Spain: Strain on the plain.
Also: Israel, Ukraine, Russia, Turkey, China, Italy and Sudan.
SPAIN. Strain on the plain.
The centre holds, but at the expense of unity.
The conservative People’s Party looked set to win Spain’s election on Sunday but came far short of a majority. The far-right Vox party, on which a People's Party government would depend, lost 19 of the 52 seats it previously held.
INTELLIGENCE. In contrast to the swing against Prime Minister Pedro Sanchez’s left-wing coalition in May, when Spain held regional and local elections, Sunday's result was a victory for the middle. Against predictions, Sanchez's Socialists gained two seats but came second to the centre-right People's Party. Yet victory isn’t assured for the PP. It would need both Vox and one or more regionalist parties to govern – an almost impossible combination.
FOR BUSINESS. The result avoids a neo-Francoist Madrid as EU president, but it is bad news for markets. Spain now faces a hung parliament, a new election, or an even weaker Sanchez coalition. Pro-independence Catalan and Basque parties lost votes but could nonetheless emerge in a stronger position. This will not be what most Spaniards voted for, nor will it please firms, many of which fled Barcelona when Catalan independence was last considered.
ISRAEL. Unreasonable.
Once-fringe politicians take democracy to the brink. Again.
Tens of thousands held rival rallies across Israel on Sunday ahead of a Knesset vote on changes to the judiciary, which would include preventing judges from ruling on executive decisions based on a “reasonableness” standard.
INTELLIGENCE. Israel has long had a fractious democracy, but a longstanding consensus on the role of its courts and institutions is being tested by Benjamin Netanyahu’s right-wing coalition, which includes the ultra-religious fringe. Thousands of defence force reservists have declared they will refuse to serve should the legislation pass. Over 100 retired security chiefs, including former heads of Mossad, have supported this refusal. Tehran will be watching.
FOR BUSINESS. Israel has faced many seemingly existential crises before, but the stress is showing. The heads of Israel's two largest banks warned Friday of an economic crisis. Tech sector leaders warned Saturday of an investor exodus. Netanyahu himself was hospitalised Sunday and fitted with a pacemaker. But despite calls for a climb-down, including from the White House, the legislation almost certainly has the numbers in the Knesset.
Written by former diplomats and industry specialists, Geopolitical Dispatch gives you the global intelligence for business and investing you won’t find anywhere else.
UKRAINE. RUSSIA. Stuck in the mud.
Long-range strikes don’t make up for a grinding land war.
Two office buildings in central Moscow were damaged by a drone attack early Monday, with authorities blaming Ukraine. Hosting Belarus's president in St Petersburg on Sunday, Vladimir Putin said Kyiv's counteroffensive had failed.
INTELLIGENCE. The attack is embarrassing to Putin, who was using his Belarussian counterpart’s visit to again demonstrate his grip on power in the wake of the Wagner mutiny. President Alexander Lukashenko helped negotiate the surrender of Wagner’s forces, many of whom are now in Belarus undertaking exercises 13 kilometres from the Polish border. The attack follows strikes on a Crimea fuel depot on Saturday and an Odesa cathedral on Sunday.
FOR BUSINESS. Drone strikes make compelling footage but won’t be decisive in the war. The frontline has barely moved. US Secretary of State Antony Blinken said on Sunday that while Kyiv had taken half the territory Russia initially seized, it faced “a very hard fight” to retake more. Blow-by-blow news is exciting, but firms should expect a stalemate at current lines, whether formalised in peace talks or marking the boundary of a long-term, low-level attritional war.
TURKEY. RUSSIA. CHINA. Southern discomfort.
Developing partners don’t like but won’t oppose Moscow’s Black Sea moves.
The West should consider Russia's demands on the Black Sea grain deal, Turkey’s president said on Friday. Sino-Russian naval drills concluded in the Sea of Japan on Sunday, with analysts saying they marked a “high point” in trust.
INTELLIGENCE. Speculation that China and the ‘Global South’ are upset with Russia for ending Black Sea grain exports is probably right. Speculation that this is why Putin won’t attend South Africa’s BRICS Summit is probably wrong. Putin may get an earful when he hosts African leaders this week, but he will likely promise bilateral deals from Russia’s ample reserves. Pique over Putin’s methods likely won’t change how his allies regard his overall objectives.
FOR BUSINESS. Russia’s relations with the developing world seem robust. Beyond admonishments from Kenya, there is little evidence of widespread disquiet. Relations with China appear particularly strong. Chinese aircraft landed at Russian bases in recent drills, suggesting a new level of interoperability. Businesses should not discount the continued strengthening of Sino-Russian ties, irrespective of Beijing’s recent attempts at détente with Washington.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
ITALY. Club Med.
Giorgia Meloni gathers forces to stop the boats.
Rome hosted regional leaders on Sunday to extend an EU-backed migration deal with Tunisia. Algeria, Egypt, Ethiopia, Jordan, Lebanon, Malta, Niger, Tunisia and the UAE attended. Greece, Kuwait, Turkey and Saudi Arabia sent ministers.
INTELLIGENCE. Though seemingly boycotted by France and Spain, which have openly opposed Italy’s prime minister on migration, the meeting seems to have reaped financial pledges from the Gulf that could incentivise North African governments to stop migrants embarking from their shores. What the Gulf gets in return is unknown, but a friend in Italy – which has a seat in the EU, NATO and G7 – is never a bad thing. What is lacking is EU unity on the issue.
FOR BUSINESS. The gathering indicates Meloni’s sway in the Arab world. But it is Brussels – not Cairo or Riyadh – that determines EU migration. Berlin and Paris, for domestic reasons, are unlikely to agree to stronger measures, but unless Europe can stem irregular migration, it could come to dominate the EU’s 2024 parliamentary elections. The far-right has failed to seal a victory in Spain but it is rising elsewhere, including in Germany, where it now polls at 22%.
SUDAN. One hundred days later.
A civil war is far from over.
Sudan on Sunday marked 100 days since fighting began between the army and the paramilitary Rapid Response Forces. At least 16 civilians were killed in Darfur, lawyers said on Saturday, where the UN has begun war crimes investigations.
INTELLIGENCE. Neither side in Sudan’s increasingly bloody and widespread civil war seems to yet have an advantage. Multiple peace talks have failed amid allegations that foreign backers are using the conflict to press their own geopolitical gains. More than 3 million have been displaced, including 730,000 who have crossed Sudan’s borders. Most refugees have fled to neighbouring Chad and South Sudan, themselves at risk of renewed civil conflict.
FOR BUSINESS. Sudan is rich in resources. Russia has announced plans – currently on hold – for a naval base at Port Sudan, on the Red Sea. Turkey and the United Arab Emirates are also reportedly interested. Russia’s Wagner mercenary group is close to the Rapid Response Forces and is believed to be channelling arms through eastern Libya. Wagner chief Yevgeny Prigozhin resurfaced last week to say his forces would “set off for a new journey to Africa.”
Emailed each weekday at 5am Eastern (9am GMT), Daily Assessment gives you the strategic framing and situational awareness to stay ahead in a changing world.