Israeli Gas to Be Pumped to Syria and Lebanon through Arab Pipeline to Curb Iran’s Influence

In this Monday, March 29, 2021 file photo, the capital city of Beirut remains in darkness during a power outage as the sun sets, in Lebanon. (AP)
In this Monday, March 29, 2021 file photo, the capital city of Beirut remains in darkness during a power outage as the sun sets, in Lebanon. (AP)
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Israeli Gas to Be Pumped to Syria and Lebanon through Arab Pipeline to Curb Iran’s Influence

In this Monday, March 29, 2021 file photo, the capital city of Beirut remains in darkness during a power outage as the sun sets, in Lebanon. (AP)
In this Monday, March 29, 2021 file photo, the capital city of Beirut remains in darkness during a power outage as the sun sets, in Lebanon. (AP)

The gas that will be pumped to Lebanon through the Arab pipeline, which stretches from Egypt, Jordan and Syria, is mostly Israeli. The electricity that will be sent to Lebanon through Syria and Jordan is also mostly Israeli, in line with an agreement that was drafted years ago by senior US diplomat Amos Hochstein.

Just days ago, Hochstein himself sponsored border negotiations between Lebanon and Israel. He informed Beirut that the Arab Gas Pipeline will be exempted from the Caesar Act sanctions imposed by Washington on Syria. The US official was also behind a Jordanian-Israeli deal in 2014 that sought to promote an “axis of moderation in the Middle East between moderate Arab countries and Israel.”

Beyond the technical and economic aspects of the new gas deal, several signs indicate that it is ultimately aimed at confronting Iran’s influence in Lebanon and Syria. The greatest evidence of this is that the deal was announced just days within Tehran’s announcement that it was sending oil derivatives to Lebanon through Syria. Beyond the region, Moscow and Washington are also seeing eye-to-eye on this issue despite their varying motives and goals.

A western official quoted a senior Russian official as saying that Israel was the one who encouraged Russia and the US to force the return of the Damascus regime to southern Syria and agree to delivering energy to Lebanon. Israel believes that such a move will help confront Iran’s influence in Lebanon and Syria, said the Russian official. Furthermore, CIA chief William Burns, who had toured the region in recent months, was also involved in the gas deal, which was also backed by National Security Council Coordinator for the Middle East and North Africa Brett McGurk.

Drafting the deal demanded extensive efforts and coordination: Establishing security in southern Syria where the gas and energy networks will pass through. Indeed, Russia led “settlements” in recent months that have seen the return of government forces along the border with Jordan. The opposition was forced out of the area, mines are being removed and Amman has since improved its relations with Damascus, with Jordan’s King Abdullah and Syrian President Bashar Assad holding a telephone conversation early in October. Moreover, the Amman-Damascus highway was reopened and discussions have been held over border security and providing incentives to Damascus.

Ministerial meetings between Lebanon, Egypt, Jordan and Syria have also been held to overcome obstacles in the operation of the gas pipeline and energy network. Also part of the deal is Washington’s pledge to Moscow that the World Bank will fund the project through assistance to Lebanon’s Electricite du Liban (EDL).

Notably, US Ambassador to Lebanon Dorothy Shea informed Lebanese President Michel Aoun that Washington had agreed to the proposal after holding telephone talks with the Egyptian and Israeli energy ministers. Those talks focused on “future plan to deliver Israeli gas for liquification in Egyptian plants before their export.” Israeli sources said the plan called for “delivering the Israeli gas through natural gas plants in Egypt ahead of their export to a third country.”

Egyptian and Israeli companies have struck several agreements over the years. In 2018, they agreed to the delivery of 64 billion cubic meters of Israeli gas from the Tamar and Leviathan Mediterranean fields to Egypt. The deal is valid for ten years and was worth 15 billion dollars. After Egypt declared self-sufficiency in gas production, it announced that the import of Israeli gas transforms it into a regional energy hub.

On the Jordanian front, Hochstein had kicked off negotiations over an electricity deal between Amman and Tel Aviv in 2012. Years later, Jordan’s National Electric Power Company reached an agreement with the American company representing the Leviathan field over the delivery of 45 cubic meters of gas for electricity production.

Washington’s interest in this project was piqued in order to provide political cover for the gas and electricity projects for Lebanon. American officials informed their Arab counterparts that the projects will be exempt from the Caesar Act that came into effect in mid-2020. Beirut, Cairo and Amman still demanded written guarantees and Hochstein informed the Lebanese officials of the exemptions.

In spite of the technical and political challenges, such as fixing the actual pipeline, removing mines and protecting the border, Washington has sought to remove legal obstacles and Moscow has sought to remove the military ones all for mainly political purposes, as opposed to economic ones.



Borderless Europe Fights Brain Drain as Talent Heads North

Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
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Borderless Europe Fights Brain Drain as Talent Heads North

Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo

Until recently aerospace engineer Pedro Monteiro figured he'd join many of his peers moving from Portugal to its richer European neighbors in the quest for a better-paid job once he completes his master's degree in Lisbon.
But tax breaks proposed by Portugal's government for young workers - up to a temporary 100% income tax exemption in some cases - plus help with housing are making him think twice.
"Previous governments left young people behind," said Monteiro, 23, who is studying engineering and industrial management at the Higher Technical Institute in the Portuguese capital. "The country needs us and we want to stay but we need to see signs from the government that they are implementing policies that will help."
Monteiro cites in particular the cost of buying or renting a home amid a housing crisis aggravated by the arrival of wealthy foreigners lured by easy residency rights and tax breaks, Reuters said.
He is doubtful the government's new measures will be enough.
"Some of my friends are now working abroad and earn substantially more money... and have better career development opportunities," he said. "I'm a little bit skeptical concerning my job opportunities here in Portugal."
Portugal is the latest country in Europe to seek to tackle a brain drain holding back its economy. Tax breaks for young workers in the budget currently going through parliament will take effect next year and could benefit as many as 400,000 young people at an annual cost of 525 million euros.
Talent flight to wealthier countries of the north is a problem Portugal shares with several others in southern and central Europe, as workers take advantage of freedom of movement rules within the trade bloc. Countries including Italy have tried other schemes to counter the flight, with mixed results.
By exacerbating regional labor shortages and depriving poorer countries of tax revenues, it is yet another hurdle for the EU as it tries to improve its ebbing economic growth while addressing population decline and lagging labor productivity.
Donald Trump's victory in US elections this month raises the stakes, with the risk of across-the-board trade tariffs on European exports of at least 10% - a move that economists say could turn Europe's anaemic growth into outright recession.
About 2.3 million people born in Portugal, or 23% of its population, currently live abroad, according to Portugal's Emigration Observatory. That includes 850,000 Portuguese nationals aged 15-39, or about 30% of young Portuguese and 12.6% of its working-age population.
More concerning still is that about 40% of 50,000 people who graduate from universities or technical colleges emigrate each year, according to a study by Business Roundtable Portugal and Deloitte based on official statistics, costing Portugal billions of euros in lost income tax revenue and social security contributions.
DEMOGRAPHIC HELL
"This is not a country for young people," said Pedro Ginjeira do Nascimento, executive director of Business Roundtable Portugal, which represents 43 of the largest companies in the nation of 10 million people. "Portugal is experiencing a true demographic hell because the country is unable to create conditions to retain and attract young talent."
Internal migration within the EU is partly driven by the disparity in wages between its member states. Some economic migrants also say they are looking for better benefits such as pensions and healthcare and less rigid, hierarchichal structures that give more responsibility to those in junior roles.
Concerns are mounting over the long-term viability of Europe's economic model with its rapidly ageing population and failure to win substantial shares of high-growth markets of the future, from tech to renewable energy.
Presenting a raft of reform proposals aimed at boosting local innovation and investment, former European Central Bank chief Mario Draghi said in September the region faced a "slow agony" of decline if it did not compete more effectively.
Eszter Czovek, 45, and her husband are moving from Hungary to Austria, where workers earn an average 40.9 euros ($29.95) per hour compared to 12.8 euros per hour in Hungary, the largest wage gap between neighboring countries in the EU.
The number of Hungarians living in Austria increased to 107,264 by the beginning of 2024 from just 14,151 when Hungary joined the EU.
Czovek's husband, who works in construction, was offered a job in Austria, while she has worked in media and accounting at various multinationals. She cited better pay, pensions, work conditions and healthcare as motives for moving. She also mentioned her concern over the political situation in Hungary, which she fears might join Britain in leaving the EU.
"There was a change of regime here in 1989 and 30 years later we are still waiting for the miracle that will see us catch up with Austria," Czovek said of the revolution over three decades ago that ended communist rule in Hungary.
Since Brexit, the Netherlands has replaced Britain as a preferred destination for Portuguese talent while Germany and Scandinavian countries are also popular.
Many Europeans still head to the United States in search of better jobs - about 4.7 million were living there in 2022, according to the Washington-based Migration Policy Institute, which nonetheless notes a long-term decline since the 1960s.
In 2023, 4,892 Portuguese emigrated to the Netherlands, surpassing Britain for the first time, which in 2019 received 24,500 Portuguese.
At home, they face the eighth-highest tax burden in the Organization for Economic Co-operation and Development (OECD) even as house prices rose 186% and rents by 94% since 2015, according to property specialists Confidencial Imobiliario.
A single person in Portugal without children earned an average of 16,943 euros after tax in 2023 compared to 45,429 euros in the Netherlands, according to Eurostat.
Portugal will offer under 35s earning up to 28,000 euros a year a 100% tax exemption during their first year of work, gradually reducing the benefit to a 25% deduction between the eighth and tenth years.
Young people would also be exempted from transaction taxes and stamp duty when buying their first home as well as access to loans guaranteed by the state and rent subsidies.
"We are designing a solid package that tries to solve the main reasons why the young leave," Cabinet Minister Antonio Leitao Amaro said in an interview with Reuters.
'THINGS WON'T CHANGE'
Leitao Amaro said he did not know for sure if the tax breaks would work but that his government, which came into office in April, had to try something new.
"If we don't act ambitiously, things won't change and Portugal will continue down this path," he said.
The Italian government has already found that tax breaks used as incentives are costly and open to fraud.
In January, Italy abruptly curtailed its own scheme that was costing 1.3 billion euros in lost tax revenue, even as it lured tech workers such as Alessandra Mariani back home.
Before 2024, returners were offered a 70% tax break for five years, extendable for another five years in certain circumstances. Now, it plans to offer a slimmed-down scheme targeting specific skills after it attracted only 1,200 teachers or researchers - areas where Italy has a particular shortage.
Mariani said the incentives were key to persuading her to return to Milan in 2021 by allowing her to maintain the same standard of living she enjoyed in London.
"Had the opportunity been the same without the scheme, I would not have done it at all," said Mariani, now working at the Italian arm of the same large tech company.
With her tax breaks poised to be phased out by 2026 unless she buys a house or has a child, Mariani faces a drop in salary and she said she's once again eyeing the exit door.