle East and North Africa.

Authors: Alexander Drivas and Michael Diakantonis

About the Authors:

Alexander Drivas has graduated from the Aegean University (Department of International Relations and Organizations). He holds a Master of Arts in International, European, & Regional Studies from Panteion University, with expertise in “International Political Economy”. He is a PhD candidate at the University of Peloponnese, studying “Regional Cooperation in the Eastern Mediterranean”. He is a researcher in the Division for Euro-Atlantic Studies, at the Institute of International Relations of Panteion University while he was also a researcher at the Center for International Political Economy.

Michael Diakantonis holds a B.A. in Economics from the University of Athens and a Master of Arts in International, European & Regional Studies from Panteion University, with expertise in “International Political Economy”. He is a researcher in the Division for Euro-Atlantic Studies, at the Institute of International Relations of Panteion University and he had previously served as a researcher at the Center for International Political Economy.

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