19 July 2006

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Business Today

Malta calls for immediate cease-fire in Lebanon

James Debono

As the toll of civilian deaths in Lebanon continued to rise, with 230 Lebanese men and women losing their life since the beginning of Israeli air strikes seven days ago, Malta joins other EU countries calling for an immediate cease-fire.
“Our common European position is clear - we demand an immediate halt to hostilities,” Frendo tells Business Today, minutes after a briefing by EU foreign policy chief Javier Solana to all EU foreign ministers on the issue on Monday.
Concern is also mounting on the impact of the current crisis on the economy as oil prices reached a record high on Monday with former finance minister John Dalli warning that an escalation of the current conflict would also undermine tourism.
Commenting on the current crisis, Minister Frendo acknowledges Israel’s “sacrosanct right” to defend itself from Hizbollah attacks but he also considers the Israeli reaction as lacking a sense of proportion.
Frendo’s position reflects a general consensus among Maltese politicians that the Israelis have over reacted to the Hizbollah attacks.
In an interview with Business Today former President Guido de Marco describes the Israeli response as “ten eyes for an eye, ten teeth for a tooth.”
Former foreign minister George Vella also concurs, adding that the situation in Lebanon is only a symptom of what he referred to as the crux of the matter: Israeli defiance of UN resolution 242 which calls on Israel to withdraw to its 1967 borders.
Israel had started bombarding Lebanon following the abduction of two Israeli soldiers by Hizbollah militants who crossed Lebanon’s southern border with Israel.
John Dalli, who for some time also occupied the post of foreign minister, believes that the newly elected Israeli government is flexing its muscles to pass the message that it is tough and will not be pushed about.
“They have interpreted the abduction of its soldiers as a test on their resolve and that is why they have reacted in such a disproportionate way.”
Minister Frendo expresses his concern that the current crisis is destabilising Lebanon, a country that is finding its way back to peace after decades of war and foreign interference.

“Our fear is that the current crisis will destabilise the democratically elected Lebanese government and the balance between the different religious components of Lebanese society,” Frendo tells Business Today.
The foreign minister is also concerned that Israeli military action will only strengthen Hizbollah.
“Although Hizbollah is represented in the Lebanese government, so far it does not represent the mainstream of Lebanese politics.”
Frendo also supports a peacekeeping mission operating under a United Nations mandate to secure the Israeli-Lebanese border.
Asked whether the EU would be willing to negotiate with militant groups like Hamas and Hizbollah, Frendo insists Europe’s interlocutor on the Palestinian question is President Mahmoud Abbas.
“In Lebanon our only interlocutor is the democratically elected Lebanese government.”
On this issue former foreign minister George Vella is more flexible.
He points out that the European Union was quick in stopping aid to Hamas after heralding the Palestinian elections as free and fair.
“Hamas was not given enough time to adapt itself to governmental responsibilities. President Abbas, even by using the threat of a referendum was gradually succeeding in persuading Hamas to sign a document tacitly accepting Israel’s right to exist. But unfortunately by arresting half the Hamas-led government, Israel is not helping Abbas.”
Vella also points out the pressure being levelled against Iran by the international community could be a factor contributing to the escalation of the crisis in the Middle East.
“Iran could be trying to deflect attention on its nuclear ambitions. Everyone knows that Iran has strong ties with Hizbollah,” Vella says.
Both former President de Marco and Dr George Vella concur that problems in Lebanon and Palestine are interlocked. The former Labour minister insists that peace will remain elusive until Israel abides to resolution 242 and withdraws from Palestinian lands occupied by Israel since 1967. Vella is however sceptical that peace can be achieved by sheer talk.
“An international conference would be useless unless its decisions can be enforced,” he says.
Vella also considers the road map process as a failure since Israel embarked on unilateral action by building a separation wall and withdrawing from Gaza without prior agreement with the Palestinians.
“Only the United Nations has the legitimacy to enforce an agreement. In the past Israel has always refused the presence of a peacekeeping force on its territory but this is the only way to bring about peace.”
The current crisis is expected to have a direct impact on consumers and businesses alike. On Monday the price of crude oil reached a record peak of USD78 per barrel prompting concern of another hike in fuel prices which could strangle the Maltese economy.
The geopolitical uncertainty created by the current crisis, and the potential escalation in the region, is driving raw material prices up the roof says former finance minister John Dalli.
“One can expect the prices of other commodities to follow suit. This is very detrimental to our economy as it will put pressure on our prices, affecting our competitiveness and our inflation.”
The price of oil remained volatile on Tuesday as the conflict in the Middle East continued.
Prices rebounded slightly having fallen back from near record highs on Monday amid hopes Israel may scale back its fighting against Lebanese guerrillas.
Although neither Lebanon nor Israel are major oil producers, some investors fear the conflict could quickly destabilise the wider Middle East region, one of the world’s most important oil centres.
The current crisis could also have a negative impact on the ailing tourism industry.
“In such an uncertain scenario many travellers will be rethinking their travelling plans, preferring to stay at home to go to locations that are nearby and that can be accessed by road transport,” Dalli tells Business Today.


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