Germany: WebEx of lies
Also: Poland, Britain, the Indian Ocean, and Brazil.
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GERMANY. WebEx of lies
Olaf Scholz is losing control.
Germany's defence minister said Russia's leak of a military call was a "hybrid disinformation attack." A former NATO chief said Germany's chancellor was "too slow, too hesitant". Emmanuel Macron urged allies not to be "cowards".
INTELLIGENCE. Scholz has been under mounting domestic pressure as the economy stagnates, worker strikes bite, and his coalition’s poll numbers sink. The attacks are now coming from across Europe. In the wake of Scholz’s rebuff of Macron’s Ukraine deployment proposal, and the weekend’s leak of a WebEx conversation between senior air chiefs on the use of Taurus missiles, Scholz looks weak – even if most Germans agree with him about not sending troops.
FOR BUSINESS. For Berlin’s allies, policy differences are one thing, but the use of WebEx, an unsecure commercial video call platform, is unforgivable. Amid the subpar hardware sent to Ukraine, the routine breakdown of VIP Luftwaffe jets, and the impotent response to Nord Stream’s destruction, Berlin’s security establishment looks a mess. This is not all Scholz’s fault, but unless managed it could ultimately impact Germany’s broader national brand.
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POLAND. Food fight
As farmers block roads to Ukraine, other neighbourhood scuffles commence.
Polish and Ukrainian officials said they would accept new trade restrictions Tuesday to end a truckdriver blockade at the border. Prime Minister Donald Tusk criticised Hungary and Slovakia Monday for meeting Russia's foreign minister.
INTELLIGENCE. Tusk has been a firm supporter of Kyiv, but concern over Ukrainian competition has proven to be the stronger force. Tusk is now taking the fight to Warsaw’s erstwhile Visegrad allies in Budapest and Bratislava, whose governments have more in common with Tusk’s opposition. He will be looking to Brussels and Berlin for support, but while the EU is generally popular with Poles, Germany – and Tusk’s decision to end a WWII reparation claim – is not.
FOR BUSINESS. A revision of the EU’s transport agreement with Ukraine may appease truckers but concerns continue over Ukrainian grain imports (and, to a lesser extent, agricultural imports from Russia and Belarus). The common market’s defeat by political pressure isn’t new, but amid farmer protests across Europe, Brussels won’t want to set a precedent. EU rules are being flouted elsewhere, including in Slovakia, which recently shut its anti-corruption office.
BRITAIN. Sunak’s sinking ship
The beds are burning in Downing Street.
The Chancellor was expected to announce tax cuts and freeze fuel duties in a pre-election budget Wednesday. The Lords returned the Rwandan deportation bill to the Commons. Rishi Sunak said he makes the beds in his No. 10 flat.
INTELLIGENCE. Young, smart, and photogenic, Sunak has the makings of a historic leader. But history’s curse is to put him in charge when the Tory brand is broken, and when Britons want change. Few governments, no matter how capable, can survive fourteen years (or five prime ministers). With his policies, from Rwanda to taxation, appearing ever desperate, it might be better to call a snap election and rebuild in opposition than keep shuffling the deck chairs.
FOR BUSINESS. Beyond Sunak’s cringy interview in Grazia, the Tories look increasingly out of touch with an economy struggling with high house prices and low productivity growth. With almost no chance of staying in power, their best hope is not to fracture in opposition (or at least any more than in government). Britain’s problems are structural, and Labour will unlikely have a quick fix, but a strong win for Keir Starmer will give him the mandate for overdue reforms.
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THE INDIAN OCEAN. Circling the atolls
Delhi and Beijing eye remote outposts as the West clings on.
Maldives and China announced a military pact Tuesday, a week ahead of a 15 March deadline for Indian troops to leave. India said Saturday it would build a base at the southern end of the Lakshadweep islands, 80 miles north of Maldives.
INTELLIGENCE. Delhi is also speculated to be eyeing a base on the Mauritian island of Agalega. An Indian-funded air strip and jetty was launched last week. Mauritius and India both deny a dual purpose, but as the former seeks to oust Britain from the nearby Chagos Islands (controversially taken from Port Louis in the final days of decolonisation to secure a US naval station on Diego Garcia), the Indian Ocean’s security will need all the non-Chinese bases it can get.
FOR BUSINESS. Maldives straddles the world’s most vital shipping lane and, alongside Sri Lanka, has become central to Beijing and Delhi’s strategic planning. Should the US and Britain vacate Diego Garcia – unlikely but not impossible – Maldives’ importance will only grow. Amid Indian naval drills, China has recently sent spy vessels. Elsewhere, France is boosting its presence in Reunion, to the Indian Ocean’s west, and Australia in Cocos Island to the east.
BRAZIL. Turning São
Back to just being the country of the future?
Lula da Silva repeated a comparison of Israel to Nazi Germany on Monday. Sources told Reuters Tuesday that Brazil's former military chiefs had confirmed a 2022 coup plot. São Paulo declared a state of emergency over a dengue plague.
INTELLIGENCE. With historic tax reforms and a soothing tone, President Lula da Silva looked earlier this year like he could finally take Brazil to its full potential. He still may. GDP figures last week surprised expectations with 2.9% growth in 2023. Technocratic reform has for the most part avoided the partisanship of the streets. But Lula’s post-Gaza outbursts, and the ongoing probe into his predecessor, remind many analysts of the worst days in his first term.
FOR BUSINESS.Brazil’s right-leaning legislature is cooperating with the left-leaning executive, but should legal pressure increase on Jair Bolsonaro, it may easily backfire, Trump-like, on Lula, and galvanise the 49% of Brazilians who voted for the former president in 2022. Many of those Brazilians were on the streets last week, draped in Israeli flags. Dengue may now keep them at home but will only raise tempers. Brazil holds municipal elections in October.