Spain election fragmentation may require fresh polls

Significance A fragmented parliament and party policy divisions mean there are no straightforward government coalition options. Some of the six parties with fewer than ten seats are likely to be involved in any new government line-up, as Spain's now-four substantial parties will find it hard to produce a government among themselves. Impacts Prime Minister Mariano Rajoy's leadership of the PP may be coming to an end. The PP is the party least suited to the new era of coalition politics: adapting will be a challenge for it. Podemos' strong showing in Catalonia and the Basque Country will force pro-independence parties there to reconsider their positions. Even if other parties agreed on constitutional reform, the PP's majority in the Senate could block it. Uncertainty about the next government and reform prospects will hit international confidence and could push up debt-servicing costs.

Significance The fighting started on January 28, when the secessionist Southern Transitional Council (STC) acted on its threat to topple the Saudi-backed government, taking control of most of the city and besieging the prime minister. The STC draws support from militias including salafi fighters recruited, trained and equipped by the United Arab Emirates (UAE). Impacts The STC will struggle to build its support outside Aden in areas such as Abyan. STC efforts to put forward a political programme could create disunity, given the wide range of ideologies among its supporters. The Saudi-led coalition will invest more resources in improving living conditions in southern Yemen. Crisis contained, the coalition will refocus military efforts to capture the long-disputed central town of Taiz.


Significance This followed five rocket attacks on the US-led coalition in the last two weeks, which killed two US and one UK citizen. It also came two days after Kurdish President Barham Salih named Adnan al-Zurfi, a US-linked Shia nationalist politician, as the new prime minister-designate. Impacts Washington may hold back its response to attacks in order to further Zurfi’s ratification. A massive double hit from low oil prices and COVID-19 will force Iraq to seek more international aid. A Zurfi government could improve Iraq’s chances of gaining Western and Gulf financial assistance.


Subject Annual wage negotiations in Japan. Significance Japanese companies are preparing for their late January labour negotiations that will culminate with the annual 'spring wage offensive' (shunto) from March to June. Company unions, labour federations and employers’ organisations join in this coordination effort to set wages for the following year. For the past four years, Prime Minister Shinzo Abe and the Keidanren business federation have called for larger wage increases to stimulate economic demand. Impacts Company profits, rising until the last two quarters, will be the driving factor in wage gains. A tighter labour market will eventually push up wages. The labour market remains weak when measured by the number of available hours of work, so wages will rise slowly.


Significance Renzi's government will fight two existential battles in the coming weeks: winning the constitutional reform referendum on December 4, and obtaining from the Commission the necessary fiscal flexibility to implement the 2017 budget and avoid an excessive deficit procedure. Impacts A resignation by Renzi would probably lead to political chaos as there is no obvious alternative to him. Renzi's PD is divided over the proposed constitutional reforms and may split in case of a 'no' vote in the referendum. Forming a national unity or technocratic government in case of a 'no' vote may be impossible owing to M5S's unwillingness to compromise. The centre-right is fragmented and no political leader is emerging to fill the void left by former Prime Minister Silvio Berlusconi.


Significance Turkish President Recep Tayyip Erdogan and US Secretary of State Rex Tillerson’s agreement in Ankara to work together has reduced the possibility of a clash between Turkish and US forces in Syria. Almost simultaneously, German Chancellor Angela Merkel and Turkish Prime Minister Binali Yildirim announced in Berlin a new era in Turkish-German relations, a change confirmed by the release of a German newspaper correspondent in Turkey, after a year in prison on spying charges. Impacts The Trump administration will now speed up appointing a new ambassador to Ankara. Turkey will continue to woo German business and investors. The application of diplomatic pressure to release detained foreign journalists may influence how they operate in Turkey in future. Improved relations abroad will enable Erdogan to tighten his grip at home.


Significance Negotiations between coalition government parties and other major political players to agree on a new document outlining the government’s path forward (the ‘Carthage II Agreement’) stalled in late May over whether to replace Prime Minister Youssef Chahed and reshuffle the cabinet. A faction of the ruling Nidaa Tounes party led by its executive chairman, Hafedh Essebsi (son of Tunisia’s President Beji Caid Essebsi), called for the dismissal of the prime minister, who is also from Nidaa Tounes. Nidaa’s government coalition partner, the Islamist Ennahda, opposed the move. Impacts Insecurity over the government’s future will complicate key economic and security reforms. The political crisis will deter foreign investment. Friction between rival Nidaa Tounes factions will weaken popular confidence in politics.


Significance The government’s plan signals not only a new era in Hungarian-Chinese relations but also China’s more intensive presence within the EU. Heated debates within Hungary and the EU are likely about how to deal with this development. Impacts Further Chinese investments in Hungary are likely. Hungarian Prime Minister Viktor Orban will oppose EU policy towards China even more openly. Western allies will watch Budapest for its close partnership with Beijing.


Subject Constitutional reform in Singapore. Significance Parliament is expected in August to receive recommendations on electoral and constitutional changes that will affect opposition politics and executive powers. The government raised the initiatives in parliament in January; Prime Minister Lee Hsien Loong said they would be beneficial to Singapore and its government. However, the measures are also likely to benefit the People's Action Party (PAP), which has ruled Singapore since independence in 1965. Impacts Presidential elections are unlikely to become more competitive. Opposition parties would gain parliamentary exposure if the reform recommendations are enacted. Government scrutiny of corporations' activities in the community and local politics will intensify.


Significance Serraj assumed his post shortly after the Government of National Accord (GNA) came into existence in December 2015. However, four years on and the prime minister has failed to overcome divisions. Partly, this is the result of external interference in Libya and deep divisions within the country, but Serraj’s own personality means he has not managed to build bridges. Impacts The longer the conflict continues, the higher the risk of outside forces dictating the outcome. Turkey’s role as the GNA’s key backer will force Serraj to acquiesce to Turkish foreign policy. In the opposing camp, Egypt and the United Arab Emirates will continue to try to influence international policies towards Libya.


Subject Mali's new prime minister. Significance Prime Minister Soumeylou Boubeye Maiga resigned on April 18 after just 16 months in office. His cabinet also resigned. Four days later, President Ibrahim Boubacar Keita (IBK) appointed outgoing Finance Minister Boubou Cisse as Maiga’s replacement. The shakeup was ostensibly related to recent ethnic massacres in central Mali, but Maiga’s departure likely also reflects the president’s desire to reassert his own power. Impacts Maiga was a key intermediary with northern elites; his departure leaves a void that, if not filled, could deepen tensions with the north. The constitutional reform process may now slow; if mishandled, the same opposition that doomed the process in 2017 may resurface. Maiga’s departure could spur realignments among Muslim leaders, some of whom have opposed Keita but appear sympathetic to Cisse.


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