(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
The newly-mended Israeli- Turkish relationship will be good for Israel’s economy, according to credit ratings agency Moody’s, both because it will provide a market for Israel’s gas and because it enhances regional stability.
“Turkey is likely to become a primary market for gas exports from Leviathan – potentially through the construction of a new pipeline in the Mediterranean – now that the two countries are set to begin discussions about a gas deal,” Moody’s wrote a note on the deal released Monday.
The reconciliation deal, which will see the full normalization of ties for the first time since 2010, came as Israel pushed ahead with its long-stalled plan to develop the Leviathan gas field. The fact that Egypt recently discovered its own natural gas reserves, however, put in question how much gas they would still want to buy, though experts predict that Egypt will take a significant amount of time to develop its new gas finds. The deal with Turkey, therefore, created a convenient opening.
It also shores up one of the premises Prime Minister Benjamin Netanyahu had for circumventing the Antitrust Authority when pushing through the gas regulation. As acting Economy Minister, Netanyahu invoked, for the first time, Article 52, which allowed him to override the antitrust regulator in the interest of national security. Netanyahu can point to Turkey and the geopolitical interests around renewed ties as just such an example.
Moody’s noted that a gas pipeline to Turkey “also provides an important route to European markets for exports from the eastern Mediterranean gas basin, and would allow Israeli gas to serve as an alternative to Russian gas, which is frequently used for political leverage in European- Russian disagreements.”
All that, the agency concluded, was positive for Israel’s economic outlook.