Iran's options

The world is watching: How will Iran respond to the US drone strike that killed Major General Qassim Suleimani?

Iran has already said that it will no longer adhere to limitations on its capacity for uranium enrichment set out under the 2015 nuclear deal. While the Islamic Republic would come up short against the US military in a conventional war, it does have options for retaliation. Here are the most important.

The Iranian coastline borders a Gulf oil shipping route, including the strategic Strait of Hormuz. Any action Tehran might take against tanker traffic or vital oil installations could send oil prices surging. This fear is not unfounded: Just after the attack on Suleimani, prices jumped 4 percent in anticipation of a potential response. And back in September, Iran was blamed for attacks on Saudi oil refineries that briefly knocked 5 percent of global crude production offline.


The Strait of Hormuz is a particular worry. Iran has responded to the tightening of US sanctions in recent months by seizing tankers in the area, and in 2016, seized two US navy boats, taking American sailors hostage. If Iran were to engage in such provocations now, President Trump's response could pull the two countries toward full-blown war. That's not likely, but we can't rule it out.

Iran has also demonstrated cyber capabilities and could lash out at the US and its allies. Oil installations around the Persian Gulf are susceptible to cyberattacks that could severely undermine energy security in the region. This might only form part of Iran's response: "They will want real blood," a former US colonel in military intelligence warned this week.

Tehran's vast network of proxy forces – including Hezbollah in Lebanon, Hamas in Gaza, the Houthis in Yemen, and local militias in Syria and Iraq – could play a key role in escalation between the US and Iran. Some of these groups have affiliates in Europe, Latin America and Africa that could inflict serious damage on US interests in those regions.

Fears that Iraq will become the frontline of US-Iran tensions are well-founded. Baghdad, hoping to placate Iran's rulers – their fellow-Shia patrons – passed a resolution in parliament over the weekend to expel US troops from Iraq. (Shia lawmakers voted in favor of the resolution while many Sunni and Kurdish members, who are more supportive of US troops being in Iraq, sat out the vote.) While it's unclear how this might play out, it is a worrying sign for President Trump, who has already threatened to impose sanctions on Iraq if US troops were required to leave the country.

Iraq is a long-term US partner and a foothold for US troops in the Middle East. A US withdrawal from Iraq would severely undermine America's ability to lead the fight against the Islamic State. Speaking to Axios, a US official explained: "It hasn't escaped ISIS' attention that Iraq is in something of disarray right now."

The bottom line: All-out war between the US and Iran remains unlikely, but there is much short of war that can still go very wrong.

Amid the current need to continually focus on the COVID-19 crisis, it is understandably hard to address other important issues. But, on March 31st, Washington Governor Jay Inslee signed landmark facial recognition legislation that the state legislature passed on March 12, less than three weeks, but seemingly an era, ago. Nonetheless, it's worth taking a moment to reflect on the importance of this step. This legislation represents a significant breakthrough – the first time a state or nation has passed a new law devoted exclusively to putting guardrails in place for the use of facial recognition technology.

For more on Washington's privacy legislation, visit Microsoft On The Issues.

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Europe skirts US sanctions to help Iran: While the US insists on tightening the sanctions noose around COVID-stricken Iran, European countries are now sending medical equipment. To do so, they are using for the first time a system called INSTEX, a back-channel financial mechanism created a year ago that allows Europe to maintain trade ties with Iran despite US sanctions. Recall that in 2018 the US pulled out of the multilateral Iran nuclear agreement and reimposed crippling sanctions – the Europeans stayed in the deal and have tried to salvage it. To date, Iran has suffered more than 3,000 deaths from COVID-19, one of the highest tolls in the world. Some say that Iran's failure to contain the contagion has been complicated further by US sanctions, which have thwarted the Islamic Republic's ability to fund medical imports. Tehran has urged the US to ease sanctions to no avail, but Ayatollah Khamenei has also, citing some wild conspiracy theories about the coronavirus' origin, refused medical aid from Washington.

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Ian Bremmer breaks down the massive economic toll the COVID-19 pandemic is taking on the hospitality and service industries in America and around the globe. In the U.S. alone, millions could face unemployment as businesses struggle to stay afloat.

Over the past decade or so, the European Union has weathered the global financial crisis, a migrant crisis, and the rise of populist nationalism. Sure, it's taken its fair share of bumps and bruises along the way, but the idea of a largely borderless Europe united by common democratic values has survived more or less intact.

Then came the coronavirus. The global pandemic, in which Europe is now one of the two main epicentres, is a still-spiralling nightmare that could make those previous crises look benign by comparison. Here are a few different ways that COVID-19 is severely testing the 27-member bloc:

The economic crisis: Lockdowns intended to stop the virus' spread have brought economic activity to a screeching halt, and national governments are going to need to spend a lot of money to offset the impact. But some EU members can borrow those funds more easily than others. Huge debt loads and deficits in southern European countries like Italy and Spain, which have been hardest hit by the outbreak so far, make it costlier for them to borrow than more fiscally conservative Germany and other northern member states. In the aftermath of the global financial crisis, this imbalance nearly led the bloc's common currency, the Euro, to unravel.

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