Transcript: The west is losing patience with Israel

This is an audio transcript of the FT News Briefing podcast episode: ‘The west is losing patience with Israel’

Marc Filippino
Good morning from the Financial Times. Today is Thursday, December 14th. And this is your FT News Briefing.

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The Federal Reserve is keeping interest rates steady. COP28 pulled out a last-minute deal on fossil fuels, and it looks like Germany is going to steer clear of a financial shutdown. Plus, can Israel keep its approach to attacking Hamas without losing the support of the west?

John Paul Rathbone
In Israel, the mood, the desire to keep on fighting is very strong indeed, and they feel wildly misunderstood by the rest of the world.

Marc Filippino
I’m Marc Filippino, and here’s the news you need to start your day.

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The Federal Reserve is keeping interest rates at a 22-year high, but it did indicate that there’s some light at the end of the tunnel. Fed chair Jay Powell suggested at yesterday’s press conference that rates were probably at or near their peak for this tightening cycle. We also got projections from Fed officials about rate cuts. They showed that interest rates could come down as much as 75 basis points next year. Investors were very, very excited by all this news and the S&P 500 jumped by 1.4 per cent. We’ll get even more monetary policy news soon. Both the European Central Bank and the Bank of England meet today.

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Countries at the UN COP28 climate summit reached a deal on Wednesday to transition away from fossil fuels. Some attendees have been trying for years to pass an agreement like this, but it didn’t come easy. Here to talk about the mad scramble for a compromise is the FT’s Attracta Mooney. She’s in the United Arab Emirates covering the summit. Hi, Attracta.

Attracta Mooney
Hello.

Marc Filippino
OK. So how did they get this deal over the finish line?

Attracta Mooney
Oh, it’s been a brutal 36 hours here. On Monday evening, they released a draft text, the kind of latest iteration of this agreement. And it just caused panic across the Expo site in Dubai. So within minutes of that, you had ministers from across the EU rushing out doors, going around briefing press, going out around meeting countries, because that draft text that came out on Monday it kind of listed options that countries could do. And one of those options was a kind of shifting away from fossil fuels, but it was given a could-do rather than a would-do. And then on Tuesday night, Sultan al-Jaber, the COP28 president who also heads up the Abu Dhabi National Oil Company, held this series of meetings that started kind of late in the evening, but went on until about three o’clock in the morning. And then by the morning, so was the text, and it just got signed off straight away. No one objected, which is not that common for a big text like this.

Marc Filippino
Mmm. Attracta, what’s the most important thing in this deal?

Attracta Mooney
Well, I guess the most important thing that’s in the agreement is that it mentions fossil fuels. And at the start of this year, I’m not sure everyone was convinced that we would have any sort of agreement around the future of fossil fuels. This COP has been hosted by the United Arab Emirates, which is a major oil and gas producer, and it has been a compromise text. That’s the one word you’ll hear all day here. And that is because they’ve had to try and get almost 200 countries to agree to this. So it’s not as ambitious as some island-states particularly would like, because they are particularly vulnerable to climate change and rising sea levels. And it is more ambitious than some oil and gas producers would like. So it’s trying to please everyone and has pleased no one in the process.

Marc Filippino
Oh, compromise, halfway happy. But it makes sense that not everyone is thrilled about it. What is missing from this agreement?

Attracta Mooney
So the kind of issues with it is that it doesn’t set any hard and fast deadlines or for how to do this or when to do it by. And they want it to reach global net zero emissions by 2050. But that’s quite a tall order because at the moment we just keep increasing emissions when we need to be reducing them. So it’s very ambitious but less clear how we achieve it.

Marc Filippino
I feel like every time we go into a COP or we walk away from a COP climate summit, there are questions about the effectiveness of a meeting like this. Did you think that this was ultimately a win for the fight against climate change?

Attracta Mooney
I think that the fact that we have all fossil fuels mentioned in a COP text for the first time in almost 30 years is a win. You could argue that it’s kind of crazy that we haven’t addressed the burning of fossil fuels, which is the biggest contributor to global warming before this. But anyway, the COP process, there’s been lots of questions about it over the last few days. As always, as you said, the talks have been kind of dominated by the rules Saudi Arabia and other OPEC countries are playing or were playing in trying to get a less ambitious agreement. And there was a lot of diplomacy going on over the last 36 hours.

Marc Filippino
Attracta Mooney is the FT’s climate correspondent. Thanks, Attracta.

Attracta Mooney
Thank you very much.

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Marc Filippino
So the COP28 agreement wasn’t the only last-minute deal yesterday. Germany’s government pulled together its budget for 2024, and it means that the country will avoid a shutdown in the new year. The agreement filled a €17bn hole in the budget. The hole was a result of a landmark court ruling last month. To get that budget deal, though, German chancellor Olaf Scholz had to agree to painful cuts to green energy, construction subsidies, and transportation spending, funding for Ukraine and social security went untouched.

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The war between Israel and Hamas has been raging for almost two and a half months now. The number of casualties is in the tens of thousands. And international pressure is reaching a boiling point. Here to talk about where the war stands is the FT’s John Paul Rathbone. He’s in Tel Aviv. Hey, JP.

John Paul Rathbone
Hi, Marc.

Marc Filippino
I hear some background noise. Is that a siren or someone playing music?

John Paul Rathbone
It’s the muezzin.

Marc Filippino
What’s that?

John Paul Rathbone
The call to prayer.

Marc Filippino
Tell me more about that, JP. What’s the significance in Tel Aviv?

John Paul Rathbone
Well, there’s a large Muslim population around where I live, and it’s just a reminder of how complicated the situation here is.

Marc Filippino
Yeah. What is the mood like?

John Paul Rathbone
Well, if you talk to most Israeli Jews, the mood is still very raw. It’s as though they’ve lost a layer of their skin. And although the Hamas attack took place two months ago, hundreds of thousands of reservists have been called up. And every day there are reminders of Israeli soldiers who’ve lost their life. And then amongst the Palestinian Israelis and Arab Israelis, the mood is mixed. The casualties in the IDF, the Israel Defense Forces, are so far 115 and 619 wounded, which of course is a much, much smaller number than the nearly 19,000 civilians that are estimated to have been killed in Gaza by the health ministry there and the 50,000 wounded. But each side has its own narrative. And in Israel, the mood, the desire to keep on fighting is very strong indeed. And they feel wildly misunderstood by the rest of the world. That’s how it looks like from Israel.

Marc Filippino
So the IDF has been inside Gaza for more than a month at this point. How much of the strip does Israel control?

John Paul Rathbone
Good question and hard to answer. I mean, the general feeling is the north is under Israeli control and the south is not. But you have to caveat that because there’s also the underground aspect. There’s a vast tunnel network that’s as large as the London Underground, which Israeli forces have only just begun to penetrate and to deal with. And at the same time, there are these pockets of resistance in the northern Gaza, which continue to cause a lot of trouble for the Israeli troops.

Marc Filippino
I’m glad that you brought up feeling misunderstood by the rest of the world because just the other day, US President Joe Biden said basically that that Israel is losing global support. What does that mean for the way Israel conducts the rest of the war? Does it mean that they’ll thump down soon?

John Paul Rathbone
So you’ve got lots of Davids and Goliaths here. Gaza is tiny compared to Israel, and Israel has the most sophisticated and lethal military force in the region. But Israel, compared to its neighbours, is also tiny. So they feel they have to act and they have to go in strong because they need to deter others from doing the same. Can they carry on doing this without continued support? The US provides traditionally about $3.5bn of annual aid and they need western support to act as a deterrence for other actors in the region, not least Iran and Hizbollah in Lebanon. Will there be a kind of reassessment where the US kind of leans on Israel to say, hey, it’s got to change? That would be a bitter pill for Israel to swallow, but maybe it would lead to a more sustainable solution in the future.

Marc Filippino
JP Rathbone is the FT’s defence and security correspondent. Thanks, JP.

John Paul Rathbone
Thanks.

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Marc Filippino
You can read more on all of these stories at FT.com for free when you click the links in our show notes. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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