By Jacob L. Shapiro October 30, 2017

Catalonia is vying to become Europe’s newest nation-state, but this is a battle Catalonia ultimately can’t win. On Oct. 27, Catalan lawmakers voted to declare independence—barely. Only 51.8% of members in the Catalan parliament supported the declaration. That means even Catalans themselves are divided over whether Catalonia should secede from Spain.

Spain has threatened to do whatever is necessary to maintain the rule of law in Catalonia, and it has both the will and the means to follow through on that threat. Catalonia also has very little international support it can depend on. Even so, the Catalan revolt of 2017 will have ramifications in Spain and in Europe that will be felt for generations to come.

For many observers outside of Europe, the Catalan issue came out of left field. Sure, the Catalan government said it would hold an independence referendum, but it held a similar referendum in 2014 and nothing came of that. Surely, all the Catalan government wanted was a bargaining chip it could use in its negotiations with the Spanish government over taxes and other issues related to the region’s political autonomy. Catalonia has more to gain economically by remaining a part of Spain, so why would it want to embark on the arduous and violent process that usually accompanies declarations of independence?

But no one should be surprised that Catalan independence has become a major issue—it has been for many centuries now. It is a product of Spain’s geography and Catalonia’s unique history. The geography of Spain is immensely diverse. The northwest is rainy and faces the Atlantic. The center has historically been dry and poor. The northeast—where Catalonia is located—is fertile and faces the Mediterranean. The south has its own unique climate and spent many centuries under Muslim rule. These realities helped create unique cultures and political economies that have proven remarkably resilient over centuries, despite best efforts to subsume them under Spanish nationhood.

The Catalan declaration also came out of Catalonia’s history. There has been a uniquely Catalan political consciousness since the Middle Ages. When Ferdinand II of Aragon and Isabella of Castile married, their rule was not absolute. It was a bargain between the monarchs and the regions comprising their dominions, many with their own constitutions. Taxes might well have flowed to the crown, but the crown in turn respected the autonomy of its regional subjects. The players often changed, but “Spain” was always a grand bargain between disparate regions and distinct peoples, not a coherent national entity.

Greater Autonomy

The grand bargain did not always hold, especially in Catalonia. Catalonia has periodically sued for greater autonomy and even independence. In the 17th century, for instance, the Spanish monarchy tried to extract more money out of Catalonia because Castile was carrying too great a share of the tax burden and because the Spanish crown needed money to pay for its wars. The result was the Catalan revolt of 1640–1652. In 1932, Catalonia once more tried to seize greater autonomy, only to be crushed by Spanish dictator Francisco Franco after the Spanish Civil War of 1936–1939. The 1978 Spanish constitution once again returned autonomy to Catalonia, recognizing that Spain could not hope to claim legitimacy among all the people it aimed to rule if it did not also respect the diversity of those very people in the first place.

At first, this seemed to work sufficiently well. But over time, the same issues that for centuries had divided Catalonia from the rest of the country began to crop up again. Even as Spain’s economy grew after 1978, Catalonia remained significantly richer than the rest of the country. Today, the region’s gross domestic product accounts for 20% of Spain’s GDP, and its GDP per capita is higher than the EU-27 average. The 2008 financial crisis hit Spain particularly hard. Youth unemployment spiked to over 50% in 2014 and remains around 40% today. Overall unemployment has been declining but is still over 16%. Catalonia wants more control over its economy and less of its tax revenue going to the central government. And it began reinstituting cultural markers such as teaching the Catalan language in schools. The grand bargain that was reached in 1978 has failed to hold up in a post-2008 world.

Pandora’s Box

This explains why Spain has reacted with such force to the Catalan regional government’s moves—even though only 42% of Catalans showed up for the vote, not exactly a ringing endorsement for the separatists. Catalonia is just one of 19 autonomous communities in Spain. Basque Country, with its own language and unique culture, has also been vying for independence, and as recently as the 1990s, Basque separatists carried out terrorist attacks in Spain in support of their cause. If Spain does not crush Catalonia’s independence movement now, it could open a Pandora’s box, with other regions demanding more autonomy or even separation, and Spain can’t allow this to happen. Madrid, therefore, needs to assert direct control over Catalonia; anything less would give the appearance of Spain abdicating its responsibility to its people and its constitution.

Both sides have been hurling accusations of illegal conduct at each other. The Spanish constitution is silent on the issue of independence referendums, but the Spanish government and Spain’s Constitutional Court view the Catalan regional government’s activities as illegal. The Catalan government viewed the violent Spanish response to the vote as illegal. The Catalan government also thinks what it is doing is in keeping with the spirit of the European Union, founded as it was on the idea of national self-determination. The situation has progressed to the point that the legalities and illegalities are irrelevant. The rule of law exists only in a political community in which all, or at least the vast majority, accept it. When there is a fundamental disagreement about what the law is and who gets to enforce it, the stability that law imposes breaks down, and life goes back to being nasty, brutish, and short, with victories determined not by persuasive argument but by monopoly of force.

This is where things get complicated for the European Union. On the one hand, the EU remains steadfastly in support of its member state, Spain. But Spain will now have to use force to maintain its writ in Catalonia. That will put the EU in a lose-lose situation: It can either support a member state using force to quell a political rebellion that seeks the very thing the EU was designed to protect—national self-determination—or it can support the right to self-rule for the people of Catalonia but, in so doing, completely undermine the position of the Spanish government.

Eighteenth-century Irish statesman Edmund Burke famously said that Spain is “a great whale stranded on the shores of Europe”—as if, at the end of the day, there was something fundamentally un-European about Spain. That may have been true back then, but the 2017 Catalan revolt shows that Burke’s view of Spain no longer holds. Spain will now be a model for Europe. Catalonia is the first major secessionist movement to take concrete steps toward achieving independence in post-Maastricht Western Europe, but it won’t be the last. How Spain and the EU respond to Catalonia will set the tone for how the EU will respond to separatist or autonomy movements in places like Scotland, northern Italy, or other regions with dormant nationalism that may bubble to the surface.

2017 will be the year that the EU supports a government in putting down a movement for national self-determination on the European continent. Most, if not all, EU countries will support the use of force this time, since no country wants its own territorial integrity challenged. But condoning the use of force in this context takes the EU to a dangerous place. The EU was built around economic prosperity and was designed to ensure peace for Europe’s nations. If the EU can guarantee neither of those things, it will become irrelevant or unrecognizable. Slowly but surely, Europe is returning to history—and the suppression of Catalonia is a recurring chapter in that history.

George Friedman
Editor, This Week in Geopolitics

Après 12 ans de pouvoir sans partage, la cote de popularité de la chancelière poursuit sa chute. Les potentiels successeurs commencent à se placer.

« Merkel muss weg ! » (Merkel doit partir !), lit-on souvent depuis quelque temps sur les murs d’Allemagne. Des tags qui reflètent la colère et le désamour croissants d’une partie de la population allemande pour sa chancelière fraîchement réélue. Car si son parti, la CDU, vient d’enregistrer un si piètre résultat aux élections fédérales, Angela Merkel y est bien pour quelque chose.

Sur le baromètre qui mesure la cote de popularité des acteurs de la politique allemande, Angela Merkel, tenante du titre depuis des années, s’est fait doubler par Wolfgang Schäuble, ex-ministre des Finances et depuis quelques jours président du Bundestag, le Parlement allemand. Ce vétéran très respecté de la vie politique outre-Rhin est pour les Allemands un garant de cette continuité à laquelle ils aspirent tant. Grâce à lui, disent les sondés, les caisses de l’État sont pleines et l’économie allemande se porte bien. Angela Merkel, qui depuis sa première élection en 2005 monopolisait la première place dans le cœur de ses administrés, glisse maintenant en seconde position. Sa cote baisse de 2 à 1,6 point. C’est beaucoup. Si une grande partie de la population allemande fait toujours confiance à sa capacité de mener à bien les négociations de coalition et d’assurer la stabilité de son pays, les mécontents sont de plus en plus nombreux.

Une politique trop à gauche

Le 24 septembre, plus de deux millions de fidèles électeurs ont déserté le camp de la CDU/CSU pour aller voter ailleurs. Aucun parti n’a perdu autant d’électeurs. Près de 1,4 million d’entre eux ont préféré le FDP, le petit parti libéral et 1 million ont choisi l’AfD. En votant pour le nouveau parti d’extrême droite, ces électeurs chrétiens-démocrates ont protesté contre la politique menée par leur chancelière, tout particulièrement sur la question des migrants. Les barons de la CSU, l’aile bavaroise et conservatrice de la CDU, en veulent à Angela Merkel d’avoir mené une politique trop à gauche et exigent que l’on serre les rangs sur le flanc droit de l’Union pour ramener au bercail ces brebis égarées.

À gauche comme à droite, on reproche à la chancelière son manque de vision politique. D’être une gestionnaire qui se targue d’avancer « un pas après l’autre », mais qui fait si souvent le dos rond au lieu de s’attaquer aux problèmes que traverse son pays. Comme dans cet éditorial de la Süddeutsche Zeitung, le grand journal de centre gauche basé à Munich : « La chancelière dit que le gouvernement doit régler les problèmes auxquels sont confrontés les citoyens. C’est la meilleure recette contre le populisme de droite. C’est exact. Mais qui gouverne ce pays depuis 12 ans ? Et pourquoi les problèmes n’ont-ils pas été réglés depuis longtemps ? L’analyse de Merkel est donc aussi un aveu des graves erreurs qu’elle a commises. Les élections furent pour la chancelière un rendez-vous avec la réalité. »

Pas d’héritier en vue

Le vent est-il donc en train de tourner pour Angela Merkel ? Son pouvoir, qui, il y a quelques mois encore, paraissait infaillible, est-il en train de s’éroder ? Celle que l’on croyait indéboulonnable est ressortie très fragilisée des élections législatives. Dans les couloirs du pouvoir à Berlin, les rumeurs et les spéculations vont bon train. Les noms de ceux qui susceptibles d’assurer sa succession circulent. Angela Merkel a fait le vide autour d’elle. Elle n’a pas pris soin d’assurer sa relève. Pas de dauphin évident en vue. Mais de nouveaux visages se profilent.

Tel Jens Spahn, 37 ans, secrétaire d’État au ministère des Finances. Ce jeune chrétien-démocrate rue depuis un moment déjà dans les brancards. Sur la gestion de la crise des réfugiés, il s’est opposé ouvertement à la chancelière. On murmure à Berlin qu’il convoite la chancellerie dans quatre ans. Il se donne du mal pour se démarquer et affiche des positions à droite de la CDU. Le soir de l’élection du jeune conservateur Sebastien Kurz en Autriche, Jens Spahn poste sur Twitter une photo qui en dit long : Jens Spahn pose en compagnie du vainqueur autrichien qui, plus que tout autre Européen de l’Ouest, a tenu tête à Angela Merkel sur la question des réfugiés. Le message de Jens Spahn est clair : la politique anti-ouverture des frontières de Sebastien Kurz est responsable de sa victoire. Alors, pourquoi ne pas faire de même en Allemagne et neutraliser l’AfD par la même occasion ?

 Suivre

Jens Spahn ✔@jensspahn

Glückwunsch an den künftigen Kanzler der Republik Österreich @sebastiankurz!

23:21 – 15 oct. 2017

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Merkel occupée ailleurs

Le comble est que cette photo a été postée alors que, parallèlement aux élections autrichiennes, les sociaux-démocrates battaient la CDU dans le Land de Basse-Saxe. Pendant qu’Angela Merkel panse de nouvelles plaies, Jens Spahn fait la fête à Vienne. Le message ne saurait être plus limpide : si elle veut conserver le pouvoir, la CDU doit donner enfin un grand coup de volant à droite. Mais la question des réfugiés n’en a pas fini de déchirer la CDU.

Certains, à Berlin, se demandent même si Angela Merkel arrivera au bout de son mandat ou si elle sera obligée de passer la main à mi-parcours. Des spéculations qui ne semblent pas inquiéter outre mesure la chancelière, tout occupée en ce moment à composer une coalition capable de gouverner durant les quatre prochaines années.

 PASCALE HUGUES

IMF First Deputy Managing Director David Lipton
Munich, Germany
October 23, 2017

October 23, 2017

Good afternoon. Thank you for the kind introduction.

I am always happy to visit Germany—a country that provides an important voice in the international community for responsible economic policies.

I would like to set the stage for your discussions today with an overview of the global economy—recent positive developments and some perspectives on longer-term trends that we need to address. I’ll point toward some practical solutions where I can—and will—highlight some looming issues that require more attention.

The bottom line is that the global recovery is strengthening. That provides an environment of opportunity to address key policy issues that can help support stronger and more sustainable growth—and foster the financial stability essential to the health of the global economy.

The IMF has just released its latest World Economic Outlook, which we update on a quarterly basis. It forecasts 3.6 percent global growth this year and 3.7 percent next year. That is well above the 3.2 percent we saw in 2016.

This is good, but not enough. Before talking about what’s missing, let’s review the progress.

Consumption and Investment

The sources of strength this time include both consumption and investment. The strengthening of investment is important, because many companies have been reticent about making physical investments since the Global Financial Crisis. Investment, which is very import intensive, is contributing to an acceleration of trade, which is a way of spreading the beneficial effects of recovery across the global economy. For the first time in several years, trade is growing faster than GDP. That is most welcome.

Another important development: the recovery has become more broad-based. The advanced economies are finally all growing, led by the euro area and Japan. This, too, we haven’t seen since the crisis. We also have stronger growth across many emerging market countries, especially China, emerging Europe, and Russia.

We see Germany growing at 2 percent this year, and moderating to 1.8 percent in 2018. The U.S. is also growing—at a little over two percent. But we’ve reduced that forecast a bit because of uncertainty about the fiscal stimulus under discussion in Washington. We also have downgraded the UK forecast.

The countries contributing to the recovery add up to about 75 percent of the world, measured by GDP. Not bad. But that also leads us to what is absent.

The 25 percent of the world that is not growing represents a broad swath, in fact a large number of the developing countries. This includes some emerging market countries and the commodity exporters, especially oil-rich countries. In fact, some 46 countries are experiencing falling GDP growth in per capita terms.

Many countries are still adjusting to the sharp fall of commodities prices in 2015. This is especially the case in sub-Saharan Africa, where several countries are trying to return to growth. But they are a long way from the rapid expansion in the years of the commodities boom. This is one of the important policy challenges I referred to a moment ago.

This gap between the countries that are partaking of the recovery and those that are not tells us that this recovery is simply not strong enough. That, broadly speaking, is because many countries have not yet taken the policy steps needed to return to growth.

It also important to point out that, in terms of the benefits of the recovery, there are also disparities within many of the countries that are growing. For example, across the advanced economies, real wage growth has remained low and many people have lost ground since 2008.

Some of that stems from the lingering impact of the global crisis. Some can be blamed on technological change and trade. Whatever the cause, we have witnessed an increase in inequality that has helped breed populist resentment against globalization, migration, and change in general.

Continuing Challenges

This brings me back to the environment of opportunity—and the challenges we face. Walter Baghehot, the 19^th century British journalist, said, and I paraphrase: often, the worst decisions are made in good times. That is because the best decisions often come when we are forced to act, i.e. in bad times.

It is perhaps inevitable that policymakers may be less inclined to act at the present moment. Relief over recovery may lead to complacency. But they must act, for this recovery to be sustained.

One of the overriding challenges we face is the normalization of monetary policy from the unconventional monetary policies undertaken by several major central banks after the global crisis. We are comfortable with the accommodative stance where it remains in effect. And the first steps toward normalization by the Federal Reserve have proceeded smoothly.

But we cannot ignore the risk this process poses for a financial system accustomed to historically low interest rates.

We have also just published our Global Financial Stability Report, which analyzes market trends and risks. Most importantly, the report points to a global financial system that has become more resilient. The major banks and insurers have increased their capital and liquidity buffers, and addressed many issues from the global crisis. Emerging markets have benefited from low-cost capital flows over the past year and can borrow to spur growth.

That said, the report highlights growing vulnerabilities, for example those stemming from low rates, which make countries and investors more susceptible to unexpected shocks. A sudden shift in market sentiment or a geopolitical event could carry considerable weight.

The pursuit of higher yield has left many investors exposed to potential credit, maturity and liquidity risks. Volatility is extremely low across asset classes and countries, fueling investor complacency. These are issues that many market participants have expressed concern about.

Rising Debt

In addition, debt is increasing across the globe. In the G20 countries, private sector leverage is higher than before the financial crisis. And we are witnessing a rapid increase in the indebtedness of low-income countries, where non-traditional sovereign lenders like China, Russia and Saudi Arabia have been very active. These lenders operate outside the Paris Club of sovereign lenders, which may complicate and delay the of resolution of problem loans.

It is the responsibility of central bankers and other policymakers to address financial and debt vulnerabilities before they become more acute and more expensive to act upon.

I just mentioned progress on bank legacy issues from the global crisis. Without a more sustained effort to deal with this unfinished business, risks will remain higher and growth harder to support. This certainly applies to the euro zone, where the work of cleaning up bank balance sheets and improving cost efficiency must continue, in parallel with the effort to complete the banking union.

But this is not just a matter for the private sector. Governments also must still deal with crisis legacies. These issues include emerging market debt, fiscal consolidation in many countries, and, as I just said, the euro area banking architecture.

There are also broader structural issues that the crisis brought to the fore: demographic change and migration, infrastructure gaps, labor and product market regulation, and educational shortcomings.

The IMF has not been shy about expressing its views on these issues. So, instead of revisiting a well-worn path, I would like to focus on the predicament of emerging market and developing countries.

Emerging markets have been the high-flyers of the global economy for decades, seeking rapid growth to catch up with the advanced economies. That should be possible by investing, acquiring technology, better educating workers, and thus boosting productivity. The end result of that trend would be a convergence of living standards.

But right now, convergence does not look like a foregone conclusion. We project that over the next five years the emerging markets and developing countries will grow about 1.5 percentage points faster in per capita terms than the advanced economies.

In aggregate, this sounds good. Catching up by 1 ½ percentage points a year. But then you must consider that a small group of very large economies are catching up very fast. China, India and a few others grow rapidly enough to catch up by 4 to 5 points per year. In fact, the rest—about 43 countries—are growing more slowly than advanced economies, so they won’t be gaining ground on the advanced economies: They risk falling further behind.

That is why our message is to take advantage of this recovery, to repair the roof when the sun is shining. Continuing reforms — reforms that will be easier to pursue while the global economy is in recovery mode — can restart and accelerate convergence.

Technological Transformations

Now, I’d like to introduce another set of looming changes that will undoubtedly affect our economies in a future that in one sense is already upon us. They are technological innovations that have the potential to be both disruptive and transformative.

Let me briefly outline three issues that we at the IMF are beginning to grapple with in our analytical work.

First is what is being called the Future of Work; specifically, the ways in which automation and artificial intelligence are affecting the factory floor and the very process of industrialization. This process is well underway. I know, for example, that the Japanese company Softbank has put together a $100 billion Vision Fund to help seed innovations in this area.

But we really do not understand how this process will play out—and that includes in the realm of macroeconomics. Will it substitute for workers, putting large numbers of people out of work? Or will it enable and equip workers to be more effective, creating an array of new businesses and employment opportunities, as occurred with the advance of IT?

We particularly need to consider how this transformation will affect the developing world. Will it allow low-income countries to speed up the process of industrialization, or even leapfrog development stages other countries had to go through, all to the advantage of their young and rapidly growing work forces? Or will technological advances actually reduce the need for lower-skilled workers, closing off a route to development first forged by the emerging markets a generation ago?

The second issue is one you all are facing: cyber-threats. I recently was told by an executive with a major bank that his institution is attacked once every ten seconds by hackers. In the U.S., we just experienced the wholesale looting of credit information from Equifax. This one incident affects hundreds of millions of people—and the threat will only become more dangerous.

The international community is paying close attention to this issue. The G7 has done quite a bit of work already, and the Financial Stability Board is also leading an effort.

One thing to consider is whether the answer to the cyber-threat is the decentralized, private-sector response that we have relied on so far. Or, whether information technology is a global public good, and the time has come for governments to consider a coordinated response.

Of course, the field of cyber-security is far from the IMF’s core expertise. But we are prepared to help come to grip with the macroeconomic implications of the issue.

Digital Finance

All of which leads us directly to the third area of change: the broader universe of digital finance, which you will be discussing this afternoon. This is playing out right now before our eyes in the online payments platforms like PayPal and China’s Ali-Pay. In only a few years, many people in China’s cities have stopped using cash altogether. In East Africa, the online banking pioneered by M-Pesa has benefited millions of people who previously lived outside the financial system.

These success stories show how Fintech can be a force for inclusion and development.

But Fintech also presents a serious challenge to traditional banking models. And as online platforms develop lending and investment products, effectively acting like banks, every regulator and supervisor must be concerned with whether the current regulatory framework is adequately encompassing these businesses. Here, too, work is underway, with Fintech firms interacting with regulatory authorities on a range of possible solutions.

But we are still talking about a business that fits broadly within our frame of reference for financial services. A case can be made that next level of this digital transformation—the emergence of crypto-currencies, and new transaction and settlement technologies—is moving well beyond familiar boundaries.

The so-called distributed ledger technology is dispensing with the backroom and moving to instantaneous transactions outside the reach of governments—and that includes the scope of monetary policy. We now see central bankers starting to talk about issuing their own virtual currencies and considering ways of regulating the bitcoins and others.

Here, too, the implications are enormous. National regulators and international standard-setters need to move quickly to define a regulatory setting that can address the issues that will emerge almost before we know it. At the same time, we cannot “throw out the baby with the bathwater” by imposing a regime that stifles innovation.

The Fund has just begun to address these issues within its mandate. Like cyber-threats, there is a great deal of work to do to understand the potential macroeconomic impact. But, here, we first have to define the playing field.

Conclusion

In conclusion, I’ve covered a lot of ground in a very short time—global recovery, income convergence, technological change. Some are issues we can get our arms around. But we are just beginning to gain purchase on the others.

Each will influence the fortunes of the global economy—on our watch and further down the road. It is our responsibility to face up to the opportunities and challenges with the tools at our disposal, or to invent the new toolkits that can make a difference. Thank you very much.

By Yaakov LappinOctober 29, 2017

EXECUTIVE SUMMARY: The F-35 Joint Strike Fighter aircraft is about to become fully operational in the Israel Air Force. An intelligence-gathering machine in a league of its own, the F-35 can evade the various enemy radar systems deployed in the northern arena. It will play a key role in Israel’s quest to stop Iran and its proxies from creating a threatening military outpost in Syria, and will also help Israel guard against Hezbollah’s heavily armed fortress in Lebanon. The new platform will also boost Israel’s long-range capabilities. 

The F-35 Joint Strike Fighter jet is poised to become a key tool to help Israel stop Iran and its proxies from creating a threatening military outpost in Syria. It will also play a leading role vis-à-vis Hezbollah’s heavily armed fortress in Lebanon.

The Lockheed Martin-produced aircraft, which is due to become fully operational in December of this year, brings with it a number of new capabilities that ideally suit Israel’s requirements in terms of monitoring and, when necessary, striking Iranian-Hezbollah-Syrian military targets in Syria and Lebanon. The aircraft is well suited for the mission of selectively targeting the ongoing Iranian-Hezbollah weapons trafficking program.

The F-35 is an intelligence-gathering machine in a league of its own. It is able to deploy a range of sensors to gather detailed information on events on the ground. It can fuse unprecedented quantities of intelligence automatically, then share it with other aircraft and with the Israel Air Force’s (IAF) ground control stations.

This intelligence can then be sent to Israel’s Military Intelligence Directorate for further analysis and for the creation of a large databank of targets.

This will provide Israel with a significantly enhanced picture of the activities of Iran, Hezbollah, and the Assad regime throughout the northern arena. It will also give Israel a strong starting position in the event of an escalation of the security situation, since these targets can be struck in the future.

In mid-October, an Assad regime SA-5 surface-to-air missile battery detected and fired upon Israeli jets, which were reportedly on an intelligence-gathering mission over Lebanon. That incident is an indication of a growing Iranian-Assad-Hezbollah determination to harass Israel’s intelligence operations.

But the F-35, with its stealth capabilities, should be able to evade enemy radar detection, making such crucial missions smoother.

Israeli F-35s could be sent to gather intelligence in contested air space filled with hostile radar systems and avoid detection.

IAF officials say they are also working on getting the F-35 to communicate effectively with the older, fourth-generation F-16s and F-15s. In combat situations, the F-35s would be able to spearhead operations, moving first into contested battle zones, striking enemy targets before being detected, and sending back valuable data to the fourth-generation aircraft.

Such capabilities will be critical going forward, as both Syria and Lebanon have become filled with a variety of surface-to-air missile systems. Several different types of missile batteries are in the possession of Hezbollah and the Assad regime.

In recent years, Russia has also stationed its advanced S-300 and S-400 batteries in Syria.

The F-35’s value in this increasingly complex and challenging environment is clear. It becomes even more pronounced when examining Israel’s need to improve its long-range strike capabilities in the event of a conflict with Iran. The F-35 has unique long-range capabilities.

By 2024, Israel will have two full squadrons of F-35 A jets – a total of 50 aircraft. The last 17 of these jets were purchased by Israel in August of this year.

The Planning and Organization Department within the IAF is in the midst of intensive preparations aimed at integrating the F-35 into daily operations.

The IAF expects the new aircraft to affect the way the rest of the air force operates and to boost Israeli capabilities across the board. The IDF’s ground forces, too, could experience its benefits. The F-35’s data could be relayed quickly to units on the ground, improving their lethality and battle space awareness.

For now, the IAF is continuing to gather vast quantities of intelligence and engage in low-profile action against the radical Shi’ite axis to the north – but it is also planning for the possibility of open conflict. If such conflict unfolds, the IAF will unleash waves of heavy firepower never before seen in the region’s military history. The F-35’s unique awareness of its combat environment will let it take a leading role in such operations.

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Yaakov Lappin is a Research Associate at the Begin-Sadat Center for Strategic Studies. He specializes in Israel’s defense establishment, military affairs, and the Middle Eastern strategic environment.

BESA Center Perspectives Papers are published through the generosity of the Greg Rosshandler Family