From a legal point of view, this blow labeled as “preventive” raises questions. Both US constitutional and international law require the presence of an imminent threat for unilateral military intervention. However, the current administration has not yet provided direct evidence that an attack on American soil is imminent, and is moving its argument more toward a “long-term potential threat.”
The fight for the future of the state
amid an ongoing war, economic stagnation and recent bloody anti-government protests, it has plunged Iran into its greatest uncertainty since 1979. The Trump administration is counting on the 40 percent of the population, who are under 30 and have spent their lives under sanctions, to welcome the fall of the clerical regime. But experts warn that discontent does not automatically equate to a successful revolution. While Iran’s security apparatus has weapons and organization, the protesters do not.
Currently, two conflicting succession scenarios are taking shape, personified by two different personalities. Inside the bombed-out state, the elites, especially the powerful Revolutionary Guards, are uniting in the name of 56-year-old Mojtab Khamenei, the late leader’s second-born son. Mojtaba is a man behind the scenes, with close ties to the security apparatus and the army. His name is also associated with the harsh suppression of protests in 2009.
However, his eventual appointment would be paradoxical and extremely sensitive for the regime. The Islamic Republic was created by overthrowing the Pahlavi hereditary monarchy, and the transfer of power from son to father could thus be seen as the creation of a new dynasty. Moreover, the gathering of experts is hesitant to make an official announcement, since Israel has already declared that any new leader becomes a legitimate military target.
On the opposite side stands the 64-year-old son of the deposed Shah, who has been living in exile in the USA since the overthrow of the monarchy. Pahlavi offers a diametrically different vision: secular democracy, separation of church and state and normalization of relations with Israel and the Arab states through the so-called “Cyrus Accords”.
Pahlavi has prepared a “Manual for the emergency phase” for the first six months after the fall of the regime and claims that parts of the security forces are already secretly pledging their loyalty to him. Although he has the support of about a third of Iranians according to polls (making him the most popular opposition leader), another third strongly rejects him, for example because of his father’s repressive past.
The US attitude towards Pahlavi is interesting. While Pahlavi sees the strikes as a “humanitarian intervention” and shows confidence in Trump, the head of the White House remains cold towards him. Trump has stated that he would prefer someone popular directly from Iran. However, for the US administration, what is important is not the form of the Iranian government, but its behavior – the absence of nuclear weapons and a rational leader who will not be a threat.
Cracks in the MAGA movement
And while the bombs are falling on Tehran, the political upheavals are also felt in Washington. Trump’s sudden abandonment of isolationist policy (“America First”) and entry into a major foreign conflict is a test for the foundations of his political coalition.
The MAGA movement, which was largely formed out of opposition to the endless wars in the Middle East, is beginning to split. Influential right-wing media figures such as Tucker Carlson and Megyn Kelly have already accused Israel of dragging the US into an overseas adventure. Former staunch ally Marjorie Taylor Greene accused the president of betraying the movement.
Critics from both sides of the political spectrum draw attention to the timing of the war before the upcoming congressional elections (the so-called midterms) and at the time of the Epstein scandal, using the term “wag the dog” – an artificial invocation of conflict to divert attention from domestic problems.
Trump thus faces a historical irony. A politician who gained power by criticizing the Bushes’ foreign policy may find himself in the same trap as George W. Bush during the Iraq War, when the protracted conflict eroded his political support on the home front.
Economic shock
While political elites deal with the distribution of power, global markets react to the conflict with panic. If the American administration does not adhere to its original four-week plan and the war drags on, the hardest economic blow will paradoxically fall on the allies in Europe.
The blockade in the area of the Strait of Hormuz and the war in the energy center of the world have already caused a shock in the prices of oil, gasoline, diesel and gas. Leading economists such as Carsten Brzeski (ING Bank) and Daniel Stelter warn of devastating consequences for Europe.
From the current value of 1.16 USD, the euro may fall quickly if the conflict is prolonged. Investors often run to the “safe haven” of the US dollar in crises. According to Brzeski, he predicts a fall to USD 1.10 (a loss of five to eight percent), but Stelter warns of a catastrophic scenario of falling far below parity, down to the level of USD 0.90-0.95 per euro. This would make all imports of raw materials and energy into Europe massively more expensive.
Increasing energy prices works as an additional tax for the economy. Energy-intensive sectors in Germany, such as steel, engineering and the automotive industry, may see profit margins collapse. The business model “import cheap energy, export industry” would definitely collapse. Even a weaker euro will not help exports, because global demand, especially from China, India and the USA, will fall due to more expensive energy.
At the same time, the European Central Bank (ECB) faces an insoluble dilemma. Higher energy prices will increase inflation in the Eurozone by at least one percentage point. At a time of declining growth, the ECB would need to lower interest rates to support the economy, but it will not be able to do so due to rising inflation.
Stelter warns of the risk of an “energy black swan” – a sudden and extreme supply cut or the destruction of critical infrastructure in, for example, Saudi Arabia or Qatar. According to him, this would not only lead to a technical recession of the entire eurozone, but could also disrupt the very long-term stability of the monetary order in Europe and revive debates about energy allocation and production shutdowns.
The illusion of controlled war
The first week of the conflict with Iran thus showed that technical military superiority and the ability to strike at the enemy’s highest command posts do not guarantee quick political success. While political leaders can decide how and when a war starts, they rarely have control over how it ends.
If the United States fails to stabilize and close the conflict in the next three weeks, it also risks dragging itself into a domestic crisis, Iran into a protracted civil war, and Europe into a deep economic recession with global consequences.
Photo of the week:
What else awaits us:
- Conclusion of the quarterly meeting of the Board of Governors of the International Atomic Energy Agency (IAEA).
- Meeting of the EU Council for Justice and Home Affairs.
- The 36th Portuguese-Spanish summit will take place.
- Canadian Prime Minister Mark Carney visiting Japan.
- We continue to monitor developments around Iran today and over the weekend.
