Executive Summary

• Terrorist attack drives Germany to restrict border access. Demands of large immigrant populations combined with increasing security concerns will likely limit any relaxation of border controls in the near future.
• Although the frequency and intensity of conflicts seems to be growing in the past few years, the global economy is capable of resilience.
• The threat of Iran attacking Israel continues to worry western intelligence agencies. Iran has moderated their potential response to the assassination of Ismail Haniyeh.

Germany announced plans to tighten border controls.  What does this mean for the EU?

Germany recently announced it will set up temporary border controls at all land access points for six months, starting September 16th.  This set of controls follows other expanded checks which the German government set in place as far back as 2015 on the border with Austria as a counter to the large number of migrants seeking entry.  In 2023, Germany also tightened controls on their borders with Poland, the Czech Republic and Switzerland for similar reasons.  Last month a Syrian designated for deportation killed three people in a knife attack in Solingen.  Responsibility for the attack was claimed by the Islamic State Group, otherwise known as ISIS.

Tightening the border is entirely legal. Part of the European Union Charter, the Schengen Borders Code (SBC) provides a “Schengen area”, which includes 25 of the 27 EU members and several other countries and allows free travel between them without border controls.  The Code gives member States authority to temporarily reintroduce border control at internal borders in the event of a serious threat to the public or internal security.  The SBC is clear that any reintroduction of border control must be applied as a last resort, in exceptional situations, and must respect the principle of proportionality.

The scope and duration of border control should be restricted to the minimum needed to respond to the threat in question.  The decision is the prerogative of the Member States. The Commission may issue an opinion regarding the necessity of the measure and its proportionality but cannot veto a Member State’s decision to reintroduce border control.

In May 2024, over 85,000 applications for asylum were received by EU member states.  Of these, most were from Syria for their favorite destinations of Germany (46% of all Syrians), Austria (14%) and Greece (10%).[1]  German controls will now be extended to all land borders with France, Luxembourg, Belgium, the Netherlands and Denmark.  Austria’s Interior Minister Gernard Karner said Germany’s decision was illegal (likely because Germany did not provide the required 4-week notice) and that Austria would not accept migrants rejected by Germany.  However, he also said he was glad Germany was addressing Europe’s illegal migration issue.  Also, in May the Council of the EU adopted a new pact on migration and asylum after a 4-year study and regulatory update process.

As far back as 2010 EU nations became more and more concerned about illegal immigration.  Italy was a prime destination for illegals in the 2010-to-2012-time frame. Over time Italy managed to regulate inflows from Egypt, Tunisia and other Mediterranean states.  In 2015 the number of asylum applications reached a 30-year high[2] and the overall trend continues to increase.  By the end of 2023, some 1.1 million applications had been lodged in the EU (plus Norway and Switzerland) marking an 18% increase from 2022, and the most since 2015. Of those, Germany received a full 25% of the applications, followed by France (16%), Spain (12%), Austria (11%) and Italy (9%).  These five EU member states together received almost 75% of all first-time asylum applications in the EU in 2023. [3]

The impacts of immigration in Europe are not unlike those in the United States.  For decades, labor from Poland, Romania and other former Soviet states has migrated to Germany to provide workers for the wine and service industries.  Germany has historically tried to attract foreign labor, but recent events are driving security to the top of the agenda, closely followed by the costs of healthcare, education, housing and other costs driven by migrants many of whom request asylum status in EU nations (3.5 million in 2022).[4]

The recession in Europe ended earlier this year, with a small uptick in growth and predictions for overall GDP growth of around 1% in 2024.  However, immediate pressures on nations to deal with the fiscal demands of large immigrant populations combined with increasing security concerns will likely limit any relaxation of border controls in the near future.  Despite the migrant issue, Europe’s two biggest economies – Germany and France – grew by 0.2%, while Italy and Spain posted growth of 0.3% and 0.7% respectively.

Conclusion

It is unlikely border controls will have any adverse economic impact on most EU states, but some will still bear the brunt of dealing with migrant populations who are disallowed from moving from border states to central Europe.

Is Conflict the new normal?

Literally thousands of papers, articles, interviews, and speeches have been given on the subject of how to end conflict.  With hot wars in the Ukraine and Israel, a constant barrage of attacks by Houthi rebels and less consistent but still deadly attacks by Hezbollah, Hamas, ISIS and al Qaeda across the middle east and Africa it appears that the intellectual output of how to end conflicts has had little effect on conflict, death and destruction.

Since the 1960s, the rate and size of major conflicts, including both civil wars and interstate war has slowed globally. The largest of all the conflicts in that period were the Iran-Iraq war in the mid-1980s, the war between Ethiopia and Eritrea in 1999 and the Bosnian Civil War in the mid-1990s.  Since 2000 the number of deaths (both combatants and civilians) in armed conflicts has ranged from less than 20,000 in 2005 to over 145,000 in 2014 when Russia invaded Crimea (part of Ukraine).  In the past 4 years the numbers have continued to climb with 31 recognized conflicts and rapidly increasing casualties exceeding 150,000 per year since 2022.[5]

Concurrently since 2000 world GDP growth in the G20 has remained relatively constant with a few exceptional periods of sharp decline.  Those periods include the aftermath of the September 11^th attacks, the Great Recession of 2007-2011, and the COVID-19 Pandemic.[6]  In more recent times, growth in non-G20 states has also either rebounded from COVID-19 or shown steady growth (although somewhat lethargic in some cases) in the past 2 years.[7]

These statistics indicate that although conflict appears to be growing in the past few years, the global economy is capable of resilience and may have the ability to accommodate some level of increase in tragic events in the future.  That is not to say that a major aggressive move by Russia into NATO or some overt military attack by China against its Asian neighbors would not have serious economic impacts.  The markets look for stability but moreover they look for mature leadership to lessen the impacts of conflicts and chart a way forward for eventual resolution.  In Ukraine’s example, the continual support of the US and other European nations against Russia’s invasion has steadied the markets in a broad sense.  Israel, with their bloodlust for revenge at the expense of hostage rescue, continues to be both an aggressor and a target for attacks from various Iran-sponsored surrogates, yet the markets seem stable.

Conclusion

Any new military or terrorist attack will likely have a short-term negative impact on the markets.   This will persist as long as nations rally to the support of the victims and make good faith efforts to reduce and eventually eliminate aggression.

Will Iran attack Israel?

Iran has been under pressure from the US and other nations to not respond to the 31 July attack that killed Hamas’s political chief, Ismail Haniyeh.  In recent days Israel has intensified airstrikes on Iranian-linked targets in Syria, reportedly inflicting civilian casualties on at least three occasions, an independent U.N. commission said Tuesday.

Since Hamas’ devastating attack on Israel 11 months ago, Israel has conducted dozens of airstrikes in Gaza, the west bank and parts of Syria. Syria is a key channel for Iran to send weapons to Lebanon’s Hezbollah group.[8] Iran blamed Israel for the April airstrike on Iranian consular offices in Damascus that killed seven people including two Iranian generals, and Tehran responded with an unprecedented, and ineffective, attack against Israel almost two weeks later. Israel has carried out operations focused on stopping Iranian support flowing through Syria where thousands of Iran-backed fighters are deployed. On September 8^th, a Jordanian truck driver killed three Israelis present at the Allenby Bridge border crossing between Jordan and the West Bank.  The driver arrived at the Israeli-controlled side, exited his vehicle, and opened fire at Israelis working there, killing three civilians.  Israeli forces killed the shooter. The Iranian-backed Iraqi militia Kataib Hezbollah congratulated the Islamic Resistance in Jordan on September 8 for the shooting attack at Allenby Bridge.

The threat of Iran attacking Israel continues to worry western intelligence agencies.  The head of Britain’s MI6 foreign spy agency Richard Moore says he believes Iran is still planning to retaliate for the killing Haniyeh. This follows reports in late August that Iran’s foreign minister Abbas Araghchi had again referenced a planned retaliation against Israel over the assassination, saying it would be “measured.”  Araghchi said he made the remark in a telephone conversation with Italian Foreign Minister Antonio Tajani.  “Iran[‘s] reaction to Israeli terrorist attack in Tehran is definitive, and will be measured & well calculated,” Araghchi wrote on the social platform X. “We do not fear escalation, yet do not seek it — unlike Israel.”  Tajani said during the conversation he “called for restraint and to pursue a constructive approach, in order to stop the cycle of military actions in the region, which only risks bringing more suffering.”[9]

Reports of Iran increasing their production of enriched Uranium have persisted in recent days.  Over the past few years Iran has threatened to increase their production of weapons grade material as a preemptive deterrent for western actions.  Efforts to limit Iran’s pursuit of nuclear weapons stalled in 2022.  Then, the US accused Iran of making “unreasonable” demands related to a probe by the International Atomic Energy Agency (IAEA), into unexplained traces of uranium found at undisclosed Iranian sites. In the months that followed, the administration maintained that the Iran nuclear deal was “not on the agenda.”   Iran’s new president has suggested they are open to engagement with the West.  However, a senior State Department official said they no longer believe that there can be a return to the nuclear deal because Iran has engaged in too many escalatory acts in the years since talks broke down.  “We have no expectations that this election will lead to a fundamental change in Iran’s direction or its policies,” State Department spokesperson Matthew Miller said earlier this month. “At the end of the day, it’s not the president that has the ultimate say over the future of Iran’s policy; it is the supreme leader, and of course we have seen the direction that he has chosen to take Iran”.[10]

In June the Biden administration sent a private warning to Iran last month expressing serious concerns about Iranian research and development activities.  U.S. officials said the Iranians responded with explanations for those activities, stressing there has been no change in policy and they are not working on a nuclear weapon.[11] Although Iran has said it does not plan a change to their nuclear policy, Iran could be “pushed” into building a nuclear weapon if Israel threatens its existence, an adviser to Supreme Leader Ayatollah Ali Khamenei recently warned.  “In the case of an attack on our nuclear facilities by the Zionist regime, our deterrence will change”.[12]

Conclusion

International pressure on Israel to stop the killing in Gaza continues to build while Israel seems more intent on eliminating Hamas that freeing hostages or accelerating peace talks. Iran may yet orchestrate a coordinated attack against Israel.  Recent statements have moderated their potential response to the assassination of Ismail Haniyeh. The US response to these statements was unequivocal:  Iran would face “cataclysmic” consequences and derail momentum toward a Gaza truce if it strikes Israel.[13]  Although this is reminiscent of the famous “red line” statement by former President Obama, it still may carry enough credibility to deter an attack in the near future.

About Michael Snodgrass

Michael Snodgrass retired from the U.S. Air Force as a Major General in 2011. He is currently the President of SG Strategic Solutions LLC.

He has extensive command and leadership experience in the U.S. Air Force and joint world, as well as a wide range of disciplines, including defense and aerospace, technology development, government acquisitions and requirements, foreign military sales and leadership coaching.

He consults with the government, defense industry and other businesses on a wide range of topics. In 2019 he became an adjunct contract professor supporting the U.S. Air Force on strategy and policy development.

From 2014 to 2016 he was Vice President, International Business Development at Raytheon Corp. Prior to that he was Director of U.S. Air Force and Federal Aviation Administration programs at Engility Corp.

General Snodgrass joined Burdeshaw and Associates in 2012 and is a Senior Consultant for numerous clients in the defense and aerospace sectors. Prior to his retirement, he was U.S. Air Force Assistant Deputy Under Secretary for International Affairs; responsible for formulating and executing USAF Policy, Strategy and Programs for Building Partnerships and integrating Air Force policy with international partner goals, totaling over $40 billion total program value.

From 2007 to 2010 he served as the first Chief of Staff, U.S. Africa Command. There, he was responsible for the construction of the country’s newest Unified Geographic Command.

He has commanded at the squadron, group and wing levels and has lived in/visited over 50 nations while in uniform. He has over 3500 flight hours in various aircraft including the F-16, F-15, F-4, C-130 and HH-60, as well as over 100 combat missions in Operation Desert Storm.

In addition, General Snodgrass teaches leadership and management courses. In his spare time, he provides leadership coaching and training to the U.S. Air Force ROTC unit at Florida State University.

 

[1] See:  https://euaa.europa.eu/latest-asylum-trends-asylum

[2] See:  https://www.imf.org/external/pubs/ft/sdn/2016/sdn1602.pdf

[3] See:  https://euaa.europa.eu/latest-asylum-trends-asylum

[4] See:  https://www.euronews.com/business/2024/01/22/the-economic-impact-of-migration-on-europe

[5] See:  https://ourworldindata.org/war-and-peace

[6] See:  https://www.holoniq.com/notes/economic-outlook-march-2023-g20-executive-briefing

[7] See:  https://www.imf.org/en/Publications/WEO/Issues/2024/04/16/world-economic-outlook-april-2024

[8] See:  https://apnews.com/article/syria-iran-israel-airstrikes-un-9bb7c57d40199bda95fd49bc7907391a

[9] See:  https://www.timesofisrael.com/irans-foreign-minister-vows-calculated-response-to-killing-of-hamas-leader-haniyeh/

[10] See:  https://www.cnn.com/2024/07/19/politics/blinken-nuclear-weapon-breakout-time/index.html

[11] See: https://www.axios.com/2024/07/17/iran-nuclear-program-research-warning

[12] See:  https://www.aljazeera.com/news/2024/5/9/iran-warns-it-will-change-nuclear-doctrine-if-existence-threatened

[13] See:  https://www.timesofisrael.com/us-official-warns-iran-of-cataclysmic-consequences-if-it-attacks-israel/