The EU: Taking der Leyen’s share
Also: NATO, Russia, East Asia, Israel, Palestine, and terrorism.
In addition to our daily risk monitoring brief, the team behind Geopolitical Dispatch also provides tailored advice, risk audits, scenario planning, executive masterclasses and board briefings. Click here to get in touch.
EUROPEAN UNION. Taking der Leyen’s share
A failure to agree a commissioner spells risk.
A summit of European leaders ended late Monday without a decision on the EU Commission president. Portugal's ex-prime minister Antonio Costa was tipped as Council president, with Estonian premier Kaja Kallas as foreign policy chief.
INTELLIGENCE. With mainstream parties still holding a majority in the European Parliament, incumbent Commission chief Ursula von der Leyen was seen as a near certainty, but discussions will continue next week. The impasse suggests right-wing parties, probably led by Italy’s Giorgia Meloni, want stronger representation in Brussels, where key decisions are increasingly being made. Centrists like Emmanuel Macron will hope a decision can be made soon.
FOR BUSINESS. Populists on the right will need to be given a share of the EU executive, particularly if a socialist like Costa, or a Russia hawk like Kallas, gets a senior role. If not, divisions within the bloc could easily be exacerbated at the ballot box, leading to bigger claims down the track. As in Italy, when populists reach government, they often adopt technocratic positions. An inclusive approach will be needed to encourage such policy continuity and predictability.
Geopolitical Strategy is the advisory firm behind Geopolitical Dispatch. Our partners are former diplomats with vast experience in international affairs. We help boards, chief executives and investors to understand geopolitical developments and their impacts with clarity and concision.
NATO. Atomic weight
The alliance sends a message to Russia, and itself.
NATO chief Jens Stoltenberg met Joe Biden Monday ahead of the bloc’s Washington summit in July. Moscow criticised remarks Stoltenberg made to Britain's Telegraph newspaper that members may want to deploy more nuclear weapons.
INTELLIGENCE. NATO is nothing if not a nuclear alliance. Without these weapons, and with US conventional forces stretched around the world, it is vulnerable to Russian attack. The Financial Times last month reported internal plans suggesting NATO had just 5% of the air defences needed to protect its eastern flank. Many of its European members’ militaries remain woefully underfunded. Policy direction, particularly involving Hungary and Turkey, remains divided.
FOR BUSINESS. Stoltenberg’s hawkish comments should be seen in the context of a leader about to step away and wanting to leave the bloc stronger than when he began. The real focus should be on the statements of Mark Rutte, his probable successor, and Donald Trump, the probable next US president (at least on current polling). Rutte has allegedly promised Hungary a carve-out if he’s appointed. Trump has offered no such concessions so far.
RUSSIA. EAST ASIA. Bear in a China shop
Putin’s travel is not just a rebuke to the West.
Vladimir Putin arrived in North Korea Tuesday, his first visit in 24 years. He will visit Vietnam next, in a move criticised by the US. China's vice ministers for foreign affairs and defence arrived in Seoul for "2+2" talks with their counterparts.
INTELLIGENCE. Beijing has close ties with Pyongyang and Hanoi, but won’t necessarily welcome Putin’s courting of its communist neighbours. Washington, Seoul and Tokyo will be even more alarmed. Not only is Russia giving the North options, it’s complicating their deepening economic ties with Vietnam, which had been seen on a liberalising path, at least in trade. For Russia, it wants to signal it has friends. And show China it can play spoiler on all longitudes.
FOR BUSINESS. Russia’s ties with China have seldom been better, particularly in trade – an aim of recent US sanctions – but they have plenty of disagreements, including on a fair price for gas exports. Moscow will want to gain leverage where it can to use if it must. As for North Korea and Vietnam, beyond the sale of arms (both ways in the case of Pyongyang), there’s not much trade. Before Ukraine, Russia had closer links with South Korea and Japan.
Emailed each weekday at 5am Eastern (9am GMT), Geopolitical Dispatch goes beyond the news to outline the implications. With the brevity of a media digest, but the depth of an intelligence assessment, Geopolitical Dispatch gives you the strategic framing and situational awareness to stay ahead in a changing world.
ISRAEL. PALESTINE. Emptying the cabinet
Netanyahu tries to keep Bin-Gvir away from the keys.
Benjamin Netanyahu dissolved his war cabinet Monday, following last week's departure of centrist leader Benny Gantz. The prime minister will informally consult with his defence and strategic affairs ministers instead, officials said.
INTELLIGENCE. As tensions escalate with Hezbollah, the move to scrap the decision-making body was criticised. But Netanyahu may judge it better to have no war cabinet than one involving his far-right coalition partners, particularly National Security Minister Itamar Ben-Gvir, on whom he relies on for a Knesset majority. Without being part of the chain of command, they have already complicated the war in Gaza, not to mention Israel’s ties with the US and Europe.
FOR BUSINESS. Ben-Gvir and allies will continue to push for a formal role in defence, particularly after the passage of a difficult Haredi conscription compromise, but the military establishment has the upper hand for now. Still, Netanyahu’s political tightrope is getting narrower and until he can declare victory in Gaza, Israel will be torn between competing aims. This will continue to limit options for Israel’s economy, with debt and inflation growing problems.
TERRORISM. Jihad to be you
Islamic State is back and getting cosy with its rivals.
Russian forces killed six Islamic State-linked inmates Sunday, freeing two prison guards. IS-linked rebels in Eastern Congo have killed 100 in recent weeks. Eight IS-linked individuals have been arrested in the US after crossing the border.
INTELLIGENCE. After flaming out in 2017, Islamic State has reconstituted its franchise in central Africa, the Sahel, Somalia, Yemen, and, most recently, Central Asia. Security analysts believe IS is now collaborating with al-Qaeda in Afghanistan on recruitment, which could lead to a détente between the jihadist groups in other regions. The Syrian Observatory for Human Rights last week said Hezbollah’s leader held a secret meeting with IS inside a tunnel in April.
FOR BUSINESS. When not attacking civilians, extremists are fighting each other. Any tie-up between Al-Qaeda, IS, or other networks may be short-lived. Nonetheless, the threat remains real, with fears of an attack at the Paris Olympics or Germany’s Euro 2024 football tournament particularly acute. Combined with a renewed outrage over Gaza, weakened border security, and the proliferation of ungoverned spaces, terrorist violence is an underappreciated risk.