Damien Bruckard

Founder @GeopolDispatch. Former diplomat in Moscow & Int’l Chamber of Commerce. Daily geopolitics and business newsletter:

[Damien Bruckard @DBruckard]

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[Damien Bruckard @DBruckard]

1/ 🧵 Macron just ruled out a left-wing government, claiming it would threaten "institutional stability." But is this really a smart move, or could it backfire spectacularly? Let’s dive in. 👇

[Damien Bruckard @DBruckard]

6/ The takeaway? What looks like a smart tactical move could lead to a strategic defeat. Macron might be trying to keep his opponents off balance, but he could end up unleashing the very chaos he’s trying to avoid. 🤯

[Damien Bruckard @DBruckard]

On Trump’s pick of JD Vance for running mate, some have questioned Trump's pick of a "clone" (in Biden's words), but the election is all about the swing states. By selecting Vance, Trump is taking no chances in Pennsylvania and Michigan... Full analysis: https://t.co/VA5osmLmzu

[Damien Bruckard @DBruckard]

Happy to announce @GeopolDispatch has now released a premium version. Click here if you would like to trial -- five daily analyses of the most important geopolitical developments through a business and finance lens written by former diplomats: https://t.co/xZJPCQ81Y8

[Damien Bruckard @DBruckard]

#VENEZUELA. #GUYANA. Peace in #Caribbean time.

Every little thing is going to be alright. Maybe.

The Presidents of Venezuela and Guyana agreed late Thursday to not threaten or use force, as well as refrain from escalation. Talks on a gas field between Shell and Venezuela's state oil firm broke down on Thursday, Reuters said.

INTELLIGENCE. The outcome in Saint Vincent is a victory for regional diplomats but may prove fleeting if #Caracas feels the need to again distract its citizens. Similarly, should Nicolas Maduro see any casus belli from his often voluble neighbour – Guyana’s Mohamed Irfaan Ali called Maduro an “outlaw” on Wednesday – the escalation will resume. For now, Maduro probably has the crisis where he wants it: at a point where leverage is possible, but sanctions aren’t.

FOR BUSINESS. #Oil firms in both countries are pretending to ignore the situation but exit strategies are no doubt being formed. Cancelling projects or talks on technicalities avoids political complication. Force majeure cannot be invoked before a war, and in any case, a war now cannot be described as unforeseen. One player, #Chevron, has the added complication of being recently hit with an #FTC inquiry into its acquisition of #Hess, which has fields in Guyana.

[Damien Bruckard @DBruckard]

#EUROPE. #MIGRATION. Back to the wall.

Border policy remains the EU’s most contentious issue.

#Finland closed its border with #Russia on Friday, a day after reopening, due to a migrant influx. #Cyprus warned Thursday of record Syrian refugees. #Albania's constitutional court on Wednesday blocked an asylum application deal with #Italy.

INTELLIGENCE. Migration is vexing politicians in the #US, the #UK and #Australia, but in the #EU – where border policies are made in #Brussels – the problem seems intractable, leading to voters seeking extreme alternatives. And footage of uncontrolled arrivals, from the #Arctic to the #Canaries, are adding to concerns over ethnic tensions and domestic security. A proposed EU border package has meanwhile been panned by NGOs for discrimination and racial profiling.

FOR BUSINESS. As an EU-wide arrangement is sought, individual states are taking matters into their own hands, yet with not much luck. The left and right united to oppose Emmanuel Macron's migration bill on Monday. New rules in #Dublin to slash welfare rates have failed to curb popular unrest. #Germany's opposition has presented an overhaul of asylum laws as dissatisfaction with the ruling coalition rises to 82%, potentially complicating a new budget deal.

[Damien Bruckard @DBruckard]

#EUROPE. #TERRORISM. Going to extremes.

Alleged #Hamas plots will only harm #Palestine, and #Iran.

#Denmark, #Germany and the #Netherlands on Thursday announced the arrest of four suspected Hamas members over planned attacks on Jews in Europe. Germany's domestic spy agency warned last month of an increased threat level.

INTELLIGENCE. With sporadic attacks already carried out in #France, #Belgium and elsewhere, authorities are on the highest alert in years. Hamas is unlikely to have the intent for mass terror on European soil as had #ISIS or #AlQaeda. This would only destroy any nascent sympathy it has received since #Israel began its assault on #Gaza. But European governments will see any attack on Jewish citizens as an attack on all citizens, which would have a similar effect.

FOR BUSINESS. Attacks in #Europe would not be unprecedented and even the prospect of attacks could drive down confidence in the security of public venues, or curtail tourism to certain destinations. Palestinian groups conducted atrocities in the 1970s and 80s. Hamas supported an insurgency in #Sinai until January. Yet beyond the current strikes in #Lebanon, #Yemen and #Iraq, a Hamas campaign in Europe would be a risky escalation for Hamas’s Iranian backers.

[Damien Bruckard @DBruckard]

#EUROPE. #UKRAINE. Consolation prize.

EU membership talks won’t win the war.

#EU leaders on Thursday agreed to accession talks with #Ukraine but #Hungary blocked a €50 billion aid package. Dutch leader Mark Rutte said he was confident of a funding deal in January. Accession talks will also be opened with #Moldova.

INTELLIGENCE. The chance of EU membership allows Volodymr Zelensky to claim victory, but even if accession offered security – which it doesn’t – the process could take years. Talks with #Serbia began in 2014; #Montenegro in 2012. Further aid is meanwhile unlikely. Hungary’s objections haven’t been swayed by the release of €10 billion in frozen funds. And Viktor Orban will feel he has already gone out on a limb by abstaining from the accession decision.

FOR BUSINESS. Many EU leaders are quietly confident the talks will only be symbolic. Just 35% of European voters are in favour of enlarging the bloc. Ukraine’s membership could entitle it to an estimated €186 billion in integration funds and reduce EU-wide farm subsidies by around 20%. Vladimir Putin, in a revived annual press conference, has meanwhile warned the war will continue unless #Kyiv sues for peace, adding he might also seize the city of #Odesa.

[Damien Bruckard @DBruckard]

#UNITEDSTATES. Superpower outage.

Congress adjourns with unfinished business.

Congress passed the annual National Defense Authorization Act on Thursday, approving $886 billion in funds, including a 5.2% pay raise for personnel. While the #NDAA included $300 million for #Ukraine, a $61 billion package failed to pass.

INTELLIGENCE. The NDAA included compromises on abortion, transgender health, and surveillance, but the House majority won’t fold on Ukraine unless the Senate – agreeing to meet next week – can do a deal on border security. And complicating any residual bipartisanship will be impeachment hearings on Joe Biden, which the House opened on Wednesday, and a subpoena on his son Hunter, who may now also face contempt of Congress charges.

FOR BUSINESS. It's been a bad year for the 118th Congress – the least productive legislature since 1932. Next year could be worse, with the noise of elections, further eroding #Washington’s reputation in foreign capitals. Irrespective of the merits of funding Ukraine, which faces an uphill fight either way, a lack of #US support will be given as evidence of US decline. And while the US remains preeminent, in global affairs it’s perception that matters as much as reality.

[Damien Bruckard @DBruckard]

#ETHIOPIA. Addis and subtracting.

Fiscal and security promises so far don’t add up.

Ethiopia prepared for a call with bondholders on Thursday after missing a $33 million coupon payment. The country's State Minister for Peace was sacked on Tuesday amid charges he was plotting to violently overthrow the government.

INTELLIGENCE. Prime Minister Abiy Ahmed won a #Nobel Prize in 2019 but things have gone downhill since. The end of the war with #Eritrea was replaced by a civil war in #Tigray, plus insurgencies elsewhere. Economic reforms and blistering growth early in his term have come back to earth. Increasingly unhinged comments, suggesting the invasion of neighbouring states, have spooked diplomats. The #US only recently resumed food aid after systemic theft.

FOR BUSINESS. Ethiopia has huge potential, but the factors limiting its political unity – a landlocked, mountainous geography, unstable neighbours, ethnic tensions – have stymied its economic success. Abiy was once thought something of a silver bullet, but the challenges continue. Where the West has failed to ensure stability and growth, #China may try. #Beijing has already struck a debt deal. Now in the Belt and Road, #Addis joins the #BRICS next month.

[Damien Bruckard @DBruckard]

#JAPAN. #Tokyo drift.

A slide back to political and economic torpor.

Fumio Kishida reshuffled his cabinet on Thursday in the wake of a fundraising scandal. Support for his party fell to a ten-year low, a poll showed Tuesday. Revisions last week suggested a 2.9% annualised GDP decline for the third quarter.

INTELLIGENCE. #Kishida's domestic woes have overshadowed his hosting of the British and Italian defence ministers to agree an ambitious fighter jet program, not to mention a summit of Southeast Asian leaders this weekend. Like its economy, Japan has strategically sought to break out of decades of stagnation. And as with the economy, this was briefly achieved under Shinzo Abe. But since Abe’s 2020 retirement (and 2022 assassination), the doldrums are back.

FOR BUSINESS. Business confidence belies these trends. The quarterly #Tankan survey hit a 30-year high on Wednesday. Yet much of this sentiment is based on a cheap yen, which helps exports. A dovish turn in #US monetary policy could erode this advantage, as well as lose Japan a window to revive #inflation. Stagnant factory output in #China, #Taiwan, and #SouthKorea doesn’t bode well either. So far avoided, Kishida may be forced to call snap elections.

[Damien Bruckard @DBruckard]

#INDIA. #UNITEDSTATES. Firing #Quad.

A pillar of the US Indo-Pacific strategy wobbles.

Joe Biden will not travel to India in January, a US official said Wednesday. #Delhi had postponed a meeting of 'Quad' leaders after Biden turned down an invitation to India’s Republic Day parade the day before, local media said Tuesday.

INTELLIGENCE. India uses its guest of honour at the 26 January military parade as a signal of favour. #Obama went in 2015; #Putin in 2007. The president of #France has been five times. Turndowns are rare, though apparently #Trump refused. Yet allegations of an Indian plot to kill a US citizen in #NewYork makes a January visit untenable, and it is hard to see a date working later in the year as #Biden and #Modi focus on elections. Putin may hope he’s runner-up.

FOR BUSINESS. A bigger casualty is the Quad summit, which the leaders of #India, the #US, #Australia, and #Japan agreed in 2021 to hold annually. But beyond the burden of Modi’s illiberalism (and trade with #Russia) on the format’s survival, attempts by the others to steady ties with #China have upset India. And as #Washington uses #AUKUS as its main mode of cooperation with #Canberra, and its trilateral with #Seoul as its mechanism for #Tokyo, the Quad is losing relevance.

[Damien Bruckard @DBruckard]

#ISRAEL. #UNITEDSTATES. Hear no evil.

#Biden gives a warning #Netanyahu will ignore.

Israel's foreign minister said Wednesday the war in #Gaza would continue "with or without international support". Joe Biden said Tuesday Israel was "starting to lose" this after the #UN General Assembly voted 153 to ten for a ceasefire.

INTELLIGENCE. International criticism seldom trumps national interest, particularly in Israel, but #Biden’s increasingly frank statements show real limits in US support, which Israel needs. Normally, threats would work, as they did in May 2021 when Biden called Netanyahu to declare a #ceasefire. But this time the stakes are higher, including politically for Netanyahu, whose only path to staying in power (and avoiding jail) is to retain the support of his hard-line partners.

FOR BUSINESS. Netanyahu will only declare victory on his own terms, but fighting may end sooner if support coalesces around Benny Gantz or another opposition figure who can form a new government and find an offramp. In the meantime, increasingly severe measures may be taken, putting further pressure on Israel’s reputation. Some of the possibilities seem extreme. Flooding #Hamas’s tunnels with seawater, for instance, could literally salt Gaza’s earth.

[Damien Bruckard @DBruckard]

#UKRAINE. Out in the cold.

#Zelensky walks an increasingly lonely road.

Volodymyr Zelensky urged allies to provide more funds, following a visit to Washington and ahead of a European leaders' summit on Thursday. A #US general was taking a hands-on role in #Kyiv, the @nytimes reported on Monday.

INTELLIGENCE. With just hours left this year for Congress to agree new funding for Ukraine, and with #Hungary playing hardball with the #EU, a difficult winter is set for Kyiv unless #Washington and #Brussels can make near impossible compromises. For the #WhiteHouse, this would mean further alienating the Democratic base with a hard-line border policy. For #Europe, this would mean upending years of governance protocols and caving into budgetary blackmail.

FOR BUSINESS. #Biden may relent – ending a crisis on the border may outweigh progressive outrage – but Brussels may stare #ViktorOrban down, even if that means no deal on Ukraine. And even if Orban is rewarded, other EU members – including #Austria and #Slovakia – are showing discord. Either way, funds alone are not enough. Ukraine needs a strategy, as Republicans have pointed out and as Lt. Gen. Antonio Aguto’s reported deployment may prove.

[Damien Bruckard @DBruckard]

#ARGENTINA. Shock and awe therapy.

The new government wastes no time enacting its agenda.

Argentina said on Tuesday it would devalue the peso by around 50%, cut energy subsidies and cancel public works tenders. The #IMF welcomed the plans, stating it would help put Argentina onto a path of private-sector-led growth.

INTELLIGENCE. Javier Milei was elected on a radical economic agenda, which included promises to eradicate the central bank and significantly pare back spending. But these first moves are more conventional, with the IMF having recommended a devaluation of the currency and cutting unsustainable subsidies. Economy Minister Luis Caputo was blunt; persistent fiscal deficits were the cause of Argentina’s economic woes, and shock treatment was needed.

FOR BUSINESS. The moves will hurt those accustomed to #Peronist middle-class welfare but includes a doubling of social spending for the poorest. Argentina now has a poverty rate above 40%, and the challenge to keep the economy competitive without worsening destitution, or driving hungry porteños onto the streets, is huge. The measures have nonetheless sent a positive message to investors. The Argentine S&P MERVAL Index hit a record high on Tuesday.