Israeli prime minister may be near the end of the road

Significance This is the first time a sitting premier has faced criminal charges. The decision has been looming for several months and comes as the country risks heading towards a third election in the space of a year, absent a last-minute deal to form a coalition. Impacts Netanyahu’s removal would not lead to immediate policy changes, which are more dependent on the eventual composition of the next coalition. If Netanyahu survives, the next election will be defined by polarising claims of a conspiracy against him. Right-wing political leaders’ relationship with the judiciary and police will further sour.

Subject Spain outlook. Significance Following its general election victory for the first time since 2008, Spain’s Socialist Party (PSOE) must negotiate with centre-right opposition or regional Basque or Catalan parties to form a government. An agreement with the centre-right Ciudadanos would likely provide more domestic stability and would be the preferred option in Brussels and for investors, but Ciudadanos has ruled this out, while the PSOE leadership is under internal pressure to avoid negotiations with right-wing parties. Impacts Vox will target working-class PSOE voters who may become disillusioned if Prime Minister Pedro Sanchez fails to instigate economic reforms. Ciudadanos would rather stay in opposition and aim to become Spain’s largest right-wing party, overtaking the People’s Party. Domestic instability will reduce Spain's capacity to enhance its post-Brexit policy influence in Brussels.


Significance The election for the House of Representatives, the lower house of parliament, will be the second since the constitution was revised in 2011. This specified that the leader of the party winning the largest number of seats should be given the first opportunity to form a government. The revision led to the moderate Islamist party, the Justice and Development Party (PJD), leading the government for the first time after its victory in the November 2011 poll. Impacts The election will focus attention on contentious reforms to pensions, subsidies and the education system. The months ahead will be dominated by speculation about party alliances and the likely shape of a future coalition government. The palace seems ready to accept a second term for Prime Minister Abdelilah Benkirane, but is also keen to see PAM within government.


Significance This follows former Prime Minister Mehdi Jomaa’s announcement on March 29 of a new, non-ideological party that includes technocrats and former ministers -- the Alternative Party. Six years after the 2011 Arab uprisings, Tunisian politics is still in flux -- facing serious social and economic challenges. Impacts Protests and industrial strikes will continue in the months ahead as the government tries to reduce public spending. Political parties are losing the trust of the population. Further cabinet reshuffles are likely, but political leaders are wary of making bold structural reforms.


Subject Borisov’s third administration. Significance The government approved by parliament on May 4 is Prime Minister Boyko Borisov’s third since 2009. It is the first time his Citizens for Bulgaria’s European Development (GERB) party has joined in formal coalition with United Patriots (OB), a bloc comprising three nationalist parties. Two OB leaders, Krasimir Karakachanov and Valery Simeonov, are deputy prime ministers, but only the former combines this position with a portfolio (defence). OB’s third and most controversial leader -- Ataka party leader Volen Siderov, noted previously for rabid anti-NATO and pro-Putin statements -- has no formal government role. Impacts GERB has reaffirmed its domination of Bulgarian politics with minimal concessions to its formal coalition partners. The spectre of increased Russian influence over Bulgarian politics that worried some EU partners has seemingly dissipated. A firmer line against migration is likely as a sop to OB, but meaningful reform of the judiciary will again be strenuously avoided. Sofia’s worries about Turkey and the Western Balkans and its forthcoming EU presidency may make it more amenable to EU influence and advice.


Subject Canadian provincial and federal politicial dynamics. Significance As Ontario Premier Doug Ford’s term gets underway, Quebec is beginning its election campaign, running to October 1; the centre-right Coalition Avenir Quebec (CAQ) will likely perform well. Prime Minister Justin Trudeau faces a fractious final year, as relations worsen between the Liberal federal government and various new right-wing provincial governments. Leading issues are migration, carbon taxes, cross-border trade and right-wing provincial governments’ socially conservative and fiscally austere agendas. Impacts Failed NAFTA renegotiations would hurt Trudeau’s administration before 2019 and necessitate further post-2019 negotiations. Right-wing provincial premiers will still cooperate with Trudeau to mitigate the effect of US trade tariffs on Canada. Currently, Trudeau and the Liberals are likely to win in 2019, but opposition parties will gain votes.


Subject Poland’s isolation over EU labour reform. Significance "They will not break us," Prime Minister Beata Szydlo said in a recent interview for a right-wing weekly. She was referring to Poland’s opposition to EU migration policy and more generally to a broader set of issues that divide the right-wing government in Warsaw from its EU partners. Szydlo's belligerent rhetoric plays well with domestic audiences but conceals Poland’s inability to build alliances and protect its interests. These weaknesses have become apparent during recent talks on reforming the EU’s Posted Workers Directive. Impacts New regulations may erode the competitive advantage of Polish firms that regularly post workers to western EU member states. The Polish budget would lose posted workers’ social insurance contributions, a loss estimated as worth up to 275 million dollars a month. Poland’s reputation as a regional spokesman for the interests of CEE member states may be undermined.


Significance Voting in the race to replace Tom Mulcair as leader of Canada’s social-democratic NDP begins on September 18, with results announced by October 1. The victor of the contest will go on to contest 2019’s federal election against Prime Minister Justin Trudeau and Conservative leader Andrew Scheer. While not a contender for government, the NDP’s standing and performance at the polls will help determine whether Trudeau’s Liberals are elected to a second term or the Conservatives return to power. Impacts Oil-friendly NDP Alberta Premier Rachel Notley will probably be ousted in 2019 by a new right-wing fusion party. The NDP-Green coalition in British Columbia will pressure the new federal leader for more militant stances on climate and energy policy. Trudeau will probably increase his majority in 2019 should NDP support remain tepid despite a new leader.


Significance For the first time, there is a sustained increase in support for Scottish independence. The main reasons include dislike of UK Prime Minister Boris Johnson and his cabinet north of the border, the UK government’s pursuit of a ‘hard’ Brexit and questions about its response to the COVID-19 pandemic. Impacts Soaring Scottish unemployment when the UK furlough schemes end would undermine London’s claim to be protecting Scottish jobs. Rising support for Scottish independence could prompt the UK government to seek a closer trade agreement with the EU. The UK government will be unable to conceal the economic impacts of Brexit under the economic fallout of COVID-19. A Scottish vote for independence would put huge pressure on the UK government to resign and call early elections.


Subject Local and municipal election results. Significance The largely united opposition made a major breakthrough in local elections on October 13, taking Budapest and other cities and towns and eroding Prime Minister Viktor Orban's Fidesz party’s predominant position since 2006. A sex scandal plus changes within the opposition have apparently lost Fidesz the middle class, further emphasising the already stark divide between cities and the countryside. Impacts Orban’s weaker position will dent the confidence of the global right-wing populist movement, of which he is a figurehead. Domestic capital associated with the Orban government is at risk as investors price in a potential loss of government support. The decline in political stability may at least momentarily moderate investor confidence in Hungary.


Significance On October 23, President Reuven Rivlin passed on the task of forming the government to Benny Gantz, leader of the centrist Blue and White alliance, after incumbent Prime Minister Binyamin Netanyahu failed. Neither the centre-left bloc nor the bloc of religious and right-wing parties (led by Netanyahu's Likud) has a majority without Yisrael Beiteinu, but so far Gantz and Netanyahu have failed to find an acceptable compromise despite pressure from Lieberman and Rivlin to form a unity administration. Meanwhile, Netanyahu himself faces an impending indictment on corruption charges. Impacts Consecutive rounds of elections will create a strain on the public finances. Netanyahu will refuse any power rotation deal where he is not given the premiership first. Another election, especially if coupled with an indictment, will accelerate a trend of public fatigue with Netanyahu.


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