Passport

Iran Watch: War games or mind games?

Ron Prosor, Israel's ambassador to the United Nations, may have told reporters on Friday that international sanctions have been "more effective than people think." But his prime minister -- a longtime sanctions skeptic -- struck a different tone today. The "sanctions are painful," Benjamin Netanyahu conceded, but they haven't yet produced a "halt or retreat in the Iranian nuclear program" or loosened the regime's "political grip."

The comments came shortly after a report by Israel's Channel 10 on an Israeli military assessment that a three-week-long Iranian-led missile attack on Israel would produce fewer than 300 civilian casualities -- a lower estimate than Israeli Defense Minister Ehud Barak's suggestion in November that fewer than 500 people would be killed in such an assault. Here's more from the Jerusalem Post:

According to the estimates, described as a worst-case scenario, thousands of missiles would be launched toward Israel from Lebanon, Syria, and Gaza as part of the Iranian attack. The scenario took into account Israel's defenses as of 2012, with the Iron Dome rocket-defense system not yet at its full deployment.

Missiles would also be launched at Israel from Iran, according to defense experts briefing the ministers, however, they added, Tehran's conventional missile capabilities are limited.

To coincide with Netanyahu's press conference on Tuesday, the prime minister's office released an animated Passover-themed video touting his achievements, including the development of the Iron Dome (see 0:40, where a smiling Israel fends off scowling rockets with an umbrella):  

Iran meter: In criticizing sanctions, Netanyahu may be emphasizing that Israel has not abandoned the military option -- particularly ahead of nuclear talks between Iran and the world's top powers this month. And Anshel Pfeffer at Haaretz thinks the military's casualty estimate may have become public for similar reasons.    

"It would seem that the leaked briefing was put out by someone in the cabinet who is interested in allaying the Israeli public's fears of the repercussions of a military strike on Iran," he writes.

If so, it's by no means certain that Israelis will take the bait. In the most recent monthly Peace Index poll by The Israel Democracy Instititute and Tel Aviv University, nearly 60 percent of respondents said they thought a retaliatory assault by Iran would cause more casualities than Barak's estimate of 500 civilians. (Israel's shortage of gas masks and bomb shelters surely hasn't bolstered confidence.)

As tensions mount, so too have suspicions that Iran-related leaks by government officials -- whether via Bloomberg's report on Iran's elusive centrifuge "workshops" or the New York Times' report on a U.S. simulation of an Israeli strike -- are politically motivated. In leaking information to the media, Ron Ben-Yishai at Yedioth Ahronoth charged last week, the Obama administration has "shifted from persuasion efforts vis-à-vis decision-makers and Israel's public opinion to a practical, targeted assassination of potential Israeli operations in Iran."

Whether or not these allegations have merit, one hopes that all the speculation about political posturing doesn't blunt the impact of legitimate risk assessments about the fallout from a conflict over Iran's nuclear program.

Uriel Sinai/Getty Images

Passport

Want to know how to break up the eurozone? Ask an 11-year-old.

How much does euro-skepticism pay these days? About $325,000, to be exact. The New York Times reported on Tuesday that Simon Wolfson, the British CEO who sponsors the Wolfson Economics Prize, will award 250,000 pounds to "the person that puts forward the most elegant scenario for how a country or countries might leave the euro zone - or how the 17-nation compact might unwind."

The essays written by the five finalists "are more or less free of politics," and "are a reminder of the vast challenge that Europe confronts it is to keep the euro zone intact."

Roger Bootle and his team at Capital Economics, a London-based consulting firm, argue that "A country currently in difficulties on the southern periphery should embrace the idea of currency depreciation rather than fearing it. It's part of the solution, not the problem. One way or another these countries have got to become more competitive, and the only way they can do that without causing a disaster ... is by leaving the euro."

Jonathan Tepper, the Chief Editor of macroeconomic research group Variant Perception, emphasizes the success of past currency breakups in Czechoslovakia, the former Soviet Union, and the Austro-Hungarian empire:

"In almost all these cases, currency breakups went relatively smoothly. They were complicated, but they were feasible."

Jens Nordvig and Nick Firoozye at Nomura advocate for introducing "a European currency unit similar to what we had before the euro was created," while Neil Record of Record Currency Management argues that "a very small group should create a plan with a secret taskforce ... and the plan in my opinion ought to be that if there is one exit of a country, if that becomes inevitable, then the whole of the euro ought to be abandoned."

The judges were "particularly taken" with the "original and elegant" solution of former analyst Catherine Dobbs, who "proposes that the euro disappears, with all holders of euros having their euro claims replaced by claims on the new currencies, according to a set proportion."

The Wolfson Economics Prize is "the second biggest cash prize to be awarded to an academic after the Nobel Prize."  This year's 425 entrants included analysts, investment bankers, and traders, but it was 11-year-old Jurre Hermans of the Netherlands who won the judges' hearts with his intricate pizza diagram explaining how Greeks could swap their euros for drachmas. Here is the "clever" part of Jurre's plan, as translated into English by his father:

"The Greek people do not want to exchange their Euro's for Drachms because they know that this Drachme will lose its value dramatically. They try to keep or hide their Euro's. They know that if they wait a while they will get more Drachmes. So if a Greek man tries to keep his Euros (or bring his euros to a bank in [sic] an other country like Holland or Germany) and it is discovered, he gets a penalty just as high or double as the whole amount of euros he tried to hide!!!"

According to Policy Exchange, Jurre "will receive an €100 gift voucher for his efforts."  If an "amicable divorce" is really what the euro zone needs, a pizza diagram may be the most diplomatic way to go about it.

EMILY WABITSCH/AFP/Getty Images