In Israel, the press and politicians seem to be worried about what’s happening around the country’s borders, but in my opinion, they are not worried enough (now there is a first!).

Worried about Turkey? You betcha!

Worried about the Syrian civil war and its consequences? Oh yes.

Worried about Lebanon and the fact that Prime Minister Miqati has just resigned? Increasingly so.

I have even heard some reporter friends who are worried about Jordan.

But Egypt?

It seems that we have forgotten about Egypt. Unless there is some kidnapping in the Sinai, the press and politicians do not seem to be very worried.

The attitude seems to be “well, Morsi has not cancelled the peace treaty. He is getting on with his own problems and not bothering us. So let him be.”

But that could all change.

In fact both Iran and Israel should closely look at the latest economic developments in Egypt, as it could impact the tensions between them.

The Economist describes the current situation as:

Unemployment may be as high as 20%. The stock exchange this year has slumped by a tenth. Tourism, which used to account for 12% of Egypt’s GDP, has evaporated. Foreign investment has dried up. Foreign reserves have shrunk. Many of Egypt’s most dynamic businessmen have fled, fearing they will be arraigned for complicity with Mr Mubarak.

Are you thinking what I am thinking? “And after the commercial break: Greek style economic meltdown on Israel’s southern border.”

Not worried yet? Well, read on:

Egypt needs a government that can take some difficult decisions swiftly. To that end, Mr Morsi should select a fresh team of ministers from a much wider ideological spectrum, including technocrats and secular-minded people as well as his own Islamist brethren….Without people willing to put their country before themselves, Egypt faces economic collapse.

Call me a pessimist, but I just don’t see Morsi being able to “reach across the aisle” and to muster enough consensus across Egypt’s political spectrum to push through much-needed economic reform.

What could this mean for Israel?

Worst case scenario: In a bid to score much-needed political points Morsi adopts a much tougher anti-Israel tone. The Salafist follow suit. Due to inability to fix the economic situation, both sides try to outbid each other in their anti-Israeli policies. This could mean calls to change parts of the peace treaty or even attempts to do so.

Best case scenario: In order to secure more funds from the West, Morsi becomes even more pro-western and more pro Saudi.

What could this mean for Iran?

Worst case scenario: see the best case scenario for Israel.

Best case scenario: In order to increase his own bargaining power and leverage against the West, Morsi could start improving his relations with Iran. Unlikely for now, but stranger things have happened at sea, as the saying goes.

The problem for Israel is that even the best case scenario is likely to be quite unsettling.