France: Bet noire
Also: Belgium, the EU, Israel, Palestine, China, and Vietnam.
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FRANCE. Bet noire
Macron takes a gamble to stop the far right.
Emmanuel Macron called a snap legislative election Sunday after his party was trounced at EU polls. Macron, who has another three years as president, said it was an "essential time for clarification". The first round will be held on 30 June.
INTELLIGENCE. Macron will hope the far-right National Rally’s 32% showing was a protest and voters will have sobered up by late June. Yet with NR consistently outperforming Macron’s Ensemble in opinion polls, it’s a big gamble to take. The last time a similar snap election was held, Jacques Chirac caused an uproar, leading to a testy “cohabitation” government with Lionel Jospin. Cohabitation would be even more awkward with NR’s Jordan Bardella.
FOR BUSINESS. Though not on the ballot, Macron risks another referendum on himself. And the electorate, having not seen the sky fall in when far-right Giorgia Meloni took control of Italy in 2022, may be happy to call his bluff. The move is additionally risky considering the Olympics begins less than three weeks after the election's second round, and S&P just downgraded France’s credit rating to AA-. S&P cited “political fragmentation” as a contributing factor.
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BELGIUM. To the victor Belang the spoils
Flemish secessionism will complicate any coalition.
The right-wing New Flemish Alliance (N-VA) came first in national elections Sunday. The far-right Vlaams Belang came equal second with the Francophone Reformist Movement (MR). Prime Minister Alexander De Croo’s party came ninth.
INTELLIGENCE. De Croo, who has since resigned, undoubtedly lost, but it is less clear who won. The N-VA, while also seeking Flemish secession, won’t want to form government with the more extreme Belang, which would deter any tie-up with parties from French-speaking Wallonia, essential to a parliamentary majority. Unless Belgians return to the polls, coalition talks could take months. De Croo’s coalition took 18 and required the support of seven parties.
FOR BUSINESS. There’s a good chance N-VA won’t be able to form government. It has been excluded from coalitions before, despite being the largest party by seats. There’s an even greater chance Belang will be excluded. One party almost guaranteed to feature is the centrist MR, which has been part of every government since 1999 and is often compared to Ensemble in France. Its rise from 14 to 20 seats may have given Macron hope the centre can still hold.
EUROPEAN UNION. Right angles
Not all states saw the drubbing of Germany or France.
Far-right groups in the European Parliament had collectively gained 148 seats in Sunday’s poll, early counting showed, but less than the number of the centre-right European People’s Party at 184. Losers were the centre and the greens.
INTELLIGENCE. Despite early indications in The Netherlands, where the centre-right lost seats to the far-right, in the case of Europe overall, the biggest losers were the parties supporting Macron’s government in France and Scholz’s in Germany. Europe otherwise remains far from a coherent polity (which nationalists would like to see continue), with most votes reflecting local dynamics. In several states, like Poland and Hungary, the right actually underperformed.
FOR BUSINESS. The vote in aggregate will likely leave Ursula von der Leyen in charge of the European Commission, though with the possible reliance on support from the European Conservatives and Reformists (ECR) bloc, the less radical of the two far-right factions. At a national level this would give more weight to Giorgia Meloni. Her Brothers of Italy is forecast to more than double it seats, giving it 24 of the ECR’s 73 (more than the Polish Law and Justice’s 20).
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ISRAEL. PALESTINE. Gantz charter
A centrist ex-minister sets out a new course.
Benny Gantz quit Benjamin Netanyahu's war cabinet Sunday, citing the prime minister’s inability to provide a “day-after” strategy for Gaza. Israelis celebrated the rescue of four hostages. Gaza’s health ministry said 274 died in the operation.
INTELLIGENCE. Netanyahu will be glad the rescue gives him a temporary reprieve as Gantz’s exit, while having no impact on the government’s majority, will further erode the cabinet’s legitimacy in the eyes of many Israelis. To many Westerners, including the Biden Administration, it also erodes another avenue to influencing Israel’s approach. While Gantz is no dove, he was seen as an honest broker. His National Unity party has filed a motion to dissolve the Knesset.
FOR BUSINESS. Netanyahu will likely hang on, but Gantz and his colleague Gadi Eisenkot, who also resigned, will be formidable rivals at the next election. In the meantime, Netanyahu will have fewer constraints on how he pursues Hamas and seeks the release of remaining hostages. The EU described Saturday’s rescue as a “massacre”. Israel hit back to condemn Hamas’s human shield tactics, including holding three of the hostages in the home of a journalist.
CHINA. VIETNAM. Friend or pho?
Hanoi quietly builds its presence in the South China Sea.
Vietnam had dredged as much new land in the South China Sea as in the previous two years combined, analysts said Friday. Hanoi arrested a prominent reporter Saturday, two weeks after naming its former police minister as president.
INTELLIGENCE. The Center for Strategic and International Studies said Vietnam had created 692 acres of land since November. Yet as Hanoi increasingly models itself on its northern neighbour it hasn’t attracted Beijing’s ire, unlike Manila, which has done less physically to bolster its claims, but has visibly involved its allies in the West. This missing link may be Russia, a friend to both China and Vietnam (but, with India, also an exporter of missiles to the Philippines).
FOR BUSINESS. The differing reactions to Hanoi and Manila suggest the South China Sea may be more a symbolic issue to Beijing, though it also supports the theory that China withdraws when bayonets meet steel, which Vietnam has (unlike the Philippines). Either way, despite the political similarities between Beijing and Hanoi under Secretary GeneralNguyen Phu Trong, their military interests diverge. This includes in Cambodia, where China is building a port.