Netanyahu’s rivals try to outdo him over Iran

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Good morning from the Financial Times. Today is Tuesday, March 24th, and this is your FT News briefing.

An unlikely country is acting as lead mediator between the US and Iran, and the wartime energy crisis is now leverage for EU-US trade negotiations. Plus a few of Israel's opposition parties see an opportunity in the war in Iran. There's no debate at all really among Jewish Israeli parties about Whether or not the war is justified, the debate is about how best to wage it. I'm Mark Filippino, and here's the news you need to start your day.

Pakistan is taking the lead to try and broker an end to the war in the Middle East. The nation has pitched its capital, Islamabad, as a possible venue for talks as early as this week. It would involve senior figures from the Trump administration and Iran. That's according to two officials familiar with the discussions who said initial talks took place on Sunday.

A day later, US President Donald Trump posted on social media that he was delaying his threat to quote obliterate Iran's power plants after quote very good and productive conversations with Tehran. Now Iran's foreign ministry denied there had been any direct negotiations with the US since the start of the war, but said that some regional states were involved in mediation efforts.

Even still, markets breathed a sigh of relief after Trump's post. The price of Brent Crude dropped more than 10% to trade around$100 a barrel. US stocks shot up and the SP 500 ended Monday up a little bit more than 1%.

The war in Iran has severely disrupted global energy trading. Now the US is trying to use that as leverage as it finalizes a trade deal with the European Union. US President Trump's ambassador to the block has warned that the agreement must be passed without amendments, and if it's not, the EU will risk losing favorable access to liquefied natural gas shipments. Henry Foy, the FT's Brussels bureau chief, joins me now to talk about that. Hey Henry. Hi Mark.

So for this story, Henry, you spoke to Andrew Puzder. He's America's ambassador to the EU. Why is he issuing this warning and what would losing favorable access actually look like for the EU? So Mark, on Thursday the European Parliament is due to vote to essentially approve the trade deal between the US and the EU, which was signed, as you may recall, back in August of last

year. What the European Parliament has tried to do is add in a few extra things that it wants, a bit of a wish list in terms of what would happen if the Americans broke certain promises they'd made and a few kind of safeguards. The Americans are saying they don't want that. They want the exact same deal that was agreed between US President Donald Trump and European Commission President Ursula.

von der Leyen, what he's saying to us about gas is that the other part of this trade deal, which was seven hundred and fifty billion dollars of increased energy sales from US to Europe in the form of gas. oil and civil nuclear technologies would be at risk. Those favorable terms that the Americans pledged to give to Europeans to buy more of this stuff would go away. He said, quote, We'd be back to square one if the Turnbury deal, as it's referred to,

isn't implemented. So it's not a direct threat of we'll cut you off from gas. It's that stuff you thought you were going to get in the future on good terms might not be coming. And how do you think this threat is going to go down with Brussels? Well, I mean, this is the exact perfect time for the Americans to make this threat. The closure of the Strait of Hurmuz by the Iranians and the targeting of gas

infrastructure around the Gulf, specifically Qatar, has really, really hit European gas supplies. European gas prices are roughly double what they were at the start. of the year. Qatar in particular is a very, very important gas supplier to Europe, especially countries

such as Italy. Of course, we don't buy pipeline gas from Russia anymore, and Russian LNG supplies are being wound down in response to the war in Ukraine. So the Europeans really need gas supplies right now. They were banking on this coming from the Americans. And so It is another major concern on top of a a big pile of worries here in Brussels over how Europe continues to get access to gas and at what price.

Henry, you mentioned that the European Parliament is due to ratify this trade deal on Thursday, given the threat from Puzzler. How likely is it that the EU feels like it can backtrack on some of this deal? I think what you'll see on Thursday is a big debate, lots of shouting in Parliament about what we should and shouldn't be giving away to the Americans, but ultimately it will agree to ratify this. You'll then have a certain amount of negotiations with the European Member States to finally

agree it. But I think what will come out of this is is an agreement that is almost exactly the same as the one that was agreed between Trump and von der Leyen. And the changes that are made will probably be acceptable to the Americans. Essentially right now, the the Europeans are not in a position to use any kind of leverage, especially if the Americans are talking about

LNG supplies. I just one thing I want to add, Mark. It's kind of amusing. When Trump added on this seven hundred and fifty billion dollar energy pledge to the trade deal. A lot of Europeans said that was outrageous. A lot of Europeans said we shouldn't be buying it. It's fossil fuels. We want to be weaning ourselves off. And also it feels like blackmail that Trump is demanding we buy this stuff.

Now, in March, people are saying, Oh my goodness, we need this American gas desperately. And so it really is interesting how that package of of energy deals has flipped from being something Europe felt was a burden to something they really desperately need to activate. Yeah, tide definitely turned. Henry Foyes, the FT's Brussels bureau chief. Thanks so much, Henry. Chizwak.

Car makers are panicked buying aluminum. They're worried that supplies could run out in months if the Middle East conflict continues. You see, producers in the Gulf have cut production. The war has disrupted their power supplies and shipping routes. And the Gulf is a major aluminum exporter. Europe gets 14% of its imports from the region. Japan gets twenty-five percent.

So now car makers are trying to build up stockpiles of the metal. Traders in Japan even said the country's car manufacturers were considering buying supplies from Russia. They've been boycotting the country since its full scale invasion of Ukraine.

Israel's opposition parties are not only on board with Prime Minister Benjamin Netanyahu's assault on Iran, they want the attacks to go even further. The war on Iran is incredibly popular in Israel, and the country's more liberal politicians have turned hawkish too. I'm joined now by the FT's James Shatter, our Jerusalem correspondent. Hi, James. Hi. So James, how does the Israeli public feel about the offensive against Iran?

It's very popular, particularly by the standards of Israeli politics where you know consensus is is a pretty rare commodity. There was a poll earlier this month by the Israel Democracy Institute. which found that overall eighty two percent of Israelis support the war. Uh however there was a divide between um the opinions of Jewish Israelis and the opinions of Palestinian citizens of Israel who make up the minority. Uh among Jewish Israelis, ninety three percent

of people support the war, which is a you know an incredibly high figure um for sort of any issue really. Whereas among Palestinian citizens of Israel, um most people were opposed to the war, only twenty six percent of people supported it. Got it. And now how has that played out with Israel's opposition parties?

Well, the way they've reacted sort of reflects those polls really. So among the parties that draw the majority of their votes from Palestinian citizens of Israel, there's been opposition to the war. They've been, you know, outspoken uh in opposing it.

But among the parties, the Zionist parties that uh draw the majority of their votes from uh Jewish Israelis, there's been you know support across the board for the war. The debate is about how best to wage it uh and how to capitalize on the results.

of the war. So you there have been parties like uh the left wing Democrats, who are headed by Yay Golan, who's a former deputy head of the Israeli military, who've you know been very supporting the war but said that Israel needs to find a way to turn its military achievements into diplomatic achievements and criticise the government for failing to have an obvious plan of how to do that.

other parties um urge the government to be more aggressive. So Avikdoor Lieberman, who heads the uh Israel Betaining Party, would be one example of that, as well as interestingly Yaya Lapid, who heads the the centrist Yeshhatid Party, which would normally find itself to the left of Netanyahu and his coalition, but on the case of Iran, he's actually been calling for policies that more hawkish than, at least in some respects, than what the government has done so far.

James, what does this mean for Netanyahu's party in the coalition government? I know that Israel has to hold a parliamentary election by October of this year. Yes, that's right. And I think both Netanyahu's allies and his opponents think that he will try and make the war a big part of his campaign. He's you know, basically ever since October the seventh when Hamas attacked

Israel in what is widely regarded as one of the biggest security failures in the country's history. Netanyahu's been under pressure for being in charge uh when those failings took place. And he's been seeking to rehabilitate his reputation as someone who is able to guarantee Israel's security.

You know, he rebranded the war in Gaza as uh you know the war of redemption and since then Israel has gone on to fight on multiple fronts. It's fought in Lebanon, it's uh you know now fighting in Iran. Certainly if you look at the polls so far, they haven't really shifted in his favour and i in a similar way in during the the twelve day war

with Iran last year, although Netanyahu's Likud Party got a short lived bump in its favour in the polls after the war, that came at the expense of his coalition partners. So it it's possible that the war might not really shift And what about the flip side of this? Do you think that Israel's opposition parties can actually gain public support from the conflict in Iran? I think it depends a lot on how the war ends, but I think the problem for both sides is that

security isn't really an issue where either of them has all the cards. So I think it's totally possible that actually Other issues, you know, domestic issues which dominated Israeli politics uh before the war could end up being just as decisive uh as as the war itself. James Shatter is the FT's Jerusalem correspondent. Thanks, James. Thank you very much.

You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News briefing. Check back tomorrow for the latest business news. Investing with Schwab is like spending a Saturday at a great farmer's market. You can fill your reusable tote with a bit of everything.

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