Israel will act if militants raid Syrian chemical or biological weapons stocks

JERUSALEM (CBS/AP) - Israelis rushed to get government-issue gas masks Wednesday, the latest sign of mounting fears that Syria's chemical weapons stockpiles could be used against them as the crisis there deepens.

Until a few days ago, the possibility of getting dragged into Syria's civil war was not a major issue in Israel, whose leaders have had a laser-like focus on the potential threat posed by Iran's suspect nuclear program. That changed when Syrian President Bashar Assad's grip on his country turned more doubtful last week, following startling military gains by rebels and a bomb attack that killed four top officials.

Syria on Monday threatened to unleash chemical and biological weapons if the country faces a foreign attack.

Besides biological agents such as anthrax, Syria is believed to have hundreds of tons worth of chemical weapons ranging from paralyzing nerve agents like Sarin and VX to old-fashioned blister agents like mustard gas, CBS News correspondent David Martin reports. They can be launched by missiles, fired by artillery, or dropped from airplanes. It would take more than gas masks to protect against them

Reflecting the fears, Israeli officials reported a run on gas masks in recent days. Demand has almost doubled in the past few days, to 4,200 requests on Tuesday from a years-old average of about 2,200, said Merav Lapidot, a spokeswoman for the Israeli postal service, which distributes the masks.

CBS

'Muslim Brothers plotting overthrow of Gulf states'

DUBAI - Dubai's chief of police has warned of an "international plot" to overthrow the governments of Gulf Arab countries, saying the region needs to be prepared to counter any threat from Islamist dissidents as well as Syria and Iran.

The comments by Dahi Khalfan, one of the most outspoken security officials in the United Arab Emirates, follow the detention in the UAE since April of at least 20 dissidents, according to relatives of the detainees and activists.

"There's an international plot against Gulf states in particular and Arab countries in general...This is preplanned to take over our fortunes," Khalfan told reporters at a gathering late on Wednesday marking the Muslim holy month of Ramadan.

"The bigger our sovereign wealth funds and the more money we put in the banks of Western countries, the bigger the plot to take over our countries...The brothers and their governments in Damascus and North Africa have to know that the Gulf is a red line, not only for Iran but also for the Brothers as well."

Most of the detainees since April are Islamists, targeted by an official clampdown amid concern they may be emboldened by the rise of the Muslim Brotherhood in other Arab countries such as Egypt.

UAE Interior Ministry officials have not been available to comment on the arrests. Last week, UAE officials announced that authorities were investigating a foreign-linked group planning "crimes against the security of the state".

"I had no idea that there is this large number of Muslim Brotherhood in the Gulf states. We have to be alert and on guard because the wider these groups become, the higher probability there is for trouble," Khalfan said on Wednesday.

"We are aware that there are groups plotting to overthrow Gulf governments in the long term."


Jerusalem Post

U.S., Lockheed Martin reach deal on Israeli F-35 fighter jets

The Pentagon has reached an agreement with Lockheed Martin Corp on a $450 million program to enhance electronic warfare equipment on the F-35 fighter jet, and integrate Israeli-unique systems beginning in 2016, sources, according to sources familiar with the negotiations.

The deal, to be finalized in coming weeks, marks a big step forward for Israel's $2.75 billion agreement to buy 19 F-35 jets, which was signed in October 2010 and includes options for up to 75 of the radar-evading fighters.

The Pentagon said the Israeli foreign arms sale could be worth up to $15.2 billion if all options are exercised, when it first approved the sale in September 2008.

"This agreement kicks off the Israeli program," said one of the sources, who was not authorized to speak on the record. "Now all of the agreements are in place."
The F-35 will allow for even greater collaboration in the coming years with Israel, a critical strategic ally for the United States at a time when much of the Middle East is in turmoil.

The deal comes as Defense Secretary Leon Panetta prepares to visit Israel next week where he will discuss heightened tensions with Iran, which on Thursday underscored its support for Syria despite its brutal crackdown on a 16-month uprising.

It also provides a vote of confidence in the embattled F-35 program, whose cost and technology challenges have overshadowed a year of progress in flight testing.
The deal will allow increased participation in the F-35 Joint Strike Fighter program by Israeli companies, including Elbit Systems Ltd and state-owned Israel Aerospace Industries, which will start building wings for the radar-evading warplane.

IAI already builds wings for the F-16 fighter jet, the world's most widely used fighter, also built by Lockheed. Elbit, in a joint venture with Rockwell Collins, makes the advanced helmet used by pilots on the single-seat F-35.

Agreement on development of the new Israeli version of the F-35 will allow Israel to install its own radio and datalink systems, as well as other equipment, on the jets it is buying.

But the deal also covers enhancements to the airplane's electronic warfare capabilities that will benefit the United States, Israel and the other nine countries that either have already ordered fighter planes, or plan to in coming years
The radar-evading, multirole F-35 is the Pentagon's costliest arms purchase, expected to top $396 billion for 2,443 aircraft in three models through the mid-2030s.

Lockheed and its subcontractors are building the stealthy warplane for the U.S. Air Force, Navy and Marine Corps along with Britain and seven other co-development partners -- Italy, Turkey, Canada, Australia, Denmark, Norway and the Netherlands
In addition to Israel, Japan also has a signed agreement to buy the F-35, which was designed to replace a range of fighter, strike and ground-attack aircraft, including the F-16.

The Defense Department this year postponed production of 179 F-35s until after 2017, stretching development and testing in an effort to curb costly retrofits and save money. The latest restructuring, the third such major revamp, added 33 months and $7.9 billion to the development plan.

Lockheed Martin, the Pentagon's No. 1 supplier by sales, is developing the F-35 with Northrop Grumman Corp and Britain's BAE Systems PLC. Britain initially invested $2 billion in the F-35's development, the most of any of the eight partner nations.

Work on the electronic warfare enhancements will be done largely by BAE Systems, the sources saki

Haaretz

Greek Deposit Plunge Continues

On one hand we have Mario Draghi promising he has a magic wand (not a printer - remember the keys to that are now held by Angela Merkel who is on vacation) and to "believe him" that the EUR will survive. On the other we have Greece which is a poster child of everything that is wrong in Europe. 

And that we summarize as follows: i) an epic and now relentless deposit outflow from Greek banks which continues as all trust in the local banking system is now gone, as €7 billion in deposits or the second biggest amount ever, is pulled and 20% of the entire corporate and household deposit base has vaporized in the past year, and ii) an economy in which it is every man for himself and where nobody pays any taxes any more, period. Best of luck in preserving that EUR Super Mario.

Here is the just released move in June deposits in Greece:

And a quick story on which Greece will never be fixed no matter what magic Draghi and Potter concoct between them:

The Financial Crimes Squad (SDOE) on Thursday reported that six in 10 businesses inspected at popular tourist resorts were not issuing sales receipts, and that of the 1,410 checks conducted in July, 57.1 percent found business owners to be in breach of the law.

SDOE officials said that they recorded a total of 22,435 infringements during their sweep, and that their efforts will continue throughout the summer.

In Zakynthos in the Ionian and Rethymno on Crete, every business inspected was breaking the law, while on the islands of Paros and Myconos, 70 percent were avoiding taxes.

No deposits, and no tax revenues: thank you Germany for continuing to fund this slow motion trainwreck thus providing everyone with hours of taxpayer-subsidized entertainment.

Zero Hedge

Russian Warships Will Not Enter Syria Port – Navy Chief

MOSCOW, July 26 (RIA Novosti) – Russia’s navy chief said on Thursday that a flotilla of Russian warships off the coast of Syria would not dock at a port leased by Moscow in the violence-stricken Middle East country.

“The joint fleet flotilla will not enter the port of Tartus,” Vice Admiral Viktor Chirkov told journalists. “It is carrying out military drills in the Mediterranean.”

The flotilla is comprised of 10 warships, plus escort vessels. Chirkov also said the flotilla was carrying marines.

The navy said earlier this month that the deployment of the powerful task force was not linked to the current crisis in Syria, where thousands of people have been killed in an almost 17-month uprising against President Bashar al-Assad.

The Western Syria port of Tartus is Russia’s only foreign naval base outside the former Soviet Union. But Russian analysts have consistently played down the port’s strategic importance, saying it is in reality little more than a refueling stop.

But Chirkov said on Thursday that Russia had no intention of giving up the base. He did not however give further details or clarify how Russia would hold onto the base in the event of a pro-Western government coming to power in Syria.

Russia – along with China – has vetoed three resolutions against the Assad regime over what it says is a pro-rebel bias. Moscow insists it has no special interest in seeing Assad remain in power, but that the “Syrian people” must decide his fate.

President Vladimir Putin vowed in a pre-election campaign article earlier this year not to allow in Syria a repeat of last year’s “Libya scenario," which saw the ouster and murder of long-time Libyan dictator Muammar Gaddafi after a NATO military campaign.

RIA Novosti

Europe is sleepwalking towards imminent disaster

Europe is “sleepwalking towards disaster”, according to the 17 experts, who warned that over the past few weeks “the situation in the debtor countries has deteriorated dramatically”.

“The sense of a neverending crisis, with one domino falling after another, must be reversed. The last domino, Spain, is days away from a liquidity crisis,” said the economists. They include two members of Germany’s Council of Economic Experts and leading euro specialists at the London of School of Economics, all euro supporters.

“This dramatic situation is the result of a eurozone system which, as currently constructed, is thoroughly broken. The cause is a systemic failure. It is the responsibility of all European nations that were parties to its flawed design, construction and implementation to contribute to a solution. Absent this collective response, the euro will disintegrate,” they added in a co-signed report for the Institute for New Economic Thinking.

The warning came as contagion from Spain pushed Italy’s borrowing costs to danger levels, with two-year yields rocketing 40 basis points to more than 5pc. The Milan bourse tumbled 3pc, led by bank shares. Italian equities have been in freefall since it became clear two weeks ago that the EU’s June summit deal had failed to break the nexus between crippled banks and sovereign states.

The crisis is starting to ricochet back into Germany, where the PMI manufacturing index for July fell to its lowest since mid-2009. Doubts are emerging about the creditworthiness of the German state itself.

The Telegraph

Israeli taxes are steps towards a $25-30bn war budget

The Israeli government convenes Monday, July 30, to approve an austerity-cum-taxation package entailing a 5-percent, across-the-board cutback in government ministry budgets to raise NIS 1 billion, or $250 million, in revenue; a tax hike will yield another NIS 3 billion, or $750 million. Both steps will generate an estimated total income of about one billion dollars.

Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz explained Wednesday, July 25, that these measures are vital to save Israel from economic decline like Germany, whose credit rating turned negative this week, or disaster like Greece and Spain which teeter on the brink of bankruptcy. Even America’s economic troubles are cited as worth avoiding.

Beer and cigarettes went up that night as a foretaste of the new measures.
Government leaders warned that the new steps were just the first round of further cutbacks and tax hikes in store for 2013. They are estimated to realize a further revenue injection of NIS 20 billion ($5 billion).

The first package was produced this week at an emergency economic marathon led by the prime minister, Bank of Israel Governor Stanley Fischer and other heads of the economy. The public was informed that the most urgent item on its agenda was ways and means of keeping Israel’s annual deficit within the 3-3.4 percent limit despite rising calls on the national purse. In every statement, ministerial spokesmen stressed that more tough measures were in store after the current round.

But for now, the education, social welfare and defense budgets remained untouched.

Some critics of Netanyahu government critics blame its policy of overspending in response to a wave of social protesters; others resent the one percent hike on VAT on purchases as hitting low-income groups.

At the same time, DEBKAfile's sources in Jerusalem report that Netanyahu and Steinitz have rightly turned genuine economic difficulty into a lever for getting the country on track for a war economy, without saying this in so many words.
They have therefore avoided discussing the consequences of the new measures – aside from a cap on the national deficit – or their duration. Israel’s leaders appreciate that the country is perilously close to war but they can’t tell for how long it will last or how it will end. A short war might boost economic development while a long conflict costing billions would require more belt-tightening.
Gone are the old days when an embattled Israel was able to ask and receive from Washington easy-term loans to cover its war costs, military hardware gratis to replenish depleted weapons and ammo stores and/or international loan guarantees. Today, Jerusalem knows that given the present state of the US economy and the possibility of Israel having to act unilaterally against Iran, it will have to come up with its own war funding.

This week’s marathon most certainly went past economic steps to ponder cost-accounting relative to the number of countries potentially at war with Israel as critical to size of the defense budget. Cost estimates swing wildly between an operation against Iran, facing Iran, Syria and Hizballah together for a long or short conflict, or a possible contest with Egypt to purge Sinai of terrorists.

Netanyahu and Defense Minister Ehud Barak gave part of the game away about the dual purpose of the new measures in the comments they made Wednesday and Thursday, July 25-26.

Both used an interesting tactic: First, they focused on the dry facts and figures of government spending, is deficit, revenue etc. but they then made speeches about the new security dangers facing Israel and the high cost of repelling them.

Netanyahu said that recent regional regime changes mean that Israel has to spend more on defense to maintain its balance of strength and face the challenges of a nuclear Iran, missile threats, cyber warfare and a colossal influx of weaponry to the region “which are in certain hands today and may be in others tomorrow.”
There is no knowing how Bashar Assad means to use Syria’s large stocks of chemical and biological stores, which way the Syrian situation is destined to develop, or against whom Israel may be called upon to fight.
He cited the cost (NIS1.4 billion) of building the security fence along Egypt’s Sinai border for the first time after three decades of treating this frontier as a border of peace.
How much would it cost to send troops into Syria to seize control of Syria’s unconventional war stocks and prevent their use against Israel? A large Israeli force would be needed for this preemptive raid. But what then? Do the soldiers’ stay on guard indefinitely, remove the stock from Syria or destroy it regardless of collateral damage? Those options would carry a price tag in the range of $1-2 billion.
The prime minister left the nuclear issue to the defense minister.
Barak took the opportunity of a graduation ceremony at the Israeli National Security College Wednesday, July 25, to say: Israel might have to make "tough and crucial decisions" about its security and future. "I am well aware of the difficulties involved in thwarting Iran's attempts to acquire a nuclear weapon. However, it is clear to me that without a doubt, dealing with the threat itself will be far more complicated, far more dangerous and far more costly in resources and human life than thwarting it"

This was a broad hint at Israel’s sense that it has no choice but to attack Iran’s nuclear program because the cost of inaction would be far greater.
Barak also commented that the lesson Israel has drawn from the Syrian calamity is that when it comes to a security crunch, Israel can only rely on itself.

While all the official statements focused on saving the Israel economy from drowning in the maelstrom of the global crisis, DEBKAfile's military and Jerusalem sources noted that nothing was said about the sources of replenishing the drain on the national coffers of fighting a war.
A clue may be found in the offer made by the finance minister of big tax breaks for three big multinational companies operating in Israel – Intel, Teva and CheckPoint - in return for their consent to plow their local profits back into Israel.
The accumulated amount mentioned is NIS 100 billion ($25 billion) for which they would only be charged 3 percent tax.
Steintiz would not have discussed this deal in public had it not been approved in principle.
DEBKAfile’s analysts conclude that if this sum can be made available to the Israeli economy in a war crisis, the national deficit could be kept at a manageable level and foreign capital discouraged from fleeing the country. It therefore looks as though the Netanyahu government is digging the Israeli economy in to weather a war and setting up a strategic financial reserve in the range of $25-30 billion, and perhaps more, for the worst-case scenario.

DEBKAfile