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Oil rich Libyan people are on the edge because of economic crisis

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While the Prime Minister of the Government of National Unity Abdülhamid Dibeybe and the Head of the Government of Stability, Fathi Bashagha, elected by the House of Representatives, are fighting for power, Libyans take to the streets due to the long-lasting power cuts, the inadequacy of basic services and rising prices.

Power outages, which lasted more than 15 hours a day and became routine in many parts of Libya, became a more important problem as the summer temperatures increased. In the country where youth unemployment exceeds 50 percent, food prices, especially bread, are constantly increasing. In addition to poor living conditions, the closure of the country’s largest oil fields as political leverage in early April increased the unrest. In the face of this picture, the last straw was that the two political poles based in Tripoli and Benghazi left the table where they sat at the end of June without an agreement for a constitutional framework and roadmap to the elections.

A group organized through social media called for demonstrations and civil disobedience in all cities of Libya on July 1 with the slogan “Youth Revolution”. Protests were held at many points in Benghazi and other eastern and southern cities, especially in the capital Tripoli, demanding that the legislative and executive organs be abolished, a state of emergency be declared and elections be held as soon as possible in the country. A group of activists raided the House of Representatives, setting parts of the building on fire and releasing classified documents they had obtained from the House. The documents revealed that 69 million Libyan dinars ($ 14 million) were spent on members of parliament for personal expenses such as food, drink and oil purchased for personal cars while the public was in the grip of the economic crisis. While the protests may seem spontaneous, this highlights the potential for growing unrest to enhance violence.

Political division

In Libya, where there are two power centers based in Tripoli and Benghazi, political and military wings have been holding reconciliation meetings for two years under the auspices of the United Nations (UN). During the political talks in Geneva, it was decided to hold the presidential and parliamentary elections in the country on December 24th, 2021, but the elections could not be held on the scheduled date. The House of Representatives in Tobruk elected Fathi Bashagha as prime minister on February 10th, when most of the deputies in the west of the country did not attend, on the grounds that the mandate of the current National Unity Government (UBH) expired on December 24th, 2021, and on March 1st, gave a vote of confidence to the Bashagha government. Prime Minister of UBH, Abdulhamid Dibeybe, accused the House of Representatives of deviating from the roadmap determined in the Geneva Agreement, and said that he was at his post and that he would hand over the task only to an elected government.

The last attempt at reconciliation between the two poles was held in June. The negotiations between the Libyan State Supreme Council and the House of Representatives, which were held under the leadership of the UN in Cairo, the capital of Egypt, did not yield any results. There was no consensus in the meetings held in Geneva on 28-30 June with the President of the State Supreme Council Khalid al-Mishri and the TM President Akile Salih and the delegations with them, and Fathi Bashagha, who was elected Prime Minister by Tobruk, also threatened to enter the capital Tripoli by force. Having raised the same threat before, Bashagha has not been able to go to Tripoli and take over the government until today.

Crashed


The internal conflicts that have been going on since 2011, triggered by foreign powers cost Libya $576 billion (according to the UN’s 2020 report), and destroyed Libya’s socioeconomic structure. The closure of oil fields, which account for more than 90 percent of state revenues, for political purposes led the country to spend without being able to save, and the state’s coffers were quickly emptied. The devaluation decision of the Central Bank of Libya, implemented in January 2021, reduced the purchasing power by three and a half times. The depreciation of the Libyan dinar rapidly increased the price of major consumer goods, which were imported, and the cost of fixing the problems in the country increased.

The reduction of oil production as a political trump in Africa’s richest oil country, the fact that the names of Libyan politicians from both wings cannot reach a political consensus and are frequently involved in bribery and corruption scandals create unease among the people struggling with the economic crisis. It is also known that behind the scenes of the current division lies the dispute over who will control the Libyan budget. The point reached today is a complete disaster; UBH in Tripoli controls the Central Bank, that is, state revenues, but has no official budget. The Bashagha government, elected by the House of Representatives, which has the power to issue a budget, has an official budget though no revenue.

It is alleged that UBH, which has not had an official budget since 2019, is trying to meet its cash needs with short-term tactics by liquidating state-owned cash-rich companies. It is difficult to predict the long-term damage of these temporary solutions, which alleviate the cost of the crisis in the short term. Despite its rich natural resources and great manpower potential, Libya is now exhausted by political conflicts, restless and very impoverished compared to 11 years ago.

EAST MEDITERRANEAN

British bases in Southern Cyprus and Gibraltar on high alert

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The United Kingdom has convened emergency security talks in response to potential threats against its military bases in Southern Cyprus and Gibraltar, reportedly stemming from heightened tensions with Russia. The threat level at these bases has been assessed as “significant,” indicating that an attack is considered likely.

According to The Telegraph, senior defense officials have engaged in urgent discussions with regional authorities to address these risks. This follows Russian President Vladimir Putin’s warning that the UK could be targeted in retaliation for Ukraine’s use of British Storm Shadow cruise missiles.

A source familiar with the matter stated, “Southern Cyprus is much more vulnerable to attack. Russia could arm Hezbollah or another proxy group to launch an attack through Iran. One of our biggest concerns is the possibility that the Houthis could be armed to launch an attack due to their proximity to Cyprus.”

The current threat level to British military bases, categorized as “significant,” places it in the middle of the UK’s five-point threat scale. This scale ranges from “low” to “critical,” with a significant level indicating that an attack is highly likely in the near future.

Government sources confirmed that these security reviews are ongoing. However, they emphasized that such discussions are part of routine procedures to assess and enhance security measures.

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Germany pushes for ‘positive’ message to Turkey at EU summit

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Germany has stepped up pressure in recent days for a ‘positive’ message on the future of EU-Turkey relations to be included in the final declaration of the EU summit, Euractiv has learned.

Two EU diplomats confirmed to Euractiv that Berlin is pushing for the inclusion of a paragraph in the final text of the EU summit conclusions urging the European Commission to continue monitoring the development of EU-Turkey relations.

After months of escalating relations between Greece, Cyprus and Turkey, the EU’s chief diplomat Josep Borrell prepared a report on the state of play of EU-Turkey political, economic and trade relations in early 2023.

Although the first report was completed in November 2023, it could not be discussed due to the busy agenda of EU leaders at the last three summits.

However, according to Euractiv, Cyprus wanted a “proper” discussion at this summit before sending a “positive” message, as suggested by Germany.

An EU diplomat told Euractiv that European Council President Charles Michel was not keen to discuss the issue because of the heavy agenda.

Relations with Athens, migration and satisfaction with sanctions against Russia

According to Euractiv, the European Commission would like to see a reference to a possible EU-Turkey discussion between EU leaders in the final declaration and, at best, a reference to Borrell’s November report.

According to EU officials, positive steps have been taken in recent months, with improved relations with Greece (especially on migration) and special measures taken against Russian sanctions-busting.

However, there are still ‘some concerns’ about President Recep Tayyip Erdoğan’s description of Hamas as a ‘liberation group fighting to preserve Palestinian land’ rather than a ‘terrorist organisation’.

Cyprus issue stands out as main obstacle

According to Euractiv, there are also some concerns about Ankara’s stance on Cyprus. Sources in Athens stress that Greece could accept a paragraph calling on the Commission to continue the EU-Turkey situation reports.

However, the same sources said that this paragraph should include the following statement from the previous EUCO conclusions “The European Council reiterates the EU’s readiness to engage with Turkey in a gradual, proportionate and reversible way to enhance cooperation in various areas of common interest”.

In addition, the Greek Cypriot side asked for the inclusion of a sentence clarifying that the European Council should have the “last word” on any political decision concerning Turkey.

Cyprus asked for the inclusion of an EU representative on the Cyprus problem, but not all member states agree, Euractiv reported.

Finally, Cyprus asked for the inclusion of the EU’s line on the Cyprus problem, i.e. a bi-communal, bi-national federal solution, in opposition to Turkey’s efforts for a two-state solution.

Athens and Nicosia react to Erdoğan’s comments

Tensions have eased in recent months as Greece and Turkey have engaged in dialogue to improve bilateral relations.

But earlier this week Erdogan provoked the ire of Athens and Nicosia when he said: “Maybe even if we were burdened with the south, I say this as a son of today, there would be no more south-north, there would be no more south-north, Cyprus would be completely ours.”

Cyprus said the statement was “unacceptable”. In Greece, a source in the Greek Foreign Ministry argued that Erdogan’s “statements on the illegal occupation of Cyprus in 1974 constitute a blatant distortion of historical facts and an insult to the memory of the victims”.

The source pointed out that these remarks were made at a time when efforts are underway to resume negotiations under the auspices of the UN, within the framework of UN Security Council resolutions, for the settlement of the Cyprus problem.

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Tehran-Riyadh rapprochement may be the key in Arash/Durra

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Tehran has called for negotiations over the disputed gas field between Iran, Kuwait and Saudi Arabia. A Riyadh-Tehran rapprochement could help bring the parties to a settlement in the gas field, which has not been shared since the 1960s.

After Iran announced it would drill in the Arash/Durra gas field in the Persian Gulf, Kuwait and then Saudi Arabia claimed that the field belonged to them.

The controversy started when Mohsen Khojestemehr, Managing Director of the National Iranian Oil Company, announced that “preparations to start drilling in the oil field have been completed.” “The board of directors of the National Oil Company has been allocated a significant amount of resources to implement the development plan for this field,” Khojestemehr said, according to Iranian state media.

Following Iran’s announcement, an anonymous Kuwaiti Foreign Ministry official said that the Arash/Durra Gas Field in the Persian Gulf and its natural wealth, the subject of the dispute with Iran, belongs entirely to Kuwait and Saudi Arabia. The official called on Iran to sit down with Kuwait and Saudi Arabia and start negotiations to define the maritime border between the two countries.

A day later, a similar call came from Saudi Arabia. Riyadh argued that the entire Durra field belongs to Saudi Arabia and Kuwait and urged Iran to “sit down at the table”.

The Arash/Durra Gas Field in the Persian Gulf, discovered in 1967, has been causing problems between Iran and Kuwait for years. The Iranian side of the gas field is called Arash, while the Kuwaiti side is known as Durra.

Saudi Arabia and Kuwait signed an agreement in March 2022 to develop the Durra Gas Field. Iran, on the other hand, argued that the agreement was “illegal” and announced that it would start drilling in the region.

Kuwait and Saudi Arabia had previously called on Iran to negotiate on this issue, but there was no response from Tehran.

Robin Mills, CEO of Dubai-based Qamar Energy, told The National, “The Saudi-Iran restoration of diplomatic relations included talk of developing joint oil fields. Kuwait has held negotiations with Iran on the border but maintains its position that Al Durra belongs entirely to Kuwait and Saudi Arabia”.

Nora Bakhsh, a researcher on Saudi Arabia and the Gulf, said that the rapprochement between Iran and Saudi Arabia was looking positive so far, but these negotiations are still in the beginning stages and Tehran’s claims to Al Durra could pose additional challenges to them.

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