Friday News Roundup — June 10, 2022

Friday greetings from Washington, D.C., where the January 6th Select Committee met in televised prime time hearings to recount the events of the insurrection, with new footage, testimony, and details about the former president’s extraordinary efforts to remain in office. While most of the coverage — and those counterprogramming the hearings — will provide context in terms of the political horserace and the lead-up to the midterms, the facts of that terrible day are inescapable. Accompanying the news this week of a disturbed, and armed, man seeking to kill Justice Kavanaugh, we see the peril our Constitution faces from a cycle of disillusionment giving way to one of violence. As President Reagan reminded us best, “freedom is never more than one generation away from extinction. It has to be fought for and defended by each generation.”

This week, in the media, Joshua C. Huminski, the Director of the Mike Rogers Center for Intelligence & Global Affairs reviewed “Operation Car Wash” for the Diplomatic Courier. Written by two Federal Police officers, “Operation Car Wash” details the institutionalized crime and corruption that pervades Brazil’s federal and state governments, reaching the Supreme Court, presidency, and leading businesses, and which imperils the country’s democracy and future.

Next week, Huminski sits down with author and researcher Oliver Bullough to discuss his new book “Butler to the World”, a review of which will run this Saturday in the Diplomatic Courier. Huminski and Bullough will explore how the United Kingdom become a central enabler of the world’s offshore economy and what’s needed to stop the global kleptocracy. You can register for that discussion, here.

In this week’s roundup, Joshua examines the political survival of Boris Johnson, and just how many lives he might still have. Wes cover Russia’s blockade of Ukrainian wheat exports, the impact, and options for potential mediation. Dan provides a brief Geotech update on the latest announcement on standards-essential patents. Robert explores “friendsourcing” as an emerging geostrategic and economic tool. Hidetoshi provides an analysis of Japanese prime minister Fumio Kishida’s historic participation in the NATO summit later this month. We wrap with news you may have missed.

Prime Minister Boris Johnson Survives a Vote of No Confidence, But Only Just

Joshua C Huminski

Photo: Chatham House

This week, the Prime Minister of the United Kingdom, Boris Johnson, survived a vote of no confidence from within the Conservative Party, but appears politically weaker now than at any point in his premiership.

On Monday, 211 members voted to keep the prime minister in his post, but 148 voted to oust him — a far worse ratio than his predecessor, Theresa May, who survived a vote of no confidence over her opposition to an agreement on Brexit at 200 votes to 117 in December 2018. The prime minister tried to put a positive spin on the victory, saying “It’s a convincing result, a decisive result,” adding, “we can focus and move on to the stuff that really matters to people.”

The juxtaposition between the vote of no confidence and the Queen’s Jubilee — a bank holiday which concluded on Sunday — was sharp. Celebrating the Queen’s 70th year on the throne, the country was alive with parties and events, including a trooping of the color and a large concert in front of Buckingham Palace. As soon as the pomp and circumstance had ended, the Tory party’s knives came out for the prime minister, but it was not enough to bring down the embattled party leader.

Monday’s vote, though notionally a win, is the latest in a series of blows the prime minister has suffered, almost all of which are own-goals. Last month a government report detailed how 10 Downing Street was host to a series of fetes amidst the national lockdown, a scandal that became known as “Partygate”. The prime minister was photographed sharing drinks with colleagues for leaving-dos and other events, this while the Queen was obligated to mourn the passing of Prince Phillip in April 2021, alone, and the country was told to stay inside amidst the Covid-19 lockdown. The prime minister received a “fixed penalty notice” or fine along with his wife Carrie Johnson and Rishi Sunak, the chancellor, and over 120 others for their participation in the Downing Street parties.

Partygate was, however, not a one and done event, but a long-running open sore of sorts for the prime minister as more and more disclosures emerged about what went on during lockdown. Throughout the story’s development, Johnson deployed much of his charm, wit, and dissimulation first saying there weren’t any parties at all and that the government’s own guidance had been followed at all times. He later suggested that he wasn’t involved in the parties (and then photos of his participation emerged), said that they were work events (which they were clearly not), and that he would wait for the government’s report — the so-called Sue Gray report — before deciding on a next course of action. He issued repeated apologies at every new disclosure, but largely avoided punishment aside from the aforementioned fine and Monday’s vote of no confidence.

That they were parties at all were something of a red herring as the government’s guidance prohibited gatherings — whether work, social, or otherwise — full stop. This afforded Johnson and his supporters enough rhetorical wiggle-room to distract from the overall core violation of the government’s own edicts.

The Prime Minister also finds himself suffering from the poor performance of the United Kingdom’s economy and rising “stagflation”, and allegations that refurbishments at his residence were paid for by a Tory party donor. Yet, the sense of moral hypocrisy and ethical malfeasance was something from which even the notoriously slippery Johnson was unable to fully escape. While the war in Ukraine, a strong leadership position the prime minister took up for the United Kingdom, was able to distract a touch from the ongoing political crisis in Westminster, it was not enough to avoid an internal party revolt at Johnson’s performance.

What happens next remains to be seen. By any measure, Johnson is a politically weakened leader. Despite him winning, that 40% of the party voted against him cannot be plausibly sold as a victory. Some speculate that he will undertake a “punishment reshuffle” of the cabinet to settle scores against those seen as insufficiently supportive of his leadership.

He could, alternatively, reach out to those MPs who voted against him and take a more consensual approach following the political rebuke. Given the size of the no votes, it suggests that those opposed to his leadership of the party are drawn from across the Tory party political spectrum and no amount of mollification and conciliation — even if that were really in the prime minister’s nature — will be able to bring back his opponents into the fold. Indeed, it appears that the vote was less about ideology and precisely about Johnson’s leadership, style, and behavior in 10 Downing Street.

A normal prime minister might see the writing on the wall and consider surviving this vote of no confidence as a political defeat. Johnson is not a normal prime minister or a normal politician. He has succeeded, by and large, by bucking norms that crossing lines that would have sunk any of his contemporaries or predecessors. Any one of the blows he has inflicted on himself would have likely seen Gordon Brown, David Cameron, or Theresa May step down or certainly been shown the door, but Johnson continues to survive.

There is, perhaps, another straw that could break the prime minister’s back — the verdict of the House of Commons’ privileges committee on whether or not he misled Parliament. If the committee finds that he knowingly misled parliament, that is typically a resigning offense. Unsurprisingly, Johnson has said that he would not stand down, even if the committee finds against him. If the party performs poorly in the forthcoming by-elections — in Yorkshire and Devon — to replace two MPs who resigned in disgrace (one for watching pornography during the House of Commons proceedings and another for allegedly sexually assaulting a 15-year-old boy at a pool party in 2018), Johnson could well find himself without any remaining support in the party beyond his coterie of hardcore loyalists. As it stands, Johnson may have bought himself another year, but that could change. Under the 1922 Committee’s rules (formally known as the Conservative Private Members’ Committee), the party must wait one year before holding another vote of no confidence. If, however, the privileges committee finds against Johnson and he refuses to go, the 1922 Committee could well change its own rules — it can do so at any time, really.

The Prime Minister has become the focal point for the country’s malaise and listlessness for both the right and the wrong reasons. His leadership has not produced that which the country needs — a sense of purpose and direction, and clear guidance post-Brexit. The promised new Eden of a Britain free from the European Union’s shackles has not materialized, if it ever will, which it likely will not. While London and Northern Ireland are doing comparably better economically, the rest of the country is suffering from supply chain shocks, rising inflation, and poor growth. The housing crunch is appalling and public services remain stagnant and slow. The problem is that on every political and economic issue, serious leadership is necessary for the country, but it only finds Johnson’s pursuit of self-preservation and popularity.

Could Johnson rally in the wake of the vote of no confidence and press on with an agenda the country so desperately needs? Sure, but it is doubtful that it is in his nature. For a man who apes Churchill to his core and even sees himself as such in the present crisis over Ukraine, Johnson seems constitutionally incapable of knuckling under and doing the hard things and the country is facing some very hard things indeed.

Russian Blockade of Ukrainian Grain Attracts Growing International Attention

Wesley Culp

Wikimedia Commons Photo

While fighting between Russia and Ukraine continues to rage in Ukraine’s southern and eastern regions, much of the world’s attention has understandably been glued to the ebb and flow of the two sides’ battlefield fortunes. However, growing pressure on global wheat prices stemming from supply disruptions connected to fighting between Russia and Ukraine has increasingly become too substantial to ignore.

Both Ukraine and Russia were leading suppliers of wheat to the world market up until Russia’s invasion in February 2022. According to the Observatory of Economic Complexity, Russia accounted for 19.5% of all wheat exports in the world in 2020, while Ukraine accounted for roughly 8.9%. This made Russia the largest exporter of wheat that year, and Ukraine the fifth.

The most dramatic disruptions to the harvest and transport of wheat in the Black Sea region can be found in Ukraine, whose territory has been host to the massive violence of the current conflict. The effects of Russia’s invasion have been dramatic: the U.S. Department of Agriculture estimates that 21.5 Million tons of wheat will be produced in Ukraine in the 2022 to 2023 season, down 11.5 Million since the last season. Immediate spikes in Black Sea shipping insurance costs after the invasion combined with corporate concerns about public image drove a steep decline in the number of ships exporting wheat from Russian ports in the months following the invasion, which further constrained the flow of wheat onto the world market.

Production isn’t the only barrier preventing Ukrainian wheat from being exported, as Russia’s ongoing blockade of Ukrainian ports on the Black Sea has choked off the flow significantly. Despite the sinking of the Russian cruiser Moskva in April, the elements of the Russian Navy in the Black Sea have been able to achieve and maintain undeniable naval superiority in the approaches to Ukraine’s remaining coast from Crimea to the Romanian border, effectively determining that 90% of Ukraine’s grain cannot be exported. While Ukraine maintains full control over its borders with its western neighbors of Poland, Slovakia, Hungary, Romania, and Moldova, bulk transport of Ukrainian wheat by rail to compensate for the blockade is unfeasible due to railway gauge difference between Ukraine and its Western neighbors. Ukraine’s rail network is still built in the gauge used by Russia and Ukraine’s other post-Soviet neighbors, a relic of Ukraine’s inclusion in the Russian Empire and Soviet neighbors, which forces goods to be transferred between trains when the gauge shifts.

To add insult to injury, Russia has attracted some condemnation for its seizure of Ukrainian wheat from territories it controls, as well as its attempt to sell that same wheat abroad. U.S. Secretary of State Antony Blinken has spotlighted reports that Russia has seized grain from Ukraine for export, and the United States has also alerted 14 African countries that they could be receiving stolen Ukrainian grain from Russia. Russian President Vladimir Putin’s June 3 meeting with African Union Chairman and Senegalese President Macky Sall notably featured Putin’s assignment of blame for wheat supply disruptions to Ukraine and Western sanctions. Russian efforts to shift responsibility for wheat and grain supply disruptions has further complicated efforts to reach an agreement to facilitate Ukrainian grain exports.

Sensing these risks, significant international attention is building to find a solution that will facilitate the export of Ukrainian grain despite Russia’s blockade. While Russia has agreed to Turkish-mediated proposals to allow certain export corridors from Ukrainian ports such as Odessa through its blockade on the condition that Ukraine demine its ports, Ukraine has expressed significant reservations that a full demining of the approaches to those ports as demanded by the proposal would open them up to Russian amphibious assault. Turkey has emerged as the primary mediator in United Nations efforts to create an agreement to facilitate sea corridors for wheat and other grain exports, although Kyiv has expressed doubts that Turkey’s diplomatic push will be sufficient to ensure that Moscow upholds its side of any bargain reached.

Given the worldwide supply chain risks at play which necessitate a return of Ukrainian wheat and grain to world markets, the United Nations has provided its backing to the Turkish-led export corridor negotiations. Wheat importers such Egypt have been forced to take creative action to stave off major domestic disruptions to the supply of wheat. Preexisting supply chain challenges in world wheat and grain markets have been severely exacerbated by Russia’s blockade and the ongoing war, making international mediation to facilitate Ukrainian wheat and grain experts all the more urgent.

A Resolution on Standards-Essential Patents

Dan Mahaffee

As part of our Geotech work at CSPC, we are closely tracking policies related to the protection of intellectual property. One of the cornerstones of our innovation ecosystem is the protection of intellectual property such that innovators’ are rewarded for their breakthroughs and revenue from sales and licensing, in turn, funds future R&D. In our previous Geotech reports and roundtables, an area of particular concern had been Standards-Essential Patents (SEPs) and the draft policy put forward by the Department of Justice in 2021. This week, the Biden administration announced a policy on SEPs that would be case-by-case. This policy replaces the past 2013 guidance and avoids 2021 draft guidance, both criticized by many innovators, while also withdrawing 2019 guidance which raised concerns under the Biden administration’s review of antitrust policies.

SEPs are of particular importance for strategically critical technologies, particularly licensing of technology standards for 5G and future 6G networks. With the future of these technologies at stake, matters of antitrust and competition had to be considered alongside national security and economic competitiveness. The administration’s draft policy was potentially counterproductive: it discouraged participation in the international technology standards-setting bodies even as the administration encouraged American innovators to lead in those very bodies. As Beijing continues to steal IP and weaken IP protections, this draft policy threatened to devalue key American innovations. In terms of policymaking, the draft was also critiqued as a product solely from the Department of Justice — rather than all the administration stakeholders in SEP policy. The 2019 policy for example, came from the U.S. Patent and Trademark Office (USPTO), National Institute for Standards and Technology (NIST), and DOJ.

The administration listened to the criticism from innovators, Congress, and think tanks. This policy’s case-by-case approach allows for the protection of innovators’ intellectual property and the freedom for the private sector to make the licensing and patent deals in firms’ best interests, while also reserving a role for government to address anti-competitive behavior. USPTO, DOJ, and NIST were all involved in this policy.

Innovation leaders see this is a welcome change for U.S. innovation policy. Brian Pomper of the Innovation Alliance — who had joined one of our CSPC virtual panels on March 29th — released a statement including the following:

This decision to allow courts to determine on a case-by- case basis the proper relief when an SEP has been infringed gets the government out of the business of dictating policy on SEP enforcement and treating SEPs differently from any other patent. Importantly, it makes clear that SEP holders have the right to obtain injunctive relief like any other patent holder when a court determines that is the proper remedy. This is critical to ensuring that our patent system continues to incentivize technological breakthroughs, keeping America at the forefront of global innovation.

Intellectual property policy and the protection of the fruits of our innovation is an important part of the competition for technology leadership. Balancing the various concerns of national security, international competition, and a thriving domestic marketplace are complex, and watching SEP policy will continue to be important. While the path to it was complex, it appears now that the stakeholders in innovation policy have been heeded.

Comprehensive Trade Agreements are Dead; Long Live Friendsourcing

Robert Gerber

Friendshoring (or ally-shoring or friendsourcing) is the new trend in trade. In essence, it means building trade partnership and economic interdependence with like-minded partners. The term “friendshoring” emerged around 2020 and it found its way into Biden Administration strategies shortly thereafter. The Administration needed to counter China’s aggressive economic diplomacy, particularly in Asia, and the COVID-related supply chain crunch showed us the grim realities of a future scenario where free countries rely on China for production of things we really need. (Note: we here at CSPC prefer the term “friendsourcing” over friendshoring and we will use it going forward.)

The Obama Administration pursued the U.S.-EU Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) as means to compete with China and gain market access for U.S. products and services. But these comprehensive trade agreements failed because they were too broad in scope and were unable to overcome rising domestic political concerns about potential job losses from offering countries reciprocal access to U.S. markets. Similarly, the EU-Canada free trade agreement was signed but not ratified by all EU member states. The Trump Administration sought an alternative: it pursued “trade deals” in the form of executive branch actions that would not require Congressional approval, paired with tariff actions against China for its flagrant violations of World Trade Organization rules like subsidies and intellectual property theft. The Trump Administration’s Clean Path initiative, which persuaded a number of European partners to ban Chinese technology from their 5G networks, was an early and rather successful form of friendsourcing.

In principle, friendsourcing has merit. Free countries cannot be dependent on China for critical materials. They must ensure they can either produce or procure critical technologies from like-minded friendlies. Sovereign free states should have alternatives to relying on economic partnerships with authoritarian China. And there is a global void in rules of the road for digital trade, which China would love to fill. Traditional free trade agreements (FTAs) have their limitations, one of which is that WTO rules require that FTAs must cover “substantially all the trade” between partners. This results in negotiations bogging down over disputes on highly sensitive topics like agriculture policy. And the WTO has been unreliable in enforcing the terms of multilateral agreements.

The Biden Administration’s U.S.-EU Trade and Technology Council, the recently-announced Indo-Pacific Economic Framework (IPEF), and the U.S.-Taiwan Initiative on 21st-Century Trade are all examples of friendsourcing executive agreements. These will center on establishing joint norms, standards, and commitments in areas like digital trade, clean energy, transparency/anti-corruption, and supply chain resilience. The White House described the IPEF as a defensive ring against “non-market policies and practices as well as economic coercion.” While a dozen countries have agreed to begin discussions on the IPEF, the challenge will be to persuade capitals to adopt these measures and make commitments without the incentives of U.S. tariff reductions (aka market access). These countries would also like preferential treatment for U.S. government procurement, yet the Biden Administration announced it would tighten “Buy America” rules. The supply chain resilience/security part will be particularly tricky as the U.S. government cannot compel private companies to buy from a certain country (exceptions are the International Emergency Economic Powers Act which allowed the President to ban imports of Russian oil, inter alia).

Some critics of friendsourcing say it is bad for business and will lead to higher costs. This is a valid point for discussion, but the benefits of freeing countries from China-dependence and promulgating “high standard rules of the road” outweigh these concerns.

The U.S. Department of Commerce has set an ambitious timeline for IPEF discussions (it refuses to call them negotiations). To achieve its objectives, it will have to muster a lot of creativity, and hope for more own-goals by China. The White House should also find a way to successfully tie these initiatives to global efforts to reduce inflation and countries’ urgent need to secure non-Russian energy sources. The Chinese foreign minister said the IPEF is “doomed to failure.” Beijing’s dyspeptic reaction shows that the concept has strategic value even in its nascent form.

Japan’s Pivot to the West

Hidetoshi Azuma

Photo Credit: NATO

Japanese prime minister Fumio Kishida recently confirmed his highly-speculated participation in the upcoming North Atlantic Treaty Organization (NATO) summit in Madrid at the end of this month. Kishida is set to join the event as the first Japanese leader in history and looks to further consolidate his emerging grand strategy firmly positioning Japan as Asia’s bulwark against the global ascendancy of authoritarianism. Indeed, such a trajectory would be the culmination of his steady efforts to revamp Japan’s grand strategy in a new era in which the country increasingly faces the prospect for a two-front war in Asia. The upshot is Tokyo’s growing pivot to the West in an effort to remedy its own local issues ranging from domestic politics to regional flashpoints, such as Taiwan.

Since taking office in October 2021, Kishida has been steadily consolidating Japan’s geopolitical position vis-a-vis China. His abiding concern has been China’s growing geopolitical challenges in areas ranging from US-China technology competition to maritime security in the Indo-Pacific. In fact, the Japanese prime minister revealed in his campaign manifesto his admiration for the Yoshida Doctrine, which positioned post-WWII Japan as Asia’s bulwark against communism in alliance with the US. Kishida undoubtedly identified himself with his predecessor, former prime minister Shigeru Yoshida, who guided Japan’s grand strategy at the height of the US-Soviet Cold War in the 1950s. The opening salvo of Kishida’s grand strategic maneuvers was the introduction of his signature economic security policy in an attempt to revamp Japan’s own geoeconomic security at home in light of Beijing’s unrestricted challenges, particularly economic espionage. He then went on to strengthen the Quadrilateral Security Dialogue (QUAD) by signing a historic reciprocal access agreement with Australia at the beginning of January 2022. The significance of this semi-military alliance lay in Tokyo’s growing desire to expand its security relations beyond the traditional framework of the US-Japan alliance and Canberra’s emerging pivot away from China.

Initially, the actual scorecards of Kishida’s grand strategic maneuvers remained hardly satisfactory despite his obvious anti-China focus. The real impediment was in fact Tokyo’s questionable policy of rapprochement with Russia, which Kishida inherited from his predecessor, former prime minister Shinzo Abe. Indeed, the Japanese leader remained largely indifferent to Ukraine’s growing plight in the face of Russia’s looming military buildup and even continued to hold talks with Moscow on bilateral economic cooperation until mid-February. This was largely because Tokyo had long failed to appreciate the geostrategic significance of sea power inherent in the Yoshida Doctrine. Kishida was no exception despite his party lineage tradable to Yoshida. Ultimately, it took Russia’s launch of its full-scale invasion on February 24 for Kishida to finally acknowledge the geopolitical reality in Europe. While Tokyo immediately pulled off an about-turn on Russia, its retroactive move only underscored the lack of its solid strategic framework beyond China.

Despite his initial clumsiness toward Russia, Kishida was quick to adjust to, if not thrive in, the new geopolitical reality following Russia’s invasion of Ukraine late February. His anti-Russia policy went beyond economic sanctions and ultimately encompassed a broader solidarity with other democracies. In fact, the signing of another reciprocal access agreement this time with the United Kingdom further underscored Tokyo’s emerging shift in its geostrategic trajectory away from the conventional paradigm revolving around the US-Japan alliance. Indeed, the defense pact with Britain evoked a sense of dejavú of the 1902 Anglo-Japanese alliance signed on the eve of the 1904–5 Russo-Japanese War. In other words, the perennial Russian threat to Japan’s northern flank once again acted as a deus ex machina in forcing the country to rediscover its sea power orientation designed by Yoshida in 1951.

Kishida’s rediscovery of the Yoshida Doctrine led him to boost Japan’s sea power grand strategy through additional diplomatic engagements. Following his historic defense pact with the UK, he welcomed US president Biden in Tokyo, where he also hosted the QUAD summit with the leaders of the two other member states. The flurry of summits in Tokyo highlighted the launch of the Indo-Pacific Economic Framework for Prosperity (IPEF) and led to the consolidation of the rules-based order in the Indo-Pacific, adding substance to the otherwise vague Free and Open Indo-Pacific Concept. The significance of Kishida’s multilateral diplomacy in Tokyo was that he essentially assisted Biden with reaffirming Washington’s regional commitment, culminating in the president’s resounding declaration of potential US military involvement in Taiwan.

Kishida’s upcoming engagement with NATO will therefore be the continuation of his globetrotting diplomacy designed to strengthen Japan’s geopolitical position vis-a-vis China. The real significance of Kishida’s NATO agenda is that it would underscore Japan’s pivot to the West, rebranding the country as a global player facing off the rise of authoritarianism worldwide. Such a pivot would allow Tokyo to increasingly synchronize its security policy with the West’s, including various initiatives to counter disinformation, a field in which Japan critically lags behind. Moreover, Japan’s deepening engagement with NATO would inspire the creation of an “Asian NATO,” an idea often floated around in Tokyo with no solid prospect for realization so far. Indeed, the existing regional security frameworks, such as QUAD and AUKUS, would merit unified leadership toward a multilateral treaty alliance inspired by the European success model.

Moreover, there would be other expected benefits from Kishida’s visit to Madrid later this month. Domestically, his unprecedented participation in the NATO summit would allow him to score a political victory over his rival, Abe, who had toyed with a similar agenda with limited success. Indeed, this would gain even more political weight ahead of the upcoming Upper House election in July as the intra-party factionalism intensifies between Kishida and Abe. At the regional level, Kishida’s presence in Madrid would allow him to meet the new South Korean president, Yoon Seok-youl. Tokyo’s summitry with Seoul remains frozen since 2019, and the normalization of the Japan-South Korea relations would be a prerequisite to involving NATO in the Taiwanese affairs. Ironically, NATO’s foreign soil would allow the two leaders to overcome the historical animosity and face the common geopolitical challenge thrusted to their rear.

Kishida’s upcoming appearance at the NATO summit in Madrid later this month would consummate his emerging grand strategy and symbolize Japan’s pivot to the West. It is a remarkable departure from the lingering strategic ambiguity which colored his predecessors’ thinking for decades. Modern Japan has consistently sought to position itself as a part of the West, and Kishida’s NATO agenda is merely the confirmation of its natural geostrategic orientation. What is at stake is the chaotic regional affairs ranging from the historical acrimony in the Japan-South Korea relations to the potential Taiwan crisis. In a region in which cohesion is all but impossible ironically despite its cultural affinity for harmony, Japan’s pivot to the West is a much-needed geopolitical vector allowing Asian countries to overcome their tribalist impulses for common good in a Free and Open Indo-Pacific.

News You May Have Missed

Bulgarian ITN Party Leaves Governing Coalition, Prime Minister Promises to Lead Minority Government

In the latest development in a series of disputes over government spending and Bulgaria’s position on North Macedonia’s bid to join the European Union, the populist “There is Such a People” (ITN) has exited Bulgaria’s governing coalition. In particular, ITN displeasure with Bulgarian Prime Minister Kiril Petkov’s support for lifting Sofia’s veto on North Macedonia’s accession to the EU proved to be an insurmountable obstacle, especially after Petkov’s party rejected ITN demands that additional funds be allocated to construction companies in the next budget. Following the announcement, Petkov promised that he would seek to carry on governing with a minority coalition with the leftist “Coalition for Bulgaria” and reformist “Democratic Bulgaria” coalition partners of his centrist “We Continue the Change” (PP) party. Both ITN and PP have traded accusations that the other has been uncooperative over the months since the coalition was formed in December 2021. Bulgaria faces a period of relative instability in the near-term future as a result of the loss of its majority coalition government.

Texas LNG Terminal Explosion Raises Concerns for European Gas Supply

While U.S. natural gas prices plunged, they spiked in Europe as an explosion, cause undetermined, shut down one of the largest liquified natural gas (LNG) plants on the Texas Gulf Coast. Freeport LNG, the operator, expects at least three weeks of disruption, at a time when U.S. LNG exports are seen as a key substitute for European dependence on Russian energy.

The views of authors are their own, not that of CSPC.

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